Exhibit 10.11
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT dated June 21, 2004 (the "Settlement
Agreement") is among the United States, reorganized Fansteel Inc. ("Fansteel"),
a Delaware corporation, and Waukegan, Inc., a wholly-owned subsidiary of
Fansteel ("WI"), a Delaware corporation with offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
WHEREAS, the United States District Court for the District of
Delaware (the "Court") entered an order dated December 23, 2003 (the
"Confirmation Order") confirming the "Second Amended Joint Reorganization Plan
of Fansteel Inc. and Subsidiaries" (the "Plan");
WHEREAS, pursuant to the Plan and the Confirmation Order, WI acquired
title to the real property located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Waukegan Property") on January 23, 2004 (the "Effective Date"), as
more particularly described in the deed to WI;
WHEREAS, pursuant to Article IV.E.7 of the Plan, Fansteel delivered a
non-interest bearing, unsecured note in the aggregate principal amount of
$1,250,000 (the "WI Note") to WI in full satisfaction, settlement, release and
discharge of the Waukegan Facility Environmental Claims/Obligations (as defined
in the Plan). Pursuant to the Plan and the Confirmation Order, the WI Note was
to be used by WI to fund the remedial actions that may be required at the
Waukegan Property, with payments matched to correspond to WI's anticipated
expenditures for the remedial actions. Fansteel also agreed to deliver to WI any
Net Insurance Proceeds (as defined in the Plan) received by Fansteel for claims
with respect to the Waukegan Property;
WHEREAS, pursuant to Article IVE.7 of the Plan, Fansteel is to deliver
to WI as a mandatory prepayment the proceeds of successful prosecution of
insurance claims relating to the Waukegan Property;
WHEREAS WI has entered into a Real Estate Vacant Land Sales Contract
dated as of June 3, 2004 (the "Waukegan Purchase and Sale Contract") with Ampsky
and Associates, LLC (the "Purchaser") whereby Purchaser has agreed to purchase
the Waukegan Property and assume responsibility for performing the remedial
obligations of WI under the Plan (a copy of the Waukegan Purchase and Sale
Contract is attached hereto as Exhibit "A");
WHEREAS, pursuant to an Indemnity and Assumption Agreement (the
"Waukegan Indemnity"), the Purchaser has agreed to indemnity WI and Fansteel for
all of the Environmental Claims/Obligations associated with the Waukegan
Property (a copy of the Waukegan Indemnity is attached hereto as Exhibit "B");
WHEREAS, the Purchaser entered into a consent order with the City of
Waukegan (the "City") that was lodged and approved by the Chancery Division of
the Lake County Circuit Court of the Nineteenth Judicial Circuit on June 17,
2004 (the "Waukegan
Consent Order") whereby the Purchaser has agreed to remediate the Waukegan
Property under the Site Remediation Program ("SRP") of the Illinois
Environmental Protection Agency ("IEPA) at a cost of up to $1,250,000, and the
Purchaser has procured and delivered to the City, financial assurances in the
form of a standby letter of credit for the benefit of the City in the amount of
$1,250,000 for the remediation of the Waukegan Property (the "Waukegan L/C") (a
copy of the Waukegan Consent Decree and the Waukegan L/C are attached hereto as
Exhibit "C"); and
WHEREAS, pursuant to Article IV.E.7 of the Plan, WI may request consent
from the United States Environmental Protection Agency ("USEPA") to transfer the
Waukegan Facility to a third party if such third party agrees to assume WI's
obligations under the Plan.
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. The United States consents to the transfer of the Waukegan Property
to the Purchaser conditioned on the execution of the Waukegan Purchase and Sale
Agreement, the execution of the Waukegan Indemnity, the entry of the Waukegan
Consent Order and the delivery of the Waukegan L/C substantially in the form
attached hereto on or prior to the closing date.
2. From and after the satisfaction of the conditions to the transfer of
the Waukegan Property set forth in paragraph 1 hereof, the United States agrees
not to seek to enforce the provisions of Article IV(E)(7) of the Plan such that:
(a) Neither Fansteel nor WI, respectively, shall have any further
payment obligations under the WI Note, which shall be deemed
immediately cancelled and extinguished;
(b) Neither Fansteel nor WI, respectively, shall have any remedial or
post-remedial obligations with respect to the Waukegan Property,
including, but not limited, to any obligations related to or on
account of the Waukegan Facility Environmental Claims/Obligations;
(c) Fansteel shall have no further obligation to prosecute and turn
over any proceeds of insurance claims relating to the Waukegan
Property.
3. Nothing in this Settlement Agreement shall be construed to create
any rights in, or grant any cause of action to, any person not a party to this
Settlement Agreement. Fansteel and WI expressly reserve any and all rights
(including, but not limited to, any right to contribution), defenses, claims,
demands, and causes of action that they may have with respect to any matter,
transaction, or occurrence relating in any way to the Waukegan Property against
any person not a party hereto.
MISCELLANEOUS
4. This Settlement Agreement and any other documents to be executed in
connection herewith shall constitute the sole and complete agreement of the
parties hereto with respect to the matters addressed herein. This Settlement
Agreement may not be amended except by a writing signed by all parties to this
Settlement Agreement.
5. This Settlement Agreement shall not in any manner limit, abridge or
otherwise impair the scope and effect of the discharge under Section 1141 of the
Bankruptcy Code contained in the Plan as to any third parties or as to any
claims that are not addressed by this Settlement Agreement.
6. This Settlement Agreement may be executed in one or more
counterparts each of which shall constitute an original and all of which shall
constitute one and the same agreement.
7. This Settlement Agreement shall be binding upon and shall inure to
the benefit of the United States, WI, and Fansteel, their legal successors and
assigns.
[No Further Text on this Page; Signature Page Follows]
THE UNDERSIGNED PARTIES ENTER INTO THIS SETTLEMENT AGREEMENT
FOR THE UNITED STATES OF AMERICA:
Date: By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Senior Counsel
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
FOR FANSTEEL INC.
Date: By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
FOR WAUKEGAN, INC.
Date: By: /s/ E. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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E. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
