In re: NATIONAL STEEL CORPORATION, et al., Chapter 11, Debtors

Case No. 02-08699, (Jointly Administered)United States Bankruptcy Court, N.D. Illinois.
January 13, 2004

ORDER APPROVING COMPROMISE
JOHN SQUIRES, Bankruptcy Judge

This matter coming to be heard on Debtors’ Motion For Approval Of Compromise With The Huber Parties (the “Motion”); due notice of the Motion having been given; and the Court having examined the Motion, heard any arguments of counsel, and being fully advised in the premises:

IT IS HEREBY ORDERED THAT:

1. This matter is a core proceeding, and this Order is a final Order, as those terms are defined in 28 U.S.C. § 157 and 158.

2. The Motion is granted. National Steel Corporation is authorized to compromise its claims with the Huber Parties (as defined in the Motion) according to the terms described in the Motion. National Steel Corporation is further authorized to deliver to the Huber Parties the settlement agreement attached to the Motion as Exhibit 1.

EXHIBIT 1

SETTLEMENT AGREEMENT
WHEREAS, National Steel Corporation, on the one hand, and Louis J. Huber, Spectra Resources, Inc., Susan L. Huber Irrevocable Living Trust, Daniel L. Huber Irrevocable Living Trust, Laura J, Huber Irrevocable Living Trust, and Susan L, Huber Revocable Living Trust, on the other hand, with the benefit of counsel, wish to enter into a full and final settlement of all civil claims between them;

WHEREAS the parties, individually and collectively, deny any and all wrongdoing or liability based on any claims or allegation asserted in the Actions (as that term is defined below);

WHEREAS, National Steel Corporation and forty-one affiliated companies are currently debtors in possession in bankruptcy proceedings pending in the United Slates Bankruptcy Court in the Northern District of Illinois, Eastern Division (“Bankruptcy Court”) captioned In re: NationalSteel Corporation, Case Nos. 02-08697 through 08738 (the “Bankruptcy Proceeding”);

WHEREAS, this Agreement is subject to approval by the Court in the Bankruptcy Proceeding (“Bankruptcy Court Approval”);

NOW, THEREFORE, in consideration of the mutual agreements and understandings set forth-below, the parties hereby agree as follows:

I. DEFINITIONS

(a) The term “Actions” shall refer to the lawsuits filed in United States District Court for the Eastern District of Missouri captionedSpectra Resources, Inc. v. National Steel Corporation, No. 4:00 CV 01816 TIA, and National Steel Corporation v. Susan L. HuberIrrevocable Living Trust et al., No. 4:02 CV 1370 CAS.

(b) The term “Agreement” shall refer to this settlement agreement.

(c) The term “NSC” shall refer to National Steel Corporation and its affiliates.

(d) The term “Huber Parties” shall refer to Louis J. Huber, Spectra Resources, Inc., Susan L. Huber Irrevocable Living Trust, Daniel L. Huber Irrevocable Living Trust, Laura J. Huber Irrevocable Living Trust, Susan L. Huber Revocable Living Trust, and their agents, employees, attorneys, predecessors, successors, assigns, grantors, beneficiaries, trustees and representatives.

II. TERMS

Section 1. Bankruptcy Court Approval

This Agreement and all undertakings by NSC and the Huber Parties set forth herein are subject to the approval of the United States Bankruptcy Court in the Bankruptcy Proceeding. Upon execution of this Agreement by all parties, it shall be presented to the Bankruptcy Court, and each party hereto will use its best efforts to obtain Bankruptcy Court Approval of this Agreement. In the event that the Bankruptcy Court, alter consideration, does not enter an order approving the Settlement Agreement, the Huber Parties may declare this Agreement terminated and of no further effect by notifying NSC and Williams
Connolly LLP in writing. In such event, and following such action of the Bankruptcy Court as may be necessary, this Agreement shall be considered null and void, and each party hereto shall be restored to its position as if this Agreement had not been entered into.

Section 2. Payment

The Huber Parties shall cause to be paid to NSC, in immediately available funds, the sum of one million dollars ($1,000,000.00) (the “Settlement Amount”). Payment shall be made by wire into the account specified in Exhibit A. The Huber Parties shall pay the Settlement Amount in full on or before the fifth business day after receiving an order by the Bankruptcy Court approving this Agreement. In the event that the Huber Parties fail to satisfy their obligations to pay the Settlement Amount by that date, they will pay an additional ten thousand dollars ($10,000.00) per day that the payment is late.

Section 3. Releases

Within five (5) business days after NSC has received the Settlement Amount from the Huber Parties, the Huber Parties and NSC shall deliver to each other the fully executed releases substantially in the forms attached hereto as Exhibits B and C The Huber Parties further agree at that time to withdraw any pending claims against NSC or any other debtors, whether pre-petition, administrative, and/or otherwise, that have been filed in connection with the Bankruptcy Proceeding. NSC acknowledges that it has no knowledge of any such claim having been asserted by the Huber Parties.

Section 4. Dismissals

In consideration of the mutual promises and obligations set forth and imposed herein, and after the Settlement Amount has been received by NSC and cleared, the Huber Parties shall dismiss their claims in the Actions with prejudice and NSC shall dismiss its claims against the Huber Parties in the Actions with prejudice. NSC’s claims against William Wadlow in the Actions arc not a subject of this Agreement and shall not be dismissed pursuant to this Agreement.

Section 5. Attorneys’ Fees and Expenses

Each party hereto shall bear and be solely responsible for any and all attorneys’ fees, costs, arid litigation expenses they have incurred, and no party shall be responsible for the attorneys’ fees, costs and litigation expenses incurred by any other party. The dismissals to be entered pursuant to Section 4 above shall reflect that each party is to bear its own costs.

2Section 6. Enforcement of Agreement

Any controversy, dispute, or claim arising out of or relating to this Agreement or any asserted breach hereof shall be brought before the United States District Court for the Eastern District of Missouri, The parties agree (i) to submit to the jurisdiction of the United States District Court for the Eastern District of Missouri for purposes of enforcing the terms of this Agreement, and (ii) to accept service in any manner allowed by such courts and waive any objection to venue therein, including any claim of inconvenient forum or the like.

Section 7, Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this agreement

(b) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri without regard to any otherwise applicable principles of law.

(c) Modification. This Agreement may not be modified or amended except in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived except in writing by the party charged with waiver. The parties to this Agreement hereby acknowledge that there exist no settlements, promises or undertakings related to the subject matter of this Agreement except as set forth herein.

(d) Separable Provisions. In case any term of this Agreement shall be invalid, illegal, or unenforceable, the remaining provisions of this Agreement shall not in any way be affected or impaired. Upon determination that any such term is invalid, illegal, or unenforceable, that term shall be read so as to effect the original intent of the parties as nearly as possible.

(e) Binding Agreement. By executing this Agreement the parties acknowledge that they have read this Agreement in its entirety, that they understand the terms of this Agreement, that this Agreement shall be binding upon their successors and assigns, and that they sought advice from counsel as they deemed necessary in order to understand the meaning of this Agreement, All parties hereby agree to be bound by the terms and conditions of this Agreement and the attached releases.

(f) Execution. This Agreement may be executed in counterparts and by facsimile.

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IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed as of December ___, 2003.

NATIONAL STEEL CORPORATION

By: ________________________________________ Name: Kirk Sobecki Title: President

SPECTRA RESOURCES, INC.

By: ________________________________________ Name: Louis J. Huber Title: President
____________________________________________ Louis J. Huber
SUSAN L. HUBER IRREVOCABLE LIVING TRUST
By: ________________________________________ Guaranty Trust Co. of Missouri (Trustee) Name: _________________ Title: ________________
DANIEL L. HUBER IRREVOCABLE LIVING TRUST
By: ________________________________________ Guaranty Trust Co. of Missouri (Trustee) Name: ________________ Title: _______________

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LAURA J. HUBER IRREVOCABLE LIVING TRUST
By: ________________________________________ Guaranty Trust Co. of Missouri (Trustee) Name: ________________ Title: _______________
SUSAN L. HUBER REVOCABLE LIVING TRUST
By: _________________________________________ Susan L. Huber (Trustee)

5 Exhibit A

ACCOUNT INTO WHICH TO PAY SETTLEMENT AMOUNT
Mellon Bank, Pittsburgh, PA

ABA No. 043000261

Account No. 137-0855

Reference: National Steel Corp./Huber Settlement

Exhibit B

RELEASE
The Undersigned, individually and as officers, directors, shareholders, and/or trustees, for and on behalf of themselves, their predecessors, successors and assigns, members, officers, directors, trust beneficiaries, employees, representatives, attorneys, agents and affiliates, in consideration of the promises set forth in that certain Settlement Agreement (the “Agreement”) dated as of December __, 2003, by and among National Steel Corporation (“NSC”) and the Undersigned, do hereby remise, release, acquit and forever discharge NSC and its shareholders, subsidiaries, affiliates, officers, directors, agents, employees, representatives, attorneys, successors and assigns, past or present (collectively, the “NSC Releasees”), of and from any and all manner of claims, causes of action, allegations, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, and demands, whether known or unknown, discoverable or undiscoverable, suspected or unsuspected, contingent, unliquidated or disputed, which any of the Undersigned ever had, now have, or hereafter shall or may have against any NSC Releasee, arising out of or relating to the matters that are the subject of the lawsuits and counterclaims filed in the United States District Court for the Eastern District of Missouri captionedSpectra Resources, Inc. v. National Steel Corporation, No. 4:00 CV 01816 TIA, and National Steel Corporation v. Susan L. HuberIrrevocable Living Trust, et al., No. 4:02 CV 1370 CAS (each a “Released Claim”). Nothing herein shall preclude any of the Undersigned from enforcing any rights available to them under the Agreement.

Each of the Undersigned covenants not to bring or continue any Released Claim before any court, arbitrator or other tribunal in any jurisdiction, whether as a claim, a cross-claim, or counterclaim. Each NSC Releasee may plead this Release as a complete bar to any Released Claim brought in derogation of this covenant not to sue. Each of the Undersigned hereby represents, warrants and agrees that (i) it has not assigned, pledged, hypothecated or otherwise divested itself or encumbered all or any part of the Released Claims, (ii) no other person or entity has any interest in or ownership of the Released Claims covered by this Release and (Hi) it will indemnify, defend and hold each NSC Releasee harmless from and against any or all of any part of the Released Claims so assigned, pledged, hypothecated, divested or encumbered and which is brought against such NSC Releasee.

SPECTRA RESOURCES, INC. LOUIS J. HUBER

By: __________________________ _____________________________

Name: Title:

Subscribed and sworn to before Subscribed and sworn to before me this ___ day of ______, 2003 me this ___ day of ______, 2003

_______________________________ _______________________________ Notary Public Notary Public My commission expires: My commission expires:

SUSAN L. HUBER LIVING TRUST DANIEL L. HUBER IRREVOCABLE LIVING TRUST

By: ___________________________ By: ___________________________ Guaranty Trust Co. of Missouri Guaranty Trust Co. of Missouri (Trustee) (Trustee) Name: Name: Title: Title:

Subscribed and sworn to before me Subscribed and sworn to before this ___ day of _________, 2003 me this ___ day of ______, 2003

_________________________________ _______________________________ Notary Public Notary Public My commission expires: My commission expires:

LAURA J. HUBER IRREVOCABLE SUSAN L. HUBER REVOCABLE LIVING TRUST LIVING TRUST

By: _____________________________ By: ___________________________ Guaranty Trust Co. of Missouri Susan L. Huber (Trustee) (Trustee) Name: Title:

Subscribed and sworn to before me this Subscribed and sworn to before ___ day of _________, 2003 me this ___ day of ______, 2003

______________________________________ _______________________________ Notary Public Notary Public My commission expires: My commission expires:

Exhibit C

RELEASE
National Steel Corporation (“NSC”), for and on behalf of its predecessors, successors and assigns, officers, directors, employees, representatives, attorneys, agents and affiliates, in consideration of the promises set forth in that certain Settlement Agreement (the “Agreement”) dated as of December ___, 2003, by and among NSC, on the one hand, and Louis J, Huber, Spectra Resources, Inc., Susan L. Huber Irrevocable Living Trust, Daniel L, Huber Irrevocable Living Trust, Laura J. Huber Irrevocable Living Trust, Susan L. Huber Revocable Living Trust (collectively, “the Huber Parties”), on the other, does hereby remise, release, acquit and forever discharge the Huber Parties and their respective shareholders, subsidiaries, affiliates, officers, directors, agents, employees, representatives, attorneys, successors, and assigns, past or present (collectively, the “Huber Releasees”), of and from any and all manner of claims, causes of action, allegations, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, and demands, whether known or unknown, discoverable or undiscoverable, suspected or unsuspected, contingent, unliquidated or disputed, which NSC ever had, now have, or hereafter shall or may have against any Huber Releasee, arising out of or relating to the matters that are the subject of the lawsuits and counterclaims filed in the United States District Court for the Eastern District of Missouri captioned SpectraResources, Inc. v. National Steel Corporation, No. 4:00 CV 01816 TIA, and National Steel Corporation v. Susan L. Huber IrrevocableLiving Trusty et al., No. 4:02 CV 1370 CAS (each a “Released Claim”), provided that the foregoing release by NSC does not encompass any claims that NSC and/or its trustee in bankruptcy may have (a) against the Huber Releasees arising under Chapter 5 of the Bankruptcy Code or corresponding state law, or (b) against William Wadlow, Nothing herein shall preclude NSC from enforcing any rights available to it under the Agreement.

NSC covenants not to bring or continue any Released Claim before any court, arbitrator or other tribunal in any jurisdiction, whether as a claim, a cross-claim, or counterclaim. Each Huber Releasee may plead this Release as a complete bar to any Released Claim brought in derogation of this covenant not to sue, NKC hereby represents, warrants and agrees that (i) it has not assigned, pledged, hypothecated or otherwise divested itself or encumbered all or any part of the Released Claims, (ii) no other person or entity has any interest in or ownership of the Released Claims covered by this Release and (iii) it will indemnity, defend and hold each Huber Releasee harmless from and against any or all of any part of the Released Claims so assigned, pledged, hypothecated, divested or encumbered and which is brought against such Huber Releasee.

NATIONAL STEEL CORPORATION

By: _________________________

Name: Title:

Subscribed and sworn to before me this ___ day of ___________, 2003.

______________________________ Notary Public My commission expires: