UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-----------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------------- ---------------
NEW CF&I, INC.
(Exact name of registrant as specified in its charter)
Delaware 02-20781 93-1086900
- ----------------------------------------------------------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation or Number)
organization)
1000 Broadway Building, Suite 2200, Portland, Oregon 97205
- ----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(503) 223-9228
- ----------------------------------------------------------------------
(Registrant's telephone number, including area code)
- ----------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
CF&I STEEL, L.P.
(Exact name of registrant as specified in its charter)
Delaware 02-20779 93-1103440
- ----------------------------------------------------------------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation or Number)
organization)
1000 Broadway Building, Suite 2200, Portland, Oregon 97205
- ----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(503) 223-9228
- ----------------------------------------------------------------------
(Registrant's telephone number, including area code)
- ----------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
------ -----
<PAGE>
NEW CF&I, INC.
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements - New CF&I, Inc.
--------------
Consolidated Balance Sheets
June 30, 1996 (unaudited)
and December 31, 1995. . . . . . . . . . 2
Consolidated Statements of
Income (unaudited)
Three months and six months
ended June 30, 1996
and 1995 . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows
(unaudited)
Six months ended June 30, 1996
and 1995 . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial
Statements (unaudited). . . . . . . . . 5
Financial Statements - CF&I Steel, L.P.
----------------
Balance Sheets
June 30, 1996 (unaudited)
and December 31, 1995 . . . . . . . . . 6
Statements of Operations (unaudited)
Three months and six months
ended June 30, 1996
and 1995 . . . . . . . . . . . . . . . 7
Statements of Cash Flows (unaudited)
Six months ended June 30, 1996
and 1995 . . . . . . . . . . . . . . . 8
Notes to Financial
Statements (unaudited). . . . . . . . . 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . 10-12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . 13
SIGNATURES . . . . . . . . . . . . . . . . . . . 13
1
<PAGE>
NEW CF&I, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30,
1996 December 31,
(Unaudited) 1995
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 3 $ -
Trade accounts receivable, net 43,767 45,904
Inventories 63,400 70,249
Deferred tax asset 5,007 5,007
Other 7,075 1,056
-------- --------
Total current assets 119,252 122,216
-------- --------
Property, plant and equipment:
Land and improvements 3,530 3,530
Buildings 6,043 5,867
Machinery and equipment 198,149 188,726
Construction in progress 37,660 31,586
-------- --------
245,382 229,709
-------- --------
Accumulated depreciation (16,915) (11,124)
-------- --------
228,467 218,585
-------- --------
Excess of cost over net
assets acquired 37,472 37,983
Other assets 13,221 13,484
-------- --------
$398,412 $392,268
======== ========
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 6,201 $ 4,576
Accounts payable 42,780 53,867
Accrued expenses 22,775 16,269
-------- --------
Total current liabilities 71,756 74,712
Long-term debt 47,760 50,666
Long-term debt -
Oregon Steel Mills, Inc. 188,600 181,750
Other deferred liabilities 33,266 34,157
Deferred employee benefits 5,746 5,388
Deferred income taxes 4,823 -
-------- --------
351,951 346,673
-------- --------
Minority interests 522 587
-------- --------
Redeemable common stock 21,840 21,840
-------- --------
STOCKHOLDERS' EQUITY
Common stock 1 1
Additional paid-in capital 16,604 16,603
Retained earnings 7,494 6,564
-------- --------
24,099 23,168
-------- --------
$398,412 $392,268
======== ========
The accompanying notes are an integral part of the
consolidated financial statements.
2
<PAGE>
<TABLE>
NEW CF&I, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales $ 92,258 $ 62,137 $204,901 $149,824
Costs and expenses:
Cost of sales 85,496 50,566 184,975 132,247
Selling, general and
administrative expenses 4,614 4,446 9,521 8,805
Profit participation - 449 275 449
-------- -------- -------- --------
Operating income 2,148 6,676 10,130 8,323
Other income (expense):
Interest and dividend income 9 9 19 31
Interest expense (4,612) (2,138) (9,194) (3,897)
Minority interest 173 (186) 56 (117)
Other, net 570 57 570 46
-------- -------- -------- --------
Income (loss) before income taxes (1,712) 4,418 1,581 4,386
Income tax benefit (expense) 743 (1,849) (651) (1,958)
-------- -------- -------- --------
Net income (loss) $ (969) $ 2,569 $ 930 $ 2,428
======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
3
</TABLE>
<PAGE>
<TABLE>
NEW CF&I, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
Six Months Ended June 30,
-------------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 930 $ 2,428
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,325 2,968
Deferred income taxes 465 1,134
Minority interest (64) 117
Other, net (570) 346
Changes in current assets and liabilities, net 9,044 12,182
--------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 16,130 19,175
--------- --------
Cash flows from investing activities:
Additions to property, plant and equipment (21,385) (27,896)
Proceeds from disposal of property, plant and equipment 594 69
Other, net (905) (402)
--------- --------
NET CASH USED BY INVESTING ACTIVITIES (21,696) (28,229)
--------- --------
Cash flows from financing activities:
Borrowings from Oregon Steel Mills, Inc. 102,750 69,500
Payments to Oregon Steel Mills, Inc. (95,900) (58,500)
Payment of long-term debt (1,281) (2,418)
--------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,569 8,582
--------- --------
Net increase (decrease) in cash and cash equivalents 3 (472)
Cash and cash equivalents at beginning of period - 480
--------- --------
Cash and cash equivalents at end of period $ 3 $ 8
========= ========
Supplemental disclosures of cash flow information:
Cash paid for:
Interest $ 9,154 $ 7,839
Income taxes paid to parent company 338 10
Non-Cash Investing and Financing Activities:
At June 30, 1996 and 1995, the Company financed property, plant and equipment with accounts payable of $10.1
million and $8.7 million, respectively.
The accompanying notes are an integral part of the consolidated financial statements.
4
/TABLE
<PAGE>
NEW CF&I, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
---------------------
The consolidated financial statements include the accounts of New
CF&I, Inc. and its subsidiaries (the "Company"). All significant
intercompany balances and transactions have been eliminated upon
consolidation. Certain previously reported amounts have been
reclassified to conform with current period presentation.
The unaudited financial statements include all adjustments
(consisting of normal recurring accruals) which, in the opinion of
management, are necessary for a fair presentation of the interim
periods. Results for an interim period are not necessarily
indicative of results for a full year. Reference should be made
to the Company's Registration Statement on Form S-1 (No.
333-02355) for additional disclosures including a summary of
significant accounting policies.
2. Inventories
-----------
Inventories consist of:
June 30, December 31,
1996 1995
---------- ------------
(In thousands)
Raw materials $ 18,169 $ 16,480
Semi-finished product 18,496 25,816
Finished product 17,749 20,012
Stores and operating supplies 8,986 7,941
-------- --------
$ 63,400 $ 70,249
======== ========
3. Contingencies
-------------
ENVIRONMENTAL. The Company owns a 95.2 percent interest in CF&I
Steel, L.P. ("CF&I") which owns the Pueblo, Colorado steel mill.
In connection with CF&I's acquisition of certain assets from CF&I
Steel Corporation in 1993, CF&I established a reserve of $36.7
million for environmental remediation. The Colorado Department of
Public Health and Environment issued a 10-year post-closure permit
with two ten-year renewals to CF&I which became effective on
October 30, 1995. The permit contains a schedule for corrective
actions to be completed which is substantially reflective of a
straight-line rate of expenditure over 30 years. At June 30,
1996, CF&I has a reserve of $35.2 million, of which $33.3 million
is classified as non-current in other deferred liabilities in the
consolidated balance sheet.
GUARANTEES. On June 19, 1996, Oregon Steel Mills, Inc. ("Oregon
Steel") completed a public offering of $235 million principal
amount of 11% First Mortgage Notes due 2003 (the "Notes"). The
Company has guaranteed the obligations of Oregon Steel under the
Notes, and those guarantees are secured by a lien on substantially
all the property, plant and equipment and certain other assets of
the Company.
In addition, Oregon Steel maintains a $125 million credit
agreement with a group of banks which is collateralized, in part,
by the accounts receivable and inventory of the Company, and also
guaranteed by the Company.
4. Commitments
-----------
During 1996 the Company continued construction of various capital
improvement projects at its Pueblo, Colorado steel mill.
Commitments for expenditures related to the completion of these
projects were $17.5 million at June 30, 1996.
5
<PAGE>
CF&I STEEL, L.P.
BALANCE SHEETS
(In thousands)
June 30,
1996 December 31,
(Unaudited) 1995
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ - $ -
Trade accounts receivable, net 43,321 45,533
Inventories 63,270 70,087
Other 1,407 971
--------- ---------
Total current assets 107,998 116,591
--------- ---------
Property, plant and equipment:
Land and improvements 3,525 3,525
Buildings 5,936 5,760
Machinery and equipment 196,023 186,626
Construction in progress 37,660 31,586
--------- ---------
243,144 227,497
Accumulated depreciation (16,252) (10,569)
--------- ---------
226,892 216,928
--------- ---------
Excess of cost over net assets
acquired 37,472 37,983
Other assets 13,221 12,317
--------- ---------
$ 385,583 $ 383,819
========= =========
LIABILITIES
Current liabilities:
Current portion of
long-term debt $ 6,201 $ 4,576
Accounts payable 45,056 55,601
Accrued expenses 22,129 15,652
--------- ---------
Total current liabilities 73,386 75,829
Long-term debt 47,760 50,666
Long-term debt -
Oregon Steel Mills, Inc. 188,600 181,750
Long-term debt - New CF&I, Inc. 17,400 16,800
Other deferred liabilities 33,266 34,157
Deferred employee benefits 5,746 5,388
--------- ---------
366,158 364,590
--------- ---------
PARTNERS' EQUITY
Limited partner 522 587
General partner 18,903 18,642
--------- ---------
19,425 19,229
--------- ---------
$ 385,583 $ 383,819
========= =========
The accompanying notes are an integral part of the consolidated
financial statements.
6
<PAGE>
<TABLE>
CF&I STEEL, L.P.
STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- -----------------------
1996 1995 1996 1995
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Sales $ 91,041 $ 61,454 $202,520 $148,754
Costs and expenses:
Cost of sales 84,601 50,165 183,251 131,702
Selling, general and
administrative expenses 4,476 4,328 9,252 8,561
Profit participation - 449 275 449
-------- -------- -------- --------
Operating income 1,964 6,512 9,742 8,042
Other income (expense):
Interest and dividend income 9 8 19 17
Interest expense (4,998) (2,546) (9,961) (4,693)
Other, net 570 57 570 46
-------- -------- -------- --------
Net income (loss) $ (2,455) $ 4,031 $ 370 $ 3,412
======== ======== ======== ========
The accompanying notes are an integral part of the consolidated financial statements.
7
/TABLE
<PAGE>
<TABLE>
CF&I STEEL, L.P.
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
Six Months Ended June 30,
-------------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 370 $ 3,412
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 6,217 2,824
Other, net (570) 346
Changes in current assets and liabilities, net 9,650 12,588
--------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 15,667 19,170
--------- --------
Cash flows from investing activities:
Additions to property, plant and equipment (21,359) (27,895)
Proceeds from disposal of property, plant and equipment 594 69
Other, net (905) (402)
--------- --------
NET CASH USED BY INVESTING ACTIVITIES (21,670) (28,228)
--------- --------
Cash flows from financing activities:
Borrowings from related parties 103,350 69,500
Payments to related parties (95,900) (58,500)
Payment of long-term debt (1,281) (2,418)
Partner distributions (166) -
--------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 6,003 8,582
--------- --------
Net increase (decrease) in cash and cash equivalents - (476)
Cash and cash equivalents at beginning of year - 481
--------- --------
Cash and cash equivalents at end of year $ - $ 5
========= ========
Supplemental disclosures of cash flow information:
Cash paid for:
Interest $ 9,154 $ 7,839
Non-Cash Investing and Financing Activities:
At June 30, 1996 and 1995, the Company financed property, plant and equipment with accounts payable of $10.1
million and $8.7 million, respectively.
The accompanying notes are an integral part of the consolidated financial statements.
8
</TABLE>
<PAGE>
CF&I STEEL, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
---------------------
The financial statements include the accounts of CF&I Steel, L.P.
(the "Partnership"). Certain previously reported amounts have
been reclassified to conform with current period presentation.
The unaudited financial statements include all adjustments
(consisting of normal recurring accruals) which, in the opinion
of management, are necessary for a fair presentation of the
interim periods. Results for an interim period are not
necessarily indicative of results for a full year. Reference
should be made to the Partnership's Registration Statement on
Form S-1 (No. 333-02355-1) for additional disclosures including a
summary of significant accounting policies.
2. Inventories
-----------
Inventories consist of:
June 30, December 31,
1996 1995
----------- ------------
(In thousands)
Raw materials $18,169 $16,480
Semi-finished product 18,496 25,816
Finished product 17,749 20,012
Stores and operating supplies 8,856 7,779
------- -------
$63,270 $70,087
======= =======
3. Contingencies
-------------
ENVIRONMENTAL. The Partnership acquired certain assets from CF&I
Steel Corporation in 1993 and established a reserve of $36.7
million for environmental remediation. The Colorado Department
of Public Health and Environment issued a 10-year post-closure
permit with two ten-year renewals to the Partnership which became
effective on October 30, 1995. The permit contains a schedule
for corrective actions to be completed which is substantially
reflective of a straight-line rate of expenditure over 30 years.
At June 30, 1996, the Partnership has a reserve of $35.2 million,
of which $33.3 million is classified as non-current in other
deferred liabilities in the balance sheet.
GUARANTEES. On June 19, 1996, Oregon Steel Mills, Inc. ("Oregon
Steel") completed a public offering of $235 million principal
amount of 11% First Mortgage Notes due 2003 (the "Notes"). The
Partnership has guaranteed the obligations of Oregon Steel under
the Notes, and those guarantees are secured by substantially all
the property, plant and equipment and certain other assets of the
Partnership.
In addition, Oregon Steel maintains a $125 million credit
agreement with a group of banks which is collateralized, in part,
by the accounts receivable and inventory of the Partnership, and
also guaranteed by the Partnership.
4. Commitments
-----------
During 1996 the Partnership continued construction of various
capital improvement projects at its Pueblo, Colorado steel mill.
Commitments for expenditures related to the completion of these
projects were $17.5 million at June 30, 1996.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General
- -------
The following information contains forward-looking statements
which involve certain risks and uncertainties. Actual results and
events may differ significantly from those discussed in the forward-
looking statements.
The New CF&I, Inc. (the "Company") consolidated financial
statements include the accounts of CF&I Steel, L.P. (the
"Partnership"), a 95.2 percent owned subsidiary and the Colorado &
Wyoming Railway Company, a wholly-owned short-line railroad, serving
principally the Pueblo mill. For the three months ended June 30, 1995
and 1996 and the six months ended June 30, 1995 and 1996, sales of the
Partnership were 98.9 percent, 98.7 percent, 99.3 percent, and 98.8
percent, respectively, of the consolidated sales of the Company. For
the three months ended June 30, 1995 and 1996 and the six months ended
June 30, 1995 and 1996, cost of sales of the Partnership were 99.2
percent, 99.0 percent, 99.6 percent, and 99.1 percent, respectively,
of the consolidated cost of sales of the Company.
Results of Operations
- ---------------------
The following table sets forth for the Company tonnage sold, sales and
average selling price per ton:
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended, Six Months Ended,
June 30 June 30
------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Tonnage sold:
Rail 61,600 64,300 156,800 142,900
Rod/Bar/Wire 104,100 17,200 216,800 101,900
Seamless Pipe 34,000 25,300 74,600 54,200
Semi-finished 14,000 - 21,100 -
------- ------- ------- -------
Total 213,700 106,800 469,300 299,000
======= ======= ======= =======
Sales (in thousands): $92,258 $62,137 $204,901 $149,824
Average selling price per ton: $432 $545(FN1) $437 $488(FN1)
(FN1) Excludes insurance proceeds of approximately $4 million received in the second quarter of 1995 as
reimbursement of lost profits resulting from lost production and start-up delays caused by an explosion that
occurred during the third quarter of 1994.
</TABLE>
<PAGE>
- --------------------------
Sales increased 48.5 percent to $92.3 million in the second
quarter of 1996 and increased 36.8 percent to $204.9 million for the
first six months of 1996. Shipments increased 100.1 percent to
213,700 tons in the second quarter of 1996 and increased 57 percent to
469,300 tons in the first six months of 1996. The increase in sales
and shipments primarily was due to increased shipments of rod and bar
and semifinished products in 1996. Rod and bar shipments were 89,300
and 186,300 tons during the three and six month periods ended June 30,
1996, compared to 1,800 and 70,000 tons in the corresponding 1995
periods. Rod and bar sales of $19.3 million and shipments of 58,100
tons were capitalized during the second quarter of 1995 when the rod
and bar mill was in its pre-operational phase. Semifinished shipments
were 14,000 and 21,100 tons during the three and six month periods
ended June 30, 1996, compared to none and 500 tons in the
corresponding 1995 periods.
Selling prices decreased $113 to $432 per ton for the second
quarter of 1996 and decreased $51 to $437 per ton for the first six
months of 1996. The decrease in average selling price was due to
increased sales of rod and bar and semifinished products in 1996. Rod
and bar and semifinished products have significantly lower selling
prices than other CF&I products. Of the $30.1 million sales increase
in the second quarter of
10
<PAGE>
1996, $58.2 million was the result of volume increases offset by $24.1
million resulting from lower average selling prices. An additional
decline of $4 million was from proceeds of an insurance settlement in
1995 not recurring in 1996. Of the $55.1 million sales increase for
the first six months of 1996, $83 million was the result of volume
increases offset by $23.9 million resulting from lower average selling
prices and $4 million from the 1995 insurance settlement not recurring
in 1996.
Gross profit for the three month and six month periods ended June
30, 1996 was 7.3 and 9.7 percent, respectively, compared to 18.6 and
11.7 percent for the corresponding 1995 periods. The gross profit
decline in 1996 compared to 1995 was due to the 1995 insurance
proceeds of $4 million. Gross profit was also negatively impacted by
higher costs and reduced shipments due to an outage of the ladle
refining furnace as a result of a mechanical failure which reduced
gross profits by approximately $1.6 million in the second quarter of
1996.
During July 1996, the Company installed a planned upgrade of the
rod and bar mill. During the installation, the rod and bar mill was
not in operation for seven days. Production for the month of July was
reduced by approximately 10,000 tons from what normally would have
been produced, which is expected to adversely affect the results of
operation of the Company for the third quarter of 1996. In addition
the Company's results of operations for the six months ended June 30,
1996 were favorably affected by strong shipments of rail and seamless
pipe products. Rail shipments are expected to decline in the second
half of 1996, and this decline, together with the need to adjust
further the product mix, including rod and bar product mix, is
expected to adversely affect the Company's results of operations for
the second half of 1996 compared to the first half of 1996.
Selling, general and administrative expenses for the three months
and the six months ended June 30, 1996 increased $169,000 and
$716,000, respectively, from the corresponding periods in 1995. The
increase was primarily due to increased shipping expenses resulting
from increased tons shipped in 1996.
There was no profit participation expense for the second quarter
of 1996 and $275,000 for the six months ended June 30, 1996. Profit
participation expense for the second quarter and six months ended June
30, 1995 was $449,000. The decreased expense is a result of decreased
profits.
Total interest cost for the three months and six months ended
June 30, 1996 was $4.6 million and $9.2 million, respectively,
compared to $2.1 million and $3.9 million for the corresponding
periods in 1995. The higher interest cost primarily is the result of
additional debt incurred to fund the capital expenditure programs.
Capitalized interest for the three and six month periods ended June
30, 1996 was $800,000 and $1.4 million, respectively, compared to $2.1
million and $4.3 million for the corresponding 1995 periods.
The Company's effective income tax rate was a benefit of 43
percent for the quarter ended June 30, 1996 and an expense of 41
percent for the six months ended June 30, 1996. The effective income
tax rates for the same periods in 1995 were 42 percent and 45 percent.
The effective tax rates in 1995 and 1996 varied from the combined
state and federal statutory rates due to differences in the
deductibility of certain miscellaneous business expenses.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations for the six months ended June 30, 1996
was $16.1 million compared to $19.2 million in the corresponding 1995
period. The major items affecting this $3.1 million decrease were a
lower net income ($1.5 million) and a lower decrease in inventories
($7 million). These cash uses were partially offset by increased
depreciation and amortization ($3.4 million) and a decrease in
accounts receivable ($3.1 million).
Since its acquisition by Oregon Steel Mills, Inc. ("Oregon
Steel") in March 1993, the Company has required substantial amounts of
cash to fund its operations and capital expenditures. Borrowing
requirements for capital expenditures and other cash needs, both
short-term and long-term, are provided through loans from Oregon
Steel. As of June 30, 1996, $188.6 million of aggregate principal
amount of these loans was outstanding, all of which was classified as
long-term. The loans are in the form of notes which are due on
11
<PAGE>
demand or, if no demand is made, due in the years 2002 through 2004.
Interest on the principal amount of the loans is based on Oregon
Steel's long-term bond rate and payable monthly. Because these loans
from Oregon Steel are due on demand, the applicable interest rate is
effectively subject to renegotiation at any time, and there is no
assurance the interest rate will not be materially increased in the
future. In addition, Oregon Steel is not required to provide
financing to the Company and, although no repayments are expected in
1996, may in any event demand repayment of these loans at any time.
If Oregon Steel were to demand repayment of these loans, it is
unlikely that the Company would be able to obtain from external
sources financing necessary to repay these loans or to fund its
capital expenditures and other cash needs. Failure to obtain
alternative financing would have a material adverse effect on the
Company and the Partnership. If the Company were able to obtain the
necessary financing, it is likely that such financing would be at
interest rates and on terms substantially less favorable to the
Company than those provided by Oregon Steel.
Term debt of $67.5 million was incurred by the Company as part of
the purchase price of the Pueblo Mill on March 3, 1993. This debt is
uncollateralized and is payable over 10 years with interest at 9.5
percent. As of March 31, 1996, the outstanding balance on the debt
was $54.0 million, of which $47.8 million was classified as long-term
debt.
On June 19, 1996, Oregon Steel completed a public offering of
$235 million principal amount of 11% First Mortgage Notes due 2003
(the "Notes"). The Company and the Partnership have guaranteed the
obligations of Oregon Steel under the Notes, and those guarantees are
secured by a lien on substantially all of the property, plant and
equipment and certain other assets of the Company and the Partnership.
The Company expects that anticipated needs for working capital
and the capital expenditure program will be met from funds generated
from operations and available borrowings from Oregon Steel.
CAPITAL EXPENDITURES. During the first six months of 1996, the
Company expended approximately $14.3 million, excluding capitalized
interest, on its capital program.
12
<PAGE>
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
4.1 Indenture dated as of June 1, 1996 among Oregon
Steel Mills, Inc., as Issuer, Chemical Bank, as
Trustee, and New CF&I, Inc. and CF&I Steel,
L.P., as Guarantors, with respect to 11% First
Mortgage Notes due 2003 (the "Notes").
10.0 Amended and Restated Credit Agreement dated June
12, 1996, among Oregon Steel Mills, Inc., as
Borrower, certain Commercial Lending
Institutions, as the Lenders, First Interstate
Bank of Oregon, N.A., as the Administrative
Agent for the Lenders, the Bank of Nova Scotia,
as the Syndication Agent for the Lenders, and
First Interstate Bank of Oregon, N.A. and the
Bank of Nova Scotia, as the Managing Agents for
the Lenders.
27.1 Financial Data Schedule - New CF&I, Inc.
27.2 Financial Data Schedule - CF&I Steel, L.P.
(b) Reports on Form 8-K
On July 26, 1996, the Company and the Partnership
filed Form 8-Ks in which the Company and the
Partnership dismissed their independent accountants,
Coopers & Lybrand, L.L.P, as of July 25, 1996. On
July 31, 1996, Form 8-K/As were filed with the
response letters of Coopers & Lybrand, L.L.P.
On August 1, 1996, the Company and the Partnership
filed Form 8-Ks in which the Company and the
Partnership engaged Price Waterhouse L.L.P. as
independent accountants as of July 25, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
NEW CF&I, INC.
Date: August 8, 1996 /s/ L. Ray Adams
-------------------------------
L. Ray Adams
Vice President of Finance and
Chief Financial Officer
CF&I STEEL, L.P.
By: New CF&I, Inc.
General Partner
Date: August 8, 1996 /s/ L. Ray Adams
------------------------------
L. Ray Adams
Vice President of Finance and
Chief Financial Officer
New CF&I, Inc.
13
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3
<SECURITIES> 0
<RECEIVABLES> 44271
<ALLOWANCES> 504
<INVENTORY> 63400
<CURRENT-ASSETS> 119252
<PP&E> 245382
<DEPRECIATION> 16915
<TOTAL-ASSETS> 398412
<CURRENT-LIABILITIES> 71756
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 24098
<TOTAL-LIABILITY-AND-EQUITY> 398412
<SALES> 204901
<TOTAL-REVENUES> 204901
<CGS> 184975
<TOTAL-COSTS> 184975
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9194
<INCOME-PRETAX> 1581
<INCOME-TAX> 651
<INCOME-CONTINUING> 930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 930
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
OREGON STEEL MILLS, INC., as Issuer,
CHEMICAL BANK, as Trustee,
and
NEW CF&I, INC. and
CF&I STEEL, L.P.
as Guarantors
-------------
INDENTURE
Dated as of June 1, 1996
-------------
$235,000,000
11% First Mortgage Notes due 2003
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of June 1, 1996
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . 7.11
(a)(2) . . . . . . . . . . . . . . . . . . . . . 7.11
(a)(3) . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . 7.09;
. . . . . . . . . . . . . . . . . . . . . 7.11;
. . . . . . . . . . . . . . . . . . . . . 13.02
(c) . . . . . . . . . . . . . . . . . . . . . N.A.
Section 311(a) . . . . . . . . . . . . . . . . . . . . . 7.12
(b) . . . . . . . . . . . . . . . . . . . . . 7.12
(c) . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . 13.03
(c) . . . . . . . . . . . . . . . . . . . . . 13.03
Section 313(a) . . . . . . . . . . . . . . . . . . . . . 7.07
(b) . . . . . . . . . . . . . . . . . . . . . 7.07
(c) . . . . . . . . . . . . . . . . . . . . . 7.07;
. . . . . . . . . . . . . . . . . . . . . 13.02
(d) . . . . . . . . . . . . . . . . . . . . . 7.07
Section 314(a) . . . . . . . . . . . . . . . . . . . . . 4.07;
. . . . . . . . . . . . . . . . . . . . . 13.02
(b) . . . . . . . . . . . . . . . . . . . . . 11.02
(c)(1) . . . . . . . . . . . . . . . . . . . . . 13.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . 13.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . 11.02;
. . . . . . . . . . . . . . . . . . . . . 11.03;
. . . . . . . . . . . . . . . . . . . . . 11.04;
. . . . . . . . . . . . . . . . . . . . . 11.05
(e) . . . . . . . . . . . . . . . . . . . . . 13.05
Section 315(a) . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . 7.05;
. . . . . . . . . . . . . . . . . . . . . 13.02
(c) . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . 6.11
Section 316(a) (last
sentence) . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . 6.07
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . 2.04
Section 318(a) . . . . . . . . . . . . . . . . . . . . 13.01
(c) . . . . . . . . . . . . . . . . . . . . 13.01
- --------------------
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Incorporation by Reference of Trust Indenture Act 19
Section 1.03. Rules of Construction . . . . . . . . . . . . . . 19
ARTICLE TWO
THE SECURITIES
Section 2.01. Forms and Dating. . . . . . . . . . . . . . . . . 20
Section 2.02. Execution and Authentication. . . . . . . . . . . 20
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . 21
Section 2.04. Paying Agent To Hold Money in Trust . . . . . . . 22
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . . . 22
Section 2.06. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . 22
Section 2.07. Replacement Securities. . . . . . . . . . . . . . 23
Section 2.08. Outstanding Securities. . . . . . . . . . . . . . 23
Section 2.09. Treasury Securities . . . . . . . . . . . . . . . 24
Section 2.10. Temporary Securities. . . . . . . . . . . . . . . 24
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . 24
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . 24
Section 2.13. CUSIP Number. . . . . . . . . . . . . . . . . . . 25
Section 2.14. Deposit of Moneys . . . . . . . . . . . . . . . . 25
ARTICLE THREE
REDEMPTION OF SECURITIES
Section 3.01. Notices to the Trustee. . . . . . . . . . . . . . 25
Section 3.02. Selection of Securities To Be Redeemed. . . . . . 25
Section 3.03. Notice of Redemption. . . . . . . . . . . . . . . 25
Section 3.04. Effect of Notice of Redemption. . . . . . . . . . 26
Section 3.05. Deposit of Redemption Price . . . . . . . . . . . 26
Section 3.06. Securities Redeemed or Purchased in Part. . . . . 26
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities . . . . . . . . . . . . . . 27
Section 4.02. Maintenance of Office or Agency . . . . . . . . . 27
Section 4.03. Corporate Existence . . . . . . . . . . . . . . . 27
Section 4.04. Payment of Taxes and Other Claims . . . . . . . . 28
- ------------------------
Note: This table of contents shall not, for any purpose, be deemed to
be a part of the Indenture.
i
Page
----
Section 4.05. Maintenance of Properties; Insurance; Books
and Records; Compliance with Law . . . . . . . 28
Section 4.06. Compliance Certificate. . . . . . . . . . . . . . 28
Section 4.07. SEC Reports . . . . . . . . . . . . . . . . . . 29
Section 4.08. Limitation on Indebtedness. . . . . . . . . . . . 29
Section 4.09. Limitation on Restricted Payments . . . . . . . . 32
Section 4.10. Limitation on Issuances and Sale of Capital Stock
by Subsidiaries. . . . . . . . . . . . . . . . 34
Section 4.11. Limitation on Liens . . . . . . . . . . . . . . . 34
Section 4.12. Change of Control . . . . . . . . . . . . . . . . 34
Section 4.13. Disposition of Proceeds of Asset Sales. . . . . . 36
Section 4.14. Limitation on Transactions with Interested Persons
. . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.15. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries. . . . . . 40
Section 4.16. Limitations on Sale-Leaseback Transactions. . . . 41
Section 4.17. Additional Guarantors; Additional Security
Documents. . . . . . . . . . . . . . . . . . . 41
Section 4.18. Impairment of Security Interests. . . . . . . . . 41
Section 4.19. Limitation on Amendments to CF&I Agreements . . . 42
Section 4.20. Waiver of Stay, Extension or Usury Laws . . . . . 42
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc.. . . . . . . . . . . 42
Section 5.02. Successor Substituted . . . . . . . . . . . . . . 43
ARTICLE SIX
EVENTS OF DEFAULT AND REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . . . . 44
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . . . 45
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . . 46
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . . 46
Section 6.05. Control by Majority . . . . . . . . . . . . . . . 46
Section 6.06. Limitation on Suits . . . . . . . . . . . . . . . 46
Section 6.07. Right of Holders to Receive Payment . . . . . . . 47
Section 6.08. Collection Suit by Trustee. . . . . . . . . . . . 47
Section 6.09. Trustee May File Proofs of Claims . . . . . . . . 47
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . . 48
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . 48
Section 6.12. Restoration of Rights and Remedies. . . . . . . . 48
- -------------------------
Note: This table of contents shall not, for any purpose, be deemed to
be a part of the Indenture.
ii
<PAGE>
Page
----
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties. . . . . . . . . . . . . . . . . . . . . . 48
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . . . 49
Section 7.03. Individual Rights of Trustee. . . . . . . . . . . 50
Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . 50
Section 7.05. Notice of Default . . . . . . . . . . . . . . . . 50
Section 7.06. Money Held in Trust . . . . . . . . . . . . . . . 50
Section 7.07. Reports by Trustee to Holders . . . . . . . . . . 51
Section 7.08. Compensation and Indemnity. . . . . . . . . . . . 51
Section 7.09. Replacement of Trustee. . . . . . . . . . . . . . 51
Section 7.10. Successor Trustee by Merger, etc. . . . . . . . . 52
Section 7.11. Eligibility . . . . . . . . . . . . . . . . . . . 52
Section 7.12 Co-Trustee. . . . . . . . . . . . . . . . . . . . 52
Section 7.13. Preferential Collection of Claims Against Company
. . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's Obligations. . . . . 53
Section 8.02. Legal Defeasance and Covenant Defeasance. . . . . 55
Section 8.03. Application of Trust Money. . . . . . . . . . . . 57
Section 8.04. Repayment to Company or Guarantors. . . . . . . . 57
Section 8.05. Reinstatement . . . . . . . . . . . . . . . . . . 58
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders. . . . . . . . . . . . 58
Section 9.02. With Consent of Holders . . . . . . . . . . . . . 59
Section 9.03. Compliance with Trust Indenture Act . . . . . . . 60
Section 9.04. Revocation and Effect of Consents . . . . . . . . 60
Section 9.05. Notation on or Exchange of Securities . . . . . . 60
Section 9.06. Trustee May Sign Amendments, etc. . . . . . . . . 60
ARTICLE TEN
GUARANTEE OF SECURITIES
Section 10.01. Guarantee. . . . . . . . . . . . . . . . . . . . 61
Section 10.02. Execution and Delivery of Guarantee. . . . . . . 62
Section 10.03. Merger or Consolidation of a Guarantor . . . . . 62
Section 10.04. Release of a Guarantor.. . . . . . . . . . . . . 64
Section 10.05. Waiver of Subrogation. . . . . . . . . . . . . . 64
- ----------------------
Note: This table of contents shall not, for any purpose, be deemed to
be a part of the Indenture.
iii
<PAGE>
Page
----
Section 10.06. Limitation of Guarantor's Liability. . . . . . . 65
Section 10.07. Contribution . . . . . . . . . . . . . . . . . . 65
ARTICLE ELEVEN
COLLATERAL AND SECURITY
Section 11.01. Collateral and Security Documents; Additional
Collateral . . . . . . . . . . . . . . . . . . 65
Section 11.02. Recording, Registration and Opinions . . . . . . 67
Section 11.03. Release of Collateral. . . . . . . . . . . . . . 68
Section 11.04. Possession and Use of Collateral . . . . . . . . 68
Section 11.05. Specified Releases of Collateral . . . . . . . . 69
Section 11.06. Disposition of Collateral Without Release. . . . 72
Section 11.07. Form and Sufficiency of Release. . . . . . . . . 73
Section 11.08. Purchaser Protected. . . . . . . . . . . . . . . 73
Section 11.09. Authorization of Actions To Be Taken by the
Trustee Under the Security Documents. . . . . 73
Section 11.10. Authorization of Receipt of Funds by the Trustee
Under the Security Documents. . . . . . . . . 74
ARTICLE TWELVE
APPLICATION OF TRUST MONEYS
Section 12.01. Collateral Account . . . . . . . . . . . . . . . 74
Section 12.02. Withdrawal of Insurance Proceeds and Condemnation
Awards . . . . . . . . . . . . . . . . . . . . 74
Section 12.03. Withdrawal of Net Cash Proceeds to Fund an Asset
Sale Offer. . . . . . . . . . . . . . . . . . 76
Section 12.04. Withdrawal of Trust Moneys for Investment in
Replacement Assets. . . . . . . . . . . . . . 77
Section 12.05. Withdrawal of Trust Moneys on Basis of Retirement
of Securities. . . . . . . . . . . . . . . . . 77
Section 12.06. Investment of Trust Moneys. . . . . . . . . . . . 78
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act of 1939. . . . . . . . . . . 78
Section 13.02. Notices. . . . . . . . . . . . . . . . . . . . . 79
Section 13.03. Communication by Holders with Other Holders. . . 79
Section 13.04. Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . 79
Section 13.05. Statements Required in Certificate or Opinion. . 80
Section 13.06. Rules by Trustee, Paying Agent, Registrar. . . . 80
Section 13.07. Legal Holidays . . . . . . . . . . . . . . . . . 80
Section 13.08. Governing Law. . . . . . . . . . . . . . . . . . 80
Section 13.09. No Interpretation of Other Agreements. . . . . . 80
Section 13.10. No Recourse Against Others . . . . . . . . . . . 80
Section 13.11. Successors . . . . . . . . . . . . . . . . . . . 81
Section 13.12. Duplicate Originals. . . . . . . . . . . . . . . 81
Section 13.13. Separability . . . . . . . . . . . . . . . . . . 81
- -----------------------
Note: This table of contents shall not, for any purpose, be deemed to
be a part of the Indenture.
iv
<PAGE>
Section 13.14. Table of Contents, Headings, etc.. . . . . . . . 81
Section 13.15. True Copy. . . . . . . . . . . . . . . . . . . . 81
Section 13.16. Benefits of Indenture. . . . . . . . . . . . . . 81
EXHIBIT A Form of Security and Guarantee . . . . . . . . . . . A-1
EXHIBIT B Form of Security Agreement . . . . . . . . . . . . . B-1
EXHIBIT C Form of Mortgage . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D Form of Intercreditor Agreement. . . . . . . . . . . D-1
EXHIBIT E Form of CF&I Note. . . . . . . . . . . . . . . . . . E-1
- ------------------
Note: This table of contents shall not, for any purpose, be deemed to
be a part of the Indenture.
v
<PAGE>
INDENTURE, dated as of June 1, 1996, among OREGON STEEL
MILLS, INC., a corporation incorporated under the laws of the State of
Delaware (the "Company"), CHEMICAL BANK, a New York banking
corporation, as trustee (the "Trustee"), and NEW CF&I, INC., a
Delaware corporation, and CF&I STEEL, L.P., a Delaware limited
partnership, as guarantors.
Each party hereto agrees as follows for the benefit of
each other party and for the equal and ratable benefit of the Holders
of the Company's 11% First Mortgage Notes due 2003 (the "Securities").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness of a person (a)
assumed in connection with an Asset Acquisition from such person or
(b) existing at the time such person becomes a Subsidiary of any other
person.
"Affiliate" means, with respect to any specified person,
any other person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified person.
"After-Acquired Property" shall have the meaning set forth
in Section 11.01.
"Agent" means any Registrar or Paying Agent of the
Securities.
"Amended Credit Agreement" means the Old Credit Agreement,
as amended and restated by the Credit Agreement Amendment to be
entered into prior to or concurrently with the issuance of the
Securities, as the same may be amended, supplemented or otherwise
modified from time to time and including all exhibits and schedules
thereto.
"Asset Acquisition" means (a) an Investment by the Company
or any Subsidiary of the Company in any other person pursuant to which
such person shall become a Subsidiary of the Company, or shall be
merged with or into the Company or any Subsidiary of the Company, (b)
the acquisition by the Company or any Subsidiary of the Company of the
assets of any person (other than a Subsidiary of the Company) which
constitute all or substantially all of the assets of such person or
(c) the acquisition by the Company or any Subsidiary of the Company of
any division or line of business of any person (other than a
Subsidiary of the Company).
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease or other disposition (including, without
limitation, by merger or consolidation or sale of shares of Capital
Stock of a Subsidiary) to any person, in one or a series of related
transactions, of (a) any Capital Stock of any Subsidiary of the
Company (other than in respect of directors' qualifying shares or
investments by foreign nationals mandated by applicable law); (b) all
or substantially all of the properties and assets of any division or
line of business of the Company or any Subsidiary of the Company; or
(c) any other properties or assets of the Company or any Subsidiary of
the Company other than in the ordinary course of business, and also
means any transaction which results in a Guarantor being released from
its Guarantee as provided in Section 10.04. For the purposes of this
definition, the term "Asset Sale" shall not include (i) any sale,
issuance, conveyance, transfer, lease or other disposition of property
or assets (including, without limitation, by merger or consolidation
of a Subsidiary) that is governed by and complies with the provisions
of Article Five or Section 10.03 (except in each case to the extent
provided under Section 4.13), (ii) any sale, transfer or other
disposition of property or assets (including, without limitation, by
merger or consolidation or sale of shares of Capital Stock of a
Subsidiary) by the Company or any of its Subsidiaries in one or a
series of related transactions in respect of which the Company or such
Subsidiary receives cash or property with an aggregate Fair Market
Value of $50,000 or less (provided, however, that notwithstanding the
-------- -------
other provisions of this clause (ii), any such transaction which
results in a Guarantor being released from its Guarantee as provided
under Section 10.04 shall nonetheless be deemed to constitute an Asset
Sale), (iii) any sale, transfer or other disposition of Excluded
Assets (other than property or assets of the type referred to in
clause (i) or clause (viii) of the definition of Excluded Assets) or
any Bank Collateral and (iv) any Restricted Payment made in accordance
with Section 4.09 or any Permitted Investment.
1
<PAGE>
"Asset Sale Offer" shall have the meaning set forth in
Section 4.13.
"Asset Sale Offer Price" shall have the meaning set forth
in Section 4.13.
"Asset Sale Purchase Date" shall have the meaning set
forth in Section 4.13.
"Average Life to Stated Maturity" means, with respect to
any Indebtedness, as at any date of determination, the quotient
obtained by dividing (a) the sum of the products of (i) the number of
years (or any fraction thereof) from such date to the date or dates of
each successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Indebtedness
multiplied by (ii) the amount of each such principal payment by (b)
the sum of all such principal payments.
"Bank Agent" means the person or any or all of the persons
as, from time to time, may be named as agent or agents for the banks
under the Credit Agreement in accordance with the terms thereof.
"Bank Collateral" means property of the types specified in
the definition of "Bank Collateral" set forth in the form of Security
Agreement attached hereto as Exhibit B owned by the Company, New CF&I,
CF&I or any other Subsidiary or Unrestricted Subsidiary of the
Company.
"Bankruptcy Law" means Title 11 of the United States Code
and any similar applicable state or federal law for the relief of
debtors generally.
"Board of Directors" means (i) with respect to any person
other than a partnership, the board of directors of such person or any
duly authorized committee of such board, and (ii) with respect to any
partnership, the board of directors of a direct corporate general
partner (or, if there is no direct corporate general partner, an
indirect corporate general partner) of such partnership or any duly
authorized committee of such board or, if there is no such direct or
indirect corporate general partner, the appropriate governing body of
any general partner of such partnership.
"Board Resolution" means a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company or any
Guarantor, as the case may be, to have been duly adopted by the Board
of Directors of the Company or such Guarantor, as the case may be, and
to be in full force and effect on the date of such certification, and
delivered to the Trustee; provided that in the case of any Guarantor
--------
which is a partnership, the copy of such resolution shall be certified
by the Secretary or an Assistant Secretary of a direct or indirect
corporate general partner of such Guarantor or, if there is no such
direct or indirect corporate general partner, by an appropriate
signatory of any general partner of such Guarantor.
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions
in The City of New York, State of New York are authorized or obligated
by law, regulation or executive order to close.
"Camrose" means Camrose Pipe Company, a general
partnership organized under the laws of the Province of Alberta,
Canada, and its successors.
"Capital Stock" means, with respect to any person, any and
all shares, interests (including, without limitation, limited and
general partnership interests and joint venture interests),
participations, rights or other equivalents (however designated) in
the equity interest of such person, and any rights (other than debt
securities convertible into or exchangeable for an equity interest),
warrants or options exchangeable for or convertible into an equity
interest in such person.
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"Capitalized Lease Obligation" means any obligation under
a lease of (or other agreement conveying the right to use) any
property (whether real, personal or mixed) that is required to be
classified and accounted for as a capital lease obligation under GAAP,
and the amount of any such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with
GAAP.
"Cash Equivalents" means, at any time, (a) any evidence of
indebtedness with a maturity of 180 days or less issued or directly
and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof);
(b) certificates of deposit or acceptances with a maturity of 180 days
or less of any financial institution that is a member of the Federal
Reserve System having combined capital and surplus and undivided
profits of not less than $500,000,000; (c) certificates of deposit
with a maturity of 180 days or less of any financial institution that
is not organized under the laws of the United States, any state
thereof or the District of Columbia that are rated at least A-2 by S&P
or at least P-2 by Moody's or at least an equivalent rating category
of another nationally recognized securities rating agency; and (d)
repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by
the government of the United States of America or issued by any agency
thereof and backed by the full faith and credit of the United States
of America, in each case maturing within 180 days from the date of
acquisition.
"CF&I" means CF&I Steel, L.P., a Delaware limited
partnership and its successors pursuant to this Indenture.
"CF&I Note" means the promissory note of CF&I,
substantially in the form attached as Exhibit E to this Indenture, as
the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms of this Indenture and such
instrument.
"CF&I Partnership Agreement" means the Amended and
Restated Agreement of Limited Partnership of CF&I Steel, L.P. dated
March 3, 1993, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms of this
Indenture and such instrument.
"Change of Control" means the occurrence of any of the
following events: (a) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), other than the
Company's employee stock ownership plan, is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to have "beneficial ownership" of
all securities that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time,
upon the happening of an event or otherwise), directly or indirectly,
of more than 30% of the total Voting Stock of the Company; (b) the
Company consolidates with, or merges with or into, another person or
sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any person, or any person
consolidates with, or merges with or into, the Company, in any such
event pursuant to a transaction in which the outstanding Voting Stock
of the Company is converted into or exchanged for cash, securities or
other property, other than any such transaction where (i) the
outstanding Voting Stock of the Company is converted into or exchanged
for (1) Voting Stock (other than Redeemable Capital Stock) of the
surviving or transferee corporation or (2) cash, securities and other
property in an amount which could then be paid by the Company as a
Restricted Payment under this Indenture, or a combination thereof, and
(ii) immediately after such transaction no "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Company's employee stock ownership plan, is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after
the passage of time, upon the happening of an event or otherwise),
directly or indirectly, of more than 30% of the total Voting Stock of
the surviving or transferee corporation; (c) at any time during any
consecutive two-year period, individuals who at the beginning of such
period constituted the board of directors of the Company (together
with any new directors whose election by such board of directors or
whose nomination for election by the stockholders of the Company was
approved by a vote of 66-2/3% of the directors then still in office
who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the board of directors of
the Company then in office; or (d) the Company is liquidated or
dissolved or adopts a plan of liquidation.
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"Change of Control Date" shall have the meaning set forth
in Section 4.12.
"Change of Control Offer" shall have the meaning set forth
in Section 4.12.
"Change of Control Purchase Date" shall have the meaning
set forth in Section 4.12.
"Change of Control Purchase Price" shall have the meaning
set forth in Section 4.12.
"Collateral" means, collectively, all of the property and
assets that are from time to time subject to the Lien of the Security
Documents.
"Collateral Account" means the collateral account
established pursuant to Section 12.01.
"Collateral Proceeds" shall have the meaning set forth in
Section 4.13.
"Combination Mill" means the Steckel combination steel
plate rolling mill which, on the Issue Date, was being constructed at
the Company's Portland, Oregon steel mill.
"Common Stock" means, with respect to any person, any and
all shares, interests or other participations in, and other
equivalents (however designated and whether voting or nonvoting) of,
such person's common stock, whether outstanding at the Issue Date or
issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Common Stock Offering" means the offering by the Company
of shares of its Common Stock (including shares which may be sold upon
exercise of the underwriters' over-allotment option) to be made
concurrently with the offering of the Securities.
"Company" means the party named as such in this Indenture
until a successor replaces it (or any previous successor) pursuant to
this Indenture, and thereafter means such successor.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by any one of its
Chairman, its Vice-Chairman, its Chief Executive Officer, its
President, an Executive Vice President, a Senior Vice President or a
Vice President, and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Consolidated Cash Flow Available for Fixed Charges"
means, with respect to any person for any period, (a) the sum of,
without duplication, the amounts for such period, taken as a single
accounting period, of (i) Consolidated Net Income, (ii) Consolidated
Non-cash Charges, (iii) Consolidated Interest Expense, and (iv)
Consolidated Income Tax Expense less (b) any non-cash items increasing
----
Consolidated Net Income for such period.
"Consolidated Fixed Charge Coverage Ratio" means, with
respect to any person, the ratio of the aggregate amount of
Consolidated Cash Flow Available for Fixed Charges of such person for
the four full fiscal quarters immediately preceding the date of the
transaction (the "Transaction Date") giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (such four full
fiscal quarter period being referred to herein as the "Four Quarter
Period") to the aggregate amount of Consolidated Fixed Charges of such
person for the Four Quarter Period. In addition to and without
limitation of the foregoing, for purposes of this definition,
"Consolidated Cash Flow Available for Fixed Charges" and "Consolidated
Fixed Charges" shall be calculated after giving effect on a pro forma
--- -----
basis for the period of such calculation to, without duplication, (a)
the incurrence of any Indebtedness of such person or any of its
Subsidiaries (and the application of the net proceeds thereof) during
the period commencing on the first day of the Four Quarter Period to
and including the Transaction Date (the "Reference Period"),
including, without limitation, the incurrence of the Indebtedness
giving rise to the need to make such calculation (and the application
of the net proceeds thereof), as if such incurrence (and application)
occurred on the first day of the Reference Period, and (b) any Asset
Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a
result of such person or one of its Subsidiaries (including any person
who becomes a Subsidiary as a result of the Asset Acquisition)
incurring, assuming or otherwise being liable for Acquired
Indebtedness) occurring
4
<PAGE>
during the Reference Period, as if such Asset Sale or Asset
Acquisition occurred on the first day of the Reference Period.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes
of determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio", (i) interest on
outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum
--- -----
equal to the rate of interest on such Indebtedness in effect on the
Transaction Date; and (ii) if interest on any Indebtedness actually
incurred on the Transaction Date may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest
rate in effect on the Transaction Date will be deemed to have been in
effect during the Reference Period. If such person or any of its
Subsidiaries directly or indirectly guarantees Indebtedness of a third
person, the above clause shall give effect to the incurrence of such
guaranteed Indebtedness as if such person or such Subsidiary had
directly incurred or otherwise assumed such guaranteed Indebtedness.
"Consolidated Fixed Charges" means, with respect to any
person for any period, the sum of, without duplication, the amounts
for such period of (a) Consolidated Interest Expense and (b) the
product of (i) the aggregate amount of dividends and other
distributions paid or accrued during such period in respect of
Preferred Stock and Redeemable Capital Stock of such person and its
Subsidiaries on a consolidated basis and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus
the then current combined federal, state and local statutory tax rate
of such person, expressed as a decimal.
"Consolidated Income Tax Expense" means, with respect to
any person for any period, the provision for federal, state, local and
foreign income taxes of such person and its Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any
person for any period, without duplication, the sum of (a) the
aggregate amount of cash and non-cash interest expense of such person
and its Subsidiaries paid, accrued and/or scheduled to be paid or
accrued during such period as determined on a consolidated basis in
accordance with GAAP (including, without limitation, the following
(whether or not reflected as an expense on the consolidated income
statement of such person): (i) any amortization of debt discount, (ii)
the net cost under Interest Rate Protection Obligations, (iii) the
interest portion of any deferred payment obligation, (iv) all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, (v) all accrued
interest and (vi) all capitalized interest) and (b) the interest
component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such person and its Subsidiaries
during such period as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Net Income" means, with respect to any
person, for any period, the consolidated net income (or loss) of such
person and its Subsidiaries for such period as determined in
accordance with GAAP, adjusted, to the extent included in calculating
such net income, by excluding, without duplication, (a) all
extraordinary gains or losses, (b) the portion of net income (but not
losses) of such person and its Subsidiaries allocable to minority
interests in unconsolidated persons to the extent that cash dividends
or distributions have not actually been received by such person or one
of its Subsidiaries, (c) net income (or loss) of any person combined
with such person or one of its Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of
combination, (d) any gain or loss realized upon the termination of any
employee pension benefit plan, on an after-tax basis, (e) gains or
losses in respect of any Asset Sales by such person or one of its
Subsidiaries and (f) the net income of any Subsidiary of such person
to the extent that the declaration of dividends or similar
distributions by that Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its
charter or partnership agreement or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders or limited or
general partners, as the case may be, and further adjusted by
including, without duplication, the aggregate amount of cash dividends
or cash distributions actually received by such person or any of its
Subsidiaries from any Unrestricted Subsidiary of such person.
"Consolidated Net Worth" means, with respect to any person
at any date, the consolidated stockholders' or partners' equity, as
the case may be, of such person less the amount of such stockholders'
or partners' equity, as the case may be, attributable to Redeemable
Capital Stock of such person and its Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
5
<PAGE>
"Consolidated Non-cash Charges" means, with respect to any
person for any period, the aggregate depreciation, amortization and
other non-cash expenses of such person and its Subsidiaries reducing
Consolidated Net Income of such person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP
(excluding any such charges constituting an extraordinary item or loss
or any such charge which required an accrual of or a reserve for cash
charges for any future period).
"consolidation" means, with respect to any person, the
consolidation of the accounts of such person and each of its
Subsidiaries if and to the extent the accounts of such person and each
of its Subsidiaries would normally be consolidated with those of such
person, all in accordance with GAAP. The term "consolidated" shall
have a meaning correlative to the foregoing.
"control" means, with respect to any specified person, the
power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of Voting Stock, by
contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Corporate Trust Office" means the office of the Trustee
at which at any particular time its corporate trust business shall be
principally administered, which on the date hereof is located in New
York, New York.
"covenant defeasance" shall have the meaning set forth in
Section 8.02.
"CPC" means Camrose Pipe Corporation, a Delaware
corporation, and its successors.
"Credit Agreement" means the Amended Credit Agreement and
any successor or replacement facility entered into in compliance with
this Indenture, in each case including all exhibits and schedules
thereto, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms and the terms
of this Indenture.
"Credit Agreement Amendment" means the amendment to and
restatement of the Old Credit Agreement entered into by the Company,
the Bank Agent and other lenders party thereto concurrently with or
prior to the issuance of the Securities, amending and restating the
Old Credit Agreement to, among other things, reduce the aggregate
principal amount of borrowings which may be outstanding thereunder at
any one time.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any of its Subsidiaries against
fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar person under any Bankruptcy Law.
"Default" means any event or condition that is, or after
notice or passage of time or both would be, an Event of Default.
"Depositary" means, with respect to Global Securities, the
person designated as Depositary pursuant to Section 2.01 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean
each person who is then a Depositary hereunder, and if at any time
there is more than one such person, such persons.
"Event of Default" shall have the meaning set forth under
Section 6.01 herein.
"Excess Proceeds" shall have the meaning set forth in
Section 4.13.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Excluded Assets" means (i) property acquired or
constructed with Indebtedness described in and which complies with,
and which Indebtedness is secured by a Lien on such property permitted
under, clause (g) of the
6
<PAGE>
definition of Permitted Liens (but only so long as such purchase money
Indebtedness or Indebtedness incurred solely to refinance, replace or
refund such purchase money Indebtedness in accordance with such clause
(g) is outstanding and, in either such case, is secured by such Lien),
(ii) subject to the proviso to this sentence, the Old Plate Mill,
(iii) the Old Rod Mill, (iv) the Fontana Rolling Mill, (v) real
property located in Portland, Oregon owned by the Company on the Issue
Date, but only to the extent such property is not subject to (and is
not intended to be subject to) a Mortgage, together with all
buildings, improvements and fixtures thereon and all leases, rents and
other rights relating to such real property, buildings, improvements
and fixtures, and all proceeds of any of the foregoing, (vi) certain
motor vehicles and mobile equipment (including mobile cranes, loaders,
forklifts, trailers, backhoes, towmotors and graders) owned by CF&I on
the Issue Date with an aggregate book value (net of depreciation) not
to exceed $1.5 million and listed on a schedule or exhibit to the
Security Agreement entered into by CF&I, (vii) Motor Vehicles (as
defined in the form of Security Agreement attached as Exhibit B
hereto), and (viii) any specific item of property subject to a Lien
securing the obligations of the Company or a Subsidiary of the Company
in respect of a commercial letter of credit, but only so long as such
letter of credit and Lien comply with, and are permitted under, clause
(t) of the definition of Permitted Liens and only so long as such
letter of credit is outstanding and such property is subject to such
Lien; provided that, notwithstanding the foregoing, the Old Plate Mill
--------
shall not be deemed an Excluded Asset until such time as (A)
construction of the Combination Mill and all related improvements
shall have been completed, (B) the Combination Mill and all related
equipment and facilities shall have been installed, shall be fully
operational and shall be operating, and the Old Plate Mill shall have
been permanently taken out of service and (C) the Company shall have
complied with the provisions of this Indenture relating to the release
of the Old Plate Mill from the Lien of the Security Documents and the
pledge of the Combination Mill, together with all related fixtures,
improvements, equipment and machinery, as Collateral for the
Securities. With respect to any property securing Indebtedness as
described in clause (i) of the foregoing sentence, at such time as the
purchase money Indebtedness or Indebtedness incurred to refinance,
replace or refund such purchase money Indebtedness referred to in such
clause (i) shall no longer be outstanding, or at such time as such
purchase money Indebtedness or any such Indebtedness incurred to
refinance, replace or refund such purchase money Indebtedness shall no
longer be secured by a Lien on such property permitted under clause
(g) of the definition of Permitted Liens, and with respect to any
property securing a commercial letter of credit described in clause
(viii) of the foregoing sentence, at such time as such letter of
credit shall no longer be outstanding or the obligations of the
Company or any Subsidiary of the Company in respect thereof shall no
longer be secured by a Lien on such property permitted under clause
(t) of the definition of Permitted Liens, then, in each of the
foregoing cases, to the extent that such property is of the type which
would constitute "Trust Property" (as defined in the form of Mortgage
attached as Exhibit C to this Indenture) (assuming, in the case of
real property or a leasehold interest in real property, that an
appropriate description of such property or leasehold interest were
included as a schedule to such form of Mortgage and assuming, in the
case of fixtures, improvements and other types of Trust Property, that
a description of the related real property or leasehold interest in
real property, as the case may be, were included as a schedule to such
form of Mortgage) or "Collateral" (as defined in the form of Security
Agreement attached as Exhibit B to this Indenture), such property
shall be treated as After-Acquired Property and the Company shall, or
shall cause the relevant Guarantor to, cause such property to be made
subject to the Lien of the Security Documents in the manner and to the
extent required by this Indenture.
"Excluded Intangibles" means any right, title or interest
of the Company or any Guarantor in, to or under any contract,
agreement or other instrument entered into with, or any license
granted by or to, any person that is not the Company or a Subsidiary
or Unrestricted Subsidiary of the Company and which contract,
agreement, instrument or license by its express terms prohibits the
assignment thereof or the grant of a security interest therein by the
Company or such Guarantor, as the case may be, or by its express terms
permits such assignment or grant of a security interest only with the
consent of such person; provided that any such right, title and
interest shall cease to be an Excluded Intangible to the extent that
an appropriate consent to such assignment or grant of a security
interest has been obtained; and provided, further, that Excluded
Intangibles shall not include (i) the leasehold interest in the
Company's office space located at 1000 S.W. Broadway, Portland, Oregon
or (ii) any contracts, agreements, licenses or other instruments
specifically identified in any Security Document as being subject to
the Lien created by or granted in such Security Document.
"Excluded Securities" means the Capital Stock of any of
the Company's Subsidiaries or Unrestricted Subsidiaries.
7
<PAGE>
"Fair Market Value" means, with respect to any property or
assets, the price which could be negotiated in an arm's-length free
market transaction, for cash, between a willing seller and a willing
buyer, neither of which is under pressure or compulsion to complete
the transaction. Fair Market Value shall, except for purposes of
Section 6.01(f), be determined by the Board of Directors of the
Company acting in good faith and shall be evidenced by a Board
Resolution delivered to the Trustee except (i) any determination of
Fair Market Value made with respect to any parcel of real property
with a value in excess of $10,000,000 shall (except for purposes of
Section 6.01(f)) be made by an Independent Appraiser and (ii) as
otherwise indicated in this Indenture.
"Final Maturity Date" means June 15, 2003.
"Fontana" means Oregon Steel--Fontana Division, Inc., a
Delaware corporation and former subsidiary of the Company which was
merged into the Company.
"Fontana Rolling Mill" means the steel plate rolling
equipment owned by the Company which, on the Issue Date, is located in
Fontana, California.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the
United States of America, which are applicable from time to time and
are consistently applied.
"Global Security" means a Security issued to the
Depositary or its nominee in accordance with Section 2.02 and bearing
the legend required by Section 2.02.
"Guarantee" means, with respect to any Guarantor, its
guarantee of the Securities and certain other obligations pursuant to
this Indenture and its guarantee endorsed on the Securities in
substantially the form attached as Exhibit A to this Indenture and, in
the case of CF&I, such term includes the CF&I Note, in substantially
the form attached as Exhibit E to this Indenture, delivered to the
Trustee in connection with CF&I's aforesaid guarantee, in each case as
the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms of this Indenture.
"guarantee" means, as applied to any obligation, (a) a
guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in
any manner, of any part or all of such obligation and (b) an
agreement, direct or indirect, contingent or otherwise, the practical
effect of which is to assure in any way the payment or performance (or
payment of damages in the event of non-performance) of all or any part
of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Guarantors" means (i) each of New CF&I and CF&I and (ii)
each of the Company's other Subsidiaries which, after the Issue Date,
becomes a Guarantor, including those who become Guarantors after the
Issue Date as required by Section 4.17.
"Holder" or "Securityholder" means the person in whose
name a Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any person, without
duplication, (a) all liabilities of such person for borrowed money or
for the deferred purchase price of property or services, excluding any
trade payables and other accrued current liabilities incurred in the
ordinary course of business and which are not overdue by more than 90
days, but including, without limitation, all obligations, contingent
or otherwise, of such person in connection with any letters of credit,
banker's acceptance or other similar credit transaction, (b) all
obligations of such person evidenced by bonds, notes, debentures or
other similar instruments, (c) all indebtedness created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such person (even if the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), but
excluding trade accounts payable arising in the ordinary course of
business, (d) all Capitalized Lease Obligations of such
8
<PAGE>
person, (e) all Indebtedness referred to in the preceding clauses of
other persons and all dividends of other persons, the payment of which
is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien
upon property (including, without limitation, accounts and contract
rights) owned by such person, even though such person has not assumed
or become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of such
property or asset or the amount of the obligation so secured), (f) all
guarantees of Indebtedness referred to in this definition by such
person, (g) all Redeemable Capital Stock of such person valued at the
greater of its voluntary or involuntary maximum fixed repurchase price
plus accrued dividends, (h) all net payment obligations under or in
respect of Currency Agreements and Interest Rate Protection
Obligations of such person at the date of determination and (i) any
amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to in clauses (a)
through (h) above. For purposes hereof, the "maximum fixed repurchase
price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of
such Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to be
determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the
Board of Directors of the issuer of such Redeemable Capital Stock.
"Indenture" means this Indenture, as amended, modified or
supplemented from time to time.
"Independent Appraiser" means a person who in the course
of its business appraises property and (i) where real property is
involved, who is a member in good standing of the American Institute
of Real Estate Appraisers, recognized and licensed to do business in
the jurisdiction where the applicable real property is situated, (ii)
who does not have a direct or indirect financial interest in the
Company and (iii) who, in the judgment of the Board of Directors of
the Company, is otherwise independent and qualified to perform the
tasks for which it is engaged.
"Independent Financial Advisor" means a firm (a) which
does not, and whose directors, officers and employees or Affiliates do
not, have a direct or indirect financial interest in the Company (it
being understood that securities of the Company acquired in the
ordinary course of trading operations shall not be deemed to give rise
to such direct or indirect financial interest in the Company) and (b)
which, in the judgment of the Board of Directors of the Company, is
otherwise independent and qualified to perform the task for which it
is to be engaged.
"Intercompany Indebtedness" means any Indebtedness owed by
the Company to any Subsidiary or Unrestricted Subsidiary of the
Company or owed by any Subsidiary or Unrestricted Subsidiary of the
Company to the Company or any other Subsidiary or Unrestricted
Subsidiary of the Company.
"Intercreditor Agreement" means the intercreditor
agreement among the Company, the Guarantors, the Trustee and the Bank
Agent, substantially in the form attached as Exhibit D to this
Indenture, as the same may be amended, supplemented or modified from
time to time in accordance with its terms or the terms of this
Indenture, and any successor or replacement agreement, the terms of
which are no less favorable to the holders of the Securities in any
material respect (as evidenced by an Officers' Certificate delivered
to the Trustee) than those contained in the original intercreditor
agreement as in effect on the Issue Date.
"interest" means, with respect to any Security, the amount
of all interest accruing on such Security, including all interest
accruing subsequent to the occurrence of any events specified in
Sections 6.01(g) or (h) or which would have accrued but for any such
event, whether or not such claims are allowable under applicable law.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities, as set forth therein.
"Interest Rate Protection Agreement" means any arrangement
with any other person whereby, directly or indirectly, such person is
entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated
notional amount in exchange for periodic payments made by such person
calculated by applying a fixed or a floating rate of interest on the
same notional amount and shall include without limitation, interest
rate swaps, caps, floors, collars and similar agreements.
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"Interest Rate Protection Obligations" means the
obligations of any person pursuant to an Interest Rate Protection
Agreement.
"Investment" means, with respect to any person, any direct
or indirect loan or other extension of credit or capital contribution
to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of
others), or any purchase or acquisition by such person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by, any other person. In addition, the Fair
Market Value of the assets of any Subsidiary of the Company at the
time that such Subsidiary is designated as an Unrestricted Subsidiary
shall be deemed to be an Investment made by the Company in such
Unrestricted Subsidiary at such time. "Investments" shall exclude
extensions of trade credit by the Company and its Subsidiaries in the
ordinary course of business in accordance with normal trade practices
of the Company or such Subsidiary, as the case may be.
"Issue Date" means June 19, 1996.
"legal defeasance" shall have the meaning set forth in
Section 8.02.
"Lien" means any mortgage, charge, pledge, lien (statutory
or other), security interest, hypothecation, assignment for security,
claim, preference, priority or other encumbrance upon or with respect
to any property of any kind. A person shall be deemed to own subject
to a Lien any property which such person has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Maturity Date" means, with respect to any Security, the
date on which any principal of such Security becomes due and payable
as therein or herein provided, whether at the Stated Maturity with
respect to such principal or by declaration of acceleration, call for
redemption or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Mortgage" means a deed of trust (or mortgage), assignment
of rents and leases and security agreement substantially in the form
attached as Exhibit C to this Indenture (including such changes to
such form as may be necessary or desirable to conform to applicable
laws or customs regarding property in the jurisdiction where such
instrument is to be recorded), as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with the terms of this Indenture and such instrument.
"Napa" means Napa Pipe Corporation, a Delaware corporation
and former subsidiary of the Company which was merged into the
Company.
"Net Award" means all proceeds, awards or payments for any
Collateral which is taken by eminent domain, expropriation or similar
governmental actions or sold pursuant to the exercise by the United
States of America or any State, municipality, province or other
governmental authority of any right which it may have to purchase, or
to designate a purchaser or to order a sale of, all or any part of the
Collateral, in each case less collection expenses.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds thereof in the form of cash or Cash Equivalents
including payments in respect of deferred payment obligations when
received in the form of cash or Cash Equivalents (except to the extent
that such obligations are financed or sold with recourse to the
Company or any Subsidiary of the Company) net of (a) brokerage
commissions and other fees and expenses (including, without
limitation, fees and expenses of legal counsel and investment bankers)
related to such Asset Sale, (b) provisions for all taxes payable as a
result of such Asset Sale, (c) amounts required to be paid to any
person (other than the Company or any Subsidiary of the Company)
owning a beneficial interest in the assets subject to the Asset Sale,
(d) appropriate amounts to be provided by the Company or any
Subsidiary of the Company, as the case may be, as a reserve required
in accordance with GAAP against any liabilities associated with such
Asset Sale and retained by the Company or any Subsidiary of the
Company, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee, and
(e) repayment of Indebtedness (excluding Indebtedness under the Credit
Agreement) secured by a Lien on the property or assets subject to such
Asset Sale (but only if such Lien is permitted by this Indenture and
the relevant Security
10
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Documents and only to the extent such repayment is required by the
terms of such Indebtedness and the aggregate amount of such cash and
Cash Equivalents applied to repay such Indebtedness does not exceed
the Fair Market Value of such property or assets or, if less, the
total amount of cash and Cash Equivalents received for such property
and assets in such Asset Sale).
"Net Proceeds" means the insurance proceeds (excluding any
liability insurance proceeds payable to the Trustee for any loss,
liability or expense incurred by it) paid as a result of damage to, or
the loss, destruction or condemnation of, all or any portion of the
Collateral, less collection expenses.
"New CF&I" means New CF&I, Inc., a Delaware corporation,
and its successors pursuant to this Indenture.
"New CF&I Stockholders Agreement" means the Restated
Stockholders Agreement dated as of November 16, 1995, among the
Company, New CF&I, Nippon Steel Corporation, NS Finance III, Inc.,
Nissho Iwai Corporation, and Nissho Iwai American Corporation, as the
same may be amended, supplemented or otherwise modified from time to
time in accordance with the terms of this Indenture and such
instrument.
"Non-Collateral Proceeds" shall have the meaning set forth
in Section 4.13 hereof.
"Officer" means, with respect to the Company or any
Guarantor, the Chairman, the Chief Executive Officer, the President,
any Executive Vice President, any Senior Vice President, any Vice
President, the Treasurer, the Secretary or the Controller of the
Company or such Guarantor, as the case may be, and, in any instance
where this Indenture calls for a second Officer to attest or
countersign or otherwise execute any instrument or document, the term
"Officer" shall also include any Assistant Secretary, Assistant
Treasurer or Assistant Controller; provided that in the case of any
--------
Guarantor which is a partnership, the term "Officer" shall mean any
Officer of a direct corporate general partner (or, if there is no
direct corporate general partner, an indirect corporate general
partner) of such partnership or, if there is no such direct or
indirect corporate general partner, any duly authorized signatory of a
general partner of such partnership.
"Officers' Certificate" means with respect to the Company
or any Guarantor, a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or Assistant Secretary of the
Company or such Guarantor, as the case may be, and delivered to the
Trustee.
"Old Credit Agreement" means the Credit Agreement dated as
of December 14, 1994 among the Company, First Interstate Bank of
Oregon, N.A. and the Bank of Nova Scotia, as agents, and the banks
party thereto, as amended by Amendment No. 1 thereto dated as of
September 30, 1995 and Waiver and Amendment No. 2 thereto dated as of
March 22, 1996.
"Old Plate Mill" means the 110 inch steel plate rolling
mill equipment which was operating at the Company's Portland, Oregon
steel mill on the Issue Date, excluding, however, any such equipment
which is to be used in connection with the operation of the
Combination Mill.
"Old Pledge Agreements" mean all pledge agreements entered
into by the Company or any of its present or former Subsidiaries or
Unrestricted Subsidiaries (including, without limitation, Napa and
Fontana) pursuant to the Old Credit Agreement.
"Old Rod Mill" means the rod mill equipment owned by CF&I
which, prior to the Issue Date, had been replaced by the new rod and
bar mill owned by CF&I and taken out of operation, excluding, however,
any such equipment which is or is to be used in connection with the
operation of such new rod and bar mill.
"Old Security Agreements" mean all mortgages, deeds of
trust, security agreements and similar agreements (other than the Old
Pledge Agreements) entered into by the Company or any of its present
or former Subsidiaries or Unrestricted Subsidiaries (including,
without limitation, Napa and Fontana) pursuant to the Old Credit
Agreement.
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"Opinion of Counsel" means, with respect to the Company or
any Guarantor, a written opinion from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or a Guarantor.
"Pari Passu Indebtedness" means Indebtedness of the
Company or any Guarantor which ranks pari passu in right of payment
---- -----
with the Securities or the Guarantee of such Guarantor, as the case
may be.
"Paying Agent" shall have the meaning set forth in Section
2.03, except that, for the purposes of Section 4.12 and Section 4.13
and Articles Three and Eight, the Paying Agent shall not be the
Company or a Subsidiary of the Company or any of their respective
Affiliates.
"Permitted Investments" means any of the following: (a)
Investments in any Wholly-Owned Subsidiary of the Company which is a
Guarantor (including any person that pursuant to such Investment
becomes a Wholly-Owned Subsidiary of the Company which is a Guarantor)
and any person that is merged into or consolidated with, or transfers
or conveys all or substantially all of its assets to, the Company or
any Wholly-Owned Subsidiary of the Company which is a Guarantor at the
time such Investment is made; (b) Investments in Cash Equivalents; (c)
Investments in deposits with respect to leases, utilities, bid or
performance bonds, self-insurance or similar requirements provided to
third parties in the ordinary course of business; (d) Investments in
the Securities; (e) Investments in Currency Agreements on commercially
reasonable terms entered into by the Company or any of its
Subsidiaries in the ordinary course of business in connection with the
operations of the business of the Company or its Subsidiaries to hedge
against fluctuations in foreign exchange rates; (f) Investments in
evidences of Indebtedness, securities or other property received from
another person by the Company or any of its Subsidiaries in connection
with any bankruptcy case or by reason of a composition or readjustment
of debt or a reorganization of such person or as a result of
foreclosure, perfection or enforcement of any Lien in exchange for
evidences of Indebtedness, securities or other property of such person
held by the Company or any of its Subsidiaries, or for other
liabilities or obligations of such other person to the Company or any
of its Subsidiaries that were created in accordance with the terms of
the Indenture; (g) Investments in Interest Rate Protection Agreements
on commercially reasonable terms entered into by the Company or any of
its Subsidiaries in the ordinary course of business in connection with
the operations of the business of the Company or its Subsidiaries to
hedge against fluctuations in interest rates; (h) the contribution of
the Old Rolling Mill (but only at such time as it constitutes an
Excluded Asset) and the Fontana Rolling Mill to a corporation or other
entity in return for an equity interest in such corporation or other
entity; and (i) Investments in partnerships, joint ventures or other
entities to acquire or develop sources of raw materials used in
steelmaking or other steel-related businesses in an aggregate amount
not to exceed $40 million.
"Permitted Liens" means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges
or claims which are either (i) not yet delinquent or (ii) being
contested in good faith by appropriate proceedings diligently
conducted and as to which the Company or any of its Subsidiaries
shall have set aside on its books such reserves as may be required
pursuant to GAAP;
(b) Liens of landlords, carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith by
appropriate proceedings diligently conducted, if such reserve
or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(c) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of governmental insurance,
governmental benefits or social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-
of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(d) Liens arising out of judgments or awards not giving
rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been
duly initiated for
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<PAGE>
the review of such judgment or award shall not have been finally
terminated or the period within which such proceedings may be
initiated shall not have expired;
(e) easements, rights-of-way, zoning restrictions and
other similar charges or encumbrances in respect of real property
not interfering in any material respect with the ordinary conduct
of the business of the Company or any of its Subsidiaries and
which, in the case of any of the foregoing which are created or
incurred after the Issue Date, do not materially detract from the
value of the property subject thereto;
(f) leases and subleases granted by the Company or any
Subsidiary of the Company to others which do not interfere in any
material respect with the ordinary conduct of the business of the
Company or any of its Subsidiaries and which, in the case of any
of the foregoing which are granted after the Issue Date, do not
materially detract from the value of the property subject thereto;
and any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease permitted under this Indenture;
(g) Liens (and replacements, renewals or extensions
thereof) securing Indebtedness the proceeds of which are applied
(A) solely to acquire or construct property or assets (other than
the Combination Mill or any part thereof (including, without
limitation, any machinery, equipment or fixtures constituting a
part thereof) or any improvements constructed in connection
therewith) of the Company or any Subsidiary of the Company
acquired or constructed after the Issue Date or (B) solely to
refinance, replace or refund Indebtedness referred to in clause
(A) as long as the principal amount of any such new Indebtedness
does not exceed the principal amount of the Indebtedness so
replaced, refinanced or refunded; provided, however, that (i) no
such Lien (including any replacement, renewal or extension
thereof) shall extend to or cover any property or assets of the
Company or any Subsidiary of the Company other than the property
and assets so acquired or constructed (together with proceeds and
products thereof and any intangibles reasonably related thereto)
and the property or assets so acquired or constructed do not
constitute Replacement Assets and are not acquired or constructed
with Net Cash Proceeds from Asset Sales (or with amounts which,
pursuant to this Indenture, are deemed to constitute Collateral
Proceeds), (ii) the Lien securing such Indebtedness either (x)
exists at the time of such acquisition or construction or
(y) shall be created within 180 days of such acquisition or the
completion of such construction, (iii) the principal amount of
the Indebtedness referred to in clause (A) above secured by such
Lien does not exceed 100% of the cost of such acquisition or
construction and such Indebtedness and any Indebtedness incurred
to refinance, replace or refund such Indebtedness is incurred in
accordance with this Indenture and (iv) prior to initially
granting any such Lien (but not in connection with any
replacements, renewals or extensions thereof), the Company shall
provide the Trustee with an Officers' Certificate stating that (x)
the property and assets subject to such Lien do not constitute
Replacement Assets and were not acquired or constructed with Net
Cash Proceeds from Asset Sales (or with amounts which, pursuant to
this Indenture are deemed to constitute Collateral Proceeds) and
(y) the Collateral could be operated independently of such
property and assets or such property and assets could be disposed
of independently of the Collateral without interfering with the
continued operation and maintenance of the Collateral and without
impairing the value of the Collateral (without taking into account
any incremental increase in the value of the Collateral
attributable to such property and assets) or interfering with the
Trustee's ability to realize such value;
(h) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(i) Liens on Bank Collateral securing Interest Rate
Protection Agreements and Currency Agreements permitted by this
Indenture;
(j) Liens on the Bank Collateral securing Indebtedness
and other obligations under the Credit Agreement permitted by this
Indenture and any guarantees permitted by this Indenture of the
obligations under the Credit Agreement, and other Liens existing
as of the Issue Date (other than (A) Liens created by or pursuant
to the Old Pledge Agreements, (B) Liens created by or pursuant to
the Old Security Agreements (except that, if the Company, CF&I or
New CF&I shall elect, in lieu of entering into a new security
agreement in order to pledge its Bank Collateral as security for
its obligations under the Amended Credit Agreement (in the case of
the Company) or any guarantee permitted by this Indenture of the
Company's obligations under the Amended Credit Agreement (in the
case of New CF&I and CF&I), to amend or restate its Old Security
Agreement, then
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the Liens on the Bank Collateral created by such amended or
restated Old Security Agreement (after giving effect to such
amendment or restatement) shall be deemed Permitted Liens),
and (C) Liens on Excluded Securities and Intercompany
Indebtedness);
(k) Liens in favor of the Company; provided that if such
--------
Liens are on any Collateral, such Liens are either collaterally
assigned to the Trustee or subordinate to the Lien in favor of the
Trustee securing the Securities or the Guarantees, as the case may
be;
(l) Liens securing obligations in respect of this
Indenture, the Securities, the Security Documents, the
Intercreditor Agreement and the Guarantees;
(m) Liens on the Collateral to the extent permitted or
created by the respective Security Documents or the Intercreditor
Agreement;
(n) Liens in favor of the Trustee;
(o) Liens on the assets or property of any person
existing at the time such person becomes a Subsidiary of the
Company after the Issue Date or is merged into or consolidated
with the Company or any Subsidiary of the Company after the Issue
Date, and in any such case not incurred as a result of (or in
connection with or in anticipation of) such person becoming a
Subsidiary of the Company or such merger or consolidation, as the
case may be; provided that such Liens do not extend to or cover
--------
any other property or assets of the Company or any Subsidiary of
the Company (other than property or assets of the person so
acquired); and provided further that the property or assets so
-------- -------
acquired do not constitute Replacement Assets or otherwise
constitute a replacement of all or part of the Collateral;
(p) Liens on assets or property existing at the time of
acquisition thereof by the Company or a Subsidiary of the Company
after the Issue Date and not incurred as a result of (or in
connection with or in anticipation of) such acquisition; provided
--------
that such Liens do not extend to or cover any property or assets
of the Company or any Subsidiary of the Company (other than the
property or assets so acquired); and provided further that the
-------- -------
property or assets so acquired do not constitute Replacement
Assets or otherwise constitute a replacement of all or part of the
Collateral;
(q) any replacement, extension or renewal, in whole or
in part, of any Lien described in the foregoing clauses (j), (o)
or (p), provided that (i) no such replacement, extension or
renewal Lien extends to or covers any property or assets of the
Company or any of its Subsidiaries other than the property or
assets covered by the predecessor Lien and (ii) to the extent that
any such predecessor Lien secures Indebtedness, the principal
amount of Indebtedness secured by such replacement, extension or
renewal Lien shall not be increased;
(r) restrictions on the sale, assignment, transfer,
mortgage, pledge, hypothecation, encumbrance or change of legal or
beneficial ownership with respect to any Common Stock of New CF&I
arising pursuant to the New CF&I Stockholders Agreement or with
respect to any partnership interests in CF&I arising pursuant to
the CF&I Partnership Agreement (provided that, in the case of any
amendment, supplement or modification of the New CF&I Stockholders
Agreement or the CF&I Partnership Agreement entered into after the
Issue Date, the restrictions thereunder are no more restrictive to
the Company or any of its Subsidiaries than those in the New CF&I
Stockholders Agreement or the CF&I Partnership Agreement, as the
case may be, as in effect on the Issue Date);
(s) Liens on property (other than Collateral) created by
the Standing Letter of Credit Agreement dated March 15, 1995 from
the Company to Banca Nazionale de Lavoro ("BNL") as in effect on
the Issue Date or any amendment to or replacement of such
agreement which is not prohibited by and does not violate any
covenant in this Indenture, in each case securing Indebtedness or
letters of credit in an aggregate principal amount not to exceed
$4,000,000 at any time outstanding, provided that the Liens
arising under any such amendment or replacement encumber only the
same types of property and assets encumbered by the Liens
14
<PAGE>
created by such agreement as in effect on the Issue Date and such
amendment or replacement is otherwise no less favorable to Holders
of the Securities than such agreement as in effect on the Issue
Date; and
(t) Liens upon specific items of property securing
obligations of the Company or a Subsidiary of the Company in
respect of a commercial letter of credit issued by a financial
institution in favor of the seller or supplier of such property;
provided that (i) such letter of credit is issued to facilitate the
purchase of such property by, and shipment of such property to, the
Company or any Subsidiary of the Company in the ordinary course of
its business, (ii) such letter of credit is payable against
delivery to the relevant financial institution of appropriate
documents, (iii) such Lien and letter of credit (and all
obligations of the Company and any Subsidiaries of the Company in
respect thereof) shall be terminated at or prior to the time that
such property is delivered to the premises of the Company or a
Subsidiary of the Company and, in any event, no later than 365 days
after the issuance of such letter of credit, (iv) such letter of
credit is not issued in respect of liabilities for borrowed money,
obligations evidenced by bonds, notes, debentures or other
instruments, Capital Leases or guarantees in respect of any of the
foregoing, and (v) such Lien does not extend to or cover any
property or assets other than the specific items of property to be
purchased by and shipped to the Company or a Subsidiary of the
Company as aforesaid (together with proceeds of such property) and
the aggregate amount payable by the Company or any of its
Subsidiaries in respect of such letter of credit shall not exceed
100% of the cost of such property (plus interest, freight,
insurance and other customary expenses).
"person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-
stock company, trust, charitable foundation, unincorporated
organization, government or any agency or political subdivision
thereof or any other entity.
"Place of Payment" means (i) the Borough of Manhattan, The
City of New York and (ii) such other places where the Company may
maintain an office or agency in accordance with Section 4.02 where
Securities may be presented or surrendered for payment; provided that,
--------
for purposes of payment of interest and principal on any Global
Security for which the Depositary is The Depository Trust Company, the
Place of Payment with respect to such Global Note shall be deemed to
be the Borough of Manhattan, The City of New York.
"Predecessor Security" means, with respect to any
particular Security, every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular
Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.07 hereof in exchange for
a mutilated Security or in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the mutilated,
lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any person, any
Capital Stock of such person of any class or series (however
designated) that ranks prior, as to payment of dividends or
distributions or as to distributions upon voluntary or involuntary
liquidation, dissolution or winding up, to shares of Capital Stock of
any other class or series of such person. For purposes of this
definition, the term "Capital Stock" shall not include rights,
warrants or options.
"principal" means, with respect to any debt security
(including, without limitation, the Securities), the principal of the
security plus, when applicable, the premium, if any, on the security.
The fact that there may be references in this Indenture to the
"principal of and premium, if any, on" any security (including,
without limitation, the Securities) shall not limit or be construed to
limit the effect of the foregoing definition.
"Redeemable Capital Stock" means any shares of any class
or series of Capital Stock that, either by the terms thereof, by the
terms of any security into which it is convertible or exchangeable or
by contract or otherwise, is or upon the happening of an event or
passage of time would be, required to be redeemed prior to the Final
Maturity Date or is redeemable at the option of the holder thereof at
any time prior to the Final Maturity Date, or is convertible into or
exchangeable for debt securities at any time prior to the Final
Maturity Date. Notwithstanding the foregoing, to the extent that any
Common Stock of New CF&I is either (i) subject to the terms of the New
CF&I Stockholders Agreement as in effect on the Issue Date or (ii)
subject to the terms of any similar instrument or agreement (including
any amendment, supplement or restatement to the New CF&I Stockholders
Agreement) which provides for repurchase or redemption of such Common
Stock by the Company or New CF&I on terms no less favorable to the
Company and New CF&I than those set forth in the New CF&I Stockholders
Agreement as in effect on the Issue Date, then such
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<PAGE>
Common Stock of New CF&I shall not be deemed Redeemable Capital Stock
solely by virtue of being subject to the New CF&I Stockholders
Agreement or such other instrument or agreement.
"Redemption Date" means, with respect to any Security to
be redeemed, the date fixed by the Company for such redemption
pursuant to this Indenture and the Securities.
"Redemption Price" means, with respect to any Security to
be redeemed, the price fixed for such redemption pursuant to the terms
of this Indenture and the Securities.
"Registrar" shall have the meaning set forth in Section
2.03.
"Replacement Assets" shall have the meaning set forth in
Section 4.13.
"Released Interests" shall have the meaning set forth in
Section 11.05.
"Released Trust Moneys" shall have the meaning set forth
in Section 12.04.
"Restricted Payment" shall have the meaning set forth in
Section 4.09.
"Sale-Leaseback Transaction" of any person means an
arrangement with any lender or investor or to which such lender or
investor is a party providing for the leasing by such person of any
property or asset of such person which has been or is being sold or
transferred by such person after the acquisition thereof or the
completion of construction or commencement of operation thereof to
such lender or investor or to any person to whom funds have been or
are to be advanced by such lender or investor on the security of such
property or asset; provided that the term Sale-Leaseback Transaction
--------
shall not include any such transaction pursuant to which CF&I shall
sell or transfer any of the water rights and related water system
owned by it on the Issue Date in conjunction with an agreement or
other arrangement pursuant to which CF&I receives the right to
purchase or receive water represented by any portion of the water
rights so sold or transferred (it being understood that this proviso
shall not prevent any such sale or transfer of water rights or water
system from constituting an Asset Sale). The Stated Maturity of such
arrangement shall be the date of the last payment of rent or any other
amount due under such arrangement prior to the first date on which
such arrangement may be terminated by the lessee without payment of a
penalty.
"SEC" means the Securities and Exchange Commission, as
from time to time constituted, or if at any time after the execution
of this Indenture such Commission is not existing and performing the
applicable duties now assigned to it, then the body or bodies
performing such duties at such time.
"Securities" means the securities that are issued under
this Indenture, as amended or supplemented from time to time pursuant
to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Security Agreement" means a security agreement,
substantially in the form attached as Exhibit B to this Indenture
(including such changes to such form as may be necessary or desirable
to conform to applicable laws in the jurisdiction or jurisdictions
whose laws are applicable to the Lien created by such agreement), as
the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms of such instrument or this
Indenture.
"Security Documents" means collectively, (i) the Mortgages
executed by the Company and CF&I, (ii) the Security Agreements
executed by the Company, New CF&I and CF&I, (iii) all other Mortgages
or Security Agreements executed after the Issue Date by the Company or
any Guarantor, and (iv) all other mortgages, deeds of trust, security
agreements, pledge agreements, or other similar agreements evidencing
or creating any Lien on Collateral in favor of the Trustee (or, in the
case of mortgages, deeds of trust or similar agreements, in favor of
the Trustee or another trustee thereunder), for the benefit of the
Holders of the Securities, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with the terms of such instrument and this Indenture.
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"S&P" means Standard & Poor's Corporation, and its
successors.
"Specifically Secured Construction Contract" shall mean
any contract, agreement or other obligation in favor of the Company or
any Guarantor relating to the provision by any other person of labor
and/or materials in respect of the alteration, renovation or
construction of all or any part of any buildings, structures or
improvements in connection with the Combination Mill.
"Stated Maturity", when used with respect to any Security
or any installment of interest thereon, means the date specified in
such Security as the fixed date on which the principal of such
Security or such installment of interest is due and payable, and when
used with respect to any other Indebtedness, means the date specified
in the instrument governing such Indebtedness as the fixed date on
which the principal of such Indebtedness, or any installment of
interest thereon, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the
Company or a Guarantor which is expressly subordinated in right of
payment to the Securities or the Guarantee of such Guarantor, as the
case may be.
"Subsidiary" means, with respect to any person, (a) a
corporation a majority of whose Voting Stock is at the time, directly
or indirectly, owned by such person, by one or more Subsidiaries of
such person or by such person and one or more Subsidiaries thereof and
(b) any other person (other than a corporation), including, without
limitation, a joint venture, limited partnership or general
partnership, in which such person, one or more Subsidiaries thereof or
such person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof, owns more than 50%
of the outstanding shares, interests, participations or other
equivalents in the equity interest (however designated) in such
person. For purposes of this definition, any directors' qualifying
shares or investments by foreign nationals mandated by applicable law
shall be disregarded in determining the ownership of a Subsidiary.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be
deemed a Subsidiary of the Company under this Indenture, other than
for purposes of the definition of an Unrestricted Subsidiary, unless
the Company shall have designated an Unrestricted Subsidiary as a
"Subsidiary" by written notice to the Trustee under this Indenture,
accompanied by an Officers' Certificate as to compliance with this
Indenture; provided, however, that the Company shall not be permitted
-------- -------
to designate any Unrestricted Subsidiary as a Subsidiary unless, after
giving pro forma effect to such designation, (i) the Company would be
--- -----
permitted to incur $1.00 of additional Indebtedness under the first
paragraph of Section 4.08 (assuming a market rate of interest with
respect to such Indebtedness), (ii) all Indebtedness and Liens of such
Unrestricted Subsidiary would be permitted to be incurred by a
Subsidiary of the Company under this Indenture and (iii) such
Unrestricted Subsidiary shall have entered into a supplemental
indenture pursuant to which it shall have become a Guarantor and
complied with the other obligations described under Section 4.17. A
designation of an Unrestricted Subsidiary as a Subsidiary may not
thereafter be rescinded.
"Surviving Entity" shall have the meaning set forth in
Section 5.01.
"Surviving Person" shall have the meaning set forth in
Section 10.03.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the Issue Date.
"Title Policy" shall have the meaning set forth in Section
11.02(c).
"Trust Moneys" means all cash and Cash Equivalents
received by the Trustee (i) upon the release of Collateral from the
Lien of this Indenture and/or the Security Documents, including all
Collateral Proceeds (and amounts deemed, pursuant to this Indenture,
to constitute Collateral Proceeds) and all moneys received in respect
of the principal of all purchase money, governmental and other
obligations; (ii) as Net Proceeds and Net Awards (other than any
liability insurance proceeds payable to the Trustee for any loss,
liability or expense incurred by it); (iii) pursuant to the Security
Documents; (iv) as proceeds of any sale or other disposition of all or
any part of the Collateral by or on behalf of the Trustee or any
collection, recovery, receipt, appropriation or other realization of
or from all or any part of the Collateral pursuant to this Indenture
or any of the Security Documents or otherwise; (v) which constitute
Collateral Proceeds or are deemed pursuant to this Indenture to
constitute Collateral Proceeds from any transaction which results in a
Guarantor being released from its Guarantee pursuant to this
Indenture; or (vi) for application as provided in the relevant
provisions
17
<PAGE>
of this Indenture or any Security Document or whose disposition is not
otherwise specifically provided for in this Indenture or in any
Security Document; provided, however, that Trust
-------- -------
Moneys shall in no event include any property deposited with the
Trustee pursuant to Section 3.05, Section 4.12 or Article Eight or
delivered to or received by the Trustee pursuant to Section 6.10
hereof.
"Trust Moneys Release Notice" shall have the meaning set
forth in Section 12.04.
"Trust Officer" means any officer in the Corporate Trust
Office of the Trustee or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above-
designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the
particular subject.
"Trustee" means the party named as such in this Indenture
until a successor replaces such party (or any previous successor) in
accordance with the provisions of this Indenture, and thereafter means
such successor.
"Unrestricted Subsidiary" means (a) Camrose, CPC, Oregon
Steel Mills International, Inc., a U.S. Virgin Islands corporation,
Oregon Steel de Guayana, Inc., a Delaware corporation, OSM
Glassification, Inc., an Oregon corporation, Colorado & Wyoming
Railway Company, a Delaware corporation, and The Union Ditch and
Water Company, a Colorado corporation and (b) any other Subsidiary of
the Company established or acquired after the Issue Date (i) none of
whose properties or assets were owned by the Company or any of its
Subsidiaries prior to the Issue Date, other than any such assets as
are transferred to such Unrestricted Subsidiary in accordance with
Section 4.09 hereof, (ii) whose properties and assets, to the extent
that they secure Indebtedness, secure only Non-Recourse Indebtedness,
(iii) which has no Indebtedness other than Non-Recourse Indebtedness,
(iv) which is not a Guarantor and does not own, directly or
indirectly, any Capital Stock of a Guarantor and (v) which the Company
designates as an Unrestricted Subsidiary by written notice delivered
to the Trustee at the time such Unrestricted Subsidiary is established
or acquired, accompanied by an Officers' Certificate to the effect
that such designation complies with this Indenture. As used above,
"Non-Recourse Indebtedness" means Indebtedness as to which (x) neither
the Company nor any of its Subsidiaries (other than the relevant
Unrestricted Subsidiary or another Unrestricted Subsidiary) (1)
provides credit support (including any undertaking, agreement or
instrument which would constitute Indebtedness), (2) guarantees or is
otherwise directly or indirectly liable or (3) constitutes the lender
(in each case, other than pursuant to and in compliance with Section
4.09) and (y) no default with respect to such Indebtedness (including
any rights which holders thereof may have to take enforcement action
against the relevant Unrestricted Subsidiary or its assets) would
permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or its Subsidiaries (other than
Unrestricted Subsidiaries) to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its Stated Maturity.
"U.S. Government Obligations" shall have the meaning set
forth in Section 8.02.
"Valuation Date" shall have the meaning set forth in
Section 11.05.
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board
of directors, managers or trustees of any person (irrespective of
whether or not, at the time, Capital Stock of any other class or
classes shall have, or might have, voting power by reason of the
happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary of the
Company of which 100% of the outstanding Capital Stock is owned by the
Company, by one or more Wholly-Owned Subsidiaries of the Company or by
the Company and one or more Wholly-Owned Subsidiaries of the Company.
For purposes of this definition (a) any directors' qualifying shares
or investments by foreign nationals mandated by applicable law shall
be disregarded in determining the ownership of a Subsidiary and (b)
the limited partnership interests in CF&I and the Common Stock of New
CF&I owned by persons other than the Company and its Subsidiaries on
the Issue Date likewise shall be disregarded in determining ownership
of such Subsidiaries (it being understood that any increase in the
capital account of a limited partner of CF&I pursuant to the terms of
the CF&I Partnership Agreement shall not, in and of itself, cause such
limited partnership interest not to qualify under this clause (b)).
For purposes of the foregoing definition, neither CF&I nor New CF&I
shall be deemed not to be a Wholly-Owned Subsidiary of the Company
solely by virtue of any
18
<PAGE>
sale, transfer or assignment after the Issue Date of any limited
partnership interests or Common Stock referred to in clause (b) of the
preceding sentence (including, without limitation, by admission of
additional limited partners to CF&I), so long as such sale, transfer
or assignment is otherwise made in compliance with the provisions of
this Indenture.
Section 1.02. Incorporation by Reference of Trust
-----------------------------------
Indenture Act.
-------------
Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the
following meanings:
"Commission" means the SEC;
----------
"indenture securities" means the Securities and the
--------------------
Guarantees;
"indenture security holder" means a Securityholder or
-------------------------
Holder;
"indenture to be qualified" means this Indenture;
-------------------------
"indenture trustee" or "institutional trustee" means the
----------------- ---------------------
Trustee; and
"obligor" on the indenture securities means the Company,
-------
any Guarantor or any other obligor on the Securities or the
Guarantees, if any.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or
defined by SEC rule and not otherwise defined herein have the meanings
assigned to them therein.
Section 1.03. Rules of Construction.
---------------------
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
1. a term has the meaning assigned to it;
2. words in the singular include the plural, and words
in the plural include the singular;
3. "or" is not exclusive;
4. provisions apply to successive events and
transactions;
5. all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP;
6. the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision; and
7. all references to $ or dollars shall refer to the
lawful currency of the United States of America.
19
<PAGE>
ARTICLE TWO
THE SECURITIES
Section 2.01. Forms and Dating.
----------------
The Securities (including Global Securities) and the
Trustee's certificate of authentication thereon shall be in
substantially the form of Exhibit A hereto, with such appropriate
insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any
applicable law or with the rules of any securities exchange or as may,
consistently herewith, be determined by the Officers of the Company
executing such Securities, as evidenced by their execution thereof.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and integral multiples
thereof.
If so provided in a Company Order pursuant to Section
2.02, the Securities shall be issued under this Indenture in the form
of Global Securities. In such case, The Depository Trust Company
shall be the initial Depositary for such Global Securities. Global
Securities will be registered in the name of the Depositary or a
nominee of the Depositary.
The definitive Securities and the Guarantees shall be
printed, typewritten, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner
permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing
such Securities, as evidenced by their execution of such Securities.
Each Security shall be dated the date of its authentication.
The terms and provisions contained in the form of the
Securities and the Guarantees annexed hereto as Exhibit A and, in the
case of the CF&I Note, Exhibit E shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent
applicable, the Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.
Section 2.02. Execution and Authentication.
----------------------------
One Officer of the Company shall execute the Securities on
behalf of the Company by either manual or facsimile signature under
the Company's seal (which may be a facsimile of the genuine seal),
attested by the manual or facsimile signature of any other Officer of
the Company. The Company's seal (or a facsimile thereof) shall be
impressed, affixed, imprinted or reproduced on the Securities.
Typographical and other minor errors and defects in any such
reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
If an Officer of the Company whose signature is on a
Security no longer holds that office at the time the Trustee
authenticates the Security or at any time thereafter, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized officer
of the Trustee (so long as Chemical Bank is the Trustee) or an
authorized signatory (in case any other person is serving as Trustee)
manually signs the certificate of authentication on the Security.
Such signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate Securities for original
issue in an aggregate principal amount not to exceed $235,000,000 upon
receipt of a Company Order directing the Trustee to authenticate the
Securities and certifying that all conditions precedent to the
issuance of the Securities contained herein have been complied with.
The aggregate principal amount of Securities outstanding at any time
may not exceed $235,000,000, except as provided in Section 2.07.
The Company Order directing the authentication and
delivery of Securities shall specify whether such Securities shall be
issued in the form of definitive Securities or Global Securities. If
the Company Order specifies that the Securities are to be issued in
the form of one or more Global Securities, then the Company shall
execute and the
20
<PAGE>
Trustee shall, in accordance with this Section and such Company Order,
authenticate and deliver one or more Global Securities in definitive
form that:
(a) shall represent and shall be denominated in an
amount equal to the aggregate principal amount of the Securities,
(b) shall be registered in the name of the
Depositary or a nominee of such Depositary,
(c) shall, at the instruction of the Company, be
delivered by the Trustee to the Depositary or held by the Trustee
on behalf of the Depositary, and
(d) shall include and bear a legend substantially
to the effect that unless and until it is exchanged in whole or
in part for definitive Securities, such Global Security may not
be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
The Depositary must, at the time of its designation and at
all times while it serves as Depositary, be a clearing agency
registered under the Exchange Act and any other applicable statute or
regulation.
With the prior written approval of the Company, the
Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
Such authenticating agent shall have the same rights as the Trustee in
any dealings hereunder with the Company or with any of the Company's
Affiliates.
Section 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which
shall be located in the Borough of Manhattan, The City of New York,
State of New York) where Securities may be presented for registration
of transfer or for exchange (the "Registrar"), an office or agency
(which shall be located in the Borough of Manhattan, The City of New
York, State of New York) where Securities may be presented for payment
of principal and interest (the "Paying Agent") and an office or agency
(which shall be located in the Borough of Manhattan, the City of New
York, State of New York) where notices and demands to or upon the
Company and the Guarantors in respect of the Securities, the
Guarantees and this Indenture may be served, and the Company may from
time to time designate one or more other offices or agencies for any
such purposes as provided in Section 4.02. The Registrar shall keep a
register of the Securities and of their transfer and exchange. At the
option of the Company, interest may be paid by check mailed to the
persons entitled thereto as shown on such register. The Company may
have one or more co-Registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
Except as otherwise expressly provided in this Indenture, the Company
or any Affiliate thereof may act as Paying Agent.
The Company shall enter into an appropriate agency
agreement with any Registrar or Paying Agent not a party to this
Indenture, which shall incorporate the provisions of the TIA. The
agreement shall implement the provisions of this Indenture that relate
to such Registrar or Paying Agent. The Company shall give prompt
written notice to the Trustee of the name and address of any such
Registrar or Paying Agent or agent for service of notices and demand.
If the Company fails to maintain a Registrar, Paying Agent or agent
for service of notices and demands, or fails to give the foregoing
notice, the Trustee shall act as such and shall be entitled to
appropriate compensation in accordance with Section 7.08.
21
<PAGE>
Section 2.04. Paying Agent To Hold Money in Trust.
-----------------------------------
Each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, or interest on, the Securities (whether such
money has been distributed to it by the Company, any Guarantor or any
other obligor on the Securities or the Guarantees), and the Company
(or any other obligor on the Securities or the Guarantees) and the
Paying Agent shall notify the Trustee of any default by the Company
(or any other obligor on the Securities or the Guarantees) in making
any such payment. If the Company or an Affiliate of the Company acts
as Paying Agent, it shall segregate the money and hold it as a
separate trust fund. The Company at any time may require a Paying
Agent to distribute all money held by it to the Trustee and account
for any funds disbursed and the Trustee may at any time during the
continuance of any Event of Default, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the
Trustee and to account for any funds distributed. Upon doing so, the
Paying Agent (other than an obligor on the Securities or any
Guarantees) shall have no further liability for the money so paid over
to the Trustee.
Section 2.05. Holder Lists.
------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the
names and addresses of Holders and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least ten Business Days before each
Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders,
which list may be conclusively relied upon by the Trustee.
Section 2.06. Registration, Registration of Transfer and
------------------------------------------
Exchange.
--------
Subject to the provisions of this Section 2.06, upon
surrender for registration of transfer of any Security at any office
or agency of the Company designated pursuant to Section 4.02, the
Company shall execute, and the Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more
new Securities, of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously
outstanding with the Guarantees duly endorsed thereon and executed by
each Guarantor.
Notwithstanding any other provision of this Section,
unless and until it is exchanged in whole or in part for definitive
Securities, a Global Security may not be transferred except as a whole
by the Depositary to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
Subject to the provisions of this Section 2.06, at the
option of the Holder, Securities may be exchanged for other
Securities, of any authorized denomination or denominations and of a
like aggregate principal amount, upon surrender of the Securities to
be exchanged at any office or agency of the Company designated
pursuant to Section 4.02. Whenever any such Securities are so
surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive with the Guarantees duly endorsed
thereon and executed by each Guarantor.
If (i) the Depositary is at any time unwilling, unable or
ineligible to continue as Depositary and a successor Depositary is not
appointed by the Company within 60 days of the date the Company is so
informed in writing or becomes aware of the same, or (ii) an Event of
Default has occurred and is continuing, the Company promptly will
execute and deliver to the Trustee definitive Securities (and the
Guarantors will execute and deliver the Guarantees endorsed thereon),
and the Trustee, upon receipt of a Company Order for the
authentication and delivery of such definitive Securities (which the
Company will promptly execute and deliver to the Trustee), will
authenticate and deliver definitive Securities, without charge, in an
aggregate principal amount equal to the principal amount of the
Outstanding Global Securities, in exchange for all such Global
Securities. However, prior to the issuance of definitive Securities
in exchange for Global Securities pursuant to clause (ii) of the
preceding sentence, the Trustee shall promptly consult with local
counsel, selected by the Trustee (and the Company shall pay the fees
or disbursements of such counsel), in the jurisdictions in which any
real property (or interests therein), buildings, improvements or
fixtures covered by a Mortgage are located and if any such counsel
shall advise the Trustee that the Trustee will or may be required to
own, deliver or present certificates evidencing the Securities in
order to foreclose upon, sell or otherwise exercise its rights
22
<PAGE>
or remedies with respect to, or to release, any such Collateral, then
no definitive Securities shall be issued until (i) such requirements
to own, deliver or present Securities shall have been satisfied or
(ii) holders of at least a majority in aggregate principal amount of
the outstanding Securities shall have directed the Trustee to issue
definitive Securities. Such definitive Securities shall be registered
in such name or names as the Depositary shall instruct the Trustee.
In any exchange provided for in the preceding paragraph,
the Company will execute and the Trustee will authenticate and deliver
definitive Securities in the authorized denominations provided by
Section 2.01.
Upon the exchange of a Global Security for definitive
Securities, such Global Security shall be cancelled by the Trustee.
Definitive Securities issued in exchange for Global Securities
pursuant to this Section shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct
the Trustee.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company or
the Registrar or a co-Registrar) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the
Company and the Registrar or a co-Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges or transfers
pursuant to Sections 2.07, 2.10, 3.06, 4.12, 4.13 or 9.05, or of
Global Securities for definitive Securities pursuant to this Section
2.06. The Trustee shall not be required to exchange or register a
transfer of any Security for a period of 15 days immediately preceding
the first mailing of notice of redemption of Securities to be redeemed
or of any Security selected, called or being called for redemption
except, in the case of any Security where notice has been given that
such Security is to be redeemed in part, the portion thereof not to be
redeemed.
Section 2.07. Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Trustee or
if the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity, sufficient
in the judgment of both the Company and the Trustee, to protect the
Company, the Trustee or any Paying Agent or Registrar from any loss
which any of them may suffer if a Security is replaced. The Company
may charge such Holder for its reasonable out-of-pocket expenses in
replacing a Security, including reasonable fees and disbursements of
counsel. Every replacement Security is an additional obligation of
the Company and the Guarantors.
The provisions of this Section 2.07 are (to the extent
permitted by law) exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement of
mutilated, lost, destroyed or wrongfully taken Securities.
Section 2.08. Outstanding Securities.
----------------------
Securities outstanding at any time are all the Securities
that have been authenticated by the Trustee except those cancelled by
it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be
outstanding because the Company or any of its Affiliates holds the
Security.
If a Security is replaced pursuant to Section 2.07 (other
than a mutilated Security surrendered for replacement), it ceases to
be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security
23
<PAGE>
is held by a bona fide purchaser. A mutilated Security ceases to be
---- ----
outstanding upon surrender of such Security and replacement thereof
pursuant to Section 2.07.
If on a Redemption Date or a Maturity Date the Paying
Agent (other than the Company or an Affiliate of the Company) holds
cash designated and set aside for and sufficient to pay all of the
principal and interest due on the Securities payable on that date, and
is not prohibited from paying such cash to the Holders of such
Securities pursuant to the terms of this Indenture, then on and after
that date such Securities cease to be outstanding and interest on them
shall cease to accrue.
Section 2.09. Treasury Securities.
-------------------
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction, waiver
or consent, Securities owned by the Company or any of its Affiliates
shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee knows
or has reason to know are so owned shall be disregarded.
Section 2.10. Temporary Securities.
--------------------
Until definitive Securities are prepared and ready for
delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in
the form of definitive Securities but may have variations that the
Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary
Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as definitive
Securities.
Section 2.11. Cancellation.
------------
The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for
transfer, exchange or payment. The Trustee, or at the direction of
the Trustee, the Registrar or the Paying Agent (other than the Company
or an Affiliate of the Company), and no one else, shall promptly
cancel and, at the written direction of the Company, shall dispose of
all Securities surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not issue new
Securities to replace Securities that it has paid or delivered to the
Trustee for cancellation. If the Company or any of its Affiliates
shall acquire any of the Securities, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness
represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section
2.11.
Section 2.12. Defaulted Interest.
------------------
If the Company defaults on a payment of interest on the
Securities, it shall pay the defaulted interest, plus (to the extent
permitted by law) any interest payable on the defaulted interest, in
accordance with the terms hereof, to the persons who are Holders on a
subsequent special record date, which date shall be at least five
Business Days prior to the payment date. The Company shall fix such
special record date and payment date in a manner satisfactory to the
Trustee. At least 15 days before such special record date, the
Company shall mail to each Holder a notice that states the special
record date, the payment date and the amount of defaulted interest,
and interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing provisions of this Section 2.12,
defaulted interest may also be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange.
Section 2.13. CUSIP Number.
------------
The Company in issuing the Securities may use a "CUSIP"
number (if then generally in use), and if so, the Trustee may use the
CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; provided, however, that any such notice may state that no
-------- -------
representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Securities, and that reliance
may be placed only on the other
24
<PAGE>
identification numbers printed on the Securities. The Company will
promptly notify the Trustee of any change in the CUSIP number.
Section 2.14. Deposit of Moneys.
-----------------
On or before each Interest Payment Date, Change of Control
Purchase Date, Asset Sale Purchase Date and Maturity Date, the Company
shall deposit or cause to be deposited with the Trustee or Paying
Agent in immediately available funds money sufficient to make cash
payments, if any, due on such Interest Payment Date, Change of Control
Purchase Date, Asset Sale Purchase Date or Maturity Date, as the case
may be, in a timely manner which permits the Paying Agent to remit
timely payment to the Holders on such Interest Payment Date, Change of
Control Purchase Date, Asset Sale Purchase Date or Maturity Date, as
the case may be.
ARTICLE THREE
REDEMPTION OF SECURITIES
Section 3.01. Notices to the Trustee.
----------------------
If the Company elects to redeem Securities pursuant to
Paragraph 2(a) of the Securities, it shall notify the Trustee of the
Redemption Date and principal amount of Securities to be redeemed.
The Company shall notify the Trustee by an Officers'
Certificate, stating that such redemption will comply with the
provisions hereof and of the Securities, of any redemption at least 45
days before the Redemption Date.
Section 3.02. Selection of Securities To Be Redeemed.
--------------------------------------
In the event that less than all of the Securities are to
be redeemed at any time, selection of the particular Securities or
portions thereof for redemption will be made by the Trustee on a pro
rata basis, by lot or by such method as the Trustee shall deem fair
and appropriate; provided, however, that no Securities shall be
-------- -------
redeemed except in a principal amount of $1,000 or an integral
multiple of $1,000.
The Trustee shall promptly notify the Company and the
Registrar in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of
Securities shall relate, in the case of any Security redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Security which has been or is to be redeemed.
Section 3.03. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior
to the Redemption Date, to each Holder of Securities to be redeemed,
at the address of such Holder appearing in the list of Holders of
Securities maintained by the Registrar.
All notices of redemption shall identify the Securities to
be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(c) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption
ceases to accrue on and after the Redemption Date, and the only
remaining right of the
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<PAGE>
Holders of such Securities is to receive payment of the
Redemption Price and accrued interest, if any, upon surrender to
the Paying Agent of the Securities redeemed;
(d) if any Security is to be redeemed in part, the
portion of the principal amount (equal to $1,000 or any integral
multiple thereof) of such Security to be redeemed and that on
and after the Redemption Date, upon surrender for cancellation of
such original Security to the Paying Agent, a new Security or
Securities in the aggregate principal amount equal to the
unredeemed portion thereof will be issued without charge to the
Holder;
(e) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price
and the name and address of the Paying Agent;
(f) the CUSIP number, if any, relating to such
Securities, but no representation is made as to the correctness
or accuracy of any such CUSIP numbers; and
(g) the paragraph of the Securities pursuant to which
the Securities are being redeemed.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the
Company's written request, by the Trustee in the name and at the
expense of the Company.
Section 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the
Redemption Price. Upon surrender to the Paying Agent, such Securities
called for redemption shall be paid at the Redemption Price plus
accrued interest to the Redemption Date, but interest installments
whose maturity is on or prior to such Redemption Date will be payable
on the relevant Interest Payment Dates to the Holders of record at the
close of business on the relevant record dates referred to in the
Securities.
Section 3.05. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall
deposit with the Paying Agent an amount of money in same day funds
sufficient to pay the Redemption Price of, and accrued interest on,
all the Securities or portions thereof which are to be redeemed on
that date, other than Securities or portions thereof called for
redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such Redemption
Price plus accrued interest on the Securities (or portions thereof)
called for redemption to the Redemption Date, interest on the
Securities (or portions thereof) to be redeemed will cease to accrue
on and after the applicable Redemption Date, whether or not such
Securities are presented for payment. If any Security (or portion
thereof) called for redemption shall not be so paid upon surrender
thereof for redemption, the principal thereof and, to the extent
lawful, accrued interest thereon shall, until paid, bear interest from
the Redemption Date at the interest rate borne by the Securities.
Section 3.06. Securities Redeemed or Purchased in Part.
----------------------------------------
Upon surrender to the Paying Agent of a Security which is
to be redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities with a Guarantee duly
endorsed thereon and executed by each Guarantor, of any authorized
denomination as requested by such Holder in aggregate principal amount
equal to the unredeemed portion of the principal of the Security so
surrendered.
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ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities.
---------------------
The Company will pay, or cause to be paid, the principal
of and interest on the Securities on the dates and in the manner
provided in the Securities and this Indenture. An installment of
principal or interest shall be considered paid on the date due if the
Trustee or Paying Agent (other than the Company, a Subsidiary of the
Company or any Affiliate thereof) holds on that date money, in
immediately available funds, designated and set aside for and
sufficient to pay the installment in a timely manner and is not
prohibited from paying such money to the Holders of the Securities
pursuant to the terms of this Indenture.
The Company will pay interest on overdue principal at the
rate of interest borne by the Securities and in the manner provided in
the Securities and this Indenture; it shall pay interest on overdue
installments of interest at the same rate and in the same manner, to
the extent lawful.
Section 4.02. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be
surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the
Company and the Guarantors in respect of the Securities, the
Guarantees and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served
at the address of the Trustee as set forth in Section 13.02.
The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented
or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation
-------- -------
or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office
or agency.
The Company initially appoints the Trustee at its
Corporate Trust Office as Registrar, Paying Agent and agent for
service of notices and demands in connection with the Securities, the
Guarantees and this Indenture.
Section 4.03. Corporate Existence.
-------------------
Subject to Article Five and Section 10.03, the Company
shall do or cause to be done all things necessary to, and will cause
each of its Subsidiaries to, preserve and keep in full force and
effect the corporate or partnership, as the case may be, existence and
rights (charter and statutory), licenses and/or franchises of the
Company and each of its Subsidiaries; provided, however, that the
-------- -------
Company or any of its Subsidiaries shall not be required to preserve
any such rights, licenses or franchises if the Board of Directors of
the Company shall reasonably determine that (a) the preservation
thereof is no longer desirable in the conduct of the business of the
Company and its Subsidiaries taken as a whole and (b) the loss thereof
is not materially adverse to either the Company and its Subsidiaries
taken as a whole or to the ability of the Company to otherwise satisfy
its obligations hereunder.
Section 4.04. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges levied or imposed upon the
Company or any of its Subsidiaries or upon the income, profits or
property of the Company or any of its Subsidiaries, and (b) all lawful
claims for labor, materials and supplies which, if unpaid, might by
law become a Lien upon the property of the Company or
27
<PAGE>
any Subsidiary of the Company; provided, however, that, except as
-------- -------
otherwise provided herein or in any Security Document, the Company
shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate provision for the
payment thereof has been made or where the failure to effect such
payment or discharge is not adverse in any material respect to either
the Company and its Subsidiaries taken as a whole or to the ability of
the Company to otherwise satisfy its obligations hereunder.
Section 4.05. Maintenance of Properties; Insurance; Books
-------------------------------------------
and Records; Compliance with Law.
--------------------------------
(a) The Company shall, and shall cause each of its
Subsidiaries to, cause all properties and assets to be maintained and
kept in good condition, repair and working order (reasonable wear and
tear excepted) and supplied with all necessary equipment, and shall
cause to be made all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto, as shall be
reasonably necessary for the proper conduct of its business; provided,
--------
however, that nothing in this Section 4.05(a) shall prevent the
Company or any of its Subsidiaries from discontinuing the operation
and maintenance of any of its properties or assets if such
discontinuance is, in the judgment of the Board of Directors of the
Company or such Subsidiary, desirable in the conduct of its business
and if such discontinuance is not materially adverse to either the
Company and its Subsidiaries taken as a whole or the ability of the
Company to otherwise satisfy its obligations hereunder.
(b) The Company shall, and shall cause each of its
Subsidiaries to, maintain with financially sound and reputable
insurers such insurance as may be required by law and such other
insurance (other than with respect to any environmental impairment
liability insurance not commercially available) to such extent and
against such hazards and liabilities as is customarily maintained by
companies similarly situated (which may include self-insurance in the
same form as is customarily maintained by companies similarly
situated).
(c) The Company shall, and shall cause each of its
Subsidiaries to, keep proper books of record and account, in which
full and correct entries shall be made of all business and financial
transactions of the Company and each Subsidiary of the Company and
reflect on its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP.
(d) The Company shall and shall cause each of its
Subsidiaries to comply with all statutes, laws, ordinances, or
government rules and regulations to which it is subject, non-
compliance with which would materially adversely affect either the
Company and its Subsidiaries taken as a whole or the ability of the
Company to otherwise satisfy its obligations hereunder.
(e) Nothing in this Section 4.05 shall be deemed to
limit any obligations of the Company or any Guarantor under any of the
Security Documents.
Section 4.06. Compliance Certificate.
----------------------
(a) The Company will deliver to the Trustee within 60
days after the end of each of the Company's first three fiscal
quarters and within 90 days after the end of the Company's fiscal year
an Officers' Certificate stating whether or not the signers know of
any Default or Event of Default under this Indenture that occurred
during such fiscal period. If they do know of such a Default or Event
of Default, the certificate shall describe any such Default or Event
of Default and its status. The first certificate to be delivered
pursuant to this Section 4.06(a) shall be for the first fiscal quarter
of the Company beginning after the Issue Date. The Company and each
Guarantor shall also deliver a certificate to the Trustee at least
annually from its principal executive, financial or accounting officer
(which, in the case of any Guarantor which is a partnership, shall be
the principal executive, financial or accounting officer of a direct
corporate general partner (or, if there is no such direct corporate
general partner, of an indirect corporate general partner) of such
partnership or, if there is no such direct or indirect corporate
general partner, from any individual performing similar duties on
behalf of such partnership) as to his or her knowledge of the
Company's or such Guarantor's, as the case may be, compliance with all
conditions and covenants under this Indenture and the Security
Agreements, such compliance to be determined without regard to any
period of grace or requirement of notice provided herein or therein.
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<PAGE>
(b) The Company shall deliver to the Trustee within 90
days after the end of each fiscal year a written statement by the
Company's independent certified public accountants stating (i) that
their audit examination has included a review of the terms of this
Indenture and the form of Securities as they relate to accounting
matters, and (ii) whether, in connection with their audit examination,
any Default or Event of Default under this Indenture has come to their
attention and, if such a Default or Event of Default has come to their
attention, specifying the nature and period of existence thereof;
provided, however, that, without any restriction as to the scope of
- -------- -------
the audit examination, such independent certified public accountants
shall not be liable by reason of any failure to obtain knowledge of
any such Default or Event of Default that would not be disclosed in
the course of an audit examination conducted in accordance with GAAP.
(c) The Company will deliver to the Trustee as soon as
possible, and in any event within 10 days after the Company becomes
aware of the occurrence of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and
what action the Company is taking or proposes to take with respect
thereto.
Section 4.07. SEC Reports.
-----------
The Company shall file with the SEC the annual reports,
quarterly reports and other documents required to be filed with the
SEC pursuant to Sections 13 and 15 of the Exchange Act, whether or not
the Company has a class of securities registered under the Exchange
Act. In accordance with the provisions of TIA Section 314(a), the
Company, at its expense, shall file with the Trustee and mail to each
Holder, within 15 days after it files them with the SEC (or if any
such filing is not permitted under the Exchange Act, 15 days after the
Company would have been required to make such filing), copies of such
reports and documents (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the
Company is (or would have been) required to file with the SEC pursuant
to Section 13 or 15 of the Exchange Act. The Company also shall
comply with the other provisions of TIA Section 314(a). In addition,
the Company shall cause its annual reports to stockholders and any
quarterly or other financial reports furnished by it to stockholders
generally to be filed with the Trustee and mailed no later than the
date such materials are mailed or made available to the Company's
stockholders, to the Holders at their addresses as set forth in the
list of Holders of Securities maintained by the Registrar. In
addition, the Company will cause the Guarantors to file with the SEC
the annual reports, quarterly reports and other documents required to
be filed by them pursuant to Sections 13 and 15 of the Exchange Act
and, at the Company's expense, to file with the Trustee, within 15
days after filing them with the SEC, copies of such reports and
documents which the Guarantors are required to file with the SEC, and
to comply, to the extent required, with the provisions of TIA Section
314(a). So long as any of the Securities are evidenced by Global
Securities, the Company also agrees to promptly mail copies of any
such reports and documents filed by the Company or any Guarantor with
the Trustee as aforesaid to any beneficial owner of Securities upon
written request by such beneficial owner.
Section 4.08. Limitation on Indebtedness.
--------------------------
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or in any manner become directly or indirectly liable,
contingently or otherwise, for the payment of (in each case, to
"incur") any Indebtedness (including, without limitation, any Acquired
Indebtedness); provided, however, that the Company or any of its
-------- -------
Subsidiaries will be permitted to incur Indebtedness (including,
without limitation, Acquired Indebtedness) if (a) at the time of such
incurrence, and after giving pro forma effect thereto, the
Consolidated Fixed Charge Coverage Ratio of the Company is at least
equal to (i) in the case of Indebtedness incurred prior to June 15,
1998, 2 to 1 and (ii) in the case of Indebtedness incurred on or after
June 15, 1998, 2.5 to 1, (b) such Indebtedness has no scheduled
principal payment prior to the 123rd day after the Final Maturity Date
and (c) no Default or Event of Default shall have occurred and shall
be continuing at the time of such incurrence or would result as a
consequence of such incurrence.
Notwithstanding the foregoing, the Company and its
Subsidiaries may, to the extent specifically set forth below, incur
each and all of the following:
(a) Indebtedness of the Company under this Indenture or
evidenced by the Securities and Indebtedness of any Guarantor
evidenced by its Guarantee;
29
<PAGE>
(b) Indebtedness of the Company and its Subsidiaries
outstanding on the Issue Date (other than Indebtedness under, or
guarantees of Indebtedness under, the Old Credit Agreement);
(c) Indebtedness of the Company under the Credit
Agreement in an aggregate principal amount at any one time
outstanding not exceeding the greater of (x) $125,000,000 and (y)
the sum of 50% of the amount of inventory and 80% of the amount
of accounts receivable of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, less
in the case of each of clause (x) and (y) the aggregate amount of
Indebtedness under the Credit Agreement which has been repaid
with the Net Cash Proceeds of Asset Sales; and the guarantee by
any Subsidiary of Indebtedness of the Company incurred in
compliance with this subparagraph;
(d) (i) Interest Rate Protection Obligations of the
Company covering Indebtedness of the Company or a Subsidiary of
the Company and (ii) Interest Rate Protection Obligations of any
Subsidiary of the Company covering Indebtedness of such
Subsidiary; provided, however, that, in the case of either
-------- -------
clause (i) or (ii), (A) any Indebtedness to which any such
Interest Rate Protection Obligations relate bears interest at
fluctuating interest rates and is otherwise permitted to be
incurred under this Section 4.08 and (B) the notional principal
amount of any such Interest Rate Protection Obligations does not
exceed the principal amount of the Indebtedness to which such
Interest Rate Protection Obligations relate, provided that,
notwithstanding the foregoing provisions of this clause (B), the
Company and its Subsidiaries may also enter into Interest Rate
Protection Obligations relating to Indebtedness which they
anticipate will be incurred so long as (x) the aggregate notional
principal amount of such Interest Rate Protection Obligations
does not exceed the lesser of $50,000,000 and the aggregate
principal amount of Indebtedness they anticipate will be
incurred, and (y) such Interest Rate Protection Obligations are
treated as a hedge under GAAP and otherwise comply with the other
provisions of this subparagraph (d);
(e) Indebtedness of a Wholly-Owned Subsidiary owed to
and held by the Company or another Wholly-Owned Subsidiary, in
each case which is unsecured and is not subordinated in right of
payment to any Indebtedness of such Subsidiary, except that (i)
any transfer of such Indebtedness by the Company or a Wholly-
Owned Subsidiary (other than to the Company or to a Wholly-Owned
Subsidiary) and (ii) the sale, transfer or other disposition by
the Company or any Subsidiary of the Company of Capital Stock of
a Wholly-Owned Subsidiary which is owed Indebtedness of another
Wholly-Owned Subsidiary such that it ceases to be a Wholly-Owned
Subsidiary of the Company shall, in each case, be an incurrence
of Indebtedness by such Subsidiary subject to the other
provisions of this Section 4.08;
(f) Indebtedness of the Company owed to and held by a
Wholly-Owned Subsidiary of the Company which is unsecured and
subordinated in right of payment to the payment and performance
of the Company's obligations under this Indenture and the
Securities except that (i) any transfer of such Indebtedness by a
Wholly-Owned Subsidiary of the Company (other than to another
Wholly-Owned Subsidiary of the Company) and (ii) the sale,
transfer or other disposition by the Company or any Subsidiary of
the Company of Capital Stock of a Wholly-Owned Subsidiary which
holds Indebtedness of the Company such that it ceases to be a
Wholly-Owned Subsidiary shall, in each case, be an incurrence
of Indebtedness by the Company, subject to the other provisions
of this Section 4.08;
(g) Indebtedness under Currency Agreements; provided
that in the case of Currency Agreements which relate to
Indebtedness, such Currency Agreements do not increase the
Indebtedness of the Company and its Subsidiaries outstanding
other than as a result of fluctuations in foreign currency
exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(h) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is
-------- -------
extinguished within two business days of incurrence;
(i) Indebtedness (including Indebtedness represented by
letters of credit) incurred in respect of bid or performance
bonds provided in the ordinary course of business;
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<PAGE>
(j) Indebtedness of the Company or any of its
Subsidiaries represented by letters of credit for the account of
the Company or such Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment
obligations in connection with self-insurance or similar
requirements in the ordinary course of business or which letters
of credit were otherwise issued in the ordinary course of
business and not in connection with or in respect of liabilities
for borrowed money, obligations evidenced by bonds, notes,
debentures or other similar instruments, Capital Leases or
guarantees in respect thereof;
(k) Indebtedness of the Company or any Subsidiary of the
Company in addition to that described in clauses (a) through (j)
above and (l) below, in an aggregate principal amount outstanding
at any time not exceeding $30,000,000;
(l) unsecured Indebtedness of CF&I evidenced by any
promissory note which CF&I is required to deliver to one of its
limited partners pursuant to Section 7.1 of the CF&I Partnership
Agreement (as in effect on the Issue Date) or incurred pursuant
to Section 7.3-2(ii)(2) of the CF&I Partnership Agreement (as in
effect on the Issue Date) to finance a shortfall in a required
cash distribution to a limited partner of CF&I;
(m) (i) Indebtedness of the Company the proceeds of
which are used solely to refinance (whether by amendment,
renewal, extension or refunding) Indebtedness of the Company or
any of its Subsidiaries and (ii) Indebtedness of any Subsidiary
of the Company the proceeds of which are used solely to refinance
(whether by amendment, renewal, extension or refunding)
Indebtedness of such Subsidiary, in each case other than (I)
Indebtedness under (or guarantees of Indebtedness under) the Old
Credit Agreement or any other Indebtedness refinanced, redeemed
or retired with the proceeds from the sale of the Securities or
from the Common Stock Offering and (II) Indebtedness under clause
(c), (d), (e), (f), (g), (h), (i), (j), (k) or (l) of this
covenant; provided, however, that (x) the principal amount of
-------- -------
Indebtedness incurred pursuant to this clause (m) (or, if such
Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of
such Indebtedness) shall not exceed the sum of the principal
amount of Indebtedness so refinanced, plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of such Indebtedness or the amount of any
premium reasonably determined by the Board of Directors of the
Company as necessary to accomplish such refinancing by means of a
tender offer or privately negotiated purchase, plus the amount of
expenses in connection therewith, (y) in the case of Indebtedness
incurred by the Company or a Guarantor pursuant to this clause
(m) to refinance Subordinated Indebtedness, such Indebtedness (A)
has no scheduled principal payment prior to the 123rd day after
the Final Maturity Date, (B) has an Average Life to Stated
Maturity greater than the remaining Average Life to Stated
Maturity of the Securities and (C) is subordinated to the
Securities or to the Guarantee of such Guarantor, as the case may
be, in the same manner and to the same extent that the
Subordinated Indebtedness being refinanced is subordinated to the
Securities or to the Guarantee of such Guarantor, as the case may
be, and (z) in the case of Indebtedness incurred by the Company
or a Guarantor pursuant to this clause (m) to refinance Pari
Passu Indebtedness, such Indebtedness (A) has no scheduled
principal payment prior to the 123rd day after the Final Maturity
Date, (B) has an Average Life to Stated Maturity greater than the
remaining Average Life to Stated Maturity of the Securities and
(C) constitutes Pari Passu Indebtedness or Subordinated
Indebtedness.
Section 4.09. Limitation on Restricted Payments.
---------------------------------
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital Stock of the
Company or any of its Subsidiaries or any payment made to the
direct or indirect holders (in their capacities as such) of
Capital Stock of the Company or any of its Subsidiaries (other
than (1) dividends or distributions payable solely in Capital
Stock of the Company (other than Redeemable Capital Stock) or in
options, warrants or other rights to purchase Capital Stock of
the Company (other than Redeemable Capital Stock), (2) the
declaration or payment of dividends or other distributions to the
extent declared or paid to the Company or any Subsidiary of the
Company, (3) the declaration or payment of dividends or other
distributions by any Subsidiary of the Company to all holders of
Capital Stock of such Subsidiary on a pro rata basis and
--- ----
31
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(4) the declaration or payment of distributions by CF&I to
holders of its limited and general partnership interests in
accordance with the terms of the CF&I Partnership Agreement as
in effect on the Issue Date),
(b) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock of the Company or any of its
Subsidiaries (other than any such Capital Stock owned by a
Wholly-Owned Subsidiary of the Company which is a Guarantor),
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value,
prior to any scheduled maturity, scheduled repayment, scheduled
sinking fund payment or other Stated Maturity, any Subordinated
Indebtedness or Pari Passu Indebtedness (other than any such
Indebtedness owned by the Company or a Wholly-Owned Subsidiary of
the Company which is a Guarantor and other than any such Pari
Passu Indebtedness under the Credit Agreement), or
(d) make any Investment (other than any Permitted
Investment) in any person
(such payments or Investments described in the preceding clauses (a),
(b), (c) and (d) are collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to the
proposed Restricted Payment (the amount of any such Restricted
Payment, if other than cash, shall be the Fair Market Value on the
date of such Restricted Payment of the asset(s) proposed to be
transferred by the Company or such Subsidiary, as the case may be,
pursuant to such Restricted Payment), (i) no Default or Event of
Default shall have occurred and be continuing, (ii) immediately prior
to and after giving effect to such Restricted Payment, the Company
would be able to incur $1.00 of additional Indebtedness pursuant to
the first paragraph of Section 4.08 (assuming a market rate of
interest with respect to such additional Indebtedness) and (iii) the
aggregate amount of all Restricted Payments declared or made from and
after the Issue Date would not exceed the sum of (x) 50% of the
aggregate Consolidated Net Income of the Company accrued on a
cumulative basis during the period beginning on the first day of the
fiscal quarter of the Company during which the Issue Date occurs and
ending on the last day of the fiscal quarter of the Company
immediately preceding the date of such proposed Restricted Payment,
which period shall be treated as a single accounting period (or, if
such aggregate cumulative Consolidated Net Income of the Company for
such period shall be a deficit, minus 100% of such deficit) plus (y)
----
the aggregate net cash proceeds received by the Company either (A) as
capital contributions to the Company after the Issue Date from any
person (other than a Subsidiary or an Unrestricted Subsidiary of the
Company) or (B) from the issuance or sale of Capital Stock (excluding
Redeemable Capital Stock and excluding shares of Common Stock
(including any shares issued upon exercise of the underwriters' over-
allotment option) issued in the Common Stock Offering, but including
Capital Stock issued upon the conversion of convertible Indebtedness
or from the exercise of options, warrants or rights to purchase
Capital Stock (other than Redeemable Capital Stock)) of the Company to
any person (other than to a Subsidiary or an Unrestricted Subsidiary
of the Company) after the Issue Date plus (z) in the case of the
----
disposition or repayment of any Investment which was made after the
Issue Date and which constituted a Restricted Payment (excluding any
Investment described in clause (v) of the following paragraph), an
amount equal to the lesser of the return of capital with respect to
such Investment and the cost of such Investment, in either case, less
the cost of the disposition of such Investment. For purposes of the
preceding clause (iii)(y), the value of the aggregate net proceeds
received by the Company upon the issuance of Capital Stock upon the
conversion of convertible Indebtedness or upon the exercise of
options, warrants or rights will be the net cash proceeds received
upon the issuance of such Indebtedness, options, warrants or rights
plus the incremental cash amount received by the Company upon the
conversion or exercise thereof.
None of the foregoing provisions will prohibit (i) the
payment of any dividend within 60 days after the date of its
declaration, if at the date of declaration such payment would be
permitted by the foregoing paragraph; (ii) so long as no Default or
Event of Default shall have occurred and be continuing, the
redemption, repurchase or other acquisition or retirement of any
shares of any class of Capital Stock of the Company or any Subsidiary
of the Company in exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to the Company from
any person (other than a Subsidiary or an Unrestricted Subsidiary of
the Company) or (y) issue and sale of other shares of Capital Stock
(other than Redeemable Capital Stock and other than shares of Common
Stock (including any shares issued upon exercise of the underwriters'
over-allotment option) issued in the Common Stock Offering) of the
Company to any person (other than to a Subsidiary or an Unrestricted
Subsidiary of the Company); provided, however, that the amount of any
-------- -------
such net cash proceeds that are utilized for any such redemption,
repurchase or other acquisition or retirement shall be excluded from
clause (iii)(y) of the preceding paragraph; (iii) so long as no
Default or Event of
32
<PAGE>
Default shall have occurred and be continuing, any redemption,
repurchase or other acquisition or retirement of Subordinated
Indebtedness by exchange for, or out of the net cash proceeds of, a
substantially concurrent (x) capital contribution to the Company from
any person (other than a Subsidiary or an Unrestricted Subsidiary of
the Company) or (y) issue and sale of (A) Capital Stock (other than
Redeemable Capital Stock and other than shares of Common Stock
(including any shares issued upon exercise of the underwriters' over-
allotment option) issued in the Common Stock Offering) of the Company
to any person (other than to a Subsidiary or an Unrestricted
Subsidiary of the Company); provided, however, that the amount of any
-------- -------
such net cash proceeds that are utilized for any such redemption,
repurchase or other acquisition or retirement shall be excluded from
clause (iii)(y) of the preceding paragraph; or (B) Indebtedness of the
Company issued to any person (other than to a Subsidiary or an
Unrestricted Subsidiary of the Company) so long as such Indebtedness
is Subordinated Indebtedness which (1) has no Stated Maturity earlier
than the 123rd day after the Final Maturity Date, (2) has an Average
Life to Stated Maturity equal to or greater than the remaining Average
Life to Stated Maturity of the Securities and (3) is subordinated to
the Securities in the same manner and at least to the same extent as
the Subordinated Indebtedness so purchased, exchanged, redeemed,
acquired or retired; (iv) so long as no Default or Event of Default
shall have occurred and be continuing, any redemption, repurchase or
other acquisition or retirement of Pari Passu Indebtedness by exchange
for, or out of the net cash proceeds of, a substantially concurrent
(x) capital contribution to the Company from any person (other than a
Subsidiary or an Unrestricted Subsidiary of the Company) or (y) issue
and sale of (A) Capital Stock (other than Redeemable Capital Stock and
other than shares of Common Stock (including any shares issued upon
exercise of the underwriters' over-allotment option) issued in the
Common Stock Offering) of the Company to any person (other than to a
Subsidiary or an Unrestricted Subsidiary of the Company); provided,
--------
however, that the amount of any such net cash proceeds that are
- -------
utilized for any such redemption, repurchase or other acquisition or
retirement shall be excluded from clause (iii)(y) of the preceding
paragraph; or (B) Indebtedness of the Company issued to any person
(other than a Subsidiary or an Unrestricted Subsidiary of the
Company), so long as such Indebtedness is Subordinated Indebtedness or
Pari Passu Indebtedness which (1) has no Stated Maturity earlier than
the 123rd day after the Final Maturity Date and (2) has an Average
Life to Stated Maturity equal to or greater than the remaining Average
Life to Stated Maturity of the Securities; (v) Investments
constituting Restricted Payments made as a result of the receipt of
non-cash consideration from any Asset Sale made pursuant to and in
compliance with Section 4.13; (vi) so long as no Default or Event of
Default shall have occurred and be continuing at the time of any
payment pursuant to this clause (vi) or would result as a consequence
thereof, the payment of dividends on the Company's Common Stock after
the Issue Date in an aggregate amount not to exceed $25,000,000; and
(vii) application of the net proceeds from the issuance and sale of
the Securities and from the issuance and sale of Common Stock of the
Company in the Common Stock Offering to repay Indebtedness under the
Old Credit Agreement. In computing the amount of Restricted Payments
previously made for purposes of clause (iii) of the preceding
paragraph, Restricted Payments made under the preceding clause (v)
shall be included and clauses (i), (ii), (iii), (iv), (vi) and (vii)
shall not be so included.
In addition, none of the foregoing provisions will
prohibit the Company or any of its Subsidiaries from continuing to own
any Investment which it owned on the Issue Date.
Section 4.10. Limitation on Issuances and Sale of Capital
-------------------------------------------
Stock by Subsidiaries.
---------------------
The Company (a) will not permit any of its Subsidiaries to
issue any Capital Stock (other than to the Company or a Wholly-Owned
Subsidiary of the Company which is a Guarantor) and (b) will not
permit any person (other than the Company or a Wholly-Owned Subsidiary
of the Company which is a Guarantor) to own any Capital Stock of any
Subsidiary of the Company; provided, however, that this covenant shall
-------- -------
not prohibit the issuance and sale of (i) all, but not less than all,
of the issued and outstanding Capital Stock of any Subsidiary of the
Company owned by the Company and its Subsidiaries in compliance with
the other provisions of this Indenture (including, without limitation,
Sections 4.13 and 10.04) or (ii) directors' qualifying shares or
investments by foreign nationals mandated by applicable law; and
provided further that clause (b) of this Section 4.10 shall not apply
- -------- -------
to any Capital Stock of CF&I or New CF&I which, on the Issue Date, was
not owned by the Company or a Wholly-Owned Subsidiary of the Company
which is a Guarantor, so long as there is no increase in the
percentage of the outstanding Capital Stock of CF&I or New CF&I which
is owned by persons other than the Company and its Wholly-Owned
Subsidiaries which are Guarantors (it being understood that an
increase in the capital account of a limited partner of CF&I pursuant
to the terms of the CF&I Partnership Agreement shall not be deemed, in
and of itself, to be an increase in the percentage of CF&I's Capital
Stock owned by persons other than the Company and its Wholly-Owned
Subsidiaries which are Guarantors).
33
<PAGE>
Section 4.11. Limitation on Liens.
-------------------
The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien of
any kind (other than Permitted Liens) against or upon (a) any item of
Collateral (whether owned on the Issue Date or thereafter acquired) or
any proceeds therefrom or (b) any other property or assets (including,
without limitation, Intercompany Indebtedness and Capital Stock) of
the Company or any of its Subsidiaries (whether owned on the Issue
Date or thereafter acquired) or any proceeds therefrom, unless, solely
in the case of Liens on property or assets referred to in this clause
(b) or proceeds therefrom (i) in the case of Liens securing
Subordinated Indebtedness, the Securities are secured by a Lien on
such property, assets or proceeds that is senior in priority to such
Liens and (ii) in all other cases, the Securities are equally and
ratably secured.
Section 4.12. Change of Control.
-----------------
Upon the occurrence of a Change of Control (the date of
such occurrence, the "Change of Control Date"), the Company shall make
an offer to purchase (a "Change of Control Offer") on a Business Day
(the "Change of Control Purchase Date") not more than 60 nor less than
30 days following the Change of Control Date, all of the then
outstanding Securities at a purchase price (the "Change of Control
Purchase Price") equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the Change of Control Purchase
Date.
Notice of a Change of Control Offer shall be mailed by the
Company not later than the 30th day after the Change of Control Date
to the Holders of Securities at their last registered addresses with a
copy to the Trustee and the Paying Agent, the copy mailed to the
Trustee to be accompanied by an Officers' Certificate stating that a
Change of Control has occurred and that the Company is required to
make a Change of Control Offer. The Change of Control Offer shall
remain open from the time of mailing for at least 20 Business Days and
until 5:00 p.m., New York City time, on the Change of Control Purchase
Date. The notice, which shall govern the terms of the Change of
Control Offer, shall include such disclosures as are required by law
and shall state:
(a) that the Change of Control Offer is being made
pursuant to this Section 4.12 and that all Securities validly
tendered into the Change of Control Offer and not withdrawn will
be accepted for payment;
(b) the Change of Control Purchase Price (including the
amount of accrued interest, if any) for each Security, the Change
of Control Purchase Date and the date and time on which the
Change of Control Offer expires;
(c) that any Security not tendered for payment will
continue to accrue interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the
payment of the Change of Control Purchase Price, any Security
accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control
Purchase Date;
(e) that Holders electing to have Securities purchased
pursuant to a Change of Control Offer will be required to
surrender such Securities, with the form entitled "Option of
Holder to Elect Purchase" on the reverse side of the Security
duly completed, to the Paying Agent at the address specified in
the notice prior to 5:00 p.m., New York City time, on the Change
of Control Purchase Date and must complete any form of letter of
transmittal proposed by the Company and acceptable to the Trustee
and the Paying Agent;
(f) that Holders of Securities will be entitled to
withdraw their election if the Paying Agent receives, not later
than 5:00 p.m., New York City time, on the Change of Control
Purchase Date, a facsimile transmission or letter (which may be
delivered by mail, air courier, hand delivery or otherwise)
setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase, the Security
certificate number (if any) and a statement that such Holder is
withdrawing its election to have such Securities purchased;
34
<PAGE>
(g) that Holders whose Securities are purchased only in
part will be issued Securities equal in principal amount to the
unpurchased portion of the Securities surrendered;
(h) the instructions that Holders must follow in order
to tender their Securities; and
(i) information concerning the business of the Company,
the most recent annual and quarterly reports of the Company filed
with the SEC pursuant to the Exchange Act (or, if the Company is
not then required to file any such reports with the SEC, the
comparable reports prepared pursuant to Section 4.07), a
description of material developments in the Company's business,
information with respect to pro forma historical financial
information after giving effect to such Change of Control and
such other information concerning the circumstances and relevant
facts regarding such Change of Control Offer as would be material
to a Holder of Securities in connection with the decision of such
Holder as to whether or not it should tender Securities pursuant
to the Change of Control Offer.
Notwithstanding the foregoing paragraph, as long as any
Securities are evidenced by Global Securities, (i) Securities may be
tendered or surrendered for payment upon a Change of Control Offer,
tendered Securities may be withdrawn, and letters of transmittal (or
electronic messages in lieu thereof) may be completed and delivered,
in accordance with the then current procedures of the Depositary (and
the Company shall appropriately amend the notice described in the
preceding paragraph to incorporate a description of such procedures)
and (ii) the Company shall otherwise comply with the then current
rules and procedures of the Depositary in connection with such Change
of Control Offer.
On the Change of Control Purchase Date, the Company shall
(i) accept for payment Securities or portions thereof validly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent money, in immediately available funds, sufficient to pay the
Change of Control Purchase Price of all Securities or portions thereof
so tendered and accepted and (iii) deliver to the Trustee the
Securities so accepted together with an Officers' Certificate setting
forth the Securities or portions thereof tendered to and accepted for
payment by the Company. The Paying Agent shall promptly mail or
deliver to the Holders of Securities so accepted payment in an amount
equal to the Change of Control Purchase Price, and the Trustee shall
promptly authenticate and mail or deliver to each such Holder a new
Security equal in principal amount to any unpurchased portion of the
Security surrendered. Any Securities not so accepted shall be
promptly mailed or delivered by the Company to the Holders thereof.
The Company will publicly announce the results of the Change of
Control Offer not later than the first Business Day following the
Change of Control Purchase Date. For purposes of this Section 4.12,
the Trustee shall act as Paying Agent.
The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements applicable to a Change of Control
Offer made by the Company and purchases all Securities validly
tendered and not withdrawn under such Change of Control Offer.
The Company will comply with Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable, in the event that a
Change of Control occurs and the Company is required to purchase
Securities as described above. To the extent that the provisions of
any applicable securities laws or regulations conflict with the
provisions of this Section 4.12, the Company shall comply with such
applicable securities laws and regulations and shall not be deemed by
virtue thereof to have breached its obligations under this Section
4.12.
Section 4.13. Disposition of Proceeds of Asset Sales.
--------------------------------------
(a) The Company will not, and will not permit any of its
Subsidiaries to, make any Asset Sale unless (i) the Company or such
Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the Capital
Stock or other property or assets sold or otherwise disposed of, (ii)
at least 85% of such consideration consists of cash or Cash
Equivalents, (iii) if such Asset Sale involves Collateral, it shall be
in compliance with the provisions of Article Eleven of this Indenture
and (iv) the Company or such Subsidiary, as the case may be, shall
apply such Net Cash Proceeds as provided in the immediately succeeding
paragraph.
35
<PAGE>
Any such Net Cash Proceeds shall be applied within 365
days of the related Asset Sale as follows:
(i) to the extent that such Net Cash Proceeds are
derived from property or assets (including Capital Stock) which
do not constitute Collateral or are not deemed (pursuant to the
provisions of this Section 4.13 set forth below) to constitute
Collateral Proceeds ("Non-Collateral Proceeds"), such Non-
Collateral Proceeds may, at the option of the Company, be applied
to repay Indebtedness outstanding under the Credit Agreement; and
(ii) with respect to any Net Cash Proceeds derived from
property or assets (including Capital Stock) which constitute
Collateral ("Collateral Proceeds") or derived from a transaction
as a result of which a Guarantor is released from its Guarantee
as provided in Section 10.04 and which (pursuant to the
provisions of this Section 4.13 set forth below) are deemed to be
Collateral Proceeds, and with respect to any Non-Collateral
Proceeds remaining after application as described in subparagraph
(i) above (all such Collateral Proceeds and amounts deemed to be
Collateral Proceeds, together with any such remaining Non-
Collateral Proceeds being hereinafter called, collectively, the
"Available Amount"), such Available Amount shall, if the Company
so elects, be applied to make an investment in properties and
assets that replace the properties and assets that were the
subject of such Asset Sale or in properties and assets that will
be used in the business of the Company and its Subsidiaries
existing on the Issue Date or in businesses reasonably related
thereto ("Replacement Assets"); provided that any Replacement
Assets acquired with any such Collateral Proceeds or amounts
deemed to constitute Collateral Proceeds (A) shall be owned by
the Company or a Guarantor and shall not be subject to any Liens
except as expressly permitted by this Indenture and the Security
Documents (and the Company or such Guarantor, as the case may be,
shall execute and deliver to the Trustee such Security Documents
or other instruments as shall be necessary to cause such
Replacement Assets to become subject to a Lien in favor of the
Trustee (or, in the case of Replacement Assets subject to a
Mortgage, the Trustee or another trustee under such Mortgage),
for the benefit of the Holders of the Securities, securing its
obligations under the Securities or its Guarantee, as the case
may be, and otherwise shall comply with the provisions of this
Indenture applicable to After-Acquired Property); and (B) shall
not include any Bank Collateral, Excluded Intangibles, Excluded
Securities or Excluded Assets.
Any portion of the Available Amount that is not used as described in
subparagraph (i) or (ii) above within such 365 day period shall
constitute "Excess Proceeds" subject to disposition as provided in
paragraph (b) below.
(b) When the aggregate amount of Excess Proceeds equals
or exceeds $10,000,000, the Company shall make an offer to purchase
(an "Asset Sale Offer") from all Holders of the Securities, on a date
not more than 40 Business Days thereafter (the "Asset Sale Purchase
Date"), the maximum aggregate principal amount (expressed as a
multiple of $1,000) of the outstanding Securities that may be
purchased with such Excess Proceeds, at a price, payable in cash,
equal to 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the purchase date (the "Asset Sale Offer Price").
To the extent that the aggregate principal amount of Securities
tendered pursuant to an Asset Sale Offer is less than the maximum
aggregate principal amount which may be purchased with such Excess
Proceeds, any such remaining Excess Proceeds will be retained by the
Company, free and clear of the Lien of this Indenture and the Security
Documents. If the aggregate principal amount of Securities validly
tendered and not withdrawn by Holders thereof exceeds the maximum
aggregate principal amount which may be purchased with such Excess
Proceeds, Securities to be purchased will be selected on a pro rata
--- ----
basis (with such adjustments as may be deemed appropriate by the
Company so that only Securities in denominations of $1,000 or integral
multiples of $1,000 shall be acquired). Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be reset to zero.
(c) All Collateral Proceeds and amounts which, pursuant
to the provisions described below, are deemed to be Collateral
Proceeds shall, pending their application in accordance with this
Section 4.13 or the release thereof in accordance with the provisions
of this Section 4.13 or Article Twelve hereof, be deposited as Trust
Moneys in the Collateral Account under this Indenture. Such
Collateral Proceeds shall be invested by the Trustee in Cash
Equivalents pursuant to a Company Order given in accordance with
Section 12.06 hereof; provided, however, that in no event shall the
-------- -------
Company specify a maturity date later than the Asset Sale Purchase
Date. Such Company Order shall be accompanied by an Officers'
Certificate of the Company setting forth (i) a statement to the effect
that the Company or a Subsidiary of the Company has made an Asset Sale
and (ii) if applicable, the aggregate principal amount of Securities
offered to be purchased and the basis of calculation in determining
such aggregate principal amount.
36
<PAGE>
(d) In the event that the Company shall, in any
transaction or series of transactions, sell, assign, convey, transfer,
lease or otherwise dispose of substantially all (but not all) of its
properties and assets as an entirety in a transaction permitted under
the terms of Section 5.01 hereof, or if the Company shall cause or
permit any of its Subsidiaries to enter into any such transaction or
series of transactions if such transaction or series of transactions,
in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or other disposition of substantially all (but not
all) of the properties and assets of the Company or of the Company and
its Subsidiaries (taken as a whole) in a transaction permitted under
the terms of Section 5.01 hereof, the Surviving Entity shall be deemed
to have sold the properties and assets of the Company and its
Subsidiaries not so transferred for purposes of this Section 4.13 and
shall comply with the provisions of this Section 4.13 with respect to
such deemed sale as if it were an Asset Sale. The Fair Market Value
of such properties and assets of the Company and its Subsidiaries
deemed to be sold shall be deemed to be the Net Cash Proceeds for
purposes of this Section 4.13. In the event that any Guarantor shall,
in any transaction or series of transactions, sell, assign, convey,
transfer, lease or otherwise dispose of substantially all (but not
all) of its properties and assets in a transaction permitted under
Section 10.03, the Surviving Person shall be deemed to have sold the
properties and assets of such Guarantor not so transferred for
purposes of this covenant and shall comply with the provisions of this
covenant with respect to such deemed sale as if it were an Asset Sale.
The Fair Market Value of such properties and assets of such Guarantor
deemed to have been sold shall be deemed to be the Net Cash Proceeds
for purposes of the Asset Sale provisions of this Indenture.
(e) In the event of a merger or consolidation of a
Guarantor, sale of Capital Stock of a Guarantor, sale of property or
assets of a Guarantor or other transactions as a result of which a
Guarantor will be released from its Guarantee as provided in Section
10.04, then, anything in this Indenture to the contrary
notwithstanding, (i) such transaction shall be deemed to be an Asset
Sale and shall be subject to and shall only be made in compliance with
the terms of this Section 4.13 and (ii) the Net Cash Proceeds of such
transaction shall be allocated between Collateral Proceeds and Non-
Collateral Proceeds as follows: (A) such Net Cash Proceeds shall be
multiplied by a fraction (1) the numerator of which is the Fair Market
Value of the Collateral owned by such Guarantor and (2) the
denominator of which is the Fair Market Value of all property and
assets (including Collateral) owned by such Guarantor, and the
resulting amount shall be deemed Collateral Proceeds, and (B) the
remainder of such Net Cash Proceeds shall be deemed Non-Collateral
Proceeds.
(f) Notice of an Asset Sale Offer shall be mailed by the
Company to all Holders of Securities not less than 20 Business Days
nor more than 40 Business Days before the Asset Sale Purchase Date at
their last registered address with a copy to the Trustee and the
Paying Agent, the copy mailed to the Trustee to be accompanied by an
Officers' Certificate stating that an Asset Sale has occurred and that
the Company is required to make an Asset Sale Offer for the principal
amount of Securities set forth in such certificate. The Asset Sale
Offer shall remain open from the time of mailing for at least 20
Business Days and until at least 5:00 p.m., New York City time, on the
Asset Sale Purchase Date. The notice, which shall govern the terms of
the Asset Sale Offer, shall include such disclosures as are required
by law and shall state:
(i) that the Asset Sale Offer is being made pursuant to
this Section 4.13 and the aggregate principal amount of
Securities which the Company is offering to purchase thereby;
(ii) the Asset Sale Offer Price (including the amount of
accrued interest, if any) for each Security, the Asset Sale
Purchase Date and the date and time on which the Asset Sale Offer
expires;
(iii) that any Security not tendered or accepted for
payment will continue to accrue interest in accordance with the
terms thereof;
(iv) that, unless the Company shall default in the
payment of the Asset Sale Offer Price, any Security accepted for
payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Asset Sale Purchase Date;
(v) that Holders electing to have Securities purchased
pursuant to an Asset Sale Offer will be required to surrender
such Securities, with the form entitled "Option of Holder to
Elect Purchase" on the reverse side of the Security duly
completed, to the Paying Agent at the address specified in the
notice prior to
37
<PAGE>
5:00 p.m., New York City time, on the Asset Sale Purchase Date
and must complete any form of letter of transmittal proposed by
the Company and acceptable to the Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m.,
New York City time, on the Asset Sale Purchase Date, a facsimile
transmission or letter (which may be delivered by mail, air
courier, hand delivery or otherwise) setting forth the name of
the Holder, the principal amount of Securities the Holder
delivered for purchase, the Security certificate number (if any)
and a statement that such Holder is withdrawing its election to
have such Securities purchased;
(vii) that if Securities in an aggregate principal amount
in excess of the maximum aggregate principal amount which may be
purchased with such Excess Proceeds are tendered pursuant to the
Asset Sale Offer, the Company shall purchase Securities on a pro
---
rata basis among the Holders whose Securities have been tendered
----
(with such adjustments as may be deemed appropriate by the
Company so that only Securities in denominations of $1,000 or
integral multiples of $1,000 shall be acquired);
(viii) that Holders whose Securities are purchased only in
part will be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered;
(ix) the instructions that Holders must follow in order
to tender their Securities; and
(x) information concerning the business of the Company,
the most recent annual and quarterly reports of the Company filed
with the SEC pursuant to the Exchange Act (or, if the Company is
not required to file any such reports with the SEC, the
comparable reports prepared pursuant to Section 4.07), a
description of material developments in the Company's business,
information with respect to pro forma historical financial
information after giving effect to such Asset Sale and Asset Sale
Offer and such other information concerning the circumstances and
relevant facts regarding such Asset Sale Offer as would be
material to a Holder of Securities in connection with the
decision of such Holder as to whether or not it should tender
Securities pursuant to the Asset Sale Offer.
Notwithstanding the foregoing paragraph, as long as any
Securities are evidenced by Global Securities, (i) Securities may be
tendered or surrendered for payment upon an Asset Sale Offer, tendered
Securities may be withdrawn, and letters of transmittal (or electronic
messages in lieu thereof) may be completed and delivered, in
accordance with the then current procedures of the Depositary (and the
Company shall appropriately amend the notice described in the
preceding paragraph to incorporate a description of such procedures)
and (ii) the Company shall otherwise comply with the then current
rules and procedures of the Depositary in connection with such Asset
Sale Offer.
(h) On the Asset Sale Purchase Date, the Company shall
(i) accept for payment, on a pro rata basis (if necessary) as
--- ----
described in subparagraph (g)(vii) above, Securities or portions
thereof tendered pursuant to the Asset Sale Offer, (ii) deposit with
the Paying Agent money, in immediately available funds, in an amount
sufficient to pay the Asset Sale Offer Price of all Securities or
portions thereof so tendered and accepted and (iii) deliver to the
Trustee the Securities so accepted together with an Officers'
Certificate setting forth the Securities or portions thereof tendered
to and accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Securities so accepted payment
in an amount equal to the Asset Sale Offer Price, and the Trustee
shall promptly authenticate and mail or deliver to each such Holder a
new Security equal in principal amount to any unpurchased portion of
the Security surrendered. Any Securities not so accepted shall be
promptly mailed or delivered by the Company to the Holders thereof.
The Company will publicly announce the results of the Asset Sale Offer
not later than the first Business Day following the Asset Sale
Purchase Date. To the extent that the aggregate principal amount of
Securities tendered pursuant to an Asset Sale Offer is less than the
maximum aggregate principal amount of Securities which can be
purchased with such Excess Proceeds, the Company may, by delivery to
the Trustee of an Officers' Certificate to such effect, retain any
such remaining Excess Proceeds, free and clear of the lien of this
Indenture and the Security Documents. Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be reset to zero. For
purposes of this Section 4.13, the Trustee shall act as Paying Agent.
(i) The Company will comply with Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable, in the event
that an Asset Sale
38
<PAGE>
occurs and the Company is required to purchase Securities as described
above. To the extent that the provisions of any applicable securities
laws or regulations conflict with the provisions of this Section 4.13,
the Company shall comply with such applicable securities laws and
regulations and shall not be deemed by virtue thereof to have breached
its obligations under this Section 4.13.
Section 4.14. Limitation on Transactions with Interested
------------------------------------------
Persons.
-------
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into or suffer to exist
any transaction or series of related transactions (including, without
limitation, the sale, transfer, disposition, purchase, exchange or
lease of assets, property or services) with, or for the benefit of,
any Affiliate of the Company (other than an Affiliate which is a
Subsidiary of the Company) or any beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is
exercisable immediately, after the passage of time or upon the
happening of an event) of 5% or more of the outstanding Common Stock
of the Company or of any Subsidiary or Unrestricted Subsidiary of the
Company ("Interested Persons"), unless (a) such transaction or series
of related transactions is on terms that are no less favorable to the
Company or such Subsidiary, as the case may be, than those which could
have been obtained in a comparable transaction at such time from
persons who are not Affiliates of the Company or Interested Persons,
(b) with respect to a transaction or series of transactions involving
aggregate payments or value equal to or greater than $5,000,000, the
Company has obtained a written opinion from an Independent Financial
Advisor stating that the terms of such transaction or series of
transactions are fair to the Company or its Subsidiary, as the case
may be, from a financial point of view and (c) with respect to a
transaction or series of transactions involving aggregate payments or
value equal to or greater than $2,500,000, the Company shall have
delivered an Officers' Certificate to the Trustee certifying that such
transaction or series of transactions complies with the preceding
clause (a) and, if applicable, certifying that the opinion referred to
in the preceding clause (b) has been delivered and that such
transaction or series of transactions has been approved by the Board
of Directors of the Company; provided, however, that this Section 4.14
-------- -------
will not restrict the Company or any of its Subsidiaries from (i)
paying dividends or making other distributions in respect of its
Capital Stock permitted under Section 4.09, (ii) paying reasonable and
customary fees to directors of the Company or any of its Subsidiaries
who are not employees of the Company, (iii) making loans or advances
to officers, employees or consultants of the Company and its
Subsidiaries (including travel and moving expenses) in the ordinary
course of business for bona fide business purposes of the Company or
such Subsidiary not in excess of $2,000,000 in the aggregate at any
one time outstanding, (iv) making contributions of Common Stock of the
Company to the Company's employee stock ownership plan or (v) making
payments in the ordinary course of business to employees of the
Company and its Subsidiaries and Unrestricted Subsidiaries pursuant to
any profit participation plan or other employee compensation
arrangements; and provided further that clauses (b) and (c) of this
-------- -------
Section 4.14 shall not be applicable with respect to transactions
entered into in the ordinary course of business between the Company or
any of its Subsidiaries, on the one hand, and Camrose, on the other
hand, or between CF&I, on the one hand, and Nippon Steel Corp., Nissho
Iwai American Corporation or any of their respective Affiliates, on
the other hand and provided further that this Section 4.14 shall not
-------- -------
be applicable to transactions pursuant to the terms of the new CF&I
Stockholders Agreement or the CF&I Partnership Agreement or any
similar agreement or instrument entered into after the Issue Date
(provided that, in the case of any amendment, supplement or
modification of the New CF&I Stockholders Agreement or the CF&I
Partnership Agreement entered into after the Issue Date, or in the
case of any similar instrument or agreement entered into after the
Issue Date, the provisions thereof are no less favorable to the
Company, New CF&I and CF&I than those in the New CF&I Stockholders
Agreement or the CF&I Partnership Agreement, as the case may be, as in
effect on the Issue Date).
Section 4.15. Limitation on Dividends and Other Payment
-----------------------------------------
Restrictions Affecting Subsidiaries.
-----------------------------------
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on
the ability of any Subsidiary of the Company to (a) pay dividends, in
cash or otherwise, or make any other distributions on or in respect of
its Capital Stock or any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness owed to the Company
or any other Subsidiary of the Company, (c) make loans or advances to,
or any investment in, the Company or any other Subsidiary of the
Company, (d) transfer any of its properties or assets to the Company
or any other Subsidiary of the Company or (e) guarantee any
Indebtedness of the Company or any other Subsidiary of the Company,
except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) customary non-
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assignment provisions of any contract or any lease governing a
leasehold interest of the Company or any Subsidiary of the Company,
(iii) customary restrictions on transfers of property subject to a
Lien permitted under this Indenture which could not materially
adversely affect the Company's ability to satisfy its obligations
under this Indenture and the Securities or any Guarantors' ability to
satisfy its obligations under this Indenture and its Guarantee, (iv)
any agreement or other instrument of a person acquired by the Company
or any Subsidiary of the Company (or a Subsidiary of such person) in
existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrance or restriction is not
applicable to any person, or the properties or assets of any person,
other than the person, or the properties or assets of the person, so
acquired, (v) provisions contained in agreements or instruments
relating to Indebtedness which prohibit the transfer of all or
substantially all of the assets of the obligor thereunder unless the
transferee shall assume the obligations of the obligor under such
agreement or instrument, (vi) provisions contained in this Indenture,
the Securities, the Guarantees, the Intercreditor Agreement or any
Security Documents, (vii) (A) provisions contained in the Credit
Agreement and in guarantees by CF&I and New CF&I permitted by this
Indenture of the Company's obligations under the Credit Agreement, and
in security agreements or similar documents permitted by this
Indenture entered into by the Company, CF&I and New CF&I pledging Bank
Collateral to secure their respective obligations thereunder (in each
case as in effect on the Issue Date but only after giving effect to
any amendments or restatements thereto which are entered into on or
prior to the Issue Date), and provisions in permitted amendments and
replacements thereof which are no less favorable to the holders of the
Securities than those contained in the Credit Agreement or in any such
guarantee or security agreement or similar document as in effect on
the Issue Date (after giving effect to any amendments or restatements
thereto entered into on or prior to the Issue Date), and (B)
provisions contained in such additional guarantees of the Company's
obligations under the Credit Agreement permitted by this Indenture and
in such additional security agreements or similar documents permitted
by this Indenture pledging Bank Collateral pursuant to the Credit
Agreement which may be entered into after the Issue Date by other
Subsidiaries of the Company (and in permitted amendments and
replacements thereof) which in each case are no less favorable to the
holders of the Securities than the provisions of the guarantees,
security agreements or similar documents, as the case may be, referred
to in clause (A) above (as in effect on the Issue Date but only after
giving effect to any amendments or restatements thereto which are
entered into on or prior to the Issue Date); (viii) provisions
contained in other agreements or instruments relating to Indebtedness
in effect on the Issue Date (as in effect on the Issue Date) and
provisions in amendments and permitted refinancings or replacements
thereof which are no less favorable to the Holders of the Securities
than those contained in the agreements or instruments so amended,
refinanced or replaced (other than encumbrances or restrictions
existing under or by reason of the Old Credit Agreement, the Old
Pledge Agreements or the Old Security Agreements, except to the extent
that the Old Security Agreements of the Company, New CF&I or CF&I
shall have been amended or restated on or prior to the Issue Date in
connection with the Credit Agreement Amendment and therefore are
permitted pursuant to clause (vii) above); and (ix) encumbrances and
restrictions under the CF&I Partnership Agreement and the New CF&I
Stockholders Agreement (each as in effect on the Issue Date) and in
any amendments thereto which are no less favorable to the Holders of
the Securities than those contained in the agreement prior to such
amendment.
Section 4.16. Limitations on Sale-Leaseback Transactions.
------------------------------------------
The Company will not, and will not permit any of its
Subsidiaries to, enter into any Sale-Leaseback Transaction with
respect to any property of the Company or any of its Subsidiaries.
Notwithstanding the foregoing, the Company and its Subsidiaries may
enter into Sale-Leaseback Transactions with respect to property which
does not constitute Collateral and which property is acquired or
constructed after the Issue Date, provided that (a) after giving pro
forma effect to the Indebtedness, if any, incurred in such Sale-
Leaseback Transaction, the Company would be able to incur $1.00 of
additional Indebtedness pursuant to the first paragraph of Section
4.08 (assuming a market rate of interest with respect to such
additional Indebtedness) and (b) such Sale-Leaseback Transaction
complies with Section 4.13 above and the Net Cash Proceeds of such
transaction are applied in accordance with Section 4.13 above.
Section 4.17. Additional Guarantors; Additional Security
------------------------------------------
Documents.
---------
The Company will not, and will not permit any Subsidiary
of the Company to, directly or indirectly, establish or acquire a new
Subsidiary of the Company or such Subsidiary, as the case may be,
unless either (A) such new Subsidiary is designated as an Unrestricted
Subsidiary in accordance with the definition of the term "Unrestricted
Subsidiary" herein or (B) (i) such new Subsidiary simultaneously
executes and delivers a supplemental indenture pursuant to which such
new Subsidiary becomes a Guarantor and guarantees the obligations of
the Company under the
40
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Securities on the same terms as the other Guarantors and also executes
and delivers a written instrument pursuant to which it shall become a
party to the Intercreditor Agreement; (ii) to the extent that such
new Subsidiary owns (or thereafter acquires) any property or assets of
the types which would constitute "Trust Property" (as such term is
defined in the form of Mortgage attached as Exhibit C to this
Indenture) (assuming, in the case of real property or a leasehold
interest in real property, that an appropriate description of such
property or leasehold interest were included as a schedule to such
form of Mortgage and assuming, in the case of fixtures, improvements
and other types of Trust Property, that a description of the related
real property or leasehold interest in real property, as the case may
be, were included as a schedule to such form of Mortgage) or
"Collateral" (as such term is defined in the form of Security
Agreement attached as Exhibit B to this Indenture), such new
Subsidiary shall execute and deliver to the Trustee such Security
Documents as shall be necessary to cause such property and assets to
become subject to a Lien in favor of the Trustee (or, in the case of
property or assets subject to a Mortgage, the Trustee or another
trustee under such Mortgage), for the benefit of the Holders of the
Securities, securing such new Subsidiary's obligations under its
Guarantee and otherwise shall comply with the provisions of this
Indenture applicable to After-Acquired Property; and (iii) the Company
shall deliver to the Trustee an Officers' Certificate and an Opinion
of Counsel, each in form reasonably satisfactory to the Trustee, each
stating that the establishment or acquisition of such new Subsidiary
complies with this Indenture and that the supplemental indenture and
any Security Documents entered into by such new Subsidiary comply with
this Indenture. For purposes of this Section 4.17, the designation of
any Unrestricted Subsidiary as a Subsidiary shall be deemed to be the
establishment of a new Subsidiary. The Company will not permit any
Unrestricted Subsidiary to own any Capital Stock of a Guarantor.
Section 4.18. Impairment of Security Interests.
--------------------------------
The Company will not, and will not permit any of its
Subsidiaries to, take or omit to take any action which action or
omission could reasonably be expected to have the result of adversely
affecting or impairing the Lien in favor of the Trustee (or, in the
case of property or assets subject to a Mortgage, the Trustee or
another trustee under such Mortgage) for the benefit of the Holders of
the Securities, in the Collateral.
The Company will not, and will not permit any of its
Subsidiaries to, grant to any person (other than the Trustee (or, in
the case of property or assets subject to a Mortgage, the Trustee or
another trustee under such Mortgage) for the benefit of the Holders of
the Securities) any interest whatsoever in the Collateral except as
expressly permitted by this Indenture, the Intercreditor Agreement and
the Security Documents.
Section 4.19. Limitation on Amendments to CF&I
--------------------------------
Agreements.
----------
The Company will not, and will not permit any Subsidiary
of the Company to, enter into or consent to any amendment, supplement,
waiver or other modification of the CF&I Partnership Agreement or the
New CF&I Stockholders Agreement which (i) in any manner would be
adverse to the interests of the Holders of the Securities or the
Trustee (it being understood that the admission by CF&I of one or more
additional or substitute limited partners shall not be deemed adverse
to the interests of the holders of the Securities or the Trustee so
long as made in compliance with the other provisions of this
Indenture) or (ii) in the case of the CF&I Partnership Agreement,
would increase the amount of cash or other property distributable to,
or the amount of profits allocated to, any limited partner of CF&I.
Section 4.20. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company and each Guarantor each covenants (to the
extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law or any usury law or other
law which would prohibit or forgive the Company or such Guarantor, as
the case may be, from paying all or any portion of the principal of or
interest on the Securities as contemplated herein or in the
Securities, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the Company
and each Guarantor each hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay
or impede the execution of any power herein granted to the Trustee,
but will suffer and permit the execution of every such power as though
no such law had been enacted.
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ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc.
----------------------------
The Company will not, in any transaction or series of
transactions, merge or consolidate with or into, or sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially
all of its properties and assets to, any person or persons, and the
Company will not permit any of its Subsidiaries to enter into any such
transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or other disposition of all or
substantially all of the properties and assets of the Company or of
the Company and its Subsidiaries, taken as a whole, to any other
person or persons, unless (i) either (x) if the transaction or series
of transactions is a merger, the Company shall be the surviving person
of such merger, or (y) the person formed by such consolidation or into
which the Company or such Subsidiary, as the case may be, is merged or
to which the properties and assets of the Company or such Subsidiary,
as the case may be, are transferred (any such surviving person or
transferee person being the "Surviving Entity") shall be a corporation
organized and existing under the laws of the United States of America,
any state thereof or the District of Columbia and shall expressly
assume by a supplemental indenture, executed and delivered to the
Trustee and in form reasonably satisfactory to the Trustee, the due
and punctual payment of the principal of and interest on all the
Securities and the due and punctual performance and observance of
every covenant and obligation of this Indenture and the Securities on
the part of the Company to be performed or observed (and such
supplemental indenture shall also be executed by each Guarantor and
shall further provide that each Guarantor confirms that its
obligations under this Indenture, its Guarantee (including, if
applicable, the CF&I Note), the Intercreditor Agreement and its
Security Documents remain in full force and effect), and shall
expressly assume, by amendment, supplement or other appropriate
instruments executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual performance and
observance of all of the obligations of the Company under the
Intercreditor Agreement and its Security Documents and, in the case of
any such transaction involving such Subsidiary, all of the obligations
of such Subsidiary under this Indenture, its Guarantee (including, in
the case of CF&I, the CF&I Note), the Intercreditor Agreement and its
Security Documents (and the Surviving Entity shall cause such
amendments, supplements or other instruments to be filed and recorded
in such jurisdictions as may be required by applicable law to preserve
and protect the Lien of the Security Documents on the Collateral owned
by the Company and, if applicable, such Subsidiary (in the case of a
merger or consolidation) or on the Collateral transferred to the
Surviving Entity (in the case of a transfer of assets), together with
such financing statements as may be required to perfect any security
interests in such Collateral which may be perfected by the filing of a
financing statement under the Uniform Commercial Code of the relevant
states); (ii) the Collateral owned by the Company and, in the case of
any such transaction involving such Subsidiary, by such Subsidiary (in
the case of a merger or consolidation) or the Collateral transferred
to the Surviving Entity (in the case of a transfer of assets) shall
(1) continue to constitute Collateral under this Indenture and the
Security Documents, (2) shall be subject to the Lien in favor of the
Trustee (or, in the case of property or assets subject to a Mortgage,
the Trustee or another trustee under such Mortgage) for the benefit of
the Holders of the Securities and (3) shall not be subject to any Lien
other than Liens expressly permitted by this Indenture and the
Security Documents; (iii) the property and assets of the person which
is merged or consolidated with or into the Company, to the extent that
such property or assets are of the types which would constitute "Trust
Property" (as defined in the form of Mortgage attached as an Exhibit C
to this Indenture) (assuming, in the case of real property or a
leasehold interest in real property, that an appropriate description
of such property or leasehold interest were included as a schedule to
such form of Mortgage and assuming, in the case of fixtures,
improvements and other types of Trust Property, that a description of
the related real property or leasehold interest in real property, as
the case may be, were included as a schedule to such form of Mortgage)
or "Collateral" (as defined in the form of Security Agreement attached
as an Exhibit B to this Indenture) shall be treated as After-Acquired
Property and the Company or the Surviving Entity, as the case may be,
shall take such action as may be necessary to cause such property and
assets to be made subject to the Lien of the Security Documents in the
manner and to the extent specified in Section 11.01 (including
delivery of such documents, Officers' Certificates and Opinions of
Counsel as may be required by Section 11.01); (iv) (1) immediately
before and immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
--- -----
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have occurred and
be continuing and (2) the Company, or the Surviving Entity, as the
case may be, after giving effect to such transaction
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or series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), could incur $1.00 of additional Indebtedness under the
terms of the first paragraph of Section 4.08 (assuming a market rate
of interest with respect to such additional Indebtedness); (v)
immediately after giving effect to such transaction or series of
transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with
or in respect of such transaction or series of transactions), the
Consolidated Net Worth of the Company or the Surviving Entity, as the
case may be, is at least equal to the Consolidated Net Worth of the
Company immediately before such transaction or series of transactions;
and (vi) the Company shall have delivered, or caused to be delivered,
to the Trustee an Officers' Certificate and an Opinion of Counsel,
each in form reasonably satisfactory to the Trustee, each stating that
such consolidation, merger, transfer, lease, assignment or other
disposition and any supplemental indenture, amendments, supplements or
other instruments or agreements required by clause (i) or (iii) above
complies with the requirements of this Indenture and that all
conditions precedent herein provided for relating to such transaction
or series of transactions have been complied with (except that such
Opinion of Counsel need express no opinion as to the matters referred
to in clause (ii)(3), (iv) or (v) above).
Section 5.02. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all
of the properties and assets of the Company in accordance with Section
5.01 hereof, in which the Company is not the continuing corporation,
the successor person or persons formed by such consolidation or into
which the Company is merged or the successor person to which such
sale, assignment, conveyance, transfer, lease or other disposition is
made, shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture, the
Intercreditor Agreement, the relevant Security Documents and the
Securities with the same effect as if such successor had been named as
the Company herein and therein (and thereafter, except in the case of
a lease, the predecessor corporation shall be released from all of its
obligations hereunder and thereunder); provided, however, that solely
-------- -------
for purposes of computing amounts described in subclause (iii) of the
first paragraph of Section 4.09, any such successor person shall only
be deemed to have succeeded to and be substituted for the Company with
respect to periods subsequent to the effective time of such merger,
consolidation or transfer of assets.
ARTICLE SIX
EVENTS OF DEFAULT AND REMEDIES
Section 6.01. Events of Default.
-----------------
An "Event of Default" means any of the following events:
(a) default in the payment of the principal of or
premium, if any, on any Security when the same becomes due and
payable (upon Stated Maturity, acceleration, optional redemption,
required purchase, scheduled principal payment or otherwise); or
(b) default in the payment of an installment of interest
on any of the Securities, when the same becomes due and payable,
and any such Default continues for a period of 30 days; or
(c) default by the Company or any Guarantor in the
performance or observance of any term, covenant or agreement
contained in the Securities, any Security Document, this
Indenture, the Intercreditor Agreement or any Guarantee (other
than a default specified in clause (a) or (b) above) and such
default continues for a period of 30 days after written notice of
such default requiring the Company to remedy the same and stating
that such notice is a "Notice of Default" hereunder shall have
been given (i) to the Company by the Trustee or (ii) to the
Company and the Trustee by Holders of at least 25% in aggregate
principal amount of the Securities then outstanding; or
(d) default or defaults under one or more agreements,
instruments, mortgages, bonds, debentures or other evidences of
Indebtedness under which the Company or any Subsidiary of the
Company then has
43
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outstanding Indebtedness in excess of $5,000,000, individually or
in the aggregate, and either (i) such Indebtedness is already
due and payable in full or (ii) such default or defaults have
resulted in the acceleration of the maturity of such
Indebtedness; or
(e) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of $5,000,000,
either individually or in the aggregate, shall be entered against
the Company or any Subsidiary of the Company or any of their
respective properties and shall not be discharged or fully bonded
and there shall have been a period of 60 days after the date on
which any period for appeal has expired and during which a stay
of enforcement of such judgment, order or decree, shall not be in
effect; or
(f) either (i) any agent or lender under the Credit
Agreement or (ii) any holder of at least $5,000,000 in aggregate
principal amount of Indebtedness of the Company or any of its
Subsidiaries shall commence judicial proceedings to foreclose
upon assets of the Company or any of its Subsidiaries having an
aggregate Fair Market Value, individually or in the aggregate, in
excess of $5,000,000 or shall have exercised any right under
applicable law or applicable security documents to take ownership
of any such assets in lieu of foreclosure; or
(g) the commencement by the Company or any Subsidiary of
the Company of a voluntary case or proceeding under any
Bankruptcy Law or the consent by the Company or any Subsidiary of
the Company to the entry of an order for relief or similar decree
in respect of the Company or such Subsidiary in an involuntary
case or proceeding under any Bankruptcy Law or the filing by the
Company or any Subsidiary of the Company of a petition, answer or
consent seeking reorganization or relief under any Bankruptcy
Law, or the consent by the Company or any Subsidiary of the
Company to the filing of any such petition or to the appointment
of or taking possession by a Custodian of the Company, any
Subsidiary of the Company, or of any substantial part of the
property of the Company or of any Subsidiary of the Company, or
the making by the Company or any Subsidiary of the Company of an
assignment for the benefit of creditors, or the admission by the
Company or any Subsidiary of the Company in writing that it is
bankrupt, insolvent or unable to pay its debts generally as they
become due, or the taking of corporate action or partnership
action, as the case may be, by the Company or any Subsidiary of
the Company in furtherance of any such action; or
(h) the entry by a court having jurisdiction in the
premises of a judgment, decree or order for relief in respect of
the Company or any Subsidiary of the Company in an involuntary
case or proceeding under any applicable Bankruptcy Law, or
determining that the Company or any Subsidiary of the Company is
bankrupt or insolvent or that the Company or any Subsidiary of
the Company is entitled to seek reorganization, arrangement,
adjustment or composition of its indebtedness, or appointing a
Custodian of or for the Company, any Subsidiary of the Company or
any substantial part of properties of the Company or any
Subsidiary of the Company, or ordering the winding up or
liquidation of the affairs of the Company or any Subsidiary of
the Company, and any such judgment, order, or decree shall remain
unstayed and in effect for a period of 60 consecutive days; or
(i) any Guarantee ceases to be in full force and effect
or is declared null and void, or any Guarantor denies that it has
any further liability under any Guarantee, or gives notice to
such effect (other than by reason of the termination of this
Indenture or the release of any such Guarantee in accordance with
Section 10.04 hereof); or
(j) any of the Security Documents ceases to be in full
force and effect, or any of the Security Documents ceases to give
the Trustee (or, in the case of a Mortgage, ceases to give the
Trustee or any other trustee under such Mortgage) any of the
Liens, rights, powers or privileges purported to be created
thereby, or any of the Security Documents is declared null and
void, or the Company or any Guarantor denies that it has any
further liability under any Security Document to which it is a
party or gives notice to such effect (in each case other than by
reason of the termination of the Indenture or any such Security
Document in accordance with its terms or the release of any
Guarantor in accordance with Section 10.04 hereof).
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Subject to the provisions of Sections 7.01 and 7.02, the
Trustee shall not be charged with knowledge of any Default or Event of
Default unless written notice thereof shall have been given to a Trust
Officer at the Corporate Trust Office of the Trustee by the Company,
the Paying Agent, any Holder, any Guarantor or any of their respective
agents.
Section 6.02. Acceleration.
------------
If an Event of Default (other than as specified in Section
6.01(g) or (h)) shall occur and be continuing, the Trustee, by written
notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding, by written notice
to the Trustee and the Company, may declare the principal of, premium,
if any, and accrued and unpaid interest on all of the outstanding
Securities to be due and payable immediately, upon which declaration,
all amounts payable in respect of the Securities shall be immediately
due and payable. If an Event of Default specified in Section 6.01(g)
or 6.01(h) occurs and is continuing, then the principal of, premium,
if any, and accrued and unpaid interest on all of the Securities shall
ipso facto become and be immediately due and payable without any
- ---- -----
declaration or other act on the part of the Trustee or any Holder of
Securities.
After a declaration of acceleration under this Indenture,
but before a judgment or decree for payment of the money due has been
obtained by the Trustee, the Holders of at least a majority in
aggregate principal amount of the outstanding Securities, by written
notice to the Company and the Trustee, may rescind such declaration
and its consequences if (a) the Company has paid or deposited with the
Trustee a sum sufficient to pay (i) all sums paid or advanced by the
Trustee under Section 7.08, the Intercreditor Agreement and the
Security Documents and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel,
(ii) all interest on the Securities which has become due otherwise
than by such declaration of acceleration and to the (fullest extent
permitted by law) interest thereon at the rate of interest borne by
the Securities and (iii) the principal of and premium, if any, on any
Securities which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate of interest borne by the
Securities, (b) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction; and (c) all Events of
Default, other than the non-payment of principal of, premium, if any,
and interest on the Securities that has become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 6.04.
No such rescission shall affect any subsequent Default or
Event of Default or impair any right subsequent therein.
Section 6.03. Other Remedies.
--------------
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or in
equity to collect the payment of principal of, premium, if any, or
interest on the Securities or to enforce the performance of any
provision of the Securities, the Guarantees, the Security Documents,
the Intercreditor Agreement or this Indenture.
All rights of action and claims under this Indenture, the
Security Documents, the Intercreditor Agreement, the Guarantees or the
Securities may be enforced by the Trustee even if it does not possess
any of the Securities or Guarantees or does not produce any of them in
the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default shall
not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent
permitted by law.
Section 6.04. Waiver of Past Defaults.
-----------------------
Subject to the provisions of Section 6.07 and 9.02, the
Holders of not less than a majority in aggregate principal amount of
the outstanding Securities by notice to the Trustee may, on behalf of
the Holders of all the Securities, waive any past default under this
Indenture, the Securities, the Guarantees, the Intercreditor Agreement
or any Security Documents and its consequences, except an Event of
Default specified in Section 6.01(a) or (b) or in respect of any
covenant or provision hereof or thereof which cannot be modified or
amended without the consent of each
45
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Holder so affected pursuant to Section 9.02. When a default is so
waived, it shall be deemed cured and shall cease to exist.
Section 6.05. Control by Majority.
-------------------
The Holders of not less than a majority in aggregate
principal amount of the outstanding Securities shall have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee under this Indenture, the Securities, the
Guarantees, the Intercreditor Agreement or the Security Documents;
provided, however, that the Trustee may refuse to follow any direction
- -------- -------
(a) that conflicts with any rule of law or this Indenture, (b) that
the Trustee determines may be unduly prejudicial to the rights of
another Securityholder, or (c) that may expose the Trustee to personal
liability unless the Trustee has been provided reasonable indemnity
against any loss or expense caused by its following such direction;
and provided further that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction.
Section 6.06. Limitation on Suits.
-------------------
No Holder of any Securities shall have any right to
institute any proceeding or pursue any remedy with respect to this
Indenture, the Intercreditor Agreement, the Securities, the Guarantees
or the Security Documents unless:
(a) the Holder gives written notice to the Trustee of a
continuing Event of Default;
(b) the Holder or Holders of at least 25% in aggregate
principal amount of the outstanding Securities make a written
request to the Trustee to institute such proceeding as Trustee
under the Securities and this Indenture;
(c) such Holder or Holders offer and, if requested,
provide to the Trustee reasonable indemnity against any loss,
liability or expense;
(d) the Trustee does not comply with the request within
30 days after receipt of the request and the offer and, if
requested, provision of indemnity; and
(e) during such 30-day period the Holders of at least a
majority in aggregate principal amount of the outstanding
Securities do not give the Trustee a direction which is
inconsistent with the request.
The foregoing limitations shall not apply to a suit
instituted by a Holder for the enforcement of the payment of principal
of, premium, if any, or interest on, any Securities on or after the
respective due dates set forth in such Securities.
A Holder may not use this Indenture to prejudice the
rights of any other Holders or to obtain priority or preference over
such other Holders.
Section 6.07. Right of Holders to Receive Payment.
-----------------------------------
Notwithstanding any other provision in this Indenture, the
right of any Holder of a Security to receive payment of the principal
of, premium, if any, and interest on such Security, on or after the
respective Stated Maturities expressed in such Security or upon
redemption or upon repurchase pursuant to Section 4.12 or 4.13, or to
bring suit for the enforcement of any such payment on or after its
Stated Maturity or the relevant Redemption Date, Change of Control
Purchase Date or Asset Sale Purchase Date, as the case may be, is
absolute and unconditional and shall not be impaired or affected
without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in clause (a) or (b) of
Section 6.01 occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against
the Company, any Guarantor
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or any other obligor on the Securities or the Guarantees for the whole
amount of principal of, premium, if any, and interest remaining
unpaid, together with interest on overdue principal and premium and,
to the extent that payment of such interest is lawful, on overdue
installments of interest, in each case at the rate per annum borne by
the Securities and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel.
Section 6.09. Trustee May File Proofs of Claims.
---------------------------------
The Trustee may file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company, the Guarantors or any other
Subsidiary of the Company (or any other obligor upon the Securities or
the Guarantees), their creditors or their property and shall be
entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute
the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel, and any other amounts
due the Trustee under Section 7.08. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the
rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article
Six, it shall pay out such money in the following order:
First: to the Trustee for amounts due to it under Section
7.08 and for any amounts due under the Security Documents (other
than payments of interest and principal described in the next two
subclauses);
Second: to Holders for interest accrued on the
Securities, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for
interest;
Third: to Holders for principal amounts (including any
premium) owing under the Securities, ratably, without preference
or priority of any kind, according to the amounts due and payable
on the Securities for principal (including any premium); and
Fourth: the balance, if any, to the Company or, to the
extent the Trustee collects any amount from any Guarantor, to
such Guarantor.
The Trustee, upon prior written notice to the Company, may
fix a record date and payment date for any payment to Securityholders
pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court may in its discretion
require the filing by any party litigant in the suit of an undertaking
to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against
any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to any suit by the Trustee, any suit by a
Holder pursuant to Section 6.07, or a suit by Holders of more than 10%
in aggregate principal amount of the outstanding Securities.
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Section 6.12. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Indenture or under any
Security Document, the Intercreditor Agreement, any Security or any
Guarantee and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such
Holder, then and in every such case the Company, each Guarantor, the
Trustee and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former
positions hereunder and thereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no
such proceeding had been instituted.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties.
------
(a) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, the Intercreditor Agreement and the
Security Documents, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of
Default,
(i) the Trustee need perform only such duties as
are specifically set forth in this Indenture, the Intercreditor
Agreement and the Security Documents, and no implied covenants or
obligations shall be read into this Indenture, the Intercreditor
Agreement or the Security Documents against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture, the Intercreditor
Agreement or the Security Documents, as the case may be; but in
the case of any such certificates or opinions which by any
provision hereof or thereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture, the Intercreditor Agreement or
the relevant Security Document.
(c) No provision of this Indenture, the Intercreditor
Agreement or any Security Document shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error
of judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05; and
(iv) no provision of this Indenture, the
Intercreditor Agreement or any Security Document shall require
the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder or thereunder or in the exercise of any of
its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to
it.
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(d) Every provision of this Indenture, the Intercreditor
Agreement and the Security Documents that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section
7.01.
Section 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01 hereof and the provisions of TIA
Section 315:
(a) the Trustee may rely on any document reasonably
believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact
or matter stated in the document;
(b) before the Trustee acts or refrains from acting, it
may consult with counsel and may require an Officers' Certificate
or an Opinion of Counsel, which shall (if applicable) conform to
Sections 13.04 and 13.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on
such certificate or opinion;
(c) the Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of
any agent appointed with due care;
(d) the Trustee shall not be liable for any action taken
or omitted by it in good faith and reasonably believed by it to
be authorized or within the discretion, rights or powers
conferred upon it by this Indenture, the Intercreditor Agreement
or the relevant Security Document other than any liabilities
arising out of its own negligence;
(e) the Trustee may consult with counsel of its own
choosing and the advice or opinion of such counsel as to matters
of law shall be full and complete authorization and protection
in respect of any action taken, omitted or suffered by it under
this Indenture, the Intercreditor Agreement or any Security
Document, as the case may be, in good faith and in accordance
with the advice or opinion of such counsel;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, notice,
request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters
as it may see fit; and
(g) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture, the
Intercreditor Agreement or any Security Document at the request,
order or direction of any of the Holders pursuant to the
provisions of this Indenture, the Intercreditor Agreement or any
Security Document, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby.
Section 7.03. Individual Rights of Trustee.
----------------------------
The Trustee, any Paying Agent, Registrar or any other
agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to Sections
7.11 and 7.13 and TIA Sections 310 and 311, may otherwise deal with
the Company and its Subsidiaries with the same rights it would have if
it were not the Trustee, Paying Agent, Registrar or such other agent.
Section 7.04. Trustee's Disclaimer.
--------------------
The Trustee makes no representations as to the validity or
sufficiency of this Indenture, the Intercreditor Agreement, any
Security Document, the Securities or any Guarantee, it shall not be
accountable for the Company's use or application of the proceeds from
the Securities, it shall not be responsible for the use or application
of any money received by any Paying Agent other than the Trustee and
it shall not be responsible for any recital contained herein or any
statement in the Securities other than the Trustee's certificate of
authentication. The Trustee shall not be responsible for perfecting
or maintaining the perfection of any security interest granted to it
under any
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Security Document or for filing, refiling, recording or rerecording
any document, Mortgage, notice or instrument in any public office at
any time or times and shall not be responsible for seeing to the
insurance on or the payment of any taxes with respect to any property
subject to any Security Document.
Section 7.05. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail
to each Holder notice of the Default or Event of Default within 30
days after obtaining knowledge thereof; provided, however, that,
except in the case of a default in the payment of the principal,
premium, if any, or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee of the board of directors or a
committee of the directors of the Trustee and/or Trust Officers in
good faith determines that the withholding of such notice is in the
interest of the Holders.
Section 7.06. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds
except to the extent required by this Indenture, the Intercreditor
Agreement or any Security Document or by law. The Trustee shall not
be under any liability for interest on any moneys received by it
hereunder or under the Intercreditor Agreement or any Security
Document, except as the Trustee may agree with the Company.
Section 7.07. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, to the extent
that any of the events described in TIA Section 313(a) shall have
occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such May 15 that complies with
TIA Section 313(a). The Trustee also shall comply with TIA Sections
313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed with the SEC and each
securities exchange, if any, on which the Securities are listed.
The Company shall notify the Trustee in writing if the
Securities become listed on any securities exchange after the Issue
Date.
Section 7.08. Compensation and Indemnity.
--------------------------
The Company and each Guarantor, jointly and severally,
covenant and agree to pay the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express
trust. The Company and each Guarantor, jointly and severally, shall
reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances incurred or made by it. Such expenses shall
include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company and each Guarantor, jointly and severally,
shall indemnify the Trustee for, and hold it harmless against, any
loss or liability incurred by it arising out of or in connection with
the administration of this trust and its rights or duties hereunder
and under the Intercreditor Agreement and the Security Documents,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties under this Indenture, the Intercreditor Agreement
or any Security Document. The Company and the Guarantors need not
reimburse any expense or indemnify against any loss or liability to
the extent incurred by the Trustee through its negligence, bad faith
or willful misconduct.
To secure the Company's and the Guarantors' payment
obligations in this Section 7.08, the Trustee shall have a Lien prior
to the Securities on all assets held or collected by the Trustee, in
its capacity as Trustee, except assets held in trust to pay principal
of, premium, if any, or interest on particular Securities.
50
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Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses or
renders services in connection with an Event of Default specified in
Section 6.01(g) or (h) the expenses and the compensation for the
services are intended to constitute expenses of administration under
any Bankruptcy Law.
The Company's and the Guarantors' obligations under this
Section 7.08 and any Lien arising hereunder shall survive the
resignation or removal of any Trustee, the discharge of the Company's
and the Guarantors' obligations pursuant to Article Eight and/or the
termination of this Indenture.
Section 7.09. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company. The
Holders of at least a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the
Trustee. The Company may remove the Trustee if:
a. the Trustee fails to comply with Section 7.11 hereof
or Section 310(b) of the TIA;
b. the Trustee is adjudged a bankrupt or an insolvent
or an order for relief is entered with respect to the Trustee
under any Bankruptcy Law;
c. a receiver or other public officer takes charge of
the Trustee or its property; or
d. the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall
notify each Holder of such event and shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes
office, the Holders of at least a majority in principal amount of the
outstanding Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company.
Immediately after that, the retiring Trustee shall, upon the payment
of its charges, transfer all property held by it as Trustee to the
successor Trustee, and the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture,
the Security Documents and the Intercreditor Agreement, and the
Company and the Guarantors shall take such action as shall be
necessary so that all Collateral (including all Trust Moneys and other
property in the Collateral Account) shall continue to be subject to
the Lien of the Security Documents in favor of the Trustee (or, in the
case of property or assets subject to a Mortgage, the Trustee or
another trustee under such Mortgage) for the benefit of the Holders of
the Securities. A successor Trustee shall mail notice of its
succession to each Securityholder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in principal
amount of the outstanding Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.11 or
Section 310(b) of the TIA, any Holder who has been a bona fide Holder
of a Security for at least six months may petition any court of
competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to
this Section 7.09, the Company's obligations under Section 7.08 shall
continue for the benefit of the retiring Trustee.
Section 7.10. Successor Trustee by Merger, etc.
---------------------------------
If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust business
to, another corporation or national banking association, the
resulting, surviving or transferee
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corporation or national banking association without any further act
shall, if such resulting, surviving or transferee corporation or
national banking association is otherwise eligible hereunder, be the
successor Trustee.
Section 7.11. Eligibility.
-----------
There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Sections 310(a)(1) and
310(a)(5) and which shall have a combined capital and surplus of at
least $100,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
federal, state, territorial or District of Columbia supervising or
examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 7.12. Co-Trustee.
----------
(a) If at any time or times it shall be necessary or
prudent in order to conform to any law of any jurisdiction in which
any of the Collateral shall be located, or the Trustee shall be
advised by counsel satisfactory to it that it is necessary or prudent
in the interest of the Holders, or the Holders of at least 25% in
aggregate principal amount of the outstanding Securities shall in
writing so request the Trustee and the Company, or the Trustee shall
deem it desirable for its own protection in the performance of its
duties hereunder, the Trustee, the Company and the Guarantors shall
execute and deliver all instruments and agreements necessary or proper
to constitute another bank or trust company, or one or more persons
approved by the Trustee and the Company, either to act as co-trustee
or co-trustees (each a "co-trustee") of all or any of the Collateral,
jointly with the Trustee, or to act as separate trustee or trustees of
any such property. If the Company or the Guarantors shall not have
joined in the execution of such instruments and agreements within 10
days after the Company receives a written request from the Trustee to
do so, or if an Event of Default has occurred and is continuing, the
Trustee may act under the foregoing provisions of this Section 7.12
without the concurrence of the Company or any Guarantor. The Company
and each of the Guarantors each hereby appoint the Trustee as its
agent and attorney to act for it under the foregoing provisions of
this Section 7.12 in either of such contingencies.
(b) Every separate trustee and every co-trustee, other
than any successor Trustee appointed pursuant to Section 7.09, shall,
to the extent permitted by law, be appointed and act and be such,
subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee hereunder shall be conferred or
imposed and exercised or performed by the Trustee and such
separate trustee or separate trustees or co-trustee or co-
trustees, jointly, as shall be provided in the instrument
appointing such separate trustee or separate trustees or co-
trustee or co-trustees, except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed singly by
such separate trustee or separate trustees or co-trustee or co-
trustees, but solely at the direction of the Trustee;
(ii) no trustee or co-trustee hereunder shall be
personally liable by reason of any act or omission of any other
trustee or co-trustee hereunder; and
(iii) the Company, the Guarantors and the Trustee, at any
time by an instrument in writing executed by them jointly, may
accept the resignation of or remove any such separate trustee or
co-trustee and, in that case by an instrument in writing executed
by them jointly, may appoint a successor to such separate trustee
or co-trustee, as the case may be, anything contained herein to
the contrary notwithstanding. If the Company or the Guarantors
shall not have joined in the execution of any such instrument
within 10 days after the Company receives a written request from
the Trustee to do so, or if an Event of Default has occurred and
is continuing, the Trustee shall have the power to accept the
resignation of or remove any such separate trustee or co-trustee
and to appoint a successor without the concurrence of the Company
or any Guarantor, the
52
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Company and each of the Guarantors each hereby appointing the
Trustee its agent and attorney to act for it in such connection
in such contingency. If the Trustee shall have appointed a
separate trustee or co-trustee as above provided, the Trustee may
at any time, by an instrument in writing, accept the resignation
of or remove any such separate trustee or co-trustee and the
successor to any such separate trustee or co-trustee shall be
appointed by the Company, the Guarantors and the Trustee, or by
the Trustee alone pursuant to this Section 7.12.
Section 7.13. Preferential Collection of Claims Against
-----------------------------------------
Company.
-------
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). If the present or any
future Trustee shall resign or be removed, it shall be subject to TIA
Section 311(a) to the extent provided therein.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's Obligations.
----------------------------------------
The Company may terminate its obligations under the
Securities, its Security Documents and this Indenture, except those
obligations referred to in the penultimate paragraph of this Section
8.01 (whereupon the obligations of the Guarantors under the
Securities, this Indenture, the Guarantees and their Security
Documents except those obligations referred to in the penultimate
paragraph of this Section 8.01, shall also terminate, and the Company
may, by complying with the provisions of Section 11.05(a), obtain the
release of the Collateral as security for the Securities and the
Guarantees), if all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been
replaced or Securities for whose payment money has theretofore been
deposited with the Trustee or the Paying Agent in trust or segregated
and held in trust by the Company and thereafter repaid to the Company
or a Guarantor, as provided in Section 8.04) have been delivered to
the Trustee for cancellation, the Company and each Guarantor shall
have paid all sums payable by it under this Indenture, the Securities,
the Guarantees, the Intercreditor Agreement and the Security Documents
and the Company shall have delivered an Officers' Certificate and an
Opinion of Counsel stating that all conditions precedent herein
provided for the termination of the Company's and each Guarantor's
obligations under the Securities, this Indenture, the Guarantees and
their Security Documents have been complied with, or if:
(a) either (i) pursuant to Article Three, the Company
shall have given notice to the Trustee and mailed a notice of
redemption to each Holder of the redemption of all of the
Securities in accordance with the terms hereof or (ii) all
Securities have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or
caused to be deposited with the Trustee, under the terms of an
irrevocable trust agreement in form satisfactory to the Trustee,
as trust funds in trust solely for the benefit of the Holders for
that purpose, money in U.S. dollars in such amount as is
sufficient, without consideration of investment or reinvestment
of such monies, to pay and discharge the entire indebtedness on
the Securities then outstanding not theretofore delivered to the
Trustee for cancellation for principal, premium, if any, and
interest to maturity or redemption, as the case may be, as
certified in a certificate of a nationally recognized firm of
independent public accountants delivered to the Trustee;
provided that the Trustee shall have been irrevocably instructed
by Company Order to apply such money to the payment of said
principal, premium, if any, and interest with respect to the
Securities;
(c) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, this
Indenture or any other material instrument to which the Company
or any Guarantor is a party or by which it is bound;
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(d) each of the Company and each Guarantor shall have
paid all other sums payable by it under this Indenture, the
Securities, the Guarantees, the Intercreditor Agreement and the
Security Documents; and
(e) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent herein provided for the termination
of the Company's and each Guarantor's obligations under the
Securities, this Indenture, its Guarantees and its Security
Documents, as the case may be, have been complied with.
Notwithstanding the foregoing paragraph, the Company's
obligations under and the other provisions of Sections 2.02, 2.03,
2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 4.20, 7.07, 7.08 and
7.09 and this Article Eight of this Indenture and each Guarantor's
obligations in respect thereof under Article Ten shall survive until
the Securities are no longer outstanding pursuant to the last
paragraph of Section 2.08. After the Securities are no longer
outstanding, the Company's obligations under and the other provisions
of Sections 7.08, 8.03, 8.04 and 8.05 and each Guarantor's obligations
under Article Ten in respect thereof shall survive.
After such delivery or irrevocable deposit, the Trustee,
upon request, shall acknowledge in writing the discharge of the
Company's and each Guarantor's obligations under the Securities, this
Indenture, the Security Documents and its Guarantee, as the case may
be, except for those surviving obligations specified above.
Section 8.02. Legal Defeasance and Covenant Defeasance.
----------------------------------------
(a) The Company may, at its option by Board Resolution
of the Board of Directors of the Company, at any time, with respect to
the Securities, elect to have either paragraph (b) or paragraph (c)
below be applied to the outstanding Securities upon compliance with
the conditions set forth in paragraph (d) below.
(b) Upon the Company's exercise under paragraph (a)
above of the option applicable to this paragraph (b), the Company and
each Guarantor shall be deemed to have been released and discharged
from their respective obligations with respect to the outstanding
Securities and Guarantees on the date the conditions set forth below
are satisfied (hereinafter, "legal defeasance") (whereupon the Company
may, by complying with the requirements of Section 11.05(a), obtain
the release of the Collateral as security for the Securities and the
Guarantees). For this purpose, such legal defeasance means that the
Company shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of
paragraph (e) below and the other Sections of and matters under this
Indenture referred to in (i) and (ii) below, and to have satisfied all
its other obligations under such Securities and this Indenture insofar
as such Securities are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same),
except for the following which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of
outstanding Securities to receive solely from the trust fund described
in paragraph (d) below and as more fully set forth in such paragraph,
payments in respect of the principal of, premium, if any, and
interest on the Securities when such payments are due, (ii) the
Company's obligations under and the other provisions of Sections 2.02,
2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.02, 4.20, 7.07, 7.08 and
7.09 and each Guarantor's obligations in respect thereof under Article
Ten, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (iv) this Article Eight and each Guarantor's
obligations in respect thereof under Article Ten. Subject to
compliance with this Section 8.02, the Company may exercise its option
under this paragraph (b) notwithstanding the prior exercise of its
option under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a)
above of the option applicable to this paragraph (c), the Company
shall be released and discharged from its obligations under any
covenant contained in Sections 4.08 through 4.19 and under the
provisions set forth in clauses (i) (but only to the extent that
such clause (i) requires the execution and delivery of documents
in order to assume or to confirm obligations under the Intercreditor
Agreement, the Security Documents or the CF&I Note or the filing or
recording of such documents or of financing statements), (ii), (iii),
(iv)(2) and (v) of Section 5.01 and each Guarantor shall be released
and discharged from its obligations under clauses (a) (but only to the
extent that such clause (a) requires the execution and delivery of
documents in order to assume or to confirm obligations under the
Intercreditor Agreement, the Security Documents or the CF&I Note or
the filing or recording of such documents or of financing statements),
(b), (c), (d)(2) and (e) of the first sentence of Section 10.03 and
the penultimate sentence of Section 10.03 (but only to the extent that
such penultimate sentence
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requires the execution and delivery of documents to confirm
obligations under the Intercreditor Agreement, the Security Documents
or the CF&I Note), on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance") (whereupon
the Company may, by complying with the requirements of Section
11.05(a), obtain the release of the Collateral as security for the
Securities and the Guarantees, and upon any such release the Company
shall also be released and discharged from its obligations under
Article Eleven), and the Securities shall thereafter be deemed to be
not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For this purpose,
such covenant defeasance means that, with respect to the outstanding
Securities, the Company and each Guarantor may omit to comply with and
shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default, but,
except as specified above, the remainder of this Indenture, the
Guarantees and such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application
of either paragraph (b) or paragraph (c) above to the outstanding
Securities:
(i) the Company shall irrevocably have deposited
or caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.11 who
shall agree to comply with the provisions of Article Eight
applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged
(pursuant to a pledge and security agreement in form
reasonably satisfactory to the Trustee) as security for, and
dedicated solely to, the benefit of the Holders of the
Securities, (x) cash, in United States dollars, or (y)
direct non-callable obligations of, or non-callable
obligations guaranteed by, the United States of America for
the payment of which guarantee or obligation the full faith
and credit of the United States is pledged ("U.S. Government
Obligations") maturing as to principal, premium, if any, and
interest in such amounts of cash, in United States dollars,
and at such times as are sufficient without consideration of
any reinvestment of such amounts, to pay principal of,
premium, if any, and interest on the outstanding Securities
not later than one day before the due date of any payment,
or (z) a combination thereof, in an amount sufficient (in
each case referred to in (x), (y) or (z)), in the opinion of
a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which
shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge the principal of, premium, if
any, and interest on the outstanding Securities as and when
the same shall become due and payable in accordance with the
terms of this Indenture and of such Securities; provided,
--------
however, that the Trustee (or other qualifying trustee)
-------
shall have received an irrevocable Company Order instructing
the Trustee (or other qualifying trustee) to apply such
money or the proceeds of such U.S. Government Obligations to
said payments with respect to the Securities;
(ii) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or,
insofar as Section 6.01(g) or (h) is concerned, at any time
during the period ending on the 123rd day after the date of
such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such
period);
(iii) such legal defeasance or covenant defeasance
shall not cause the Trustee to have a conflicting interest
with respect to any securities of the Company or any
Guarantor;
(iv) such legal defeasance or covenant defeasance
shall not result in a breach or violation of, or constitute
a default under, this Indenture or any other material
agreement or instrument to which the Company or any
Guarantor is a party or by which it is bound;
(v) in the case of an election under paragraph (b)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (x) the Company has received
from, or there has been published by, the Internal Revenue
Service a ruling or (y) since the Issue Date, there has been
a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the outstanding
Securities will not recognize income, gain or loss for
Federal income tax purposes as a result of such legal
defeasance and will be subject to Federal income tax on the
same
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<PAGE>
amounts, in the same manner and at the same times as
would have been the case if such legal defeasance had not
occurred;
(vi) in the case of an election under paragraph
(c) above, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of the
outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance
had not occurred;
(vii) in the case of an election under either
paragraph (b) or (c) above, an Opinion of Counsel to the
effect that (x) the trust funds will not be subject to any
rights of any other holders of Indebtedness of the Company
and (y) after the 123rd day following the deposit, the trust
funds will not be subject to avoidance or recovery under any
applicable Bankruptcy Law and nothing in any such Bankruptcy
Law will prohibit the Trustee from distributing the trust
funds to the Holders;
(viii) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided for
relating to either the legal defeasance under paragraph (b)
above or the covenant defeasance under paragraph (c) above,
as the case may be, have been complied with;
(ix) if the cash and U.S. Government Obligations
deposited with the Trustee under subparagraph (i) above are
sufficient to pay and discharge the principal of, premium,
if any, and interest on the outstanding Securities provided
such Securities are redeemed on a particular Redemption
Date, the Company shall have given the Trustee irrevocable
instructions to redeem such Securities on such date and to
provide notice of such redemption to Holders as provided in
this Indenture;
(x) if the trust funds referred to in subparagraph
(i) of paragraph (d) above shall have been deposited with
another trustee in accordance with the provisions thereof,
such other trustee shall have delivered to the Trustee a
certificate (on which certification the Trustee may
conclusively rely) that such other trustee is holding and
will continue to hold and will apply such trust funds in
accordance with the requirements of Sections 8.02 and 8.03;
and
(xi) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit
was not made by the Company with the intent of preferring
the Holders over other creditors of the Company or of
defeating, hindering, delaying or defrauding any other
creditors of the Company or others.
(e) All money and U.S. Government Obligations (including
the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this paragraph (e), the
"Trustee") pursuant to paragraph (d) above in respect of the
outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(other than the Company or any Subsidiary or Affiliate of the Company)
as the Trustee may determine, to the Holders of such Securities of all
sums due and to become due thereon in respect of principal, premium
and interest, but such money need not be segregated from other funds
except to the extent required by law.
The Company and the Guarantors, jointly and severally,
shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to paragraph (d) above or the principal, premium,
if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the
Holders of the outstanding Securities.
Anything in this Section 8.02 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from
time to time upon Company Request any money or U.S. Government
Obligations held by it as provided in paragraph (d) above which, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent legal defeasance or
covenant defeasance.
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Section 8.03. Application of Trust Money.
--------------------------
The Trustee (or any other qualifying trustee) shall hold
in trust money and U.S. Government Obligations deposited with it
pursuant to Sections 8.01 and 8.02, and shall apply the deposited
money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any,
and interest on the Securities.
Section 8.04. Repayment to Company or Guarantors.
----------------------------------
The Trustee and the Paying Agent shall pay to the Company
or any applicable Guarantor, upon receipt by the Trustee or the Paying
Agent, as the case may be, of an Officers' Certificate, any money held
by it for the payment of principal, premium, if any, or interest that
remains unclaimed for two years after payment to the Holders is
required; provided, however, that the Trustee and the Paying Agent
-------- -------
before being required to make any payment may, but need not, at the
expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and
that after a date specified therein, which shall be at least 30 days
from the date of such publication or mailing, any unclaimed balance of
such money then remaining will be repaid to the Company or any
applicable Guarantor. After payment to the Company or any Guarantor,
Holders entitled to money must look solely to the Company for payment
as general creditors unless an applicable abandoned property law
designates another person, and all liability of the Trustee or Paying
Agent with respect to such money shall thereupon cease.
Section 8.05. Reinstatement.
-------------
If the Trustee (or other qualifying trustee) or Paying
Agent is unable to apply any money or U.S. Government Obligations in
accordance with this Indenture by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then
and only then the Company's and each Guarantor's obligations under
this Indenture, the Guarantees and the Securities shall be revived and
reinstated as though no deposit had been made pursuant to this
Indenture, until such time as the Trustee is permitted to apply all
such money or U.S. Government Obligations in accordance with this
Indenture; provided, however, that if the Company or a Guarantor has
-------- -------
made any payment of principal of, premium, if any, or interest on any
Securities because of the reinstatement of its obligations, the
Company or such Guarantor, as the case may be, shall be subrogated to
the rights of the Holders of such Securities to receive such payment
from the money or U.S. Government Obligations held by the Trustee (or
other qualifying trustee) or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
--------------------------
The Company and the Guarantors, each when authorized by a
Board Resolution of its Board of Directors, and the Trustee may amend,
waive or supplement this Indenture, the Securities, the Security
Documents, the Intercreditor Agreement or the Guarantees without
notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to evidence the succession of another person to the
Company in accordance with Article Five hereof or the succession
of another person to a Guarantor in accordance with Section
10.03 hereof, and the assumption by any such successor of the
obligations of the Company or such Guarantor, as the case may be,
as provided herein;
(c) to comply with any requirements of the SEC in order
to effect or maintain the qualification of this Indenture under
the TIA;
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(d) to give effect to the release of any Released
Interests or any other release of Collateral released in
accordance with the terms of this Indenture or the relevant
Security Document (including, without limitation, pursuant to
subsection 8.1 of any Security Agreement);
(e) to evidence or effect the pledge of additional or
substitute assets or property as Collateral (including, without
limitation, pursuant to subsection 8.1 of any Security
Agreement);
(f) to evidence the release of any Guarantor in
accordance with Section 10.04 hereof or the addition of any new
Guarantor;
(g) to evidence and provide for the acceptance of
appointment hereunder by a separate or successor Trustee with
respect to the Securities and to make such additions or changes
as shall be necessary or appropriate to provide for or facilitate
the administration of the trusts hereunder by more than one
trustee pursuant to the requirements of Section 7.12 hereof; and
(h) to make any other change that does not adversely
affect the rights of any Holder or, in the case of any other
change to the Intercreditor Agreement, that does not adversely
affect the rights of any Holder in any material respect.
Section 9.02. With Consent of Holders.
-----------------------
Subject to Section 6.04, the Company and the Guarantors,
each when authorized by a Board Resolution of its Board of Directors,
and the Trustee may amend or supplement this Indenture, the
Securities, the Security Documents, the Intercreditor Agreement or the
Guarantees with the written consent of the Holders of not less than a
majority in aggregate principal amount of the Securities then
outstanding, and the Holders of not less than a majority in aggregate
principal amount of the Securities then outstanding by written notice
to the Trustee may waive future compliance by the Company or any
Guarantor with any provision of this Indenture, the Security
Documents, the Guarantees, the Securities or the Intercreditor
Agreement.
Notwithstanding the provisions of this Section 9.02,
without the consent of each Holder affected, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may not:
(a) reduce the percentage in outstanding aggregate
principal amount of Securities the Holders of which must consent
to an amendment, supplement or waiver of any provision of this
Indenture, the Guarantees, the Security Documents, the Securities
or the Intercreditor Agreement;
(b) reduce the rate or change the time for payment of
interest on any Security;
(c) change the currency in which any Security, or any
premium or interest thereon, is payable or make the principal of,
premium, if any, or interest on any Security payable in money
other than that stated in the Security;
(d) reduce the principal amount of or extend the fixed
maturity of any Security or alter the redemption provisions
(including, without limitation, the amount of premium, if any,
payable upon redemption) with respect thereto;
(e) waive a default in the payment of the principal of,
premium, if any, or interest on any Security when the same shall
become due and payable, whether upon Stated Maturity,
acceleration, optional redemption, required purchase, scheduled
payment or otherwise;
(f) modify this Section 9.02 or Section 6.04 or Section
6.07;
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(g) amend, change, or modify the obligation of the
Company to make and consummate a Change of Control Offer in the
event of a Change of Control or to make and consummate an Asset
Sale Offer pursuant to Section 4.13;
(h) modify or change any provision of this Indenture
affecting the ranking of the Securities or any Guarantee in a
manner adverse to the Holders;
(i) impair the right to institute suit for the
enforcement of any payment on or with respect to the Securities;
(j) release any Guarantor from any of its obligations
under its Guarantee or Security Documents or this Indenture other
than in compliance with Section 10.04 hereof; or
(k) directly or indirectly release or terminate the Liens
created by this Indenture and the Security Documents as to all or
substantially all of the Collateral, except as expressly
permitted under this Indenture and the Security Documents.
It shall not be necessary for the consent of the Holders
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Company shall mail to the Holder
of each Security affected thereby, with a copy to the Trustee, a
notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any
amendment, supplement or waiver.
Section 9.03. Compliance with Trust Indenture Act.
-----------------------------------
Every amendment of or supplement to this Indenture, any
Guarantee, any Security Document, the Intercreditor Agreement or the
Securities shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Security is a continuing
consent by such Holder and every subsequent Holder of that Security or
portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder
may revoke the consent as to his Security or portion of a Security
prior to such amendment, supplement or waiver becoming effective.
Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or
waiver becomes effective. Notwithstanding the above, nothing in this
paragraph shall impair the right of any Holder under Section 316(b) of
the TIA.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to
consent to any amendment, supplement or waiver. If a record date is
fixed, then notwithstanding the second and third sentences of the
immediately preceding paragraph, those persons who were Holders at
such record date (or their duly designated proxies), and only those
persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such
persons continue to be Holders after such record date. Such consent
shall be effective only for actions taken within 90 days after such
record date.
After an amendment, supplement or waiver becomes
effective, it shall bind every Holder unless it makes a change
described in any of clauses (a) through (k) of the second paragraph of
Section 9.02; if it makes such a change, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to
it and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security.
Section 9.05. Notation on or Exchange of Securities.
-------------------------------------
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If an amendment, supplement or waiver changes the terms of
a Security, the Trustee shall (in accordance with the specific
direction, if any, of the Company) request the Holder of the Security
to deliver it to the Trustee. The Trustee shall (in accordance with
the specific direction, if any, of the Company) place an appropriate
notation on the Security and on Securities issued on registration of
transfer or exchange of such Security about the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or issue a
new Security shall not affect the validity and effect of such
amendment, supplement or waiver.
Section 9.06. Trustee May Sign Amendments, etc.
---------------------------------
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article Nine if the amendment, supplement
or waiver does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not,
sign it. In signing or refusing to sign such amendment, supplement or
waiver, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that any amendment, supplement or waiver is authorized
or permitted by this Indenture, that it is not inconsistent herewith
and that it will be valid and binding upon the Company and the
Guarantors in accordance with its terms.
ARTICLE TEN
GUARANTEE OF SECURITIES
Section 10.01. Guarantee.
---------
Subject to the provisions of this Article Ten, each
Guarantor hereby, jointly and severally, unconditionally guarantees to
each Holder of a Security authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities, the
Security Documents or the Intercreditor Agreement or the obligations
of the Company or any other Guarantors to the Holders or the Trustee
hereunder or thereunder, that: (a) the principal of and interest on
the Securities will be duly and punctually paid in full when due,
whether at Stated Maturity, upon acceleration, upon optional
redemption, upon required purchase or otherwise, and interest on the
overdue principal and (to the extent permitted by law) interest, if
any, on the Securities and all other obligations of the Company and
the Guarantors to the Holders or the Trustee under this Indenture, the
Securities, the Security Documents and the Intercreditor Agreement
(including fees, expenses, indemnities or other amounts payable
thereunder) will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Securities, the same
will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at Stated Maturity,
upon acceleration, upon optional redemption, upon required purchase or
otherwise. Failing payment when due of any amount so guaranteed, or
failing performance of any other obligation of the Company to the
Holders or the Trustee, for whatever reason, each Guarantor will be
obligated, jointly and severally, to pay, or to perform or cause the
performance of, the same immediately. An Event of Default under this
Indenture or the Securities shall constitute an event of default under
this Guarantee, and shall entitle the Holders of Securities and the
Trustee to accelerate the obligations of the Guarantors hereunder in
the same manner and to the same extent as the obligations of the
Company.
Each of the Guarantors hereby agrees (to the maximum
extent permitted by law) that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or
enforceability of the Securities, the Security Documents, the
Intercreditor Agreement or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, any
release of any other Guarantor or any Collateral, the recovery of any
judgment against the Company, any action to enforce the same, whether
or not a Guarantee is affixed to any particular Security, or any other
circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each of the Guarantors hereby
waives (to the maximum extent permitted by law) the benefit of
diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenants (to the maximum extent
permitted by law) that its Guarantee will not be
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discharged except by complete performance of the obligations contained
in the Securities, this Indenture, the Security Documents, the
Intercreditor Agreement and this Guarantee. This Guarantee is a
guarantee of payment and not of collection. If any Holder or the
Trustee is required by any court or otherwise to return to the Company
or to any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or such Guarantor,
any amount paid by the Company or such Guarantor to the Trustee or
such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further
agrees (to the fullest extent permitted by law) that, as between it,
on the one hand, and the Holders of Securities and the Trustee, on the
other hand, (a) the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article Six hereof for the purposes of
this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (b) in the event of any acceleration of such
obligations as provided in Article Six hereof, such obligations
(whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Guarantee.
This Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against
the Company for liquidation or reorganization, should the Company
become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant
part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Securities
are, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee on the
Securities, whether as a "voidable preference", "fraudulent transfer"
or otherwise, all as though such payment or performance had not been
made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Securities shall, to the
fullest extent permitted by law, be reinstated and deemed reduced only
by such amount paid and not so rescinded, reduced, restored or
returned.
Section 10.02. Execution and Delivery of Guarantee.
-----------------------------------
To further evidence the Guarantee set forth in Section
10.01, each Guarantor hereby agrees that a notation of such Guarantee,
substantially in the form included in Exhibit A hereto, shall be
executed on behalf of such Guarantor by one of its Officers (by manual
or facsimile signature) under its corporate seal (which may be a
facsimile of its genuine seal and provided that, if any Guarantor is a
partnership, the corporate seal shall be that of its direct or
indirect corporate general partner executing the Guarantee or, if such
partnership has no direct or indirect corporate general partner, the
seal shall be that of its general partner executing the Guarantee or,
if such general partner has no seal, the seal may be omitted) attested
by the manual of facsimile signature of another of its Officers and
shall be endorsed on each Security authenticated and delivered by the
Trustee. Typographical and other minor defects in any reproduction of
any such signature or seal shall not affect the validity or
enforceability of any Guarantee. In addition, the validity and
enforceability of any Guarantee shall not be affected by the fact that
a notation of such Guarantee is not affixed to any particular
Security.
Each of the Guarantors hereby agrees that its Guarantee
set forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of
such Guarantee.
If an Officer of a Guarantor whose signature on a
Guarantee no longer holds that office at the time the Trustee
authenticates such Security or at any time thereafter, such
Guarantor's Guarantee of such Security shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any
Guarantee set forth in this Indenture on behalf of each Guarantor.
To provide an "original evidence of debt" as required by
Section 38-38-101 and 38-39-102 of the Colorado Revised Statutes (or
any successor statutes thereto), CF&I has, on the Issue Date, executed
and delivered the CF&I Note to the Trustee, which CF&I Note further
evidences the Guarantee set forth in Section 10.01. The parties
hereto agree that the Guarantee of CF&I set forth in this Article Ten
and the notation of such Guarantee endorsed on each Security shall in
no way be limited by the CF&I Note. The CF&I Note shall be executed
and attested as provided above in this Section 10.02, but
notwithstanding the foregoing provisions of this Section 10.02, a
notation of the CF&I Note shall not be endorsed on the Securities.
Anything herein to the contrary notwithstanding, CF&I's covenants and
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agreements and the other provisions and limitations set forth in this
Article Ten applicable to CF&I's Guarantee shall, unless the context
otherwise requires, apply equally to the CF&I Note and, as a result,
the CF&I Note will be entitled to the benefits of such covenants and
agreements and shall be subject to such other provisions and
limitations (including, without limitation, Sections 10.01, 10.05,
10.06 and 10.07). The Trustee shall hold the CF&I Note for the
benefit of the Holders. Upon receipt of a Company Request in
connection with any release or partial release of property subject to
any Mortgage executed by CF&I, the Trustee shall present the Global
Security to the relevant public trustee in the State of Colorado in
order to obtain such release or partial release (but the Trustee shall
thereafter retain possession of the Global Securities).
Section 10.03. Merger or Consolidation of a Guarantor.
--------------------------------------
Except for a transaction made in accordance with the
provisions of Section 10.04, no Guarantor will, in any transaction or
series of transactions, merge or consolidate with or into, or sell,
assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to, any person or
persons, unless (a) either (i) if such transaction or series of
transactions is a merger, such Guarantor shall be the surviving person
of such merger, or (ii) the person formed by such consolidation or
into which such Guarantor is merged or to which the properties and
assets of such Guarantor are transferred (any such surviving person or
transferee being the "Surviving Person") shall be the Company or a
Wholly-Owned Subsidiary of the Company and shall be a corporation (or
if such Guarantor is CF&I, a corporation or a limited partnership)
organized and existing under the laws of the United States of America,
any state thereof or the District of Columbia and shall expressly
assume (except in the case of a merger into or the transfer of
properties and assets to the Company), by a supplemental indenture
executed and delivered to the Trustee, in form reasonably satisfactory
to the Trustee, the due and punctual payment of all amounts due under
the Guarantee of such Guarantor and the due and punctual performance
and observance of all of the other obligations of such Guarantor under
its Guarantee and this Indenture, and shall expressly assume, by
amendment, supplement or other appropriate instrument, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the due and punctual performance and observance of all of the
obligations of such Guarantor under the Intercreditor Agreement and
its Security Documents and, if such Guarantor is CF&I, all of its
obligations under the CF&I Note (and the Surviving Person shall cause
such amendments, supplements or other instruments to be filed and
recorded in such jurisdictions as may be required by applicable law to
preserve and protect the Lien of the Security Documents on the
Collateral owned by such Guarantor (in the case of a merger or
consolidation) or on the Collateral transferred to the Surviving
Person (in the case of a transfer of assets), together with such
financing statements as may be required to perfect any security
interests in such Collateral which may be perfected by the filing of a
financing statement under the Uniform Commercial Code of the relevant
states); (b) the Collateral owned by such Guarantor (in the case of a
merger or consolidation) or the Collateral transferred to the
Surviving Person (in the case of a transfer of assets) (1) shall
continue to constitute Collateral under this Indenture and the
Security Documents, (2) shall be subject to a Lien in favor of the
Trustee (or, in the case of property or assets subject to a Mortgage,
the Trustee or another trustee under such Mortgage) for the benefit of
the Holders of the Securities and (3) shall not be subject to any Lien
other than Liens expressly permitted by this Indenture and the
Security Documents; (c) the property and assets of the person which is
merged or consolidated with or into such Guarantor or to which the
properties and assets of such Guarantor are transferred, to the extent
that such property and assets are of types that would constitute
"Trust Property" (as defined in the form of Mortgage attached as an
exhibit to this Indenture) (assuming, in the case of real property or
a leasehold interest in real property, that an appropriate description
of such property or leasehold interest were included as a schedule to
such form of Mortgage and assuming, in the case of fixtures,
improvements and other types of Trust Property, that a description of
the related real property or leasehold interest in real property, as
the case may be, were included as a schedule to such form of Mortgage)
or "Collateral" (as defined in the form of Security Agreement attached
as an exhibit to this Indenture) shall be treated as After-Acquired
Property and such Guarantor or the Surviving Person, as the case may
be, shall take such actions as may be necessary to cause such property
and assets to be made subject to the Lien of the Security Documents in
the manner specified in Section 11.01 (including delivery of such
documents, Officers' Certificates and Opinions of Counsel as may be
required by Section 11.01); (d) except in the case of a merger into or
the transfer of properties and assets to the Company, (1) immediately
before and immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
--- -----
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions), no Default or Event of Default shall have occurred and
be continuing and (2) the Company, after giving effect to such
transaction or series of transactions on a pro forma basis (including,
--- -----
without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or
series of transactions), could incur $1.00
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of additional Indebtedness pursuant to the first paragraph of Section
4.08 (assuming a market rate of interest with respect to such
additional Indebtedness); and (e) except in the case of a merger into
or the transfer of properties and assets to the Company, immediately
after giving effect to such transactions or series of transactions on
a pro forma basis (including, without limitation, any Indebtedness
incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), the
Consolidated Net Worth of such Guarantor or the Surviving Person, as
the case may be, is at least equal to the Consolidated Net Worth of
such Guarantor immediately before such transaction or series of
transactions. At the time of any consolidation, merger, transfer,
lease, assignment or other disposition subject to the provisions
described in this paragraph, the Company shall deliver, or cause to be
delivered, to the Trustee an Officers' Certificate and an Opinion of
Counsel, each in form reasonably satisfactory to the Trustee, each
stating that such transaction and any supplemental indenture,
amendments, supplements or other instruments or agreements required by
clause (a) or (c) above or by this sentence comply with the
requirements of this Indenture and that all conditions precedent
herein provided for relating to such transaction have been complied
with (except that such Opinion of Counsel need express no opinion as
to the matters referred to in clauses (b)(3), (d) or (e) above), and
the Company and each other Guarantor shall have confirmed, by
supplemental indenture executed and delivered to the Trustee in form
reasonably satisfactory to the Trustee, that its obligations under
this Indenture, the Intercreditor Agreement, its Guarantee (including,
if applicable, the CF&I Note) and its Security Documents remain in
full force and effect. Upon any consolidation or merger or sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the assets of a Guarantor in accordance with this
paragraph in which such Guarantor is not the continuing person, the
successor formed by such consolidation or into which such Guarantor is
merged or to which such sale, assignment, conveyance, transfer lease
or disposition is made shall succeed to, and be substituted for, and
may exercise every right and power of, such Guarantor under this
Indenture, the Intercreditor Agreement, its Guarantee and the relevant
Security Documents with the same force and effect as if such successor
person had been named as a Guarantor herein and therein (and
thereafter, except in the case of a lease, the predecessor Guarantor
shall be released from its obligations hereunder and thereunder).
Section 10.04. Release of a Guarantor.
----------------------
(a) In the event of a sale or other disposition of all
of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock
of any Guarantor (or its parent) owned by the Company and its
Subsidiaries, in each case to a person which is not the Company or a
Subsidiary or an Affiliate of the Company and which is otherwise made
in compliance with this Indenture, such Guarantor will be released
from all of its obligations under its Guarantee, the Intercreditor
Agreement, this Indenture and its Security Documents; provided that
--------
(i) such transaction is made in accordance with the provisions set
forth in Section 4.13; and (ii) any such release shall occur only if
(a) all Indebtedness owing by such Guarantor to the Company or any of
its Subsidiaries or Unrestricted Subsidiaries shall have been paid in
full and (b) all obligations of such Guarantor under all of its
guarantees of, and under all of its pledges of assets or other Liens
which secure, Indebtedness of the Company or any of its Subsidiaries
or Unrestricted Subsidiaries shall also terminate. Prior to any
transaction which will result in the release of a Guarantor from its
Guarantee pursuant to this paragraph, the Company will deliver an
Officers' Certificate to the Trustee stating that such transaction
will be effected in accordance with the provisions of this Section
10.04 in order to obtain the release of such Guarantor.
(b) The Trustee shall deliver an appropriate instrument
evidencing the release of a Guarantor upon receipt of a request of the
Company accompanied by an Officers' Certificate certifying as to the
compliance with this Section 10.04. Any Guarantor not so released
will remain liable under its Guarantee as provided in this Article
Ten.
Except as set forth in Articles Four and Five, Section
10.03 and this Section 10.04, nothing contained in this Indenture or
in any of the Securities shall prevent any consolidation or merger of
a Guarantor with or into the Company or another Guarantor.
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Section 10.05. Waiver of Subrogation.
---------------------
Until the date that is 123 days after the later of (x) the
date on which the principal of, premium, if any, and interest on all
of the outstanding Securities shall have been indefeasibly paid to the
Holders thereof and (y) the date on which any and all other amounts
owing by the Company or any of the Guarantors under this Indenture,
the Securities, the Guarantees, the CF&I Note, the Security Documents
or the Intercreditor Agreement shall have been indefeasibly paid to
the persons entitled thereto, each Guarantor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire
against the Company that arise from the existence, payment,
performance or enforcement of such Guarantor's obligations under its
Guarantee, the Security Documents, the Intercreditor Agreement and
this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any
right to participate in any claim or remedy of any Holder of
Securities against the Company, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-
off or in any other manner, payment or security on account of such
claim or other rights. If any amount shall be paid to any Guarantor
in violation of the preceding sentence and the Securities shall not
have been paid in full, such amount shall have been deemed to have
been paid to such Guarantor for the benefit of, and held in trust for
the benefit of, the Holders of the Securities, and shall forthwith be
paid to the Trustee for the benefit of such Holders to be credited and
applied upon the Securities, whether matured or unmatured, in
accordance with the terms of this Indenture. Each Guarantor
acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the
waiver set forth in this Section 10.05 is knowingly made in
contemplation of such benefits.
Section 10.06. Limitation of Guarantor's Liability.
-----------------------------------
Each Guarantor, and by its acceptance hereof, each Holder
hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee (including, in
the case of CF&I, the CF&I Note) not constitute a fraudulent transfer
or conveyance for purposes of any Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
other Federal or state law. To effectuate the foregoing intention,
the Holders and each Guarantor hereby irrevocably agree that the
obligations of such Guarantor under its Guarantee (including, in the
case of CF&I, the CF&I Note) shall be limited to the maximum amount as
will, under applicable law and (to the extent permitted by applicable
law) after giving effect to all other contingent and fixed liabilities
of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee (including, in
the case of CF&I, the CF&I Note) or pursuant to Section 10.07, result
in the obligations of such Guarantor under its Guarantee (including,
in the case of CF&I, the CF&I Note) not constituting such fraudulent
transfer or conveyance under applicable law.
Section 10.07. Contribution.
------------
In order to provide for just and equitable contribution
among the Guarantors, the Guarantors agree, inter se, that in the
----- --
event any payment or distribution is made by any Guarantor (a "Funding
Guarantor") under its Guarantee (including, in the case of CF&I, the
CF&I Note), such Funding Guarantor shall be entitled to a contribution
from all other Guarantors in a pro rata amount based on the Adjusted
--- ----
Net Assets of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company's obligations with respect to the Securities,
this Indenture, the Intercreditor Agreement or any Security Document
or any other Guarantor's obligations with respect to its Guarantee
(including, in the case of CF&I, the CF&I Note). "Adjusted Net
Assets" of any Guarantor at any date shall mean the lesser of the
amount by which (x) the fair value of the property of such Guarantor
exceeds the total amount of liabilities, including, without
limitation, the probable liability of such Guarantor with respect to
contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but
excluding liabilities under its Guarantee (including, in the case of
CF&I, the CF&I Note), of such Guarantor at such date and (y) the
present fair salable value of the assets of such Guarantor at such
date exceeds the amount that will be required to pay the probable
liability of such Guarantor on its debts (after giving effect to all
other fixed and contingent liabilities incurred or assumed on such
date and after giving effect to any collection from any Subsidiary of
such Guarantor in respect of the obligations of such Subsidiary under
the Guarantee), excluding debt in respect of the Guarantee (including,
in the case of CF&I, the CF&I Note), as they become absolute and
matured.
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ARTICLE ELEVEN
COLLATERAL AND SECURITY
Section 11.01. Collateral and Security Documents;
----------------------------------
Additional Collateral.
---------------------
(a) In order to secure the due and punctual payment of
the principal of and interest on the Securities when and as the same
shall be due and payable, whether on an Interest Payment Date, at
maturity, on any Asset Sale Purchase Date or Change of Control
Purchase Date, or by acceleration, redemption or otherwise, and
interest on the overdue principal of and (to the extent permitted by
law) interest, if any, on the Securities and the performance of all
other obligations of the Company and the Guarantors to the Holders or
the Trustee under this Indenture, the Securities, the Guarantees, the
Intercreditor Agreement, the Security Documents and any other
documents contemplated hereby, as the case may be, the Company, the
Guarantors and the Trustee have simultaneously with the execution of
this Indenture entered into the Security Documents. The Trustee, the
Company and the Guarantors each hereby agree that the Trustee holds
its interest in the Collateral in trust for the benefit of the Holders
pursuant to the terms of the Security Documents.
(b) Promptly upon (i) the acquisition or receipt by the
Company or any of the Guarantors of property and assets (whether real,
personal or mixed, tangible or intangible, and including, without
limitation, property and assets acquired or received pursuant to a
merger or consolidation of any person or persons with or into the
Company or a Guarantor, pursuant to an Asset Sale, pursuant to a
transaction as a result of which a Guarantor is released as provided
in Section 10.04, pursuant to a transaction as a result of which a
person becomes a Guarantor as provided in Section 4.17, or pursuant to
Section 12.02 or 12.04 hereof) of the type that constitutes or would
constitute "Trust Property" as defined in the form of Mortgage
attached as Exhibit C hereto (assuming, in the case of real property
or a leasehold interest in real property, that an appropriate
description of such property or leasehold interest were included as a
schedule to such form of Mortgage and assuming, in the case of
fixtures, improvements and other types of Trust Property, that a
description of the related real property or leasehold interest in real
property, as the case may be, were included as a schedule to such form
of Mortgage), or "Collateral" as defined in the form of Security
Agreement attached hereto as Exhibit B (each such item of property and
each such asset so acquired or received being referred to herein as
"After-Acquired Property"),
(i) the Company or the applicable Guarantor, as the case
may be, and the Trustee will enter into such amendments or
supplements to the Security Documents or additional Mortgages (in
each case in registerable or recordable form), Security
Agreements and other Security Documents, and the Company or the
applicable Guarantor, as the case may be, shall cause such
amendments, supplements, Mortgages, Security Agreements and other
Security Documents to be filed and recorded in all such
governmental offices, as shall be necessary in order to grant and
create a valid first priority Lien on and security interest
in such After-Acquired Property in favor of the Trustee (or, in
the case of property or assets subject to a Mortgage, the Trustee
or another trustee under such Mortgage) (subject to no prior
Liens except as expressly permitted by this Indenture and the
Security Documents), shall cause appropriate financing
statements to be filed in such governmental offices as shall be
necessary in order to perfect any security interest in such
After-Acquired Property as to which a security interest may,
under the Uniform Commercial Code of the applicable jurisdiction,
be perfected by the filing of a financing statement and, if any
such After-Acquired Property consists of stock certificates,
promissory notes or other property as to which, under the
relevant Uniform Commercial Code, a security interest may be
perfected by possession, deliver such certificates, promissory
notes and other property, together with stock powers or
assignments duly endorsed in blank, to the Trustee; and
(ii) the Company or the applicable Guarantor, as the case
may be, shall also deliver to the Trustee the following:
(x) to the extent such After-Acquired Property
consists of real property or a leasehold interest in real
property, a title insurance
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policy or an endorsement to an existing title insurance
policy, in the American Land Title Insurance Loan Policy
Extended Coverage form, or its equivalent, and in an
amount at least equal to the purchase price thereof (or,
if such property was not purchased or such purchase price
cannot be determined by the Company, the Fair Market Value
thereof as determined by the Board of Directors of the
Company and set forth in an Officers' Certificate
delivered to the Trustee), in favor of the Trustee
insuring that the Lien of the Security Documents or any
additional Security Documents constitutes a valid and
perfected first priority Lien, subject only to such Liens
as are permitted by this Indenture and the applicable
Security Document, on such real property or leasehold
interest in an aggregate amount equal to the purchase
price or the Fair Market Value, as applicable, of the real
property or leasehold interest and containing such
endorsements and other assurances of the type included in
the title insurance policy delivered to the Trustee on the
Issue Date with respect to the real property Collateral,
together with an Officers' Certificate stating that any
Liens or such real property or leasehold interest are
Liens expressly permitted by this Indenture and the
applicable Security Document;
(y) any Opinions of Counsel required pursuant to
Section 11.02(b) below; and
(z) evidence of payment of all filing fees,
recording and registration charges, transfer taxes and
other costs and expenses, including reasonable legal fees
and disbursements of counsel for the Trustee (and any
local counsel), that may be incurred to validly and
effectively subject the After-Acquired Property to the
Lien of any applicable Security Document and perfect
such Lien; and
(iii) The Company shall deliver to the Trustee an Opinion
of Counsel and an Officers' Certificate to the effect that the
documents that have been or are therewith delivered to the
Trustee pursuant to this Section 11.01(b) (including any
amendments, supplements, Mortgages, Security Agreements or other
Security Documents referred to in paragraph (i) above) conform to
the requirements of this Indenture.
(c) Each Holder, by accepting a Security, agrees to all
the terms and provisions of the Security Documents and the
Intercreditor Agreement, including the additional Security Documents
described in paragraph (b) of this Section 11.01, as the same may be
amended or supplemented from time to time pursuant to the provisions
of the Security Documents (including such additional Security
Documents) and the Intercreditor Agreement and this Indenture.
Section 11.02. Recording, Registration and Opinions.
------------------------------------
(a) The Company and the Guarantors shall take or cause
to be taken all action required to perfect, maintain, preserve and
protect the Lien on and security interest in the Collateral granted by
the Security Documents (subject only to Liens expressly permitted by
this Indenture and the Security Documents), including without
limitation, the filing of financing statements, continuation
statements and any instruments of further assurance, in such manner
and in such places as may be required by law fully to preserve and
protect the rights of the Holders and the Trustee under this Indenture
and the Security Documents to all property comprising the Collateral.
The Company and the Guarantors shall from time to time promptly pay
all financing and continuation statement recording, registration
and/or filing fees, charges and taxes relating to this Indenture and
the Security Documents, any amendments thereto and any other
instruments of further assurance required pursuant to the Security
Documents. The Trustee shall not be responsible for any failure to so
register, file or record.
(b) The Company shall furnish to the Trustee, promptly
after the execution and delivery of this Indenture, Opinion(s) of
Counsel either (i) substantially to the effect that, in the opinion of
such counsel, this Indenture and the grant of the Liens on and
security interests in the Collateral intended to be made by the
Security Documents and all other instruments of further assurance,
including, without limitation, financing statements, have been
properly recorded and filed to the extent necessary to record or
register (as the case may be), and if applicable, to perfect the Liens
on and security interests in the Collateral created by the Security
Documents, to the extent that, in the case of perfection of security
interests, a security interest may be perfected by filing under the
Uniform Commercial Code of the applicable jurisdiction, and reciting
the details of such action, and stating that as to the Liens and
security interests created pursuant to the Security Documents, such
recordings, registrations and filings are the only recordings,
registrations and filings necessary to give notice thereof and that no
re-recordings, re-registrations or refilings are necessary to maintain
such notice (other than as stated in such opinion), or (ii) to the
effect that, in the opinion of such
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counsel, no such action is necessary to record or register such Liens
or to perfect such security interests. The Company or the applicable
Guarantor shall furnish to the Trustee, at the time of execution and
delivery of any additional Security Document(s) or any amendments or
supplements to existing Security Documents, Opinion(s) of Counsel
either substantially to the effect set forth in clause (i) of the
immediately preceding sentence (but relating only to such additional
Security Documents or any amendments or supplements to existing
Security Documents and the related After-Acquired Property) or to the
effect set forth in clause (ii) thereof, and to the further effect
that such additional Security Documents or amendments or supplements
to existing Security Documents, as the case may be, have been duly
authorized, executed and delivered by, and constitute the valid,
binding and enforceable obligations of the Company or the relevant
Guarantor, as the case may be, subject to customary exceptions. In
addition, promptly after execution and delivery of this Indenture, the
Company shall deliver the opinion(s) required by Section 314(b) of the
TIA.
(c) The Company or the applicable Guarantor shall
furnish to the Trustee, at the time of execution and delivery of this
Indenture, with respect to each Mortgage, (i) a policy of title
insurance (or a commitment to issue such policy) insuring (or
committing to insure) the Lien of such Mortgage as a valid first
mortgage Lien on the real property and fixtures described therein
which policy (or commitment) shall (a) be issued by a reputable title
company, (b) include such reinsurance arrangements, if any (with
provisions for direct access), as shall be customary in the same
general area and for transactions of this type and size, (c) have been
supplemented by such endorsements as are customary in the same general
area and for transactions of this type and size or, where such
endorsements are not available at commercially reasonable premium
costs, opinion letters of reputable architects or other reputable
professionals (including, without limitation, endorsements or opinion
letters on matters relating to usury, first loss, last dollar, zoning,
non-imputation, public road access, contiguity (where appropriate),
cluster, survey, variable rate and so-called comprehensive coverage
over covenants and restrictions, if available) and (d) contain only
such exceptions to title as shall be Permitted Liens (each, a "Title
Policy"), (ii) the aggregate amount of all such policies shall be not
less than the principal amount of the Securities and (iii) an
Officers' Certificate stating that such title insurance policies
comply with the requirements of this subsection (c).
(d) The Company shall furnish to the Trustee on
September 30 in each year, beginning with September 30, 1996,
Opinion(s) of Counsel, dated as of such date, either (i)(x) stating
that, in the opinion of such counsel, action has been taken with
respect to the recording, registration, filing, re-recording, re-
registration and refiling of all supplemental indentures, financing
statements, continuation statements and other documents as is
necessary to maintain the Lien of the Security Documents and reciting
with respect to the Liens on and security interests in the Collateral
the details of such action or referring to prior Opinions of Counsel
in which such details are given, and (y) stating that, based on
relevant laws as in effect on the date of such Opinion of Counsel, all
financing statements, continuation statements and other documents have
been executed and filed that are necessary as of such date and during
the succeeding 24 months fully to maintain the Liens and security
interests of the Securityholders and the Trustee hereunder and under
the Security Documents with respect to the Collateral, provided that
if there is a required filing of a continuation statement within such
24 month period and such continuation statement is not effective if
filed at the time of the opinion, such opinion may so state and in
that case the Company shall cause a continuation statement to be
timely filed so as to maintain such Liens and security interests and
shall provide a further Opinion of Counsel to the effect of this
clause (i) upon the filing of the relevant continuation statement; or
(ii) stating that, in the opinion of such counsel, no such action is
necessary to maintain such Liens or security interests.
Section 11.03. Release of Collateral.
---------------------
(a) The Trustee shall not at any time release Collateral
from the Liens created by this Indenture and the Security Documents
unless such release is in accordance with the provisions of this
Indenture and the Security Documents.
(b) Anything herein to the contrary notwithstanding, at
any time when an Event of Default shall have occurred and be
continuing, no release of Collateral pursuant to the provisions of
this Indenture or the Security Documents shall be effective as against
the Holders.
(c) The release of any Collateral from the Lien of the
Security Documents shall not be deemed to impair the security under
this Indenture in contravention of the provisions hereof if and to the
extent the Collateral is released pursuant to this Indenture and the
Security Documents. To the extent applicable, the Company shall cause
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TIA Section 314(d) relating to the release of property from the Lien
of the Security Documents and relating to the substitution therefor of
any property to be subjected to the Lien of the Security Documents to
be complied with. Any certificate or opinion required by TIA Section
314(d) may be made by an Officer of the Company, except in cases where
TIA Section 314(d) requires that such certificate or opinion be made
by an independent person, which person shall be an independent
engineer, appraiser or other expert selected or approved by the
Trustee in the exercise of reasonable care.
Section 11.04. Possession and Use of Collateral.
--------------------------------
Subject to and in accordance with the provisions of this
Indenture and the Security Documents, so long as no Event of Default
shall have occurred and be continuing, the Company and the Guarantors
shall have the right to remain in possession and retain exclusive
control of and to exercise all rights with respect to the Collateral
(other than Trust Moneys held by the Trustee, other than monies or
U.S. Government Obligations deposited pursuant to Article Eight, and
other than as set forth in the Security Documents and this Indenture),
to operate, manage, develop, lease, use, consume and enjoy the
Collateral (other than Trust Moneys held by the Trustee, other than
moneys and U.S. Government Obligations deposited pursuant to Article
Eight and other than as set forth in the Security Documents and this
Indenture), to alter or repair any Collateral consisting of machinery
or equipment so long as such alterations and repairs do not diminish
the value thereof or impair the Lien of the Security Documents thereon
and to collect, receive, use, invest and dispose of the reversions,
remainders, interest, rents, lease payments, issues, profits,
revenues, proceeds and other income thereof.
Section 11.05. Specified Releases of Collateral.
--------------------------------
(a) Satisfaction and Discharge; Defeasance. The Company
--------------------------
and the Guarantors shall be entitled to obtain a full release of all
of the Collateral from the Liens of this Indenture and of the Security
Documents upon compliance with the conditions precedent set forth in
Section 8.01 for satisfaction and discharge of this Indenture or for
legal defeasance or covenant defeasance pursuant to Section 8.02.
Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel, each to the effect that such
conditions precedent have been complied with (and which may be the
same Officers' Certificate and Opinion of Counsel required by Article
Eight), together with such documentation, if any, as may be required
by the TIA (including, without limitation, Section 314(d) of the TIA)
prior to the release of such Collateral, the Trustee shall forthwith
take all necessary action (at the request of and the expense of the
Company) to release and reconvey to the Company and the applicable
Guarantors without recourse all of the Collateral, and shall deliver
such Collateral in its possession to the Company and the applicable
Guarantors including, without limitation, the execution and delivery
of releases and satisfactions wherever required.
(b) Dispositions of Collateral Permitted by Section
-----------------------------------------------
4.13. The Company and the Guarantors, as the case may be, shall be
- ----
entitled to obtain a release of, and the Trustee shall release, items
of Collateral (the "Released Interests") subject to an Asset Sale upon
compliance with the conditions precedent that the Company shall have
delivered to the Trustee the following:
(i) Company Order. A Company Order requesting release
-------------
of Released Interests, such Company Order (A) specifically
describing the proposed Released Interests, (B) specifying the
Fair Market Value of such Released Interests on a date within 60
days of the Company Order (the "Valuation Date"), (C) stating
that the consideration to be received is at least equal to the
Fair Market Value of the Released Interests, (D) stating that the
release of such Released Interests will not impair the value of
the remaining Collateral or interfere with or impede the
Trustee's ability to realize the value of the remaining
Collateral and will not impair the maintenance and operation of
the remaining Collateral, (E) confirming the sale of, or an
agreement to sell, such Released Interests in a bona fide sale to
a person that is not an Affiliate of the Company or, in the event
that such sale is to a person that is such an Affiliate,
confirming that such sale is being made in accordance with
Section 4.14, (F) certifying that such Asset Sale complies with
the terms and conditions of this Indenture, including, without
limitation, Section 4.13 hereof and (G) in the event that there
is to be a substitution of property for the Collateral subject to
the Asset Sale, specifying the property intended to be
substituted for the Collateral to be disposed of;
(ii) Officers' Certificate. An Officers' Certificate of
---------------------
the Company certifying that (A) such sale covers only the
Released Interests and/or property which is not Collateral and
complies with the terms and
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conditions of this Indenture, including, without limitation,
Section 4.13 hereof, (B) all Collateral Proceeds (including
amounts deemed by this Indenture to be Collateral Proceeds) from
the sale of any of the Released Interests will be deposited in
the Collateral Account, and all Net Cash Proceeds from the sale
of any of the Released Interests (and any other property which is
not Collateral) will be applied pursuant to Section 4.13, (C)
there is not and will not be a Default or Event of Default in
effect or continuing on the date thereof, the Valuation Date or
the date of such Asset Sale, (D) the release of the Collateral
will not result in a Default or Event of Default hereunder and
(E) all conditions precedent to such release have been complied
with; and
(iii) Compliance with TIA and Section 11.01. All
-------------------------------------
documentation required by the TIA (including, without limitation,
Section 314(d) of the TIA), if any, prior to the release of
Collateral by the Trustee, and, in the event there is to be a
substitution of property for the Collateral subject to the Asset
Sale, all documentation required by the TIA to effect the
substitution of such new Collateral and to subject such new
Collateral to the Lien of the relevant Security Documents, and
all documents required by Section 11.01 hereof.
(iv) Opinion of Counsel. An Opinion of Counsel stating
------------------
that the documents that have been or are therewith delivered to
the Trustee in connection with such release conform to the
requirements of this Indenture and that all conditions precedent
herein provided for relating to such release have been complied
with.
Upon compliance by the Company with the conditions
precedent set forth above, the Trustee shall cause to be released and
reconveyed to the Company or the applicable Guarantor the Released
Interest without recourse by executing a release in the form provided
by the Company or the applicable Guarantor.
(c) Eminent Domain, Expropriation and Other Governmental
----------------------------------------------------
Takings. The Company and the Guarantors, as the case may be, shall be
- -------
entitled to obtain a release of, and the Trustee shall release, items
of Collateral taken by eminent domain or expropriation or sold
pursuant to the exercise by the United States of America or any State,
municipality, province or other governmental authority thereof of any
right which it may then have to purchase, or to designate a purchaser
or to order a sale of, all or any part of the Collateral, upon
compliance with the conditions precedent that the Company shall have
delivered to the Trustee the following:
(i) Officers' Certificate. An Officers' Certificate of
---------------------
the Company certifying that (A) such Collateral has been taken by
eminent domain or expropriation and the amount of the award
therefor, or that such property has been sold pursuant to a right
vested in the United States of America, or a State, municipality,
province or other governmental authority thereof to purchase, or
to designate a purchaser, or order a sale of such Collateral and
the amount of the proceeds of such sale, and (B) all conditions
precedent to such release have been complied with;
(ii) Opinion of Counsel. An Opinion of Counsel to the
------------------
effect that (A) such property has been lawfully taken by exercise
of the right of eminent domain, or has been sold pursuant to the
exercise of a right vested in the United States of America or a
State, municipality, province or other governmental authority to
purchase, or to designate a purchaser or order a sale of, such
property, (B) in the case of any such taking by eminent domain,
the award for such property has become final or an appeal
therefrom is not advisable in the interests of the Company or the
Holders, (C) the documents that have been or are therewith
delivered to the Trustee in connection with such release conform
to the requirements of this Indenture, and (D) all conditions
precedent herein provided relating to such release have been
complied with;
(iii) Eminent Domain or Expropriation Award. Cash equal
-------------------------------------
to the amount of the award for such property or the proceeds of
such sale, shall be deposited with the Trustee in the Collateral
Account and held as Trust Moneys subject to the disposition
thereof pursuant to Article Twelve hereof; and
(iv) Compliance with TIA. All documentation required by
-------------------
the TIA (including, without limitation, Section 314(d) of the
TIA), if any, prior to the release of Collateral by the Trustee.
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Upon compliance by the Company with the conditions
precedent set forth above, the Trustee shall cause to be released and
reconveyed to the Company or the applicable Guarantor without recourse
the aforementioned items of Collateral by executing a release in the
form provided by the Company or the applicable Guarantor.
(d) Release of Old Plate Mill. The Company shall be
-------------------------
entitled to obtain a release of, and the Trustee shall release, the
Old Plate Mill from the Collateral, upon compliance with the
conditions precedent that the Company shall have delivered to the
Trustee the following:
(i) Officers' Certificate. An Officers' Certificate of
---------------------
the Company requesting release of the Old Plate Mill and
certifying that (A) construction of the Combination Mill and all
related improvements shall have been completed, (B) the
Combination Mill and all related equipment and facilities have
been installed, are fully operational and are operating, and the
Old Plate Mill has been permanently taken out of service, (C) the
Combination Mill, together with all related fixtures,
improvements, equipment and machinery, is subject to a Lien in
favor of the Trustee (or, in the case of any of the foregoing
subject to a Mortgage, the Trustee or another trustee under such
Mortgage) for the benefit of the Holders of the Securities,
subject to no prior Liens except as expressly permitted by the
Indenture and the Security Documents (provided that,
notwithstanding the foregoing, the Combination Mill shall not at
the time be subject to any Permitted Liens of the type referred
to in clause (g) of the definition of that term), and, to the
extent that any part of the Combination Mill or any related
fixtures, improvements, equipment or machinery constitutes After-
Acquired Property, the Company has otherwise complied with
Section 11.01 hereof in respect thereto, (D) no Default or Event
of Default has occurred and is continuing or will occur as a
result of the release of the Old Plate Mill, (E) the release of
the Old Plate Mill will not interfere with or impede the
Trustee's ability to realize the value of the remaining
Collateral and will not impair the maintenance and operation of
the remaining Collateral, (F) the Old Plate Mill constitutes an
Excluded Asset, and (G) all conditions precedent to such release
have been complied with;
(ii) Pledge of Combination Mill Pursuant to Section
----------------------------------------------
11.01. All documentation required by Section 11.01 relating to
-----
the pledge of the Combination Mill, together with all related
fixtures, improvements, equipment and machinery, as Collateral
for the Securities;
(iii) Compliance with TIA. All documentation required by
-------------------
the TIA (including, without limitation, Section 314(d) of the
TIA), if any, prior to the release of Old Plate Mill by the
Trustee; and
(iv) Opinion of Counsel. An Opinion of Counsel stating
------------------
that the documents that have been or are therewith delivered to
the Trustee in connection with such release conform to the
requirements of this Indenture and that all conditions precedent
herein provided for relating to such release have been complied
with.
Upon compliance by the Company with the conditions
precedent set forth above, the Trustee shall cause the Old Plate Mill
to be released and reconveyed to the Company without recourse by
executing a release in the form provided by the Company.
(e) Released Property. So long as no Default or Event
-----------------
of Default shall have occurred and be continuing or would result
therefrom, the Company (acting on behalf of itself or any Guarantor)
shall be entitled to obtain a release of, and the Trustee shall
release, Collateral (other than Trust Moneys and other than moneys and
U.S. Government Obligations deposited pursuant to Article Eight)
specified by the Company ("Released Property") provided (i) the Fair
Market Value of the Released Property in any single transaction, or
series of related transactions, shall not exceed $250,000, and the
aggregate Fair Market Value of all such Released Property (including
the Released Property then proposed to be released) in any calendar
year shall not exceed $1,000,000 and (ii) prior to granting such
release, the Company shall provide the Trustee with the following:
(i) Company Order. A Company Order requesting release
-------------
of Released Property, such Company Order (A) specifically
describing the proposed Released Property, (B) specifying the
Fair Market Value of such Released Property on a date within 60
days of the Company Order, (C) stating that the release of such
Released Property will not interfere with or impede the Trustee's
ability to realize the value of the remaining Collateral and will
not impair the maintenance and operation of the remaining
Collateral and (D) stating that the Fair
70
<PAGE>
Market Value of such Released Property does not exceed $250,000
and that the aggregate Fair Market Value of all Released Property
(including the Released Property then proposed to be released) in
the then current calendar year does not exceed $1,000,000;
(ii) Officer's Certificate. An Officers' Certificate
---------------------
certifying that no Default or Event of Default has occurred and
is continuing or will occur as a result of the release of the
Released Property, and all conditions precedent to such release
have been complied with;
(iii) Compliance with TIA. All documentation required by
-------------------
the TIA (including, without limitation, Section 314(d) of the
TIA), if any, prior to the release of the Released Property by
the Trustee; and
(iv) Opinion of Counsel. An Opinion of Counsel (in
------------------
accordance with Section 314(c) of the TIA) stating that the
documents that have been or are therewith delivered to the
Trustee in connection with such release conform to the
requirements of this Indenture and that all conditions precedent
herein provided relating to such release have been complied with.
Upon compliance by the Company with the conditions
precedent set forth above, the Trustee shall cause to be released and
reconveyed to the Company without recourse the aforementioned items of
Collateral by executing a release in the form provided by the Company.
(f) Release of Guarantor. In the event that any
--------------------
Guarantor shall be released from its obligations under its Guarantee,
this Indenture and its Security Documents pursuant to Section 10.04
hereof, such Guarantor shall be entitled to obtain a release of, and
the Trustee shall release, all Collateral owned by such Guarantor
(provided that, if any such Collateral is jointly owned with another
Guarantor or with the Company, such release shall not affect the Lien
on such Collateral granted by such other Guarantor or by the Company
pursuant to the relevant Security Documents), upon compliance with the
conditions precedent that the Company shall have delivered to the
Trustee the following:
(i) Company Order. A Company Order requesting the
-------------
release of the Collateral owned by such Guarantor and
specifically describing such Collateral;
(ii) Officers' Certificate. An Officers' Certificate of
---------------------
the Company certifying that (A) such Guarantor has been released
from its obligations under its Guarantee, this Indenture and its
Security Documents in compliance with Section 10.04 hereof and
(B) no Default or Event of Default has occurred and is continuing
or will occur as a result of the release of such Collateral, and
(C) all conditions precedent to such release have been complied;
and
(iii) Compliance with TIA. All documentation if any,
-------------------
required by the TIA (including, without limitation, Section
314(d) of the TIA) prior to the release of such Collateral by the
Trustee.
(iv) Opinion of Counsel. An Opinion of Counsel stating
------------------
that the documents that have been or are therewith delivered to
the Trustee in connection with such release conform to the
requirements of this Indenture and that all conditions precedent
herein provided for relating to such release have been complied
with.
Upon compliance by the Company with the conditions precedent set
forth above, the Trustee shall cause to be released and reconveyed to
the applicable Guarantor without recourse, the Collateral pledged by
such Guarantor by executing a release in the form provided by the
Company (provided that, as set forth in the first clause of this
paragraph, such release shall not affect the Lien on any such
Collateral which may have been granted by any other Guarantor or by
the Company).
Section 11.06. Disposition of Collateral Without Release.
-----------------------------------------
Notwithstanding the provisions of Section 11.05, so long as no Default
or Event of Default shall have occurred and be continuing or would
result therefrom, the Company and the Guarantors may, without any
prior release or consent by the Trustee, conduct ordinary course
activities in respect of the Collateral which do not individually or
in the aggregate adversely affect the value of the Collateral,
including selling or otherwise disposing of, in any single transaction
or series of related transactions, any
71
<PAGE>
property subject to the Lien of this Indenture or the Security
Documents which has become worn out or obsolete and which either has
an aggregate Fair Market Value of $25,000 or less or which is replaced
by property of substantially equivalent or greater value which becomes
subject to the Lien of the Security Documents as After-Acquired
Property; abandoning, terminating, cancelling, releasing or making
alterations in or substitutions of any leases or contracts subject to
the Lien of this Indenture or any of the Security Documents other than
any Specifically Secured Construction Contract; surrendering or
modifying any franchise, license or permit subject to the Lien of this
Indenture or any of the Security Documents which it may own or under
which it may be operating; altering, repairing, replacing, changing
the location or position of and adding to its structures, machinery,
systems, equipment, fixtures, and appurtenances, provided, however
-------- -------
that no change in the location of any such Collateral subject to the
Lien of any of the Security Documents shall be made which (1) removes
such property into a jurisdiction in which any instrument required by
law to preserve the Lien of any of the Security Documents on such
property, including all necessary financing statements and
continuation statements, has not been recorded, registered or filed in
the manner required by law to preserve the Lien of and security
interest in any of the Security Documents on such property, (2) does
not comply with the terms of this Indenture and the Security Documents
or (3) otherwise impairs the Lien of the Security Documents;
demolishing, dismantling, tearing down or scrapping any Collateral or
abandoning any thereof if, in the good faith opinion of the Board of
Directors of the Company (as evidenced by a Board Resolution delivered
to the Trustee if it involves Collateral having a Fair Market Value in
excess of $25,000) such demolition, dismantling, tearing down,
scrapping or abandonment is in the best interests of the Company, will
not interfere with or impede the Trustee's ability to realize the
value of the remaining Collateral and will not impair the maintenance
and operation of the remaining Collateral, and the Fair Market Value
and utility of the Collateral as an entirety, and the security for the
Securities, will not thereby be otherwise impaired; granting a
nonexclusive license of any intellectual property; and abandoning
intellectual property which has become obsolete and not used in the
business.
Section 11.07. Form and Sufficiency of Release. In the
-------------------------------
event that the Company or any Guarantor has sold, exchanged, or
otherwise disposed of or proposes to sell, exchange or otherwise
dispose of any portion of the Collateral that under the provisions of
Section 11.05 or 11.06 may be sold, exchanged or otherwise disposed of
by the Company or any Guarantor, and the Company or such Guarantor
requests the Trustee to furnish a written disclaimer, release or
quitclaim of any interest in such property under this Indenture, the
applicable Guarantee and the Security Documents, upon being satisfied
that the Company or such Guarantor is selling, exchanging or otherwise
disposing of the Collateral in accordance with the provisions of
Section 11.05 or 11.06, the Trustee shall execute, acknowledge and
deliver to the Company or such Guarantor such an instrument in the
form provided by the Company, and providing for release without
recourse, promptly after satisfaction of the conditions set forth
herein for delivery of any such release and shall take such other
action as the Company or such Guarantor may reasonably request and is
necessary to effect such release. Notwithstanding the preceding
sentence, all purchasers and grantees of any property or rights
purporting to be released herefrom shall be entitled to rely upon any
release executed by the Trustee hereunder as sufficient for the
purpose of this Indenture and as constituting a good and valid release
of the property therein described from the Lien of this Indenture and
of the Security Documents.
Section 11.08. Purchaser Protected.
-------------------
No purchaser or grantee of any property or rights
purporting to be released herefrom shall be bound to ascertain the
authority of the Trustee to execute the release or to inquire as to
the existence of any conditions herein prescribed for the exercise of
such authority.
Section 11.09. Authorization of Actions To Be Taken by
---------------------------------------
the Trustee Under the Security Documents.
----------------------------------------
Subject to the provisions of the Security Documents and
the Intercreditor Agreement, (a) the Trustee may, in its sole
discretion and without the consent of the Holders, take all actions it
deems necessary or appropriate in order to (i) enforce any of the
terms of the Security Documents or the Intercreditor Agreement and
(ii) collect and receive any and all amounts payable in respect of the
obligations of the Company and the Guarantors or the Bank Agent
hereunder or thereunder and (b) the Trustee shall have power to
institute and to maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any act that
may be unlawful or in violation of the Security Documents, the
Intercreditor Agreement or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders in the Collateral
(including the power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative
72
<PAGE>
or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the
security interest thereunder or be prejudicial to the interests of the
Holders or of the Trustee). The Trustee is hereby expressly
authorized to execute, deliver and perform its obligations under the
Security Documents and the Intercreditor Agreement. Except during the
continuance of an Event of Default, the Trustee shall not be required
to take any action under the Security Documents or the Intercreditor
Agreement that involves the exercise by it of discretion. The Trustee
may, however, take any such action upon the basis of, at the election
of the Trustee, either an Officers' Certificate or an Opinion of
Counsel, or both, of the Company stating the nature of the proposed
action and that any such action is appropriate, necessary or advisable
under the circumstances, complies with the Indenture, the
Intercreditor Agreement and the Security Documents and does not
adversely affect the interests of the Holders; provided that the
foregoing shall not limit the ability of the Trustee to take action at
its discretion in the absence of such an Officers' Certificate or
Opinion of Counsel. Except during the continuance of an Event of
Default, the Trustee may refrain from taking any such action pending
receipt of such Officers' Certificate and/or Opinion of Counsel, if so
requested by it, and shall incur no liability to any person for
failure to take any such action pending receipt thereof. The Trustee
shall be fully protected in acting on the basis of any such Officers'
Certificate and/or Opinion of Counsel and shall incur no liability to
any person arising out of any action taken on the basis thereof.
Section 11.10. Authorization of Receipt of Funds by the
----------------------------------------
Trustee Under the Security Documents.
- ------------------------------------
The Trustee is authorized to receive any funds for the
benefit of Holders distributed under the Security Documents, to apply
such funds as provided in this Indenture, the Intercreditor Agreement
and the Security Documents, and to make further distributions of such
funds to the Holders in accordance with the provisions of Article
Twelve and the other provisions of this Indenture.
ARTICLE TWELVE
APPLICATION OF TRUST MONEYS
Section 12.01. Collateral Account.
------------------
On the Issue Date there shall be established and, at all
times hereafter until this Indenture shall have terminated, there
shall be maintained with the Trustee an account which shall be
entitled the "Collateral Account" (the "Collateral Account"). The
Collateral Account shall be established and maintained by the Trustee
at its Corporate Trust Office. All Trust Moneys which are received by
the Trustee (including, without limitation, all Collateral Proceeds,
Net Proceeds and Net Awards required to be deposited with the Trustee)
shall be deposited in the Collateral Account and thereafter shall be
held by the Trustee for the benefit of the Holders as a part of the
Collateral and, upon any entry upon or sale or other disposition of
the Collateral or any part thereof pursuant to any of the Security
Documents, said Trust Moneys shall be applied in accordance with
Section 6.10 and may also be applied by the Trustee to cure any Event
of Default; but prior to any such entry, sale or other disposition,
all or any part of the Trust Moneys may be withdrawn, and shall be
released, paid or applied by the Trustee in accordance with the terms
of this Article.
Section 12.02. Withdrawal of Insurance Proceeds and
------------------------------------
Condemnation Awards.
-------------------
To the extent that any Trust Moneys consist of either (a)
Net Proceeds or (b) Net Awards, such Trust Moneys may be withdrawn by
the Company and shall be paid by the Trustee upon a Company Request
delivered to the Trustee to reimburse the Company or the applicable
Guarantor for expenditures made, or to pay costs incurred, by the
Company or such Guarantor in connection with the repair, rebuilding or
replacement of the Collateral destroyed, damaged or taken, upon
receipt by the Trustee of the following:
(a) An Officers' Certificate of the Company, dated not
more then 30 days prior to the date of the application for the
withdrawal and payment of such Trust Moneys setting forth:
(i) that expenditures have been made, or costs
incurred by the Company or such Guarantor, as the case may
be, in a specified amount in connection with certain
repairs, rebuildings
73
<PAGE>
and replacements of the Collateral, which shall be briefly
described, and stating the Fair Market Value thereof to the
Company or such Guarantor at the date of the acquisition
thereof by the Company or such Guarantor;
(ii) that no part of such expenditures or costs has
been or is being made the basis for the withdrawal of any
Trust Moneys in any previous or then pending application
pursuant to this Section 12.02;
(iii) that no part of such expenditures or costs has
been paid out of either the proceeds of insurance upon any
part of the Collateral not required to be paid to the Trustee
under the Security Documents or any award for or the proceeds
from any of the Collateral being taken not required to be
paid to the Trustee under Section 11.05(c), as the case may
be;
(iv) that there is no outstanding Indebtedness,
other than costs for which payment is being requested, known
to the Company, after due inquiry, for the purchase price or
construction of such repairs, rebuildings or replacements, or
for labor, wages, materials or supplies in connection with
the making thereof, which, if unpaid, might become the
subject of a vendor's, mechanics', laborers', materialmen's,
statutory or other similar Lien upon any such repairs,
rebuildings or replacement, which Lien might, in the opinion
of the signers of such Officers Certificate, materially
impair the security afforded by such repairs, rebuildings or
replacements;
(v) that the property to be repaired, rebuilt or
replaced is necessary or desirable in the conduct of the
Company's or such Guarantor's business;
(vi) whether any part of such repairs, rebuildings
or replacements within six months before the date of
acquisition thereof by the Company has been used or operated
by others than the Company in a business similar to that in
which such property has been or is to be used or operated by
the Company, and whether the fair value to the Company, at
the date of such acquisition of such part of such repairs,
rebuildings or replacement is at least $25,000;
(vii) that the Company or such Guarantor has title
to such repairs, rebuildings and replacements that is
substantially similar to its title to the property destroyed,
damaged or taken and that any Liens upon such repairs,
rebuildings and replacements are expressly permitted by this
Indenture and the applicable Security Documents;
(viii) that no Default or Event of Default shall
have occurred and be continuing; and
(ix) that all conditions precedent herein provided
for relating to such withdrawal and payment have been
complied with;
(b) All documentation required under the TIA (including,
without limitation, Section 314(d) of the TIA);
(c) All documentation necessary to subject such repairs,
rebuildings or replacements to a valid first priority Lien and
security interest in favor of the Trustee (or, in the case of
property subject to a Mortgage, the Trustee or another trustee
under such Mortgage) for the benefit of the Holders pursuant
to the Security Documents, including, without limitation, all
instruments, agreements, certificates, Opinions of Counsel and
documents required by Section 11.01; and
(d) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are
therewith delivered to the Trustee conform to the
requirements of this Indenture and the other Security
Documents, and that, upon the basis of such Company
Request and the accompanying documents specified in this
Section 12.02, all conditions precedent herein provided
for relating to such withdrawal and payment have been
74
<PAGE>
complied with, and the Trust Moneys whose withdrawal is
then requested may be paid over under this Section 12.02;
(ii) that the relevant Security Documents create a
valid, binding and enforceable Lien on and security
interest in such repairs, rebuildings and replacements in
favor of the Trustee (or, in the case of property subject
to a Mortgage, the Trustee or another trustee under such
Mortgage) in favor of the Holders and, to the extent that
a security interest in any such property may be perfected
under the relevant Uniform Commercial Code, a perfected
security interest in such property; and
(iii) that all the Company's or such Guarantor's
right, title and interest in and to said repairs,
rebuilding or replacements, or combination thereof are
then subject to the Lien of this Indenture and the
relevant Security Documents.
Upon compliance with the foregoing provisions of this Section
12.02 and Section 11.01, the Trustee shall, upon Company Request, pay
an amount of Trust Moneys of the character aforesaid equal to the
amount of the expenditures or costs stated in the Officers'
Certificate required by clause (i) of paragraph (a) of this Section
12.02, or the Fair Market Value to the Company or the applicable
Guarantor of such repairs, rebuildings and replacements stated in such
Officers' Certificate (or in an Independent Appraiser's or Independent
Financial Advisor's certificate, if required by the TIA), whichever is
less; provided, however, that notwithstanding the above, so long as no
-------- -------
Default or Event of Default shall have occurred and be continuing, in
the event that any Net Proceeds or Net Awards for such property or
proceeds of such sale do not exceed $25,000 and, in the good faith
estimate of the Company, such destruction or damage resulting in such
Net Proceeds or such taking or sale resulting in such Net Awards does
not detrimentally affect the value or use of the applicable Collateral
in any material respect, upon delivery to the Trustee of an Officers'
Certificate of the Company to such effect and compliance with Section
11.01, the Trustee shall release to the Company or the applicable
Guarantor such Net Proceeds or Net Awards for such property or
proceeds of such sale, free of the Lien hereof and of the Security
Documents.
Section 12.03. Withdrawal of Net Cash Proceeds to Fund an
------------------------------------------
Asset Sale Offer.
----------------
To the extent that any Trust Moneys consist of Collateral
Proceeds (or amounts deemed pursuant to this Indenture to be
Collateral Proceeds) received by the Trustee pursuant to the
provisions of Section 4.13 hereof and an Asset Sale Offer has been
made in accordance therewith, such Trust Moneys may be withdrawn by
the Company and shall be paid by the Trustee to the Paying Agent for
application in accordance with Section 4.13 upon a Company Order to
the Trustee and upon receipt by the Trustee of the following:
(a) An Officers' Certificate, of the Company dated not
more than five days prior to the Asset Sale Purchase Date
stating:
(i) that no Default or Event of Default shall have
occurred and be continuing;
(ii) (x) that such Trust Moneys constitute
Collateral Proceeds or are deemed, pursuant to Section 4.13,
to constitute Collateral Proceeds, (y) that pursuant to and
in accordance with Section 4.13, the Company has made an
Asset Sale Offer and (z) the amount of Excess Proceeds
(to the extent then determinable) to be applied to the
repurchase of the Securities pursuant to the Asset Sale
Offer;
(iii) the Asset Sale Purchase Date; and
(iv) that all conditions precedent and covenants
herein provided for relating to such application of Trust
Moneys have been complied with;
(b) All documentation, if any, required under Section
314(d) of the TIA; and
(c) An Opinion of Counsel stating that the documents
that have been or are therewith delivered to the Trustee in
connection with the Asset Sale Offer pursuant to this Section
12.03 conform to the
75
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requirements of this Indenture and that all conditions precedent
herein provided for relating to such application of Trust Moneys
have been complied with.
Upon compliance with the foregoing provisions of this Section
12.03, the Trustee shall apply the Trust Moneys as directed and
specified by such Company Order, subject to Section 4.13.
Section 12.04. Withdrawal of Trust Moneys for Investment
-----------------------------------------
in Replacement Assets.
---------------------
In the event the Company (or a Subsidiary of the Company
if such Subsidiary has engaged in the Asset Sale) intends to reinvest
Collateral Proceeds (or amounts which, pursuant to Section 4.13, are
deemed to constitute Collateral Proceeds) of an Asset Sale in
Replacement Assets (the "Released Trust Moneys"), such Collateral
Proceeds constituting Trust Moneys may be withdrawn by the Company and
shall be paid by the Trustee to the Company (or as otherwise directed
by the Company) for application in accordance with Section 4.13 upon a
Company Order to the Trustee and upon receipt by the Trustee of the
following:
(a) a notice signed by the Company (each, a "Trust Moneys
Release Notice"), which shall (i) refer to this Section 12.04,
(ii) contain all documents referred to below, (iii) describe with
particularity the Released Trust Moneys, (iv) describe with
particularity the Replacement Assets to be invested in with
respect to the Released Trust Moneys and (v) be accompanied by a
counterpart of the instruments proposed to give effect to the
release fully executed and acknowledged (if applicable) by all
parties thereto other than the Trustee;
(b) An Officers' Certificate of the Company certifying
that (i) such Trust Moneys constitute Net Cash Proceeds, (ii) the
release of the Released Trust Moneys complies with the terms and
conditions of Section 4.13 of this Indenture, (iii) there is no
Default or Event of Default in effect or continuing on the date
thereof, (iv) the release of the Released Trust Moneys will not
result in a Default or Event of Default hereunder and (v) all
conditions precedent to such release have been complied with;
(c) All documentation required under the TIA (including,
without limitation, Section 314(d) of the TIA);
(d) All documentation necessary to subject such
Replacement Assets to a valid first priority Lien and security
interest (subject only to Liens expressly permitted by this
Indenture or the relevant Security Documents) in favor of the
Trustee (or, in the case of property subject to a Mortgage, the
Trustee or another trustee under such Mortgage) for the benefit
of the Holders pursuant to the Security Documents, including,
without limitation, all instruments, agreements, Opinions of
Counsel, certificates and other documents required by Section
11.01; and
(e) An Opinion of Counsel stating:
(i) that the documents that have been or are
therewith delivered to the Trustee in connection with an
investment in Replacement Assets conform to the
requirements of this Indenture and that all conditions
precedent herein provided for relating to such application
of Trust Moneys have been complied with; and
(ii) to the extent that such Replacement Assets
were acquired with Collateral Proceeds (or amounts deemed
to constitute Collateral Proceeds), the relevant Security
Documents create a valid, binding and enforceable Lien on
and security interest in such Replacement Assets in favor
of the Trustee (or, in the case of Replacement Assets
subject to a Mortgage, the Trustee or another trustee
under such Mortgage) for the benefit of the Holders and,
to the extent that a security interest in any such
Replacement Assets may be perfected under the relevant
Uniform Commercial Code, a perfected security interest in
such property.
Upon compliance with the foregoing provisions of this
Indenture, the Trustee shall apply the Released Trust Moneys as
directed and specified by the Company, subject to Section 4.13.
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<PAGE>
Section 12.05. Withdrawal of Trust Moneys on Basis of
--------------------------------------
Retirement of Securities.
------------------------
Trust Moneys (other than Collateral Proceeds from an Asset
Sale) may be withdrawn by the Company to be applied to pay the
principal of and interest on the Securities on any Stated Maturity,
upon redemption or retirement, or upon the purchase thereof (including
purchase in the open market, upon tender or otherwise and including,
without limitations, pursuant to an offer to purchase pursuant to
Section 4.12 but excluding an offer to purchase pursuant to Section
4.13, which is governed by Section 12.03) and shall be paid by the
Trustee to the Company (or as otherwise directed by the Company) for
application to such purposes upon a Company Order to the Trustee and
upon receipt by the Trustee of the following:
(a) a Board Resolution of the Company requesting the
withdrawal and payment of a specified amount of Trust Moneys;
(b) an Officers' Certificate of the Company, dated not
more than 5 days prior to date of the application for the
withdrawal and payment of such Trust Moneys, certifying that (i)
there is no Default or Event of Default in effect or continuing
on the date thereof and (ii) all conditions precedent herein
provided relating to such withdrawal and application have been
complied with;
(c) an Opinion of Counsel stating that the documents that
have been or are therewith delivered to the Trustee in connection
with such withdrawal conform to the requirements of this
Indenture and that all conditions precedent herein provided
relating to such withdrawal have been complied with; and
(d) all documentation, if any, required by the TIA
(including, without limitation, Section 314(d) of the TIA).
Upon compliance with the foregoing provisions of this Indenture,
the Trustee shall apply the Trust Moneys as directed and specified by
such Company Order in accordance with this Section 12.05.
Section 12.06. Investment of Trust Moneys.
--------------------------
The Trustee shall be entitled to apply any Trust Moneys to
cure any Event of Default. So long as no Default or Event of Default
shall have occurred and is continuing, all or any part of any Trust
Moneys held by the Trustee shall from time to time be invested or
reinvested by the Trustee in any Cash Equivalents pursuant to a
Company Order, which shall specify the Cash Equivalents in which such
Trust Moneys shall be invested and shall certify that such investments
constitute Cash Equivalents and the Trustee shall sell any such Cash
Equivalent only upon receipt of a Company Order specifying the
particular Cash Equivalent to be sold. So long as no Default or Event
of Default occurs and is continuing, any interest or dividends
accrued, earned or paid on such Cash Equivalents (in excess of any
accrued interest or dividends paid at the time of purchase) that may
be received by the Trustee shall be forthwith paid to the Company.
Such Cash Equivalents shall be held by the Trustee as a part of the
Collateral, subject to the same provisions hereof as the cash used by
it to purchase such Cash Equivalents.
The Trustee shall not be liable or responsible for any
loss resulting from such investments or sales except only for its own
negligent action, its own negligent failure to act or its own willful
misconduct in complying with this Section 12.06.
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act of 1939.
---------------------------
This Indenture is subject to the provisions of the TIA
that are required to be a part of this Indenture, and shall, to the
extent applicable, be governed by such provisions.
77
<PAGE>
If any provision of this Indenture modifies or excludes
any provision of the TIA that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
Section 13.02. Notices.
-------
Any notice or communication shall be sufficiently given if
in writing and delivered in person or by air courier or mailed by
first class mail, postage prepaid, addressed as follows:
If to the Company or any Guarantor to:
Oregon Steel Mills, Inc.
1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205
Attention: Chief Financial Officer
If to the Trustee to:
Chemical Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trustee Administration Department
The parties hereto by notice to the other parties may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed, postage prepaid, to a
Holder, including any notice delivered in connection with TIA Section
310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b),
shall be mailed by first class mail to such Holder at the address of
such Holder as it appears on the Securities register maintained by the
Registrar and shall be sufficiently given to such Holder if so mailed
within the time prescribed. Copies of any such communication or
notice to a Holder shall also be mailed to the Trustee.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency
with respect to other Holders. Except for a notice to the Trustee,
which is deemed given only when received, if a notice or communication
is mailed in the manner provided above, it is duly given, whether or
not the addressee receives it.
Section 13.03. Communication by Holders with Other
-----------------------------------
Holders.
-------
Holders may communicate pursuant to TIA Section 312(b)
with other Holders with respect to their rights under this Indenture,
the Security Documents, the Guarantees or the Securities. The
Company, the Guarantors, the Trustee, the Registrar and any other
person shall have the protection of TIA Section 312(c).
Section 13.04. Certificate and Opinion as to Conditions
----------------------------------------
Precedent.
---------
Upon any request or application by the Company or any
Guarantor to the Trustee to take any action under this Indenture, such
obligor shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion
of such counsel, all such conditions precedent have been complied
with.
78
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Section 13.05. Statements Required in Certificate or
-------------------------------------
Opinion.
-------
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that the person making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such person, he
has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an
-------- -------
Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials or other appropriate
certificates.
Section 13.06. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules for action by or at
a meeting of Securityholders. The Paying Agent or Registrar may make
reasonable rules for its functions.
Section 13.07. Legal Holidays.
--------------
In any case where any Interest Payment Date, Stated
Maturity, Maturity Date, Redemption Date, Change of Control Purchase
Date or Asset Sale Purchase Date of any Security shall not be a
Business Day at a Place of Payment, then (notwithstanding any other
provision of this Indenture or any Security), payment of interest or
principal need not be made at such Place of Payment on such date, but
may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on such Interest
Payment Date, Stated Maturity, Maturity Date, Redemption Date, Change
of Control Purchase Date or Asset Sale Purchase Date, as the case may
be, and no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date, Stated Maturity,
Maturity Date, Redemption Date, Change of Control Purchase Date or
Asset Sale Purchase Date, as the case may be, to such next succeeding
Business Day.
Section 13.08. Governing Law.
-------------
The laws of the State of New York shall govern this
Indenture, the Guarantees and the Securities without regard to the
principles of conflicts of law. The Trustee, the Company, each
Guarantor and the Holders agree (to the fullest extent permitted by
law) to submit to the jurisdiction of the courts of the State of New
York in any action or proceeding arising out of or relating to this
Indenture, the Guarantees or the Securities.
Section 13.09. No Interpretation of Other Agreements.
-------------------------------------
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any Guarantor.
Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 13.10. No Recourse Against Others.
--------------------------
A director, officer, employee, stockholder or limited
partner, as such, of the Company or any Guarantor shall not have any
liability for any obligations of the Company under the Securities or
this Indenture or for any obligations of a Guarantor under any
Guarantee, the Security Documents, the Intercreditor Agreement or this
Indenture or for any claim based on, in respect of or by reason of,
such obligations or their creation by reason of his,
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<PAGE>
her or its status as such director, officer, employee, stockholder or
limited partner. Each Holder by accepting a Security waives and
releases all such liability.
Section 13.11. Successors.
----------
All agreements of the Company and the Guarantors in this
Indenture, the Securities, the Security Documents, the Intercreditor
Agreement and the Guarantees shall bind their respective successors.
All agreements of the Trustee in this Indenture shall bind its
successors.
Section 13.12. Duplicate Originals.
-------------------
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 13.13. Separability.
------------
In case any provision in this Indenture, any Guarantee or
the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not (to the maximum extent permitted by law) in any way be
affected or impaired thereby, and a Holder shall have no claim
therefor against any party hereto.
Section 13.14. Table of Contents, Headings, etc.
---------------------------------
The Table of Contents, Cross-Reference Table and headings
of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof,
and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 13.15. True Copy.
---------
The Company shall, within three Business Days of receipt
of a written request by the Trustee, furnish the Trustee with a true
copy of this Indenture.
Section 13.16. Benefits of Indenture.
---------------------
Except as provided in this Article Thirteen, nothing in
this Indenture, the Guarantees or in the Securities, express or
implied, shall give to any person, other than the parties hereto and
their successors hereunder, and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to
be hereunto affixed and attested, all as of the day and year first
above written.
[Seal] OREGON STEEL MILLS, INC.
Attest: By:
--------------------
Name: Name:
Title: Title:
[Seal] CHEMICAL BANK, as Trustee
Attest: By:
-------------------
Name: Name:
Title: Title:
[Seal] NEW CF&I, INC., as a Guarantor
Attest: By:
-------------------
Name: Name:
Title: Title:
CF&I STEEL, L.P., as a Guarantor
[Seal] By: NEW CF&I, INC., its General
Partner
Attest: By:
--------------------
Name: Name:
Title: Title:
U.S. $125,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT,
dated as of June 12, 1996
among
OREGON STEEL MILLS, INC.,
as the Borrower,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
FIRST INTERSTATE BANK OF OREGON, N.A.,
as the Administrative Agent for the Lenders,
THE BANK OF NOVA SCOTIA,
as the Syndication Agent for the Lenders,
and
FIRST INTERSTATE BANK OF OREGON, N.A. and
THE BANK OF NOVA SCOTIA,
as the Managing Agents for the Lenders.
<PAGE>
TABLE OF CONTENTS
PAGE
I DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . 1
1.1. Defined Terms. . . . . . . . . . . . . . . . 1
1.2. Use of Defined Terms . . . . . . . . . . . . 21
1.3. Cross-References . . . . . . . . . . . . . . 21
1.4. Accounting and Financial Determinations. . . 21
II COMMITMENTS, BORROWING PROCEDURES AND NOTES. . . . . . 21
2.1. Commitments. . . . . . . . . . . . . . . . . 21
2.1.1. Revolving Loan Commitment. . . . . . . . . . 22
2.1.2. Swingline Commitment . . . . . . . . . . . . 22
2.1.3. Lenders Not Permitted or Required To Make
Loans. . . . . . . . . . . . . . . . . . . . 23
2.2. Optional Reduction of Commitment Amounts . . 23
2.3. Borrowing Procedure. . . . . . . . . . . . . 23
2.3.1. Revolving Loans. . . . . . . . . . . . . . . 24
2.3.2. Swingline Loans. . . . . . . . . . . . . . . 24
2.4. Continuation and Conversion Elections. . . . 24
2.5. Funding. . . . . . . . . . . . . . . . . . . 25
2.6. Notes. . . . . . . . . . . . . . . . . . . . 25
III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES . . . . . . 25
3.1. Repayments and Prepayments . . . . . . . . . 25
3.1.1. Voluntary Prepayments. . . . . . . . . . . . 26
3.1.2. Exceeding the Revolving Loan Commitment. . . 26
3.1.3. Acceleration . . . . . . . . . . . . . . . . 26
3.2. Application of Payments and Prepayments. . . 26
3.2.1. Voluntary Prepayments. . . . . . . . . . . . 26
3.3. Interest Provisions. . . . . . . . . . . . . 27
3.3.1. Rates. . . . . . . . . . . . . . . . . . . . 27
3.3.2. Post-Maturity Rates. . . . . . . . . . . . . 28
3.3.3. Payment Dates. . . . . . . . . . . . . . . . 28
3.3.4. Interest Rate Determination. . . . . . . . . 29
3.4. Fees . . . . . . . . . . . . . . . . . . . . 29
3.4.1. Commitment Fee . . . . . . . . . . . . . . . 29
3.4.2. Upfront Fee. . . . . . . . . . . . . . . . . 29
3.4.3. Agents' Fees . . . . . . . . . . . . . . . . 29
IV CERTAIN LIBO RATE AND OTHER PROVISIONS . . . . . . . . 30
4.1. LIBO Rate Lending Unlawful . . . . . . . . . 30
4.2. Deposits Unavailable . . . . . . . . . . . . 30
4.3. Increased LIBO Rate Loan Costs, etc. . . . . 30
4.4. Funding Losses . . . . . . . . . . . . . . . 31
4.5. Increased Capital Costs. . . . . . . . . . . 31
i
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TABLE OF CONTENTS
-----------------
(CONTINUED)
PAGE
----
4.6. Taxes. . . . . . . . . . . . . . . . . . . . 32
4.7. Payments, Computations, etc. . . . . . . . . 33
4.8. Sharing of Payments. . . . . . . . . . . . . 34
4.9. Setoff . . . . . . . . . . . . . . . . . . . 34
4.10. Use of Proceeds. . . . . . . . . . . . . . . 35
4.11. Actions of Affected Lenders. . . . . . . . . 35
V CONDITIONS TO EFFECTIVENESS AND INITIAL BORROWING. . . 36
5.1. Initial Borrowing. . . . . . . . . . . . . . 36
5.1.1. Resolutions, etc.. . . . . . . . . . . . . . 36
5.1.2. Delivery of Notes. . . . . . . . . . . . . . 36
5.1.3. Payment of Outstanding Indebtedness, etc.. . 36
5.1.4. Guaranties . . . . . . . . . . . . . . . . . 36
5.1.5. Security Agreements. . . . . . . . . . . . . 36
5.1.6. Receipt of Proceeds. . . . . . . . . . . . . 37
5.1.7. Intercreditor Agreement. . . . . . . . . . . 37
5.1.8. Opinion of Counsel . . . . . . . . . . . . . 37
5.1.9. Organization Documents . . . . . . . . . . . 37
5.1.10. Certificate and Agreement. . . . . . . . . . 38
5.1.11. Closing Fees, Expenses, etc. . . . . . . . . 38
5.2. All Borrowings . . . . . . . . . . . . . . . 38
5.2.1. Compliance with Warranties, No Default,
etc. . . . . . . . . . . . . . . . . . . . . 38
5.2.2. Borrowing Request. . . . . . . . . . . . . . 39
5.2.3. Satisfactory Legal Form. . . . . . . . . . . 39
VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 39
6.1. Organization, etc. . . . . . . . . . . . . . 39
6.2. Due Authorization, Non-Contravention, etc. . 40
6.3. Government Approval, Regulation, etc.. . . . 40
6.4. Validity, etc. . . . . . . . . . . . . . . . 40
6.5. Financial Information. . . . . . . . . . . . 41
6.6. No Material Adverse Change . . . . . . . . . 41
6.7. Litigation, Labor Controversies, etc.. . . . 41
6.8. Subsidiaries . . . . . . . . . . . . . . . . 41
6.9. Ownership of Properties. . . . . . . . . . . 41
6.10. Taxes. . . . . . . . . . . . . . . . . . . . 41
6.11. Pension and Welfare Plans. . . . . . . . . . 42
6.12. Environmental Warranties . . . . . . . . . . 42
6.13. Regulations G, U and X . . . . . . . . . . . 43
6.14. Accuracy of Information. . . . . . . . . . . 43
VII COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 44
7.1. Affirmative Covenants. . . . . . . . . . . . 44
ii
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TABLE OF CONTENTS
-----------------
(CONTINUED)
PAGE
----
7.1.1. Financial Information, Reports, Notices,
etc. . . . . . . . . . . . . . . . . . . . . 44
7.1.2. Compliance with Laws, etc. . . . . . . . . . 46
7.1.3. Maintenance of Properties. . . . . . . . . . 46
7.1.4. Insurance. . . . . . . . . . . . . . . . . . 47
7.1.5. Books and Records. . . . . . . . . . . . . . 47
7.1.6. Environmental Covenant . . . . . . . . . . . 47
7.1.7. Future Guarantors; Further Assurances. . . . 48
7.1.8. Opinion of New Guarantors. . . . . . . . . . 48
7.2. Negative Covenants . . . . . . . . . . . . . 48
7.2.1. Business Activities. . . . . . . . . . . . . 48
7.2.2. Indebtedness . . . . . . . . . . . . . . . . 48
7.2.3. Liens. . . . . . . . . . . . . . . . . . . . 50
7.2.4. Financial Condition. . . . . . . . . . . . . 51
7.2.5. Investments. . . . . . . . . . . . . . . . . 51
7.2.6. Restricted Payments, etc.. . . . . . . . . . 52
7.2.7. Rental Obligations . . . . . . . . . . . . . 53
7.2.8. Sale and Leasebacks. . . . . . . . . . . . . 53
7.2.9. Consolidation, Merger, etc.. . . . . . . . . 53
7.2.10. Asset Dispositions, etc. . . . . . . . . . . 54
7.2.11. Transactions with Affiliates . . . . . . . . 54
7.2.12. Negative Pledges, Restrictive Agreements,
etc. . . . . . . . . . . . . . . . . . . . . 54
7.2.13. Interest Rate Protection . . . . . . . . . . 55
VIII EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . 55
8.1. Listing of Events of Default . . . . . . . . 55
8.1.1. Non-Payment of Obligations . . . . . . . . . 55
8.1.2. Breach of Warranty . . . . . . . . . . . . . 55
8.1.3. Non-Performance of Certain Covenants and
Obligations. . . . . . . . . . . . . . . . . 55
8.1.4. Non-Performance of Other Covenants and
Obligations. . . . . . . . . . . . . . . . . 55
8.1.5. Default on Other Indebtedness. . . . . . . . 55
8.1.6. Judgments. . . . . . . . . . . . . . . . . . 56
8.1.7. Pension Plans. . . . . . . . . . . . . . . . 56
8.1.8. Control of the Borrower. . . . . . . . . . . 56
8.1.9. Bankruptcy, Insolvency, etc. . . . . . . . . 56
8.1.10. Impairment of Security, etc. . . . . . . . . 57
8.1.11. Environmental Matters. . . . . . . . . . . . 57
8.2. Action if Bankruptcy . . . . . . . . . . . . 57
8.3. Action if Other Event of Default . . . . . . 58
IX THE AGENTS . . . . . . . . . . . . . . . . . . . . . . 58
9.1. Actions. . . . . . . . . . . . . . . . . . . 58
iii
<PAGE>
TABLE OF CONTENTS
-----------------
(CONTINUED)
PAGE
----
9.2. Funding Reliance, etc. . . . . . . . . . . . 59
9.3. Exculpation. . . . . . . . . . . . . . . . . 59
9.4. Successor. . . . . . . . . . . . . . . . . . 60
9.5. Loans by First Interstate and Scotiabank . . 60
9.6. Credit Decisions . . . . . . . . . . . . . . 61
9.7. Copies, etc. . . . . . . . . . . . . . . . . 61
X MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . 61
10.1. Waivers, Amendments, etc.. . . . . . . . . . 61
10.2. Notices. . . . . . . . . . . . . . . . . . . 62
10.3. Payment of Costs and Expenses. . . . . . . . 63
10.4. Indemnification. . . . . . . . . . . . . . . 63
10.5. Survival . . . . . . . . . . . . . . . . . . 64
10.6. Severability . . . . . . . . . . . . . . . . 65
10.7. Headings . . . . . . . . . . . . . . . . . . 65
10.8. Execution in Counterparts, Effectiveness,
etc. . . . . . . . . . . . . . . . . . . . . 65
10.9. Governing Law; Entire Agreement. . . . . . . 65
10.10. Successors and Assigns . . . . . . . . . . . 65
10.11. Sale and Transfer of Loans and Notes;
Participations in Loans and Notes. . . . . . 66
10.11.1. Assignments. . . . . . . . . . . . . . . . . 66
10.11.2. Participations . . . . . . . . . . . . . . . 67
10.12. Confidentiality. . . . . . . . . . . . . . . 68
10.13. Other Transactions . . . . . . . . . . . . . 69
10.14. Forum Selection and Consent to
Jurisdiction . . . . . . . . . . . . . . . . 69
10.15. Waiver of Jury Trial . . . . . . . . . . . . 70
10.16. Amendment and Restatement of Original
Credit Agreement . . . . . . . . . . . . . . 70
iv
<PAGE>
TABLE OF CONTENTS
-----------------
(CONTINUED)
PAGE
----
SCHEDULE 1 - Disclosure Schedule
EXHIBIT A - Form of Revolving Note
EXHIBIT B - Form of Swingline Note
EXHIBIT C - Form of Borrowing Request
EXHIBIT D - Form of Continuation/Conversion Notice
EXHIBIT E - Form of Lender Assignment Agreement
EXHIBIT F - Form of Guaranty
EXHIBIT G - Form of Security Agreement
EXHIBIT H - Form of Opinion of Counsel to the Obligors
EXHIBIT I - Form of Borrowing Base Certificate
EXHIBIT J - Form of Compliance Certificate
EXHIBIT K - Form of Intercreditor Agreement
EXHIBIT L - Form of Certificate and Agreement
v
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 12,
1996, among OREGON STEEL MILLS, INC., a Delaware corporation (the
"Borrower"), the various financial institutions as are or may become
--------
parties hereto (collectively, the "Lenders"), FIRST INTERSTATE BANK OF
-------
OREGON, N.A. ("First Interstate"), as administrative agent (the
----------------
"Administrative Agent") for the Lenders, THE BANK OF NOVA SCOTIA
--------------------
("Scotiabank"), as syndication agent for the Lenders (the "Syndication
---------- -----------
Agent") and First Interstate and Scotiabank as managing agents (the
- -----
"Managing Agents") for the Lenders,
---------------
W I T N E S S E T H:
WHEREAS, the Borrower, various financial institutions, First
Interstate, as administrative agent, Scotiabank, as syndication agent
and First Interstate and Scotiabank, as managing agents, have
heretofore executed that certain Credit Agreement dated as of December
14, 1994, as amended by that certain Amendment No. 1 dated September
30, 1995 and that certain Waiver and Amendment No. 2 dated March 22,
1996 (as so amended, the "Original Credit Agreement");
-------------------------
WHEREAS, the Borrower, the Lenders, the Administrative Agent, the
Syndication Agent and the Managing Agents now desire to amend and
restate the Original Credit Agreement in its entirety;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree to amend
and restate the Original Credit Agreement in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
-------------
underscored) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the
singular and plural forms thereof):
"Account Debtor" means any Person who is or who may become
--------------
obligated under or on account of an Account.
"Accounts" means any right to payment for inventory sold or
--------
leased or for services rendered which is not evidenced by an
<PAGE>
instrument or chattel paper, whether or not it has been earned by
performance. For purposes of this definition, the terms
"inventory," "instrument" and "chattel paper" have the respective
meanings set forth in the Uniform Commercial Code in effect in the
State of New York as of the Effective Date.
"Administrative Agent" is defined in the preamble and includes
--------------------
each other Person as shall have subsequently been appointed as the
successor Administrative Agent pursuant to Section 9.4.
-----------
"Affiliate" of any Person means any other Person which, directly
---------
or indirectly, controls, is controlled by or is under common control
with such Person (excluding the ESOP or any trustee under, or any
committee with responsibility for administering, the ESOP or any
Plan). A Person shall be deemed to be "controlled by" any other
Person if such other Person possesses, directly or indirectly, power
(a) to vote 15% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election
of directors or managing general partners; or
(b) to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.
"Agent(s)" means, as the context may require, any (or all) of the
--------
Administrative Agent, the Syndication Agent or either Managing Agent.
"Agreement" means, on any date, this Amended and Restated Credit
---------
Agreement as originally in effect on the Effective Date and as
thereafter from time to time amended, supplemented, amended and
restated, or otherwise modified and in effect on such date.
"Alternate Base Rate" means, on any date and with respect to all
-------------------
Base Rate Loans, a fluctuating rate of interest per annum equal to the
higher of
(a) the rate of interest most recently announced by
First Interstate at its Domestic Office as its prime rate; and
(b) the Federal Funds Rate most recently determined by
the Administrative Agent plus one-half of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest
rate of interest determined by First Interstate in connection with
extensions of credit. Changes in the rate of interest on that portion
of any Loans maintained as Base Rate Loans will take effect
simultaneously with each change in the Alternate Base Rate. The
Administrative Agent will give notice promptly to the Borrower and the
Lenders of changes in the Alternate Base Rate.
2
<PAGE>
"Applicable Margin" means, in the case of any Loan, a rate per
-----------------
annum determined by reference to the Leverage Ratio as of the last day
of the most recently ended Fiscal Quarter, as follows:
Reserve
Adjusted Base Swingline
Leverage LIBO Rate Rate
Ratio Margin Margin Margin
-------- --------- ------ ----------
less than 2.0 to 1.0 .75% .0% .75%
2.0 to 1.0 or more but
less than 3.0 to 1.0 1.25% .25% 1.25%
3.0 to 1.0 or more but
less than 3.5 to 1.0 1.50% .50% 1.50%
3.5 to 1.0 or more but
less than 4.0 to 1.0 1.75% .75% 1.75%
4.0 to 1.0 or more but
less than 4.5 to 1.0 2.00% 1.00% 2.00%
4.5 to 1.0 or more 2.25% 1.25% 2.25%
The Applicable Margin shall be based on the Leverage Ratio as set
forth in the most recent Compliance Certificate, and shall be
effective from and including the date the Administrative Agent
receives such Compliance Certificate to but excluding the date on
which the Administrative Agent receives the next Compliance
Certificate; provided, however, that if Administrative Agent does not
-------- -------
receive a Compliance Certificate by the date required by Section
-------
7.1.1(c), the Applicable Margin shall, effective as of such date,
- --------
increase by one level to but excluding the date the Administrative
Agent receives such Compliance Certificate. Subject to the foregoing
proviso, from the Effective Date until the date on which the
Administrative Agent has received a Compliance Certificate for the
quarter ended June 30, 1996, the Borrower's Reserve Adjusted LIBO
Margin, Base Rate Margin and Swingline Rate Margin will be 2.25%,
1.25% and 2.25%, respectively.
"Assignee Lender" is defined in Section 10.11.1.
--------------- ---------------
"Authorized Officer" means, relative to any Obligor, those of its
------------------
officers (or in the case of a Borrowing Request, any other employee)
whose signatures and incumbency shall have been certified to the
Administrative Agent and the Lenders pursuant to Section 5.1.1 or from
-------------
time to time after the Effective Date.
"Bank Group Presentation" means the Borrower's book dated
-----------------------
April 18, 1996 entitled "OREGON STEEL MILLS, INC. PRESENTATION TO
SENIOR SECURED BANK GROUP."
3
<PAGE>
"Base Rate Loan" means a Loan bearing interest at a fluctuating
--------------
rate determined by reference to the Alternate Base Rate.
"Borrower" is defined in the preamble.
-------- --------
"Borrowing" means the Loans of the same type and, in the case of
---------
LIBO Rate Loans, having the same Interest Period made by all Lenders
on the same Business Day and pursuant to the same Borrowing Request.
"Borrowing Base" means, as of any date of determination thereof,
--------------
an amount equal to the sum of (x) 80% of the value of all Eligible
Accounts outstanding at such date, plus (y) 50% of the value of all
Eligible Inventory at such date.
"Borrowing Base Certificate" means a certificate duly executed by
--------------------------
an Authorized Officer of the Borrower, substantially in the form of
Exhibit I hereto.
- ---------
"Borrowing Request" means a loan request and certificate duly
-----------------
executed by an Authorized Officer of the Borrower, substantially in
the form of Exhibit C hereto.
---------
"Business Day" means
------------
(a) any day which is neither a Saturday or Sunday nor a
legal holiday on which banks are authorized or required to be
closed in New York, New York and Portland, Oregon; and
(b) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day which is a Business
Day for purposes of clause (a) above and which is also a day
on which dealings in Dollars are carried on in the interbank
eurodollar markets of the Reference Lenders' LIBO Offices.
"Camrose" means Camrose Pipe Corporation, a Delaware corporation
-------
and wholly-owned Subsidiary of the Borrower.
"Camrose Partnership" means Camrose Pipe Company, a Canadian
-------------------
general partnership which is 60% owned by Camrose.
"Capitalized Lease Liabilities" means all monetary obligations of
-----------------------------
the Borrower or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as
capitalized leases, and, for purposes of this Agreement and each other
Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any
other amount due under such
4
<PAGE>
lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
--------------------------
(a) any obligation, maturing not more than one year
after such time, issued or guaranteed by the United States or
Canadian Government;
(b) municipal notes or note funds rated at the time of
purchase, SP-1/A-1 or SP-2/A-2 by Standard & Poor's Ratings
Group or VM1G1 or VM1G2 by Moody's Investors Service, Inc.;
municipal bonds or bond funds rated at the time of purchase, AAA
or AA by Standard & Poor's Ratings Group or Aaa or Aa by Moody's
Investors Service, Inc.; or money market preferred stock rated at
the time of purchase, AAA or AA by Standard & Poor's Ratings
Group or aaa or aa by Moody's Investors Service, Inc.;
(c) commercial paper, maturing not more than nine months
from the date of issue, which is issued by (i) a corporation
(other than an Affiliate of any Obligor) organized under the laws
of any state of the United States or of the District of Columbia
and rated at least A-2 by Standard & Poor's Ratings Group or at
least P-2 by Moody's Investors Service, Inc., or (ii) any Lender
(or its holding company); or
(d) any certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued
by either (i) a commercial banking institution that is a member
of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $500,000,000, or
(ii) any Lender.
"CERCLA" means the Comprehensive Environmental Response,
------
Compensation and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response
-------
Compensation Liability Information System List.
"Certificate and Agreement" means the Certificate and Agreement
-------------------------
executed and delivered pursuant to Section 5.1.10, substantially in
--------------
the form of Exhibit L hereto.
---------
"CF&I Steel, L.P." means CF&I Steel, L.P., a Delaware limited
----------------
partnership which is 95.2% owned by New CF&I.
"Change in Control" means (i) the acquisition by any Person
-----------------
(other than the ESOP), or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange
5
Act of 1934) of 20% or more of the outstanding shares of voting stock
of the Borrower, or (ii) the occurrence of any event or condition that
would require the Borrower to repurchase or redeem any First Mortgage
Notes as a result of any "change in control," "change of control" or
similar circumstance under the definitive documentation for any First
Mortgage Notes.
"Code" means the Internal Revenue Code of 1986, as amended,
----
reformed or otherwise modified from time to time.
"Commitment" means, as the context may require, a Lender's
----------
Revolving Loan Commitment or the Swingline Lender's Swingline Loan
Commitment.
"Commitment Amount" means, as the context may require, either the
-----------------
Revolving Loan Commitment Amount or the Swingline Loan
Commitment Amount.
"Commitment Fee Rate" means the percentage determined by
-------------------
reference to the Leverage Ratio as of the last day of its most
recently ended Fiscal Quarter, as follows:
Leverage Ratio Commitment Fee Rate
-------------- -------------------
less than 2.0 to 1.0 .25%
2.0 to 1.0 or more but
less than 4.0 to 1.0 .375%
4.0 to 1.0 or more .50%
"Commitment Termination Date" means, as the context may require,
---------------------------
the Revolving Loan Commitment Termination Date or the Swingline Loan
Commitment Termination Date.
"Commitment Termination Event" means
----------------------------
(a) the occurrence of any Default described in clauses (a)
-----------
through (d) of Section 8.1.9; or
--- -------------
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of the Loans to be due and payable
pursuant to Section 8.3, or
-----------
(ii) in the absence of such declaration, the giving
of notice by the Administrative Agent, acting at the
direction of the Required Lenders, to the Borrower that the
Commitments have been terminated.
6
<PAGE>
"Compliance Certificate" means a certificate duly executed by an
----------------------
Authorized Officer of the Borrower, substantially in the form of
Exhibit J hereto.
- ---------
"Consolidated Tangible Net Worth" means (i) the book value of the
-------------------------------
Borrower and its Subsidiaries' equity plus (ii) the book value of the
----
Borrower and its Subsidiaries' minority interests minus (iii) the
-----
aggregate amount of any intangible assets of the Borrower and its
Subsidiaries, including goodwill, franchises, licenses, patents,
trademarks, tradenames, copyrights, servicemarks and brandnames.
"Contingent Liability" means any agreement, undertaking or
--------------------
arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to
supply funds to, or otherwise to invest in, a debtor, or otherwise to
assure a creditor against loss) the indebtedness, obligation or any
other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of
dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be calculated in
accordance with GAAP.
"Continuation/Conversion Notice" means a notice of continuation
------------------------------
or conversion and certificate duly executed by an Authorized Officer
of the Borrower, substantially in the form of Exhibit D hereto.
---------
"Controlled Group" means all members of a controlled group of
----------------
corporations and all members of a controlled group of trades or
businesses (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under
Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.
"Default" means any Event of Default or any condition, occurrence
-------
or event which, after notice or lapse of time or both, would
constitute an Event of Default.
"Disclosure Schedule" means the Disclosure Schedule attached
-------------------
hereto as Schedule 1, as it may be amended, supplemented or otherwise
----------
modified from time to time by the Borrower with the written consent of
the Managing Agents and the Required Lenders.
"Dollar" and the sign "$" mean lawful money of the United States.
------ -
"Domestic Office" means, relative to any Lender, the office of
---------------
such Lender designated as such below its signature hereto or
7
<PAGE>
designated in the Lender Assignment Agreement or such other office of
a Lender (or any successor or assign of such Lender) within the United
States as may be designated from time to time by notice from such
Lender, as the case may be, to each other Person party hereto.
"EBITDA" means, for any period of four Fiscal Quarters, the
------
Borrower and its Subsidiaries' earnings before interest expense,
taxes, depreciation and amortization, calculated on a rolling four
Fiscal Quarter basis.
"Effective Date" means the date this Agreement becomes effective
--------------
pursuant to Section 10.8.
------------
"Eligible Account" means, at the time of any determination
----------------
thereof, any Account of the Borrower or any Guarantor as to which each
of the following requirements has been fulfilled to the reasonable
satisfaction of the Administrative Agent:
(a) the Borrower or such Guarantor has lawful and absolute
title to such Account and such Account is, in the Borrower's or
such Guarantor's reasonable judgment, collectible in the ordinary
course of business;
(b) such Account is not subject to a bona fide dispute,
setoff, counterclaim or other claim or defense on the part of any
person (including such Account Debtor) denying liability under
such Account;
(c) such Account is not subject to any Lien in favor of any
Person, except Liens permitted by clause (a), (e), (f), (g), or
---------- --- --- ---
(h) of Section 7.2.3;
--- -------------
(d) such Account is a bona fide Account (which, with
respect to an Account arising from a sale of inventory, was
created as a result of a sale on an absolute basis and not on a
consignment, approval or sale-and-return basis) of the Borrower
or such Guarantor arising in the ordinary course of the
Borrower's or such Guarantor's business, and which,
(i) in the case of Accounts arising from the sale
of inventory, such inventory has been shipped or delivered
and all other actions have been taken necessary to create a
binding obligation on the part of the Account Debtor for
such Account;
(ii) in the case of Accounts relating to the rendering
of services, such services have been performed or completed
and all other actions have been taken necessary to create a
binding obligation on the part of the Account Debtor for
such Account;
8
<PAGE>
(e) with respect to such Account, the Account Debtor is not
(i) an Affiliate of the Borrower, or
(ii) the subject of any reorganization, bankruptcy,
receivership, custodianship, insolvency or other condition
analogous to those described in clauses (a) through (d) of
----------- ---
Section 8.1.9;
-------------
(f) such Account is not outstanding more than 90 days past
the original billing date therefor;
(g) such Account is the subject of a first priority
perfected security interest in favor of the Administrative Agent;
(h) such Account is not owing from any Account Debtor
from whom more than 25% of the Accounts owed to the Borrower and
the Guarantors are more than 90 days past the original billing
date therefor;
(i) the Account Debtor thereunder is not the United States
or any department, agency or instrumentality thereof unless the
Borrower assigns its rights to payment of such account to the
Administrative Agent, in form and substance satisfactory to the
Administrative Agent, so as to comply with the Assignment of
Claims Act of 1940, as amended; and
(j) the Account Debtor thereunder is not located outside
of the United States unless payment thereunder is secured by a
letter of credit in form and substance satisfactory to the
Administrative Agent.
"Eligible Inventory" means, at the time of any determination
------------------
thereof, all Inventory of the Borrower or any Guarantor arising in the
ordinary course of business and as to which each of the following
requirements has been fulfilled to the reasonable satisfaction of the
Administrative Agent:
(a) all of such Inventory is located in the United States;
(b) none of such Inventory shall consist of (i) items in
the custody of third parties (other than the Borrower or a
Guarantor) for processing or manufacture, (ii) items in the
Borrower's or such Guarantor's possession but intended by the
Borrower or such Guarantor for return to the suppliers thereof,
(iii) items belonging to third parties (other than the Borrower
and the Guarantors) that have been consigned to the Borrower or
such Guarantor or are otherwise in the
9
<PAGE>
Borrower's or such Guarantor's custody or possession, (iv) items
in the Borrower's or such Guarantor's custody and possession on a
sale-on-approval or sale-or-return basis or subject to any other
repurchase or return agreement or (v) miscellaneous operating
items which are generally categorized by the Borrower as "stores
inventory";
(c) none of such Inventory shall be unsalable, obsolete,
damaged or otherwise unfit for sale or consumption in the normal
course of the business of the Borrower or such Guarantor;
(d) none of such Inventory shall be subject to any Lien
in favor of any Person, except Liens permitted by clause (a),
----------
(e), (f), (g) or (h) of Section 7.2.3; and
--- --- --- --- -------------
(e) all of such Inventory is the subject of a first
priority perfected security interest in favor of the
Administrative Agent.
"Environmental Laws" means all applicable federal, state or local
------------------
statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to
protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect
from time to time. References to sections of ERISA also refer to any
successor sections.
"ESOP" means the employee stock ownership plan for the employees
----
of the Borrower and certain of its Subsidiaries in effect as of the
Effective Date and any successor to such plan.
"Event of Default" is defined in Section 8.1.
---------------- -----------
"Federal Funds Rate" means, for any period, a fluctuating
------------------
interest rate per annum equal for each day during such period to
(a) the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York;
or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by First Interstate from three federal
funds brokers of recognized standing selected by it.
10
<PAGE>
"First Interstate" is defined in the preamble.
---------------- --------
"First Mortgage Notes" means those certain first mortgage notes
--------------------
of the Borrower due 2003, having an original aggregate principal
amount of $235,000,000, issuable under an Indenture (the "Indenture")
---------
dated as of June 1, 1996 among the Borrower, Chemical Bank, as
Trustee, New CF&I and CF&I Steel, L.P., and includes all obligations
of the Company, New CF&I, CF&I Steel, L.P. and any other future
Guarantor under the Indenture, such first mortgage notes, the
promissory note executed by CF&I Steel, L.P. to Chemical Bank, as
Trustee under the Indenture, the guarantees of New CF&I, CF&I Steel,
L.P. and any other future Guarantor executed pursuant to the
Indenture, the Intercreditor Agreement and the mortgages, security
agreements and other documents securing payment of any amounts and
performance of any obligations under the Indenture, such first
mortgage notes, such promissory note of CF&I Steel, L.P., such
guarantees or the Intercreditor Agreement.
"Fiscal Quarter" means any quarter of a Fiscal Year.
--------------
"Fiscal Year" means any period of twelve consecutive calendar
-----------
months ending on December 31; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the "1995 Fiscal
----
Year") refer to the Fiscal Year ending on the December 31 occurring
during such calendar year.
"F.R.S. Board" means the Board of Governors of the Federal
------------
Reserve System or any successor thereto.
"Funded Debt" means the outstanding principal amount of all
-----------
Indebtedness of the Borrower and its Subsidiaries of the nature
referred to in clauses (a) and (b) of the definition of
----------- ---
"Indebtedness".
------------
"Funded Debt to Capitalization Ratio" means the ratio of (x)
-----------------------------------
Funded Debt to (y) the sum of (i) Funded Debt plus (ii) Consolidated
----
Tangible Net Worth.
"GAAP" is defined in Section 1.4.
---- -----------
"Guaranties" means the Amended and Restated Guaranties executed
----------
and delivered pursuant to Section 5.1.4, substantially in the form of
-------------
Exhibit F hereto, as amended, supplemented, restated or otherwise
- ---------
modified from time to time.
"Guarantors" means CF&I Steel, L.P., New CF&I and any other
----------
Significant Subsidiary that delivers a Guaranty pursuant to the
provisions of Section 7.1.7 hereof.
-------------
11
<PAGE>
"Hazardous Material" means
------------------
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous
or toxic chemical, material or substance within the meaning of
any other applicable federal, state or local law, regulation,
ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or
standards of conduct concerning any hazardous, toxic or
dangerous waste, substance or material, all as amended or
hereafter amended.
"Hedging Obligations" means, with respect to any Person, all
-------------------
liabilities of such Person under interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and
all other agreements or arrangements designed to protect such Person
against fluctuations in interest rates, currency exchange rates or
commodity prices.
"herein", "hereof", "hereto", "hereunder" and similar terms
------ ------ ------ ---------
contained in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document, as the case may be, as a whole
and not to any particular Section, paragraph or provision of this
Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
---------------------------
certification of any independent public accountant as to any financial
statement of any Obligor, any qualification or exception to such
opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of
any item in such financial statement and which, as a condition
to its removal, would require an adjustment to such item the
effect of which would be to cause such Obligor to be in default
of any of its obligations under Section 7.2.4.
-------------
"including" means including without limiting the generality of
---------
any description preceding such term.
"Indebtedness" of any Person means, without duplication:
------------
12
<PAGE>
(a) all obligations of such Person for borrowed money
and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(b) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded
as Capitalized Lease Liabilities;
(c) all obligations, contingent or otherwise, relative
to the face amount of all letters of credit, whether or not
drawn, and banker's acceptances issued for the account of such
Person;
(d) all other items which, in accordance with GAAP, would
be included as liabilities on the liability side of the balance
sheet of such Person as of the date at which Indebtedness is to
be determined;
(e) whether or not so included as liabilities in accordance
with GAAP, all indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such
indebtedness shall have been assumed by such Person or is limited
in recourse; provided, however, that the indebtedness secured by
-------- -------
a Lien on the Borrower's or any Subsidiary's interest in any
joint venture permitted by the terms of Section 7.2.3(h) hereof
----------------
shall not be considered Indebtedness; and
(f) all Contingent Liabilities of such Person in respect
of any of the foregoing.
For all purposes of this Agreement, (i) Permitted Intercompany Loans
shall not be considered Indebtedness and (ii) the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint
venture in which such Person is a general partner or a joint venturer
to the extent that either (x) such Person is directly obligated for
such Indebtedness or (y) that such Indebtedness is a Contingent
Liability of such Person.
"Indemnified Liabilities" is defined in Section 10.4.
----------------------- ------------
"Indemnified Parties" is defined in Section 10.4.
------------------- ------------
"Indenture" is defined in the definition of the term "First
---------
Mortgage Notes" set forth above.
"Intercreditor Agreement" is defined in Section 5.1.7.
----------------------- -------------
13
<PAGE>
"Interest Coverage Ratio" means, for any period of four Fiscal
-----------------------
Quarters, the ratio of (x) the sum of the Borrower and its
Subsidiaries' (i) EBITDA during such period, plus (ii) the non-cash
----
portion of the Borrower's contribution to its employee stock ownership
plan during such period, to (y) the Borrower and its Subsidiaries'
total interest expense (including capitalized interest) paid in cash
during such period.
"Interest Period" means, relative to any LIBO Rate Loans, the
---------------
period beginning on (and including) the date on which such LIBO Rate
Loan is made or continued as, or converted into, a LIBO Rate Loan
pursuant to Section 2.3 or 2.4 and shall end on (but exclude) the day
----------- ---
which numerically corresponds to such date one, two, three or six
months thereafter (or, if such month has no numerically corresponding
day, on the last Business Day of such month), as the Borrower may
select in its relevant notice pursuant to Section 2.3 or 2.4;
----------- ---
provided, however, that
- -------- -------
(a) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the
same duration;
(b) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on
the next following Business Day (unless such next following
Business Day is the first Business Day of a calendar month, in
which case such Interest Period shall end on the Business Day
next preceding such numerically corresponding day); and
(c) no Interest Period for any Loan may end later than
the Stated Maturity Date for such Loan.
"Inventory" means all inventory, as such term is defined in the
---------
Uniform Commercial Code in effect in the state of New York as of the
Effective Date.
"Investment" means, relative to any Person,
----------
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business)
other than Permitted Intercompany Loans;
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such
Person in any other Person.
The amount of any Investment shall be the original principal or
capital amount thereof less all returns of principal or equity thereon
(and without adjustment by reason of the financial
14
<PAGE>
condition of such other Person) and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in
an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"Lender Assignment Agreement" means a Lender Assignment Agreement
---------------------------
substantially in the form of Exhibit E hereto.
---------
"Lenders" is defined in the preamble.
------- --------
"Leverage Ratio" means, as of the end of any Fiscal Quarter of
--------------
the Borrower, the ratio of the Borrower and its Subsidiaries' (x)
Funded Debt to (y) EBITDA.
"LIBO Rate" is defined in Section 3.3.1.
--------- -------------
"LIBO Rate Loan" means a Loan bearing interest, at all times
--------------
during an Interest Period applicable to such Loan, at a fixed rate of
interest determined by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.3.1.
---------------------------- -------------
"LIBOR Office" means, relative to any Lender, the office of such
------------
Lender designated as such below its signature hereto or designated in
the Lender Assignment Agreement or such other office of a Lender as
designated from time to time by notice from such Lender to the
Borrower and the Administrative Agent, whether or not outside the
United States, which shall be making or maintaining LIBO Rate Loans of
such Lender hereunder.
"LIBOR Reserve Percentage" is defined in Section 3.3.1.
------------------------ -------------
"Lien" means any security interest, mortgage, pledge,
----
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property to
secure payment of a debt or performance of an obligation or other
priority or preferential arrangement of any kind or nature
whatsoever.
"Loan" means, as the context may require, a Revolving Loan or a
----
Swingline Loan of any type.
"Loan Document" means this Agreement, the Notes, the Guaranties,
-------------
the Security Agreements, each agreement relating to the Hedging
Obligations to which a Lender is a party (unless otherwise agreed by
such Lender), the Intercreditor Agreement and each other agreement,
document or instrument delivered in connection with this Agreement.
15
<PAGE>
"Managing Agents" is defined in the preamble and includes each
--------------- --------
other Person as shall have subsequently been appointed as a successor
Managing Agent pursuant to Section 9.4.
-----------
"Material Adverse Effect" means any circumstance or event which
-----------------------
is reasonably likely to (i) have a material adverse effect on the
validity or enforceability of this Agreement, the Notes or any other
Loan Document, (ii) have a material adverse effect on the financial
condition, operations, assets, business or properties of Borrower and
its Subsidiaries, taken as a whole, or (iii) materially impair the
ability of the Borrower or any Guarantor to fulfill its respective
obligations under this Agreement or any other Loan Document.
"Material Partnership" means each of the Camrose Partnership,
--------------------
CF&I Steel, L.P. and any other partnership in which Borrower or any
Subsidiary has an Investment in excess of $10,000,000.
"Monthly Payment Date" means the last day of each calendar month
--------------------
or, if any such day is not a Business Day, the next succeeding
Business Day.
"Net Equity Proceeds" means, with respect to any issuance by the
-------------------
Borrower or any Subsidiary of any equity securities, the gross
consideration received by or for the account of the issuer minus
-----
underwriting and brokerage commissions, discounts and fees and other
professional fees and expenses relating to such issuance that are
payable by the issuer.
"Net First Mortgage Proceeds" means, with respect to the issuance
---------------------------
by the Borrower of the First Mortgage Notes, the gross consideration
received by or for the account of the Borrower minus the underwriting
-----
and brokerage commissions, discounts and fees and other professional
fees and expenses relating to such issuance that are payable by the
Borrower.
"Net Income" means the consolidated net income of the Borrower
----------
and its Subsidiaries, determined in accordance with GAAP.
"New CF&I" means New CF&I, Inc., a Delaware corporation and
--------
87%-owned Subsidiary of the Borrower.
"Note" means, as the context may require, a Revolving Note or the
----
Swingline Note.
"Obligations" means all obligations (monetary or otherwise) of
-----------
the Borrower and each other Obligor arising under or in connection
with this Agreement, the Notes and each other Loan Document.
16
<PAGE>
"Obligor" means, as the context may require, the Borrower, any
-------
Guarantor or any other Person (other than an Agent or any Lender)
obligated under any Loan Document.
"Original Credit Agreement" is defined in the first recital.
------------------------- -------------
"Organic Document" means, relative to any Obligor, its
----------------
certificate of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any
of its authorized shares of capital stock.
"Participant" is defined in Section 10.11.2.
----------- ---------------
"PBGC" means the Pension Benefit Guaranty Corporation and any
----
entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined
------------
in section 3(2) of ERISA, which is subject to Title IV of ERISA (other
than a multiemployer plan as defined in section 4001(a)(3) of ERISA),
and to which the Borrower or any corporation, trade or business that
is, along with the Borrower, a member of a Controlled Group, may have
liability, including any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA at
any time during the preceding five years, or by reason of being deemed
to be a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set
----------
forth opposite its signature hereto or set forth in the Lender
Assignment Agreement, as such percentage may be adjusted from time to
time pursuant to Lender Assignment Agreement(s) executed by such
Lender and its Assignee Lender(s) and delivered pursuant to Section
-------
10.11.1.
- -------
"Permitted Dispositions" means (x) any sale, transfer, lease or
----------------------
conveyance by the Borrower or any of its Subsidiaries of any assets
that is made in the ordinary course of its business or (y) any sale,
transfer, lease or conveyance of any of the properties and assets more
particularly described on Item 1.1 ("Permitted Dispositions") of the
--------
Disclosure Schedule.
"Permitted Intercompany Loans" means (i) any loans from the
----------------------------
Borrower to any of the Guarantors, (ii) the existing intercompany loan
from New CF&I to CF&I Steel, L.P. or (iii) any loans from any of the
Borrower's Subsidiaries to the Borrower to the extent that such loans
are subordinated on terms and conditions satisfactory to Managing
Agents.
"Permitted Receivables Financing" means any sale (or financing)
-------------------------------
by the Borrower or its Subsidiaries of Accounts to a
17
<PAGE>
receivables purchaser, on terms satisfactory to the Required Lenders.
"Person" means any natural person, corporation, partnership,
------
firm, association, trust, government, governmental agency or any other
entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
----
"Quarterly Payment Date" means the last day of each March, June,
----------------------
September, and December or, if any such day is not a Business Day, the
next succeeding Business Day.
"Reference Lenders" means First Interstate, Scotiabank and United
-----------------
States National Bank of Oregon.
"Release" means a "release", as such term is defined in CERCLA.
-------
"Required Lenders" means, at any time, Lenders holding at least
----------------
51% of the then aggregate outstanding principal amount of the
Revolving Notes (including, for such purposes, any participations of
the Lenders under Swingline Loans), or, if no such principal amount is
then outstanding, Lenders having at least 51% of the aggregate
Revolving Loan Commitments.
"Resource Conservation and Recovery Act" means the Resource
--------------------------------------
Conservation and Recovery Act, 42 U.S.C. Section 690, et seq., as in
effect from time to time.
"Restricted Disposition" means any sale, transfer, lease,
----------------------
contribution or conveyance by the Borrower or any Subsidiary of its
assets that is not a Permitted Disposition.
"Revolving Loan" is defined in Section 2.1.1.
-------------- -------------
"Revolving Loan Commitment" means, relative to any Lender, such
-------------------------
Lender's obligation to make Revolving Loans pursuant to Section 2.1.1.
-------------
"Revolving Loan Commitment Amount" means, on any date,
--------------------------------
$125,000,000, as such amount may be reduced from time to time pursuant
to Section 2.1.
-----------
"Revolving Loan Commitment Termination Date" means the
------------------------------------------
earliest of
(a) June 11, 1999;
18
<PAGE>
(b) the date on which the Revolving Loan Commitment
Amount is terminated in full or reduced to zero pursuant to
Section 2.2; and
-----------
(c) the date on which any Commitment Termination Event
occurs.
Upon the occurrence of any event described above, the Revolving Loan
Commitments shall terminate automatically and without any further
action.
"Revolving Note" means a promissory note of the Borrower payable
--------------
to any Lender, in the form of Exhibit A hereto (as such promissory
---------
note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the Borrower to such
Lender resulting from outstanding Revolving Loans, and also means all
other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Scotiabank" is defined in the preamble.
---------- --------
"Security Agreements" means the Amended and Restated Security
-------------------
Agreements executed and delivered pursuant to Section 5.1.5,
-------------
substantially in the form of Exhibit G hereto, as amended,
---------
supplemented, restated or otherwise modified from time to time.
"Significant Subsidiary" means each Subsidiary of the Borrower
----------------------
that
(a) as of the Effective Date, is designated with an
asterisk in Item 2 ("Subsidiaries") of the Disclosure Schedule;
------
(b) accounted for at least 5% of consolidated revenues
of the Borrower and its Subsidiaries or 5% of consolidated
earnings of the Borrower and its Subsidiaries before interest and
taxes, in each case for the four Fiscal Quarters of the Borrower
ending on the last day of the last Fiscal Quarter of the Borrower
immediately preceding the date as of which any such determination
is made; or
(c) has assets which represent at least 5% of the
consolidated assets of the Borrower and its Subsidiaries as of
the last day of the last Fiscal Quarter of the Borrower
immediately preceding the date as of which any such determination
is made,
all of which, with respect to clauses (b) and (c), shall be as
----------- ---
reflected on the financial statements of the Borrower for the period,
or as of the date, in question.
19
"Stated Maturity Date" means
--------------------
(a) in the case of any Revolving Loan, June 9, 1999; and
(b) in the case of any Swingline Loan, June 9, 1999.
"Subsidiary" means, with respect to any Person, any corporation
----------
of which more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether at the time capital stock of
any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person; provided, however, that in the case of
-------- -------
the Borrower, such term also includes, without limitation, Camrose
Partnership and CF&I Steel, L.P.
"Swingline Lender" means First Interstate.
----------------
"Swingline Loan" is defined in Section 2.1.2.
-------------- -------------
"Swingline Loan Commitment" means the Swingline Lender's
-------------------------
obligation to make Swingline Loans pursuant to Section 2.1.2.
-------------
"Swingline Loan Commitment Amount" means, on any date
--------------------------------
$15,000,000, as such amount may be reduced from time to time pursuant
to Section 2.2.
-----------
"Swingline Loan Commitment Termination Date" means the earlier of
------------------------------------------
(a) the Revolving Loan Commitment Termination Date; or
(b) the date on which the Swingline Loan Commitment
Amount is terminated in full or reduced to zero pursuant to
Section 2.2.
-----------
Upon the occurrence of any event described above, the Swingline Loan
Commitment shall terminate automatically and without any further
action.
"Swingline Note" means the promissory note of the Borrower
--------------
payable to the Swingline Lender, in the form of Exhibit B hereto (as
---------
such promissory note may be amended, endorsed or otherwise modified
from time to time), evidencing the aggregate Indebtedness of the
Borrower to the Swingline Lender resulting from outstanding Swingline
Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
20
<PAGE>
"Syndication Agent" is defined in the preamble and includes each
----------------- --------
other Person as shall have subsequently been appointed as the
successor Syndication Agent pursuant to Section 9.4.
-----------
"Taxes" is defined in Section 4.6.
----- -----------
"type" means, relative to any Loan, the portion thereof, if any,
----
being maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its
------------- ---
fifty States and the District of Columbia.
"Welfare Plan" means a "welfare plan", as such term is defined in
------------
section 3(1) of ERISA.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or
--------------------
the context otherwise requires, terms for which meanings are provided
in this Agreement shall have such meanings when used in the Disclosure
Schedule and in each Note, Borrowing Request, Continuation/Conversion
Notice, Loan Document, notice and other communication delivered from
time to time in connection with this Agreement or any other Loan
Document.
SECTION 1.3. Cross-References. Unless otherwise specified,
----------------
references in this Agreement and in each other Loan Document to any
Article or Section are references to such Article or Section of this
Agreement or such other Loan Document, as the case may be, and, unless
otherwise specified, references in any Article, Section or definition
to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless
---------------------------------------
otherwise specified, all accounting terms used herein or in any other
Loan Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder (including under Section 7.2.4)
-------------
shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with, those
generally accepted accounting principles ("GAAP") applied in the
----
preparation of the audited financial statements referred to in
Section 6.5.
- -----------
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the
-----------
conditions of this Agreement (including Article V), each Lender
---------
severally agrees to make Loans pursuant to the Commitments
described in this Section 2.1.
-----------
21
<PAGE>
SECTION 2.1.1. Revolving Loan Commitment. From time to time on
-------------------------
any Business Day occurring prior to the Revolving Loan Commitment
Termination Date, each Lender will make Loans (relative to such
Lender, its "Revolving Loans") to the Borrower equal to such Lender's
---------------
Percentage of the aggregate amount of the Borrowing of Revolving Loans
requested by the Borrower to be made on such day. The Commitment of
each Lender described in this Section 2.1.1 is herein referred to as
-------------
its "Revolving Loan Commitment". On the terms and subject to the
-------------------------
conditions hereof, the Borrower may from time to time borrow, prepay
and reborrow Revolving Loans.
SECTION 2.1.2. Swingline Commitment. From time to time on any
--------------------
Business Day occurring prior to the Swingline Loan Commitment
Termination Date, the Swingline Lender will make Swingline Loans to
the Borrower in the aggregate amount of Swingline Loans requested by
the Borrower to be made on such date. The Commitment of the Swingline
Lender described in this Section 2.1.2 is herein referred to as the
-------------
"Swingline Loan Commitment". On the terms and subject to the
-------------------------
conditions hereof, the Borrower may from time to time, borrow, prepay
and reborrow Swingline Loans. All Swingline Loans shall bear interest
at a fluctuating rate determined by reference to the Federal Funds
Rate plus the Applicable Margin for Swingline Loans. On the date a
----
Swingline Loan is made hereunder, each Lender absolutely and
unconditionally agrees to and does purchase a participation in an
amount equal to its respective Percentage of Revolving Loans in such
Swingline Loan. At the request of the Swingline Lender, made through
the Administrative Agent at any time and from time to time, including,
without limitation, following the occurrence of Event of Default, each
Lender (including the Swingline Lender) absolutely and unconditionally
agrees to fund the Swingline Loans then outstanding by advancing such
Lender's Percentage of the outstanding Swingline Loans to the
Administrative Agent for disbursement to the Swingline Lender. Such
advances shall be made no later than 10:00 a.m. (Portland time) on the
next following Business Day after a request therefor is made.
Advances made by the Lenders hereunder for purposes of funding
Swingline Loans shall constitute Revolving Loans (and be advanced as
Base Rate Loans) for all purposes hereof. In consideration of the
Lenders' agreement to advance funds for purposes of repaying Swingline
Loans and purchasing participations in Swingline Loans, the Swingline
Lender agrees to pay to each Lender, such Lender's Percentage of the
Applicable Margin for Swingline Loans collected by the Swingline
Lender on all outstanding Swingline Loans. Such payment shall be made
by the Swingline Lender to the Administrative Agent, for the account
of the Lenders, monthly in arrears on each Monthly Payment Date.
22
<PAGE>
SECTION 2.1.3. Lenders Not Permitted or Required To Make Loans.
-----------------------------------------------
No Lender shall be permitted or required to make any Revolving Loan
if, after giving effect thereto,
(i) the sum of (x) the aggregate outstanding Swingline
Loans plus (y) the aggregate outstanding principal amount of
----
all Revolving Loans of all Lenders would exceed the
Revolving Loan Commitment Amount,
(ii) the sum of (x) the aggregate outstanding
Swingline Loans plus (y) the aggregate outstanding principal
----
amount of all Revolving Loans of all Lenders would exceed
the then-current Borrowing Base, or
(iii) the aggregate outstanding principal amount of
all Swingline Loans and all Revolving Loans of such Lender
would exceed such Lender's Percentage of the Revolving Loan
Commitment Amount.
The Swingline Lender shall not be permitted or required to make any
Swingline Loan, if, after giving effect thereto, the aggregate
outstanding principal amount of:
(i) the sum of (x) the aggregate outstanding principal
amount of all Revolving Loans of all Lenders plus (y) the
aggregate outstanding Swingline Loans would exceed the
Revolving Loan Commitment Amount,
(ii) the sum of (x) the aggregate outstanding
principal amount of all Revolving Loans of all Lenders plus
----
(y) the aggregate outstanding Swingline Loans would exceed
the Borrowing Base, or
(iii) all Swingline Loans would exceed the Swingline
Loan Commitment Amount.
SECTION 2.2. Optional Reduction of Commitment Amounts. The
----------------------------------------
Borrower may, from time to time on any Business Day occurring after
the time of the initial Borrowing hereunder, voluntarily reduce the
amount of any Commitment Amount; provided, however, that all such
-------- -------
reductions shall require at least one Business Day's prior notice to
the Administrative Agent and be permanent, and any partial reduction
of the Swingline Loan Commitment Amount shall be in a minimum amount
of $1,000,000 and in an integral multiple of $1,000,000 and any
partial reduction of any other Commitment Amount shall be in a minimum
amount of $10,000,000 and in an integral multiple of $1,000,000.
SECTION 2.3. Borrowing Procedure. The Borrower may request
-------------------
Loans to be made pursuant to this Section 2.3.
-----------
23
<PAGE>
SECTION 2.3.1. Revolving Loans. By delivering a Borrowing
---------------
Request to the Administrative Agent on or before 9:00 a.m.,
Portland time, on a Business Day, the Borrower may from time to time
irrevocably request, on not less than three Business Days' notice in
the case of LIBO Rate Loans and on not less than one Business Day's
notice in the case of Base Rate Loans, that a Borrowing of Revolving
Loans be made in a minimum amount of $5,000,000 and an integral
multiple of $1,000,000 or in the unused amount of the Revolving Loan
Commitment. Not later than 10:00 a.m., Portland time, on the date of
receipt, the Administrative Agent shall give notice to each Lender of
the terms of each Borrowing Request for Revolving Loans submitted by
the Borrower. On the terms and subject to the conditions of this
Agreement, each Borrowing shall be comprised of the type of Loans, and
shall be made on the Business Day, specified in such Borrowing
Request. On or before 11:00 a.m. (Portland time) on the Business Day
specified in the Borrowing Request each Lender shall deposit with the
Administrative Agent same day funds in an amount equal to such
Lender's Percentage of the requested Borrowing. Such deposit will be
made to an account which the Administrative Agent shall specify from
time to time by notice to the Lenders. To the extent funds are
received from the Lenders, the Administrative Agent shall make such
funds available to the Borrower by deposit to the accounts the
Borrower shall have specified in its Borrowing Request. No Lender's
obligation to make any Loan shall be affected by any other Lender's
failure to make any Loan.
SECTION 2.3.2. Swingline Loans. By delivering a Borrowing
---------------
Request to the Swingline Lender on or before 3:00 p.m., Portland Time,
on a Business Day, the Borrower may from time to time irrevocably
request that a Borrowing of Swingline Loans be made on such date in a
minimum amount of $100,000 and an integral multiple of $100,000 or in
the unused amount of the Swingline Loan Commitment. On the terms and
subject to the conditions of this Agreement, each Borrowing of
Swingline Loans shall be made on the Business Day specified in such
Borrowing Request. The Swingline Lender shall make the Swingline Loan
available to the Borrower by deposit to the accounts the Borrower
shall have specified in its Borrowing Request.
SECTION 2.4. Continuation and Conversion Elections. By
-------------------------------------
delivering a Continuation/Conversion Notice to the Administrative
Agent on or before 9:00 a.m., Portland time, on a Business Day, the
Borrower may from time to time irrevocably elect, on not less than
three nor more than five Business Days' notice that all, or any
portion in an aggregate minimum amount of $1,000,000 and an integral
multiple of $100,000, of any Revolving Loans be, in the case of Base
Rate Loans, converted into LIBO Rate Loans or, in the case of LIBO
Rate Loans, be converted into a Base Rate Loan or continued as a LIBO
Rate Loan (in the absence of delivery of a Continuation/Conversion
Notice with respect to any LIBO Rate Loan
24
<PAGE>
at least three Business Days before the last day of the then current
Interest Period with respect thereto, such LIBO Rate Loan shall, on
such last day, automatically convert to a Base Rate Loan); provided,
--------
however, that (i) each such conversion or continuation shall be pro
- -------
rated among the applicable outstanding Loans of all Lenders, and (ii)
no portion of the outstanding principal amount of any Revolving Loans
may be continued as, or be converted into, LIBO Rate Loans when any
Default has occurred and is continuing. Not later than 10:00 a.m.,
Portland time, on the date of receipt, the Administrative Agent shall
give notice to each Lender of the terms of each Continuation/
Conversion Notice delivered to it by the Borrower.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill
-------
its obligation to make, continue or convert LIBO Rate Loans hereunder
by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Lender) to make or
maintain such LIBO Rate Loan; provided, however, that such LIBO Rate
-------- -------
Loan shall nonetheless be deemed to have been made and to be held by
such Lender, and the obligation of the Borrower to repay such LIBO
Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In
addition, the Borrower hereby consents and agrees that, for purposes
of any determination to be made for purposes of Sections 4.1, 4.2, 4.3
------------ --- ---
or 4.4, it shall be conclusively assumed that each Lender elected to
---
fund all LIBO Rate Loans by purchasing Dollar deposits in its LIBOR
Office's interbank eurodollar market.
SECTION 2.6. Notes. Each Lender's Loans under a Commitment
-----
shall be evidenced by a Note payable to the order of such Lender in a
maximum principal amount equal to such Lender's Percentage of the
original applicable Commitment Amount. The Borrower hereby
irrevocably authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to such Lender's Notes (or
on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and
----- ----
the interest rate and Interest Period applicable to the Loans
evidenced thereby. Such notations shall be conclusive and binding on
the Borrower absent manifest error; provided, however, that the
-------- -------
failure of any Lender to make any such notations shall not limit or
otherwise affect any Obligations of the Borrower or any other Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall
--------------------------
repay in full the unpaid principal amount of each Loan upon the
25
Stated Maturity Date therefor. Prior thereto, payments and
prepayments of Loans shall be made as set forth below:
SECTION 3.1.1. Voluntary Prepayments. From time to time on any
---------------------
Business Day, the Borrower may make a voluntary prepayment, in whole
or in part, of the outstanding principal amount of any Loans;
provided, however, that
- -------- -------
(i) any such prepayment shall be applied to such Loans
as shall be specified by the Borrower in a written notice to
the Administrative Agent, or in the absence of such notice, as
the Administrative Agent shall specify;
(ii) no such prepayment of any LIBO Rate Loan may be
made on any day other than the last day of the Interest Period
for such Loan;
(iii) voluntary prepayments of Swingline Loans may be
made with notice from an Authorized Officer of the Borrower to
the Swingline Lender prior to 3:00 p.m. on the date of such
payment, and all voluntary prepayments of Revolving Loans shall
require at least one Business Day's prior written notice to the
Administrative Agent; and
(iv) all voluntary partial prepayments of Swingline Loans
shall be in an aggregate minimum amount of $100,000 and an
integral multiple of $100,000; and all voluntary partial
prepayments of Revolving Loans shall be in an aggregate minimum
amount of $5,000,000 and an integral multiple of $1,000,000.
SECTION 3.1.2. Exceeding the Revolving Loan Commitment. On each
---------------------------------------
date when the sum of the aggregate outstanding principal amount of all
Revolving Loans and Swingline Loans exceeds the lesser of (x) the
Revolving Loan Commitment Amount (as it may be reduced from time to
time) and (y) the then effective Borrowing Base amount, the Borrower
shall make a mandatory prepayment of the Revolving Loans or Swingline
Loans (or both) in an aggregate amount equal to such excess.
SECTION 3.1.3. Acceleration. The Borrower shall, immediately
------------
upon any acceleration of the Stated Maturity Date of any Loans
pursuant to Section 8.2 or Section 8.3, repay all Loans, unless,
----------- -----------
pursuant to Section 8.3, only a portion of all Loans is so
-----------
accelerated.
SECTION 3.2. Application of Payments and Prepayments.
---------------------------------------
SECTION 3.2.1. Voluntary Prepayments. Each prepayment of any
---------------------
Loans made pursuant to this Section shall be without premium or
penalty, except as may be required by Section 4.4. No voluntary
-----------
26
prepayment of principal of any Revolving Loans shall cause a reduction
in the Revolving Loan Commitment Amount, and no voluntary prepayment
of principal of any Swingline Loans shall cause a reduction in the
Swingline Loan Commitment Amount.
SECTION 3.3. Interest Provisions. Interest on the outstanding
-------------------
principal amount of Loans shall accrue and be payable in accordance
with this Section 3.3.
-----------
SECTION 3.3.1. Rates. Pursuant to an appropriately delivered
-----
Borrowing Request or Continuation/Conversion Notice, the Borrower may
elect that Base Rate Loans and LIBO Rate Loans comprising a Borrowing
accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate
from time to time in effect plus the Applicable Margin; and
(b) on that portion maintained as a LIBO Rate Loan,
during each Interest Period applicable thereto, equal to the
sum of the LIBO Rate (Reserve Adjusted) for such Interest
Period plus the Applicable Margin.
All Swingline Loans shall accrue interest at a rate per annum equal to
the sum of Federal Funds Rate from time to time in effect plus the
Applicable Margin for Swingline Loans.
The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to
----------------------------
be made, continued or maintained as, or converted into, a LIBO Rate
Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) determined pursuant to the
following formula:
LIBO Rate LIBO Rate
= -------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO
Rate Loans will be determined by the Administrative Agent on the basis
of the LIBOR Reserve Percentage in effect on, and the applicable rates
furnished to and received by the Administrative Agent from the
Reference Lenders, two Business Days before the first day of such
Interest Period, subject, however, to the provisions of Section 3.3.4.
------- ------- -------------
"LIBO Rate" means, relative to any Interest Period for LIBO Rate
---------
Loans, the rate of interest equal to the average (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the rates per annum at which
Dollar deposits in immediately available funds are offered to each
Reference Lender's LIBOR Office in the interbank eurodollar market as
at or about 12:00 noon New York time two Business Days prior to the
beginning of such Interest Period for
27
<PAGE>
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of each such Reference Lender's LIBO
Rate Loan and for a period approximately equal to such Interest
Period.
"LIBOR Reserve Percentage" means, relative to any Interest Period
------------------------
for LIBO Rate Loans, the reserve percentage (expressed as a decimal)
equal to the maximum aggregate reserve requirements (including all
basic, emergency, supplemental, marginal and other reserves and taking
into account any transitional adjustments or other scheduled changes
in reserve requirements) specified under regulations issued from time
to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including "Eurocurrency Liabilities", as
currently defined in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.
All LIBO Rate Loans shall bear interest from and including the
first day of the applicable Interest Period to (but not including) the
last day of such Interest Period at the interest rate determined as
applicable to such LIBO Rate Loan.
SECTION 3.3.2. Post-Maturity Rates. After the date any
-------------------
principal amount of any Loan is due and payable (whether on the Stated
Maturity Date, upon acceleration or otherwise), or after any other
monetary Obligation of the Borrower shall have become due and payable,
the Borrower shall pay, but only to the extent permitted by law,
interest (after as well as before judgment) on such amounts at a rate
per annum equal to the sum of the Alternate Base Rate plus 2% plus the
Applicable Margin for Base Rate Loans then in effect.
SECTION 3.3.3. Payment Dates. Interest accrued on each Loan
-------------
shall be payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole
or in part, of principal outstanding on such Loan;
(c) with respect to Revolving Loans made as Base Rate
Loans, on each Quarterly Payment Date occurring after the
Effective Date, and with respect to Swingline Loans made as Base
Rate Loans, on each Monthly Payment Date occurring after the
Effective Date;
(d) with respect to LIBO Rate Loans, the last day of
each applicable Interest Period (and, if such Interest Period
shall exceed 90 days, on the 90th day of such Interest Period);
and
28
<PAGE>
(e) on that portion of any Loans the Stated Maturity
Date of which is accelerated pursuant to Section 8.2 or
-----------
Section 8.3, immediately upon such acceleration.
-----------
Interest accrued on Loans or other monetary Obligations arising under
this Agreement or any other Loan Document after the date such amount
is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3.4. Interest Rate Determination. Each Reference
---------------------------
Lender agrees to furnish to the Administrative Agent timely
information for the purpose of determining each LIBO Rate. If any one
or more of the Reference Lenders shall fail timely to furnish such
information to the Administrative Agent for any such interest rate,
the Administrative Agent shall determine such interest rate on the
basis of the information furnished by the remaining Reference Lenders.
SECTION 3.4. Fees. The Borrower agrees to pay the fees set
----
forth in this Section 3.4. All such fees shall be non-refundable.
-----------
SECTION 3.4.1. Commitment Fee. The Borrower agrees to pay to
--------------
the Administrative Agent for the account of each Lender, for the
period (including any portion thereof when any of its Commitments are
suspended by reason of the Borrower's inability to satisfy any
condition of Article V) commencing on the Effective Date and
---------
continuing through the final Commitment Termination Date, a commitment
fee at the Commitment Fee Rate per annum on such Lender's Percentage
of the sum of the average daily unused portion of the Revolving
Commitment Amount; provided, however, that for purposes of determining
-------- -------
usage under the Revolving Commitment, all outstanding Swingline Loans
shall be deemed to be Revolving Loans. Such commitment fees shall be
payable by the Borrower in arrears on each Quarterly Payment Date,
commencing with the first such day following the Effective Date, and
on each Commitment Termination Date.
SECTION 3.4.2. Upfront Fee. The Borrower agrees to pay to the
-----------
Administrative Agent for the account of each Lender on the Effective
Date, an upfront fee based on such Lender's initial Commitment and
based on such Lender's final allocated Commitment in such amounts as
previously agreed by the Borrower and the Managing Agents.
SECTION 3.4.3. Agents' Fees. The Borrower agrees to pay to the
------------
Agents for their own account, in addition to all other amounts payable
by the Borrower under Sections 3.4.1 and 3.4.2, such other fees as
-------------- -----
were described in the fee letters dated February 21, 1996 between the
Borrower and First Interstate and the Borrower and Scotiabank.
29
<PAGE>
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall
--------------------------
determine (which determination shall, upon notice thereof to the
Borrower and the Lenders, be conclusive and binding on the Borrower)
that the introduction of or any change in or in the interpretation of
any law makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Lender to make,
continue or maintain any Loan as, or to convert any Loan into, a LIBO
Rate Loan, the obligations of such Lender to make, continue, maintain
or convert any such Loans shall, upon such determination, forthwith be
suspended until such Lender shall notify the Administrative Agent that
the circumstances causing such suspension no longer exist, and all
LIBO Rate Loans of such Lender shall automatically convert into Base
Rate Loans at the end of the then current Interest Periods with
respect thereto or sooner, if required by such law or assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent
--------------------
shall have determined that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Reference
Lenders in their relevant markets; or
(b) by reason of circumstances affecting the Reference
Lenders' relevant markets, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBO
Rate Loans,
then, upon notice from the Administrative Agent to the Borrower and
the Lenders, the obligations of all Lenders under Section 2.3 and
-----------
Section 2.4 to make or continue any Loans as, or to convert any Loans
- -----------
into, LIBO Rate Loans shall forthwith be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower
-----------------------------------
agrees to reimburse each Lender for any increase in the cost to such
Lender of, or any reduction in the amount of any sum receivable by
such Lender in respect of, making, continuing or maintaining (or of
its obligation to make, continue or maintain) any Loans as, or of
converting (or of its obligation to convert) any Loans into, LIBO Rate
Loans which results from the introduction of or any change since the
date of this Agreement in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof
(including, by way of example, but not limited to, a change in
official reserve requirements). Such
30
<PAGE>
Lender shall promptly notify the Administrative Agent and the Borrower
in writing of the occurrence of any such event, such notice to state,
in reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost or
reduced amount. Such additional amounts shall be payable by the
Borrower directly to such Lender within five days of its receipt of
such notice, and such notice shall, in the absence of manifest error,
be conclusive and binding on the Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall
--------------
incur any loss or expense (including any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to make, continue or maintain any portion of
the principal amount of any Loan as, or to convert any portion of the
principal amount of any Loan into, a LIBO Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loans on a date other than
the scheduled last day of the Interest Period applicable thereto,
whether pursuant to Section 3.1 or otherwise;
-----------
(b) any Loans not being made as LIBO Rate Loans in
accordance with the Borrowing Request therefor, except as a
result of a Lender's breach of its Commitments hereunder; or
(c) any Loans not being continued as, or converted into,
LIBO Rate Loans in accordance with the Continuation/Conversion
Notice therefor, except as a result of a Lender's breach of
its Commitments hereunder,
then, upon the written notice of such Lender to the Borrower (with a
copy to the Administrative Agent), the Borrower shall, within five
days of its receipt thereof, pay directly to such Lender such amount
as will (in the reasonable determination of such Lender) reimburse
such Lender for such loss or expense. Such written notice (which
shall include calculations in reasonable detail) shall, in the absence
of manifest error, be conclusive and binding on the Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
-----------------------
introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive,
guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other governmental
authority affects or would affect the amount of capital required or
expected to be maintained by any Lender or any Person controlling such
Lender, and such Lender determines (in its sole and absolute
discretion) that the rate of return on its or such controlling
Person's capital as a consequence of its Commitments or the Loans made
by such Lender is reduced to a level below that which such
31
<PAGE>
Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon
notice from time to time by such Lender to the Borrower and the
Administrative Agent, the Borrower shall immediately pay directly to
such Lender additional amounts sufficient to compensate such Lender or
such controlling Person for such reduction in rate of return. A
statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Borrower.
In determining such amount, such Lender may use any method of
averaging and attribution that it (in its sole and absolute
discretion) shall deem applicable.
SECTION 4.6. Taxes. All payments by the Borrower of principal
-----
of, and interest on, the Loans and all other amounts payable hereunder
shall be made free and clear of and without deduction for any present
or future income, excise, stamp or franchise taxes and other taxes,
fees, duties, withholdings or other charges of any nature whatsoever
imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Lender's net income or receipts
(such non-excluded items being called "Taxes"). In the event that any
-----
withholding or deduction from any payment to be made by the Borrower
hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Administrative Agent an
official receipt or other documentation satisfactory to the
Administrative Agent evidencing such payment to such
authority; and
(c) pay to the Administrative Agent for the account of
the Lenders such additional amount or amounts as is necessary to
ensure that the net amount actually received by each Lender will
equal the full amount such Lender would have received had no such
withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the
Administrative Agent or any Lender with respect to any payment
received by the Administrative Agent or such Lender hereunder, the
Administrative Agent or such Lender may pay such Taxes and the
Borrower will promptly pay such additional amounts (including any
penalties, interest or expenses) as is necessary in order that the net
amount received by such person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount
such person would have received had not such Taxes been asserted.
32
<PAGE>
If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative
Agent, for the account of the respective Lenders, the required
receipts or other required documentary evidence, the Borrower shall
indemnify the Lenders for any incremental Taxes, interest or penalties
that may become payable by any Lender as a result of any such failure.
For purposes of this Section 4.6, a distribution hereunder by the
-----------
Administrative Agent or any Lender to or for the account of any Lender
shall be deemed a payment by the Borrower.
Upon the request of the Administrative Agent, each Lender that is
organized under the laws of a jurisdiction other than the United
States shall, prior to the due date of any payments under the Notes,
execute and deliver to the Borrower and the Administrative Agent, on
or about the first scheduled payment date in each Fiscal Year, one or
more (as the Administrative Agent may reasonably request) United
States Internal Revenue Service Forms 4224 or Forms 1001 or such other
forms or documents (or successor forms or documents), appropriately
completed, as may be applicable to establish the extent, if any, to
which a payment to such Lender is exempt from withholding or deduction
of Taxes.
SECTION 4.7. Payments, Computations, etc. All payments by the
---------------------------
Borrower pursuant to Swingline Loans shall be made by the Borrower
directly to the Swingline Lender. Unless otherwise expressly
provided, all other payments by the Borrower pursuant to this
Agreement, the Notes or any other Loan Document shall be made by the
Borrower to the Administrative Agent for the pro rata account of the
Lenders entitled to receive such payment. All such payments required
to be made to the Administrative Agent or Swingline Lender shall be
made, without setoff, deduction or counterclaim, not later than 10:00
a.m., Portland time, on the date due, in same day or immediately
available funds, to such account as the Administrative Agent or
Swingline Lender shall specify from time to time by notice to the
Borrower. Funds received after that time shall be deemed to have been
received by the Administrative Agent or Swingline Lender on the next
succeeding Business Day. The Administrative Agent shall promptly
remit in same day funds to each Lender its share, if any, of such
payments received by the Administrative Agent for the account of such
Lender. All interest and fees shall be computed on the basis of the
actual number of days (including the first day but excluding the last
day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest
on a Base Rate Loan, 365 days or, if appropriate, 366 days). Whenever
any payment to be made shall otherwise be due on a day which is not a
Business Day, such payment shall (except as otherwise required by
clause (c) of the definition of the term "Interest Period" with
- ---------- ---------------
respect to LIBO Rate Loans) be made on the next succeeding Business
33
<PAGE>
Day and such extension of time shall be included in computing interest
and fees, if any, in connection with such payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain
-------------------
any payment or other recovery (whether voluntary, involuntary, by
application of setoff or otherwise) on account of any Loan (other than
pursuant to the terms of Sections 4.3, 4.4 and 4.5) in excess of its
------------ --- ---
pro rata share of payments then or therewith obtained by all Lenders,
such Lender shall purchase from the other Lenders such participations
in Loans made by them as shall be necessary to cause such purchasing
Lender to share the excess payment or other recovery ratably with each
of them; provided, however, that if all or any portion of the excess
-------- -------
payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and each Lender which has sold
a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share
(according to the proportion of (a) the amount of such selling
Lender's required repayment to the purchasing Lender to (b) the total
--
amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this
Section may, to the fullest extent permitted by law, exercise all its
rights of payment (including pursuant to Section 4.9) with respect to
-----------
such participation as fully as if such Lender were the direct creditor
of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section
applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section to share in the
benefits of any recovery on such secured claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of
------
any Default described in clauses (a) through (d) of Section 8.1.9 or
----------- --- -------------
any other Event of Default, have the right to appropriate and apply to
the payment of the Obligations owing to it (whether or not then due),
any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with such Lender; provided,
--------
however, that any such appropriation and application shall be subject
- -------
to the provisions of Section 4.8. Each Lender agrees promptly to
-----------
notify the Borrower and the Administrative Agent after any such setoff
and application made by such Lender; provided, however, that the
-------- -------
failure to give such notice shall not affect the validity of such
setoff and application. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights
of
34
<PAGE>
setoff under applicable law or otherwise) which such Lender may have.
SECTION 4.10. Use of Proceeds. The Borrower shall apply the
---------------
proceeds of each Borrowing for general corporate purposes (including
non-hostile acquisitions) and working capital purposes of the Borrower
and its Subsidiaries other than Camrose and the Camrose Partnership.
Without limiting the foregoing, no proceeds of any Loan will be used
to acquire any equity security of a class which is registered pursuant
to Section 12 of the Securities Exchange Act of 1934 or any "margin
stock", as defined in F.R.S. Board Regulation U.
SECTION 4.11. Actions of Affected Lenders. Each Lender agrees
---------------------------
to use reasonable efforts (including reasonable efforts to change the
booking office for its Loans) to avoid or minimize any illegality
pursuant to Section 4.1 or any amounts which might otherwise be
-----------
payable pursuant to Sections 4.3, 4.5 or 4.6; provided, however, that
------------ --- --- -------- -------
such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender
to be material. In the event that such reasonable efforts are
insufficient to avoid all such illegality pursuant to Section 4.1 or
-----------
all amounts that might be payable pursuant to Sections 4.3, 4.5 or
------------ ---
4.6, then the Borrower shall have the right, but not the obligation,
- ---
at its own expense, to request such Lender (the "Affected Lender") to
---------------
transfer its Commitments hereunder to any other Lender (which itself
is not then an Affected Lender) or financial institution designated by
the Borrower and approved by the Managing Agents (which approval shall
not be unreasonably withheld or delayed), and such Lender hereby
agrees to transfer and assign without recourse (in accordance with and
subject to the restrictions contained in this Agreement) all its
interests, rights and obligations under this Agreement to such
assignee; provided, however, that no Lender shall be obligated to make
-------- -------
any such assignment unless (i) such assignment shall not conflict with
any law or any rule, regulation or order of any governmental
authority, (ii) such assignee shall pay to the Affected Lender in
immediately available funds on the date of such assignment the
principal of the Loans made by such Lender hereunder, and (iii) the
Borrower shall pay to the Affected Lender in immediately available
funds on the date of such assignment the interest accrued to the date
of such assignment hereunder and all other amounts accrued for such
Lender's account or owed to it hereunder.
35
<PAGE>
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND INITIAL BORROWING
SECTION 5.1. Initial Borrowing. The obligations of the Lenders
-----------------
to fund the initial Borrowing shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth
in this Section 5.1.
-----------
SECTION 5.1.1. Resolutions, etc. The Administrative Agent shall
----------------
have received from each Obligor a certificate, dated the date of the
initial Borrowing, of its Secretary or Assistant Secretary as to
(a) resolutions of its Board of Directors then in full
force and effect authorizing the execution, delivery and
performance of this Agreement, the Notes and each other Loan
Document to be executed by it; and
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement, the Notes and
each other Loan Document executed by it,
upon which certificate each Lender may conclusively rely until it
shall have received a further certificate of the Secretary of such
Obligor canceling or amending such prior certificate.
SECTION 5.1.2. Delivery of Notes. The Administrative Agent
-----------------
shall have received, for the account of each Lender, its Notes duly
executed and delivered by the Borrower.
SECTION 5.1.3. Payment of Outstanding Indebtedness, etc. All
-----------------------------------------
Indebtedness identified in Item 7.2.2(b) ("Indebtedness to be Paid")
-------------
of the Disclosure Schedule, together with all interest, all prepayment
premiums and other amounts due and payable with respect thereto, shall
have been paid in full (including, to the extent necessary, from
proceeds of the initial Borrowing); and all commitments for such
Indebtedness shall have been terminated.
SECTION 5.1.4. Guaranties. The Administrative Agent shall have
----------
received the Guaranties, dated the date hereof, duly executed by the
Guarantors.
SECTION 5.1.5. Security Agreements. The Administrative Agent
-------------------
shall have received executed counterparts of the Security Agreements,
dated as of the date hereof, duly executed by the Borrower and the
Guarantors, together with
(a) acknowledgment copies of properly filed Uniform
Commercial Code financing statements (Form UCC-1), dated a date
reasonably near to the date of the initial Borrowing, or
36
such other evidence of filing as may be acceptable to the
Managing Agents, naming the Borrower and each Guarantor, as the
debtors and the Administrative Agent as the secured party, or
other similar instruments or documents, filed under the Uniform
Commercial Code of all jurisdictions as may be necessary or, in
the opinion of the Managing Agents, desirable to perfect the
security interest of the Administrative Agent pursuant to the
Security Agreement;
(b) executed copies of proper Uniform Commercial Code
Form UCC-3 termination statements, if any, necessary to release
all Liens and other rights of any Person in any collateral
described in the Security Agreement previously granted by any
Person, together with such other Uniform Commercial Code Form
UCC-3 termination statements as the Managing Agents may
reasonably request from such Obligors; and
(c) certified copies of Uniform Commercial Code Requests
for Information or Copies (Form UCC-11), or a similar search
report certified by a party acceptable to the Managing Agents,
dated a date reasonably near to the date of the initial
Borrowing, listing all effective financing statements which
name the Borrower and each Guarantor (under their present names
and any previous names) as the debtor and which are filed in the
jurisdictions in which filings were made pursuant to clause (a)
----------
above, together with copies of such financing statements (none of
which (other than those described in clause (a), if such Form
----------
UCC-11 or search report, as the case may be, is current enough to
list such financing statements described in clause (a)) shall
----------
cover any collateral described in the Security Agreement).
SECTION 5.1.6. Receipt of Proceeds. The Borrower shall have
-------------------
received at least $71,000,000 of Net Equity Proceeds and at least
$225,000,000 of Net First Mortgage Proceeds.
SECTION 5.1.7. Intercreditor Agreement. The Managing Agents
-----------------------
shall have received a fully-executed intercreditor agreement, in
substantially the form of Exhibit K hereto and otherwise reasonably
---------
satisfactory to the Managing Agents, with the trustee for the holders
of the First Mortgage Notes (the "Intercreditor Agreement").
-----------------------
SECTION 5.1.8. Opinion of Counsel. The Administrative Agent
------------------
shall have received opinions, dated as of the Effective Date and
addressed to the Administrative Agent and all Lenders, from Schwabe
Williamson & Wyatt, counsel to the Obligors, substantially in the form
of Exhibit H hereto.
---------
SECTION 5.1.9. Organization Documents. The Administrative Agent
----------------------
shall have received from the Borrower and each Guarantor a
37
<PAGE>
certificate, dated the date of the initial Borrowing, of its Secretary
or Assistant Secretary as to
(a) the articles or certificate of incorporation of such
Person as in effect on such date, certified by the Secretary of
State of the state of its incorporation as of a recent date (to
the extent such certification is available), and the bylaws of
such Person as in effect on such date, certified by the Secretary
or an Assistant Secretary as of such date; and
(b) a good standing certificate for such Person from the
Secretary of State of the state of its incorporation as of a
recent date (to the extent such certification is available).
SECTION 5.1.10. Certificate and Agreement. The Managing Agents
-------------------------
shall have received the fully-executed Certificate and Agreement.
SECTION 5.1.11. Closing Fees, Expenses, etc. The Administrative
---------------------------
Agent shall have received for its own account, or for the account of
the Syndication Agent, the Managing Agents and each Lender, as the
case may be, all fees, costs and expenses due and payable pursuant to
Sections 3.4 and 10.3, if then invoiced.
- ------------ ----
SECTION 5.2. All Borrowings. The obligation of each Lender to
--------------
fund any Loan on the occasion of any Borrowing (including the initial
Borrowing) shall be subject to the satisfaction of each of the
conditions precedent set forth in this Section 5.2.
-----------
SECTION 5.2.1. Compliance with Warranties, No Default, etc.
-------------------------------------------
Both before and after giving effect to any Borrowing (but, if any
Default of the nature referred to in Section 8.1.5 shall have occurred
-------------
with respect to any other Indebtedness, without giving effect to the
application, directly or indirectly, of the proceeds thereof) the
following statements shall be true and correct
(a) the representations and warranties set forth in
Article VI (excluding, however, those contained in Section 6.7)
---------- -----------
shall be true and correct with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case
such representations and warranties shall be true and correct as
of such earlier date);
(b) except as disclosed by the Borrower to the
Administrative Agent and the Lenders pursuant to Section 6.7
-----------
(i) no labor controversy, litigation, arbitration
or governmental investigation or proceeding shall be pending
or, to the knowledge of the Borrower, threatened against the
Borrower or any of its Subsidiaries which might have a
Material Adverse Effect; and
38
<PAGE>
(ii) no development shall have occurred in any
labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to
Section 6.7 which might have a Material Adverse Effect; and
-----------
(c) no Default shall have then occurred and be continuing,
and neither the Borrower, any other Obligor, nor any of its
Subsidiaries are in material violation of any law or governmental
regulation or court order or decree.
SECTION 5.2.2. Borrowing Request. For all Borrowings of
-----------------
Revolving Loans, the Administrative Agent shall have received a
Borrowing Request for such Borrowing, and for all Borrowings of
Swingline Loans, the Swingline Lender shall have received a Borrowing
Request for such Borrowing. Each of the delivery of a Borrowing
Request and the acceptance by the Borrower of the proceeds of such
Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing (both immediately before
and after giving effect to such Borrowing and the application of the
proceeds thereof) the statements made in Section 5.2.1 are true and
-------------
correct.
SECTION 5.2.3. Satisfactory Legal Form. All documents executed
-----------------------
or submitted pursuant hereto by or on behalf of the Borrower or any of
its Subsidiaries or any other Obligors shall be satisfactory in form
and substance to the Managing Agents and their counsel; and the
Managing Agents and their counsel shall have received all information,
approvals, opinions, documents or instruments as the Managing Agents
or their counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agents to enter into this
Agreement and to make Loans hereunder, the Borrower represents and
warrants unto the Agents and each Lender as set forth in this
Article VI.
- ----------
SECTION 6.1. Organization, etc. The Borrower and each of its
-----------------
Subsidiaries is a corporation validly organized and existing and in
good standing under the laws of the state of its incorporation, is
duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business
requires such qualification (except where the failure to so qualify
shall not have a Material Adverse Effect), and has full power and
authority and holds all requisite governmental licenses, permits and
other approvals to enter into and perform its Obligations under
39
<PAGE>
this Agreement, the Notes and each other Loan Document to which it is
a party and to own and hold under lease its property and to conduct
its business substantially as currently conducted by it.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The
-----------------------------------------
execution, delivery and performance by the Borrower of this Agreement,
the Notes and each other Loan Document executed or to be executed by
it, and the execution, delivery and performance by each other Obligor
of each Loan Document executed or to be executed by it are within the
Borrower's and each such Obligor's corporate powers, have been duly
authorized by all necessary corporate action, and do not
(a) contravene the Borrower's or any such Obligor's Organic
Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting the Borrower or any such Obligor; or
(c) result in, or require the creation or imposition of,
any Lien on any of any Obligor's properties, except for the
Liens created pursuant to the Loan Documents.
SECTION 6.3. Government Approval, Regulation, etc. No
------------------------------------
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or other
Person is required for the due execution, delivery or performance by
the Borrower or any other Obligor of this Agreement, the Notes or any
other Loan Document to which it is a party. Neither the Borrower nor
any of its Subsidiaries is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and the
-------------
Notes and each other Loan Document executed by the Borrower will, on
the due execution and delivery thereof, constitute, the legal, valid
and binding obligations of the Borrower enforceable in accordance with
their respective terms, and each Loan Document executed pursuant
hereto by each other Obligor will, on the due execution and delivery
thereof by such Obligor, be the legal, valid and binding obligation of
such Obligor enforceable in accordance with its terms, all subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and general principles of equity.
40
<PAGE>
SECTION 6.5. Financial Information. The audited balance sheets
---------------------
of the Borrower and its Subsidiaries as at December 31, 1995, and the
related statements of earnings and cash flow of the Borrower and its
Subsidiaries, and the unaudited financial statements of the Borrower
and its Subsidiaries as at March 31, 1996, copies of which have been
furnished to the Administrative Agent and each Lender, have been
prepared in accordance with GAAP consistently applied, and present
fairly the consolidated financial condition of the corporations
covered thereby as at the dates thereof and the results of their
operations for the periods then ended.
SECTION 6.6. No Material Adverse Change. Since the date of the
--------------------------
audited financial statements described in Section 6.5, except as
-----------
otherwise disclosed in Item 6.6 ("Material Developments") of the
--------
Disclosure Schedule, there has been no Material Adverse Effect.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no
------------------------------------
pending or, to the knowledge of the Borrower, threatened litigation,
action, proceeding, or labor controversy affecting the Borrower or any
of its Subsidiaries, or any of their respective properties,
businesses, assets or revenues, which may have a Material Adverse
Effect, except as disclosed in Item 6.7 ("Litigation") of the
--------
Disclosure Schedule.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries,
------------
except those Subsidiaries
(a) which are identified in Item 6.8 ("Existing
--------
Subsidiaries") of the Disclosure Schedule; or
(b) which are permitted to have been acquired in
accordance with Section 7.2.5 or 7.2.10.
------------- ------
SECTION 6.9. Ownership of Properties. The Borrower and each of
-----------------------
its Subsidiaries owns good and marketable title to all of its
properties and assets, real and personal, tangible and intangible, of
any nature whatsoever (including patents, trademarks, trade names,
service marks and copyrights), free and clear of all Liens, charges or
claims (including infringement claims with respect to patents,
trademarks, copyrights and the like) except as permitted pursuant to
Section 7.2.3.
- -------------
SECTION 6.10. Taxes. The Borrower and each of its Subsidiaries
-----
has filed all tax returns and reports required by law to have been
filed by it and has paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set
aside on its books.
41
<PAGE>
SECTION 6.11. Pension and Welfare Plans. During the twelve-
-------------------------
consecutive-month period prior to the date of the execution and
delivery of this Agreement and prior to the date of any Borrowing
hereunder, no steps have been taken to terminate any Pension Plan, and
no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to
any Pension Plan which might result in the incurrence by the Borrower
or any member of the Controlled Group of any material liability, fine
or penalty. Except as disclosed in Item 6.11 ("Employee Benefit
---------
Plans") of the Disclosure Schedule, neither the Borrower nor any
member of the Controlled Group has any contingent liability with
respect to any post-retirement benefit under a Welfare Plan, other
than liability for continuation coverage described in Part 6 of
Title I of ERISA.
SECTION 6.12. Environmental Warranties. Except as set forth in
------------------------
Item 6.12 ("Environmental Matters") of the Disclosure Schedule:
- ---------
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its
Subsidiaries have been, and continue to be, owned or leased by
the Borrower and its Subsidiaries in material compliance with
all Environmental Laws;
(b) there have been no past, and there are no pending or
threatened
(i) claims, complaints, notices or requests for
information received by the Borrower or any of its
Subsidiaries with respect to any alleged violation of any
Environmental Law that, singly or in the aggregate, have,
or may reasonably be expected to have, a Material Adverse
Effect, or
(ii) complaints, notices or inquiries to the Borrower
or any of its Subsidiaries regarding potential material
liability under any Environmental Law that, singly or in the
aggregate, have, or may reasonably be expected to have, a
Material Adverse Effect;
(c) there have been no Releases of Hazardous Materials at,
on or under any property now or previously owned or leased by the
Borrower or any of its Subsidiaries that, singly or in the
aggregate, have, or may reasonably be expected to have, a
Material Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued and
are in material compliance with all permits, certificates,
approvals, licenses and other authorizations relating to
42
<PAGE>
environmental matters and necessary or desirable for their
businesses;
(e) no property now or previously owned or leased by the
Borrower or any of its Subsidiaries is listed or proposed for
listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean- up;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any
property now or previously owned or leased by the Borrower or any
of its Subsidiaries that, singly or in the aggregate, have, or
may reasonably be expected to have, a Material Adverse Effect;
(g) neither Borrower nor any Subsidiary of the Borrower
has directly transported or directly arranged for the
transportation of any Hazardous Material to any location which
is listed or proposed for listing on the National Priorities
List pursuant to CERCLA, on the CERCLIS or on any similar state
list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to
material claims against the Borrower or such Subsidiary thereof
for any remedial work, damage to natural resources or personal
injury, including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable
asbestos present at any property now or previously owned or
leased by the Borrower or any Subsidiary of the Borrower that,
singly or in the aggregate, have, or may reasonably be expected
to have, a Material Adverse Effect; and
(i) no conditions exist at, on or under any property now
or previously owned or leased by the Borrower which, with the
passage of time, or the giving of notice or both, would give rise
to material liability under any Environmental Law.
SECTION 6.13. Regulations G, U and X. The Borrower is not
----------------------
engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Loans will
be used for a purpose which violates, or would be inconsistent with,
F.R.S. Board Regulation G, U or X. Terms for which meanings are
provided in F.R.S. Board Regulation G, U or X or any regulations
substituted therefor, as from time to time in effect, are used in this
Section with such meanings.
SECTION 6.14. Accuracy of Information. All factual information
-----------------------
heretofore or contemporaneously furnished by or on behalf of the
Borrower in writing to the Agents or any Lender for
43
<PAGE>
purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of the Borrower to the Agents or
any Lender will be, true and accurate in every material respect on the
date as of which such information is dated or certified and as of the
date of execution and delivery of this Agreement by the Agents and
such Lender, and such information is not, or shall not be, as the case
may be, incomplete by omitting to state any material fact necessary to
make such information not misleading.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with
---------------------
the Agents and each Lender that, until all Commitments have terminated
and all Obligations have been paid and performed in full, the Borrower
will perform the obligations set forth in this Section 7.1.
-----------
SECTION 7.1.1. Financial Information, Reports, Notices, etc.
--------------------------------------------
The Borrower will furnish, or will cause to be furnished, to the
Administrative Agent for the further distribution to each of the
Lenders copies of the following financial statements, reports, notices
and information:
(a) as soon as available and in any event within 50 days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Borrower, consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as of the end
of such Fiscal Quarter and consolidated and consolidating
statements of earnings and consolidated statements of cash flow
of the Borrower and its Subsidiaries for such Fiscal Quarter and
for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Quarter, certified by an
Authorized Officer of the Borrower;
(b) as soon as available and in any event within 100 days
after the end of each Fiscal Year of the Borrower, a copy of the
annual audit report for such Fiscal Year for the Borrower and its
Subsidiaries, including therein audited consolidated and
unaudited consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such Fiscal Year and audited
consolidated and unaudited consolidating statements of earnings
and audited consolidated statements of cash flow of the Borrower
and its Subsidiaries for such Fiscal Year, in each case certified
(without any Impermissible Qualification) in a manner acceptable
to the Managing Agents by independent public accountants
acceptable to the Managing
44
<PAGE>
Agents, together with a certificate from such accountants to the
effect that, in making the examination necessary for the signing
of such annual report by such accountants, they have not become
aware of any Default or Event of Default under Article VIII that
------------
has occurred and is continuing, or, if they have become aware of
such Default or Event of Default, describing such Default or
Event of Default and the steps, if any, being taken to cure it;
(c) as soon as available and in any event within 50 days
after the end of each Fiscal Quarter and 100 days after the end
of each Fiscal Year, a Compliance Certificate, executed by an
Authorized Officer of the Borrower, showing (in reasonable detail
and with appropriate calculations and computations in all
respects satisfactory to the Managing Agents) compliance with the
financial covenants set forth in Section 7.2.4;
-------------
(d) as soon as available and in any event within 15 days
after the end of each month, a Borrowing Base Certificate as of
the end of such month;
(e) as soon as possible and in any event within five
Business Days after the occurrence of each Default, a
statement of an Authorized Officer of the Borrower setting
forth details of such Default and the action which the Borrower
has taken and proposes to take with respect thereto;
(f) as soon as possible and in any event within five
Business Days after (x) the occurrence of any material adverse
development with respect to any litigation, action, proceeding,
or labor controversy described in Section 6.7 or (y) the
-----------
commencement of any material labor controversy, litigation,
action, proceeding of the type described in Section 6.7, notice
-----------
thereof and copies of all documentation relating thereto;
(g) promptly after the same become publicly available,
copies of all reports which the Borrower sends to any of its
securityholders, and all registration statements, Forms 10K,
Forms 10Q, Forms 8K and similar reports which the Borrower or any
of its Subsidiaries files with the Securities and Exchange
Commission, any other national securities exchange or any foreign
securities commission or exchange relating to issuance and sale
of securities;
(h) immediately upon becoming aware of the institution
of any steps by the Borrower or any other Person to terminate
any Pension Plan, or the failure to make a required contribution
to any Pension Plan if such failure is sufficient to give rise to
a Lien under section 302(f) of ERISA, or the taking of any action
with respect to a Pension Plan which
45
<PAGE>
could result in the requirement that the Borrower furnish a
bond or other security to the PBGC or such Pension Plan, or the
occurrence of any event with respect to any Pension Plan which
could result in the incurrence by the Borrower of any material
liability, fine or penalty, or any material increase in the
contingent liability of the Borrower with respect to any post-
retirement Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto;
(i) as soon as possible and in any event within 15 days
after the receipt by the Borrower or any Subsidiary thereof,
copies of all final, written environmental audits prepared by, or
at the request of, the Borrower or its Subsidiaries or affecting
any properties of the Borrower or any of its Subsidiaries;
(j) as soon as available and in any event within 60 days
after the commencement of each Fiscal Year, a consolidated
financial forecast for the Borrower and its Subsidiaries for such
Fiscal Year; and
(k) such other information concerning the condition or
operations, financial or otherwise, of the Borrower or any of
its Subsidiaries as any Lender through the Administrative Agent
may from time to time reasonably request.
SECTION 7.1.2. Compliance with Laws, etc. The Borrower will,
-------------------------
and will cause each of its Significant Subsidiaries to, comply in all
material respects with all applicable laws, rules, regulations and
orders, such compliance to include (without limitation):
(a) the maintenance and preservation of its corporate
existence and, except to the extent that such failure will have a
Material Adverse Effect, qualification as a foreign corporation;
and
(b) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or
upon its property except to the extent being diligently contested
in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 7.1.3. Maintenance of Properties. The Borrower will,
-------------------------
and will cause each of its Subsidiaries to, maintain, preserve,
protect and keep its properties in good repair, working order and
condition, and make necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith
may be properly conducted at all times unless the Borrower determines
in good faith that the continued maintenance of any of its properties
is no longer economically desirable and
46
<PAGE>
except for properties that may be the subject of Permitted
Dispositions.
SECTION 7.1.4. Insurance. The Borrower will, and will cause
---------
each of its Subsidiaries to, maintain or cause to be maintained with
responsible insurance companies insurance with respect to its
properties and business (including business interruption insurance)
against such casualties and contingencies and of such types and in
such amounts as is customary in the case of similar businesses and
will, upon request of the Administrative Agent, furnish to the
Administrative Agent at reasonable intervals a certificate of an
Authorized Officer of the Borrower setting forth the nature and extent
of all insurance maintained by the Borrower and its Subsidiaries in
accordance with this Section.
SECTION 7.1.5. Books and Records. The Borrower will, and will
-----------------
cause each of its Subsidiaries to, keep books and records which
accurately reflect all of its business affairs and transactions and
permit the Managing Agents or any of their respective representatives,
at reasonable times and intervals and upon reasonable notice, to visit
all of its offices, to discuss its financial matters with its officers
and independent public accountant (and the Borrower hereby authorizes
such independent public accountant to discuss the Borrower's financial
matters with each Managing Agent or its representatives whether or not
any representative of the Borrower is present) and to examine (and, at
the expense of the Borrower, photocopy extracts from) any of its books
or other corporate records. The Borrower shall pay any fees of such
independent public accountant incurred in connection with any Managing
Agent's exercise of its rights pursuant to this Section.
SECTION 7.1.6. Environmental Covenant. The Borrower will, and
----------------------
will cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties
in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect
(except for permits associated with properties that have been
the subject of a Permitted Disposition) and remain in material
compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Environmental Laws;
(b) immediately notify the Administrative Agent and
provide copies upon receipt of all material adverse written
claims, complaints, notices or inquiries relating to the
condition of its facilities and properties or compliance with
Environmental Laws, and shall promptly cure and have dismissed
with prejudice to the satisfaction of the Administrative Agent
any actions and proceedings relating to compliance with
47
<PAGE>
Environmental Laws, except for those being diligently contested
in good faith and by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set
aside on its books; and
(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to
evidence compliance with this Section 7.1.6.
-------------
SECTION 7.1.7. Future Guarantors; Further Assurances. The
-------------------------------------
Borrower may, in its discretion and with the prior written approval of
the Managing Agents, from time to time cause any of its Significant
Subsidiaries that is not already a Guarantor to execute and deliver a
Guaranty and Security Agreement and to provide opinions and
documentation of the type set forth in Section 5.1.1 and
-------------
Section 7.1.8 as to such Guarantor.
- --------------
SECTION 7.1.8. Opinion of New Guarantors. The Borrower shall
-------------------------
cause to be delivered within 30 days after a Significant Subsidiary
becomes a Guarantor favorable opinions of counsel confirming, among
other things, that (i) such Guarantor's obligations under its Guaranty
and Security Agreement are legal, valid, binding and enforceable
against such Guarantor and (ii) no government approvals, consents,
registrations or filings are required by such Guarantor except as have
been obtained.
SECTION 7.2. Negative Covenants. The Borrower agrees with the
------------------
Agents and each Lender that, until all Commitments have terminated and
all Obligations have been paid and performed in full, the Borrower
will perform the obligations set forth in this Section 7.2.
-----------
SECTION 7.2.1. Business Activities. The Borrower will not, and
-------------------
will not permit any of its Subsidiaries to, engage in any business
activity, except in the business of manufacturing specialty and
commodity steel products and such activities as may be incidental or
related thereto.
SECTION 7.2.2. Indebtedness. The Borrower will not, and will
------------
not permit any of its Subsidiaries to, create, incur, assume or suffer
to exist or otherwise become or be liable in respect of any
Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of the Loans and other
Obligations;
(b) until the Effective Date, Indebtedness identified in
Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure
-------------
Schedule;
48
<PAGE>
(c) Indebtedness existing as of the Effective Date which
is identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the
-------------
Disclosure Schedule;
(d) Indebtedness in respect of the Borrower's and
Guarantors' obligations under the First Mortgage Notes (and any
refundings or refinancings thereof that are on terms no less
favorable to the Borrower and the Lenders) and the guaranties by
the Guarantors of the Borrower's obligations thereunder;
(e) unsecured Indebtedness incurred in the ordinary course
of business (including open accounts extended by suppliers on
normal trade terms in connection with purchases of goods and
services, but excluding Indebtedness incurred through the
borrowing of money or Contingent Liabilities) including, without
limitation, accrued expenses, taxes payable, accrued
environmental liabilities, deferred employment benefits and
deferred income taxes, to the extent incurred in the ordinary
course of business;
(f) Indebtedness in respect of Capitalized Lease
Liabilities for assets contemplated by the Borrower's capital
expenditure plan set forth in the Bank Group Presentation;
(g) Indebtedness in an aggregate principal amount not to
exceed $30,000,000, relative to letters of credit issued for the
account of the Borrower and its Subsidiaries;
(h) Indebtedness of the Borrower and its Subsidiaries in
an aggregate principal amount not to exceed $5,000,000 in respect
of the deferred purchase price of capital assets acquired by the
Borrower and its Subsidiaries exclusive of all capital
expenditures and Investments projected to be made by the Borrower
in the Bank Group Presentation;
(i) the obligations of the Borrower and its Subsidiaries
in connection with a Permitted Receivables Financing;
(j) Indebtedness of Subsidiaries of the Borrower and
guaranties by such Subsidiaries of Indebtedness of joint ventures
in which such Subsidiaries are a joint venturer so long as
neither the Borrower nor any Guarantor has any liability or
Contingent Liability for any such Indebtedness or guarantee;
(k) any Hedging Obligations of the Borrower or any
Subsidiary; and
(l) other unsecured Indebtedness of the Borrower and its
Subsidiaries in an aggregate amount not to exceed $15,000,000;
49
<PAGE>
provided, however, that no Indebtedness otherwise permitted by clauses
- -------- -------- -------
(e), (f), (g), (h), (i), (j) or (l) shall be permitted if, after
- --- --- --- --- --- --- ---
giving effect to the incurrence thereof, any Default shall have
occurred and be continuing.
SECTION 7.2.3. Liens. The Borrower will not, and will not
-----
permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its property, revenues or assets, whether
now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations, granted
pursuant to any Loan Document;
(b) Liens securing payment of Indebtedness of the type
permitted and described in clauses (b) and (c) of Section 7.2.2;
----------- --- -------------
(c) Liens securing payment of the First Mortgage Notes on
any or all of the property of the Borrower and the Guarantors
other than that pledged to the Lenders pursuant to the terms of
the Security Agreement and other than the stock and intercompany
accounts of any Significant Subsidiary;
(d) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter
payable without penalty or being diligently contested in good
faith by appropriate proceedings and for which adequate reserves
in accordance with GAAP shall have been set aside on its books;
(e) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for
sums not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;
(f) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance
or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory obligations, leases
and contracts (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety or
appeal bonds;
(g) judgment Liens in existence less than 30 days after
the entry thereof or with respect to which execution has been
stayed or the payment of which is covered in full (subject to a
customary deductible) by insurance maintained with responsible
insurance companies;
50
<PAGE>
(h) Liens on the Borrower's or any Subsidiary's joint
venture interest in favor of the lenders to such joint venture
and securing such joint venture's obligations to such lender; and
(i) Liens securing Hedging Obligations.
SECTION 7.2.4. Financial Condition. The Borrower will not
-------------------
permit to occur any of the events set forth below:
(a) Its Consolidated Tangible Net Worth at any time to be
less than (i) $232,500,000 plus (ii) 50% of Net Income (without
----
giving effect to any losses) for each Fiscal Quarter beginning on
or after January 1, 1996 plus (iii) 100% of the Net Equity
----
Proceeds from any equity offering by the Borrower or any of its
Subsidiaries after January 1, 1996.
(b) Its Interest Coverage Ratio, tested on a rolling
four quarter basis, to be less than the specified ratio as of the
end of any of the following Fiscal Quarters:
Fiscal Quarter Minimum Interest Coverage Ratio
-------------- -------------------------------
June 30, 1996 1.50 to 1.0
September 30, 1996 1.50 to 1.0
December 31, 1996 1.50 to 1.0
March 31, 1997 1.75 to 1.0
June 30, 1997 1.75 to 1.0
September 30, 1997 2.00 to 1.0
December 31, 1997 2.00 to 1.0
March 31, 1998 2.25 to 1.0
June 30, 1998 and thereafter 2.50 to 1.0
(c) Its Funded Debt to Capitalization Ratio to exceed
.55 to 1.00 as of the end of any Fiscal Quarter.
SECTION 7.2.5. Investments. The Borrower will not, and will not
-----------
permit any of its Subsidiaries to, make, incur, assume or suffer to
exist any Investment in any other Person, except:
(a) Investments identified in Item 7.2.5(a) ("Ongoing
-------------
Investments") of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) without duplication, Investments permitted as
Indebtedness pursuant to Section 7.2.2 or as contemplated by the
-------------
Borrower's capital expenditure plan set forth in the Bank Group
Presentation; provided that no such Investments may be made in
--------
Camrose or the Camrose Partnership;
51
<PAGE>
(d) Investments in Camrose or the Camrose Partnership in
an aggregate amount at any time not to exceed $5,000,000;
(e) in the ordinary course of business, Investments by
the Borrower in any of its Subsidiaries other than Camrose or the
Camrose Partnership, or by any such Subsidiary in any of its
Subsidiaries or any other Subsidiary other than Camrose or the
Camrose Partnership, by way of contributions to capital or loans
or advances; and
(f) other Investments in an aggregate amount at any time
not to exceed $15,000,000 minus any losses on such Investments;
-----
provided, however, that
- -------- -------
(g) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent
---------------
Investment" may continue to be held notwithstanding that such
----------
Investment if made thereafter would not comply with such
requirements; and
(h) no Investment otherwise permitted by clause (e) or
----------
(f) shall be permitted to be made if, immediately before or
---
after giving effect thereto, any Default shall have occurred and
be continuing.
SECTION 7.2.6. Restricted Payments, etc. On and at all times
------------------------
after the Effective Date the Borrower will not declare, pay or make
any dividend or distribution (in cash, property or obligations) on any
shares of any class of capital stock (now or hereafter outstanding) of
the Borrower or on any warrants, options or other rights with respect
to any shares of any class of capital stock (now or hereafter
outstanding) of the Borrower (other than dividends or distributions
payable in its common stock or warrants to purchase its common stock
or splitups or reclassifications of its stock into additional or other
shares of its common stock) or apply, or permit any of its
Subsidiaries to apply, any of its funds, property or assets to the
purchase, redemption, sinking fund or other retirement of, or agree or
permit any of its Subsidiaries to purchase or redeem, any shares of
any class of capital stock (now or hereafter outstanding) of the
Borrower, or warrants, options or other rights with respect to any
shares of any class of capital stock (now or hereafter outstanding) of
the Borrower, if either before or after giving effect to any of such
actions, there shall exist a Default or an Event of Default.
SECTION 7.2.7. Rental Obligations. The Borrower will not, and
------------------
will not permit any of its Subsidiaries to, enter into at any time any
arrangement which does not create a Capitalized Lease Liability and
which involves the leasing by the Borrower or any of
52
<PAGE>
its Subsidiaries from any lessor of any real or personal property (or
any interest therein), except arrangements which, together with all
other such arrangements which shall then be in effect, will not
require the payment of an aggregate amount of rentals by the Borrower
and its Subsidiaries in excess of (excluding escalations resulting
from a rise in the consumer price or similar index) $4,000,000 for any
Fiscal Year or $15,000,000 during the remaining term of this
Agreement; provided, however, that any calculation made for purposes
-------- -------
of this Section shall exclude any amounts required to be expended for
maintenance and repairs, insurance, taxes, assessments, and other
similar charges.
SECTION 7.2.8. Sale and Leasebacks. The Borrower will not, and
-------------------
will not permit any of its Subsidiaries to, enter into any transaction
by which the Borrower or any of its Subsidiaries, directly or
indirectly, becomes liable as a lessee or as a guarantor or other
surety with respect to any lease, whether an operating lease or a
capital lease of any property (whether real or personal or mixed)
whether now owned or hereafter acquired (i) which the Borrower or any
of its Subsidiaries has sold or transferred or is to sell or transfer
to any other Person, or (ii) which the Borrower or any of its
Subsidiaries intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by the
Borrower or any such Subsidiary to any person in connection with such
lease.
SECTION 7.2.9. Consolidation, Merger, etc. The Borrower will
--------------------------
not, and will not permit any of its Subsidiaries to, liquidate or
dissolve, consolidate with, or merge into or with, any other
corporation, or purchase or otherwise acquire all or substantially all
of the assets of any Person (or of any division thereof) except
(a) the Borrower or any Subsidiary may make Permitted
Dispositions;
(b) any Subsidiary may liquidate or dissolve voluntarily
into, and may merge with and into, the Borrower or any other
Subsidiary so long as, after giving effect thereto, the Borrower
or a Guarantor, if a party to such merger, is the surviving
corporation, and the assets or stock of any Subsidiary may be
purchased or otherwise acquired by the Borrower or any other
Subsidiary; and
(c) so long as no Default has occurred and is continuing
or would occur after giving effect thereto, the Borrower or any
of its Subsidiaries may purchase all or substantially all of the
assets of any Person, or acquire such Person by merger, in
connection with alternative metallics ventures contemplated by
the Bank Group Presentation or if permitted as a capital
expenditure as contemplated by the Bank Group Presentation;
provided, however, that after giving effect to any such merger
-------- -------
53
<PAGE>
the Borrower or its Subsidiary party thereto is the surviving
corporation.
SECTION 7.2.10. Asset Dispositions, etc. The Borrower will not,
-----------------------
and will not permit any of its Subsidiaries to, sell, transfer, lease,
contribute or otherwise convey, or grant options, warrants or other
rights with respect to, any or all of its assets (including the
capital stock of Subsidiaries) to any Person, unless (a) such sale,
transfer, lease, contribution or conveyance is a Permitted
Disposition, (b) such sale is a Restricted Disposition and the net
proceeds from such sale together with the net proceeds of all other
Restricted Dispositions since the Effective Date does not exceed
$40,000,000 in the aggregate or (c) such sale is a Permitted
Receivables Financing.
SECTION 7.2.11. Transactions with Affiliates. The Borrower will
----------------------------
not, and will not permit any of its Subsidiaries to, enter into, or
cause, suffer or permit to exist any arrangement or contract with any
of its other Affiliates unless such arrangement or contract is fair
and equitable to the Borrower or such Subsidiary and is an arrangement
or contract of the kind which would be entered into by a prudent
Person in the position of the Borrower or such Subsidiary with a
Person which is not one of its Affiliates.
SECTION 7.2.12. Negative Pledges, Restrictive Agreements, etc.
---------------------------------------------
The Borrower will not, and will not permit any of its Significant
Subsidiaries to, enter into any agreement (excluding this Agreement
and any other Loan Document) prohibiting
(a) the creation or assumption of any Lien in favor of
the Administrative Agent upon its Accounts and Inventory,
whether now owned or hereafter acquired or, except as provided
in the Indenture as in effect on the Effective Date, the ability
of the Borrower or any other Obligor to amend or otherwise modify
this Agreement or any other Loan Document; or
(b) except as provided in the financing arrangements
contemplated by Section 7.2.3, the ability of any Significant
-------------
Subsidiary to make any payments, directly or indirectly, to
the Borrower by way of dividends, or except as provided in the
Indenture as in effect on the Effective Date, advances,
repayments of loans or advances, reimbursements of management and
other intercompany charges, expenses and accruals or other
returns on investments, or any other agreement or arrangement
which restricts the ability of any such Significant Subsidiary to
make any payment, directly or indirectly, to the Borrower.
SECTION 7.2.13. Interest Rate Protection. The Borrower may
------------------------
arrange and continue in effect interest rate protection on
commercially standard terms and conditions so long as the
54
<PAGE>
Borrower's payment obligations thereunder do not continue beyond the
Stated Maturity Date.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the
----------------------------
following events or occurrences described in this Section 8.1 shall
constitute an "Event of Default" (unless waived pursuant to the
----------------
provisions of Section 10.1).
------------
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall
--------------------------
default in the payment or mandatory prepayment when due of any
principal of or interest on any Loan, or the Borrower shall default
(and such default shall continue unremedied for a period of five days)
in the payment when due of any commitment fee or of any other
Obligation.
SECTION 8.1.2. Breach of Warranty. Any representation or
------------------
warranty of the Borrower or any other Obligor made or deemed to be
made hereunder or in any other Loan Document executed by it or any
other writing or certificate furnished by or on behalf of the Borrower
or any other Obligor to any Agent or any Lender for the purposes of or
in connection with this Agreement or any such other Loan Document
(including any certificates delivered pursuant to Article V) is or
shall be incorrect when made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and
----------------------------------------
Obligations. The Borrower shall default in the due performance and
- -----------
observance of any of its obligations under Section 7.2.
-----------
SECTION 8.1.4. Non-Performance of Other Covenants and
--------------------------------------
Obligations. Any Obligor shall default in the due performance and
- -----------
observance of any other agreement contained herein or in any other
Loan Document executed by it, and such default shall continue
unremedied for a period of 30 days after notice thereof shall have
been given to the Borrower by the Administrative Agent or any Lender.
SECTION 8.1.5. Default on Other Indebtedness. A default shall
-----------------------------
occur in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Indebtedness
(other than Indebtedness described in Section 8.1.1) of the Borrower
-------------
or any of its Subsidiaries having a principal amount, individually or
in the aggregate, in excess of $5,000,000, or a default shall occur in
the performance or observance of any obligation or condition with
respect to such Indebtedness if the effect of such default is to
accelerate the maturity of any such
55
<PAGE>
Indebtedness or such default shall continue unremedied for any
applicable period of time sufficient to permit the holder or holders
of such Indebtedness, or any trustee or agent for such holders, to
cause such Indebtedness to become due and payable prior to its
expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment
---------
of money in excess of $5,000,000 shall be rendered against the
Borrower or any of its Subsidiaries and either
(a) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order; or
(b) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect.
SECTION 8.1.7. Pension Plans. Any of the following events shall
-------------
occur with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any
member of its Controlled Group or any other Person to
terminate a Pension Plan if, as a result of such termination,
the Borrower or any such member could be required to make a
contribution to such Pension Plan, or could reasonably expect to
incur a liability or obligation to such Pension Plan, in excess
of $5,000,000; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under section
302(f) of ERISA.
SECTION 8.1.8. Control of the Borrower. Any Change in Control
-----------------------
shall occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower, any
---------------------------
of its Subsidiaries or any Material Partnership shall
(a) become insolvent or generally fail to pay, or admit
in writing its inability or unwillingness to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or other
custodian for the Borrower, any of its Subsidiaries or any
Material Partnership or any property of any thereof, or make a
general assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a
56
<PAGE>
trustee, receiver, sequestrator or other custodian for the
Borrower, any of its Subsidiaries or any Material Partnership
or for a substantial part of the property of any thereof, and
such trustee, receiver, sequestrator or other custodian shall
not be discharged within 60 days, provided that the Borrower,
each Subsidiary and each Material Partnership hereby expressly
authorizes the Administrative Agent and each Lender to appear in
any court conducting any relevant proceeding during such 60-day
period to preserve, protect and defend their rights under the
Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect of
the Borrower, any of its Subsidiaries or any Material
Partnership, and, if any such case or proceeding is not commenced
by the Borrower, such Subsidiary or such Material Partnership,
such case or proceeding shall be consented to or acquiesced in by
the Borrower, such Subsidiary or such Material Partnership or
shall result in the entry of an order for relief or shall remain
for 60 days undismissed, provided that the Borrower, each
Subsidiary and each Material Partnership hereby expressly
authorizes the Administrative Agent and each Lender to appear in
any court conducting any such case or proceeding during such 60-
day period to preserve, protect and defend their rights under the
Loan Documents; or
(e) take any corporate action authorizing, or in
furtherance of, any of the foregoing.
SECTION 8.1.10. Impairment of Security, etc. Any Loan Document,
---------------------------
or any Lien granted thereunder, shall (except in accordance with its
terms), in whole or in part, terminate, cease to be effective or cease
to be the legally valid, binding and enforceable obligation of any
Obligor party thereto; the Borrower, any other Obligor or any other
party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or any Lien
securing any Obligation shall, in whole or in part, cease to be a
perfected first priority Lien.
SECTION 8.1.11. Environmental Matters. Any claims shall be made
---------------------
under any Environmental Laws that, singly or in the aggregate, have,
or may reasonably be expected to have, upon the final resolution
thereof a Material Adverse Effect, net of any reserves.
SECTION 8.2. Action if Bankruptcy. If any Event of Default
--------------------
described in clauses (a) through (d) of Section 8.1.9 shall occur, the
----------- --- -------------
Commitments (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all outstanding
57
<PAGE>
Loans and all other Obligations shall automatically be and become
immediately due and payable, without notice or demand.
SECTION 8.3. Action if Other Event of Default. If any Event of
--------------------------------
Default (other than any Event of Default described in clauses (a)
-----------
through (d) of Section 8.1.9) shall occur for any reason, whether
--- -------------
voluntary or involuntary, and be continuing, the Administrative Agent,
upon the direction of the Required Lenders, shall by notice to the
Borrower declare all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable and/or
the Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations
which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Commitments shall
terminate.
ARTICLE IX
THE AGENTS
SECTION 9.1. Actions. Each Lender hereby appoints First
-------
Interstate as its Administrative Agent under and for purposes of this
Agreement, the Notes and each other Loan Document; each Lender hereby
appoints Scotiabank as the Syndication Agent for the purposes of
syndicating the credit facilities provided hereunder; and each Lender
hereby appoints First Interstate and Scotiabank as its Managing Agents
under and for purposes of this Agreement. Each Lender authorizes the
Administrative Agent to act on behalf of such Lender under this
Agreement, the Notes and each other Loan Document and, in the absence
of other written instructions from the Required Lenders received from
time to time by the Administrative Agent (with respect to which the
Administrative Agent agrees that it will comply, except as otherwise
provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms
hereof and thereof, together with such powers as may be reasonably
incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document,
the Agents shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Agents have or be deemed to
have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agents. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this
Agreement) each Agent, pro rata according to such Lender's Percentage,
from and against any and all liabilities, obligations, losses,
damages, claims, costs or expenses of any kind or nature whatsoever
which
58
<PAGE>
may at any time be imposed on, incurred by, or asserted against, such
Agent in any way relating to or arising out of this Agreement, the
Notes and any other Loan Document, including reasonable attorneys'
fees, and as to which such Agent is not reimbursed by the Borrower;
provided, however, that no Lender shall be liable for the payment of
- -------- -------
any portion of such liabilities, obligations, losses, damages, claims,
costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from an
Agent's gross negligence or wilful misconduct. No Agent shall be
required to take any action hereunder, under the Notes or under any
other Loan Document, or to prosecute or defend any suit in respect of
this Agreement, the Notes or any other Loan Document, unless it is
indemnified hereunder to its satisfaction. If any indemnity in favor
of an Agent shall be or become, in such Agent's determination,
inadequate, such Agent may call for additional indemnification from
the Lenders and cease to do the acts indemnified against hereunder
until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative
---------------------
Agent shall have been notified by telephone, confirmed in writing, by
any Lender by 5:00 p.m., Portland time, on the day prior to a
Borrowing that such Lender will not make available the amount which
would constitute its Percentage of such Borrowing on the date
specified therefor, the Administrative Agent may assume that such
Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not
have made such amount available to the Administrative Agent, such
Lender shall repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from
the date the Administrative Agent made such amount available to the
Borrower to the date such amount is repaid to the Administrative
Agent, at the interest rate applicable at the time to Loans comprising
such Borrowing. If a Lender shall fail to repay the Administrative
Agent all amounts owing under the preceding sentence, the Borrower
shall forthwith on demand repay all such amounts together with
interest thereon through the date such amount is repaid to the
Administrative Agent.
SECTION 9.3. Exculpation. Neither any Agent nor any of its
-----------
respective directors, officers, employees or agents shall be liable to
any Lender for any action taken or omitted to be taken by it under
this Agreement or any other Loan Document, or in connection herewith
or therewith, except for its own wilful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the
creation, perfection or priority of any Liens purported to be created
by any of the Loan Documents, or the
59
<PAGE>
validity, genuineness, enforceability, existence, value or sufficiency
of any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any
other Loan Document. Any such inquiry which may be made by any Agent
shall not obligate it to make any further inquiry or to take any
action. Each Agent shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate,
statement or writing which such Agent believes to be genuine and to
have been presented by a proper Person.
SECTION 9.4. Successor. If any Agent shall be guilty of gross
---------
negligence or willful misconduct, the Required Lenders may, upon 10
days' prior written notice to the Borrower and such Agent, remove such
Agent. Any Agent may resign as such at any time upon at least 30
days' prior written notice to the Borrower and all Lenders. If any
Agent at any time shall resign or be removed, the Required Lenders may
appoint another Lender as a successor Agent which shall thereupon
become an Agent hereunder. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving written
notice of resignation or within 10 days after the Required Lenders
shall have delivered a removal notice, then the retiring or removed
Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be one of the Lenders or a commercial banking institution
organized under the laws of the U.S. (or any State thereof) or a U.S.
branch or agency of a commercial banking institution, and having a
combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as an Agent hereunder by a successor
Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such
successor Agent may reasonably request, and shall thereupon succeed to
and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations under this Agreement. After any retiring
Agent's resignation hereunder as an Agent, the provisions of
(a) this Article IX shall inure to its benefit as to any
----------
actions taken or omitted to be taken by it while it was an
Agent under this Agreement; and
(b) Section 10.3 and Section 10.4 shall continue to inure
------------ ------------
to its benefit.
SECTION 9.5. Loans by First Interstate and Scotiabank. First
----------------------------------------
Interstate and Scotiabank shall each have the same rights and powers
with respect to (x) the Loans made by each of them or any of their
Affiliates, and (y) the Notes held by each of them or any of their
Affiliates as any other Lender and may exercise the same as if they
were not an Agent. First Interstate and Scotiabank and
60
<PAGE>
their Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any
Subsidiary or Affiliate of the Borrower as if First Interstate and
Scotiabank were not Agents hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it
----------------
has, independently of the Agents and each other Lender, and based on
such Lender's review of the financial information of the Borrower,
this Agreement, the other Loan Documents (the terms and provisions of
which being satisfactory to such Lender) and such other documents,
information and investigations as such Lender has deemed appropriate,
made its own credit decision to extend its Commitments. Each Lender
also acknowledges that it will, independently of the Agents and each
other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to
make its own credit decisions as to exercising or not exercising from
time to time any rights and privileges available to it under this
Agreement or any other Loan Document.
SECTION 9.7. Copies, etc. The Administrative Agent shall give
-----------
prompt notice to each Lender of each notice or request required or
permitted to be given to the Administrative Agent by the Borrower
pursuant to the terms of this Agreement (unless concurrently delivered
to the Lenders by the Borrower). The Administrative Agent will
distribute to each Lender each document or instrument received for its
account and copies of all other communications received by the
Administrative Agent from the Borrower for distribution to the Lenders
by the Administrative Agent in accordance with the terms of this
Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this
------------------------
Agreement and of each other Loan Document (other than agreements
relating to the Hedging Obligations which may be amended, modified or
waived solely with the consent of the Borrower and Lender party
thereto) may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by
the Borrower and the Required Lenders; provided, however, that no such
-------- -------
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders
shall be effective unless consented to by each Lender;
61
<PAGE>
(b) modify this Section 10.1, change the definition of
------------
"Required Lenders", increase any Commitment Amount or the
----------------
Percentage of any Lender, reduce any fees described in Article
III or extend the date for any such fees, release all or
substantially all collateral security, release any Guarantor
or extend any Commitment Termination Date shall be made without
the consent of each Lender and each holder of a Note; provided,
--------
however that the release by the Lenders of their security
-------
interest in the Borrower's and Guarantor's Accounts in
connection with a Permitted Receivables Financing will
require the approval of only the Required Lenders;
(c) extend the due date for, or reduce the amount of,
any scheduled repayment or prepayment of principal of or
interest on any Loan (or reduce the principal amount of or
rate of interest on any Loan) shall be made without the
consent of the holder of that Note evidencing such Loan; or
(d) affect adversely the interests, rights or
obligations of any Agent qua an Agent shall be made without
---
consent of such Agent.
Notwithstanding the foregoing, the Administrative Agent shall not
release any collateral security unless it has received the prior
written consent of the Required Lenders except (i) for releases in
connection with the sale or transfer of collateral by an Obligor in
the ordinary course of its business or (ii) as provided in the
following sentence. The Lenders acknowledge and agree that unless an
Event of Default shall have occurred and be continuing, upon the
request of the Borrower, a Guarantor that is not a Significant
Subsidiary shall be released from its obligations under any Guaranty
or Security Agreement delivered by it. No failure or delay on the
part of any Agent, any Lender or the holder of any Note in exercising
any power or right under this Agreement or any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No
notice to or demand on the Borrower in any case shall entitle it to
any notice or demand in similar or other circumstances. No waiver or
approval by any Agent, any Lender or the holder of any Note under this
Agreement or any other Loan Document shall, except as may be otherwise
stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 10.2. Notices. All notices and other communications
-------
provided to any party hereto under this Agreement or any other Loan
Document shall be in writing or by facsimile and addressed,
delivered or transmitted to such party at its address, facsimile
number set forth below its signature hereto or set forth in the
62
<PAGE>
Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage
prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when received.
SECTION 10.3. Payment of Costs and Expenses. The Borrower
-----------------------------
agrees to pay on demand all expenses of the Agents (including the fees
and out-of-pocket expenses of counsel to the Agents and of local
counsel, if any, who may be retained by counsel to the Agents) in
connection with
(a) the negotiation, preparation, execution and delivery
of this Agreement and of each other Loan Document, including
schedules and exhibits, and any amendments, waivers, consents,
supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be
required, whether or not the transactions contemplated hereby
are consummated, and
(b) the filing, recording, refiling or rerecording of
the Security Agreement and/or any Uniform Commercial Code
financing statements relating thereto and all amendments,
supplements and modifications to any thereof and any and all
other documents or instruments of further assurance required
to be filed or recorded or refiled or rerecorded by the terms
hereof or the Security Agreement, and
(c) the preparation and review of the form of any
document or instrument relevant to this Agreement or any other
Loan Document.
The Borrower further agrees to pay, and to save the Agents and the
Lenders harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution or delivery of
this Agreement, the borrowings hereunder, or the issuance of the Notes
or any other Loan Documents. The Borrower also agrees to reimburse
the Agents and each Lender upon demand for all reasonable out-of-
pocket expenses (including attorneys' fees and legal expenses
(including all allocated costs of any Lender's in-house counsel))
incurred by the Agents or such Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not
consummated, of any Obligations and (y) the enforcement of any
Obligations (including, without limitation, any expenses incurred by
the Managing Agents, the Administrative Agent or any Lender pursuant
to the Intercreditor Agreement).
SECTION 10.4. Indemnification. In consideration of the
---------------
execution and delivery of this Agreement by each Lender and the
extension of the Commitments, the Borrower hereby indemnifies,
63
<PAGE>
exonerates and holds the Agents and each Lender and each of their
respective officers, directors, employees, agents and Affiliates
(collectively, the "Indemnified Parties") free and harmless from and
-------------------
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the
action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any
-----------------------
of them as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of any
Loan;
(b) the entering into and performance of this Agreement
and any other Loan Document by any of the Indemnified Parties
(including any action brought by or on behalf of the Borrower as
the result of any determination by the Required Lenders pursuant
to Article V not to fund any Borrowing);
---------
(c) any investigation, litigation or proceeding related
to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment or the Release by
the Borrower or any of its Subsidiaries of any Hazardous
Material; or
(d) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases
from, any real property owned or operated by the Borrower or any
Subsidiary thereof of any Hazardous Material (including any
losses, liabilities, damages, injuries, costs, expenses or claims
asserted or arising under any Environmental Law), regardless of
whether caused by, or within the control of, the Borrower or such
Subsidiary,
except for any such Indemnified Liabilities arising for the account of
a particular Indemnified Party by reason of the relevant Indemnified
Party's gross negligence or wilful misconduct. If and to the extent
that the foregoing undertaking may be unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which
is permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under
--------
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the
- ------------ --- --- --- ---- ----
Lenders under Section 9.1, shall in each case survive any termination
-----------
of this Agreement, the payment in full of all Obligations and the
termination of all Commitments. The representations and warranties
made by each Obligor in this
64
<PAGE>
Agreement and in each other Loan Document shall survive the execution
and delivery of this Agreement and each such other Loan Document.
SECTION 10.6. Severability. Any provision of this Agreement or
------------
any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions of this Agreement or
such Loan Document or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement
--------
and of each other Loan Document are inserted for convenience only and
shall not affect the meaning or interpretation of this Agreement or
such other Loan Document or any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc.
---------------------------------------------
This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be executed by the Borrower and the
Agents and be deemed to be an original and all of which shall
constitute together but one and the same agreement. This Agreement
shall become effective when counterparts hereof executed on behalf of
the Borrower and each Lender (or notice thereof satisfactory to the
Administrative Agent) shall have been received by the Administrative
Agent, notice thereof shall have been given by the Administrative
Agent to the Borrower and each Lender and the conditions set forth in
Section 5.1 have been satisfied.
- -----------
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT,
-------------------------------
THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK. This Agreement, the Notes and the other Loan Documents
constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto.
SECTION 10.10. Successors and Assigns. Except as herein
----------------------
provided, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
assigns; provided, however, that:
-------- -------
(a) the Borrower may not assign or transfer its rights
or obligations hereunder without the prior written consent of
the Administrative Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 10.11.
-------------
65
<PAGE>
SECTION 10.11. Sale and Transfer of Loans and Notes;
-------------------------------------
Participations in Loans and Notes. Each Lender may assign, or sell
- ---------------------------------
participations in, its Loans and Commitments to one or more other
Persons in accordance with this Section 10.11.
-------------
SECTION 10.11.1. Assignments. Any Lender,
-----------
(a) with the written consents of the Borrower and the
Administrative Agent (which consents shall not be unreasonably
delayed or withheld and which consent, in the case of the
Borrower, shall be deemed to have been given in the absence of a
written notice delivered by the Borrower to the Administrative
Agent, on or before the fifth Business Day after receipt by the
Borrower of such Lender's request for consent, stating, in
reasonable detail, the reasons why the Borrower proposes to
withhold such consent) may at any time assign and delegate to one
or more commercial banks or other financial institutions, and
(b) with notice to the Borrower and the Administrative
Agent, but without the consent of the Borrower or the
Administrative Agent, may assign and delegate to any of its
Affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the
Person to whom such assignment and delegation is to be made, being
hereinafter referred to as an "Assignee Lender"), all or any fraction
---------------
of such Lender's total Loans and Commitments (which assignment and
delegation shall be of a constant, and not a varying, percentage of
all the assigning Lender's Loans and Commitments) in a minimum
aggregate amount of $5,000,000; provided, however, that after giving
-------- -------
effect to such assignment, the assignor Lender's remaining aggregate
Commitment shall be at least $5,000,000; and provided, further, that,
-------- -------
the Borrower, each other Obligor and the Agents shall be entitled to
continue to deal solely and directly with such Lender in connection
with the interests so assigned and delegated to an Assignee Lender
until
(c) written notice of such assignment and delegation,
together with payment instructions, addresses and related
information with respect to such Assignee Lender, shall have
been given to the Borrower and the Administrative Agent by such
Lender and such Assignee Lender,
(d) such Assignee Lender shall have executed and
delivered to the Borrower and the Administrative Agent a
Lender Assignment Agreement, accepted by the Administrative
Agent, and
(e) the processing fees described below shall have been
paid.
66
<PAGE>
From and after the date that the Administrative Agent accepts such
Lender Assignment Agreement, (x) the Assignee Lender thereunder shall
be deemed automatically to have become a party hereto and to the
extent that rights and obligations hereunder have been assigned and
delegated to such Assignee Lender in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a
Lender hereunder and under the other Loan Documents, and (y) the
assignor Lender, to the extent that rights and obligations hereunder
have been assigned and delegated by it in connection with such Lender
Assignment Agreement, shall be released from its obligations hereunder
and under the other Loan Documents. Within five Business Days after
its receipt of notice that the Administrative Agent has received an
executed Lender Assignment Agreement, the Borrower shall execute and
deliver to the Administrative Agent (for delivery to the relevant
Assignee Lender) new Notes evidencing such Assignee Lender's assigned
Loans and Commitments and, if the assignor Lender has retained Loans
and Commitments hereunder, replacement Notes in the principal amount
of the Loans and Commitments retained by the assignor Lender hereunder
(such Notes to be in exchange for, but not in payment of, those Notes
then held by such assignor Lender). Each such Note shall be dated the
date of the predecessor Notes. The assignor Lender shall mark the
predecessor Notes "exchanged" and deliver them to the Borrower.
Accrued interest on that part of the predecessor Notes evidenced by
the new Notes, and accrued fees, shall be paid as provided in the
Lender Assignment Agreement. Accrued interest on that part of the
predecessor Notes evidenced by the replacement Notes shall be paid to
the assignor Lender. Accrued interest and accrued fees shall be paid
at the same time or times provided in the predecessor Notes and in
this Agreement. Such assignor Lender or such Assignee Lender must
also pay a processing fee to the Administrative Agent upon delivery of
any Lender Assignment Agreement in the amount of $2,500. Any
attempted assignment and delegation not made in accordance with this
Section 10.11.1 shall be null and void. In addition to the foregoing,
- ---------------
and notwithstanding any other provision hereof, any Lender may at any
time assign any or all of its rights hereunder or its Notes to any
Federal Reserve Bank.
SECTION 10.11.2. Participations. Any Lender may at any time
--------------
sell to one or more commercial banks or other Persons (each of such
commercial banks and other Persons being herein called a
"Participant") participating interests in any of the Loans,
-----------
Commitments, or other interests of such Lender hereunder; provided,
--------
however, that
- -------
(a) no participation contemplated in this Section 10.11
-------------
shall relieve such Lender from its Commitments or its other
obligations hereunder or under any other Loan Document,
67
<PAGE>
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations,
(c) the Borrower and each other Obligor and the Agents
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and each of the other Loan Documents,
(d) no Participant, unless such Participant is an
Affiliate of such Lender, or is itself a Lender, shall be
entitled to require such Lender to take or refrain from taking
any action hereunder or under any other Loan Document, except
that such Lender may agree with any Participant that such Lender
will not, without such Participant's consent, take any actions of
the type described in clause (b) or (c) of Section 10.1, and
---------- --- ------------
(e) the Borrower shall not be required to pay any amount
under Section 4.6 that is greater than the amount which it would
-----------
have been required to pay had no participating interest been
sold.
The Borrower acknowledges and agrees that each Participant, for
purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4,
------------ --- --- --- --- --- ---- ----
shall be considered a Lender.
SECTION 10.12. Confidentiality. The Lenders shall hold all
---------------
non-public information (which has been identified as such by the
Borrower) obtained pursuant to the requirements of this Agreement in
accordance with their customary procedures for handling confidential
information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure to any of their
employees, examiners, Affiliates, outside auditors, counsel and other
professional advisors in connection with this Agreement or as
reasonably required by any bona fide transferee, participant or
---- ----
assignee or as required or requested by any governmental agency or
representative thereof or pursuant to legal process; provided,
--------
however, that
- -------
(a) unless prohibited by applicable law or court order,
each Lender shall notify the Borrower of any request by any
governmental agency or representative thereof (other than any
such request in connection with an examination of the financial
condition of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure
of such information;
(b) prior to any such disclosure pursuant to this
Section 10.12, each Lender shall require any such bona fide
-------------
transferee, participant and assignee receiving a disclosure of
non-public information to agree in writing
68
(i) to be bound by this Section 10.12;
-------------
(ii) to require such Person to require any other Person
to whom such Person discloses such non-public information to
be similarly bound by this Section 10.12; and
-------------
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no
Lender shall be obligated or required to return any materials
furnished by the Borrower or any Subsidiary.
SECTION 10.13. Other Transactions. Nothing contained herein
------------------
shall preclude any Agent or any other Lender from engaging in any
transaction, in addition to those contemplated by this Agreement or
any other Loan Document, with the Borrower or any of its Affiliates in
which the Borrower or such Affiliate is not restricted hereby from
engaging with any other Person.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE AGENTS, THE LENDERS OR THE BORROWER SHALL BE BROUGHT
AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
-------- -------
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION
AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT
MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR
ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
69
<PAGE>
SECTION 10.15. Waiver of Jury Trial. THE AGENTS, THE LENDERS
--------------------
AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE AGENTS, THE LENDERS OR THE BORROWER. THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS
A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS
AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 10.16. Amendment and Restatement of Original Credit
--------------------------------------------
Agreement. This Agreement amends and restates the Original Credit
- ---------
Agreement in its entirety. By their execution hereof, each of the
Lenders approve and consent to the terms of the Intercreditor
Agreement attached hereto as Exhibit K and the Certificate and
---------
Agreement attached hereto as Exhibit L, and authorize the Managing
---------
Agents to execute such agreements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
OREGON STEEL MILLS, INC.
By:
-------------------------------
Title: Corporate Controller
Address: P.O. Box 5368
Portland, Oregon 97228
Facsimile No.: (503) 240-5232
Attention: Mr. Christopher D. Cassard
Corporate Controller
70
<PAGE>
FIRST INTERSTATE BANK OF OREGON, N.A.,
as Administrative Agent and Managing
Agent
By:
------------------------------------
Title:
-----------------------------
Address: 1300 S.W. Fifth Avenue, T19
Portland, Oregon 97201
Facsimile No.: (503) 220-4896
Attention: Patrik Norris
THE BANK OF NOVA SCOTIA, as Syndication
Agent and Managing Agent
By:
------------------------------------
Title:
------------------------------
Address: 888 S.W. Fifth Avenue
Suite 750
Portland, Oregon 97204
Facsimile No.: (503) 222-5502
Attention: Daryl Hogge
71
<PAGE>
PERCENTAGE LENDERS
---------- -------
18% FIRST INTERSTATE BANK OF OREGON, N.A.
By:
-----------------------------------
Title:
-----------------------------
Domestic
Office: 1300 S.W. Fifth Avenue, T19
Portland, Oregon 97201
Facsimile No.: (503) 220-4896
Attention: Patrik Norris
LIBOR
Office: 1300 S.W. Fifth Avenue, T19
Portland, Oregon 97201
Facsimile No.: (503) 220-4896
Attention: Patrik Norris
72
<PAGE>
18% THE BANK OF NOVA SCOTIA
By:
-----------------------------------
Title:
-----------------------------
Domestic
Office: 888 S.W. Fifth Avenue,
Suite 750
Portland, Oregon 97204
Facsimile No.: (503) 222-5502
Attention: Daryl Hogge
LIBOR
Office: 888 S. W. Fifth Avenue
Suite 750
Portland, Oregon 97204
Facsimile No.: (503) 222-5502
Attention: Daryl Hogge
73
<PAGE>
12% UNITED STATES NATIONAL BANK OF OREGON
By:
-----------------------------------
Title:
-----------------------------
Office: 555 S.W. 5th Ave., PL-7
Portland, OR 97204
Facsimile No.: (503) 275-4600
Attention: Loretta Frazier
LIBOR
Office: 555 S.W. 5th Ave., PL-7
Portland, OR 97204
Facsimile No.: (503) 275-4600
Attention: Loretta Frazier
74
<PAGE>
12% KEY BANK OF WASHINGTON
By:
-----------------------------------
Title:
-------------------------------
Domestic
Office: 700 Fifth Avenue, 48th Floor
Seattle, Washington 98104
Facsimile No.: (206) 684-6035
Attention: John Brock
LIBOR
Office: 17900 Pacific Highway South
Suite 301
Seattle, Washington 98188
Facsimile No.: (800) 297-5495
Attention: Vickie Heineck
75
<PAGE>
12% THE FIRST NATIONAL BANK OF CHICAGO
By:
----------------------------------
Title: Senior Vice President
---------------------
Domestic
Office: One First National Plaza
14th Floor, Suite 0364
Chicago, IL 60670
Facsimile No.: (312) 732-1117
Attention: L.G. Beube
LIBOR
Office: One First National Plaza
10th Floor, Suite 0634
Chicago, Illinois 60670
Facsimile No.: (312) 732-4840
Attention: Sharon Bosch
76
<PAGE>
8% THE BANK OF TOKYO - MITSUBISHI LTD.,
PORTLAND BRANCH
By:
-----------------------------------
Title:
-----------------------------
Domestic
Office: 2300 Pacwest Center
1211 S.W. Fifth Avenue
Portland, Oregon 97204
Facsimile No.: (503) 227-5372
Attention: Mr. Hiro Nakazawa
LIBOR
Office: 2300 Pacwest Center
1211 S.W. Fifth Avenue
Portland, Oregon 97204
Facsimile No.: (503) 227-5372
Attention: Mr. Hiro Nakazawa
77
<PAGE>
8% PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------------
Title:
---------------------------
Domestic
Office: 249 Fifth Avenue
PI-POPP-02-2
Pittsburgh, PA 15222
Facsimile No.: (412) 762-8746
Attention: Denise Simeone
LIBOR
Office: 249 Fifth Avenue
PI-POPP-02-2
Pittsburgh, PA 15222
Facsimile No.: (412) 762-8746
Attention: Denise Simeone
78
<PAGE>
8% NATIONSBANK OF TEXAS, N.A.
By:
-----------------------------------
Title:
-----------------------------
Domestic
Office: 901 Main Street
Dallas, Texas 75202
Facsimile No.: (214) 508-0944
Attention: Kay Hibbs
LIBOR
Office: 901 Main Street
Dallas, Texas 75202
Facsimile No.: (214) 508-0944
Attention: Kay Hibbs
79
<PAGE>
4% UNION BANK OF CALIFORNIA, N.A.
By:
------------------------------------
Title:
------------------------------
Domestic
Office: 400 California Street
17th Floor
San Francisco, CA 94104
Facsimile No.: (415) 765-3146
Attention: Norma Sarto
LIBOR
Office: 400 California Street
17th Floor
San Francisco, CA 94104
Facsimile No.: (415) 765-3146
Attention: Norma Sarto
80
<PAGE>
SCHEDULES AND EXHIBITS. (Intentionally omitted. The Registrant will
furnish supplementally a copy of these schedules and exhibits to the
Commission upon request.)
81
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 43825
<ALLOWANCES> 504
<INVENTORY> 63270
<CURRENT-ASSETS> 107998
<PP&E> 243144
<DEPRECIATION> 16252
<TOTAL-ASSETS> 385583
<CURRENT-LIABILITIES> 73386
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19425
<TOTAL-LIABILITY-AND-EQUITY> 385583
<SALES> 202520
<TOTAL-REVENUES> 202520
<CGS> 183251
<TOTAL-COSTS> 183251
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9961
<INCOME-PRETAX> 370
<INCOME-TAX> 0
<INCOME-CONTINUING> 370
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 370
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
