As filed with the Securities and Exchange Commission on October 31, 1995
Registration No. 33-__________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WHX CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 13-3768097
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
110 East 59th Street
New York, New York 10022
(212) 355-5200
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(Address, including zip code, and telephone
number, including area code, of Registrant's
principal executive offices)
MARVIN L. OLSHAN
Secretary
WHX Corporation
110 East 59th Street
New York, New York 10022
(212) 355-5200
(Name, address and telephone number of agent for service of process)
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Copies to:
Steven Wolosky, Esq.
Olshan Grundman Frome & Rosenzweig
505 Park Avenue
New York, New York 10022
(212) 753-7200
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. /X/
------------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to be Offering Price Aggregate
Securities to be Registered Registered Per Share(1) Offering Price(1) Amount of Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share......... 188,519 $10.50 $1,979,450.00 $682.57
==================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 based on the closing price of the Common Stock on the New York
Stock Exchange on October 24, 1995.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion, Dated October 31, 1995
PRELIMINARY PROSPECTUS
188,519 Shares of Common Stock
WHX CORPORATION
Common Stock ($.01 par value)
This Prospectus relates to 188,519 shares of Common Stock, par value $.01
per share (the "Common Stock") of WHX Corporation (the "Company" or "WHX")
previously issued to Klockner Namasco Corporation (the "Selling Stockholder").
The Company will not receive any proceeds from the sale of the Common Stock by
the Selling Stockholder.
The Company's Common Stock is publicly traded on the New York Stock
Exchange ("NYSE") under the symbol ("WHX"). On October 27, 1995, the closing
price for the Common Stock on the NYSE was $10.625.
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SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY A
PROSPECTIVE PURCHASER OF THE COMMON STOCK OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This offering is self-underwritten; neither the Company nor any Selling
Stockholder has employed an underwriter for the sale of the shares of Common
Stock. The Company will bear all expenses of this Offering other than discounts,
concessions or commissions on the sale of the shares of Common Stock.
The Common Stock may be offered by or for the account of the Selling
Stockholder from time to time on the NYSE, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed or at
negotiated prices. The Selling Stockholder may effect such transactions by
selling the shares of Common Stock to or through broker-dealers who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholder and/or the purchasers of Common Stock for whom such
broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer may be in excess of
customary commissions). Any broker-dealer acquiring Common Stock from the
Selling Stockholder may sell such securities in its normal market making
activities, through other brokers on a principal or agency basis, in negotiated
transactions, to its customers or through a combination of such methods.
The date of this Prospectus is October __, 1995
<PAGE>
AVAILABLE INFORMATION
WHX is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, as well as at the following regional offices: 14th
Floor, Seven World Trade Center, New York, New York 10048, and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Certain securities of WHX are listed for trading on the New York Stock
Exchange (Symbol: WHX). The foregoing material also can be inspected and copied
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005.
The Company has also filed with the Commission a Registration Statement
on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act with respect to the shares
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement, copies of which
may be obtained from the Public Reference Section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, upon
payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") are incorporated in this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K, as amended, for the
fiscal year ended December 31, 1994.
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1995 and June 30, 1995.
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-B dated June 24, 1994.
All documents filed by WHX pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the
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<PAGE>
shares offered hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated herein by reference (other than
exhibits to such documents which are not specifically incorporated by reference
in such documents). Written requests for such copies should be directed to
Wheeling- Pittsburgh Steel Corporation, Attention: Gregg Warren, 1134 Market
Street, Wheeling, West Virginia 26003, telephone number (304) 234-2400.
The Company intends to furnish its stockholders with annual reports
containing financial statements audited and reported upon by its independent
accounting firm, quarterly reports containing unaudited interim financial
information and such other periodic reports as the Company may determine to be
appropriate or as may be required by law.
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
Prospectus, in connection with the offering contemplated hereby, and, if given
or made, such information or representations must not be relied upon as having
been authorized by WHX or any underwriter, dealer or agent. This Prospectus does
not constitute an offer to sell or solicitation of an offer to buy any
Securities other than the Securities to which they relate and do not constitute
an offer to sell or a solicitation of an offer to buy any Securities in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus, nor
any sale made hereunder, shall, under any circumstances, create any implication
that there has been no change in the affairs of WHX since the date hereof or
thereof or that the information contained or incorporated by reference herein or
therein is correct as of any time subsequent to such date.
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<PAGE>
THE COMPANY
The Company is a vertically integrated manufacturer of a variety of steel
products for diverse end-user markets. Through its two operating units, the
Steel Division and Wheeling Corrugating Company ("Wheeling Corrugating"), the
Company shipped 2.4 million tons of steel products in 1994. In 1994 and the
first nine months of 1995, the Company reported sales of $1.2 billion and $1.0
billion, respectively, and net income of $76.4 million and $63.7 million,
respectively.
The Company's products include hot rolled and cold rolled sheet, and coated
products such as galvanized, prepainted and tin mill sheet. The Company also
manufactures a variety of fabricated steel products including roll formed
corrugated roofing, roof deck, floor deck, culvert, bridge form and other
products used primarily by the construction, highway and agricultural markets.
The Company's strategy is to pursue growth in profitability through the
manufacture and sale of value-added steel products, and to moderate the impact
on the Company's earnings during periods of low steel demand. Its strategic
initiatives focus on:
o Expanding internally and through acquisition into value-added
products, while reducing the Company's reliance upon basic
steel products;
o Deploying and investing in fixed assets that allow for high
utilization during periods of weak steel demand and expanded
volume during periods of strong steel demand; and
o Improving the Company's cost structure through prudent
capital expenditures, productivity increases, business
improvement teams and a cooperative partnership agreement
with union employees.
As used herein the Company shall mean WHX and its direct and indirect
subsidiaries.
The principal executive offices of the Company are located at 110 East 59th
Street, New York, New York 10022; telephone number (212) 355-5200.
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<PAGE>
INVESTMENT CONSIDERATIONS
Prospective investors should carefully consider the following investment
considerations set forth below as well as the other information set forth, or
incorporated by reference, in this Prospectus.
CONSIDERATIONS RELATING TO THE COMPANY
Sensitivity of Results of Operations to Realized Steel Prices
The Company's results of operations are substantially affected by
relatively small variations (on a percentage basis) in the realized sales prices
of its products, which depend both upon prevailing prices for steel and demand
for particular products. During 1994, the Company shipped approximately 2.4
million tons, and realized sales prices per ton of approximately $498. During
the first nine months of 1995, the Company shipped approximately 1.9 million
tons, and realized sales prices per ton of approximately $544. A one percent
increase or decrease in this average realized price would have resulted in an
increase or decrease in net sales and operating income of approximately $11.9
million. The Company sells approximately 75% of its products at prevailing
market prices. The Company believes its percentage of such sales is higher than
that of many of its domestic integrated competitors. The Company therefore may
be affected by price decreases (and may benefit from price increases) more
quickly than many of such competitors.
Substantial Capital Expenditure Requirements
The Company operates in a capital intensive industry. From 1990 through the
first nine months of 1995, the Company's capital expenditures totalled
approximately $428 million. This level of capital expenditures was used to
maintain productive capacity, improve productivity and upgrade selected
facilities to meet competitive requirements, and maintain compliance with
environmental laws and regulations, including the Clean Air Act of 1990. The
Company anticipates maintaining capital expenditures during the next two to
three year period at levels substantially comparable to those averaged since
1990 in order to maintain its competitive position, which levels will exceed
depreciation levels and represent a material use of operating funds. The Company
believes it will be able to make these expenditures in the ordinary course of
its business. However, there can be no assurance that the Company will have
adequate funds to make all required capital expenditures or that the amount of
future capital expenditures will be commensurate with historical averages.
Significant Outstanding Indebtedness of the Company
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<PAGE>
The Company has significant amounts of outstanding indebtedness. The
indebtedness of the Company and the covenants contained in the debt instruments
of the Company could significantly limit the ability of the Company to withstand
competitive pressures or adverse economic consequences, including without
limitation, the ability of the Company to make capital expenditures required to
continue to modernize facilities and maintain production capabilities.
The Company has outstanding approximately $270 million of its 9-3/8% Senior
Notes due 2003 (the "Senior Notes") and $9.5 million of its 12-1/4% First
Mortgage Notes due 2000 (the "First Mortgage Notes"). The indentures relating to
both the Senior Notes and the First Mortgage Notes contain covenants and
restrictions that limit the Company's operating flexibility.
Wheeling Pittsburgh Steel Corporation ("WPSC"), an indirect wholly-owned
subsidiary of WHX, currently has a $50 million revolving credit facility (the
"RCF") with a group of banks under which no borrowings are outstanding. The RCF
is an asset-based facility, and all borrowings thereunder are secured by WPSC's
inventory and other collateral. The RCF provides that it will be an event of
default thereunder if either (i) a person, or group of persons acting in
concert, shall acquire securities constituting 25% or more of WHX's voting
securities, or (ii) a majority of WHX's Board of Directors shall be replaced
over a two-year period without the consent of WHX's current Board of Directors.
WPSC expects to replace the RCF prior to its maturity in December 1995. There is
no assurance, however, that WPSC will be able to replace the RCF or as to the
terms of any such replacement facility.
In addition, in August 1994 WPSC entered into a separate facility for
letters of credit up to $50 million. At September 30, 1995, letters of credit
aggregating $26.1 million were outstanding under this facility, all of which are
collateralized at 105% with U.S. Government securities owned by the Company.
In August 1994, WPSC entered into an agreement to sell, up to $75 million
on a revolving basis, an undivided percentage ownership in a designated pool of
accounts receivable generated by WPSC and two of its affiliates, Wheeling
Construction Products, Inc. and Pittsburgh-Canfield Corporation. In July 1995,
WPSC amended such agreement to sell an additional $20 million on similar terms
and conditions. WPSC anticipates entering into an agreement to include the
receivables generated by Unimast Incorporated, an affiliate of WPSC, in the pool
of accounts receivables sold. There is no guarantee that such agreement will be
consummated. To the extent such receivables are sold, they are not available to
the Company as a source of collateral for additional borrowings. At September
30, 1994, the accounts receivable sold under such agreement, as amended,
aggregated approximately $67 million.
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<PAGE>
The Company's performance is subject to financial, economic and other
factors, some of which are beyond its control. The ability of the Company to
make principal and interest payments under the RCF on the First Mortgage Notes
and on the Senior Notes will be dependent upon the Company's future performance.
Future Conduct of the Company's Business
As of September 30, 1995, the Company had cash and marketable securities in
excess of $369.5 million. While the Company intends to explore acquisitions in
steel-related areas, the Company may make significant acquisitions of unrelated
businesses. As a result of any such acquisitions, the past operating history and
the present consolidated financial condition of the Company may not fully
reflect the future operations of the Company or its consolidated financial
condition following any such transactions. Except as otherwise disclosed by the
Company, including its merger proposal first sent to Teledyne, Inc.'s Board of
Directors on November 28, 1994, the Company has not made any determination to
acquire an interest in any particular company or any particular assets,
properties or businesses.
Restrictions on Dividends; Dependence on Subsidiaries and Holding
Company Structure; Effect of Indebtedness
WHX presently does not intend to pay cash dividends on the Common Stock for
the foreseeable future. WHX's ability to pay cash dividends on the Common Stock
is prohibited under the RCF without the consent of the lenders thereunder and is
limited under the indentures (as supplemented) relating to the Senior Notes and
the First Mortgage Notes.
In addition, WHX is a holding company whose earnings are derived from the
operations of its direct and indirect subsidiaries. Therefore, WHX's cash flow
and consequent ability to service its debt and pay dividends are dependent upon
the earnings of such subsidiaries and the distribution of those earnings to WHX
or upon other payments of funds by such subsidiaries to WHX. Certain agreements,
including the indentures relating to the Senior Notes and the First Mortgage
Notes, limit the amount of dividends payable by certain of such subsidiaries. As
of September 30, 1995, Wheeling-Pittsburgh Corporation, a wholly-owned
subsidiary of WHX ("WPC"), and the subsidiaries of WPC had outstanding
indebtedness of approximately $290 million and other liabilities, including
trade payables of approximately $111 million.
Further, indebtedness of WHX and its subsidiaries and covenants contained
in debt instruments governing such indebtedness may limit the ability of WHX and
its subsidiaries to withstand competitive pressures or adverse economic
consequences, including, without limitation, the ability of WHX and its
subsidiaries to make
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<PAGE>
capital expenditures required to continue to modernize facilities and to
maintain production capacity.
Antitakeover Matters
Certain provisions of the WHX Certificate of Incorporation, the RCF and the
indentures relating to the Senior Notes and the First Mortgage Notes may have
the effect of delaying or preventing transactions involving a change of control
of WHX, including transactions in which stockholders might otherwise receive a
possible substantial premium for their shares over then current market prices,
and may limit the ability of stockholders to approve transactions that they may
deem to be in their best interests. The Certificate of Incorporation (i) permits
WHX to issue "blank check" preferred stock, with such designations, rights and
preferences as may be determined from time to time by the Board of Directors,
without stockholder approval and (ii) contains certain provisions insuring
compliance with the ownership rules of the Federal Communications Act of 1934,
as amended, and the regulations enacted thereunder, which provisions limit the
amount of outstanding Common Stock which may be held by foreign persons and
entities to 25%.
Labor Matters
The Company's prior labor agreement with the United Steel Workers of
America ("USWA") expired on March 1, 1994. At such time the Company and the USWA
were unable to reach agreement on certain material terms of a new labor
agreement resulting in a two-day strike. On March 3, 1994, the Company and the
USWA reached agreement on the terms of a new labor agreement. The new labor
agreement, which was ratified by the rank and file of the USWA on April 18,
1994, expires on October 1, 1996.
It is impossible to predict whether the Company will be able to negotiate a
new collective bargaining agreement without production interruptions, or the
possible impact of such negotiations on the financial condition or results of
operations of the Company. If mutual agreement is not reached between the
Company and USWA prior to the expiration of the Company's new labor agreement,
either to extend its expiration or to enter into a new agreement, a strike by
USWA employees will likely follow. For the year ended December 31, 1994,
approximately 79% of the Company's employees were represented by the USWA (based
on the average number of employees working during such period.)
Under an agreement with the Pension Benefit Guaranty Corporation ("PBGC")
reached by the Company's predecessor during its Chapter 11 reorganization (the
"PBGC Agreement"), the Company's then existing defined benefit pension plans
were terminated and the PBGC assumed the obligations thereunder. The Company
adopted defined contribution pension plans to replace the terminated defined
benefit pension plans. All of the Company's integrated
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<PAGE>
steel competitors currently maintain defined benefit pension plans for the
benefit of their USWA-represented employees. This disparity has provided the
Company with a material competitive advantage. Under the PBGC Agreement, the
Company is prohibited from adopting any defined-benefit pension plan prior to
January 3, 1996. The PBGC may allow the Company after such date to adopt a new
defined benefit pension plan. However, it is likely that the PBGC would oppose
an abusive follow-on plan, consistent with PBGC policies and a decision by the
U.S. Supreme Court. The Company's current collective bargaining agreement with
the USWA expires October 1, 1996. It is likely that the USWA will request that
the Company adopt some form of a defined benefit pension plan. The exact cost of
such a plan would vary depending on its terms, but the adoption of such a plan
with a substantial increase in benefits over the Company's current plans would
result in increased annual pension costs, material cash funding requirements and
possibly the recognition of a material unfunded liability. Such an occurrence
would reduce or eliminate the Company's competitive advantage with respect to
pension costs.
The Company has significant accrued liabilities with respect to
post-retirement medical and life benefits for eligible employees, aggregating
approximately $412.0 million at December 31, 1994.
CONSIDERATIONS RELATING TO THE INDUSTRY
CYCLICALITY OF THE STEEL INDUSTRY
The steel industry is cyclical in nature. Domestic integrated producers
suffered substantial losses between 1981 and 1986 and also in 1991 and 1992,
primarily as a result of major economic recessions, high levels of steel
imports, the strength of the United States dollar against other currencies,
worldwide production overcapacity, increased domestic and international
competition, high labor costs and inefficient plants. Domestic steel industry
earnings greatly improved between 1987 and 1989, as compared to the prior four
year period, due in part to substantial restructuring (including the reduction
of steel production capacity), the strength of the domestic economy and the
decline of the United States dollar against foreign currencies. Domestic steel
production in 1988 was the highest since 1981. In that year, the Company
reported operating income of $179.2 million. However, industry demand slackened
during the latter half of 1990 and continued to be weak through the end of 1992.
Price increases were implemented during 1993 and 1994 and demand for steel
products has remained strong through the second quarter of 1995. Since such
time, prices have fallen and demand has softened. The Company expects prices to
continue to fall and demand to soften for the immediate future.
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<PAGE>
POSSIBLE FLUCTUATIONS IN THE COST OF RAW MATERIALS
The Company's operations require substantial amounts of raw materials,
including various types of iron ore pellets, steel scrap, coal, zinc, oxygen,
natural gas and electricity. The price and availability of these materials are
subject to market conditions affecting supply and demand. Furthermore, worldwide
competition in the steel industry has frequently limited the ability of steel
producers to raise finished product prices to recover higher raw material costs.
The Company's future profitability may be adversely affected to the extent it is
unable to pass on higher raw material costs to its customers.
COMPETITION
FOREIGN. Domestic steel producers have faced significant competition from
foreign producers. Foreign competition is intense and has adversely affected
product prices in the United States and tonnage sold by domestic producers. The
intensity of foreign competition is substantially affected by fluctuations in
the value of the United States dollar against foreign currencies. In particular,
appreciation in the value of the United States dollar against foreign currencies
could permit foreign manufacturers to sell steel in the United States at prices
below comparable prices of domestic producers. Many foreign steel producers are
owned, controlled or subsidized by their governments. Decisions by these foreign
producers with respect to production and sales may be influenced to a greater
degree by political and economic policy considerations than by prevailing market
conditions.
DOMESTIC. The Steel Division competes with other domestic integrated
producers, many of which have substantially greater resources and market share
than the Company. Domestic integrated producers also compete with mini-mills.
Mini-mills provide significant competition in certain products, principally
structural shapes, bars and rods (which are not sold by the Company). Mini-mills
are relatively efficient, low-cost producers that generally produce steel from
scrap in electric furnaces, have lower employment and environmental costs and
target regional markets. Recently developed thin slab casting technologies have
allowed one mini-mill to enter certain sheet markets, which have traditionally
been supplied by integrated producers. The ability of mini-mill producers to
capture a significant percentage of the sheet markets, which represented
approximately half of domestic industry shipments in 1994, is anticipated to
create additional available capacity for flat rolled sheet, which could
negatively impact prices and demand for the Company's products.
Wheeling Corrugating competes in a large number of regional markets with
numerous other fabricating operations, many of which are independent of the
major integrated manufacturers. Independent fabricators generally are able to
acquire flat-rolled steel
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products, their basic raw material, at prevailing market prices. In periods of
low demand for flat-rolled steel products, such market prices may be near or
below the Company's costs to produce such products and, therefore, Wheeling
Corrugating may incur higher raw materials costs than certain competitors.
Further, there are few barriers to entry into the manufacture of fabricated
products in certain individual markets currently served by Wheeling Corrugating.
Other competitors, including domestic integrated producers and mini-mills, may
determine to manufacture fabricated products and compete with Wheeling
Corrugating in its markets. Such competition may negatively affect prices that
may be obtained in certain markets by the Company for its fabricated products.
Many of Wheeling-Corrugating's competitors do not have a unionized workforce
and, therefore, may have lower operating costs than Wheeling Corrugating.
ENVIRONMENTAL CONSIDERATIONS
The Company and other steel producers have become subject to increasingly
stringent environmental standards imposed by Federal, state and local
environmental laws and regulations. The Company has expended, and can be
expected to be required to expend in the future, significant amounts for
installation of environmental control facilities, remediation of environmental
conditions and other similar matters. The costs of complying with such stringent
environmental standards may cause the Company and other domestic steel producers
to be competitively disadvantaged vis-a-vis foreign steel producers and
producers of steel substitutes, who may be subject to less stringent standards.
The Company has also been alleged to be a potentially responsible party at
various "Superfund" sites. The Company is subject to strict joint and several
liability imposed upon potentially responsible parties at "Superfund" sites;
however, the Company believes that at all of the sites involved there are
organized groups of potentially responsible parties. The Company does not
anticipate that any potential assessment and remediation costs will have a
material adverse effect on its financial condition or results of operations;
however, the Company cannot currently predict the actual assessment and
remediation costs for which it may be responsible.
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USE OF PROCEEDS
No net proceeds will be realized by the Company from the sale of the shares
of Common Stock offered by the Selling Shareholders.
SELLING STOCKHOLDER
The following table sets forth certain information regarding beneficial
ownership of Common Stock, as of October 27, 1995, and is adjusted to reflect
the sale of Common Stock offered hereby, by the Selling Stockholder.
<TABLE>
<CAPTION>
Shares to be
Shares Beneficially Owned Sold in Shares Beneficially Owned
Name Prior to Offering(1) Offering After Offering
------ ------------------------- ------------ ---------------------------
Number Percent Number Percent
------ ------- ------ --------
<S> <C> <C> <C> <C> <C>
Klockner Namasco Corporation....... 188,519 * 188,519 0 --
</TABLE>
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* Less than 1%
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is The First National
Bank of Boston.
PLAN OF DISTRIBUTION
This offering is self-underwritten; the Company has not employed an
underwriter for the sale of Common Stock by the Selling Stockholder and will
bear all expenses of the Offering.
The Common Stock may be offered for the account of the Selling Stockholder
from time to time in the over-the-counter market or in negotiated transactions,
at fixed prices which may be changed or at negotiated prices. The Selling
Stockholder may effect such transactions by selling shares to or through
broker-dealers, and all such broker-dealers may receive compensation in the form
of discounts, concessions, or commissions from the Selling Stockholder and/or
the purchasers of shares for whom such broker-dealers may act as agent or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
Any broker-dealer acquiring shares from the Selling Stockholder may sell
the shares either directly, in its normal market-making activities, through or
to other brokers on a principal or agency basis or to its customers. Any such
sales may be at prices then prevailing in the over-the-counter market or at
prices related to such prevailing market prices or at negotiated prices to its
customers or a combination of such
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methods. The Selling Stockholder and any broker-dealers that act in connection
with the sale of the Common Stock hereunder might be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act; any commissions
received by them and any profit on the resale of shares as principal might be
deemed to be underwriting discounts and commissions under the Securities Act.
Any such commissions, as well as other expenses incurred by the Selling
Stockholder and applicable transfer taxes, are payable by the Selling
Stockholder.
EXPERTS
The financial statements incorporated by reference in this Prospectus and
Registration Statement by reference to the Annual Report on Form 10-K, as
amended, of WHX Corporation for the year ended December 31, 1994 have been so
incorporated in reliance on the report (which contains two explanatory
paragraphs related to the corporate reorganization which occurred during 1994
and the filing of an initial public offering registration statement by
Wheeling-Pittsburgh Corporation, a wholly-owned subsidiary of the Company,
discussed in Notes A and B, respectively, to the financial statements) of Price
Waterhouse LLP, independent accountants, given on authority of said firm as
experts in auditing and accounting.
LEGAL MATTERS
The validity of the Securities will be passed upon for WHX and the Selling
Stockholder by Olshan Grundman Frome & Rosenzweig LLP, New York, New York.
Marvin L. Olshan, a member of Olshan Grundman Frome & Rosenzweig LLP, is a
director and Secretary of WHX and owns 1,000 shares of Common Stock and options
to purchase 32,000 shares of Common Stock. Steven Wolosky, also a member of
Olshan Grundman Frome & Rosenzweig LLP, is the Assistant Secretary of WHX and
holds options, directly or indirectly, to purchase 19,500 shares of Common
Stock.
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
No dealer, salesman or any other person is authorized to give any information or 188,519 Shares of Common Stock
to make any representations in connection with this offering not contained in
this Prospectus and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or any Selling WHX CORPORATION
Stockholder. This Prospectus does not constitute an offer to sell or
solicitation of any offer to buy the security other than the Securities offered
by this Prospectus or an offer by any person in any jurisdiction where such an
offer or solicitation is not authorized or is unlawful. The delivery of this
Prospectus shall not, under any circumstances, create any implication that
information herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
Page
Available Information.................................. 2
Incorporation of Certain Documents
By Reference......................................... 2
The Company............................................ 4 PROSPECTUS
Investment Considerations.............................. 5
Use of Proceeds........................................ 12
Selling Stockholder.................................... 12
Plan of Distribution................................... 12
Experts................................................ 13
Legal Matters.......................................... 13
October __, 1995
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses, other than underwriting discounts and
commissions, in connection with the offerings of the Securities are as follows:
SEC Registration Fee.................................. $682.57
"Blue Sky" Fees and Expenses.......................... 1,000.00
Printing and Engraving Expenses....................... 1,000.00
Legal Fees and Expenses............................... 10,000.00
Accounting Fees and Expenses.......................... 5,000.00
Transfer Agent's Fees and Expenses.................... 500.00
-----------
Total........................................ $ 18,182.57
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation of the Registrant provides that the
Registrant shall indemnify to the extent permitted by Delaware law any person
whom it may indemnify thereunder, including directors, officers, employees and
agents of the Registrant. Such indemnification (other than an order by a court)
shall be made by the Registrant only upon a proper determination that the
individual met the applicable standard of conduct. Advances of such
indemnification may be made pending such determination. Such determination shall
be made by a majority vote of a quorum consisting of disinterested directors, or
by independent legal counsel or by the stockholders. In addition, the
Registrant's Certificate of Incorporation eliminates, to the extent permitted by
Delaware law, personal liability of directors to the Registrant and its
stockholders for monetary damages for breach of fiduciary duty as directors.
The Registrant also maintains a directors and officers insurance and
company reimbursement policy. The policy insures directors and officers against
unindemnified loss arising from certain wrongful acts in their capacities and
reimburses the Registrant for such loss for which the Registrant has lawfully
indemnified the directors and officers. The policy contains various exclusions,
none of which relates to the offering hereunder.
Section 145(a) of the Delaware Corporation Law (the "DGCL") provides in
relevant part that "a corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another
II-1
<PAGE>
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, unlawful." With respect to derivative actions, Section 145(b) of
the DGCL provides in relevant part that "[a] corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor . . . [by reason of his service
in one of the capacities specified in the preceding sentence] against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper."
The Registrant has entered into an Indemnification Agreement with each
of its directors and officers whereby is has agreed to indemnify each director
and officer from and against any and all expenses, losses, claims, damages and
liability incurred by such director or officer for or as a result of action
taken or not taken while such director was acting in his capacity as a director,
officer, employee or agent of the Registrant.
ITEM 16. EXHIBITS
(a) Exhibits:
EXHIBIT NO.
*2.1 Asset Purchase Agreement between Klockner Namasco
Corporation and Wheeling-Pittsburgh Steel Corporation
dated September 30, 1995.
**4(a) Form of Common Stock Certificate.
*4(b) Registration Rights Agreement between WHX and
Klockner Namasco Corporation September 30, 1995.
***5 Opinion of Olshan Grundman Frome & Rosenzweig LLP
with respect to legality of the Common Stock.
*23.1 Consent of Olshan Grundman Frome & Rosenzweig LLP,
included in Exhibit No. 5.
*23.2 Consent of Price Waterhouse LLP, contained on page
II-6.
*24 Power of Attorney, included on page II-5.
II-2
<PAGE>
- ---------------------
* Filed herewith.
** Incorporated by reference to the Company's Registration
Statement on Form S-4, filed with the Commission on May 12,
1994 (Commission File No. 33-53591), as amended.
*** To be filed by amendment.
All schedules for which provision is made in the applicable accounting
regulations of the Commission are not required under the related instructions or
are not applicable, and therefore have been omitted.
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of an action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in
II-3
<PAGE>
reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
of 1933 shall be deemed to be part of this Registration Statement as of the time
it was declared effective.
(c) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and State of New York on the 30th of October, 1995.
WHX CORPORATION
By: /s/ Ronald LaBow
-------------------------
Ronald LaBow
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ronald LaBow, Marvin L. Olshan and James L.
Wareham, his true and lawful attorney-in-fact, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments including
post-effective amendments to this registration statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting along, may lawfully do
or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- -----
/s/ Ronald LaBow Director October 30, 1995
- --------------------------
Ronald LaBow
/s/ Frederick G. Chbosky Principal Financial October 30, 1995
- -------------------------- Officer and Principal
Frederick G. Chbosky Accounting Officer
/s/ Robert A. Davidow Director October 30, 1995
- -------------------------
Robert A. Davidow
/s/ Marvin L. Olshan Director October 30, 1995
- -------------------------
Marvin L. Olshan
/s/ Paul W. Bucha Director October 30, 1995
- --------------------------
Paul W. Bucha
/s/ William Goldsmith Director October 30, 1995
- --------------------------
William Goldsmith
/s/ James L. Wareham Director and Principal October 30, 1995
- --------------------------- Executive Officer
James L. Wareham
/s/ Raymond S. Troubh Director October 30, 1995
- ---------------------------
Raymond S. Troubh
/s/ Neil D. Arnold Director October 30, 1995
- ---------------------------
Neil D. Arnold
II-5
<PAGE>
EXHIBIT 23.2
CONSENT
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 6, 1995, except for Note B which is as of February 24, 1995, appearing
on page 21 of WHX Corporation's Annual Report on Form 10-K, as amended, for the
year ended December 31, 1994. We also consent to the references to us under the
heading "Experts" in such Prospectus.
Price Waterhouse LLP
Pittsburgh, PA
October 30, 1995
II-6
<PAGE>
EXHIBIT INDEX
PAGE
EXHIBIT NO. DESCRIPTION NUMBER
Exhibit *2.1 Asset Purchase Agreement between 26
Klockner Namasco Corporation and
Wheeling-Pittsburgh Steel Corporation
dated September 30, 1995
Exhibit **4(a) Form of Common Stock Certificate
Exhibit *4(b) Registration Rights Agreement between 70
WHX and Klockner Namasco Corporation
September 30, 1995
Exhibit ***5 Opinion of Olshan Grundman Frome &
Rosenzweig LLP with respect to
legality of the Common Stock
Exhibit *23.1 Consent of Olshan Grundman Frome &
Rosenzweig LLP, included in Exhibit
No. 5
Exhibit *23.2 Consent of Price Waterhouse LLP,
contained on page II-6
Exhibit *24 Power of Attorney, included on Page
II-5
* Filed herewith.
** Incorporated by reference to the Company's Registration
Statement on Form S-4, filed with the Commission on May 12,
1994 (Commission File No. 33-53591), as amended.
*** To be filed by amendment.
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated September 30, 1995, is by and between Klockner
Namasco Corporation, a Delaware corporation ("Seller"), and Wheeling-Pittsburgh
Steel Corporation, a Delaware corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is in the business of manufacturing and selling roofing
and siding products through its Namasco Building Products Division (the
"Division"); and WHEREAS, Buyer desires to purchase and Seller desires to sell
certain of the assets of the Division (a) located at Seller's (i) Norcross,
Georgia facility and associated warehouses (the "Norcross Facility"), (ii)
Memphis, Tennessee facility (the "Memphis Facility"), (iii) Clinton, North
Carolina facility (the "Clinton Facility") and (iv) Ocoee, Florida facility (the
"Ocoee Facility") and (b) on consignment with a customer of Seller located in
Holmesville, Ohio on the terms and subject to the conditions set forth in this
Agreement; NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, Buyer and Seller hereby agree as follows:
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<PAGE>
ARTICLE I. ASSETS TO BE PURCHASED
SECTION 1.1. DESCRIPTION OF ASSETS. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing (as hereinafter defined),
Seller shall convey, sell, transfer, assign and deliver to Buyer, and Buyer
shall purchase from Seller, all right, title and interest of Seller at the
Closing in and to those certain operating assets, properties and rights
(contractual or otherwise) of Seller which are used in connection with the
business and operations of the Division (the "Business") as set forth below: (a)
The machinery, equipment, tooling, parts, furniture, supplies and other tangible
personal property (the "Personal Property") listed on Schedule 1.1(a);
(b) All prime raw materials, component parts,
work-in-process and finished goods inventory and other primary
inventory of the Division on hand at Closing (the "Inventory") but
excluding all Inventory determined by the Buyer to not be "prime
material" (the "Non-Prime Inventory") and listed on Schedule 1.1(b);
(c) The trademarks used in conducting the Business and all
applications therefor, registrations thereof and licenses, sublicenses
or agreements in respect thereof, which Seller owns or has the right to
use or to which Seller is a party and all filings, registrations or
issuances of any of the foregoing with or by any Federal, state, local
or foreign regulatory, administrative or governmental agency listed on
Schedule 1.1(c) (collectively, the "Marks");
(d) All leases of equipment, vehicles or other tangible
personal property (the "Personal Property Leases") listed on Schedule
1.1(d);
(e) All purchase and sales orders (the "Contracts") listed
on Schedule 1.1(e);
(f) All books of account, customer lists, files, papers and
records used in conducting the Business (all of which shall be subject
to Seller's right to inspect and copy at Seller's expense during
Buyer's normal business hours); and
(g) All goodwill relating to the Division.
-3-
<PAGE>
Notwithstanding the foregoing, there shall be excluded from the assets,
properties, rights (contractual and otherwise) and business of Seller to be
conveyed, sold, transferred, assigned and delivered to Buyer under this
Agreement including, without limitation, the following: (i) cash and cash
equivalents and investment securities, (ii) all accounts receivables (the
"Receivables") relating to or arising out of the operation of the Division,
(iii) notes receivable from Seller and third parties to the Division, (iv) tax
refunds paid to Seller, whether or not such tax refunds relate to the Division,
(v) all corporate minute books, stock records, tax returns and supporting
schedules, books of original financial entry and internal accounting documents
and records (all which shall be subject to Buyer's right to inspect and copy at
Buyer's expense during Seller's normal business hours) and (vi) Non-Prime
Inventory. All of the assets, properties, rights (contractual and otherwise) and
business to be conveyed, sold, transferred, assigned and delivered to Buyer
pursuant to this Section 1.1 are hereinafter collectively referred to as the
"Property."
SECTION 1.2. NON-ASSIGNMENT OF CERTAIN PROPERTY. To the extent that the
assignment hereunder of any of the Personal Property Leases or Contracts shall
require the consent of any other party (or in the event that any of the same
shall be non- assignable), neither this Agreement nor any action taken pursuant
to its provisions shall constitute an assignment or an agreement to assign if
such assignment or attempted assignment would constitute a breach thereof or
result in the loss or diminution thereof; provided, however, that in each such
case, Seller shall use its
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<PAGE>
best efforts to obtain the consents of such other party to an assignment to
Buyer. If such consent is not obtained, Seller shall cooperate with Buyer in any
reasonable arrangement designed to provide for Buyer the benefits of any such
Personal Property Lease or Contract not assigned including, without limitation,
enforcement, for the account and benefit of Buyer, of any and all rights of
Seller against any other person with respect to any such Personal Property Lease
or Contract; provided, however, that all expenses related thereto shall be borne
by Buyer.
SECTION 1.3. ACCOUNTS RECEIVABLE. At the Closing, Seller will deliver
to Buyer a statement showing the name and amount of all Receivables existing as
of the Closing other than any Receivables referred to a collection agency by
Seller prior to the Closing Date (as hereinafter defined). Buyer will use
reasonable commercial efforts to assist Seller in collecting all Receivables
during the 90-day period following the Closing (the "Collection Period"), but in
no event will Buyer be obligated to institute suit, retain a collection agency
or institute any other extraordinary means of collection to collect any such
Receivable. In the absence of any dispute by a Receivable debtor concerning a
Receivable, all monies received from such debtor by the Buyer during the
Collection Period will be applied to the Receivable until the account is fully
paid before any monies are applied to Buyer's account with such debtor arising
from Buyer's operation of the Division. In the event that a Receivable debtor
notifies Buyer of a dispute by such debtor concerning a Receivable, all monies
received from such debtor by the Buyer will be applied to the undisputed
portion, if any, of such debtor's account with Seller
-5-
<PAGE>
until such undisputed portion is fully paid before any monies are applied to
Buyer's account with such debtor. Buyer shall pay over to Seller promptly after
each week after the Closing an amount equal to any Receivable paid to Buyer
during the preceding week. Buyer acknowledges that Seller shall be free to take
all action, including the institution of legal proceedings, to collect any and
all monies owing to Seller with respect to any Receivable, provided all such
collection efforts shall be consistent with Seller's past practices. Seller
acknowledges that Buyer has a substantial interest in the continued goodwill of
the Division and the current relationships between the Division and its account
debtors, and agrees that Seller will use commercially reasonable efforts not to
interfere unduly with Buyer's relationships with the Division's account debtors.
ARTICLE II. ASSUMPTION OF OBLIGATIONS
SECTION 2.1. ASSUMPTION OF CERTAIN LIABILITIES. Buyer shall assume and
perform all liabilities and obligations arising under the Personal Property
Leases and the Contracts (except to the extent noted on Schedule 1.1(e)), to the
extent such liabilities and obligations are first required to be performed after
the Closing. The liabilities of Seller being assumed by Buyer are hereinafter
referred to as the "Assumed Liabilities."
SECTION 2.2. LIABILITIES NOT ASSUMED. With the exception of the Assumed
Liabilities, Buyer shall not by execution and performance of this Agreement, or
otherwise, assume or otherwise be responsible for any liability or obligation of
any nature of Seller, whether relating to the Division or any of Seller's other
assets, operations, businesses or activities, or
-6-
<PAGE>
claims of such liability or obligation, matured or unmatured, liquidated or
unliquidated, fixed or contingent, or known or unknown, whether arising out of
occurrences prior to, at or after the date hereof including, without limitation,
any liability (i) as of the Closing for wages, salaries, severance, pension or
welfare benefits including, without limitation, accrued sick days and vacation
days, for employees or former employees of the Division (except to the extent
that Buyer receives the benefit of a pro rata adjustment pursuant to Section 3.5
hereof for any of such costs at Closing), (ii) as of the Closing for employee
medical benefits based upon claims arising prior to the Closing, whether or not
notice of such claim is received prior to or after Closing, (iii) for
retroactive premium adjustments for workers' compensation, (iv) for commissions
and other fees earned prior to the Closing by agents, salesmen and other
employees or former employees of the Division, (v) under any workers'
compensation claims based upon claims arising prior to the Closing, whether or
not notice of such claim is received prior to or after the Closing and (vi)
claims of any nature or kind relating to or arising out of products shipped
prior to the Closing.
ARTICLE III. PURCHASE PRICE
SECTION 3.1. CONSIDERATION. (a) Upon the terms and subject to the
conditions set forth in this Agreement, in consideration for the Property and
Seller's covenant not to compete set forth in Section 5.1 hereof and in full
payment therefor, at the Closing Buyer shall (i) assume the Assumed Liabilities
as provided in Section 2.1 hereof, (ii) deliver to Seller a certificate or
certificates representing shares
-7-
<PAGE>
of restricted common stock, par value $.01 per share (the "Common Stock"), of
WHX Corporation ("WHX") in accordance with Section 3.1(b) hereof and (iii) pay
to Seller the consideration in the form and quantities described in, and in
accordance with, Section 3.1(c) hereof (collectively, the "Purchase Price").
(b) (i) The number of shares of Common Stock of WHX (the "WHX Common
Stock") to be delivered by Buyer pursuant to Section 3.1(a) hereof shall be
initially determined to be equal to the number (rounded to the highest whole
number) derived by dividing (x) Two Million Dollars ($2,000,000) by (y) the
"Average Market Price" (as hereinafter defined). Average Market Price shall mean
$11.875, representing the average of the daily closing price of WHX Common Stock
for the ten consecutive trading days preceding the Closing Date. Notwithstanding
the foregoing, to the extent that the Average Market Price is different from the
average of the daily closing price of WHX Common Stock for the ten consecutive
trading days preceding the date upon which a registration statement (the
"Registration Statement") with respect to the WHX Common Stock to be delivered
hereunder is filed (the "Subsequent Average Market Price"), then an adjustment
shall be made to the number of shares of WHX Common Stock to be delivered by
Buyer to Seller in accordance with this Section 3.1(b). The amount of such
adjustment shall be equal to the product (which may be positive or negative) of
(A) the difference between the Average Market Price and the Subsequent Average
Market Price multiplied by (B) the number of shares of WHX Common Stock to be
delivered by Buyer to Seller at Closing (the "Adjustment Amount").
-8-
<PAGE>
(ii) (A) If the Average Market Price exceeds the Subsequent Average
Market Price, Buyer shall, as soon as practicable thereafter, deliver to Seller
an additional certificate representing the sum of (X) the Adjustment Amount and
(Y) the Interest Factor (as hereinafter defined).
(B) If the Average Market Price is less than the Subsequent Average
Market Price such that the Adjustment Amount reflects a decrease in the number
of shares of WHX Common Stock to be delivered by Buyer to Seller in accordance
with Section 3.1(a) hereof, but such Adjustment Amount is less than the Interest
Factor, Buyer shall, as soon as practicable thereafter, deliver to Seller an
additional certificate representing the net amount of the Interest Factor.
(C) If the Average Market Price is less than the Subsequent Average
Market Price such that the Adjustment Amount reflects a decrease in the number
of shares of WHX Common Stock to be delivered by Buyer to Seller in accordance
with Section 3.1(a) hereof, and such Adjustment Amount exceeds the Interest
Factor, Seller shall promptly return to Buyer the stock certificate previously
delivered thereby and, as soon as practicable thereafter, Buyer shall deliver to
Seller a certificate representing (i) the number of shares of WHX Common Stock
previously delivered thereto plus (ii) the Interest Factor less (iii) the
foregoing Adjustment Amount. (D) The Interest Factor represents shares of WHX
Common Stock and shall equal:
($2,000,000) x (.09) x Z
----
365
------------------------------
Subsequent Average Market Price
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<PAGE>
with "Z" representing the number of days elapsed between the Closing Date and
the date upon which the Registration Statement is filed (the "Filing Date").
(iii) (A) From the Filing Date until the date upon which the
Registration Statement is declared effective (the "Effective Date") by the
Securities and Exchange Commission (the "Commission"), interest shall accrue on
the $2,000,000 represented by the WHX Common Stock to be delivered by Buyer to
Seller hereunder at the rate of 9% per annum. Buyer shall pay Seller such
interest in cash within five business days of the Effective Date.
(B) Within one business day following the Effective Date, Buyer
shall cause the delivery to Seller of an opinion of counsel, from counsel
reasonably satisfactory to Seller, with respect to (i) the effectiveness of the
Registration Statement and (ii) the due authorization and valid issuance of the
shares of WHX Common Stock delivered by Buyer to Seller hereunder.
(iv) In the event Seller, following the Effective Date, is prohibited
from trading the WHX Common Stock to be delivered thereto hereunder by the terms
of the Registration Rights Agreement (as hereinafter defined), interest shall
accrue on the value of the WHX Common Stock then owned by Seller at such time at
the rate of 9% per annum until such time as Seller is free to trade the WHX
Common Stock in accordance with the Registration Rights Agreement. Buyer shall
pay Seller such interest in cash within five business days of the date upon
which such trading prohibition terminates.
(v) Anything set forth in this Agreement to the contrary
notwithstanding, if the Registration Statement is not declared effective by the
Commission on or prior to December 31, 1995,
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<PAGE>
(A) Buyer shall pay to Seller, within five business days thereafter, $2,000,000
plus interest in cash at the rate of 9% per annum from the Closing Date through
and including December 31, 1995, (B) Buyer shall have no obligation whatsoever
to deliver shares of WHX Common Stock to Seller and (C) Seller shall promptly
return to Buyer any certificates representing shares of WHX Common Stock
previously delivered to Seller by Buyer.
(c) (i) In consideration of the Inventory in the form of raw materials
(the "Raw Materials Inventory") to be purchased by Buyer in accordance with this
Agreement and at Gross Book Value (as hereinafter defined), Buyer shall, subject
to Section 3.1(c)(ii) hereof, transfer to Seller an equivalent dollar value of
(A) hot dipped galvanized coils, (B) hot rolled coils, (C) cold rolled coils or
(D) a combination thereof (collectively, the "Buyer Raw Materials"), in the
quantities and of the quality set forth on, and priced in accordance with,
Schedule 3.1. Buyer Raw Materials shall be adjusted to reflect the value of that
certain product set forth on Schedule 3.1 which has previously been sold to
Seller by Buyer but, as of the date of Closing, has not been paid for by Seller.
Upon the effectiveness of the Closing, Seller shall be deemed to have timely and
fully paid for all such product. Interest shall accrue on any unpaid balance of
Buyer Raw Materials due Seller not received by 12:00 noon on the last business
day of each month during which such balance is due at a rate of .75% per month
following the Closing and such interest shall be payable by Buyer in the form of
Buyer Raw Materials.
(ii) In consideration of the finished Inventory (the "Finished
Inventory") to be purchased by Buyer in accordance with
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<PAGE>
this Agreement, Buyer shall pay to Seller, in cash by wire transfer of
immediately available funds to a bank account designated by Seller, an amount
equal to the Gross Book Value of the Finished Inventory up to a maximum of One
Million Three Hundred Thousand Dollars ($1,300,000); provided, however, that if
the Gross Book Value of the Finished Inventory exceeds $1,300,000, Buyer shall
pay to Seller such excess in the form of Buyer Raw Materials, the type, quality
and quantities of which shall be mutually agreed upon by Buyer and Seller.
Anything to the contrary set forth in this Agreement notwithstanding, if the
Gross Book Value of the Finished Inventory is less than $1,300,000, the
difference (up to $1,300,000) shall be paid by Buyer to Seller, in cash by wire
transfer of immediately available funds to a bank account designated by Seller,
in consideration of the Raw Materials Inventory to be purchased by Buyer
pursuant to Section 3.1(c)(i) hereof. For purposes of this Section 3.1(c),
"Gross Book Value" shall mean the sum of (A) the actual material cost paid by
Seller, (B) actual cost of inbound freight and (C) storage, processing, handling
and manufacturing charges, each of which shall be consistent with Seller's past
practices.
SECTION 3.2. ADJUSTMENT OF INVENTORY.
(a) Immediately after the Closing Date, Seller and Buyer shall jointly
audit the Gross Book Value of Inventory other than Non-Prime Inventory (the
"Inventory Valuation"). The accounting procedures used to prepare the Inventory
Valuation shall include the taking of a physical inventory on the day preceding
the Closing Date or such other date as shall be mutually agreed upon by Buyer
and Seller. Buyer and its independent public accountants shall be
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entitled to participate in the taking of such physical inventory. During the
ten-day period following the Closing Date, Buyer and its accountants shall be
permitted to discuss with Seller and its accountants the proposed Inventory
Valuation and Buyer and its accountants shall from and after the Closing Date
have full access upon reasonable notice and at all reasonable times during
normal business hours to the work papers and supporting records of Seller and
its accountants related to the Inventory Valuation.
(b) If within fifteen (15) days after the Closing Date, Buyer notifies
Seller in writing that modifications are required to be made in order for the
Inventory Valuation to present fairly the Gross Book Value of the Inventory in
accordance with this Agreement (the "Modification Notice"), the Inventory
Valuation shall be so modified effective as of the fifteenth (15) day after
Seller's receipt of the Modification Notice; provided, however, if within
fourteen (14) days after receipt of the Modification Notice from Buyer, Seller
notifies Buyer of Seller's disagreement with respect to any of the
modifications, the modifications subject to such disagreement shall be
determined by a "big six" accounting firm mutually acceptable to Buyer and
Seller (the "Independent Public Accountant") in accordance with the terms of
this Agreement, on the basis of such procedures as the Independent Public
Accountant, in its sole judgment, deems applicable and appropriate, taking into
account the nature of the issues, the amount(s) in dispute and the respective
positions asserted by the parties. If Buyer does not notify Seller that
modifications to the Inventory Valuation are required within such fifteen (15)
day period, Buyer shall be deemed to have accepted the Inventory Valuation;
provided, however, that
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such deemed acceptance of Buyer shall not modify or alter the representations
and warranties of Seller contained in this Agreement. The Independent Public
Accountant shall review the disputed matters and as promptly as practicable
deliver to Buyer and Seller a statement in writing setting forth its
determination as to the proper treatment of the modifications as to which there
was disagreement, and such determination shall be final and binding upon the
parties hereto without any further right of appeal. All charges of the
Independent Public Accountant incurred in making such determination shall be
borne equally by Buyer and Seller.
(c) If the Gross Book Value of the Inventory reflected on the Inventory
Valuation, as may be adjusted pursuant to Section 3.2(b), exceeds the estimated
value paid at Closing, the Purchase Price shall be increased by an amount equal
to the amount of such excess (such amount a "Purchase Price Increase"). If the
Gross book Value of Inventory reflected on the Inventory Valuation, as may be
adjusted pursuant to Section 3.2(b), is less than the estimated value paid at
Closing, the Purchase Price shall be decreased by an amount equal to the amount
of such shortfall (such amount a "Purchase Price Decrease").
(d) If there is a Purchase Price Increase, Buyer shall pay to Seller,
on such date as shall be mutually agreed upon by Buyer and Seller following the
date of the final determination thereof, the amount of the Purchase Price
Increase. If there is a Purchase Price Decrease, Seller shall pay to Buyer, on
such date as shall be mutually agreed upon by Buyer and Seller following the
date of the final determination thereof, the amount of the Purchase Price
Decrease. Any payment made by Buyer to Seller pursuant to
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this Section 3.2(d) shall be payable in accordance with Section 3.1(c) hereof.
SECTION 3.3. PURCHASE PRICE ALLOCATION. Seller and Buyer hereby agree
that the Purchase Price for the Property shall be allocated for purposes of this
Agreement and for Federal, state and local tax purposes as set forth on an
allocation certificate in the form attached hereto as Exhibit A (the "Allocation
Certificate") to be executed by Buyer and Seller at the Closing. Buyer and
Seller shall file all Federal, state, local and foreign tax returns, including
Internal Revenue Form 8594, in accordance with the allocation set forth on such
Allocation Certificate. Any aggregate Purchase Price Increase or Purchase Price
Decrease shall adjust the dollar value allocated to the asset categories to
which it is attributable.
SECTION 3.4. ADJUSTMENTS. The Closing shall be deemed to occur as of
11:59 p.m. on the Closing Date and for all purposes, any adjustments under this
Agreement including, without limitation, pursuant to Section 3.2 hereof, shall
be deemed to be made as of such time. Section 3.5. Prorations. Seller and Buyer
shall pro-rate between them, as of the Closing, all personal property taxes,
sewer, water, gas, electrical and similar utility charges applicable to the
Business (collectively, the "Pro Rated Items"). The Pro Rated Items shall be
calculated as soon as practical after the Closing by Seller and Buyer but in no
event later than thirty (30) days after Closing and the appropriate party shall
be paid within five (5) business days of the determination thereof.
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Buyer represents and warrants to Seller that:
(a) CORPORATE EXISTENCE. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
(b) AUTHORIZATION; VALIDITY. Buyer has all requisite
corporate power and authority to enter into this Agreement, perform its
obligations hereunder and to consummate the transactions contemplated
hereby. All necessary corporate action has been taken by Buyer with
respect to the execution, delivery and performance by Buyer of this
Agreement and the consummation of the transaction contemplated hereby.
Assuming the due execution and delivery of this Agreement by Seller,
this Agreement is a legal, valid and binding obligation of Buyer,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting the enforcement of creditors'
rights generally, and the discretion of the court before which any
proceeding therefore may be brought.
(c) LITIGATION. There is no claim, litigation, action, suit,
proceeding, investigation or inquiry, administrative or judicial,
pending or, to the best knowledge of Buyer, threatened against Buyer,
at law or in equity, before any Federal, state or local court or
regulatory agency, or other governmental authority, which might have an
adverse effect on Buyer's ability to perform any of its obligations
under this Agreement or upon the consummation of the transactions
contemplated by this Agreement.
(d) NO BREACH OF STATUTE OR CONTRACT. Neither the execution
and delivery of this Agreement nor the consummation by Buyer of the
transactions contemplated hereby nor compliance by Buyer with any of
the provisions hereof will violate or cause a default under any statute
(domestic or foreign), judgment, order, writ, decree, rule or
regulation of any court or governmental authority applicable to Buyer
or any of its material properties; breach or conflict with any of the
terms, provisions or conditions of the Certificate of Incorporation, as
amended, or By-laws, as amended, of Buyer; or violate, conflict with or
breach any agreement, contract, mortgage, instrument, indenture or
license to which Buyer is party or by which Buyer is or may be bound,
or constitute a default (in and of itself or with the giving of notice,
passage of time or both) thereunder, or result in the creation or
imposition of any encumbrance upon, or give to any other party or
parties, any claim, interest or right, including rights of termination
or cancellation in, or with respect to any of Buyer's properties.
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(e) BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by or on
behalf of Buyer in such a manner as not to give rise to any claim
against Buyer, Seller or the Property for a finder's fee, brokerage
commission, advisory fee or other similar payment.
(f) WHX COMMON STOCK. The authorized capital stock of WHX
consists of 60,000,000 shares of common stock, par value $.01 per
share, and 10,000,000 shares of Preferred Stock, par value $.10 per
share. As of September 27, 1995, 27,821,756 shares of WHX Common Stock
were issued and outstanding. All shares of WHX Common Stock to be
issued and delivered to Seller in connection with the transactions
contemplated hereby will be duly and validly issued, fully paid and
nonassessable. There is no personal liability, and there are no
preemptive or similar rights, attached to the WHX Common Stock.
(g) Buyer Raw Materials. The value of the Buyer Raw Materials
reflected in Buyer's financial statements has been determined in
accordance with generally accepted accounting principles applied on a
basis consistent with past practice and such Buyer Raw Materials have
been valued for purposes of such financial statements in accordance
with Buyer's normal inventory policy of stating inventory at the lower
of cost or market. The Buyer Raw Materials to be delivered to Seller
pursuant to Section 3.1(c) hereof do not include any non-prime scrap or
regrind materials. The Buyer Raw Materials are free and clear of all
pledges, liens, security interests, encumbrances, charges, equities and
other restrictions whatsoever.
Section 4.2. Seller represents and warrants to Buyer that:
(a) CORPORATE EXISTENCE. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power to own, operate or lease
the Property and to carry on the Business as now being conducted. As a
result of the Business conducted by the Division or the character or
location of the Property, Seller is duly qualified to do business and
is in good standing in those jurisdictions listed on Schedule 4.2(a),
which are the jurisdictions where the Property is located.
(b) AUTHORIZATION: VALIDITY. Seller has all requisite
corporate power and authority to enter into this Agreement, perform its
obligations hereunder and to consummate the transactions contemplated
hereby without the approval of any third party except as set forth on
Schedule 4.2(b). All necessary corporate action has been taken by
Seller with respect to the execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions
contemplated hereby. Assuming the due execution and delivery
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of this Agreement by Buyer, this Agreement is a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general application affecting the
enforcement of creditors' rights generally, and the discretion of the
court before which any proceeding therefor may be brought.
(c) NO BREACH OF STATUTE OR CONTRACT. Except as set forth on
Schedule 4.2(c), neither the execution and delivery of this Agreement
nor the consummation by Seller of the transactions contemplated hereby
nor compliance by Seller with any of the provisions hereof will violate
or cause a default under any statute (domestic or foreign), judgment,
order, writ, decree, rule or regulation of any court or governmental
authority applicable to Seller which would have a materially adverse
effect on the Property; breach or conflict with any of the terms,
provisions or conditions of the Certificate of Incorporation, as
amended, or By-Laws, as amended, of Seller; or violate, conflict with
or breach any material agreement, contract, mortgage, instrument,
indenture or license to which Seller is a party or by which Seller is
or may be bound with respect to the Property or the Business, or
constitute a material default (in and of itself or with the giving of
notice, passage of time or both) thereunder, or result in the creation
or imposition of any encumbrance upon, or give to any other party or
parties any claim, interest or right, including rights of termination
or cancellation in, or with respect to the Property.
(d) SUBSIDIARIES. Seller has no subsidiaries which conduct or
carry on the Business, or equity investments in any other corporation,
association, partnership, joint venture or other entity which conducts
or carries on the Business.
(e) FINANCIAL STATEMENTS. The following financial statements
of Seller, which have been furnished previously to Buyer by Seller and
initialed for identification by officers of Seller and Buyer are true
and correct in all material respects and, with respect to the Business
and the Division, complete, have been derived from and are in
accordance with the books and records of Seller and fairly present the
financial condition of the Division as at the dates stated and the
results of operations of the Division for the periods then ended: the
financial statements and notes thereto included in the Building
Products Information Package, dated May 31, 1995 (the "Financial
Statements").
(f) LIABILITIES. Except as set forth on Schedule 4.2(f),
Seller has no liability or obligation of any nature (whether
liquidated, unliquidated, accrued, absolute, contingent or otherwise
and whether due or to become due) in respect of the Property except:
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(i) those set forth or reflected in the Financial
Statements which have not been paid or discharged since the
date thereof;
(ii) those arising under agreements or other commitments
expressly identified in any Schedule hereto including, but
not limited to, the Personal Property Leases and the
Contracts; and
(iii) current liabilities arising in the ordinary and
usual course of the Business subsequent to May 31, 1995 which
are accurately reflected on its books and records in a manner
consistent with past practice.
(g) MARKS. Schedule 1.1(c) sets forth all trademarks used in
conducting the Business and all applications therefor, registrations
thereof and licenses, sublicenses or agreements in respect thereof
which Seller owns or has the right to use or to which Seller is a party
and all filings, registrations or issuances of any of the foregoing
with or by any Federal, state, local or foreign regulatory,
administrative or governmental agency or agencies. Except as set forth
on Schedule 4.2(g), Seller is the sole and exclusive owner of all
right, title and interest in and to the Marks free and clear of all
liens, claims, charges, equities, rights of use, encumbrances and
restrictions whatsoever. To the best knowledge of Seller and except as
disclosed herein, the Business as conducted prior to the Closing, and
the sale by Seller and ownership by Buyer of any of the Property was
not, is not and will not be in contravention of any of the Marks or
other proprietary right of any third party.
Except as set forth in Schedule 4.2(g), none of the Marks has been
hypothecated, sold, assigned or licensed by Seller or, to the best
knowledge of Seller, any other person, corporation, firm or other legal
entity; or infringe upon or violate the rights of any person, firm,
corporation, or other legal entity, Except as set forth in Schedule
4.2(g), Seller has not given any indemnification against trademark
infringement as to any equipment, materials, products, services or
supplies which the Division uses, licenses or sells; there is not
pending or, to the best knowledge of Seller, threatened any claim to
sell, engage in or employ any such product, process, method or
operation.
(h) COMPLIANCE WITH LAWS. Except as set forth on Schedule
4.2(h), Seller is in compliance in all material respects with all
laws, ordinances, regulations and orders applicable to the Property
and has no notice of any material violations, whether actual, claimed
or alleged, thereof.
(i) BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by or on
behalf of Seller in such a manner as not to give rise to any claim
against Seller or the Property for
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a finder's fee, brokerage commission, advisory fee or other similar
payment.
(j) EMPLOYEES. With respect to the employees of Seller set
forth on Schedule 4.2(j) (the "Scheduled Employees"), there are no
outstanding liabilities or obligations related to their employment by
Seller. With respect to (i) the Scheduled Employees, in the event they
are terminated by Seller and subsequently hired by Buyer following the
Closing, or (ii) any other present or former employee of Seller, Buyer
shall not be subject to any claims of liability whatsoever.
(k) RESTRICTIVE DOCUMENTS OR LAWS. Seller is not a party to
or bound under any, and there is no pending, proposed or, to the best
knowledge of Seller, threatened certificate, mortgage, lien, lease,
agreement, contract, instrument, order, judgment or decree, or any
similar restriction which materially adversely affects, or reasonably
could be expected materially adversely to affect the Property.
(l) TITLE TO PROPERTIES. Except as set forth on Schedule
4.2(l), and except with respect to personal property leased pursuant to
the Personal Property Leases, Seller has marketable title to the
Property. Except as set forth on Schedule 4.2(l), all such properties
are held free and clear of all mortgages, pledges, liens, security
interests, encumbrances and restrictions of any nature whatsoever.
Except as set forth on Schedule 4.2(l) which liens shall be
discharged by Seller prior to the Closing, no financing statement under
the Uniform Commercial Code or similar law naming the Seller as debtor
has been filed in any jurisdiction in respect of the Property, and
Seller is not a party to or bound under any agreement or legal
obligation authorizing any party to file any such financing statement.
All machinery and equipment is being purchased by Buyer in "as
is" and "where is" condition and Seller makes no warranties, express or
implied, of merchantability or fitness for particular purpose.
(m) CONTRACTS AND COMMITMENTS. Schedules 1.1(d) and 1.1(e)
list all personal property leases, and purchase and sales orders used
in conducting or related to the Business, other than purchase and sale
orders incurred in the ordinary course of business of the Division
which are currently in effect and do not exceed $10,000. All of the
Personal Property Leases and the Contracts are valid and binding, in
full force and effect and enforceable in accordance with their
respective provisions, except as enforceability may be limited by
applicable law and general rules of equity. Seller has not assigned,
mortgaged, pledged, encumbered, or otherwise hypothecated any of its
right, title or interest under the Personal Property Lease or the
Contracts. Neither Seller nor, to the best knowledge of Seller, any
other party thereto is in
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material violation of, in default in respect of nor has there occurred
an event or condition which, with the passage of time or giving of
notice (or both), would constitute a material violation or a default of
any Personal Property Lease or Contract. No notice has been received by
Seller claiming any such default by Seller or indicating the desire or
intention of any other party thereto to amend, modify, rescind or
terminate the same.
(n) Inventories. Except as set forth on Schedule 4.2(n), the
Inventory (i) reflected in the Financial Statements has been determined
on a basis consistent with past practice, has been valued for purposes
of the Financial Statements in accordance with the Seller's normal
inventory valuation policy of stating inventory at the lower of cost
(on a first-in, first-out weighted average basis) or market and (ii)
does not include any non-prime scrap or regrind materials. The level of
the Inventory is reasonable by the present circumstances of the
Business. Since the date of the Financial Statements, there have been
no changes in the Inventory except changes in the ordinary course of
business of the Division. Except as set forth on Schedule 4.2(n) which
liens will be discharged at or prior to the Closing, the Inventory is
free and clear of all pledges, liens, security interests, encumbrances,
charges, equities and other restrictions whatsoever.
(o) Books of Account: Records. The general ledgers, books of
account and other records of Seller in respect of the Business are in
all material respects complete and correct, have been maintained in
accordance with good business practices and the matters contained
therein are appropriately and accurately reflected in the Financial
Statements.
(p) Credit Terms; Product Warranties. Schedule 4.2(p) sets
forth all the terms and conditions of credit given to any customer of
the Division in the ordinary course and all discounts given by Seller
to its customers. Schedule 4.2(p) sets forth a copy of Seller's
standard warranties and guarantees and any material departures
therefrom.
(q) Clinton Facility. Seller has removed a certain barrel of
dye located at the Clinton Facility and caused the remediation of
surrounding soils and groundwater to the extent such soils or
groundwater have become contaminated due to such barrel of dye and
required remediation pursuant to law or pursuant to regulatory order.
(r) Investment Representation. Seller will acquire the shares
of WHX Common Stock to be delivered to it pursuant to this Agreement
for investment and not with a view to the resale or distribution
thereof. Seller is an "accredited investor" as such term is defined in
Rule 501 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), or has such knowledge and experience in financial
and
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business matters that it is capable of evaluating the merits and risks
of the prospective investment and Seller acknowledges that when issued
such shares will be restricted securities which may not be sold without
registration or exemption from registration under the Securities Act
and applicable state securities laws and that, except as provided in
the Registration Rights Agreement, Buyer has no present intention of
registering the shares of WHX Common Stock, and that the certificate
evidencing said shares will bear a legend reading substantially as
follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE ACT OR AN OPINION OF COUNSEL TO THE CORPORATION
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
(s) COMPLETE DISCLOSURE. No representation or warranty made
by Seller in this Agreement and no exhibit, schedule or certificate
furnished to Buyer by or on behalf of Seller pursuant to this Agreement
or in connection with the transactions contemplated hereby, contains or
will contain at Closing, any untrue statement of a material fact or
omits or will omit to state at Closing a material fact necessary to
make the statements contained herein and therein not misleading.
ARTICLE V. COVENANTS
SECTION 5.1. COVENANT NOT TO COMPETE. Seller agrees that it will not,
for a period of five years following the date of this Agreement, engage,
directly or indirectly, whether on its own account or as a shareholder, partner,
joint venturer or agent of any person, firm, corporation or other entity or
otherwise, directly or indirectly, in any or all of the following activities:
(a) enter into or engage in any business which competes with the
Business in the manufacturing and sale of roofing and siding products
(the "Products") to the construction market in the United States; or
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(b) solicit customers or business patronage which results in
competition with the Business for the purchase of Products within the
United States.
Notwithstanding the foregoing, Seller shall be free from this and all
other restrictions to sell, transfer and otherwise dispose of, at its
discretion, (i) the finished Non-Prime Inventory not purchased by Buyer, (ii)
non-prime coils to manufacturers of roofing and siding products and (iii) any
inventory and products not transferred to Buyer following Buyer's physical
inventory related to Seller's customer in Holmesville, Ohio.
SECTION 5.2. COVENANT AGAINST DISCLOSURE. Except as required by law or
court order, Seller agrees not to (a) disclose to any person, association, firm,
corporation or other entity (other than Buyer or those designated in writing by
Buyer) in any manner, directly or indirectly, any confidential information or
data constituting assets of the Business, whether of a technical or commercial
nature, or (b) use, or permit or assist, by acquiescence or otherwise, any
person, association, firm, corporation, limited liability company or other
entity (other than Buyer or those designated in writing by Buyer) to use, in any
manner, directly or indirectly, any such information or data, excepting only use
of such data or information as is at the time generally known to the public and
which did not become generally known through any breach of any provision of
Sections 5.1 and 5.2 hereof by Seller. The parties further agree to be bound by
the terms of that certain Confidentiality Agreement, dated July 12, 1995, by and
between Buyer and Seller; provided, however, that this Agreement shall govern in
the event of any conflict. Anything set forth in this
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Agreement to the contrary notwithstanding, this provision confers on Buyer no
rights with respect to any information applicable to the business of the Buyer
other than the Business.
SECTION 5.3. COVENANT AGAINST HIRING. Seller understands that in
Buyer's view it is essential to the successful operation of the Business
acquired from Seller that Buyer retain substantially unimpaired (to an extent
determined by Buyer in its sole discretion) the Division's operating
organization. Seller shall not take any action which would induce any employee
or representative of the Division not to become or continue as an employee or
representative of Buyer. Without limiting the generality of the foregoing,
Seller shall not without the prior written consent of Buyer, whether directly or
indirectly, through any subsidiary or affiliate, employ, whether as an employee,
officer, agent, consultant or independent contractor, or enter into any
partnership, joint venture or other business association with, any person who
was at the time of Closing an employee, representative or officer of the
Division and who accepts a position of employment with Buyer within 30 days of
Closing, for a period of eight (8) months after such person ceases or has
ceased, for any reason, to be an employee, representative or officer of Seller.
SECTION 5.4. INJUNCTIVE RELIEF. Seller acknowledges and agrees that
Buyer's remedy at law for any breach of any of Seller's obligations under
Section 5.1, 5.2 or 5.3 hereof would be inadequate, and agrees and consents that
temporary and permanent injunctive relief may be granted in a proceeding which
may be
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brought to enforce any provision of Section 5.1, 5.2 or 5.3 without the
necessity of proof of actual damage.
SECTION 5.5. ACCESS TO RECORDS. Except as provided in the next
sentence, between the date hereof and the Closing, Seller shall provide Buyer
and its agents with full access to the properties and records of Seller
pertaining to the Property during normal business hours and shall allow Buyer
and its agents, at Buyer's expense, to make copies of such documents, records
and other information pertaining to the Business as Buyer may request. If this
Agreement is terminated pursuant to Article IX hereof, any documents supplied by
Seller to Buyer or its agents shall be delivered by Buyer and such agents to
Seller.
SECTION 5.6. CONDUCT OF BUSINESS PRIOR TO CLOSING. Seller agrees that
on and or after May 31, 1995 (except for Section 5.6(vi) hereof, in which case
August 9, 1995 shall be the reference date) and prior to the Closing, Seller
shall not in respect of the Property without the consent of Buyer:
(i) incur or become subject to, or agree to incur or become
subject to, any obligation or liability (absolute or contingent) except
current liabilities incurred, and obligations under contracts entered
into, in the ordinary course of business;
(ii) discharge or satisfy any lien or encumbrance or pay any
obligation or liability (absolute or contingent) other than liabilities
payable in the ordinary course of business;
(iii) mortgage, pledge or subject to lien, charge or any
encumbrance, any of the Property or agree so to do;
(iv) sell or transfer or agree to sell or transfer any of the
Property, or cancel or agree to cancel any debt or claim, except in
each case in the ordinary course of business;
(v) terminate any Contract to which it is a party; or
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(vi) directly or indirectly, solicit or encourage (including by
way of furnishing any nonpublic information concerning the Business),
or enter into any negotiations or discussions concerning, any
Acquisition Proposal (as hereinafter defined). Seller will notify Buyer
promptly by telephone, and thereafter promptly confirm in writing, if
any such information is requested from, or any Acquisition Proposal is
received by, Seller. As used in this Agreement, "Acquisition Proposal"
shall mean any proposal received by Seller prior to the Closing for a
merger or other business combination involving the Division, or for the
acquisition of, or the acquisition of a substantial equity interest in,
or a substantial portion of the assets of the Division, other than the
one contemplated by this Agreement.
SECTION 5.7. SEVERABILITY. With respect to any provision of this
Article V finally determined by a court of competent jurisdiction to be
unenforceable, Seller and Buyer hereby agree that such court shall have
jurisdiction to reform such provision so that it is enforceable to the maximum
extent permitted by law, and the parties agree to abide by such court's
determination. In the event that any provision of this Article V cannot be
reformed, such provision shall be deemed to be severed from this Agreement, but
every other provision of Article V of this Agreement shall remain in full force
and effect.
SECTION 5.8. FURTHER ASSURANCES. On and after the Closing, Seller shall
prepare, execute and deliver, at Buyer's expense, such further and necessary
instruments of conveyance, sale, assignment or transfer, and shall take or cause
to be taken such other or further and necessary action as Buyer's counsel shall
reasonably request at any time or from time to time in order to perfect, confirm
or evidence in Buyer title to all or any part of the Property or to consummate,
in any other manner, the terms and conditions of this Agreement. On and after
the Closing, Buyer shall prepare, execute and deliver, at Seller's expense, such
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further and necessary instruments, and shall take or cause to be taken such
other or further and necessary action as Seller's counsel shall reasonably
request at any time or from time to time in order to confirm or evidence Buyer's
assumption of the Assumed Liabilities or to consummate, in any other manner, the
terms and conditions of this Agreement.
SECTION 5.9. ANNOUNCEMENTS. Neither party to this Agreement shall make
any public announcements prior to the Closing with respect to this Agreement or
the transactions contemplated hereby without the consent of the other party
hereto, except as required by law.
SECTION 5.10. CONSENTS. The parties hereto agree to use all reasonable
efforts to obtain all permits, approvals, authorizations and consents of all
third parties necessary for the consummation of the transactions contemplated
hereby.
SECTION 5.11. EMPLOYEE MATTERS.
Seller recognizes that Buyer shall not be required to employ any
employees of Seller or the Business. Buyer recognizes that the scope of
employment of many of the employees of Seller includes responsibilities other
than matters related to the Business and therefore the service of such employees
may have continuing value to the Seller. Consequently, Buyer agrees that it will
not make any offer of employment to any present employees without first
obtaining the consent of the Seller. Buyer shall not interfere with Seller's
offering continued employment to such employees. In the event that Buyer, with
the Seller's consent, shall employ an employee of the Seller, Buyer shall not be
deemed a successor employer.
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ARTICLE VI. CLOSING
SECTION 6.1. CLOSING. This transaction shall close and all deliveries
to be made at the time of closing shall take place at 10:00 a.m., New York time,
September 30, 1995, at the offices of Olshan Grundman Frome & Rosenzweig LLP,
505 Park Avenue, New York, New York, 10022, or at such other place or date as
may be agreed upon from time to time in writing by Seller and Buyer (the
"Closing"). The date upon which the Closing shall occur is referred to in this
Agreement as the "Closing Date."
SECTION 6.2. DELIVERIES BY SELLER. At or prior to the Closing, Seller
shall deliver to Buyer, duly and properly executed, the following:
(a) Good and sufficient General Conveyance, Assignment and Bill of
Sale, in the form attached hereto as Exhibit B, conveying, selling,
transferring and assigning to Buyer title to all of the Property, free and
clear of all security interests, liens, charges, encumbrances or equities
whatsoever, except for those assumed by Buyer pursuant to this Agreement or
approved in writing by Buyer prior to the Closing (the "General
Conveyances, Assignment and Bill of Sale").
(b) Assignments and Assumptions of the Personal Property Leases and the
Contracts, in the form attached hereto as Exhibit C, and shall include, to
the extent obtained, the written consents of all parties necessary in order
to duly transfer all of Seller's rights thereunder to Buyer (the
"Assignment and Assumption Agreement").
(c) Assignment of the Marks, in the form attached hereto as Exhibit D,
conveying, transferring and assigning to Buyer, all of Seller's right,
title and interest to such Marks (the "U.S. Trademarks Assignment").
(d) Resolutions of the Board of Directors of Seller, authorizing the
execution and delivery of this Agreement by Seller and the performance of
its obligations hereunder, certified by the Divisional Controller of
Seller.
(e) The Certificate of Incorporation of Seller, certified as of a
recent date by the Secretary of State of Delaware.
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(f) A certificate of the Secretary of State of Delaware, dated as of a
recent date, as to the good standing of Seller in such state, along with
telephonic confirmation of such good standing on the Closing Date.
(g) A certificate of the Secretary of State of each state listed on
Schedule 4.2(a), dated as of a recent date, as to the good standing of
Seller in each such state.
(h) The legal opinion of counsel to Seller, in the form attached hereto
as Exhibit E.
(i) Toll Processing Agreements for the production of roofing and siding
products at each of the Norcross Facility and Memphis Facility, the
material terms of which are set forth in Exhibit F attached hereto, which
agreement with respect to the Norcross Facility may be terminated by Buyer
upon 60 days' prior written notice to Seller and which agreement with
respect to the Memphis Facility shall terminate on November 30, 1995
(together, the "Toll Processing Agreements"). If Buyer fails to remove any
Property from the Norcross Facility following the termination of the Toll
Processing Agreement related thereto, Buyer shall pay Seller an amount
equal to the pro rata portion of all amounts due under the lease related to
the Norcross Facility based upon (A) the square footage occupied by the
Property and (B) the length of time following termination of such Toll
Processing Agreement that such Property remains at the Norcoss Facility.
Buyer shall make such payment or payments to Seller within five business
days following the end of each month during which the Property remains at
the Norcross Facility following termination of the Toll Processing
Agreement related thereto.
(j) An Agreement as to Lease with respect to the Clinton Facility, in
the form attached hereto as Exhibit G (the "Agreement to Lease").
(k) An Investment Representation letter, in the form attached hereto as
Exhibit J.
(l) Such other separate instruments of sale, assignment or transfer
that Buyer may reasonably deem necessary or appropriate in order to
perfect, confirm or evidence title to all or any part of the Property.
SECTION 6.3. DELIVERIES BY BUYER. On or prior to the Closing, Buyer
shall deliver to Seller the Purchase Price in accordance with Sections 3.1 and
3.2 hereof, and shall deliver to Seller, all duly and property executed, the
following:
(a) The Assignment and Assumption Agreement.
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(b) Resolutions of the Executive Committee of the Board of Directors of
Buyer, authorizing the execution and delivery of this Agreement by Buyer
and the performance of its obligations hereunder, certified by the
Secretary of Buyer.
(c) Resolutions of the Executive Committee of the Board of Directors of
WHX, authorizing the issuance of the WHX Common Stock to be delivered to
Seller in accordance with Section 3.1(b) hereof and the execution and
delivery of the Registration Rights Agreement by WHX and the performance of
its obligations thereunder, certified by the Assistant Secretary of WHX.
(d) The Certificate of Incorporation of Buyer, as amended, certified as
of a recent date by the Secretary of State of Delaware.
(e) The Certificate of Incorporation of WHX, as amended, certified as
of a recent date by the Secretary of State of Delaware.
(f) A certificate of the Secretary of State of Delaware dated as of a
recent date as to the good standing of Buyer in such state, along with
telephonic confirmation of such good standing on the Closing Date.
(g) A certificate of the Secretary of State of Delaware dated as of a
recent date as to the good standing of WHX in such state, along with
telephonic confirmation of such good standing on the Closing Date.
(h) The legal opinion of counsel to Buyer, in the form attached hereto
as Exhibit H.
(i) The Toll Processing Agreements.
(j) A Registration Rights Agreement, in the form attached hereto as
Exhibit I (the "Registration Rights Agreement").
(k) Such other separate instruments of assumption that Seller may
reasonably deem necessary or appropriate in order to confirm or evidence
Buyer's assumption of the Assumed Liabilities.
Section 6.4. Environmental Transfer Statutes. Seller shall have
prepared, delivered and filed the appropriate environmental transfer documents,
if any, required under the applicable state environmental transfer statutes.
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ARTICLE VII. CONDITIONS PRECEDENT TO OBLIGATIONS
SECTION 7.1. CONDITIONS TO OBLIGATIONS OF BUYER. Each and every
obligation of Buyer to be performed at the Closing shall be subject to the
satisfaction as of or before the Closing of the following conditions (unless
waived in writing by Buyer):
(a) Representations and Warranties. Seller's representations and
warranties set forth in Section 4.2 hereof shall have been true and correct
in all material respects when made and shall be true and correct in all
material respects at and as of the Closing as if such representations and
warranties were made as of the Closing.
(b) Performance of Agreement. All covenants, conditions and other
obligations under this Agreement which are to be performed or complied with
by Seller, shall have been fully performed and complied with in all
material respects on or prior to the Closing including, without limitation,
the delivery of the fully executed instruments and documents in accordance
with Section 6.2.
(c) No Adverse Proceeding. There shall be no pending or threatened
claim, action, litigation or proceeding, judicial or administrative, or
governmental investigation against Buyer, Seller or the Property for the
purpose of enjoining or preventing the consummation of this Agreement, or
otherwise claiming that this Agreement or the consummation hereof is
illegal.
(d) Environmental Transfer Statutes. Seller shall have prepared,
delivered and filed the appropriate environmental transfer documents, if
any, required under the applicable state environmental transfer statutes.
SECTION 7.2. CONDITIONS TO OBLIGATIONS OF SELLER. Each and every
obligation of Seller to be performed at the Closing shall be subject to the
satisfaction as of or before such time of the following conditions (unless
waived in writing by Seller): (a) Representations and Warranties. Buyer's
representations and warranties set forth in Section 4.1 hereof shall have been
true and correct when made and shall be true and correct at and as of the
Closing as if such representations and warranties were made as of such time and
date.
(b) Performance of Agreement. All covenants, conditions and other
obligations under this Agreement which are to be
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performed or complied with by Buyer shall have been fully performed and
complied with in all material respects on or prior to the Closing including
the delivery of funds and the fully executed instruments and documents in
accordance with Section 6.3.
(c) No Adverse Proceeding. At the Closing there shall be no pending or
threatened claim, action, litigation or proceeding, judicial or
administrative, or governmental investigation against Buyer, Seller or the
Property for the purpose of enjoining or preventing the consummation of
this Agreement, or otherwise claiming that this Agreement or the
consummation hereof is illegal.
ARTICLE VIII. INDEMNIFICATION
SECTION 8.1. SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND AGREEMENTS.
Subject to the limitations set forth in this Article VIII and
notwithstanding any investigation conducted at any time with regard thereto by
or on behalf of Buyer or Seller, all representations, warranties, covenants and
agreements of Buyer and Seller in this Agreement and in the Additional Documents
(as set forth hereinbelow) shall survive the execution, delivery and performance
of this Agreement and shall be deemed to have been made again by Buyer and
Seller at and as of the Closing. All statements contained in any Additional
Document or Schedule or Exhibit hereto shall be deemed representations and
warranties of Buyer and Seller set forth in this Agreement within the meaning of
this Article.
SECTION 8.2. INDEMNIFICATION.
(a) Subject to the limitations set forth in this Article VIII, Seller
shall indemnify and hold harmless Buyer from and against any and all
losses, liabilities, damages, demands, claims, suits, actions, judgments or
causes of action, assessments, costs and expenses including, without
limitation, interest, penalties, reasonable attorneys' fees, any and all
reasonable expenses incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation
excluding, however, recoveries in respect of lost profits or consequential
damages
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(collectively, "Damages"), asserted against, resulting to, imposed upon, or
incurred or suffered by Buyer, directly or indirectly, as a result of or
arising from the following (individually an "Indemnifiable Claim" and
collectively "Indemnifiable Claims" when used in the context of buyer as
the Indemnified Party (as defined below)):
(i) Any inaccuracy in or breach of any of the
representations, warranties or agreements made by Seller in
this Agreement or the non-performance of any covenant or
obligation to be performed by Seller;
(ii) Any liability imposed upon Buyer as transferee of
the Property, or otherwise relating to the conduct of the
Business and operations of the Division prior to the Closing
including, without limitation, liability under the Workers
Adjustment and Retraining Notification Act, as amended, or
any similar federal, state or local plant closing,
employment termination or related laws, except to the extent
such liability may be expressly assumed by Buyer pursuant to
Section 2.1 hereof;
(iii) Any liability imposed upon Buyer by virtue of
Buyer's status as a party to this Agreement and the
transactions contemplated hereby and arising out of or
relating to any of Seller's other assets, operations,
businesses or activities which are not a part of the
Division;
(iv) Any misrepresentation in or any omission from any
certificate, Schedule or Exhibit (collectively, the
"Additional Documents") furnished or to be furnished by or
on behalf of Seller under this Agreement;
(v) Any liability for payment by Seller of Federal,
state or local taxes; or
(vi) Seller's failure to comply with the bulk transfer
laws of any state or its misapplication of the proceeds of
the purchase price of the Property in fraud of its
creditors.
(b) Subject to the limitations set forth in this Article VIII, Buyer
shall indemnify and hold harmless Seller from and against any and all
Damages asserted against, resulting to, imposed upon, or incurred or
suffered by Seller, directly or indirectly, as a result of or arising from
the following (individually an "Indemnifiable Claim" and collectively
"Indemnifiable Claims" when used in the context of Seller as the
Indemnified Party):
(i) Any inaccuracy in or breach of any of the
representations, warranties or agreements made by Buyer in
this Agreement or the non-performance of any covenant or
obligation to be performed by Buyer;
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(ii) Any liability imposed upon Seller as a result of
Buyer's use of the Property after the Closing; or
(iii) The nonperformance or nonpayment by Buyer of any
of the Assumed Liabilities.
(c) For purposes of this Article VII, all Damages shall be computed
net of any insurance coverage with respect thereto which, reduces the
Damages that would otherwise be sustained; provided, however, that in all
cases, the timing of the receipt or realization of insurance proceeds shall
be taken into account in determining the amount of reduction of Damages.
(d) Without duplication of Damages, Buyer or Seller, as the case may
be, shall be deemed to have suffered Damages arising out of or resulting
from the matters referred to in subsections (a) and (b) above if the same
shall be suffered by any parent, subsidiary or affiliate of Buyer or
Seller, respectively.
SECTION 8.3. LIMITATIONS ON INDEMNIFICATIONS. Rights to
indemnification hereunder are subject to the following limitations:
(a) Neither Buyer nor Seller shall be entitled to indemnification
hereunder with respect to an Indemnifiable Claim (or, if more than one
Indemnifiable Claim is asserted, with respect to all Indemnifiable Claims)
unless the aggregate amount of Damages with respect to such Indemnifiable
Claim or Claims exceeds $50,000 in which event the indemnity provided for
in Section 8.2 hereof shall be effective with respect to only so much of
such damages as exceeds $50,000.
(b) Any term or provision of this Agreement to the contrary
notwithstanding, the liability of each party to the other party under this
Agreement and the indemnification provisions set forth herein shall not
exceed One Million Dollars ($1,000,000).
(c) The obligation of indemnity provided herein with respect to the
representations and warranties set forth in Section 4.2(h) hereof shall
terminate three years after the Closing.
(d) The obligation of indemnity provided herein with respect to the
representations and warranties set forth in Section 4.2(l) hereof as they
relate to title shall not terminate.
(e) The obligation of indemnity provided herein with respect to the
representations and warranties set forth in Section 4.2(j) hereof shall
terminate upon expiration of the
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statutes of limitations applicable to the items contained therein.
(f) The obligation of indemnity provided herein resulting from the
assertion of liability by third parties with respect to the representations
and warranties set forth in Section 4.1 and Section 4.2 hereof (except
Section 4.2(h), Section 4.2(l) as they relate to title and Section 4.2(j)
hereof) shall terminate one year after the Closing.
(g) The obligation of indemnity provided herein with respect to the
representations and warranties set forth in Section 4.2(q) hereof shall
terminate six years after the Closing.
(h) If, prior to the termination of any obligation to indemnify as
provided for herein, written notice of a claimed breach is given by the
party seeking indemnification (the "Indemnified Party") including in detail
the basis therefor to the party from whom indemnification is sought (the
"Indemnifying Party") or a suit or action based upon a claimed breach is
commenced against the Indemnified Party, the Indemnified Party shall not be
precluded from pursuing such claimed breach or suit or action, or from
recovering from the Indemnifying Party (whether through the courts or
otherwise) on the claim, suit or action, by reason of the termination
otherwise provided for above.
SECTION 8.4. INDEMNITY PROCEDURES WITH RESPECT TO
THIRD PARTY CLAIMS.
The Indemnified Party will give the Indemnifying Party prompt written
notice of any third party claim, demand, assessment, suit or proceeding to which
the indemnity set forth in Section 8.2 applies, which notice to be effective
must describe said claim in reasonable detail (the "Indemnification Notice").
Notwithstanding the foregoing, the Indemnified Party shall not have any
obligation to give any notice of any assertion of liability by a third party
unless such assertion is in writing and the rights of the Indemnified Party to
be indemnified hereunder in respect of any third party claim shall not be
adversely affected by its failure to give notice pursuant to the foregoing
unless and, if so, only to the extent that, the Indemnifying Party is materially
prejudiced
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thereby. The Indemnifying Party will have the right to control the defense or
settlement of any such action subject to the provisions set forth below, but the
Indemnified Party may, at its election, participate in the defense of any action
or proceeding at its sole cost and expense. Should the Indemnifying Party fail
to defend any such action (except for failure resulting from the Indemnified
Party's failure to timely give the Indemnification Notice), then, in addition to
any other remedy, the Indemnified Party may settle or defend such action or
proceeding through counsel of its own choosing and may recover from the
Indemnifying Party the amount of such settlement, demand, or any judgment or
decree and all of its costs and expenses, including reasonable fees and
disbursements of counsel. The Indemnified Party will not compromise or settle
any claim without the prior written consent of the Indemnifying Party which
consent shall not be unreasonably withheld; provided, however, if such approval
is unreasonably withheld, the liability of the Indemnified Party will be limited
to the total sum represented in the amount of the proposed compromise or
settlement and the amount of the Indemnified Party's reasonable counsel fees
incurred in defending such claim, as permitted by the preceding sentence,
accrued at the time said approval is unreasonably withheld. Notwithstanding the
preceding sentence, the foregoing limitation on the liability of the Indemnified
Party shall only be applicable if (i) a complete release of the Indemnifying
Party is contemplated to be part of the proposed compromise or settlement of
such third party claim and (ii) the Indemnifying Party withholds its consent to
such compromise or settlement.
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SECTION 8.5. PROCEDURE FOR INDEMNIFICATION WITH
RESPECT TO NON-THIRD-PARTY CLAIMS.
In the event that the Indemnified Party asserts the existence of an
Indemnifiable Claim (but excluding claims resulting from the assertion of
liability by third parties), it shall give written notice to the Indemnifying
Party specifying the nature and amount of the claim asserted (the
"Indemnification Notice"). If the Indemnifying Party, within 30 days (or such
greater time as may be necessary for the Indemnifying Party to investigate such
Indemnifiable Claim not to exceed 60 days), after receiving the Indemnification
Notice from the Indemnified Party, shall not give written notice to the
Indemnified Party announcing their intent to contest such assertion of the
Indemnified Party (the "Contest Notice"), such assertion shall be deemed
accepted and the amount of claim shall be deemed a valid Indemnifiable Claim.
During the time period set forth in the preceding sentence, the Indemnified
Party shall cooperate fully with the Indemnifying Party in respect of such
Indemnifiable Claim. In the event, however, that the Indemnifying Party contests
the assertion of a claim by giving a Contest Notice to the Indemnified Party
within said period, then if the parties hereto, acting in good faith, cannot
reach agreement with respect to such claim within ten days after such notice,
the contested assertion of a claim shall be referred to arbitration in
accordance with Section 10.11 hereof.
ARTICLE IX. TERMINATION
Section 9.1. Termination by Either Party. This Agreement may be
terminated and cancelled at any time prior to the Closing by Buyer or Seller
upon written notice to the other if: (i)
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any of the representations or warranties of the other party, as the case may be,
contained herein or in any Schedule attached hereto shall prove to be inaccurate
or untrue in any material respect; or (ii) any obligation, term or condition to
be performed, kept or observed by such other party, as the case may be,
hereunder has not been performed, kept or observed in any material respect at or
prior to the time specified in this Agreement.
SECTION 9.2. TERMINATION BY BUYER. This Agreement may be terminated and
cancelled by Buyer without penalty, damages, payments or liabilities whatsoever
to either party: (i) with or without cause at any time prior to the close of
business on October 3, 1995, upon reimbursement to Seller of its reasonable
costs and expenses incurred in connection with its negotiations of, and
preparation to consummate the transactions contemplated by, this Agreement; or
(ii) at any time prior to the Closing in the event of a material adverse loss or
damage to the Property in excess of $100,000, it being understood by the parties
that none of the risk of any such loss or damage prior to the Closing shall be
borne by Buyer. In the event of a loss or damage to the Property prior to the
Closing and the Closing shall have occurred, Buyer shall be entitled to receive
any insurance proceeds received by Seller in respect of such loss or damages.
ARTICLE X. MISCELLANEOUS PROVISIONS
SECTION 10.1. NOTICES. All notices and other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery to the party for whom
intended (which
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shall include delivery by Federal Express or similar service) or three (3)
business days after being deposited, postage prepaid, certified or registered
mail, return receipt requested, in the United States mail bearing the address
shown in this Agreement for, or such other address as may be designated in
writing hereafter by, such party: If to Seller: Klockner Namasco Corporation 100
South Ashley Drive Suite 1990 Tampa, Florida 33602 Attention: David Moore
With a copy to: Powell Goldstein Frazer & Murphy
191 Peachtree Street, N.E.
16th Floor
Atlanta, Georgia 30303
Attention: Robert Reynolds, Esq.
If to Buyer: Wheeling-Pittsburgh Steel Corporation
1134 Market Street
Wheeling, West Virginia 26003
Attention: James Gibbons
V.P. - Director Long Range Planning
With a copy to: Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
Attention: Steven Wolosky, Esq.
SECTION 10.2. ENTIRE AGREEMENT. This Agreement, the Additional
Documents and the documents referred to herein embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersede all prior and contemporaneous agreements and understandings, oral
or written, relative to said subject matter.
SECTION 10.3. BINDING EFFECT; ASSIGNMENT. This Agreement and the
various rights and obligations arising hereunder shall inure to the benefit of
and be binding upon Seller, its
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successors and permitted assigns, and Buyer, its successors and permitted
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be transferred or assigned (by operation of law or otherwise) by
any of the parties hereto without the prior written consent of the other party
or parties except that Buyer shall have the right to assign its rights but not
its obligations hereunder to an affiliate of Buyer, provided such assignment
does not adversely affect the satisfaction of any of the conditions set forth in
Section 7.2 or the obligations of Buyer under this Agreement. Any transfer or
assignment of any of the rights, interests or obligations hereunder in violation
of the terms hereof shall be void and of no force or effect.
SECTION 10.4. CAPTIONS. The Article and Section headings of this
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof. Section 10.5.
Expenses of Transaction. Except as provided in Section 9.2, Seller shall pay all
costs and expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby, and will make all necessary arrangements so
that the Property will not be charged with or diminished by any such cost or
expense. Buyer shall pay all costs and expenses incurred by it in connection
with this Agreement and the transactions contemplated hereby. The liability for
sales, real estate transfer and/or documentary taxes (but not income or similar
type taxes) in connection with the sale and delivery of the Property shall be
the responsibility of Seller.
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SECTION 10.6. WAIVER; CONSENT. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented thereto. Except to the extent that a party hereto may have otherwise
agreed to in writing, no waiver by that party of any condition of this Agreement
or breach by the other party of any of its obligations or representations
hereunder or thereunder shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or representation
by the other party, nor shall any forbearance by the first party to seek a
remedy for any noncompliance or breach by the other party be deemed to be a
waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
SECTION 10.7. NO THIRD PARTY BENEFICIARIES. Subject to Section 10.3
hereof, nothing herein, expressed or implied, is intended or shall be construed
to confer upon or give to any person, firm, corporation, limited liability
company or legal entity, other than the parties hereto, any rights, remedies or
other benefits under or by reason of this Agreement.
SECTION 10.8. COUNTERPARTS. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
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SECTION 10.9. GENDER. Whenever the context requires, words used in the
singular shall be construed to mean or include the plural and vice versa, and
pronouns of any gender shall be deemed to include and designate the masculine,
feminine or neuter gender.
SECTION 10.10. REMEDIES OF BUYER AND SELLER. The Property and the Buyer
Raw Materials are unique and not readily available. Accordingly, each of Buyer
and Seller acknowledges that, in addition to all other remedies to which they
are entitled, Buyer and Seller shall have the right to enforce the terms of this
Agreement by a decree of specific performance, provided the party seeking such
remedy is not in material default hereunder.
SECTION 10.11. ARBITRATION. If the parties in good faith cannot resolve
any controversy or claim arising out of or related to this Agreement or in
connection with a breach of this Agreement within 10 days after the claimant
gives written notice of such controversy or claim to the other parties, any
party may demand and commence arbitration of the controversy or claim. In the
event of a demand for arbitration, Buyer shall select one arbitrator and Seller
shall select one arbitrator, within thirty (30) days after such demand shall
have been given (the "Demand Date") and the two arbitrators, within forty-five
(45) days after the Demand Date shall select a third arbitrator. If the third
arbitrator shall not be selected within forty-five (45) days of the Demand Date,
either Buyer or Seller may apply to the American Arbitration Association (or any
successor thereto) for the appointment of an arbitrator in New York, New York or
such other city (the "Place of Arbitration") as the parties may agree upon,
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and the parties shall be bound by the appointments made by such Association. The
arbitration shall be held as promptly as practicable thereafter under the rules
of the American Arbitration Association in effect at the time such controversy,
claim or breach is submitted to arbitration. The determination made in
accordance with such rules shall be delivered in writing to the parties hereto
and shall be final, binding and conclusive upon them and, in the case of
arbitration pursuant to this Section 10.11 hereof, the amount of the claim, if
any, of Buyer determined to exist shall be a valid Indemnifiable Claim.
SECTION 10.12. GOVERNING LAW. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
WITNESSES: BUYER:
WHEELING-PITTSBURGH STEEL
CORPORATION
- -------------------------------
By:
------------------------------
Name:
Title:
SELLER:
KLOCKNER NAMASCO CORPORATION
- -------------------------------
By:
-----------------------------
Name:
Title
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
WHEELING-PITTSBURGH STEEL CORPORATION
AND KLOCKNER NAMASCO CORPORATION
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.1(a) Personal Property
Schedule 1.1(b) Non-Prime Inventory
Schedule 1.1(c) Marks
Schedule 1.1(d) Personal Property Leases
Schedule 1.1(e) Contracts
Schedule 3.1 Buyer Raw Materials
Schedule 4.2(a) Jurisdictions in Which the Property is
Located
Schedule 4.2(b) Necessary Consents
Schedule 4.2(c) Breach of Statute or Contract
Schedule 4.2(f) Liabilities
Schedule 4.2(g) Marks
Schedule 4.2(h) Compliance with Laws
Schedule 4.2(j) Scheduled Employees
Schedule 4.2(l) Title to Properties
Schedule 4.2(n) Inventories
Schedule 4.2(p) Credit Terms; Product Warranties
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EXHIBITS
A Allocation Certificate
B General Conveyance, Assignment and Bill of Sale
C Assignment and Assumption Agreement
D U.S. Trademarks Assignment
E Opinion of Counsel to Seller
F Toll Processing Agreements
G Agreement as to Lease
H Opinion of Counsel to Buyer
I Registration Rights Agreement
J Investment Representation Letter
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EXHIBIT 4(B)
REGISTRATION RIGHTS AGREEMENT, dated as of September 30, 1995, by and
between WHX Corporation, a Delaware corporation (the "Company"), and Klockner
Namasco Corporation ("KNC").
The parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall mean the Common Stock of the Company, par value
$.01 per share.
"Demand Registration" shall have the meaning assigned to such term in
Section 3 hereof.
"Person" shall mean an individual, partnership, corporation, limited
liability company business trust, joint state company trust, unincorporated
organization, joint venture, a government authority or other entity of whatever
nature.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement, and all other amendments and supplements
to the Prospectus, including post-effective amendments to the Registration
Statement of which such Prospectus is a part, and all material incorporated by
reference in such Prospectus.
"Registrable Securities" shall mean the Securities, but only so long as
they remain Restricted Securities.
"Registration Statement" means any registration statement of the
Company which covers the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such Registration Statement.
"Restricted Securities" means the Securities upon original issuance
thereof, and at all times subsequent thereto until, in the case of any such
Security (a) it has been effectively registered under the Securities Act and
disposed of in accordance with the
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Registration Statement covering it or (b) it is distributed to the public
pursuant to Rule 144 (or any similar provisions then in force) under the
Securities Act.
"Securities" shall mean those shares of Common Stock issued to KNC
pursuant to that certain Asset Purchase Agreement by and between KNC and
Wheeling-Pittsburgh Steel Corporation; provided, however, that the Securities
referred to herein shall be adjusted to reflect equitably, in the discretion of
the Board of Directors of the Company, any consolidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares or exchange of shares effected after the issuance of such
Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Underwritten Offering" shall mean a registration in which securities
of the Company are sold to an underwriter for reoffering to the public.
2. SECURITIES SUBJECT TO THIS AGREEMENT. The Securities entitled to the
benefits of this Agreement are the Registrable Securities.
3. DEMAND REGISTRATION.
(a) Requests for Registration. At any time following the issuance of
the Registrable Securities but in no event later than September 30, 1997, KNC
may make a written request to the Company for registration under and in
accordance with the provisions of the Securities Act of all but not less than
all of the Registrable Securities (a "Demand Registration").
(b) Number of Registrations. KNC is entitled to one (1) Demand
Registration except that a registration shall not constitute a Demand
Registration for the purposes of this Section 3(b) if (i) it does not become
effective under the Securities Act within three (3) months of the date requested
or (ii) an effective Registration Statement under the Securities Act is not
maintained for a period of at least nine (9) months, including as a result of
material developments which the Company determines require the filing of a
post-effective amendment to the Registration Statement (a "Material
Development"), provided that such Demand Registration is not withdrawn after
filing at the request of KNC for a reason other than the discovery of (x)
material information regarding the Company, of which KNC was unaware at the time
of filing or (y) any material change in the prospects or condition of the
Company, financial or otherwise, since the filing of such Demand Registration.
KNC hereby agrees that if the Company determines that a Material Development has
occurred which requires a post-effective amendment to the Registration
Statement, then KNC will refrain from selling any Registrable Securities until
the post-effective amendment is declared effective.
4. INFORMATION. Upon making a request pursuant to Section 3 hereof, KNC
shall specify the intended method of disposition of the Registrable Securities.
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5. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Section 3 hereof to effect a registration under the Securities
Act, the Company will, at its expense, as expeditiously as practicable and in no
event later than thirty (30) days after the date upon which KNC requests
registration of the Registrable Securities:
(a) In accordance with the Securities Act and the rules and regulations
of the Commission, prepare and file with the Commission a Registration Statement
in the form of registration statement appropriate with respect to the
Registrable Securities for resale and use its best efforts to cause such
Registration Statement to become and remain continuously effective until the
earlier of (i) the date all of the Registrable Securities covered by such
Registration Statement have been sold in accordance with the intended method of
KNC set forth in such Registration Statement, or (ii) nine (9) months following
the date upon which such Registration Statement is declared effective, and
prepare and file with the Commission such amendments to such Registration
Statement and supplements to the Prospectus contained therein as may be
necessary to keep such Registration Statement effective and such Registration
Statement and Prospectus accurate and complete during such period;
(b) If the offering is to be underwritten, in whole or in part, enter
into a written underwriting agreement in customary form with KNC and the
underwriter(s), in form and substance reasonably satisfactory to the managing
underwriter of the public offering and KNC;
(c) Furnish to KNC and to the underwriters, if any, of the Common Stock
being registered, such reasonable number of copies of the Registration Statement
and Prospectus and such other documents as such underwriters and KNC may
reasonably request in order to facilitate the public offering of the Common
Stock;
(d) Use its best efforts to register or qualify the Common Stock
covered by such Registration Statement under such state securities or blue sky
laws of such jurisdictions as KNC and the underwriters may reasonably request,
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
connection with any such registration or qualification of such Common Stock;
(e) Promptly notify KNC, after it shall receive notice thereof, of the
date and time when such Registration Statement and each post-effective amendment
thereto has become effective or a supplement to any Prospectus forming a part of
such Registration Statement has been filed;
(f) Promptly notify KNC of any request by the Commission for the
amending or supplementing of such Registration Statement or Prospectus or for
additional information;
(g) Prepare and file with the Commission, promptly upon the request of
KNC, the Registration Statement and any amendments or supplements to such
Registration Statement or Prospectus which, in the reasonable opinion of counsel
for KNC or counsel for the managing underwriter in connection with an
underwritten public offering, is required
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under the Securities Act or the rules and regulations thereunder in connection
with the distribution of the Common Stock by KNC or to otherwise comply with the
requirements of the Securities Act and such rules and regulations;
(h) Prepare and promptly file with the Commission and promptly notify
KNC of the filing of such amendments or supplements to such Registration
Statement or Prospectus as may be necessary to correct any statements or
omissions if, at the time when a Prospectus relating to such Common Stock is
required to be delivered under the Securities Act, any event has occurred as the
result of which any such Prospectus or any other Prospectus as then in effect
may include an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading;
(i) Advise KNC, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such Registration Statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued;
(j) Cooperate with KNC and the managing underwriter, if any, to
facilitate the timely preparation and delivery of certificates representing
Common Stock to be sold and not bearing any restrictive legends; and enable such
Common Stock to be in such denominations and registered in such names as the
managing underwriter may request at least three (3) business days prior to any
sale of Common Stock to the underwriters;
(k) Enter into such customary agreements (including an underwriting
agreement) and take all such other reasonable actions in connection therewith in
order to expedite or facilitate the disposition of such Registrable Securities,
and in such connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration:
(i) make such representations and warranties to KNC and the
underwriters, if any, in form, substance and scope as are customarily
made by issuers to underwriters in primary underwritten offerings;
(ii) if an underwriting agreement is entered into, the same shall
set forth in full the indemnification provisions and procedures of
Section 9 hereof with respect to all parties to be indemnified pursuant
to said Section; and
(iii) the Company shall deliver such documents and certificates as
may be reasonably requested by KNC and the managing underwriter, if
any, to evidence compliance with the terms of this Section 5 and with
any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company.
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<PAGE>
The above shall be done at each closing under such underwriting or similar
agreement or as and to the extent required thereunder.
(l) Make available for inspection by a representative of KNC and any
underwriter participating in any disposition pursuant to a Registration
Statement, and any attorney or accountant retained by KNC or such underwriter,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with the preparation of the Registration
Statement; provided, however, that any records, information or documents that
are designated by the Company in writing as confidential shall be kept
confidential by such persons unless disclosure of such records, information or
documents is required by law, court or administrative order;
(m) Otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission, and make generally available to the Company's
security holders earnings statements satisfying the provisions of Section 11(a)
of the Securities Act, no later than forty-five (45) days after the end of any
twelve (12) month period (or ninety (90) days, if such a period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which Common Stock is
sold to underwriters in an underwritten offering or, if not sold to underwriters
in such an offering, (ii) beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of a Registration Statement;
(n) Not file any amendment or supplement to the Registration Statement
or Prospectus to which KNC has objected on the grounds that such amendment or
supplement does not comply in all material respects with the requirements of the
Securities Act or the rules and regulations thereunder, after having been
furnished with a copy thereof at least three (3) business days prior to the
filing thereof unless the Company shall have obtained an opinion of counsel that
such amendment is required under the Securities Act or the rules or regulations
adopted thereunder in connection with the distribution of Common Stock by the
Company or KNC; provided, however, that the failure of KNC or its counsel to
review or object to any amendment or supplement to the Registration Statement or
Prospectus shall not affect the rights of KNC or any controlling person or
persons thereof or any underwriter or underwriters therefor under Section 9
hereof.
6. REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with the provisions of Sections 3 and 5 of this
Agreement shall be borne by the Company including, without limitation, the
following:
(a) All registration and filing fees (including those with respect to
filings required to be made with the National Association of Securities
Dealers);
(b) Fees and expenses of compliance with all securities or blue sky
laws (including fees and disbursements of counsel for the Company or
underwriters in connection with blue sky qualifications of the Registrable
Securities and determination of its eligibility for investment under the laws of
such jurisdictions as the managing underwriter or KNC may
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<PAGE>
reasonably designate; provided, however, that the Company shall not be required
to consent to general service of process in any such state);
(c) Printing, messenger, telephone and delivery expenses;
(d) Fees and disbursements of counsel for the Company and, as
hereinafter provided, the underwriters;
(e) Fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit and
"comfort" letters required by or incident to such performance);
(f) Fees and disbursements of underwriters (excluding discounts,
commissions or fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals relating to the distribution of the Common
Stock or legal expenses of any person other than the Company, all of which shall
be paid by KNC); and
(g) Fees and expenses of other persons retained by the Company.
The Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company.
7. LISTING ON SECURITIES EXCHANGE. If, and so long as, any class or
classes of the Company's Common Stock shall be listed on any national securities
exchange (as defined in the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), including the New York Stock Exchange, Inc., the Company will,
at its expense, use its best efforts to obtain and maintain the approval for
listing upon official notice of issuance of all shares of Common Stock
registered pursuant to Section 3 hereof.
8. RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company will not
effect any public or private sale or distribution of its Common Stock, if any,
or any other equity or debt securities, including a sale pursuant to Regulation
D under the Securities Act, during the ten (10) day period prior to, and during
the forty-five (45) day period beginning on, the closing date of the
Underwritten Offering by the Company (if any) made pursuant to a Registration
Statement filed pursuant to Section 3 hereof.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification by the Company. Whenever, pursuant to Section 3
hereof, a Registration Statement relating to the Registrable Securities is filed
under the Securities Act,
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<PAGE>
the Company shall indemnify and hold harmless KNC, its officers, directors and
employees (the "Indemnities") and each person, if any, who controls any such
Indemnitee, against any losses, claims, damages or liabilities, joint or
several, to which such Indemnities or any such controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, or Prospectus contained therein, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Indemnities and each such controlling person for all legal or
other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action.
(b) Indemnification by KNC. KNC shall indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed such
Registration Statement and each other person, if any, who controls the Company,
within the meaning of the Securities Act, each underwriter and each other
Indemnitee against all losses, claims, damages or liabilities, joint or several,
to which the other Indemnities, the Company, or any such director, officer or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement, or
Prospectus contained therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only if, and to the extent that, such statement or
omission was in reliance upon and in conformity with written information
furnished to the Company by KNC specifically for use in the preparation thereof.
(c) Indemnification Procedures. Promptly after receipt by an Indemnitee
under subsection (a) or (b) of this Section 9 of notice of the commencement of
any action, such Indemnitee will, if a claim in respect thereof is to be made
against the indemnifying party under such clause, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
which it may have to any Indemnitee otherwise than under such clauses. In case
any such action shall be brought against any Indemnitee, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such Indemnitee, and after notice from the
indemnifying party to such Indemnitee of its election to assume the defense
thereof, the indemnifying party shall not be liable to such Indemnitee under
such clause for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Indemnitee shall have the right to
employ one counsel to represent such Indemnitee if, in the reasonable judgment
of such Indemnitee, it is advisable for such party to be represented by separate
counsel because separate defenses are available, or because a conflict of
interest exists between such indemnified and indemnifying party in respect of
such claim, and in that event the fees and expenses of such separate counsel
shall be paid by the indemnifying party.
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Notwithstanding the foregoing, if the Company is the indemnified party under
this Section 9, the Company shall designate the one counsel, and in all other
circumstances, the one counsel shall be designated by KNC. For purposes of this
Section 9 the terms "control," "controlling person" and "underwriter" have the
meanings which they have under the Securities Act.
(d) Contribution. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an Indemnitee, then the
indemnifying party shall contribute to the amount paid or payable by the
Indemnitee as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party on the one hand and the Indemnitee on the
other from the registration or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, or provides a lesser sum to the
Indemnitee than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the Indemnitee on the other but also the
relative fault of the indemnifying party and the Indemnitee as well as any other
relevant equitable considerations. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
10. RULE 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations promulgated by the Commission thereunder (or, if the
Company is not required to file such reports, it will upon the request of KNC,
make publicly available other information so long as necessary to permit such
sales under Rule 144 under the Securities Act), and it will take such further
action as KNC may reasonably request, all to the extent required from time to
time to enable KNC to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule 144 may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. Upon the
request of KNC, the Company will deliver to KNC a written statement as to
whether it has complied with such information and requirements.
11. AMENDMENT AND MODIFICATION. This Agreement may be amended, modified
or supplemented in any respect only by written agreement by the Company and KNC.
12. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Delaware, without giving effect to the
choice of law principles thereof.
13. INVALIDITY OF PROVISION. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
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14. NOTICES. All notices and other communications hereunder shall be in
writing and, unless otherwise provided herein, shall be deemed duly given if
delivered personally or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses or (at such other address
for the party as shall be specified by like notice):
(a) If to the Company:
WHX Corporation
110 East 59th Street
30th Floor
New York, NY 10022
Attn: Stewart E. Tabin,
Assistant Treasurer
with a copy to:
Steven Wolosky, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
(b) If to KNC:
100 South Ashley Drive
Suite 1990
Tampa, Florida 33602
Attn: David Moore
with a copy to:
Robert Reynolds, Esq.
Powell Goldstein Frazer & Murphy
191 Peachtree Street, N.E.
16th Floor
Atlanta, Georgia 30303
15. HEADINGS; Execution in Counterparts. The headings and captions
contained herein are for convenience of reference only and shall not control or
affect the meaning or construction of any provision hereof. This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and the same
instrument.
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16. ENTIRE AGREEMENT. This Agreement, including the documents and
instruments referred to herein, embodies the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein. There
are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
17. ATTORNEYS' FEES. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover such reasonable attorneys fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled, as may be ordered in connection with such
proceeding.
IN WITNESS WHEREOF, this Agreement has been signed by each of the
parties hereto as of this 30th day of September, 1995.
WHX CORPORATION
By:
----------------------------
Name:
Title:
KLOCKNER NAMASCO CORPORATION
By:
----------------------------
Name:
Title:
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OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
(212) 755-1467 fax
October 31, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: WHX CORPORATION
REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
On behalf of WHX Corporation ("WHX" or the "Registrant"), transmitted
herewith pursuant to the Securities and Exchange Commission's (the "Commission")
EDGAR System, in accordance with the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, is WHX's Registration Statement on
Form S-3 and the Exhibits thereto (the "Registration Statement"). The
Registration Statement relates to 188,519 shares of common stock of WHX.
On October 30, 1995 WHX wire transferred immediately available funds to
the Commission's account number 9108739 at Mellon Bank in Pittsburgh,
Pennsylvania in payment of the applicable filing fee. The federal funds wire
reference number is 5052.
Please direct any inquiry or comment with respect to the enclosures to
the attention of the undersigned or Steven Wolosky of this office at (212)
753-7200.
Very truly yours,
/s/ Adam W. Finerman
-------------------------
Adam W. Finerman
Enclosures
