IN RE NATIONAL STEEL CORPORATION, (Bankr.N.D.Ill. 2002)

JOHN H. SQUIRES, United States Bankruptcy Judge

This cause coming to be heard on the Debtors' Motion For Authority To Sell Real Property Free And Clear of Liens, Claims and Encumbrances (the "Motion"); due notice of the Motion having been provided; the Court having heard any arguments of counsel; and based upon the record at the hearing, THE COURT MAKES THE FOLLOWING FINDINGS OF FACT AND CONCLUSIONS OF LAW:

1. The Court has jurisdiction over the Motion pursuant to 28 U.S.C. § 1334. The Motion and this Order Constitute a core proceeding pursuant to 28 U.S.C. § 157.

2. The sale of the Property (as defined in the Motion) is in the best interests of these estates and will assist the Debtors' reorganizations.

3. The sale of the Property comports with the requirements of 11 U.S.C. § 363, and the terms of the sale are fair and reasonable.

4. The sale of the Property shall be free and clear of liens and encumbrances.

5. The negotiations for the sale of the Property were conducted a arms' length and in good faith. The buyer is a good faith purchaser pursuant to 11 U.S.C. § 363(m).

ACCORDINGLY, IT IS HEREBY ORDERED THAT:

A. To the extent set forth herein, the Motion is granted, and the terms of the sale of the Property are approved, as supplemented by the terms of (his Order. All objections to the sale of the Property have been resolved or are overruled. National Steel Corporation ("Seller") is authorized to execute and deliver such documents as are necessary to consummate the sale of the Property, including without limitation the Purchase Agreement attached to the Supplement to the Motion filed on October 15, 2002 (as modified below).

B. The purchase price for the Property shall be Four Million Five Hundred Thousand Dollars ($4,500,000.00), payable in cash at closing. Seller agrees to direct payment of the proceeds of the sale (net of closing costs and prorations) to HSBC Bank USA, as indenture trustee (HSBC"). The payment described above shall be applied provisionally to the debt owed as of the Petition Date to HSBC and the application of such payment to interest or principal shall be without prejudice to any parties' rights with respect thereto. As to any liens and claims affecting the Property that arc allegedly superior to HSBC and disputed by either Seller or any party-interest, Seller shall reserve an amount from the proceeds sufficient to satisfy the disputed liens and claims (which amount in no event shall exceed 125% of the aggregate face amount of such liens). The court shall retain jurisdiction to resolve any dispute relating to the asserted liens, including their extent, validity, priority, and enforceability. If Seller satisfies such disputed liens and claims for an amount less than the amount of proceeds reserved, Seller agrees to pay any amounts remaining to HSBC.

C. The sale of the Property shall be free of any and all liens, encumbrances, claims, deeds of trust, mortgages and security interests, whether voluntarily arising or arising by operation of law, prior to closing (together, "Encumbrances"). All Encumbrances shall attach to the proceeds of the sale of the Property with the same force, validity and priority as such Encumbrances had on the Property. Any title insurance company insuring the Buyer's title to the Property shall be entitled to rely upon this Order in removing any and all Encumbrances, including any mechanic's liens, and in providing that the Seller is transferring the Property free and clear of Encumbrances.

D. Subject to fulfillment of the terms and conditions of the Purchase Agreement (as modified below), this Order shall constitute a full assignment, transfer and conveyance of the Property, and all parties, persons and entities are directed to accept this Order as such.

E. The Purchase Agreement shall be modified as follows:

1. Paragraph P4 of the Purchase Agreement shall be modified to provide that "Conveyance of the Property shall be by Special Warranty Deed."

2. The following paragraphs shall be added as additional subparagraphs to Paragraph P:

(a) Prior to any entry on the Property to perform any on-site testing as set forth in paragraph C of the Purchase Agreement, Buyer shall give Seller written notice thereof, including the identity of the company or persons who will perform such testing and the proposed scope of the testing. Seller or its representative may be present to observe any testing or other inspection performed on the Property. Buyer shall maintain, and shall assure that its contractors maintain, public liability and property damage insurance in commercially reasonable amounts and in commercially reasonable form and substance adequate to insure against all "liability of Buyer, its agents, employees or contractors, arising out of any entry or inspections of the Property pursuant to the provisions hereof, and Buyer shall provide Seller with evidence of such insurance coverage upon request by Seller. Furthermore, any and all of Buyer's contractors must name both the Seller and Buyer as additional insureds in their insurance policies required by this paragraph.

(b) Prior to any entry on Seller's adjacent property to relocate the components referred to in paragraph P(1) of the Purchase Agreement, Buyer shall give Seller written notice thereof, including the identity of the company or persons who will perform such work. Seller or its representative may be present to observe any work performed on the property owned by Seller and located adjacent to the Property ("Seller's Adjacent Property"). Buyer shall maintain, and shall assure that its contractors maintain, public liability and property damage insurance in commercially reasonable amounts and in commercially reasonable form and substance adequate to insure against all liability of Buyer, its agents. employees or contractors, arising out of any entry or work on Seller's adjacent property pursuant to the provisions hereof, and Buyer shall provide Seller with evidence of such insurance coverage upon request by Seller. Furthermore, any and all of Buyer's contractors must name both the Seller and Buyer as additional insureds in their insurance policies required by this paragraph.

F. This Court shall retain jurisdiction to enforce the terms of this Order and the Contract.

G. This Order is a final order and is effective immediately, and the stay provided under Rule 6004(g) shall not apply.