<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): AUGUST 31, 1998
THE DOE RUN RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 333-52285 13-1255630
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1801 PARK 270 DRIVE, ST. LOUIS, MISSOURI 63146
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 453-7100
(Former name or former address, if changed since last report.)
================================================================================
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
ACQUISITION OF THE ASARCO MLD
On September 1, 1998, The Doe Run Resources Corporation ("Doe Run")
consummated the acquisition (the "ASARCO MLD Acquisition") of certain assets
relating to the ASARCO Incorporated ("ASARCO") Missouri Lead Division (the
"ASARCO MLD") , including a smelter and refinery and two mines (the "ASARCO
MLD Assets"). The ASARCO MLD Assets were used by the ASARCO MLD in
connection with the production of lead, and Doe Run intends to continue such
use. The purchase price payable at closing for the ASARCO MLD Assets, based
upon inventories at July 31, 1998, was approximately $55.8 million, plus
contingent deferred payments, if any. An adjustment to the purchase price
based upon inventories at the closing date is expected to result in a
reduction of approximately $1.9 million to the purchase price. See Doe Run's
Registration Statement on Form S-4 (File No. 333-52285) (the "Registration
Statement") under the caption "Business--Potential Acquisition of ASARCO's
Missouri Lead Division" for more information regarding this acquisition.
Doe Run financed the purchase price of the ASARCO MLD Assets primarily
through an offering (the "Offering") of $50.0 million aggregate principal
amount of 11 1/4% Senior Secured Notes due 2005 (the "New Notes"). The New
Notes have substantially the same payment terms, maturity date, optional
redemption provisions, change of control provisions and covenants as Doe
Run's 11 1/4% Senior Notes due 2005 (the "Fixed Rate Notes"). The New Notes are
expected to be secured by a first priority lien on substantially all the
property, plant and equipment of the ASARCO MLD (other than inventory,
accounts receivable or other current assets and intangibles of the ASARCO
MLD). The New Notes are fully and unconditionally guaranteed by the following
subsidiaries of Doe Run, Fabricated Products, Inc. ("FPI"), Doe Run Cayman
Ltd., Doe Run Mining S.R.L., Doe Run Peru S.R.L. ("Doe Run Peru"), Doe Run Air
S.A.C. ("Doe Run Air") and Doe Run Development S.A.C. ("Doe Run Development"
and collectively, the "Guarantors"). The net proceeds of the Offering were
$43.4 million. The balance of the purchase price was financed with borrowings
under Doe Run's revolving credit facility.
ACQUISITION OF COBRIZA
On August 31, 1998, Doe Run Peru completed the acquisition of the
capital stock of Empresa Minera Cobriza S.A., a Peruvian corporation
("Cobriza"), which owned a mine and related assets. The Cobriza assets were
used by Cobriza in connection with the production of copper concerntrates,
and Doe Run Peru intends to continue such use. The purchase price for the
capital stock of Cobriza was $7.5 million, $3.0 million of which was paid at
closing with proceeds of borrowings under Doe Run Peru's revolving credit
facility and the balance of which is payable in equal annual installments
over three years. See the Registration Statement under the caption
"Prospectus Summary--Recent Transactions and Events--Potential Acquisitions"
for more information regarding this acquisition.
ITEM 5. OTHER.
Doe Run and FPI entered into Amendment No. 1 to Loan and Security
Agreement, dated September 1, 1998, with Congress Financial Corporation which
amended the $100.0 million revolving credit facility to (as amended, the "New
Doe Run Revolving Credit Facility"), among other things, permit the issuance of
the New Notes and the liens on the ASARCO MLD Assets securing the New Notes.
Doe Run, the Guarantors and State Street Bank and Trust Company entered
into the First Supplemental Indenture, dated as of September 1, 1998, to
Indenture, dated as of March 12, 1998, to which added Doe Run Air and Doe Run
Development as guarantors of Doe Run's Fixed Rate Notes and Floating Interest
Rate Senior Notes due 2003.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial statements of business acquired
In addition to the financial statements set forth in the Registration
Statement, set forth below with respect to the ASARCO Incorporated Missouri
Lead Division are the following financial statements as of and for the
periods indicated:
(1) Report of Independent Accountants
(2) Condensed Statements of Operations for the six months ended June 30,
1997 and 1998
(3) Condensed Balance Sheets as of June 30, 1997 and 1998
(4) Condensed Statements of Cash Flows for the six months ended June 30,
1997 and 1998
(5) Notes to Condensed Financial Statements
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
ASARCO Incorporated
We have reviewed the accompanying interim condensed balance sheet of the
Missouri Lead Division as of June 30, 1998 and the related interim condensed
statements of operations and cash flows for the six month period ended June 30,
1998 and 1997. These interim condensed consolidated financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying interim condensed consolidated financial statements
for them to be in conformity with generally accepted accounting principles.
PricewaterhouseCoopers LLP
New York, New York
August 19, 1998
3
<PAGE>
MISSOURI LEAD DIVISION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
Revenues.................................................................................... $ 37,904 $ 44,178
--------- ---------
Cost of sales............................................................................... 31,193 34,661
General and administrative.................................................................. 2,148 2,472
Depreciation and depletion.................................................................. 4,374 3,997
Research.................................................................................... 138 174
--------- ---------
Operating expenses.......................................................................... 37,853 41,304
--------- ---------
Earnings before income taxes................................................................ 51 2,874
Income tax expense.......................................................................... 19 143
--------- ---------
Net earnings................................................................................ $ 32 $ 2,731
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
MISSOURI LEAD DIVISION
CONDENSED BALANCE SHEETS
(UNAUDITED)
AS OF JUNE 30,
(IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Cash.................................................................................... $ 62 $ 44
Receivables, net of allowance for doubtful accounts of $150 for 1998 and 1997........... 8,482 12,712
Metal inventories....................................................................... 3,887 5,967
Supply inventories...................................................................... 5,569 5,939
Other current assets.................................................................... 199 316
----------- -----------
Current assets........................................................................ 18,199 24,978
----------- -----------
Mineral land............................................................................ 30,542 30,515
Buildings............................................................................... 37,320 35,249
Machinery & equipment................................................................... 87,647 84,622
----------- -----------
Total cost.............................................................................. 155,509 150,386
Accumulated depreciation and depletion.................................................. (93,754) (85,550)
----------- -----------
Property, net......................................................................... 61,755 64,836
----------- -----------
Total assets.......................................................................... $ 79,954 $ 89,814
----------- -----------
----------- -----------
Accounts payable and accrued expenses................................................... $ 4,653 $ 7,053
Salaries and wages accrued.............................................................. 653 322
Reserve for workers compensation........................................................ 1,432 1,469
Other current liabilities............................................................... 1,051 1,393
----------- -----------
Current liabilities................................................................... 7,789 10,237
Reclamation reserve..................................................................... 808 267
Other non-current liabilities........................................................... 8 --
Deferred income taxes................................................................... 7,946 8,395
----------- -----------
Total liabilities..................................................................... 16,551 18,899
Divisional equity..................................................................... 63,403 70,915
----------- -----------
Total liabilities and divisional equity............................................... $ 79,954 $ 89,814
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
MISSOURI LEAD DIVISION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997
--------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net Earnings................................................................................ $ 32 $ 2,731
Adjustments to reconcile net earnings to net cash provided from operating activities:
Deferred income taxes..................................................................... (281) (846)
Depreciation and depletion................................................................ 4,374 3,997
Cash provided from operating assets and liabilities:
Accounts receivable..................................................................... 932 4,255
Accounts payable and accrued expenses................................................... (1,323) (284)
Salaries and wages accrued.............................................................. (443) (594)
Inventories............................................................................. 1,743 2,370
Other assets and liabilities............................................................ 509 674
--------- ----------
Net cash provided from operating activities................................................. 5,543 12,303
INVESTING ACTIVITIES
Capital expenditures........................................................................ (1,209) (1,856)
--------- ----------
Net cash used for investing activities...................................................... (1,209) (1,856)
FINANCING ACTIVITIES
Net distributions to Asarco................................................................. (4,504) (10,495)
--------- ----------
Net cash used for financing activities...................................................... (4,504) (10,495)
Decrease in cash............................................................................ (170) (48)
Cash at beginning of the period............................................................. 232 92
--------- ----------
Cash at end of the period................................................................... $ 62 $ 44
--------- ----------
--------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
MISSOURI LEAD DIVISION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
A.
The Missouri Lead Division ("the Company") is an unincorporated division of
Asarco Incorporated ("Asarco"). The financial statements reflect the financial
position, results of operations, and cash flows of the Company as if it were a
separate entity for all periods presented. The financial statements include
allocations of certain Asarco corporate headquarters expenses (including cash
management, legal, accounting, tax, employee benefits, insurance services, data
services and other Asarco corporate overhead). Management believes these
allocations are reasonable. However, the costs of these services and benefits
charged to the Company are not necessarily indicative of the costs that would
have been incurred if the Company had performed or provided these functions as a
separate entity. The accompanying condensed financial statements should be read
in conjunction with the Company's annual financial statements as of December 31,
1997 and 1996 and for the three year periods ended December 31, 1997 included
in the Registration Statement on Form S-4 (File No. 333-52285) filed by The
Doe Run Resources Corporation and certain of its subsidiaries with the
Securities and Exchange Commission.
The financial information included herein may not necessarily reflect the
results of operations, financial position and cash flows of the Company in the
future or what they would have been had it been a separate stand-alone entity
during the periods presented.
B.
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the Company's
financial position as of June 30, 1998 and 1997 and the results of operations
and cash flows for the six months ended June 30, 1998 and 1997. This financial
data has been subjected to a review by PricewaterhouseCoopers LLP, the Company's
independent accountants. The results of operations for the six month period are
not necessarily indicative of the results to be expected for the full year.
C. FINANCIAL INSTRUMENTS:
The Company may use derivative instruments to manage its exposure to market
risk from changes in commodity prices or the value of its assets and
liabilities. Derivative instruments which are designated as hedges must be
deemed effective at reducing the risk associated with the exposure being hedged
and must be designated as a hedge at the inception of the contract. Gains and
losses on such instruments are reported as a component of the underlying
transaction. The Company had no hedging contracts outstanding during the six
months ended June 30, 1998 or 1997. At June 30, 1998, the Company's financial
instruments also include cash, receivables and accounts payable. At June 30,
1998 the fair value of cash, receivables and accounts payable approximates
carrying values because of the short-term nature of these instruments.
D. INCOME TAXES:
Total taxes paid by Asarco and charged to the Company were $300 and $989 for
the six months ended June 30, 1998 and 1997, respectively. Income tax expense in
1997 includes a tax benefit for percentage depletion arising from the Company's
mine earnings.
7
<PAGE>
MISSOURI LEAD DIVISION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)
(DOLLARS IN THOUSANDS)
E. CONTINGENCIES AND LITIGATION:
The operations of the Company are subject to stringent federal, state and
local laws and regulations, including those relating to improving or maintaining
environmental quality and those relating to plant and mine safety and health
conditions. Although the Company believes that it is currently in substantial
compliance with material laws and regulations, it is possible that substantial
additional expenditures in the future may be required to comply with such
legislation and regulations. In light of the frequent changes in such laws and
regulations and the uncertainty inherent in this area, the Company is unable to
estimate accurately the total amount of future expenditures.
The Company is involved in pending litigation in the ordinary course of its
business. It is the opinion of management that the outcome of the legal
proceedings and environmental contingencies mentioned, will not materially
adversely affect the financial position of the Company. However, it is possible
that litigation and environmental contingencies could have a material effect on
quarterly or annual operating results, when they are resolved in future periods.
This opinion is based on considerations including experience related to previous
court judgments and settlements and remediation costs and terms.
F.
On July 28, 1998, Asarco entered into an asset purchase and sales agreement,
pursuant to which Asarco will sell certain assets to The Doe Run Resources
Corporation, a subsidiary of The Renco Group, Inc., which is expected to close
in the third quarter. The assets to be sold include the lead smelter and
refinery and two mines and associated equipment.
8
<PAGE>
(b) Pro forma financial information
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma balance sheet data has been prepared to
give effect to the ASARCO MLD Acquisition and the Offering as if they had
occurred on April 30, 1998. The following unaudited pro forma consolidated
statement of operations and other data has been prepared to give effect to: (i)
the acquisition by Doe Run Peru of Metaloroya (the "Acquisition") from
Centromin, a Peruvian government-owned conglomerate, as part of the ongoing
privatization program sponsored by the government of Peru; (ii) Doe Run's
offering of its 11 1/4% Senior Notes due 2005 and Floating Interest Rate Senior
Notes due 2003 (the "Existing Notes") and the use of the proceeds thereof (the
"Transactions"); (iii) the ASARCO MLD Acquisition; and (iv) the Offering. The
unaudited pro forma consolidated statement of operations and other data for the
year ended October 31, 1997 give effect to the Acquisition, the Transactions,
the ASARCO MLD Acquisition and the Offering and for the six months ended April
30, 1998 give effect to the Transactions, the ASARCO MLD Acquisition and the
Offering as if they had occurred on November 1, 1996.
The pro forma adjustments are based upon available information and certain
assumptions that the Company believes are reasonable under the circumstances.
Pro forma adjustments are applied to account for the Acquisition and the ASARCO
MLD Acquisition under the purchase method of accounting. Under the purchase
method of accounting, the total purchase price was allocated to Doe Run Peru's
or the ASARCO MLD's, as the case may be, assets and liabilities based on their
relative fair values. The purchase price for the ASARCO MLD is approximately
$54.5 million payable at closing, plus contingent deferred payments, if any.
Such deferred payments are contingent upon prevailing London Metal Exchange
("LME") lead prices during the five-year period subsequent to the ASARCO MLD
Acquisition. Specifically, Doe Run's obligations under the deferred purchase
price arrangement are determined annually and are only due if the annual LME
spot lead price exceeds $.285 per pound, with such payments not to exceed $12.5
million in the aggregate.
The pro forma consolidated financial information has been prepared in
accordance with U.S. GAAP and should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," the
audited financial statements of Doe Run, Doe Run Peru's Predecessor and the
ASARCO MLD, and the notes thereto, and the other financial information included
in the Registration Statement. The unaudited pro forma consolidated financial
data do not purport to be indicative of the results which would have actually
been obtained had the Acquisition, the Transactions, the ASARCO MLD Acquisition
and the Offering been consummated on the dates indicated or which may be
expected to occur in the future.
9
<PAGE>
THE DOE RUN RESOURCES CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
APRIL 30, 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE ASARCO
MLD
ACQUISITION
AND THE
HISTORICAL OFFERING(A) PRO FORMA
---------- -------------- -------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash.............................................................. $ 12,142 $ -- $ 12,142
Trade accounts receivable, net of allowance for doubtful
accounts........................................................ 66,927 -- 66,927
Inventories....................................................... 100,867 8,925 109,792
Prepaid expenses and other current assets......................... 29,793 250 29,793
---------- ------- -------------
Total current assets............................................ 209,479 9,750 219,229
Property, plant and equipment, net.................................. 205,867 46,233 252,100
Special term deposit................................................ 125,000 -- 125,000
Net deferred tax assets............................................. 9,145 -- 9,145
Other noncurrent assets, net........................................ 17,387 1,500 18,887
---------- ------- -------------
Total assets.................................................... $ 566,878 $ 56,908 $ 623,786
---------- ------- -------------
---------- ------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current maturities of long-term debt...... $ 5,895 $ -- $ 5,895
Accounts payable.................................................... 50,725 -- 50,725
Accrued liabilities................................................. 42,783 727 43,510
Net deferred tax liabilities........................................ 9,467 -- 9,467
---------- ------- -------------
Total current liabilities......................................... 108,870 727 109,597
Long-term debt, less current maturities............................... 384,681 55,675 440,356
Postretirement benefits............................................... 12,608 -- 12,608
Reclamation and environmental costs................................... 31,085 506 31,591
Other noncurrent liabilities.......................................... 13,758 -- 13,758
---------- ------- -------------
Total liabilities................................................. 551,002 56,908 607,910
Shareholders' equity:
Common stock, $.10 par value, 1,000 shares authorized, issued, and
outstanding....................................................... -- -- --
Additional paid in capital.......................................... 5,000 -- 5,000
Retained earnings................................................... 10,876 -- 10,876
---------- ------- -------------
Total shareholders' equity........................................ 15,876 -- 15,876
---------- ------- -------------
Total liabilities and shareholders' equity........................ $ 566,878 $ 56,908 $ 623,786
---------- ------- -------------
---------- ------- -------------
</TABLE>
10
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
APRIL 30, 1998
(a) Represents the estimated purchase price allocation related to the ASARCO MLD
Acquisition and the Offering.
11
<PAGE>
THE DOE RUN RESOURCES CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
HISTORICAL ASARCO MLD
------------------------ ADJUSTMENTS ACQUISITION
THE ASARCO FOR THE AND THE
COMPANY MLD(A) TRANSACTIONS OFFERING PRO FORMA
------------- --------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Net sales....................................... $ 343,405 $ 37,904 $ -- $ -- $ 381,309
Costs and expenses:
Cost of sales................................. 283,105 31,193 -- (639)(d) 313,659
Depletion, depreciation and amortization...... 11,461 4,374 -- (1,126)(e) 14,709
Selling, general and administrative
expenses.................................... 17,700 2,286 -- -- 19,986
Exploration expense........................... 1,599 -- -- -- 1,599
------------- --------- ------------ ----------- -----------
Total costs and expenses.................... 313,865 37,853 -- (1,765) 349,953
------------- --------- ------------ ----------- -----------
Income from operations...................... 29,540 51 -- 1,765 31,356
Other income (expense):
Interest expense.............................. (14,505) -- (8,278)(b) (3,849)(f) (26,632)
Interest income............................... 2,359 -- -- -- 2,359
Other, net.................................... (635) -- -- -- (635)
------------- --------- ------------ ----------- -----------
(12,781) -- (8,278) (3,849) (24,908)
Income before income taxes and extraordinary
item...................................... 16,759 51 (8,278) (2,084) 6,448
Income tax expense (benefit).................... 5,761 19 (2,897)(c) (731)(c) 2,152
------------- --------- ------------ ----------- -----------
Income (loss) before extraordinary item..... $ 10,998 $ 32 $ (5,381) $ (1,353) $ 4,296
------------- --------- ------------ ----------- -----------
------------- --------- ------------ ----------- -----------
Other data:
EBITDA(g)................................... $ 45,430
</TABLE>
------------------------
In addition to the pro forma adjustments directly attributable to the ASARCO
MLD Acquisition set forth above, the effect of the elimination of ASARCO
corporate overhead allocations, which would have decreased selling, general and
administrative expenses by $1.9 million for the six months ended April 30, 1998,
should be considered.
12
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998
(a) Represents the historical results of operations of the ASARCO MLD for the
period January 1, 1998 to June 30, 1998.
(b) Pro forma interest expense reflects the elimination of historical interest
expense due to the retirement of substantially all of the existing debt
obligations. Interest expense, as adjusted, includes interest of $14.6
million on the Existing Notes, interest on the Back-to-Back Loan of $7.2
million and amortization of debt issuance costs totaling $1.0 million. The
pro forma consolidated statement of operations does not reflect interest
income on the Special Term Deposit of $7.0 million.
(c) Reflects the income tax effect of pro forma adjustments at, and adjusts the
ASARCO MLD tax provision to, an assumed statutory tax rate of 35%.
(d) Represents the difference between the salaries, wages and benefits reflected
in the historical results of operations of the ASARCO MLD and those that
would have been expensed under Doe Run's programs, into which substantially
all of the employees of the ASARCO MLD will be enrolled pursuant to the
Asset Purchase Agreement, as a condition of the ASARCO MLD Acquisition.
(e) Reflects the decrease in depreciation based upon allocating the effective
purchase price to the fair value of the assets to be purchased in the ASARCO
MLD Acquisition.
(f) Reflects incremental interest at 11.25% on $50.0 million aggregate principal
amount of Notes issued to finance the ASARCO MLD Acquisition of $2.8
million, incremental interest interest on loans of $11.0 million under the
New Doe Run Revolving Credit Facility of $.5 million, amortization of
original issue discount on the Notes of $.4 million and amortization of
related financing costs of $.2 million.
(g) EBITDA is defined as net income (loss) before extraordinary item plus the
sum of net interest expense, income taxes and depletion, depreciation and
amortization. The trends of EBITDA generally follow the trends of operating
income. Information regarding EBITDA is presented because management
believes that certain investors use EBITDA as one measure of an issuer's
ability to service its debt. EBITDA should not be considered an alternative
to, or more meaningful than, operating income or cash flow as an indicator
of an issuer's operating performance. EBITDA is not necessarily a measure of
the funds available for debt service because such funds could be used to
fund operating requirements or other expenditures required by the Company's
business instead of debt service. Furthermore, caution should be used in
comparing EBITDA to similarly titled measures of other companies as the
definitions of these measures may vary.
13
<PAGE>
THE DOE RUN RESOURCES CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
HISTORICAL ASARCO
----------------------------------------- MLD
DOE RUN ADJUSTMENTS ADJUSTMENTS ACQUISITION
THE PERU'S ASARCO FOR THE FOR THE AND THE
COMPANY PREDECESSOR(A) MLD(B) ACQUISITION TRANSACTIONS OFFERING
----------- --------------- ----------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales.................................. $ 280,467 $ 429,313 $ 85,308 $ -- $ -- $ --
Costs and expenses:
Cost of sales............................ 234,351 364,901 68,429 -- -- (1,562)(g)
Depletion, depreciation and amortization. 14,718 5,623 8,209 1,119(c) -- (1,712)(h)
Selling, general and administrative
expenses............................... 10,959 18,524 4,954 -- -- --
Exploration expense...................... 2,705 -- -- -- -- --
----------- --------------- ----------- ------------- ------------ -----------
Total costs and expenses............... 262,733 389,048 81,592 1,119 -- (3,274)
----------- --------------- ----------- ------------- ------------ -----------
Income from operations................. 17,734 40,265 3,716 (1,119) -- 3,274
Other income (expense):
Interest expense......................... (13,740) (1,211) -- -- (30,798)(e) (7,698)(i)
Interest income.......................... 21 -- -- -- -- --
Other, net............................... (37) (863) -- -- -- --
----------- --------------- ----------- ------------- ------------ -----------
(13,756) (2,074) -- -- (30,798) (7,698)
Income before income taxes and
extraordinary item................... 3,978 38,191 3,716 (1,119) (30,798) (4,424)
Income tax expense (benefit)............... 4,331 11,513 (168) 1,518(d) (10,779)(f) (80)(j)
----------- --------------- ----------- ------------- ------------ -----------
Income (loss) before extraordinary item $ (353) $ 26,678 $ 3,884 $ (2,637) $ (20,019) $ (4,344)
----------- --------------- ----------- ------------- ------------ -----------
----------- --------------- ----------- ------------- ------------ -----------
EBITDA(k)................................
<CAPTION>
PRO FORMA
-----------
<S> <C>
Net sales.................................. $ 795,088
Costs and expenses:
Cost of sales............................ 666,119
Depletion, depreciation and amortization. 27,957
Selling, general and administrative
expenses............................... 34,437
Exploration expense...................... 2,705
-----------
Total costs and expenses............... 731,218
-----------
Income from operations................. 63,870
Other income (expense):
Interest expense......................... (53,447)
Interest income.......................... 21
Other, net............................... (900)
-----------
(54,326)
Income before income taxes and
extraordinary item................... 9,544
Income tax expense (benefit)............... 6,335
-----------
Income (loss) before extraordinary item $ 3,209
-----------
-----------
EBITDA(k)................................ $ 90,927
</TABLE>
------------------------
In addition to the pro forma adjustments directly attributable to the
Acquisition set forth above, the effect of the following on historical results
for the year ended October 31, 1997 should be considered: (i) an increase in
power costs associated with a market price contract negotiated in conjunction
with the Acquisition would have increased cost of sales by $9.6 million, (ii)
the elimination of $2.0 million of unusual personnel reduction costs related to
the privatization program and a decrease of $1.3 million in workers' profit
sharing expense as a result of such elimination would have decreased selling,
general and administrative expenses by $3.3 million and (iii) the elimination of
$3.2 million of costs related to the privatization program and $.1 million of
tax fines and penalties that would not have been incurred had the Acquisition
occurred on November 1, 1996 would have increased other, net by $3.3 million.
In addition to the pro forma adjustments directly attributable to the ASARCO
MLD Acquisition set forth above, the effect of the elimination of ASARCO
corporate overhead allocations, which would have decreased selling, general and
administrative expenses by $4.1 million for the year ended October 31, 1997,
should be considered.
14
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997
(a) Represents the historical results of operations for Doe Run Peru's
Predecessor for the period from November 1, 1996 through October 23, 1997.
(b) Represents the historical results of operations of the ASARCO MLD for the
period from January 1, 1997 to December 31, 1997.
(c) Reflects the increase in depreciation and amortization, based upon
allocating the effective purchase price to the fair values of the assets
purchased in the Acquisition.
(d) Represents the income tax effects of the above adjustments at the U.S.
statutory rate, which reduced income tax expense by $.4 million. The
adjustment also reflects the incremental U.S. tax at a rate of 5% on the
income before taxes of Doe Run Peru's Predecessor for the period from
November 1, 1996 to October 23, 1997, which increased income tax expense by
$1.9 million.
(e) Pro forma interest expense reflects the elimination of historical interest
expense due to the retirement of substantially all of the existing debt
obligations. Interest expense, as adjusted, includes interest of $29.1
million on the Existing Notes, interest on the Back-to-Back Loan of $14.5
million, amortization of debt issuance costs totaling $2.0 million and $.1
million on other obligations. The pro forma consolidated statement of
operations does not reflect interest income on the Special Term Deposit of
$14.1 million.
(f) Reflects the income tax effect of the pro forma adjustments at an assumed
statutory tax rate of 35%.
(g) Represents the difference between the salaries, wages and benefits reflected
in the historical results of operations of the ASARCO MLD and those that
would have been expensed under Doe Run's programs, into which substantially
all of the employees of the ASARCO MLD will be enrolled, as a condition of
the ASARCO MLD Acquisition, pursuant to the Asset Purchase Agreement.
(h) Represents the decrease in depreciation based upon allocating the effective
purchase price to the fair value of the assets to be purchased in the ASARCO
MLD Acquisition.
(i) Reflects incremental interest at 11.25% on $50.0 million aggregate principal
amount of Notes issued to finance the ASARCO MLD Acquisition of $5.6
million, incremental interest on loans of $11.0 million under the New Doe
Run Revolving Credit Facility of $1.0 million, amortization of original
issue discount on the Notes of $.8 million and amortization of related
financing costs of $.3 million.
(j) Reflects the income tax effect of pro forma adjustments at, and adjusts the
ASARCO MLD tax provision to, an assumed statutory rate of 35%.
(k) EBITDA is defined as net income (loss) before extraordinary item plus the
sum of net interest expense, income taxes and depletion, depreciation and
amortization. The trends of EBITDA generally follow the trends of operating
income. Information regarding EBITDA is presented because management
believes that certain investors use EBITDA as one measure of an issuer's
ability to service its debt. EBITDA should not be considered an alternative
to, or more meaningful than, operating income or cash flow as an indicator
of an issuer's operating performance. EBITDA is not necessarily a measure of
the funds available for debt service because such funds could be used to
fund operating requirements or other expenditures required by the Company's
business instead of debt service. Furthermore, caution should be used in
comparing EBITDA to similarly titled measures of other companies as the
definitions of these measures may vary.
15
<PAGE>
(c) Exhibits
EXHIBIT NO. DESCRIPTION
2.1 -- Asset Purchase and Sale Agreement, dated as of
July 28, 1998, between ASARCO Incorporated and The
Doe Run Resources Corporation for the Missouri Lead
Division and the Sugar Creek Project.*
4.1 -- First Supplemental Indenture, dated as of September 1,
1998, to Indenture, dated as of March 12, 1998, by and
among The Doe Run Resources Corporation, as issuer, and
Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run
Mining S.R.L., Doe Run Peru S.R.L., Doe Run Air S.A.C.
and Doe Run Development S.A.C., as guarantors, and
State Street Bank and Trust Company, as trustee.
4.2 -- Indenture, dated as of September 1, 1998, by and among
The Doe Run Resources Corporation, as issuer, and
Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run
Mining S.R.L., Doe Run Peru S.R.L., Doe Run Air S.A.C.
and Doe Run Development S.A.C., as guarantors, and
State Street Bank and Trust Company, as trustee,
relating to the 11 1/4% Senior Secured Notes due 2005,
Series A and the 11 1/4% Senior Secured Notes due 2005,
Series B and the Guarantees thereof (containing, as
exhibits, specimens of the Notes and the Guarantees).
4.3 -- Purchase Agreement, dated September 1, 1998, among The
Doe Run Resources Corporation, Fabricated Products,
Inc., Doe Run Cayman Ltd., Doe Run Mining S.R.L., Doe
Run Peru S.R.L., Doe Run Air S.A.C., Doe Run
Development S.A.C. and Jefferies & Company, Inc.,
relating to the 11 1/4% Senior Secured Notes due 2005.
4.4 -- Registration Rights Agreement, dated as of September 1,
1998, among The Doe Run Resources Corporation,
Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run
Mining S.R.L., Doe Run Peru S.R.L., Doe Run Air S.A.C.,
Doe Run Development S.A.C. and Jefferies & Company,
Inc., relating to the 11 1/4% Senior Secured Notes due
2005.
10.1 -- Amendment No. 1 to Loan and Security Agreement, dated
September 1, 1998, among The Doe Run Resources
Corporation, Fabricated Products, Inc. and Congress
Financial Corporation.
10.2 -- Security Agreement, dated as of September 1, 1998,
by The Doe Run Resources Corporation in favor of
State Street Bank and Trust Company, as trustee and
collateral agent.
10.3 -- Intercreditor Agreement, dated as of September 1,
1998, between State Street Bank and Trust Company,
as note trustee, and Congress Financial Corporation,
as lender.
_________________
* Incorporated by reference to the Registration Statement on Form S-4, as
amended, (File No. 333-52285) originally filed May 11, 1998.
<PAGE>
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 hereunto duly authorized.
THE DOE RUN RESOURCES CORPORATION
By: /s/ Marvin K. Kaiser
------------------------------
MARVIN K. KAISER
Vice President and Chief Financial Officer
Date: September 16, 1998
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
2.1 -- Asset Purchase and Sale Agreement, dated as of
July 28, 1998, between ASARCO Incorporated and The
Doe Run Resources Corporation for the Missouri Lead
Division and the Sugar Creek Project.*
4.1 -- First Supplemental Indenture, dated as of September 1,
1998, to Indenture, dated as of March 12, 1998, by and
among The Doe Run Resources Corporation, as issuer, and
Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run
Mining S.R.L., Doe Run Peru S.R.L., Doe Run Air S.A.C.
and Doe Run Development S.A.C., as guarantors, and
State Street Bank and Trust Company, as trustee.
4.2 -- Indenture, dated as of September 1, 1998, by and among
The Doe Run Resources Corporation, as issuer, and
Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run
Mining S.R.L., Doe Run Peru S.R.L., Doe Run Air S.A.C.
and Doe Run Development S.A.C., as guarantors, and
State Street Bank and Trust Company, as trustee,
relating to the 11 1/4% Senior Secured Notes due 2005,
Series A and the 11 1/4% Senior Secured Notes due 2005,
Series B and the Guarantees thereof (containing, as
exhibits, specimens of the Notes and the Guarantees).
4.3 -- Purchase Agreement, dated September 1, 1998, among The
Doe Run Resources Corporation, Fabricated Products,
Inc., Doe Run Cayman Ltd., Doe Run Mining S.R.L., Doe
Run Peru S.R.L., Doe Run Air S.A.C., Doe Run
Development S.A.C. and Jefferies & Company, Inc.,
relating to the 11 1/4% Senior Secured Notes due 2005.
4.4 -- Registration Rights Agreement, dated as of September 1,
1998, among The Doe Run Resources Corporation,
Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run
Mining S.R.L., Doe Run Peru S.R.L., Doe Run Air S.A.C.,
Doe Run Development S.A.C. and Jefferies & Company,
Inc., relating to the 11 1/4% Senior Secured Notes due
2005.
10.1 -- Amendment No. 1 to Loan and Security Agreement, dated
September 1, 1998, among The Doe Run Resources
Corporation, Fabricated Products, Inc. and Congress
Financial Corporation.
10.2 -- Security Agreement, dated as of September 1, 1998,
by The Doe Run Resources Corporation in favor of
State Street Bank and Trust Company, as trustee and
collateral agent.
10.3 -- Intercreditor Agreement, dated as of September 1,
1998, between State Street Bank and Trust Company,
as note trustee, and Congress Financial Corporation,
as lender.
_________________
* Incorporated by reference to the Registration Statement on Form S-4, as
amended, (File No. 333-52285) originally filed May 11, 1998.
<PAGE>
Exhibit 4.1
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of September 1, 1998 (this
"First Supplemental Indenture"), to the Indenture (as defined below), among The
Doe Run Resources Corporation, a New York corporation (the "Company"), the
Guarantors (as defined in the Indenture), each of the Subsidiaries of the
Company listed on Schedule A annexed hereto (collectively, the "Additional
Guarantors") and State Street Bank and Trust Company, as Trustee (the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Company has issued its 11 1/4% Senior Notes due 2005 and
Floating Interest Rate Senior Notes (collectively, the "Securities") in the
aggregate principal amount of $255,000,000 under and pursuant to the Indenture,
dated as of March 12, 1998 (the "Indenture"), among the Company, the Guarantors
listed therein and the Trustee; and
WHEREAS, each of the Additional Guarantors has become a Restricted
Subsidiary and pursuant to Section 4.20 of the Indenture is entering into this
First Supplemental Indenture to thereby become a Guarantor as provided in
Article Eleven of the Indenture; and
WHEREAS, pursuant to Section 9.01(4) of the Indenture, the Company,
the Guarantors, the Additional Guarantors and the Trustee may enter into this
First Supplemental Indenture without the consent of any Holder; and
WHEREAS, all consents and notices required to be obtained and given as
conditions to the execution of this First Supplemental Indenture pursuant to the
Indenture and all other documents relating to the Securities have been obtained
and given;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto agree
as follows:
ARTICLE I
AUTHORIZATION; DEFINITIONS
Section 1.01. First Supplemental Indenture. This First Supplemental
Indenture is supplemental to, and is entered into, in accordance with Section
9.01 of the Indenture, and except as modified, amended and supplemented by this
First Supplemental Indenture, the provisions of the Indenture are in all
respects ratified and confirmed and shall remain in full force and effect.
Section 1.02. Definitions. Unless the context shall otherwise require,
all terms which are defined in Section 1.01 of the Indenture shall have the same
meanings, respectively, in this First Supplemental Indenture as such terms are
given in said Section 1.01 of the Indenture.
<PAGE>
ARTICLE II
ADDITIONAL GUARANTORS
Section 2.01. Additional Guarantors. Pursuant to Section 11.01 of the
Indenture, each of the Additional Guarantors hereby expressly assumes the
obligations of, and otherwise agrees to perform all of the duties of, a
Guarantor under the Indenture, subject to the terms and conditions thereof, as
of the date set forth opposite the name of such Additional Guarantor on Schedule
A hereto.
ARTICLE III
MISCELLANEOUS
Section 3.01. Effective Date. This First Supplemental Indenture shall
become effective upon execution and delivery hereof.
Section 3.02. Counterparts. This First Supplemental Indenture may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
Section 3.03. Acceptance. The Trustee accepts the Indenture, as
supplemented by this First Supplemental Indenture, and agrees to perform the
same upon the terms and conditions set forth therein as so supplemented. The
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this First Supplemental Indenture or the due
execution by the Company, the Guarantors or the Additional Guarantors, or for or
in respect of the recitals contained herein, all of which are made solely by the
Company.
Section 3.04. Successors and Assigns. All covenants and agreements in
this First Supplemental Indenture, by the Company, the Guarantors, the
Additional Guarantors or the Trustee shall bind its respective successors and
assigns, whether so expressed or not.
Section 3.05. Severability. In case any provision in this First
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 3.06. Governing Law. This First Supplemental Indenture shall
be governed by and construed in accordance with the laws of the State of New
York, as applied to contracts made and performed within the State of New York,
without regard to principles of conflict of laws. Each of the parties hereto
agrees 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 First Supplemental
Indenture.
Section 3.07. Incorporation into Indenture. All provisions of this
First Supplemental Indenture shall be deemed to be incorporated in, and made
part of, the Indenture,
2
<PAGE>
and the Indenture, as amended and supplemented by this First Supplemental
Indenture, shall be read, taken and construed as one and the same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties have caused this First Supplemental
Indenture to be duly executed as of the date first above written.
THE DOE RUN RESOURCES CORPORATION
By: /s/ Marvin K. Kaiser
---------------------------------
Name: Marvin K. Kaiser
Title: Vice President and CFO
FABRICATED PRODUCTS, INC.
By: /s/ Marvin K. Kaiser
---------------------------------
Name: Marvin K. Kaiser
Title: Vice President--Finance
and Treasurer
DOE RUN CAYMAN LTD.
By: /s/ Marvin K. Kaiser
---------------------------------
Name: Marvin K. Kaiser
Title: Vice President
DOE RUN MINING S.R.L.
By: /s/ Marvin K. Kaiser
---------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
DOE RUN PERU S.R.L.
By: /s/ Marvin K. Kaiser
---------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
DOE RUN AIR S.A.C.
By: /s/ Marvin K. Kaiser
---------------------------------
Name: Marvin K. Kaiser
Title: Attorney-in-Fact
DOE RUN DEVELOPMENT S.A.C.
By: /s/ Marvin K. Kaiser
---------------------------------
Name: Marvin K. Kaiser
Title: Attorney-in-Fact
STATE STREET BANK AND TRUST COMPANY
By: /s/ Robert L. Reynolds
---------------------------------
Name: Robert L. Reynolds
Title: Vice President
4
<PAGE>
SCHEDULE A
ADDITIONAL GUARANTORS
<TABLE>
<CAPTION>
Name Date
- ---- ----
<S> <C>
Doe Run Air S.A.C., a Peruvian corporation................... September 1, 1998
Doe Run Development S.A.C., a Peruvian corporation........... September 1, 1998
</TABLE>
5
<PAGE>
Exhibit 4.2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE DOE RUN RESOURCES CORPORATION,
as Issuer
and
the GUARANTORS named herein,
as Guarantors
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
---------------------
INDENTURE
Dated as of September 1, 1998
---------------------
$50,000,000
11 1/4% Senior Secured Notes due 2005, Series A
and
11 1/4% Senior Secured Notes due 2005, Series B
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- ---------
<S> <C>
310(a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... N.A.
(a)(4)................................................... N.A.
(a)(5)................................................... 7.10
(b)...................................................... 7.08; 7.10; 12.02
(c)...................................................... N.A.
311(a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A.
312(a) ..................................................... 2.05
(b)...................................................... 12.03
(c)...................................................... 12.03
313(a)...................................................... 7.06
(b)(1)................................................... N.A.
(b)(2)................................................... 7.06
(c)...................................................... 7.06; 12.02
(d)...................................................... 7.06
314(a)...................................................... 4.07; 4.09; 12.02
(b)...................................................... 10.02
(c)(1)................................................... 12.04
(c)(2)................................................... 12.04
(c)(3)................................................... N.A.
(d)...................................................... 10.03
(e)...................................................... 12.05
(f)...................................................... N.A
315(a)...................................................... 7.01(b)
(b)...................................................... 7.05; 12.02
(c)...................................................... 7.01(a)
(d)...................................................... 7.01(c)
(e)...................................................... 6.11
316(a)(last sentence)....................................... 2.09
(a)(1)(A)................................................ 6.05
(a)(1)(B)................................................ 6.04
(a)(2)................................................... N.A.
(b)...................................................... 6.07; 9.04
317(a)(1)................................................... 6.08
(a)(2)................................................... 6.09
(b)...................................................... 2.04
318(a)...................................................... 12.01
(c)...................................................... 12.01
</TABLE>
- --------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions............................................... 1
SECTION 1.02. Incorporation by Reference of TIA......................... 27
SECTION 1.03. Rules of Construction..................................... 27
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating........................................... 28
SECTION 2.02. Execution and Authentication.............................. 31
SECTION 2.03. Registrar and Paying Agent................................ 32
SECTION 2.04. Paying Agent To Hold Assets in Trust...................... 33
SECTION 2.05. Securityholder Lists...................................... 33
SECTION 2.06. Transfer and Exchange..................................... 34
SECTION 2.07. Replacement Securities.................................... 42
SECTION 2.08. Outstanding Securities.................................... 42
SECTION 2.09. Treasury Securities....................................... 42
SECTION 2.10. Temporary Securities...................................... 43
SECTION 2.11. Cancellation.............................................. 43
SECTION 2.12. Defaulted Interest........................................ 43
SECTION 2.13. CUSIP Number.............................................. 44
SECTION 2.14. Designation............................................... 44
ARTICLE THREE
REDEMPTION
SECTION 3.01. Optional Redemption....................................... 44
SECTION 3.02. Notices to Trustee........................................ 45
SECTION 3.03. Selection of Securities To Be Redeemed.................... 45
SECTION 3.04. Notice of Redemption...................................... 46
SECTION 3.05. Effect of Notice of Redemption............................ 47
SECTION 3.06. Deposit of Redemption Price............................... 47
SECTION 3.07. Securities Redeemed in Part............................... 47
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities..................................... 48
SECTION 4.02. Maintenance of Office or Agency........................... 48
SECTION 4.03. Limitation on Restricted Payments......................... 49
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 4.04. Corporate Existence....................................... 52
SECTION 4.05. Payment of Taxes and Other Claims......................... 52
SECTION 4.06. Maintenance of Properties and Insurance................... 53
SECTION 4.07. Compliance Certificate; Notice of Default................. 54
SECTION 4.08. Compliance with Laws...................................... 54
SECTION 4.09. SEC Reports and Other Information......................... 55
SECTION 4.10. Waiver of Stay, Extension or Usury Laws................... 56
SECTION 4.11. Limitation on Transactions with Affiliates................ 56
SECTION 4.12. Limitation on Indebtedness................................ 57
SECTION 4.13. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries........................ 58
SECTION 4.14. Limitation on Liens....................................... 59
SECTION 4.15. Change of Control......................................... 59
SECTION 4.16. Limitation on Sale of Assets.............................. 61
SECTION 4.17. Limitation on Sale/Leaseback Transactions................. 64
SECTION 4.18. Limitation on Preferred Stock of Restricted
Subsidiaries.............................................. 65
SECTION 4.19. Qualifying Investment Requirements........................ 65
SECTION 4.20. Future Guarantees......................................... 65
SECTION 4.21. Conduct of Business....................................... 66
SECTION 4.22. Impairment of Security Interest........................... 66
SECTION 4.23. Amendment to Collateral Documents......................... 66
SECTION 4.24. Inspection and Confidentiality............................ 66
SECTION 4.25. Release of Released Real Property......................... 67
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc............................... 67
SECTION 5.02. Successor Corporation Substituted......................... 70
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default......................................... 70
SECTION 6.02. Acceleration.............................................. 72
SECTION 6.03. Other Remedies............................................ 73
SECTION 6.04. Waiver of Past Defaults................................... 74
SECTION 6.05. Control by Majority....................................... 74
SECTION 6.06. Limitation on Suits....................................... 74
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 6.07. Rights of Holders To Receive Payment...................... 75
SECTION 6.08. Collection Suit by Trustee................................ 75
SECTION 6.09. Trustee May File Proofs of Claim.......................... 76
SECTION 6.10. Priorities................................................ 76
SECTION 6.11. Undertaking for Costs..................................... 77
SECTION 6.12. Ranking................................................... 77
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee......................................... 78
SECTION 7.02. Rights of Trustee......................................... 79
SECTION 7.03. Individual Rights of Trustee.............................. 80
SECTION 7.04. Trustee's Disclaimer...................................... 80
SECTION 7.05. Notice of Default......................................... 80
SECTION 7.06. Reports by Trustee to Holders............................. 81
SECTION 7.07. Compensation and Indemnity................................ 81
SECTION 7.08. Replacement of Trustee.................................... 82
SECTION 7.09. Successor Trustee by Merger, Etc.......................... 83
SECTION 7.10. Eligibility; Disqualification............................. 83
SECTION 7.11. Preferential Collection of Claims Against Company......... 84
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations...................... 84
SECTION 8.02. Legal Defeasance and Covenant Defeasance.................. 85
SECTION 8.03. Application of Trust Money................................ 90
SECTION 8.04. Repayment to Company...................................... 90
SECTION 8.05. Reinstatement............................................. 90
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders................................ 91
SECTION 9.02. With Consent of Holders................................... 92
SECTION 9.03. Compliance with TIA....................................... 93
SECTION 9.04. Revocation and Effect of Consents......................... 93
SECTION 9.05. Notation on or Exchange of Securities..................... 94
SECTION 9.06. Trustee To Sign Amendments, Etc........................... 94
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE TEN
COLLATERAL DOCUMENTS
SECTION 10.01. Collateral and Collateral Documents....................... 95
SECTION 10.02. Recording; Priority; Opinions, Etc........................ 96
SECTION 10.03. Release of Collateral..................................... 98
SECTION 10.04. Disposition of Collateral Without Release................. 101
SECTION 10.05. Eminent Domain and Other Governmental Takings............. 102
SECTION 10.06. Trust Indenture Act Requirements.......................... 104
SECTION 10.07. Suits To Protect Collateral............................... 104
SECTION 10.08. Purchaser Protected....................................... 105
SECTION 10.09. Powers Exercisable by Receiver or Trustee................. 105
SECTION 10.10. Determinations Relating to Collateral..................... 105
SECTION 10.11. Form and Sufficiency of Release........................... 106
SECTION 10.12. Possession and Use of Collateral.......................... 106
SECTION 10.13. Disposition of Obligations Received....................... 106
SECTION 10.14. Release upon Termination of the Company's Obligations..... 107
ARTICLE ELEVEN
APPLICATION OF TRUST MONEYS
SECTION 11.01. "Trust Moneys" Defined.................................... 107
SECTION 11.02. Withdrawals of Insurance Proceeds and Condemnation
Awards.................................................... 108
SECTION 11.03. Withdrawal of Trust Moneys on Basis of Retirement of
Securities................................................ 112
SECTION 11.04. Withdrawal of Trust Moneys for Reinvestment............... 114
SECTION 11.05. Powers Exercisable Notwithstanding Default or Event of
Default................................................... 116
SECTION 11.06. Powers Exercisable by Trustee or Receiver................. 116
SECTION 11.07. Investment of Trust Moneys................................ 117
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TIA Controls.............................................. 117
SECTION 12.02. Notices................................................... 117
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 12.03. Communications by Holders with Other Holders.............. 119
SECTION 12.04. Certificate and Opinion as to Conditions Precedent........ 119
SECTION 12.05. Statements Required in Certificate or Opinion............. 119
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar................. 120
SECTION 12.07. Legal Holidays............................................ 120
SECTION 12.08. Governing Law............................................. 120
SECTION 12.09. No Adverse Interpretation of Other Agreements............. 120
SECTION 12.10. No Recourse Against Others................................ 120
SECTION 12.11. Successors................................................ 121
SECTION 12.12. Duplicate Originals....................................... 121
SECTION 12.13. Severability.............................................. 121
ARTICLE THIRTEEN
GUARANTEE OF SECURITIES
SECTION 13.01. Unconditional Guarantee................................... 121
SECTION 13.02. Limitations on Guarantees................................. 123
SECTION 13.03. Execution and Delivery of Guarantee....................... 123
SECTION 13.04. Release of a Guarantor.................................... 124
SECTION 13.05. Waiver of Subrogation..................................... 125
SECTION 13.06. Immediate Payment......................................... 125
SECTION 13.07. No Set-Off................................................ 126
SECTION 13.08. Obligations Continuing.................................... 126
SECTION 13.09. Obligations Reinstated.................................... 126
SECTION 13.10. Obligations Not Affected.................................. 126
SECTION 13.11. Waiver.................................................... 127
SECTION 13.12. No Obligation To Take Action Against the Company.......... 127
SECTION 13.13. Dealing with the Company and Others....................... 127
SECTION 13.14. Default and Enforcement................................... 128
SECTION 13.15. Amendment, Etc............................................ 128
SECTION 13.16. Acknowledgment............................................ 128
SECTION 13.17. Costs and Expenses........................................ 128
SECTION 13.18. No Waiver; Cumulative Remedies............................ 128
SECTION 13.19. Survival of Obligations................................... 129
SECTION 13.20. Guarantee in Addition to Other Obligations................ 129
SECTION 13.21. Severability.............................................. 129
SECTION 13.22. Successors and Assigns.................................... 129
Exhibit A - Form of Series A Note
Exhibit B - Form of Series B Note
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Exhibit C - Form of Legend for Book-Entry Securities
Exhibit D - Form of Transferee Letter of Representation
Exhibit E - Form of certification to be given by the holders of
beneficial interest in a temporary Regulation S global
security to Euroclear or CEDEL
Exhibit F - Form of certification to be given by Euroclear operator
or Cedel Bank, Societe Anonyme
Exhibit G - Form of certification to be given by transferee of
beneficial interest in a temporary Regulation S
global security
Exhibit H - Form of certification for transfer or exchange of
restricted global security to temporary Regulation
S global security
Exhibit I - Form of certification for transfer or exchange of
restricted global security to permanent Regulation
S global security
Exhibit J - Form of certification for transfer or exchange of
temporary Regulation S global security or permanent
Regulation S global security to restricted global
security
Exhibit K-1 - Form of certification for transfer or exchange of
non-global restricted security to restricted global
security
Exhibit K-2 - Form of certification for transfer or exchange of
non-global restricted security to permanent
Regulation S global security or temporary
Regulation S global security
Exhibit L-1 - Form of certification for transfer or exchange of
non-global permanent Regulation S security to
restricted global security
Exhibit L-2 - Form of certification for transfer or exchange
of non-global permanent Regulation S security to
permanent Regulation S global security
Exhibit M - Form of Guarantee
Exhibit N - Form of Mortgage
</TABLE>
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
this Indenture.
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INDENTURE, dated as of September 1, 1998, by and among THE DOE RUN
RESOURCES CORPORATION, a New York corporation (the "Company"), as issuer,
FABRICATED PRODUCTS, INC., a Delaware corporation, as guarantor, DOE RUN CAYMAN
LTD., a Cayman Islands company, as guarantor, DOE RUN MINING S.R.L., a Peruvian
company, as guarantor, DOE RUN PERU S.R.L., a Peruvian company, as guarantor,
DOE RUN AIR S.A.C., a Peruvian corporation, as guarantor, and DOE RUN
DEVELOPMENT S.A.C., a Peruvian corporation, as guarantor, and STATE STREET BANK
AND TRUST COMPANY, as Trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's 11
1/4% Senior Secured Notes due 2005, Series A, and Senior Secured Notes due 2005,
Series B, without distinction as to Series:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a person or any of its
Subsidiaries existing at the time such person becomes a Subsidiary (Restricted
Subsidiary, in the case of the Company) or assumed in connection with the
acquisition of assets from such person, including, without limitation,
Indebtedness incurred by such person in connection with, or in anticipation or
contemplation of, such person becoming a Subsidiary (Restricted Subsidiary, in
the case of the Company) or such acquisition.
"Acquisition" means the acquisition on October 23, 1997 by Doe Run
Peru of Metaloroya pursuant to the Subscription Agreement.
"Affiliate" of any specified person means any other person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings correlative of the
foregoing. For purposes of Section 4.11, the term "Affiliate" shall include any
person who, as a result of any transaction described therein, would become an
Affiliate.
<PAGE>
"Affiliate Transaction" has the meaning provided in Section 4.11(a).
"Agent" means any Registrar or Paying Agent.
"Agent Member" means any member of, or participant in, the Depository.
"Applicable Procedures" has the meaning provided in Section 2.06(g).
"Appraiser" means a Person who in the course of its business appraises
property and 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 located.
"Asset Acquisition" means (i) an Investment by the Company or any
Restricted Subsidiary in any other person pursuant to which such person shall
become a Restricted Subsidiary or a Subsidiary of a Restricted Subsidiary or
shall be merged with the Company or any Restricted Subsidiary or (ii) the
acquisition by the Company or any Restricted Subsidiary of the assets of any
person which constitute all or substantially all of the assets of such person or
any division or line of business of such person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease, assignment or other transfer for value by the Company or any of
the Restricted Subsidiaries (including, without limitation, any Sale/leaseback
(other than a Sale/leaseback of an asset constituting Collateral)) to any
person, in one transaction or a series of related transactions, of (i) any
Capital Stock of any Restricted Subsidiary; (ii) all or substantially all of the
properties and assets of any division or line of business of the Company or any
Restricted Subsidiary; or (iii) any other properties or assets of the Company or
any Restricted Subsidiary other than in the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include (i) any
sale, issuance, conveyance, transfer, lease or other disposition of properties
or assets that is consummated in accordance with the provisions of Article Five
and (ii) the sale of inventory in the ordinary course of business.
"Asset Sale Offer" has the meaning provided in Section 4.16(a)(ii).
"Asset Sale Offer Payment Date" means, with respect to any Available
Amount from an Asset Sale, the earlier of (x)
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the 180th day following receipt of such Available Amount or (y) such earlier
date on which an Asset Sale Offer shall expire.
"Asset Sale Release Notice" has the meaning provided in Section
10.03(b)(i).
"Available Amount" has the meaning provided in Section 4.16(a)(ii).
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any person, the Board of
Directors of such person or any committee of the Board of Directors of such
person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such person.
"Board Resolution" means with respect to any person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such person
to have been duly adopted by the Board of Directors of such person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Book-Entry Security" means a Security represented by a Global
Security and registered in the name of the nominee of the Depository.
"Business Day" means any day that is not a Legal Holiday.
"Capital Expenditures" shall mean payments for any assets, or
improvements, replacements, substitutions or additions thereto, that have a
useful life of more than one year and which, in accordance with GAAP
consistently applied, are required to be capitalized (as opposed to expensed in
the period in which the payment occurred).
"Capital Lease," as applied to any person, means any lease of (or any
agreement conveying the right to use) any property (whether real, personal or
mixed) by such person as lessee which, in conformity with GAAP, is required to
be accounted for as a capital lease on the balance sheet of such person.
"Capital Stock" means, with respect to any person, any and all shares,
interests, participation or other equivalents (however designated) of such
person's capital stock,
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<PAGE>
whether outstanding at the Issue Date or issued after the Issue Date, and any
and all rights, warrants or options exchangeable for or convertible into such
capital stock (but excluding any debt security that is exchangeable for or
convertible into such capital stock).
"Capitalized Lease Obligation" means, as to any person, the
obligations of such person under a Capital Lease and, for purposes of this
Indenture, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within two years from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within two years from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. ("S&P"), or Moody's Investors Service, Inc.
("Moody's"); (iii) commercial paper maturing no more than two years from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within two years from the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $500,000,000; (v) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above. Notwithstanding the foregoing,
for the purposes of clause (i) of the definition of "Permitted Investments," 20%
of the Cash Equivalents may include securities having a rating of at least BBB
by S&P and Baa by Moody's.
"CEDEL" means Cedel Bank, Societe Anonyme (or any successor securities
clearing agency).
"Centromin" shall mean Empresa Minera del Centro del Peru S.A.
4
<PAGE>
"Change of Control" means the occurrence of one or more of the
following events: (i) any direct or indirect sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company, DRA or Renco to any person or
group of related persons for purposes of Section 13(d) of the Exchange Act (a
"Group") (other than a Permitted Holder or a Group controlled by a Permitted
Holder), together with any Affiliates thereof (whether or not otherwise in
compliance with the provisions of this Indenture); (ii) the approval by the
holders of Capital Stock of the Company, DRA or Renco, as the case may be, of
any plan or proposal for the liquidation or dissolution of the Company, DRA or
Renco, as the case may be (whether or not otherwise in compliance with the
provisions of this Indenture); (iii) the acquisition in one or more transactions
of "beneficial ownership" (within the meaning of 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) by any
person, entity or Group (other than a Permitted Holder or a Group controlled by
any Permitted Holder) of any Capital Stock of the Company, DRA or Renco such
that, as a result of such acquisition, such person, entity or Group either (A)
beneficially owns (within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, more than 50% of the Company's, DRA's or
Renco's then outstanding voting securities entitled to vote on a regular basis
in an election for a majority of the Board of Directors of the Company, DRA or
Renco or (B) otherwise has the ability to elect, directly or indirectly, a
majority of the members of the Company's, DRA's or Renco's Board of Directors;
or (iv) the shareholders of Renco as of the Issue Date and the Permitted Holders
shall cease to own at least 50% of the equity of Renco owned by such
shareholders on the Issue Date. Notwithstanding anything to the contrary herein,
a merger of DRA with and into the Company or Renco shall not constitute a
"Change of Control" hereunder.
"Change of Control Date" has the meaning provided in Section 4.15(a).
"Change of Control Offer" has the meaning provided in Section 4.15(a).
"Change of Control Payment Date" has the meaning provided in Section
4.15(b)(2).
5
<PAGE>
"Collateral" means, collectively, all of the property and assets
(including, without limitation, Trust Moneys) that are from time to time subject
to the Collateral Documents.
"Collateral Account" has the meaning provided in Section 11.01.
"Collateral Agent" shall mean State Street Bank and Trust Company, a
Massachusetts trust company, in its capacity as collateral agent under the
Collateral Documents, and any successor thereto in such capacity.
"Collateral Documents" means, collectively, the Security Agreement,
the Mortgage, the Intercreditor Agreement and all other instruments or documents
entered into or delivered in connection with any of the foregoing, as such
agreements, instruments or documents may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"Collateral Proceeds" has the meaning provided in Section 4.16
(a)(ii).
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Company Order" means a written order or request signed in the name of
the Company by its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Consolidated EBITDA" means, with respect to any person, for any
period, the sum (without duplication) of (i) Consolidated Net Income, (ii) to
the extent Consolidated Net Income has been reduced thereby, all income taxes of
such person and its Subsidiaries (Restricted Subsidiaries, in the case of the
Company) paid or accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary, unusual or non-recurring gains or
losses), Consolidated Interest Expense (net of any interest income),
amortization expense (including amortization of deferred financing costs) and
depletion and depreciation expense and (iii) other non-cash items (other than
non-cash interest) reducing Consolidated Net Income (including, without
limitation, any non-cash charges in respect of post-employment benefits for
health care, life insurance and long-term disability benefits required in
accordance with GAAP) less other non-cash items increasing Consolidated Net
Income, all as determined on a consolidated basis for such person and
6
<PAGE>
its Subsidiaries (Restricted Subsidiaries, in the case of the Company) in
accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
person, the ratio of Consolidated EBITDA of such person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such person for the Four Quarter Period. For purposes of this definition, if the
Transaction Date occurs prior to the date on which four full fiscal quarters
have elapsed subsequent to the Issue Date and financial statements with respect
thereto are available, "Consolidated EBITDA" and "Consolidated Fixed Charges"
shall be calculated, in the case of the Company, after giving effect on a pro
forma basis to the issuance of the Securities and the Existing Securities (if
four full fiscal quarters have not elapsed subsequent to the issue date of the
Existing Securities and on or prior to the Transaction Date) and the application
of the net proceeds therefrom as if the Securities and Existing Securities, if
applicable, were issued on the first day of the Four Quarter Period. In addition
to and without limitation of the foregoing, for purposes of this definition,
"Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma basis for the period of such calculation to (i) the
incurrence of any Indebtedness (and the application of the net proceeds
therefrom) of such person or any of its Subsidiaries (Restricted Subsidiaries,
in the case of the Company) giving rise to the need to make such calculation and
any incurrence of other Indebtedness at any time on or after the first day of
the Four Quarter Period and on or prior to the Transaction Date (the "Reference
Period"), as if such incurrence occurred on the first day of the Reference
Period and (ii) 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 (Restricted
Subsidiaries, in the case of the Company)(including any person who becomes a
Subsidiary (Restricted Subsidiary, in the case of the Company) as a result of
the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness) occurring during the Reference Period, as if such Asset
Sale or Asset Acquisition (including the incurrence, assumption or liability for
any such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Reference Period. If such person or any of its Subsidiaries (Restricted
Subsidiaries, in the case of the Company) directly or indirectly guarantees
Indebtedness of a third person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such person or any Subsidiary
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<PAGE>
(Restricted Subsidiary, in the case of the Company) of such person had directly
incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in
calculating "Consolidated Fixed Charges" for purposes of determining the
denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage
Ratio," (1) interest on 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 (2) notwithstanding
clause (1) above, interest on Indebtedness determined on a fluctuating basis, to
the extent such interest is covered by agreements relating to Interest Rate
Protection Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any person for any
period, the sum of, without duplication, the amounts for such period, taken as a
single accounting period, of (i) Consolidated Interest Expense of such person
(net of any interest income) less non-cash amortization of deferred financing
costs and (ii) the product of (x) the amount of all dividends declared, paid or
accrued on Preferred Stock of such person during such period times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated Federal, state, local and foreign
tax rate (expressed as a decimal number between 1 and 0) of such person during
such period (as reflected in the audited consolidated financial statements of
such person for the most recently completed fiscal year).
"Consolidated Interest Expense" means, with respect to any person for
any period, without duplication, the sum of (i) the interest expense of such
person and its Subsidiaries (Restricted Subsidiaries, in the case of the
Company) for such period as determined on a consolidated basis in accordance
with GAAP consistently applied, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Rate Protection
Obligations (including any amortization of discounts), (c) the interest portion
of any deferred payment obligation and (d) all accrued interest, and (ii) the
interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by such person and its Subsidiaries (Restricted
Subsidiaries, in the case of the Company) during such period as determined on a
consolidated basis in accordance with GAAP consistently applied.
"Consolidated Net Income" means, with respect to any person for any
period, the net income (or loss) of such person
8
<PAGE>
and its Subsidiaries (Restricted Subsidiaries, in the case of the Company), on a
consolidated basis for such period determined in accordance with GAAP; provided
that (i) the net income of any person in which such person or any Subsidiary
(Restricted Subsidiary, in the case of the Company) of such person has an
ownership interest with a third party (other than a person that meets the
definition of a Wholly-Owned Subsidiary (Wholly-Owned Restricted Subsidiary, in
the case of the Company)) shall be included only to the extent of the amount
that has actually been received by such person or its Wholly-Owned Subsidiaries
(Wholly-Owned Restricted Subsidiaries, in the case of the Company) in the form
of dividends or other distributions during such period (subject to, in the case
of any dividend or distribution received by a Wholly-Owned Subsidiary
(Wholly-Owned Restricted Subsidiary, in the case of the Company) of such person,
the restrictions set forth in clause (ii) below) and (ii) the net income of any
Subsidiary (Restricted Subsidiary, in the case of the Company) of such person
that is subject to any restriction or limitation on the payment of dividends or
the making of other distributions shall be excluded to the extent of such
restriction or limitation; provided, further that there shall be excluded (a)
the net income (or loss) of any person (acquired in a pooling of interests
transaction) accrued prior to the date it becomes a Subsidiary (Restricted
Subsidiary, in the case of the Company) of such person or is merged into or
consolidated with such person or any Subsidiary (Restricted Subsidiary, in the
case of the Company) of such person, (b) any gain (or loss) (and related tax
effects) resulting from an Asset Sale by such person or any of its Subsidiaries
(Restricted Subsidiaries, in the case of the Company) (c) any extraordinary,
unusual or nonrecurring gains or losses (and related tax effects) in accordance
with GAAP and (d) any compensation-related expenses arising as a result of the
application of the net proceeds from the issuance of the Securities or the
Existing Securities. For purposes of Section 4.03, the amortization of deferred
financing costs relating to the issuance of the Securities and the Existing
Securities shall be excluded from this definition of "Consolidated Net Income."
"Consolidated Net Worth" means, with respect to any person at any
date, the sum of (i) the consolidated shareholders' equity of such person less
the amount of such shareholders' equity attributable to Disqualified Capital
Stock of such person and its Subsidiaries (Restricted Subsidiaries, in the case
of the Company), as determined on a consolidated basis in accordance with GAAP
consistently applied and (ii) the amount of any Preferred Stock of such person
not included in the shareholders' equity of such person in accordance with GAAP,
which Preferred Stock does not constitute Disqualified Capital Stock.
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<PAGE>
"Covenant Defeasance" has the meaning provided in Section 8.02(c).
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Depository" means, with respect to the Securities issued in the form
of one or more Book-Entry Securities, The Depository Trust Company or another
person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Depository Securities Certification" has the meaning provided in
Section 2.01.
"Destruction" has the meaning assigned to such term in the Mortgage.
"Disqualified Capital Stock" means any class of Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event (other than a
Change of Control), matures or is mandatorily redeemable, pursuant to a sinking
fund obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Maturity Date.
"Doe Run Cayman" means Doe Run Cayman Ltd., a Cayman Islands company.
"Doe Run Mining" means Doe Run Mining S.R.L., a Peruvian company.
"Doe Run Peru" means Doe Run Peru S.R.L., a Peruvian company.
"DRA" means DR Acquisition Corp., a Missouri corporation.
"DR Exploration" means Doe Run Exploration SA (Proprietary) Limited, a
South African corporation.
"Environmental Law" has the meaning assigned to such term in the
Mortgage.
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"Equity Offering" means an offering of Qualified Capital Stock of the
Company (other than to any Subsidiary of the Company).
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the registration by the Company under the
Securities Act of all the Series B Notes pursuant to a registration statement
under which the Company offers each Holder of Series A Notes the opportunity to
exchange all Series A Notes held by such Holder for Series B Notes in an
aggregate principal amount equal to the aggregate principal amount of Series A
Notes held by such Holder, all in accordance with the terms and conditions of
the Registration Rights Agreement.
"Excluded Asset" means any structure, equipment, facility,
improvement, apparatus or other property acquired or constructed by the Company
after the Issue Date which is (i) located at the Mortgaged Property, (ii) not
necessary for the proper and efficient operation of the Mortgaged Property or
for the compliance by the Mortgaged Property with any applicable law, code or
ordinance, including, without limitation, any Environmental Law, and (iii) not
an integral part (or the replacement of an integral part) of the Company's
operations as conducted at the Mortgaged Property as of the Issue Date.
"Existing Securities" means (i) the $200.0 million 11 1/4% Senior
Notes due 2005 and (ii) the $55.0 million Floating Interest Rate Senior Notes
due 2003, in each case issued by Doe Run and guaranteed by the Guarantors.
"Existing Securities Indenture" means the indenture dated as of March
12, 1998 among the Company, the Guarantors and the Trustee pursuant to which the
Existing Securities were issued, as amended and supplemented from time to time.
"Fair Market Value" means, with respect to any asset, 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 whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value of any
asset of the Company or the Restricted Subsidiaries shall be
11
<PAGE>
determined by the Board of Directors of the Company acting in good faith and
shall be evidenced by a Board Resolution thereof delivered to the Trustee;
provided that with respect to any Asset Sale which involves in excess of $5
million, the Fair Market Value of any such asset or assets shall be determined
by an Independent Financial Advisor.
"FPI" means Fabricated Products, Inc., a Delaware corporation.
"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, which are in effect as of the Issue Date.
"Global Security" means a Security evidencing all or a part of the
Securities to be issued as Book-Entry Securities, issued to the Depository in
accordance with Section 2.02 and bearing the legend or legends prescribed in
Exhibit C to 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.
"Guarantees" means the guarantee of the Securities by the Guarantors.
"Guarantor" means each of FPI, Doe Run Cayman, Doe Run Mining, Doe Run
Peru, Doe Run Air S.A.C. and Doe Run Development S.A.C. and any Restricted
Subsidiary that in the future executes a supplemental indenture pursuant to
Section 4.20 of this Indenture or otherwise in which any such Restricted
Subsidiary agrees to be bound by the terms of this Indenture; provided that any
person constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Guarantee is released in accordance with the terms
of this Indenture.
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"Hedging Agreement" shall mean any agreement with respect to (i) the
hedging of price risk associated with the purchase or sale of lead, copper,
zinc, gold and silver under which the Company is a party or beneficiary and (ii)
the hedging of currency risks in connection with funding payroll expenses, so
long as any such agreement has been entered into in the ordinary course of
business consistent with past price risk or currency management practices of the
Company and the Restricted Subsidiaries and not for purposes of speculation.
"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,
(i) all obligations of such person for borrowed money, (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations (but not obligations under Operating
Leases) of such person, (iv) all obligations of such person issued or assumed as
the deferred purchase price of property or services, all conditional sale
obligations and all obligations under any title retention agreement (but
excluding trade accounts payable, accrued expenses and deferred taxes arising in
the ordinary course of business), (v) all obligations of such person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction entered into in the ordinary course of business, (vi)
all obligations of any other person of the type referred to in clauses (i)
through (v) which are secured by any Lien on any property or asset of such first
person and the amount of such obligation shall be the lesser of the value of
such property or asset or the amount of the obligation so secured, (vii) all
guarantees of Indebtedness by such person, (viii) Disqualified Capital Stock
valued at the greater of its voluntary or involuntary maximum fixed repurchase
price plus accrued and unpaid dividends, (ix) all obligations under interest
rate agreements or hedging agreements of such person and (x) any amendment,
supplement, modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (i) through (ix) above. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified 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 Disqualified
Capital Stock, such Fair Market Value to be determined in good faith by the
Board of Directors of the person issuing such Disqualified Capital Stock.
Notwithstanding anything to the contrary
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contained herein, any obligation of the Company or any Restricted Subsidiary in
the form of an earn-out arrangement undertaken in connection with any
acquisition of property or assets by the Company or such Restricted Subsidiary,
which obligation shall be based upon increases in metal prices above price
levels existing on the date of such acquisition, shall not constitute
Indebtedness under this Indenture.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable and good faith judgment of the Board of Directors of the Company,
qualified to perform the task for which such firm has been engaged and
disinterested and independent with respect to the Company and its Affiliates.
"Initial Purchaser" means Jefferies & Company, Inc.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as
of September 1, 1998, between the Trustee and Congress Financial Corporation, as
lender under the U.S. Revolving Credit Facility.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Securities.
"Interest Rate Protection Obligations" means the obligations of any
person, pursuant to 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 other
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.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" means, with respect to any person, any direct or indirect
advance, loan, guarantee 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 otherwise), or any
purchase or acquisition by such person of any Capital
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Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other person. Investments shall exclude extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices. For the purposes of Section 4.03, the amount of any Investment (other
than an Investment covered by clause (z) of Section 4.03) shall be the original
cost of such Investment plus the cost of all additional Investments by the
Company or any of the Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the payment of dividends or distributions
in connection with such Investment or any other amounts received in respect of
such Investment.
"Issue Date" means the date on which the Securities are originally
issued under this Indenture.
"legal defeasance" has the meaning provided in Section 8.02(b).
"Legal Holiday" has the meaning provided in Section 10.07.
"Lien" means (x) any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell and any filing of or agreement to
file a financing statement as debtor under the Uniform Commercial Code or any
similar statute and (y) any agreement to enter into any of the foregoing.
"Maturity Date" means March 15, 2005.
"Metaloroya" means Empresa Metalurgica La Oroya S.A., a Peruvian
company, prior to the merger of such entity with and into Doe Run Peru.
"Mortgage" means the mortgage to be entered into after the Issue Date
by and between the Company and the Collateral Agent in substantially the form
attached hereto as Exhibit N, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"Mortgaged Property" has the meaning assigned to such term in the
Mortgage.
"Net Award" has the meaning assigned to such term in the Mortgage and
shall include any amounts received in respect
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of personal property pursuant to the Security Agreement or otherwise.
"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 Restricted Subsidiary) net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel and investment bankers) related to such Asset Sale, (ii)
provisions for all taxes payable as a direct result of such Asset Sale and (iii)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP consistently
applied against any liabilities associated with such Asset Sale and retained by
the Company or any Restricted Subsidiary, 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.
"Net Proceeds" has the meaning assigned to such term in the Mortgage.
"Non-Collateral Proceeds" has the meaning provided in Section
4.16(a)(i).
"Notes Pro Rata Amount" has the meaning provided in Section 4.16.
"Obligations" means any principal, interest, penalties, fees and other
liabilities payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Circular dated August 26,
1998, pursuant to which the Series A Notes were issued.
"Officer" means, with respect to any person, the Chairman of the
Board, the Chief Executive Officer, the President, the General Manager, any Vice
President, the Chief Financial Officer, the Finance Manager, the Controller, the
Treasurer, or the Secretary of such person or the equivalent of any of the
foregoing under any foreign jurisdiction.
"Officers' Certificate" means, with respect to any person, a
certificate signed by two Officers or by an Officer
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and either an Assistant Treasurer or an Assistant Secretary of such person and
otherwise complying with the requirements of Sections 12.04 and 12.05.
"Operating Lease" means, as applied to any person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that person is the lessor.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee complying with the requirements of Sections 12.04 and
12.05. Unless otherwise required by the TIA, the legal counsel may be an
employee of or counsel to the Company.
"Owner Securities Certification" has the meaning provided in Section
2.01.
"Paying Agent" has the meaning provided in Section 2.03.
"Permanent Regulation S Global Security" has the meaning provided in
Section 2.01.
"Permitted Holders" means Ira Leon Rennert and his Affiliates, estate,
heirs and legatees, and the legal representatives of any of the foregoing,
including, without limitation, the trustee of any trust of which one or more of
the foregoing are the sole beneficiaries.
"Permitted Indebtedness" means (i) any Indebtedness of the Company and
the Restricted Subsidiaries under (A) the U.S. Revolving Credit Facility in an
aggregate amount not to exceed $100.0 million in aggregate principal amount at
any time outstanding and (B) the Peruvian Revolving Credit Facility in an
aggregate principal amount not to exceed $60.0 million in aggregate principal
amount at any time outstanding, in each case plus any interest, fees and
expenses from time to time owed thereunder, (ii) the Securities in an aggregate
principal amount not to exceed $50.0 million and the Existing Securities in an
aggregate principal amount not to exceed $255.0 million and the related
Guarantees, (iii) any other Indebtedness of the Company and the Restricted
Subsidiaries outstanding on the Issue Date, (iv) purchase money Indebtedness and
any Indebtedness incurred for Capitalized Lease Obligations (A) of the Company
and the Restricted Subsidiaries (other than Doe Run Cayman and its Subsidiaries)
not to exceed $5.0 million in the aggregate at any time outstanding and (B) of
Doe Run Cayman and its Subsidiaries not to exceed $20.0 million in the aggregate
at any
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time outstanding, (v) Interest Rate Protection Obligations to the extent the
notional principal amount of such Interest Rate Protection Obligations does not
exceed the principal amount of the Indebtedness to which such Interest Rate
Protection Obligations relate, and Hedging Agreements, in each case entered into
in the ordinary course of business, (vi) additional Indebtedness of the Company
and the Restricted Subsidiaries not to exceed $25.0 million in the aggregate at
any time outstanding, (vii) Indebtedness owed by the Company or any of the
Wholly-Owned Restricted Subsidiaries to the Company or any Wholly-Owned
Restricted Subsidiary; provided that this clause (vii) shall also include
Indebtedness indirectly between or among the Company and/or one or more of the
Wholly-Owned Restricted Subsidiaries through one or more financial
intermediaries, (viii) any renewals, extensions, substitutions, refundings,
refinancings or replacements of any Indebtedness described in the preceding
clauses (i), (ii) and (iii) above and this clause (viii), so long as such
renewal, extension, substitution, refunding, refinancing or replacement does not
result in an increase in the aggregate principal amount of the outstanding
Indebtedness represented thereby (except if such Indebtedness refinances
Indebtedness under the Revolving Credit Facilities or any other agreement
providing for subsequent borrowings, does not result in an increase in the
commitment available under the Revolving Credit Facilities or such other
agreement) and (ix) any guarantees of the foregoing.
"Permitted Investment" means (i) cash and Cash Equivalents, (ii) any
Investment by the Company or any of the Restricted Subsidiaries in the Company
or any Wholly-Owned Restricted Subsidiary; provided that this clause (ii) shall
also include indirect Investments by the Company and the Wholly-Owned Restricted
Subsidiaries in the Company or one or more of the Wholly-Owned Restricted
Subsidiaries through one or more financial intermediaries, (iii) Related
Business Investments by the Company or any of the Restricted Subsidiaries in
joint ventures, partnerships or persons (including Unrestricted Subsidiaries)
that are not Wholly-Owned Restricted Subsidiaries in an amount not to exceed
$25.0 million in the aggregate at any one time outstanding; (iv) Investments by
the Company or any Restricted Subsidiary in another person, if as a result of
such Investment (a) such other person becomes a Wholly-Owned Restricted
Subsidiary or (b) such other person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, the Company or a
Wholly-Owned Restricted Subsidiary, (v) Investments received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers, in
each case arising in the ordinary course of business, (vi) the non-cash proceeds
of
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any Asset Sale, (vii) Investments under or pursuant to Interest Rate Protection
Obligations or Hedging Agreements, in each case in the ordinary course of
business, (viii) loans and advances to employees of the Company and the
Restricted Subsidiaries made in the ordinary course of business and (ix)
Investments represented by the Qualifying Investments Promissory Notes.
"Permitted Liens" means (i) pledges or deposits by such person under
worker's compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts (other than
for the payment of Indebtedness) or leases to which such person is a party, or
deposits to secure public statutory obligations of such person or deposits to
secure surety or appeal bonds to which such person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, (ii)
Liens imposed by law, such as landlords', carriers', warehousemen's and
mechanics' Liens or bankers' Liens incurred in the ordinary course of business
for sums which are not yet due or are being contested in good faith and for
which adequate provision has been made, (iii) Liens for taxes not yet subject to
penalties for non-payment or which are being contested in good faith and by
appropriate proceedings, if adequate reserve, as may be required by GAAP, shall
have been made therefor, (iv) Liens in favor of issuers of surety bonds or
appeal bonds issued pursuant to the request of and for the account of such
person in the ordinary course of its business, (v) Liens to support trade
letters of credit issued in the ordinary course of business, (vi) survey
exceptions, encumbrances, easements or reservations of, or rights of others for,
rights of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions on the use of real property,
(vii) Liens securing Indebtedness permitted under clause (iv) of the definition
of Permitted Indebtedness; provided that the Fair Market Value of the asset at
the time of the incurrence of the Indebtedness subject to the Lien shall not
exceed the principal amount of the Indebtedness secured, (viii) Liens with
respect to Acquired Indebtedness permitted to be incurred in accordance with
Section 4.12; provided that such Liens secured such Acquired Indebtedness at the
time of the incurrence of such Acquired Indebtedness by the Company or any of
the Restricted Subsidiaries and were not incurred in connection with, or in
anticipation of, the incurrence of such Acquired Indebtedness by the Company or
any of the Restricted Subsidiaries; provided, further, that such Liens do not
extend to or cover any property or assets of the Company or any of the
Restricted Subsidiaries other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or any of the Restricted Subsidiaries and are no
more favorable to the
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lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the Company or any of the Restricted
Subsidiaries, (ix) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default, (x) Liens on assets or
property (including any real property upon which such assets or property are or
will be located) securing Indebtedness incurred to purchase or construct such
assets or property, which Indebtedness is permitted to be incurred under this
Indenture, (xi) Liens securing Indebtedness which is incurred to refinance or
replace Indebtedness which has been secured by a Lien permitted under this
Indenture and is permitted to be refinanced or replaced under this Indenture,
provided that such Liens do not extend to or cover any property or assets of the
Company or any of the Restricted Subsidiaries not securing the Indebtedness so
refinanced or replaced, and (xii) Liens securing reimbursement obligations under
letters of credit but only in or upon the goods the purchase of which was
financed by such letters of credit.
"person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof or any similar entities.
"Peruvian Revolving Credit Facility" means one or more working capital
facilities or other working capital financings or programs entered into by Doe
Run Peru and its Subsidiaries from time to time, as the same may be amended,
restated, supplemented or otherwise modified from time to time, and includes any
agreement renewing, refinancing or replacement all or any portion of the
Indebtedness under such agreement.
"Plan of Liquidation" means, with respect to any person, a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise) (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such person otherwise than as an entirety or
substantially as an entirety and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such person to holders of
Capital Stock of such person.
"Preferred Stock" means, with respect to any person, any and all
shares, interests, participation or other equivalents (however designated) of
such person's preferred or preference stock, whether outstanding on the Issue
Date or issued thereafter, and including, without limitation, all classes and
series of preferred or preference stock of such person.
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"principal" of any Indebtedness (including the Securities and the
Existing Securities) means the principal of such Indebtedness plus the premium,
if any, on such Indebtedness.
"Prior Liens" has the meaning assigned to such term in the Mortgage.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Exchange Act.
"Qualified Capital Stock" means, with respect to any person, any
Capital Stock of such person that is not Disqualified Capital Stock or
convertible into or exchangeable or exercisable for Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Qualifying Auditors" shall mean the firm of independent auditors of
acknowledged international prestige elected annually by Centromin in accordance
with Section 4.2 of the Subscription Agreement.
"Qualifying Investment" shall mean investments that meet the
qualifications of Section 4.5 of the Subscription Agreement, as determined in
good faith by the Qualifying Auditors.
"Qualifying Investments Promissory Notes" shall have the meaning given
to such term in Section 4.19.
"Real Property" means any interest in any real property or any portion
thereof, whether owned in fee or leased or otherwise owned.
"Real Property Release Notice" has the meaning provided in Section
10.03(c)(i).
"Real Property Valuation Date" has the meaning provided in Section
10.03(c)(i).
"Record Date" means the Record Dates specified in the Securities;
provided that if any such date is a Legal Holiday, the Record Date shall be the
first day immediately preceding such specified day that is not a Legal Holiday.
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"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Securities.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement by and between the Company, the Guarantors and the Initial Purchaser,
dated as of September 1, 1998, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Related Business Investment" means any Investment, Capital
Expenditure or other expenditure by the Company or any Restricted Subsidiary
which is related to the business of the Company and the Restricted Subsidiaries
as it is conducted on the Issue Date or any business which is the same, similar
or reasonably related to such business.
"Released Assets" has the meaning provided in Section 10.03(b).
"Released Real Property" means any portion of the Real Property which
constitutes Mortgaged Property upon which an Excluded Asset is or is intended to
be situated so long as (i) such Released Real Property is not (x) necessary for
the proper and efficient operation of the Mortgaged Property or for the
compliance by the Mortgaged Property with any applicable law, code or ordinance,
including, without limitation, any Environmental Law, or (y) an integral part of
the Company's operations as conducted at the Mortgaged Property on the Issue
Date and (ii) the release of such Released Real Property will not interfere with
or impair the Trustee's ability to realize the value of the remaining
Collateral.
"Released Trust Moneys" has the meaning provided in Section 11.04.
"Renco" means The Renco Group, Inc., a New York corporation, which is
the ultimate parent of the Company, or any successor thereto.
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"Restricted Global Security" has the meaning provided in Section 2.01.
"Restricted Payment" has the meaning provided in Section 4.03.
"Restricted Period" has the meaning provided in Section 2.01.
"Restricted Security" has the meaning provided in Rule 144(a)(3) under
the Securities Act.
"Restricted Subsidiary" means any Subsidiary of the Company which at
the time of determination is not an Unrestricted Subsidiary. The Board of
Directors of the Company may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary only if, immediately after giving effect to such
designation, the Company and the Guarantors could incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.12, on a pro forma basis taking into account such designation.
"Revolving Credit Facilities" means the U.S. Revolving Credit Facility
and the Peruvian Revolving Credit Facility.
"Sale/leaseback" means any lease, whether an Operating Lease or a
Capital Lease, whereby the Company or any of the Restricted Subsidiaries,
directly or indirectly, becomes or remains liable as lessee or as guarantor or
other surety, of any property (whether real or personal or mixed) whether now
owned or hereafter acquired, (i) that the Company or the Restricted
Subsidiaries, as the case may be, has sold or transferred or is to sell or
transfer to any other person (other than the Company or any Restricted
Subsidiary), or (ii) that the Company or any of the Restricted Subsidiaries, as
the case may be, intends to use for substantially the same purpose as any other
property that has been or is to be sold or transferred by the Company or any
such Restricted Subsidiary to any person (other than the Company or any
Restricted Subsidiary) in connection with such lease.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Series A Notes and the Series B Notes.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
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"Security Agreement" means the Security Agreement, dated as of
September 1, 1998, between the Company and the Collateral Agent, as the same may
be amended, amended and restated, supplemented or otherwise modified from time
to time.
"Series A Notes" means the Company's 11 1/4% Senior Secured Notes due
2005, Series A, as amended or supplemented from time to time in accordance with
the terms hereof, that are issued pursuant to this Indenture.
"Series B Notes" means the Company's 11 1/4% Senior Secured Notes due
2005, Series B, as amended or supplemented from time to time in accordance with
the terms hereof, that are issued pursuant to this Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that
satisfies the criteria for a "significant subsidiary" set forth in Rule 1.02(w)
of Regulation S-X under the Exchange Act.
"Subsidiary" of any person means (i) any corporation of which the
outstanding capital stock having at least a majority of the votes entitled to be
cast in the election of directors under ordinary circumstances shall at the time
be owned, directly or indirectly, by such person or (ii) any other person of
which at least a majority of the voting interest under ordinary circumstances is
at the time owned, directly or indirectly, by 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.
"Subscription Agreement" means the Contrato de Transferencia de
Acciones, Aumento de Capital Social y Subscripcion de Acciones de la Empresa
Metalurgica La Oroya S.A., dated as of October 23, 1997, between Doe Run Peru
and Centromin.
"Survey" means a survey of any parcel of real property (and all
improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the state where such property is located, (ii) dated (or
redated) not earlier than six months prior to the date of delivery thereof
(unless there shall have occurred within six months prior to such date of
delivery any exterior construction on the site of such property, in which event
such survey shall be dated (or redated) after the completion of such
construction or if such construction shall not have been completed as of such
date of delivery, not earlier than 20 days prior to such date of delivery),
(iii) certified by the surveyor (in a manner
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reasonably acceptable to the title company providing title insurance) and (iv)
complying in all respects with the minimum detail requirements of the American
Land Title Association, or local equivalent, as such requirements are in effect
on the date of preparation of such survey, or that is otherwise reasonably
acceptable to the Trustee (giving consideration to the applicable transaction).
"Taking" shall have the meaning asigned to such term in the Mortgage.
"Temporary Regulation S Global Security" has the meaning provided in
Section 2.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter as in effect on the date on which this Indenture is qualified under
the TIA.
"Transferee Certificate" means the Transferee Letter of Representation
attached as Exhibit D to this Indenture.
"Transferee Securities Certification" has the meaning provided in
Section 2.06(g).
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Moneys" has the meaning provided in Section 11.01.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"U.S. Government Obligations" has the meaning provided in Section
8.01(b).
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
which at the time of determination is an Unrestricted Subsidiary (as designated
by the Board of Directors of the Company, as provided below) and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
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may designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary, unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, any Restricted Subsidiary of the Company which is not a Subsidiary of the
Subsidiary to be so designated; provided that (a) the Company certifies that
such designation complies with Section 4.03 and (b) each Subsidiary to be so
designated and each of its Subsidiaries has not at the time of designation, and
does not thereafter, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness pursuant to which
the lender has recourse to any of the assets of the Company or any of the
Restricted Subsidiaries. The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary only if, immediately after
giving effect to such designation, the Company and the Guarantors could incur at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 4.12, on a pro forma basis taking into account such
designation.
"U.S. Revolving Credit Facility" means the Loan and Security Agreement
dated as of March 12, 1998, among the Company, FPI and Congress Financial
Corporation, as Lender, as the same may be amended, restated, supplemented or
otherwise modified from time to time, and includes any agreement renewing,
refinancing or replacement of all or any portion of the Indebtedness under such
agreement.
"Valuation Date" has the meaning provided in Section 10.03(b)(i).
"Wholly-Owned Restricted Subsidiary" means any Restricted Subsidiary
which is a Wholly-Owned Subsidiary of the Company.
"Wholly-Owned Subsidiary" means any Subsidiary of such person to the
extent all of the Capital Stock or other ownership interests in such Subsidiary
(other than (x) directors' qualifying shares, (y) with respect to Doe Run Peru,
any shares purchased by employees of Doe Run Peru or Centromin in connection
with the Acquisition, which retained amount shall not exceed 1% of the total
interests in Doe Run Peru, and (z) an immaterial interest owned by other persons
solely to comply with applicable law) is owned directly or indirectly by such
person or a Wholly-Owned Subsidiary of such person.
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SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
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.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Indenture securities means the Company or any other
obligor on the Securities.
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.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
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ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificate of authentication with
respect thereto shall be substantially in the form of Exhibit A or Exhibit B
hereto, as the case may be. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company and the
Trustee shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication, shall bear interest from the applicable date and shall be
payable on the Interest Payment Dates and the Maturity Date. Each Security shall
have an executed Guarantee from each of the Guarantors endorsed thereon
substantially in the form of Exhibit M hereto.
The terms and provisions contained in the Securities 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.
Securities offered and sold in their initial distribution in reliance
on Regulation S may be initially issued in the form of temporary Global
Securities in fully registered form without interest coupons, substantially in
the form of Exhibit A with such applicable legends as are provided for in
Exhibit A or Exhibit C. Such temporary Global Securities may be registered in
the name of the Depository or its nominee and deposited with the Trustee, as
custodian for the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided (and the Guarantors shall execute the
Guarantees thereon), for credit by the Depository to the respective accounts of
the beneficial owners of the Securities represented thereby (or such other
accounts as they may direct), provided that upon such deposit all such
Securities shall be credited to or through accounts maintained at the Depository
by or on behalf of Euroclear or CEDEL. Until such time as the Restricted Period
(as defined below) shall have expired, such temporary Global Securities,
together with their Successor Securities which are Global Securities other than
the Restricted Global Security, shall be referred to herein as a "Temporary
Regulation S Global Security." After such time as the Restricted Period shall
have expired and the certifications referred to below in the next succeeding
paragraph shall have
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been provided, interests in such Temporary Regulation S Global Securities shall
be exchanged for interests in like Global Securities, referred to herein
collectively as the "Permanent Regulation S Global Security," substantially in
the form of Security set forth in Exhibit A with such applicable legends as are
provided for in Exhibit A or Exhibit C. Such Permanent Regulation S Global
Securities shall be registered in the name of the Depository or its nominee and
deposited with the Trustee, as custodian for the Depository, duly executed by
the Company and authenticated by the Trustee as hereinafter provided, for credit
to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct). The aggregate
principal amount of the Temporary Regulation S Global Security or the Permanent
Regulation S Global Security may be increased or decreased from time to time by
adjustments made on the records of the Trustee, as custodian for the Depository,
as hereinafter provided. As used herein, the term "Restricted Period" means the
period of 40 days commencing on the day after the latest of (a) the day on which
the Securities are first offered to persons other than distributors (as defined
in Regulation S) in reliance on Regulation S and (b) the date of this Indenture.
Interests in a Temporary Regulation S Global Security may be exchanged
for interests in a Permanent Regulation S Global Security only after (a) the
expiration of the Restricted Period, (b) delivery by a beneficial owner of an
interest therein to Euroclear or CEDEL of a written certification (an "Owner
Securities Certification") substantially in the form of Annex E hereto, and (c)
upon delivery by Euroclear or CEDEL to the Trustee of a written certification (a
"Depository Securities Certification") substantially in the form attached hereto
as Exhibit F. Upon satisfaction of such conditions, the Trustee will exchange
the portion of the Temporary Regulation S Global Security covered by such
certification for interests in a Permanent Regulation S Global Security. The
delivery by such Holder of a beneficial interest in such Temporary Regulation S
Global Security of such certification shall constitute an irrevocable
instruction by such holder to Euroclear or CEDEL, as the case may be, to
exchange such Holder's beneficial interest in the Temporary Regulation S Global
Security for a beneficial interest in the Permanent Regulation S Global Security
upon the expiration of the Restricted Period in accordance with the next
succeeding paragraph.
Upon:
(i) the expiration of the Restricted Period;
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(ii) receipt by Euroclear or CEDEL, as the case may be, of Owner
Securities Certifications described in the preceding paragraph;
(iii) receipt by the Depository of:
(1) written instructions given in accordance with the Applicable
Procedures from an Agent Member directing the Depository to credit or
cause to be credited to a specified Agent Member's account a
beneficial interest in a Permanent Regulation S Global Security in a
principal amount equal to that of the beneficial interest in a
corresponding Temporary Regulation S Global Security for which the
necessary certifications have been delivered; and
(2) a written order given in accordance with the Applicable
Procedures containing information regarding the account of the Agent
Member, and the Euroclear or CEDEL account for which such Agent
Member's account is held, to be credited with, and the account of the
Agent Member to be debited for, such beneficial interest; and
(iv) receipt by the Trustee of notification from the Depository of the
transactions described in (iii) above and from Euroclear or CEDEL, as the
case may be, of Depository Securities Certifications,
the Trustee, as Registrar, shall instruct the Depository to reduce the principal
amount of such Temporary Regulation S Global Security and to increase the
principal amount of such Permanent Regulation S Global Security, by the
principal amount of the beneficial interest in such Temporary Regulation S
Global Security to be so transferred, and to credit or cause to be credited to
the account of the person specified in such instructions a beneficial interest
in such Permanent Regulation S Global Security having a principal amount equal
to the amount by which the principal amount of such Temporary Regulation S
Global Security was reduced upon such transfer.
Securities offered and sold in their initial distribution in reliance
on Rule 144A under the Securities Act and other than in reliance on Rule 144A
under the Securities Act or Regulation S shall be issued in the form of one or
more Global Securities (collectively, and, together with their Successor
Securities, the "Restricted Global Security") in fully registered form without
interest coupons, substantially in the form of Security set forth in Exhibit A
with such applicable legends as are provided for in Exhibit A or Exhibit C,
except as otherwise
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permitted herein. Such Restricted Global Security shall be registered in the
name of the Depository or its nominee and deposited with the Trustee, as
custodian for the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided, for credit by the Depository to the
respective accounts of beneficial owners of the Securities represented thereby
(or such other accounts as they may direct). The aggregate principal amount of
the Restricted Global Security may be increased or decreased from time to time
by adjustments made on the records of the Trustee, as custodian for the
Depository, in connection with a corresponding decrease or increase in the
aggregate principal amount of the Temporary Regulation S Global Security or the
Permanent Regulation S Global Security, as hereinafter provided.
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary for the Company
and each Guarantor (each of whom shall, in each case, have been duly authorized
by all requisite corporate actions) shall attest to, the Securities for the
Company and the Guarantees for the Guarantors by manual or facsimile signature.
If an Officer whose signature is on a Security or a Guarantee was an
Officer at the time of such execution but no longer holds that office at the
time the Trustee authenticates the Security, the Security shall nevertheless be
valid.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Series A Notes for original issue in
the aggregate principal amount not to exceed $50,000,000 upon written orders of
the Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Securities to be authenticated, the date on which
the Securities are to be authenticated and the aggregate principal amount of
Securities outstanding on the date of authentication and shall further specify
the amount of such Securities to be issued as a Global Security or in
certificated form. The aggregate principal amount of Securities outstanding at
any time may not exceed $50,000,000, except as provided in Section 2.07. Upon
the written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate
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Securities in substitution of Securities originally issued to reflect any name
change of the Company.
Series B Notes may be issued only in exchange for a like principal
amount of Series A Notes pursuant to an Exchange Offer.
The principal and interest on Book-Entry Securities shall be payable
to the Depository or its nominee, as the case may be, as the sole registered
owner and the sole holder of the Book-Entry Securities represented thereby. The
principal and interest on Securities in certificated form shall be payable at
the office of the Paying Agent.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
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. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
If the Securities are to be issued in the form of one or more Global
Securities, then the Company shall execute and the Trustee shall authenticate
and deliver one or more Global Securities that shall represent and shall be in
minimum denominations of $1,000.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. 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. Neither
the Company nor any Affiliate of the Company shall act
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as Paying Agent. The Registrar shall keep a register of the Securities and of
their transfer and exchange. The Company, upon notice to the Trustee, may have
one or more co-Registrars and one or more additional paying agents reasonably
acceptable to the Trustee. The term "Paying Agent" includes any additional
paying agent. The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed. The initial office of the Company and the Trustee for purposes of
this Section 2.03 shall be State Street Bank and Trust Company, N.A., 61
Broadway, 15th Floor, New York, NY 10006.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee, in advance, of the name and address of any such Agent. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Securities (whether such assets have been
distributed to it by the Company or any other obligor on the Securities), and
shall notify the Trustee of any Default by the Company (or any other obligor on
the Securities) in making any such payment. The Company at any time may require
a Paying Agent to distribute all assets held by it to the Trustee and account
for any assets disbursed and the Trustee may at any time during the continuance
of any payment Default, upon written request to a Paying Agent, require such
Paying Agent to distribute all assets held by it to the Trustee and to account
for any assets distributed. Upon distribution to the Trustee of all assets that
shall have been delivered by the Company to the Paying Agent, the Paying Agent
shall have no further liability for such assets.
SECTION 2.05. Securityholder 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
the Holders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee before each Record Date and at such other times as the Trustee may
request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of
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the Holders, which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
(a) Beneficial interests in a Global Security may, subject to the
restrictions on the transferability of the Securities and upon delivery of a
certificate in the form of Exhibit D, be exchanged for certificated Securities
upon request but only upon at least 20 days' prior written notice given to the
Trustee by or on behalf of the Depository (in accordance with the Depository's
customary procedures) and will bear the applicable legends set forth in Exhibit
A.
(b) If any Global Security is to be exchanged for other Securities or
cancelled in whole, it shall be surrendered by or on behalf of the Depository or
its nominee to the Trustee, as Registrar, for exchange or cancellation as
provided in this Article Two. If any Global Security is to be exchanged for
other Securities or cancelled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, such
Global Security shall be so surrendered for exchange or cancellation as provided
in this Article Two or, if the Trustee is acting as custodian for the Depository
or its nominee (or is party to a similar arrangement) with respect to such
Global Security, the principal amount thereof shall be reduced or increased by
an amount equal to the portion thereof to be so exchanged or cancelled, or the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, in each case by means of an appropriate
adjustment made on the records of the Trustee, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depository or its
authorized representatives to make a corresponding adjustment to its records
(including by crediting or debiting any Agent Member's account as necessary to
reflect any transfer or exchange of a beneficial interest). Upon any such
surrender or adjustment of a Global Security, the Trustee shall, subject to this
Article Two, authenticate and deliver any Securities (and the Guarantors shall
execute the Guarantees thereon) issuable in exchange for such Global Security
(or any portion thereof) to or upon the order of, and registered in such names
as may be directed by, the Depository or its authorized representative and each
of the Guarantors shall execute a Guarantee thereon at the Trustee's request.
Upon the request of the Trustee in connection with the occurrence of any of the
events specified in the preceding paragraph or in paragraph (r) below, the
Company shall promptly make available to the Trustee a reasonable supply of
Securities that are not in the form of Global Securities. The Trustee shall be
entitled to rely upon any order,
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direction or request of the Depository or its authorized representative which is
given or made pursuant to this Article Two if such order, direction or request
is given or made in accordance with the Applicable Procedures, as certified to
the Trustee by the Depository.
(c) Subject to the provisions in the legends required by this
Indenture, the registered Holder may grant proxies and otherwise authorize any
person, including Agent Members and persons who may hold interests in Agent
Members, to take any action that such Holder is entitled to take under this
Indenture.
(d) Neither Agent Members nor any other person on whose behalf Agent
Members may act shall have any rights under this Indenture with respect to any
Global Security held on their behalf by the Depository or under the Global
Security, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security. With respect to any Global
Security deposited with the Trustee as custodian for the Depository for credit
to their respective accounts (or to such other accounts as they may direct) at
Euroclear or CEDEL, the provisions of the "Operating Procedures of the Euroclear
System" and the "Terms and Conditions Governing Use of Euroclear", and the
"Management Regulations" and "Instructions to Participants" of CEDEL,
respectively, shall be applicable to such Global Security, as certified to the
Trustee by Euroclear or CEDEL, as applicable.
(e) Upon presentation for transfer or exchange of any Security at the
office of the Trustee, as Registrar, located in The City of New York,
accompanied by a written instrument of transfer or exchange in the form approved
by the Company (it being understood that, until notice to the contrary is given
to holders of Securities, the Company shall be deemed to have approved the form
of instrument of transfer or exchange, if any, printed on any Security),
executed by the registered Holder, in person or by such Holder's attorney
thereunto duly authorized in writing, and upon compliance with this Section
2.06, such Security shall be transferred upon the Register, and a new Security
shall be authenticated and issued in the name of the transferee and the
Guarantors shall execute Guarantees thereon. Notwithstanding any provision to
the contrary herein
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or in the Securities, transfers of a Global Security, in whole or in part, and
transfers of interests therein of the kind described in this Section 2.06, shall
only be made in accordance with this Section 2.06. Transfers and exchanges
subject to this Section 2.06 shall also be subject to the other provisions of
this Indenture that are not inconsistent with this Section 2.06.
(f) General. A Global Security may not be transferred, in whole or in
part, to any person other than the Depository or a nominee thereof, and no such
transfer to any such other person may be registered; provided, however, that
this clause (f) shall not prohibit any transfer of a Security that is issued in
exchange for a Global Security but is not itself a Global Security. No transfer
of a Security to any person shall be effective under this Indenture or the
Securities unless and until such Security has been registered in the name of
such person. Nothing in this clause (f) shall prohibit or render ineffective any
transfer of a beneficial interest in a Global Security effected in accordance
with the other provisions of this Section 2.06.
(g) Temporary Regulation S Global Security. If the holder of a
beneficial interest in a Temporary Regulation S Global Security wishes at any
time to transfer such interest to a person who wishes to take delivery thereof
in the form of a beneficial interest in such Temporary Regulation S Global
Security, such transfer may be effected, subject to the rules and procedures of
the Depository, Euroclear and CEDEL, in each case to the extent applicable and
as in effect from time to time (the "Applicable Procedures"), only in accordance
with this clause (g). Upon delivery (i) by a beneficial owner of an interest in
a Temporary Regulation S Global Security to Euroclear or CEDEL, as the case may
be, of an Owner Securities Certification, (ii) by the transferee of such
beneficial interest in the Temporary Regulation S Global Security to Euroclear
or CEDEL, as the case may be, of a written certification (a "Transferee
Securities Certification") substantially in the form of Exhibit G hereto and
(iii) by Euroclear or CEDEL, as the case may be, to the Trustee, as Registrar,
of a Depository Securities Certification, the Trustee may direct either
Euroclear or CEDEL, as the case may be, to reflect on its records the transfer
of a beneficial interest in the Temporary Regulation S Global Security from the
beneficial owner providing the Owner Securities Certification to the person
providing the Transferee Securities Certification.
(h) Restricted Global Security to Temporary Regulation S Global
Security. If the holder of a beneficial interest in the Restricted Global
Security wishes at any time to transfer
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such interest to a person who wishes to take delivery thereof in the form of a
beneficial interest in the Temporary Regulation S Global Security, such transfer
may be effected, subject to the Applicable Procedures, only in accordance with
the provisions of this clause (h) and clause (n) below. Upon receipt by the
Trustee, as Registrar, of (A) written instructions given by or on behalf of the
Depository in accordance with the Applicable Procedures directing the Trustee to
credit or cause to be credited to a specified Agent Member's account a
beneficial interest in the Temporary Regulation S Global Security in a specified
principal amount and to cause to be debited from another specified Agent
Member's account a beneficial interest in the Restricted Global Security in an
equal principal amount and (B) a certificate in substantially the form set forth
in Exhibit H signed by or on behalf of the holder of such beneficial interest in
the Restricted Global Security, the Trustee, as Security Registrar, shall,
subject to clause (n) below, reduce the principal amount of the Restricted
Global Security, and increase the principal amount of the Temporary Regulation S
Global Security by such specified principal amount.
(i) Restricted Global Security to Permanent Regulation S Global
Security. If the holder of a beneficial interest in the Restricted Global
Security wishes at any time to transfer such interest to a person who wishes to
take delivery thereof in the form of a beneficial interest in the Permanent
Regulation S Global Security, such transfer may be effected, subject to the
Applicable Procedures, only in accordance with this clause (i). Upon receipt by
the Trustee, as Security Registrar, of (A) written instructions given by or on
behalf of the Depository in accordance with the Applicable Procedures directing
the Trustee to credit or cause to be credited to a specified Agent Member's
account a beneficial interest in the Permanent Regulation S Global Security in a
specified principal amount and to cause to be debited from another specified
Agent Member's account a beneficial interest in the Restricted Global Security
in an equal principal amount and (B) a certificate in substantially the form set
forth in Exhibit I signed by or on behalf of the holder of such beneficial
interest in the Restricted Global Security, the Trustee, as Registrar, shall
reduce the principal amount of a Restricted Global Security, and increase the
principal amount of the Permanent Regulation S Global Security by such specified
principal amount.
(j) Temporary Regulation S Global Security or Permanent Regulation S
Global Security to Restricted Global Security. If the holder of a beneficial
interest in the Temporary Regulation S Global Security or the Permanent
Regulation S Global Security at any time, wishes to transfer such interest
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to a person who wishes to take delivery thereof in the form of a beneficial
interest in the Restricted Global Security, such transfer may be effected,
subject to the Applicable Procedures, only in accordance with this clause (j)
and clause (n) below; provided that with respect to any transfer of a beneficial
interest in a Temporary Regulation S Global Security, the transferor and
Euroclear or CEDEL, as the case may be, must have previously delivered an Owner
Securities Certification and a Depository Securities Certification respectively,
with respect to such beneficial interest. Upon receipt by the Trustee, as
Registrar, of (A) written instructions given by or on behalf of the Depository
in accordance with the Applicable Procedures directing the Trustee to credit or
cause to be credited to a specified Agent Member's account a beneficial interest
in the Restricted Global Security in a specified principal amount and to cause
to be debited from another specified Agent Member's account a beneficial
interest in the Temporary Regulation S Global Security or the Permanent
Regulation S Global Security, as the case may be, in an equal principal amount
and (B) a certificate in substantially the form set forth in Exhibit J signed by
or on behalf of the holder of such beneficial interest in the Temporary
Regulation S Global Security or the Permanent Regulation S Global Security, as
the case may be, the Trustee, as Security Registrar, shall, subject to clause
(n) below, reduce the principal amount of such Temporary Regulation S Global
Security or Permanent Regulation S Global Security, as the case may be, and
increase the principal amount of the Restricted Global Security by such
specified principal amount.
(k) Non-Global Restricted Security to Global Security. If the holder
of a Restricted Security (other than a Global Security) wishes at any time to
transfer all or any portion of such Security to a person who wishes to take
delivery thereof in the form of a beneficial interest in the Restricted Global
Security, the Temporary Regulation S Global Security or the Permanent Regulation
S Global Security, such transfer may be effected, subject to the Applicable
Procedures, only in accordance with this clause (k) and clause (n) below. Upon
receipt by the Trustee, as Registrar, of (A) such Security and written
instructions given by or on behalf of such Holder as provided in this Section
2.06 directing the Trustee to credit or cause to be credited to a specified
Agent Member's account a beneficial interest in the Restricted Global Security,
the Temporary Regulation S Global Security or the Permanent Regulation S Global
Security, as the case may be, in a specified principal amount equal to the
principal amount of the Restricted Security (or portion thereof) to be so
transferred, and (B) an appropriately completed certificate substantially in the
form set forth in Exhibit K-1 hereto, if the specified account is to be credited
with a beneficial interest in the Restricted Global Security,
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or Exhibit K-2 hereto, if the specified account is to be credited with a
beneficial interest in the Temporary Regulation S Global Security or the
Permanent Regulation S Global Security, signed by or on behalf of such Holder,
then the Trustee, as Registrar, shall, subject to clause (n) below, cancel such
Restricted Security (and issue a new Security in respect of any untransferred
portion thereof) as provided in this Section 2.06 and increase the principal
amount of the Restricted Global Security, Temporary Regulation S Global Security
or Permanent Regulation S Global Security, as the case may be, by the specified
principal amount.
(l) Non-Global Permanent Regulation S Security to Restricted Global
Security or Permanent Regulation S Global Security. If the Holder of a Permanent
Regulation S Security (other than a Global Security) wishes at any time to
transfer all or any portion of such Security to a person who wishes to take
delivery thereof in the form of a beneficial interest in the Restricted Global
Security or the Permanent Regulation S Global Security, as the case may be, such
transfer may be effected only in accordance with this clause (l) and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Registrar, of (A)
such Security and instructions given by or on behalf of such Holder as provided
in this Section 2.06 directing the Trustee to credit or cause to be credited to
a specified Agent Member's account a beneficial interest in the Restricted
Global Security or the Permanent Regulation S Global Security, as the case may
be, in a principal amount equal to the principal amount of the Security (or
portion thereof) to be so transferred, and (B)(i) with respect to a transfer
which is to be delivered in the form of a beneficial interest in the Restricted
Global Security, a certificate in substantially the form set forth in Exhibit
L-1, signed by or on behalf of such Holder, and (ii) with respect to a transfer
which is to be delivered in the form of a beneficial interest in the Permanent
Regulation S Global Security, a certificate in substantially the form set forth
in Exhibit L-2, signed by or on behalf of such Holder, then the Trustee, as
Registrar, shall, subject to Clause (9) below, cancel such Security (and issue a
new Security in respect of any untransferred portion thereof) as provided in
this Section 2.06 and increase the principal amount of the Restricted Global
Security, or the Permanent Regulation S Global Security, as the case may be, by
the specified principal.
(m) Other Exchanges. Securities that are not Global Securities may be
exchanged (on transfer or otherwise) for Securities that are not Global
Securities or for beneficial interests in a Global Security (if any is then
outstanding) only in accordance with such procedures, which shall be
substantially
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consistent with the provisions of clauses (f) through (l) above (including the
certification requirements intended to insure that transfers of beneficial
interests in a Global Security comply with Rule 144A under the Securities Act,
Rule 144 under the Securities Act or Regulation S, as the case may be) and any
Applicable Procedures, as may be from time to time adopted by the Company and
the Trustee.
(n) Interests in Temporary Regulation S Global Security To Be Held
Through Euroclear or CEDEL. Until the later of the expiration of the Restricted
Period and the provision of the Owner Securities Certification and the
Depository Securities Certification, beneficial interests in any Temporary
Regulation S Global Security may be held only in or through accounts maintained
at the Depository by Euroclear or CEDEL (or by Agent Members acting for the
account thereof).
(o) When Securities in certificated form are presented to the
Registrar or a co-Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal principal amount of
Securities of other authorized denominations, the Registrar or co-Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided, however, that the
Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing. To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities (and the Guarantors shall execute the Guarantees thereon) at the
Registrar's or co-Registrar's request. No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Sections
2.02, 2.10, 3.07, 4.15, 4.16 or 9.05). The Registrar or co-Registrar shall not
be required to register the transfer of or exchange of any Security (i) during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of Securities and ending at the close of business on the
day of such mailing and (ii) selected for redemption in whole or in part
pursuant to Article Three, except the unredeemed portion of any Security being
redeemed in part.
(p) If a Series A Note is a Restricted Security in certificated form,
then as provided in this Indenture and subject to the limitations herein set
forth, the Holder, provided
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it is a Qualified Institutional Buyer, may exchange such Security for a
Book-Entry Security by instructing the Trustee (by completing the Transferee
Certificate in the form of Exhibit D hereto) to arrange for such Series A Note
to be represented by a beneficial interest in a Global Security in accordance
with the customary procedures of the Depository.
(q) Upon any exchange provided for in Section 2.06(a), the Company
shall execute and the Trustee shall authenticate and deliver to the person
specified by the Depository a new Series A Note or Series A Notes registered in
such names and in such authorized denominations as the Depository, pursuant to
the instructions of the beneficial owner of the Securities requesting the
exchange, shall instruct the Trustee. Thereupon, the beneficial ownership of
such Global Security shown on the records maintained by the Depository or its
nominee shall be reduced by the amounts so exchanged and an appropriate
endorsement shall be made by or on behalf of the Trustee on the Global Security.
Any such exchange shall be effected through the Depository in accordance with
the procedures of the Depository therefor.
(r) Notwithstanding the foregoing, no Global Security shall be
registered for transfer or exchange, or authenticated and delivered, whether
pursuant to this Section, Section 2.07, 2.10 or 3.07 or otherwise, in the name
of a person other than the Depository for such Global Security or its nominee
until (i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security or if at any time the Depository
ceases to be a clearing agency registered under the Exchange Act, and a
successor depository is not appointed by the Company within 30 days, (ii) the
Company executes and delivers to the Trustee a Company order that all such
Global Securities shall be exchangeable or (iii) there shall have occurred and
be continuing an Event of Default. Upon the occurrence in respect of any Global
Security representing the Series A Notes of any one or more of the conditions
specified in clause (i), (ii) or (iii) of the preceding sentence, such Global
Security may be registered for transfer or exchange for Series A Notes
registered in the names of, authenticated and delivered to such persons as the
Trustee or the Depository, as the case may be, shall direct.
(s) Except as provided above, any Security authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, any Global
Security, whether pursuant to this Section, Section 2.07, 2.10 or 3.07 or
otherwise, shall also be a Global Security and bear the legend specified in
Exhibit C.
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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 (and the Guarantors shall execute the Guarantees thereon) 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 the Company, the Guarantors and the Trustee, to protect the Company,
the Guarantors, the Trustee or any Agent 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 expenses of counsel. Every replacement Security shall constitute an
additional obligation of the Company and the Guarantors.
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
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 the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Securities payable on that date, then on and
after that date such Securities cease to be outstanding and interest on them
ceases to accrue; provided, however, that to the extent the Trustee is enjoined
from making payments to the Holders, interest will continue to accrue until such
time as the Trustee is not so enjoined.
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 an Affiliate
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of the Company 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 are so
owned shall be disregarded.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities (and the
Guarantors shall execute the guarantees thereon) upon receipt of a written order
of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Securities to be authenticated
and the date on which the temporary Securities are to be authenticated.
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 and the Guarantors shall execute Guarantees on, upon
receipt of a written order of the Company pursuant to Section 2.02, definitive
Securities in exchange for temporary 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,
and no one else, shall 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 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 in a payment of interest on the Securities, it
shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest to the persons who are Holders on a subsequent special
record date, which date shall be the fifteenth day next
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preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least 15
days before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities may use a CUSIP number or
numbers, and if so, the Trustee shall use the CUSIP number or numbers in notices
of redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number or numbers printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities.
SECTION 2.14. Designation.
The Indebtedness evidenced by the Securities and the Guarantees is
hereby irrevocably designated as "senior indebtedness" or such other term
denoting seniority (i) for all purposes of the provisions defining subordination
contained in agreements that provide that the Indebtedness of the Company issued
pursuant to such agreements is subordinate to Indebtedness designated as senior
indebtedness and (ii) for the purposes of any future Indebtedness of the Company
which the Company expressly makes subordinate to any senior indebtedness or such
other term denoting seniority. In connection with the issuance of any such
future subordinated Indebtedness, the Company shall take all necessary steps to
effectuate the foregoing.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Optional Redemption.
(a) The Securities will be subject to redemption, in whole or in part,
at the option of the Company, at any time on or after March 15, 2002, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued interest to the redemption date, if redeemed during the 12
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month period beginning on March 15 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2002.............................................. 105.625%
2003.............................................. 102.813%
2004 and thereafter............................... 100.000%
</TABLE>
(b) In addition, at any time prior to March 15, 2001, the Company may
redeem up to 35% of the Securities with the proceeds of one or more Equity
Offerings at a redemption price (expressed as a percentage of principal amount)
of 111.25% plus accrued interest to the redemption date; provided that at least
65% of the Securities remains outstanding immediately after any such redemption.
In order to effect the foregoing redemption with the proceeds of any Equity
Offering, the Company shall make such redemption not more than 120 days after
the consummation of any such Equity Offering.
SECTION 3.02. Notices to Trustee.
If the Company elects to redeem Securities pursuant to this Indenture
and the Securities, it shall notify the Trustee and the Paying Agent in writing
of the Redemption Date and the principal amount of the Securities to be redeemed
and whether it wants the Trustee to give notice of redemption to the Holders (at
the Company's expense) at least 30 days (unless a shorter notice shall be
satisfactory to the Trustee) but not more than 60 days before the Redemption
Date. Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.03. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed at any time, the
Trustee shall select the Securities to be redeemed in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities being redeemed are listed or, if the Securities are not listed on a
national securities exchange, on a pro rata basis, by lot or by such other
method as the Trustee shall deem fair and appropriate.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to
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be redeemed. Securities in denominations of $1,000 or less may be redeemed only
in whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. If a redemption is to be made with the
proceeds of an Equity Offering pursuant to Section 3.01(b), selection of the
Securities for redemption shall be made by the Trustee only on a pro rata basis
unless such method is otherwise prohibited. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of Securities
called for redemption.
SECTION 3.04. Notice of Redemption.
Except as otherwise provided in Section 3.01, at least 30 days but not
more than 60 days before a Redemption Date the Company shall mail a notice of
redemption by first class mail to each Holder whose Securities are to be
redeemed, with a copy to the Trustee. At the Company's request, the Trustee
shall give the notice of redemption in the Company's name and at the Company's
expense. Each notice for redemption shall identify the Securities to be redeemed
and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) 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 Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in the aggregate principal amount equal to the unredeemed
portion thereof will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities
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(or portion thereof) to be redeemed, as well as the aggregate principal
amount of Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption; and
(8) the CUSIP number, if any, relating to such Securities.
SECTION 3.05. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.04,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon surrender to the Trustee or 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 3.06. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient and timely to pay the Redemption Price
of all Securities 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). The Paying Agent shall promptly return
to the Company any U.S. Legal Tender so deposited which is not required for that
purpose upon the written request of the Company, except with respect to monies
owed as obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment.
SECTION 3.07. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Trustee shall authenticate for the Holder a new Security or Securities equal in
principal amount to the unredeemed portion of the Security surrendered.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities. An installment of
principal of or interest on the Securities shall be considered paid on the date
it is due if the Trustee or Paying Agent holds on that date U.S. Legal Tender
designated for and sufficient and timely to pay the installment. Interest on the
Securities will be computed on the basis of a 360-day year composed of twelve
30-day months.
Commencing on the 91st day after the Issue Date, the interest rate on
the aggregate principal amount of the Securities shall increase by 1.0% per
annum for each 90-day period that the Securities are not secured by all of the
Collateral pursuant to the Collateral Documents; provided that the interest rate
on the Securities shall in no event exceed 18 1/4% per annum and upon the date
that the Securities are so secured, such additional interest shall cease to
accrue.
The Company shall pay interest on overdue principal and (to the extent
permitted by law) on overdue installments of interest at a rate equal to 13.25%
per annum.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. The Company shall
give prior 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 set forth in Section 12.02.
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
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the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the office of State Street
Bank and Trust Company, Goodwin Square, 225 Asylum, 23rd Floor, Hartford, CT
06103, as such office of the Company in accordance with this Section 4.02.
SECTION 4.03. Limitation on Restricted Payments.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, after the Issue Date (a) declare or pay
any dividend or make any distribution on the Company's Capital Stock or make any
payment to holders of such Capital Stock (other than dividends or distributions
payable in Qualified Capital Stock of the Company), (b) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock, (c) purchase, redeem, prepay, defease or otherwise acquire or
retire for value, prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, Indebtedness of the Company or any of the
Guarantors that is expressly subordinate in right of payment to the Securities
or the Guarantee of such Guarantor, as the case may be, or (d) make any
Investment (excluding any Permitted Investment) (each of the foregoing actions
set forth in clauses (a), (b), (c) and (d) being referred to as a "Restricted
Payment"), if at the time of such Restricted Payment or immediately after giving
effect thereto,(i) a Default or an Event of Default shall have occurred and be
continuing or (ii) Restricted Payments made subsequent to the Issue Date (the
amount expended for such purposes, if other than in cash, shall be the Fair
Market Value of such property proposed to be transferred by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment)
shall exceed the sum of:
(w) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the
Company earned subsequent to March 12, 1998 and prior to the date the
Restricted Payment occurs (treating such period as a single accounting
period);
(x) 100% of the aggregate net proceeds, including the Fair Market
Value of Property other than cash, received by the Company from any person
(other than a Subsidiary of the Company) from the issuance and sale
subsequent to the Issue Date of Qualified Capital Stock of the Company
(excluding (A) Qualified Capital Stock paid as a
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dividend on any Capital Stock or as interest on any Indebtedness, (B) any
net proceeds from issuances and sales financed directly or indirectly using
funds borrowed from the Company or any Subsidiary of the Company, until and
to the extent such borrowing is repaid and (C) any net proceeds from any
Equity Offering which are used to redeem Securities pursuant to, and in
accordance with, the provisions under Section 3.01(c);
(y) 100% of the aggregate net proceeds, including the Fair Market
Value of property other than cash, received by the Company from any person
(other than a Subsidiary of the Company) from the issuance and sale of
Disqualified Capital Stock and/or Indebtedness, in each case that has been
converted into or exchanged for Qualified Capital Stock of the Company
after the Issue Date; and
(z) without duplication, the sum of (1) the aggregate amount returned
in cash on or with respect to Investments (other than Permitted
Investments) made subsequent to the Issue Date whether through interest
payments, principal payments, dividends or other distributions or payments,
(2) the net cash proceeds received by the Company or any Restricted
Subsidiary from the disposition of all or any portion of such Investments
(other than to a Subsidiary of the Company) and (3) upon redesignation of
an Unrestricted Subsidiary as a Restricted Subsidiary, the Fair Market
Value of such Subsidiary; provided, however, that the sum of clauses (1),
(2) and (3) above shall not exceed the aggregate amount of all such
Investments made subsequent to the Issue Date.
The foregoing provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the date of its
declaration if the dividend would have been permitted on the date of
declaration;
(2) the acquisition of Capital Stock of the Company or Indebtedness of
the Company or any Guarantor either (i) solely in exchange for shares of
Qualified Capital Stock of the Company or (ii) through the application of
net proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock of the
Company;
(3) the acquisition of Indebtedness of the Company or any Guarantor
that is expressly subordinate in right of payment to the Securities or such
Guarantor's Guarantee, as the case may be, either (i) solely in exchange
for
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Indebtedness of the Company or such Guarantor which is expressly
subordinate in right of payment to the Securities or such Guarantor's
Guarantee, as the case may be, at least to the extent that the Indebtedness
being acquired is subordinated to the Securities or such Guarantor's
Guarantee, as the case may be, and has no scheduled principal prepayment
dates prior to the scheduled final maturity date of the Indebtedness being
exchanged or (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of Indebtedness of the Company or such Guarantor which is
expressly subordinate in right of payment to the Securities or such
Guarantor's Guarantee, as the case may be, at least to the extent that the
Indebtedness being acquired is subordinated to the Securities or such
Guarantor's Guarantee, as the case may be, and has no scheduled principal
prepayment dates prior to the scheduled final maturity date of the
Indebtedness being refinanced;
(4) the making of payments by the Company or any of the Restricted
Subsidiaries to DRA or Renco (A) no earlier than ten days prior to the date
on which Renco is required to make its payments to the Internal Revenue
Service or the applicable state taxing authority, as the case may be,
pursuant to a tax sharing agreement (which tax sharing agreement provides
that the payments thereunder shall not exceed the amount the Company and
its Subsidiaries would have been required to pay for taxes on a stand-alone
basis, except that the Company and its Subsidiaries will not have the
benefit of any of its tax loss carryforwards unless such tax losses were a
result of timing differences between the Company's and its Subsidiaries'
accounting for tax and financial reporting purposes, and which tax sharing
agreement also provides that transactions between the Company, DRA and
Renco and Renco's other Subsidiaries are accounted for on a cash basis and
not on an accrual basis) and (B) to reimburse DRA or Renco for out of
pocket insurance payments made by DRA or Renco on behalf of the Company and
its Subsidiaries; and
(5) the payment by the Company or any of the Restricted Subsidiaries
of a management fee to Renco in an amount not to exceed $200,000 in any
month;
provided that in the case of clauses (2), (3) and (5), no Default or Event of
Default shall have occurred and be continuing at the time of such payment or as
a result thereof.
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In determining the aggregate amount of Restricted Payments permissible
under clause (ii) of the first paragraph of this section, amounts expended,
incurred or outstanding pursuant to clauses (1) and (2) (but not pursuant to
clauses (3), (4) or (5)) of the second paragraph of this section shall be
included as Restricted Payments; provided that any proceeds received from the
issuance of Qualified Capital Stock pursuant to clause (2) of the second
paragraph of this section shall be included in calculating the amount referred
to in clause (x) or clause (y), as the case may be, of the first paragraph of
this Section 4.03.
SECTION 4.04. Corporate Existence.
Except as otherwise permitted by Article Five, each of the Company and
the Guarantors shall do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the corporate or other
existence of each of its Subsidiaries in accordance with the respective
organizational documents of each such Subsidiary and the rights (charter and
statutory) and franchises of each of the Company and the Guarantors and each
such Subsidiary; provided, however, that each of the Company and the Guarantors
shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Subsidiaries any such existence, right
or franchise, if the Board of Directors of each of the Company and the
Guarantors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of each of the Company and the Guarantors and
will not be adverse in any material respect to the Holders.
SECTION 4.05. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any of its Subsidiaries; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim if either (a) the amount,
applicability or validity thereof is being contested in good faith by
appropriate proceedings and an adequate reserve has been established therefor to
the extent required by GAAP or (b) the failure to make such payment or effect
such discharge (together with all other such failures) would not have a material
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adverse effect on the financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole.
SECTION 4.06. Maintenance of Properties and Insurance.
(a) Each of the Company and the Guarantors shall cause all properties
used or useful in the conduct of its business or the business of any of its
Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in its judgment may be necessary, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times
unless the failure to so maintain such properties (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company and the Guarantors and their Subsidiaries
taken as a whole; provided, however, that nothing in this Section 4.06 shall
prevent the Company and the Guarantors or any of their Subsidiaries from
discontinuing the operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is either (i) in
the ordinary course of business, (ii) in the good faith judgment of the Board of
Directors of the Company or the Guarantors or the Subsidiary concerned, or of
the senior officers of the Company or the Guarantors or such Subsidiary, as the
case may be, desirable in the conduct of the business of the Company or the
Guarantors or such Subsidiary, as the case may be, or (iii) is otherwise
permitted by this Indenture.
(b) Each of the Company and the Guarantors shall provide or cause to
be provided, for itself and each of its Subsidiaries, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of each of the Company and the Guarantors are
adequate and appropriate for the conduct of the business of the Company and the
Guarantors and such Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable, good faith opinion of each of
the Company and the Guarantors, for companies similarly situated in the
industry, unless the failure to provide such insurance (together with all other
such failures) would not have a material adverse effect on the financial
condition or results of operations of each of the Company and the Guarantors and
its Subsidiaries, taken as a whole.
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SECTION 4.07. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 60 days after the
end of the Company's fiscal quarters and within 90 days after the end of the
Company's fiscal year, an Officers' Certificate stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
period has been made under the supervision of the signing Officers with a view
to determining whether it has kept, observed, performed and fulfilled its
obligations under this Indenture and further stating, as to each such Officer
signing such certificate, that to the best of his knowledge, the Company during
such preceding fiscal period has kept, observed, performed and fulfilled each
and every such covenant and no Default or Event of Default occurred during such
period and at the date of such certificate there is no Default or Event of
Default that has occurred and is continuing or, if such signers do know of such
Default or Event of Default, the certificate shall describe the Default or Event
of Default and its status with particularity. The Officers' Certificate shall
also include all calculations necessary to show covenant compliance. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the Company shall deliver to
the Trustee within 90 days after the end of each fiscal year a written statement
by its independent certified public accountants stating (A) that its audit
examination has included a review of the terms of this Indenture and the
Securities as they relate to accounting matters, and (B) whether, in connection
with its audit examination, any Default or Event of Default has come to its
attention and if such a Default or Event of Default has come to its attention,
specifying the nature and period of existence thereof.
(c) The Company will deliver to the Trustee as soon as possible, and
in any event within 10 days after the Company becomes aware or should reasonably
have become 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 4.08. Compliance with Laws.
Each of the Company and the Guarantors shall comply, and shall cause
each of its Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions
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of the United States of America, Peru and the Cayman Islands, all states and
municipalities thereof, and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the foregoing, in
respect of the conduct of their respective businesses and the ownership of their
respective properties, except such as are being contested in good faith and by
appropriate proceedings and except for such noncompliances as would not in the
aggregate have a material adverse effect on the financial condition or results
of operations of each of the Company and the Guarantors and its Subsidiaries
taken as a whole.
SECTION 4.09. SEC Reports and Other Information.
(a) At all times when the Company is required or permitted voluntarily
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act or this
Indenture is qualified under the TIA, the Company (at its own expense) shall
file with the SEC and shall file with the Trustee and mail or cause the Trustee
to mail to the Holders at their addresses set forth in the register of
Securities within 15 days after it files them with the SEC copies of the annual
reports, quarterly reports and the information, documents, and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) to be filed pursuant to Section 13 or 15(d) of the
Exchange Act. If the Company is not subject to the requirements of such Section
13 or 15(d) of the Exchange Act and not permitted to voluntarily file and this
Indenture has not been qualified under the TIA, the Company (at its own expense)
shall file with the Trustee and mail or cause the Trustee to mail to the Holders
at their addresses set forth in the register of Securities, within 15 days after
it would have been required to file such information with the SEC, all
information and financial statements, including any notes thereto and with
respect to annual reports, quarterly reports, an auditors' report by an
accounting firm of established national reputation, and a "Management's
Discussion and Analysis of Financial Condition and Results of Operations," both
comparable to the disclosure that each of the Company would have been required
to include in such annual reports, quarterly reports, information, documents or
other reports, as if the Company was subject to the requirements of such Section
13 or 15(d) of the Exchange Act, in each case in the form that would have been
required by the SEC. Upon qualification of this Indenture under the TIA, the
Company shall also comply with the provisions of TIA Section 314(a).
(b) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, upon the request of a Holder of a Series A Note, the
Company will promptly furnish or
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cause to be furnished such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto) to such
Holder or to a prospective purchaser of such Series A Note designated by such
Holder, as the case may be, in order to permit compliance by such Holder with
Rule 144A under the Securities Act.
SECTION 4.10. Waiver of Stay, Extension or Usury Laws.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, 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 that would prohibit or forgive the
each of Company and the Guarantors from paying all or any portion of the
principal of or interest on the Securities as contemplated herein, 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) each of the Company and the Guarantors 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.
SECTION 4.11. Limitation on Transactions with Affiliates.
(a) The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with or for the
benefit of an Affiliate of the Company or any Restricted Subsidiary (other than
transactions between the Company and a Wholly-Owned Restricted Subsidiary or
between Wholly-Owned Restricted Subsidiaries) (an "Affiliate Transaction"),
other than (x) Affiliate Transactions permitted under (b) below and (y)
Affiliate Transactions (including lease transactions) on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary in the aggregate
than those that might reasonably have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary on an arm's-length basis (as
determined in good faith by the Board of Directors of the Company, as evidenced
by a Board Resolution) from a person that is not an Affiliate; provided that
except as otherwise provided under (b) below, neither the Company nor any of the
Restricted Subsidiaries shall enter into an Affiliate Transaction or series of
related Affiliate Transactions involving or having a value of more than $5.0
million unless the Company or
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such Restricted Subsidiary, as the case may be, has received an opinion from an
Independent Financial Advisor, with a copy thereof to the Trustee, to the effect
that the financial terms of such Affiliate Transaction are fair and reasonable
to the Company or such Restricted Subsidiary, as the case may be, and such terms
are no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than those that could be obtained in a comparable transaction on an
arm's-length basis with a person that is not an Affiliate.
(b) The foregoing provisions shall not apply to (i) any Restricted
Payment that is made in compliance with Section 4.03, (ii) payments by the
Company or any of the Restricted Subsidiaries to Renco or DRA of the amounts set
forth in clauses (4) and (5) of the second paragraph of Section 4.03 and (iii)
reasonable and customary regular fees to directors of the Company and the
Restricted Subsidiaries who are not employees of the Company and the Restricted
Subsidiaries.
SECTION 4.12. Limitation on Indebtedness
(a) The Company will not, and will not cause or permit any of the
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, become liable, contingently or otherwise, with respect to, or
otherwise become responsible for the payment of (collectively "incur") any
Indebtedness (including Acquired Indebtedness) other than Permitted
Indebtedness; provided that the Company and the Guarantors may incur
Indebtedness (including Acquired Indebtedness) if: (A) no Default or Event of
Default shall have occurred and be continuing at the time of the proposed
incurrence thereof or shall occur as a result of such proposed incurrence, and
(B) after giving effect to such proposed incurrence, the Consolidated Fixed
Charge Coverage Ratio of the Company is at least equal to 2.25 to 1.0.
Notwithstanding the foregoing, a Restricted Subsidiary that is not a Guarantor
may incur Acquired Indebtedness to the extent such Indebtedness could have been
incurred by the Company and the Guarantors pursuant to the proviso in the
immediately preceding sentence.
(b) The Company and the Guarantors shall not, directly or indirectly,
in any event incur any Indebtedness which by its terms (or by the terms of any
agreement governing such Indebtedness) is subordinated to any other Indebtedness
of the Company or such Guarantor unless such Indebtedness is also by its terms
(or by the terms of any agreement governing such Indebtedness) made expressly
subordinated to the Securities or the Guarantee of such Guarantor, as the case
may be, to the same extent and in the same manner as such Indebtedness is
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subordinated to such other Indebtedness of the Company or such Guarantor.
SECTION 4.13. Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company will not, and will not permit any of the Restricted
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
Restricted Subsidiary to: (a) pay dividends or make any other distributions on
its Capital Stock, or any other interest or participation in, or measured by,
its profits, owned by the Company or by any Restricted Subsidiary, or pay any
Indebtedness owed to the Company or any Restricted Subsidiary; (b) make loans or
advances to the Company or any Restricted Subsidiary; or (c) transfer any of its
properties or assets to the Company or to any Restricted Subsidiary, except, in
each case, for such encumbrances or restrictions existing under or by reason of:
(i) applicable law; (ii) this Indenture; (iii) customary non-assignment
provisions of any lease governing a leasehold interest of the Company or any
Restricted Subsidiary; (iv) any instrument governing Indebtedness of a person
acquired by the Company or any Restricted Subsidiary at the time of such
acquisition, which encumbrance or restriction is not applicable to any person,
or the properties or assets of any person, other than the person or its
Subsidiaries so acquired; (v) any written agreement existing on the Issue Date
or amendments or modifications thereto, provided that no such agreement shall be
modified or amended in such a manner as to make the encumbrance or restriction
more restrictive than as in effect on the Issue Date; (vi) Indebtedness existing
and as in effect on the Issue Date, including, without limitation, the U.S.
Revolving Credit Facility or any refinancing, refunding, replacement or
extensions thereof, provided that any such encumbrance or restriction contained
in any refinancing, refunding, replacement or extension of the U.S. Revolving
Credit Facility shall be no more restrictive than such encumbrance or
restriction contained in the U.S. Revolving Credit Facility as in effect on the
Issue Date; (vii) Indebtedness under the Peruvian Revolving Credit Facility or
any refinancings, refundings, replacements or extensions thereof, provided that
such restrictions do not prohibit payments pursuant to the intercompany
agreements between the Company and the Restricted Subsidiaries as in effect on
the Issue Date or pursuant to any replacements thereof or pursuant to any
comparable agreements thereto, in each case providing for the same or similar
payments; and (viii) Indebtedness incurred in accordance with this Indenture,
provided that such encumbrance or restriction shall be no more restrictive than
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any encumbrance or restriction contained in the Revolving Credit Facilities.
SECTION 4.14. Limitation on Liens.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Liens (i) upon any item of Collateral other than the Liens created by
the Securities, this Indenture and the Collateral Documents and the Liens
expressly permitted by the applicable Collateral Document and (ii) upon any
other properties or assets of the Company (including, without limitation, any
Capital Stock of a Restricted Subsidiary) or any of the Restricted Subsidiaries
whether owned on the Issue Date or acquired after the Issue Date, or on any
income or profits therefrom, or assign or otherwise convey any right to receive
income or profits thereon other than (i) Liens existing on the Issue Date to the
extent and in the manner such Liens are in effect on the Issue Date, (ii) Liens
on the non-fixed assets of the Company and the Restricted Subsidiaries securing
Indebtedness under the Revolving Credit Facilities and (iii) Permitted Liens.
SECTION 4.15. Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase all outstanding Securities pursuant to
the offer described in paragraph (b), below (the "Change of Control Offer"), at
a purchase price equal to 101% of the principal amount thereof plus accrued
interest, if any, to the date of purchase. Within 10 days after the date upon
which the Change of Control occurred (the "Change of Control Date") requiring
the Company to make a Change of Control Offer pursuant to this Section 4.15, the
Company shall so notify the Trustee.
(b) The notice to the Holders shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to the
Change of Control Offer. Within 30 days following any Change of Control Date,
the Company shall send, by first class mail, a notice to each Holder, with
copies to the Trustee, which notice shall govern the terms of the Change of
Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Securities tendered will be accepted for payment;
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be
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no earlier than 45 days nor later than 60 days following the Change of
Control Date, other than as may be required by law) (the "Change of Control
Payment Date");
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Security accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to a
Change of Control Offer will be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the last page of
the Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day prior to the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than two Business Days prior to the Change
of Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price of all Securities so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail to such Holders new Securities equal in principal
amount to any unpurchased portion
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of the Securities surrendered. Any Securities not so accepted shall be promptly
mailed by the Company to the Holder thereof. The Company will publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date. The Company shall comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of
securities pursuant to a Change of Control Offer. The Change of Control Offer
shall remain open for at least 20 Business Days and until the close of business
on the Change of Control Payment Date. For purposes of this Section 4.15, the
Trustee shall act as the Paying Agent.
SECTION 4.16. Limitation on Sale of Assets.
(a) The Company will not, and will not permit any of the Restricted
Subsidiaries to, consummate any Asset Sale, unless (i) such Asset Sale is for at
least Fair Market Value, (ii) at least 80% of the consideration therefrom
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents and (iii) the Company or such Restricted Subsidiary shall apply
the Net Cash Proceeds of such Asset Sale within 270 days of receipt thereof, as
follows:
(i) first, to the extent such Net Cash Proceeds are received from an
Asset Sale not involving the sale, transfer or disposition of Collateral
("Non-Collateral Proceeds"), to repay (and, in the case of any revolving
credit facility, effect a permanent reduction in the commitment thereunder)
any Indebtedness secured by the assets involved in such Asset Sale or
otherwise required to be repaid with the proceeds thereof; and
(ii) second, with respect to Non-Collateral Proceeds remaining after
application pursuant to the preceding paragraph (i) equal to the Notes Pro
Rata Amount and any Net Cash Proceeds received from an Asset Sale involving
Collateral ("Collateral Proceeds" and, together with such remaining
Non-Collateral Proceeds equal to the Notes Pro Rata Amount, the "Available
Amount"), the Company shall make an offer to purchase (the "Asset Sale
Offer") from all Holders of Securities up to a maximum principal amount
(expressed as a multiple of $1,000) of Securities equal to the Available
Amount at a purchase price equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon, if any, to the date of purchase;
provided, however, that the Company will not be required to apply pursuant
to this paragraph (ii) Net Cash Proceeds received from any Asset Sale if,
and only to the extent that, such Net Cash Proceeds are applied to a
Related Business
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Investment within 270 days of such Asset Sale; and, if the Net Cash
Proceeds so invested were Collateral Proceeds, the property and assets
constituting such Related Business Investment and any other non-cash
consideration received as a result of such Asset Sale are made subject to
the Lien of this Indenture and the applicable Collateral Documents;
provided, further, that to the extent any such assets subject to an Asset
Sale constituted Collateral, any property and assets constituting a Related
Business Investment and any other non-cash consideration received as a
result of such Asset Sale shall not consist of inventory or receivables and
shall constitute Collateral under the terms of this Indenture and under the
terms of the Collateral Documents; provided, further, that if at any time
any non-cash consideration received by the Company or any such Restricted
Subsidiary, as the case may be, in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash, then such
conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in accordance
with this Section 4.16; and provided, further, that the Company may defer
the Asset Sale Offer until there is an aggregate unutilized Available
Amount equal to or in excess of $5 million resulting from one or more Asset
Sales (at which time, the entire unutilized Available Amount, and not just
the amount in excess of $5 million, shall be applied as required pursuant
to this paragraph). To the extent the Asset Sale Offer is not fully
subscribed to by Holders of the Securities, the Company and the Restricted
Subsidiaries may obtain a release of the unutilized portion of the
Available Amount from the Lien of the Collateral Documents and use it for
any purpose not prohibited by this Indenture.
The "Notes Pro Rata Amount" means an amount equal to the
Non-Collateral Proceeds remaining after application pursuant to clause (a)(i) of
the preceding paragraph multiplied by a fraction, (i) the numerator of which is
the aggregate principal amount of Securities outstanding on the second business
day immediately preceding the commencement of the applicable Asset Sale Offer
and (ii) the denominator of which is the sum of (x) the aggregate principal
amount of Securities determined pursuant to clause (i) above and (y) the
aggregate principal amount of Indebtedness outstanding under the Existing Notes
Indenture on the second business day immediately preceding the commencement of
the applicable Asset Sale Offer.
All Collateral Proceeds shall constitute Trust Moneys and shall be
delivered by the Company (or the applicable Subsidiary) to the Trustee and shall
be deposited in the Collateral Account in accordance with this Indenture.
Collateral
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Proceeds so deposited may be withdrawn from the Collateral Account pursuant to
this Indenture.
(b) In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and the Restricted Subsidiaries as an
entirety to a person in a transaction permitted under Article Five hereof, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and the Restricted Subsidiaries not so transferred for purposes of
this Section 4.16, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale. In addition, the Fair
Market Value of such properties and assets of the Company or the Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.16.
(c) The notice of an Asset Sale Offer shall be sent, by first class
mail, by the Company (or caused to be mailed by the Company) with a copy to the
Trustee to all Holders of Securities not less than 30 days nor more than 60 days
before the Asset Sale Payment Date at their last registered addresses. The Asset
Sale Offer shall remain open from the time of mailing until three days before
the Asset Sale Offer Payment Date. The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender Securities
pursuant to the Asset Sale Offer. Such notice shall state:
(1) that the Asset Sale Offer is being made pursuant to Section 4.16;
(2) the purchase price (including an amount of accrued interest) and
the Asset Sale Offer Payment Date;
(3) that any Security not tendered will continue to accrue interest;
(4) that unless the Company defaults in making payment therefor, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease
to accrue interest after the Asset Sale Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to an
Asset Sale Offer will be required to surrender the Security, with the form
entitled "Option of Holder to Elect Purchase" on the last page of the
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day prior to the
Asset Sale Offer Payment Date;
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(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, no later than two Business Days prior to the Asset
Sale Offer Payment Date, a telegram, telex, facsimile transmission or
letter stating fully the name of the Holder, the principal amount of the
Securities the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased;
(7) that if Securities in a principal amount in excess of the
principal amount of the Securities to be acquired pursuant to the Asset
Sale Offer are tendered and not withdrawn pursuant to the Asset Sale Offer,
the Company shall purchase Securities on a pro rata basis (with such
adjustment 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 so acquired); and
(8) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered.
On or before an Asset Sale Offer Payment Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the Asset
Sale Offer (on a pro rata basis if required pursuant to paragraph (7) above),
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price of all Securities or portions thereof so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate identifying the Securities or portions thereof 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 purchase price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders new
Securities equal in principal amount to any unpurchased portion of the
Securities surrendered. Any Securities not so accepted shall be promptly mailed
or delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Asset Sale Offer as promptly as practicable
following the Asset Sale Offer Payment Date. The Company shall comply, to the
extent applicable, with the requirements of Section 14(e) of the Exchange Act
and any other securities laws or regulations in connection with the repurchase
of Securities pursuant to an Asset Sale Offer.
SECTION 4.17. Limitation on Sale/Leaseback Transactions.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, enter into any Sale/leaseback.
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Notwithstanding the foregoing, the Company and the Restricted Subsidiaries may
enter into a Sale/leaseback of assets not constituting Collateral if (i) after
giving pro forma effect to any such Sale/leaseback, the Company and the
Restricted Subsidiaries shall be in compliance with Section 4.12, (ii) the sale
price in such Sale/leaseback is at least equal to the Fair Market Value of such
property and (iii) the Company or such Restricted Subsidiary shall apply the Net
Cash Proceeds of the sale as provided pursuant to Section 4.16, to the extent
required by such provision.
SECTION 4.18. Limitation on Preferred Stock of Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary to issue any
Preferred Stock (except to the Company or a Wholly-Owned Restricted Subsidiary),
nor will the Company permit any person (other than the Company or a Wholly-Owned
Restricted Subsidiary) to hold any Preferred Stock of a Restricted Subsidiary.
SECTION 4.19. Qualifying Investment Requirements.
At least semi-annually commencing April 30, 1998 until $120 million
has been expended by Doe Run Peru in the manner required by Section 4.5 of the
Subscription Agreement, (i) Doe Run Peru shall make Investments in Doe Run
Mining, which Investments, including any interest payable thereon, shall be
represented by promissory notes (the "Qualifying Investments Promissory Notes"),
in an amount equal to Doe Run Peru's expected Qualifying Investments for the
following six months and (ii) Doe Run Mining shall use the proceeds of each such
Qualifying Investment to prepay in part the promissory note issued by Doe Run
Mining to Metaloroya on October 23, 1997, the date of consummation of the
Acquisition; provided, further, that pending utilization of such proceeds for
Qualifying Investments, Doe Run Peru may repay outstanding loans under the
Peruvian Revolving Credit Facility.
SECTION 4.20. Future Guarantees.
If the Company or any of the Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Restricted Subsidiary that is not a Guarantor,
or if the Company or any of the Restricted Subsidiaries shall organize, acquire
or otherwise invest in another Restricted Subsidiary having total assets with a
book value in excess of $1 million, then such transferee or acquired or other
Restricted Subsidiary shall (i) execute and deliver to the Trustee a
supplemental indenture in
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form reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all of the Company's obligations
under the Securities and this Indenture on the terms set forth in this Indenture
and (ii) deliver to the Trustee an Opinion of Counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Restricted
Subsidiary and constitutes a legal, valid, binding and enforceable obligation of
such Restricted Subsidiary. Thereafter, such Restricted Subsidiary shall be a
Guarantor for all purposes of this Indenture. Notwithstanding the foregoing, the
following Restricted Subsidiaries shall not be required to become Guarantors
under this Indenture: (i) DR Exploration; (ii) any Restricted Subsidiary formed
or acquired in connection with Related Business Investments made by the Company
or any of the Restricted Subsidiaries pursuant to clause (iii) of the definition
of "Permitted Investment" and (iii) any Restricted Subsidiary which is not
permitted by law to become a Guarantor under this Indenture.
SECTION 4.21. Conduct of Business.
The Company and the Restricted Subsidiaries will not engage in any
businesses which are not the same, similar or reasonably related to the
businesses in which the Company and the Restricted Subsidiaries are engaged on
the Issue Date.
SECTION 4.22. Impairment of Security Interest.
The Company shall not, and shall not permit any of its Subsidiaries
to, take or omit to take any action which action or omission might or would have
the result of affecting or impairing the security interest in favor of the
Collateral Agent, on behalf of itself, the Trustee and the Holders, with respect
to the Collateral, and the Company shall not grant to any person (other than the
Collateral Agent on behalf of itself, the Trustee and the Holders) any interest
whatsoever in the Collateral other than Liens permitted by this Indenture and
the Collateral Documents.
SECTION 4.23. Amendment to Collateral Documents.
The Company will not amend, modify or supplement, or permit or consent
to any amendment, modification or supplement of, the Collateral Documents in any
way which would be adverse to the Holders.
SECTION 4.24. Inspection and Confidentiality.
(a) The Company shall, and shall cause each of its Subsidiaries to,
permit authorized representatives of the Trustee
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and the Collateral Agent to visit and inspect the properties of the Company or
its Subsidiaries, and any or all books, records and documents in the possession
of the Company relating to the Collateral, and to make copies and take extracts
therefrom and to visit and inspect the Collateral, all upon reasonable prior
notice and at such reasonable times during normal business hours and as often as
may be reasonably requested.
(b) The Trustee and the Collateral Agent and their respective
authorized representatives referred to in Section 4.24(a) agree not to use any
information obtained pursuant to this Section 4.24 for any unlawful purpose and
to keep confidential and not to disclose any such information to any person
except that (i) the recipient of the information may disclose any information
that becomes publicly available other than as a result of disclosure by such
recipient, (ii) the recipient of the information may disclose any information
that its counsel reasonably concludes is necessary to be disclosed by law,
pursuant to any court or administrative order or ruling or in any pending legal
or administrative proceeding or investigation after prior written notice,
reasonable under the circumstances, to the Company, and (iii) the recipient of
the information may disclose any information necessary to be disclosed pursuant
to any provision of the TIA or pursuant to this Indenture.
SECTION 4.25. Release of Released Real Property.
The Company shall have the right to obtain the release of any
Collateral constituting Released Real Property upon the satisfaction of the
conditions precedent set forth in Section 10.03(c) hereof.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc.
(a) The Company will not, in a single transaction or series of related
transactions, (i) consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets to
any person or (ii) adopt a Plan of Liquidation unless:
(1) either (a) the Company shall be the surviving or continuing
corporation, or (b) the person (if other than the Company) formed by such
consolidation or the person into which the Company is merged or the person
which
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acquires by sale, assignment, transfer, lease, conveyance or otherwise all
or substantially all of the assets of the Company or in the case of a Plan
of Liquidation, the person to which the assets of the Company have been
transferred (i) shall be a corporation organized and validly existing under
the laws of the United States or any State thereof or the District of
Columbia and (ii) shall expressly assume, by supplemental indenture (in
form and substance satisfactory to the Trustee) executed and delivered to
the Trustee, the due and punctual payment of the principal of, and premium,
if any, and interest on, all of the Securities, and the performance of
every covenant of this Indenture, the Securities and the Registration
Rights Agreement relating to the Securities on the part of the Company to
be performed or observed;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(b)(ii) above (including giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Company
(in the case of clause (a) of the foregoing clause (1))or such person (in
the case of clause (1)(b) thereof) (a) shall have a Consolidated Net Worth
(immediately after the transaction but prior to any purchase accounting
adjustments relating to such transaction) equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such transaction
and shall be able to incur (assuming a market rate of interest with respect
thereto) at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) as if it were the Company under paragraph (a) of Section 4.12
of this Indenture;
(3) immediately before and after giving effect to such transaction and
the assumption contemplated by clause (1)(b)(ii) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred and be
continuing;
(4) the Company or such person shall have delivered to the Trustee (A)
an Officers' Certificate and an Opinion of Counsel (which counsel shall not
be in-house counsel of the Company), each stating that such consolidation,
merger, conveyance, transfer, lease or Plan of Liquidation and if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this provision of this Indenture
and that all conditions precedent in this Indenture relating to such
transaction
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have been satisfied and (B) a certificate from the Company's independent
certified public accountants stating that the Company has made the
calculations required by clause (2) above in accordance with the terms of
this Indenture; and
(5) neither the Company nor any Restricted Subsidiary nor such person,
as the case may be, would thereupon become obligated with respect to any
Indebtedness (including Acquired Indebtedness) nor any of its property or
assets subject to any Lien, unless the Company or such Restricted
Subsidiary or such person, as the case may be, could incur such
Indebtedness (including Acquired Indebtedness) or create such Lien under
this Indenture (giving effect to such person being bound by all the terms
of this Indenture).
(b) For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.
Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.16)
will not, and the Company will not cause or permit any Guarantor to, consolidate
with or merge with or into or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets to any person (other than a
merger of the Company with any Guarantor or a merger of Guarantors) unless (i)
the entity formed by or surviving any such consolidation or merger (if other
than the Guarantor) or to which such sale, lease, conveyance or other
disposition shall have been made is a corporation organized and validly existing
under the laws of the United States or any state thereof or the District of
Columbia or an entity organized and validly existing under the laws of the
foreign jurisdiction in which such Guarantor is organized; (ii) such entity
assumes by supplemental indenture all of the obligations of such Guarantor under
such Guarantee; and (iii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing.
Notwithstanding the foregoing, (i) the merger of the Company with an
Affiliate incorporated solely for the purpose
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of incorporating the Company in another jurisdiction shall be permitted and (ii)
the merger of the Company and any Restricted Subsidiary shall be permitted.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, merger, conveyance, lease or transfer in
accordance with Section 5.01, the successor person formed by such consolidation
or into which the Company or any Guarantor, as the case may be, is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Guarantor, as the case may be, under this Indenture with the same effect as if
such successor person had been named as the Company or such Guarantor, as the
case may be, herein and thereafter (except in the case of a sale, assignment,
transfer, lease, conveyance or other disposition) the predecessor corporation
will be relieved of all further obligations and covenants under this Indenture
and the Securities, in the case of the Company, or its Guarantee, in the case of
any Guarantor.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any Securities
when the same becomes due and payable and the Default continues for a
period of 30 days;
(2) the Company defaults in the payment of the stated principal amount
of any Securities when the same becomes due and payable at maturity, upon
acceleration or redemption pursuant to an offer to purchase required
hereunder or otherwise;
(3) the Company or any of the Guarantors fails to comply in all
material respects with any of their other agreements contained in the
Securities or this Indenture (including, without limitation, under Sections
4.15, 4.16 and 5.01) and the Default continues for the period and after the
notice specified below;
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(4) there shall be any default or defaults in the payment of principal
or interest under one or more agreements, instruments, mortgages, bonds,
debentures or other evidences of Indebtedness under which the Company or
any Restricted Subsidiary then has outstanding Indebtedness in excess of
$7.5 million, individually or in the aggregate;
(5) there shall be any default or defaults under one or more
agreements, instruments, mortgages, bonds, debentures or other evidences of
Indebtedness under which the Company or any Restricted Subsidiary then has
outstanding Indebtedness in excess of $7.5 million, individually or in the
aggregate, and such default or defaults have resulted in the acceleration
of the maturity of such Indebtedness;
(6) the Company or any Restricted Subsidiary fails to perform (after
giving effect to any applicable grace periods) any term, covenant,
condition or provision of one or more agreements, instruments, mortgages,
bonds, debentures or other evidences of Indebtedness under which the
Company or any Restricted Subsidiary then has outstanding Indebtedness in
excess of $7.5 million, individually or in the aggregate, and such failure
to perform results in the commencement of judicial proceedings to foreclose
upon any assets of the Company or any such Restricted Subsidiary securing
such Indebtedness or the holders of such Indebtedness shall have exercised
any right under applicable law or applicable security documents to take
ownership of any such assets in lieu of foreclosure;
(7) one or more judgments, orders or decrees for the payment of money
which either individually or in the aggregate at any one time exceed $7.5
million shall be rendered against the Company or any Restricted Subsidiary
by a court of competent jurisdiction and shall remain undischarged and
unbonded for a period (during which execution shall not be effectively
stayed) of 60 consecutive days after such judgment becomes final and
nonappealable;
(8) the Company or any Significant Subsidiary (1) admits in writing
its inability to pay its debts generally as they become due, (2) commences
a voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (3) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law,
(4) consents to the appointment of a Custodian of it or for substantially
all of its property, (5) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, (6) makes a general
assignment for the benefit of its
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creditors or (7) takes any corporate action to authorize or effect any of
the foregoing;
(9) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any Bankruptcy Law which shall (1)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any Significant
Subsidiary, (2) appoint a Custodian of the Company or any Significant
Subsidiary or for substantially all of its property or (3) order the
winding-up or liquidation of its affairs, and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days;
(10) any of the Guarantees of any Significant Subsidiary ceases to be
in full force and effect or any of such Guarantees is declared to be null
and void and unenforceable or any of such Guarantees is found to be
invalid, or any such Guarantor denies its liability under its Guarantee
(other than by reason of release of a Guarantor in accordance with the
terms of this Indenture); or
(11) any Collateral Document after the date of its effectiveness
ceases to be in full force and effect or any Collateral Document ceases to
give the Trustee the Liens, rights, powers and privileges purported to be
created thereby in any material respect.
A Default under clause (3) above (other than in the case of any
Default under Sections 4.15, 4.16 and 5.01, which Defaults shall be Events of
Default without the notice and without the passage of time specified in this
paragraph) is not an Event of Default until the Trustee notifies the Company, or
the Holders of at least 25% in principal amount of the outstanding Securities
notify the Company and the Trustee, of the Default, and the Company does not
cure the Default within 30 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default." Such notice shall be given by the Trustee if so requested
by the Holders of at least 25% in principal amount of the Securities then
outstanding.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 6.01(8) or 6.01(9)) occurs and is continuing, then and in every such
case the Trustee may, by notice to the Company, or the Holders of at least 25%
in aggregate
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principal amount of the Securities then outstanding may, by written notice to
the Company and the Trustee, and the Trustee shall, upon the request of such
Holders, declare the aggregate unpaid principal of and premium, if any, on all
of the Securities outstanding, together with accrued but unpaid interest thereon
to the date of payment, to be due and payable and, upon any such declaration,
the same shall become and be due and payable; provided, however, that the
Trustee shall be under no obligation to follow any request of any of the Holders
unless such Holders shall have offered to the Trustee, after request by the
Trustee, reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred by it in compliance with such request, order
or direction. If an Event of Default specified in Section 6.01(8) or 6.01(9)
occurs, all unpaid principal, premium, if any, and accrued interest on the
Securities then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholder. Upon payment of such principal amount and interest, all of the
Company's obligations under the Securities and this Indenture, other than
obligations under Section 7.07, shall terminate. The Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
rescind an acceleration and its consequences if (i) all existing Events of
Default, other than the non-payment of the principal and interest on the
Securities which have become due solely by such declaration of acceleration,
have been cured or waived, (ii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, and (iii) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction. No such rescission shall affect any
subsequent default or impair any right consequent thereto. In the event that a
declaration of acceleration under either Section 6.01(4) or 6.01(5) above has
occurred and is continuing, such declaration of acceleration shall be
automatically annulled if the Indebtedness that is the subject of such Event of
Default has been discharged or paid or the holders of such Indebtedness shall
have rescinded their declaration of acceleration in respect of such Indebtedness
within 60 days thereafter and no other Event of Default has occurred during such
60-day period which has not been cured or waived.
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 or interest on
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the Securities or to enforce the performance of any provision of the Securities
or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder 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 Sections 6.07 and 9.02, the Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of, premium, if any, or interest on any
Security as specified in clauses (1) and (2) of Section 6.01 or in respect of
any provision hereof which cannot be modified or amended without the consent of
the Holder so affected pursuant to Section 9.02. When a Default or Event of
Default is so waived, it shall be deemed cured and cease to exist.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the outstanding
Securities may 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 it including, without limitation, any remedies provided for in
Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to follow
any direction that conflicts with any law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder, or
that may involve the Trustee in personal liability; provided that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default;
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(2) Holders of at least 25% in principal amount of the outstanding
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee reasonable indemnity against any
loss, liability or expense to be incurred in compliance with such request;
(4) the Trustee does not comply with the request within 30 days after
receipt of the request and the offer of satisfactory indemnity; and
(5) during such 30-day period the Holders of a majority in principal
amount of the outstanding Securities do not give the Trustee a direction
which, in the opinion of the Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) 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, the Guarantors or any other obligor on the Securities for the whole
amount of principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest 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.
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SECTION 6.09. Trustee May File Proofs of Claim.
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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relating to the Company, the
Guarantors or any other obligor upon the Securities, any of their respective
creditors or any of their respective 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 Securityholder 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 Securityholders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
taxes, disbursements and advances of the Trustee, its agent and counsel, and any
other amounts due the Trustee under Section 7.07. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Securityholder 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
Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 and then to
the Collateral Agent for amounts due under the Collateral Documents;
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 owing under the Securities and
other amounts owing to the Holders with respect to the Securities, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for principal and other amounts owing to the
Holders with respect to the Securities; and
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Fourth: to the Company or any other obligor on the Securities, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior 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 in its discretion may 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 a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Securities.
SECTION 6.12. Ranking.
Every Holder, by accepting a Security, shall be deemed to agree that
the Indebtedness of Doe Run Peru evidenced by its Guarantee will be
contractually subordinated to the Indebtedness under the Peruvian Revolving
Credit Facility. The Trustee is authorized to take any and all actions and
execute any necessary documentation, whether on the Issue Date or at any time
thereafter, to effectuate the foregoing subordination. In addition, except as
described in the preceding sentence, the Indebtedness of Doe Run Mining and Doe
Run Peru evidenced by their Guarantee will rank senior in right of payment to
all future unsecured indebtedness of Doe Run Mining and Doe Run Peru,
respectively, subject to statutorily preferred exceptions and statutorily
mandated priorities based on the date of issuance with respect to payment of
obligations under applicable Peruvian law.
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ARTICLE SEVEN
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
SECTION 7.01. Duties of Trustee.
(a) If a Default or 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 and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no covenants or obligations shall be implied in
this Indenture that are adverse to the Trustee.
(2) 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. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) 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.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in
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accordance with a direction received by it pursuant to Sections 6.02 or
6.05.
(d) No provision of this Indenture 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 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.
(e) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree with the Company. Assets
held in trust by the Trustee need not be segregated from other assets except to
the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document 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 conform to Sections 12.04 and 12.05. 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 that it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion,
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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,
if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, upon reasonable notice to the Company,
to examine the books, records, and premises of the Company, personally or
by agent or attorney.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture or any of the Collateral Documents, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred by it in compliance
with such request, order or direction.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any
Subsidiary of the Company or their respective Affiliates with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than the Trustee's certificate of
authentication.
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 Securityholder, as their
names and addresses appear on the Securityholder list described in Section 2.05,
notice of the uncured Default or Event of Default within 90 days after the
Trustee obtains actual knowledge that such Default or Event of Default has
occurred. Except in the case of a Default or an Event of Default in payment of
principal of, or interest on, any Security, and a Default that resulted from the
failure to comply with Sections 4.15, 4.16 or 5.01, the Trustee may
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withhold the notice if and so long as its board of directors, the executive
committee of its board of directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Securityholders.
SECTION 7.06. Reports by Trustee to Holders.
This Section 7.06 shall not be operative as a part of this Indenture
until this Indenture is qualified under the TIA, and, until such qualification,
this Indenture shall be construed as if this Section 7.06 were not contained
herein.
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) occurred within the previous twelve
months, but not otherwise, mail to each Securityholder 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 Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed
on any securities exchange.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services as the Company and the Trustee may agree. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all tax obligations imposed on the Trustee related to this Indenture
and all reasonable out-of-pocket expenses incurred or made by it. Such expenses
shall include the reasonable fees and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee and its agents for, and hold
them harmless against, any loss, liability or expense incurred by them except
for such actions to the extent caused by any negligence or bad faith on their
part, arising out of or in connection with the administration of this trust
including the reasonable costs and expenses of defending themselves against any
claim or liability in connection with the exercise or performance of any of
their rights, powers or duties hereunder. The Trustee shall notify the Company
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promptly of any claim asserted against the Trustee for which it may seek
indemnity, but the Trustee's failure to so notify the Company shall not affect
the Company's obligations hereunder. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel;
provided that the Company will not be required to pay such fees and expenses if
it assumes the Trustee's defense and there is no conflict of interest between
the Company and the Trustee in connection with such defense as reasonably
determined by the Trustee. The Company need not pay for any settlement made
without its written consent. The Company 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 payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(8) or (9) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Collateral Agent shall have all of the rights, benefits,
immunities and indemnities of the Trustee under Article Seven regarding its role
and activities under the Collateral Documents.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Company and the Trustee and may appoint a successor
trustee with the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
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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 a majority in principal amount of
the 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 transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, 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. 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 7.10, any Securityholder
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
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. 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, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1) and 310(a)(5). The Trustee (or in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall
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have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. In addition, if the Trustee is
a corporation included in a bank holding company system, the Trustee,
independently of such bank holding company, shall meet the capital requirements
of TIA Section 310(a)(2). The Trustee shall comply with TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company or
the Guarantors are outstanding, if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met.
SECTION 7.11. 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). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.
The Company and the Guarantors may terminate their obligations under
the Securities and the Guarantees and this Indenture, except those obligations
referred to in the penultimate paragraph of this Section 8.01, if all Securities
previously authenticated and delivered (other than destroyed, lost or stolen
Securities which have been replaced or paid and Securities for whose payment
money has heretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from such trust)
have been delivered to the Trustee for cancellation and the Company has paid all
sums payable by it hereunder, or if:
(a) 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 under arrangements satisfactory to the
Trustee for the giving of such notice;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable
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trust agreement in form and substance satisfactory to the Trustee, as trust
funds in trust solely for the benefit of the Holders for that purpose,
money or 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 and
interest in such amounts and at such times as are sufficient without
consideration of any reinvestment of such interest, to pay principal of,
premium, if any, and interest on such outstanding Securities to redemption
as certified to the Trustee by a nationally recognized firm of independent
public accountants designated by the Company; provided that the Trustee
shall have been irrevocably instructed to apply such money or the proceeds
of such U.S. Government Obligations to the payment of said principal,
premium, if any, and interest with respect to the Securities; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligation under
the Securities, the Guarantees and this Indenture have been complied with.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 7.08, 8.04 and 8.05 shall
survive until the Securities are no longer outstanding. After the Securities are
no longer outstanding, the Company's obligations in Sections 7.07, 8.04 and 8.05
shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities, the Guarantees and this Indenture 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, 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).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its
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obligations with respect to the outstanding Securities and the Guarantees on the
date the conditions set forth below are satisfied (hereinafter, "legal
defeasance"). 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
Guarantees and this Indenture insofar as such Securities and Guarantees 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 and interest on such Securities and
Guarantees when such payments are due, (ii) the Company's obligations with
respect to such Securities and Guarantees under Sections 2.05, 2.06, 2.07, 2.08,
4.02, 7.07, 7.08, 8.04 and 8.05, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (iv) this Section 8.02. 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) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article Five and in
Sections 4.03, 4.07, 4.09 and 4.11 through 4.21 with respect to the outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), 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 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 under Section 6.01, but, except as specified
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above, the remainder of this Indenture 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 as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A)
money in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal of and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (C) a combination thereof,
sufficient, 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 principal of,
premium, if any, and interest on the outstanding Securities on the Maturity
Date of such principal or installment of principal or interest 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 written order from the Company 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 or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Securities shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 6.01(8) and (9) are concerned, at
any time during the period ending on the 91st 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 result in
a breach or violation of, or constitute a Default or Event of Default
under, this Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound;
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(iv) 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 date of this Indenture, 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 amounts, in the same
manner and at the same times as would have been the case if such legal
defeasance had not occurred;
(v) 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;
(vi) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that, assuming no intervening
bankruptcy of the Company between the date of deposit and the 91st day
following the date of deposit and that no Holder is an insider of the
Company, (x) the trust funds will not be subject to any rights of any other
holders of Indebtedness of the Company, and (y) after the 91st day
following the deposit, the trust funds will not be subject to the effect of
any applicable Bankruptcy Law; provided, however, that if a court were to
rule under any such law in any case or proceeding that the trust funds
remained property of the Company, no opinion needs to be given as to the
effect of such laws on the trust funds except the following: (A) assuming
such trust funds remained in the Trustee's possession prior to such court
ruling to the extent not paid to Holders of Securities, the Trustee will
hold, for the benefit of the Holders of Securities, a valid and enforceable
security interest in such trust funds that is not avoidable in bankruptcy
or otherwise, subject only to principles of equitable subordination, (B)
the Holders of Securities will be entitled to receive adequate protection
of their interests in such trust funds if such trust funds are used, and
(C) no property, rights in property or other interests granted to the
Trustee or the Holders of Securities
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in exchange for or with respect to any of such funds will be subject to any
prior rights of any other person, subject only to prior Liens granted under
Section 364 of Title 11 of the U.S. Bankruptcy Code (or any section of any
other Bankruptcy Law having the same effect), but still subject to the
foregoing clause (B); and
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (A) 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 and (B) if any other
Indebtedness of the Company shall then be outstanding, such legal
defeasance or covenant defeasance will not violate the provisions of the
agreements or instruments evidencing such Indebtedness.
Notwithstanding the foregoing, the Opinion of Counsel and a ruling
from the Internal Revenue Service required by clause (iv) above of this Section
8.02 need not be delivered if all Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, (ii) will become due
and payable on the Maturity Date within one year or (iii) are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company.
(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 of its Affiliates) as the Trustee may determine,
to the Holders of such Securities of all sums due and to become due thereon in
respect of principal and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company 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 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.
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Anything in this Section 8.02 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request,
in writing, by the Company 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.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or 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.
Subject to Sections 7.07, 8.01 and 8.02, the Trustee shall promptly
pay to the Company, upon receipt by the Trustee of an Officers' Certificate, any
excess money, determined in accordance with Sections 8.02(d)(i) and (e), held by
it at any time. The Trustee and the Paying Agent shall pay to the Company 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 or interest that
remains unclaimed for two years; 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. After payment to the Company, Securityholders 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 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
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order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then and only then the Company's
obligations under this Indenture 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 has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company 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 Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
From time to time, the Company and the Guarantors when authorized by
Board Resolutions, and the Trustee, together, may amend or supplement this
Indenture or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency; provided that such
amendment or supplement does not adversely affect the rights of any Holder;
(2) to comply with Article Five;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to make any other change that does not materially adversely affect
the rights of any Securityholders hereunder, including, without limitation,
adding Restricted Subsidiaries as additional Guarantors; or
(5) to comply with any requirements of the SEC in connection with the
qualification of this Indenture under the TIA;
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
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SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by Board Resolutions, and the Trustee, together, with the written
consent of the Holder or Holders of at least a majority in aggregate principal
amount of the outstanding Securities, may amend or supplement this Indenture or
the Securities, without notice to any other Securityholders. Subject to Section
6.07, the Holder or Holders of a majority in aggregate principal amount of the
outstanding Securities may waive compliance by the Company with any provision of
this Indenture or the Securities without notice to any other Securityholder.
However, without the consent of each Securityholder, no amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may:
(1) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture or the Securities;
(2) reduce the rate of, or extend the time for payment of, interest,
including defaulted interest, on any Security;
(3) reduce the principal amount of any Security or any premium
thereon;
(4) change the Maturity Date of any Security, or alter the redemption
provisions or the repurchase provisions in this Indenture or the Securities
in a manner adverse to any Holder;
(5) waive a default in the payment of the principal of, interest on,
or redemption payment or repurchase payment required hereunder with respect
to, any Security, including without limitation, a failure to make payment
when required upon a Change of Control or after an Asset Sale;
(6) make any changes in any provisions relating to waivers of
defaults, the ability of the Holders to enforce their rights under this
Indenture, the Securities or this Section 9.02;
(7) make the principal of, or the interest on any Security payable in
money other than as provided for in this Indenture and the Securities as in
effect on the date hereof;
(8) affect the ranking of the Securities or the Guarantees in a manner
adverse to the Holders;
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(9) after the Company's obligation to purchase the Securities arises
thereunder, amend, change or modify in any material respect any obligation
of the Company to make and consummate a Change of Control Offer in the
event of a Change of Control or make and consummate an Asset Sale Offer in
the event of an Asset Sale or waive any default in the performance thereof
or modify any of the provisions or definitions with respect to such offers;
(10) release the Guarantee of any Significant Subsidiary; or
(11) directly or indirectly release any Lien on the Collateral except
in compliance with the terms of this Indenture, the Securities and the
Collateral Documents.
It shall not be necessary for the consent of the Holders under this
Section 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 Holders affected thereby 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 such supplemental indenture.
SECTION 9.03. Compliance with TIA.
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a 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 his Security by notice to the Trustee
or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver. Notwithstanding
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the above, nothing in this paragraph shall impair the right of any
Securityholder 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 last
sentence 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 revoke any consent previously given, whether or not such
persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (10) of Section 9.02, in which case, 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.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the 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 (and the Guarantors shall execute the
Guarantees thereon) 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 To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture.
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ARTICLE TEN
COLLATERAL DOCUMENTS
SECTION 10.01. Collateral and Collateral Documents.
(a) In order to secure the due and punctual payment of 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, by acceleration, repurchase,
redemption or otherwise, and interest on the overdue principal of and interest
(to the extent permitted by law), if any, on the Securities and performance of
all other obligations of the Company to the Holders or the Trustee under this
Indenture and the Securities, the Company and the Collateral Agent have
simultaneously (other than with respect to the Mortgages and any other
Collateral Documents related to Collateral constituting Real Property) with the
execution of this Indenture entered into the Collateral Documents, pursuant to
which the Company has granted to the Collateral Agent for the benefit of the
Trustee and the Holders a first priority Lien on and security interest in the
Collateral. The Collateral Agent and the Company hereby agree that the
Collateral Agent holds, or with respect to the Mortgages will hold, the
Collateral as a secured party or mortgagee, as the case may be, in trust for the
benefit of the Trustee, in its capacity as Trustee, and for the ratable benefit
of the Holders pursuant to the terms of the Collateral Documents. The Collateral
Agent is hereby authorized and directed to enter into the Intercreditor
Agreement.
The Company shall execute and deliver to the Collateral Agent within
90 days after the Issue Date the Mortgages and all related filings pursuant to
Section 10.02; provided, however, that the effect of, and the Holders' remedy
for, the Company's non-compliance with this sentence shall be limited to Section
4.01 of this Indenture and paragraph 1 of the Securities and such non-compliance
shall not constitute a Default or Event of Default under this Indenture or the
Securities.
(b) Each Holder, by accepting a Security, consents and agrees to all
of the terms and provisions of the Collateral Documents, as the same may be in
effect from time to time or may be amended from time to time in accordance with
the provisions of the Collateral Documents and this Indenture, and authorizes
and directs the Collateral Agent to act as mortgagee or secured party with
respect thereto.
(c) As set forth in and governed by the Collateral Documents, as among
the Holders of Securities, the Collateral
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as now or hereafter constituted shall be held for the equal and ratable benefit
of the Holders of the Securities without preference, priority or distinction of
any thereof over any other by reason of difference in time of issuance, sale or
otherwise, as security for the Securities.
SECTION 10.02. Recording; Priority; Opinions, Etc.
(a) The Company shall at its sole cost and expense perform any and all
acts and execute any and all documents (including, without limitation, the
execution, amendment or supplementation of any financing statement and
continuation statement or other statement) for filing under the provisions of
the applicable Uniform Commercial Code and the rules and regulations thereunder,
or any other statute, rule or regulation of any applicable federal, state or
local jurisdiction, including any filings in local real estate land record
offices, which are necessary or advisable and shall do such other acts and
execute such other documents as may be required under any of the Collateral
Documents (including, without limitation, obtaining with respect to each Real
Property subject to a Mortgage (x) a policy of title insurance insuring that the
Lien of this Indenture and the Mortgage constitutes a direct and valid and
perfected Mortgage Lien of the priority contemplated in Section 10.01(a) on the
Real Property, supplemented by such endorsements as shall be requested by the
Collateral Agent and containing no exceptions to title other than exceptions for
the Liens permitted by the Mortgage or that are satisfactory to the Collateral
Agent, (y) a Survey and (z) certificates of insurance required by the Mortgage),
from time to time, in order to grant, perfect and maintain in favor of the
Collateral Agent for the benefit of the Trustee and the Holders a valid and
perfected Lien on the Collateral with the priority set forth in Section
10.01(a), subject only to the Liens permitted by the Collateral Documents and to
fully preserve and protect the rights of the Trustee and the Holders under this
Indenture.
The Company shall from time to time promptly pay and satisfy all
mortgage and financing and continuation statement recording and/or filing fees,
charges and taxes relating to this Indenture and the Collateral Documents, any
amendments thereto and any other instruments of further assurance. Without
limiting the generality of the foregoing covenant, in the event at any time the
Collateral Agent or the Trustee shall determine that additional mortgage
recording, transfer or similar taxes are required to be paid to perfect or
continue any Lien on any Collateral, the Company shall pay such taxes promptly
upon demand by the Collateral Agent or the Trustee.
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(b) The Company shall, with respect to (i) below, promptly after the
initial issuance of the Securities, with respect to (ii) below, upon the
execution of the Mortgages required hereby, and with respect to (iii) below,
upon qualification of this Indenture under the TIA, furnish to the Trustee:
(i) Opinion(s) of Counsel either (a) to the effect that, in the
opinion of such counsel, this Indenture and the grant of a security
interest in the Collateral intended to be made by the Security Agreement
and all other related filings, documents and instruments of further
assurance, including, without limitation, financing statements, have been
properly recorded and filed to the extent necessary to perfect the Lien on
the Collateral created by the Security Agreement and reciting the details
of such action, and stating that as to the Liens created pursuant to the
Security Agreement, such recordings and filings are the only recordings and
filings necessary to give notice thereof and that no re-recordings or
refilings are necessary to maintain such notice (other than as stated in
such opinion), or (b) to the effect that, in the opinion of such counsel,
no such action is necessary to perfect such Lien;
(ii) Opinion(s) of Counsel either (a) to the effect that, in the
opinion of such counsel, this Indenture and the grant of a security
interest in the Collateral intended to be made by the Mortgages and all
other related filings, documents and instruments of further assurance,
including, without limitation, financing statements, have been properly
recorded and filed to the extent necessary to perfect the Lien on the
Collateral created by the Mortgages and reciting the details of such
action, and stating that as to the Liens created pursuant to the Mortgages,
such recordings and filings are the only recordings and filings necessary
to give notice thereof and that no re-recordings or refilings are necessary
to maintain such notice (other than as stated in such opinion), or (b) to
the effect that, in the opinion of such counsel, no such action is
necessary to perfect such Lien;
(iii) on October 1 in each year beginning with October 1, 1999, an
Opinion of Counsel, dated as of such date, either (a) to the effect that,
in the opinion of such counsel, such action has been taken with respect to
the recordings, registerings, filings, re-recordings, re-registerings and
refilings of all financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain the Lien of
each of the Collateral Documents and reciting with respect to such
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Liens the details of such action or referencing prior Opinions of Counsel
in which such details are given, and stating that all financing statements
and continuation statements have been executed and filed that are necessary
fully to preserve and protect the rights of the Holders and the Trustee
hereunder and under each of the Collateral Documents with respect to the
Liens, or (b) to the effect that, in the opinion of such counsel, no such
action is necessary to maintain such Liens.
SECTION 10.03. Release of Collateral.
Except as otherwise permitted by Sections 10.04 and 10.05, the
Collateral Agent shall not release Collateral from the Lien of the Collateral
Documents unless such release is in accordance with the provisions of this
Section 10.03 and of the Collateral Documents. To the extent applicable, the
Company shall cause TIA Section 314(d) relating to the release of property or
Liens to be complied with.
(a) Satisfaction and Discharge; Defeasance. The Company shall be
entitled to obtain a full release of all of the Collateral from the Lien of
this Indenture and the Collateral Documents upon compliance with all of the
conditions precedent for satisfaction and discharge of this Indenture set
forth in Section 8.01 or for defeasance pursuant to Section 8.02. Upon
delivery by the Company to the Trustee and to the Collateral Agent of an
Officers' Certificate and an Opinion of Counsel, each to the effect that
all of the conditions precedent have been complied with (which may be the
same Officers' Certificate and Opinion of Counsel required by Article
Eight), the Trustee shall take all necessary action, at the request and
expense of the Company, to release and reconvey to the Company all of the
Collateral, and shall deliver such Collateral in its possession to the
Company including, without limitation, the execution and delivery of
releases or waivers whenever necessary.
(b) Sales of Collateral Permitted by Section 4.16. The Company shall
be entitled to obtain a release of all or any part of the Collateral (other
than Trust Moneys) (the "Released Assets") subject to an Asset Sale upon
compliance with the condition precedent that the Company shall have
delivered to the Trustee and to the Collateral Agent the following:
(i) Release Notice. A notice (each, an "Asset Sale Release
Notice"), which shall (A) refer to this Section 10.03, (B) attach all
the documents referred
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to below, (C) describe with particularity the Released Asset, (D)
specify the value of such Released Asset on a date within 60 days of
the Asset Sale Release Notice (the "Valuation Date"), (E) certify that
the purchase price received is equal to the Fair Market Value of the
Released Asset as of the date of such release, (F) state that the
Released Asset 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, (G) confirm
the sale of, or an agreement to sell, such Released Interest 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 an Affiliate, confirm that such sale is
being made in accordance with Section 4.11 and (H) 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 Collateral Agent;
(ii) Officers' Certificate and Opinion of Counsel. An Officers'
Certificate and an Opinion of Counsel, each stating that (A) such
Asset Sale covers only the Released Asset and complies with the terms
and conditions of an Asset Sale pursuant to Section 4.16, (B) all Net
Cash Proceeds from the sale of the Released Asset will be applied
pursuant to Section 4.16, (C) there is no Default or Event of Default
in effect or continuing on the date thereof, (D) the release of the
Released Asset will not result in a Default or Event of Default and
(E) all conditions precedent to such release have been complied with;
(iii) Regarding Real Property. If the Released Asset is only a
portion of a discrete parcel of Real Property, evidence that a title
company shall have committed to issue an endorsement to the title
insurance policy relating to the affected Mortgaged Property
confirming that after such release, the Lien of the applicable
Mortgage continues unimpaired as a perfected Lien having the priority
set forth in Section 10.01(a) upon the remaining Mortgaged Property
subject only to Prior Liens;
(iv) Proceeds of Asset Sale. The Net Cash Proceeds and other
non-cash consideration received from the Asset Sale required to be
delivered to the Trustee pursuant to Section 4.16; and
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(v) Other Documents. Upon qualification of this Indenture under
the TIA, all documentation required by TIA Section 314(d).
(c) Release of Real Property Permitted by Section 4.25. The Company
shall be entitled to obtain a release of any part of the Collateral
constituting Released Real Property upon compliance with the condition
precedent that the Company shall have delivered to the Trustee and to the
Collateral Agent the following:
(i) Release Notice. A notice (each, a "Real Property Release
Notice") which shall (A) refer to this Section 10.03, (B) attach all
the documents referred to below, (C) describe with particularity the
Released Real Property, (D) specify the value of such Released Real
Property on a date within 60 days of the Real Property Release Notice
(the "Real Property Valuation Date"), (E) state that the Released Real
Property will not interfere with or impede the Trustee's ability to
realize the value of the remaining Collateral, is not necessary for
the proper and efficient operation of the Mortgaged Property or for
the compliance by the Mortgaged Property with any applicable law, code
or ordinance, including, without limitation, any Environmental Law,
and is not an integral part of the Company's operations as conducted
at the Mortgaged Property on the Issue Date, and (F) 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 Collateral Agent;
(ii) Officers' Certificate and Opinion of Counsel. An Officers'
Certificate and an Opinion of Counsel, each stating that (A) there is
no Default or Event of Default in effect or continuing on the date
thereof, (B) the Real Property to be released constitutes Released
Real Property, (C) the release of the Released Real Property will not
result in a Default or Event to Default and (D) all conditions
precedent to such release have been complied with;
(iii) Title Insurance. Evidence that a title company shall have
committed to issue an endorsement to the title insurance policy
relating to the affected Mortgaged Property confirming that after such
release, the Lien of the applicable Mortgage continues unimpaired as a
perfected Lien with the priority set forth in Section 10.01(a) hereof
upon the remaining
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Mortgaged Property, subject only to Prior Liens; and
(iv) Other Documents. Upon qualification of this Indenture under
the TIA, all documentation required by TIA Section 314(d).
Upon compliance with the conditions set forth in (b) or (c) above, and
the delivery by the Company of such other documents that the Trustee or the
Collateral Agent may reasonably require, the Collateral Agent shall execute,
acknowledge (if applicable) and deliver to the Company such counterpart within
10 Business Days after receipt by the Trustee of an Asset Sale Release Notice or
Real Property Release Notice, as applicable, and the satisfaction of the
applicable requirements of this Section 10.03.
At any time when a Default or an Event of Default shall have occurred
and be continuing, no release of Collateral pursuant to the provisions of this
Indenture or the Collateral Documents shall be effective as against the Holders
of the Securities.
SECTION 10.04. Disposition of Collateral Without Release.
(a) So long as no Default or Event of Default shall have occurred and
be continuing, the Company may, without any release or consent by the Collateral
Agent or the Trustee, sell or otherwise dispose of any machinery, equipment,
furniture, apparatus, tools or implements or other similar property which at
such time is subject to the Lien of the Collateral Documents, which may have
become worn out or obsolete, not exceeding individually, in Fair Market Value,
$250,000, subject in all cases to the requirements of and restrictions contained
in the TIA.
(b) In the event that the Company has sold, exchanged, or otherwise
disposed of or proposes to sell, exchange or otherwise dispose of any portion of
the Collateral which under the provisions of this Section 10.04 may be sold,
exchanged or otherwise disposed of by the Company without any release or consent
of the Collateral Agent or the Trustee, and the Company requests the Collateral
Agent or the Trustee to furnish a written disclaimer, release or quitclaim of
any interest in such property under any of the Collateral Documents, the
Collateral Agent shall promptly execute (or, if so requested by the Company,
shall promptly instruct the Trustee to execute) such an instrument upon delivery
to the Trustee of (i) an Officers' Certificate by the Company reciting the sale,
exchange or other disposition made or proposed to be made and describing in
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reasonable detail the property affected thereby, and stating and demonstrating
that such property is property which by the provisions of this Section 10.04 may
be sold, exchanged or otherwise disposed of or dealt with by the Company without
any release or consent of the Collateral Agent or the Trustee and (ii) an
Opinion of Counsel stating that the sale, exchange or other disposition made or
proposed to be made was duly made by the Company in conformity with Section
10.04(a) and that the execution of such written disclaimer, release or quitclaim
is appropriate to confirm the propriety of such sale, exchange or other
disposition under this Section 10.04. 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 Collateral
Agent or the Trustee hereunder as sufficient for the purposes of this Indenture.
SECTION 10.05. Eminent Domain and Other Governmental Takings.
Subject to the provisions of the Collateral Documents, upon the
occurrence of a Taking or should any of the Collateral be sold pursuant to the
exercise by the United States of America or any State, municipality or other
governmental authority of any right which any of them may then have to purchase,
or to designate a purchaser or to order a sale of, all or any part of the
Collateral, the Trustee shall release the property subject to such Taking or
purchase, but only upon receipt by the Trustee of the following:
(a) an Officers' Certificate stating that a Taking has occurred with
respect to such property and the amount of the Net Award therefor, or that
such property has been sold pursuant to a right vested in the United States
of America or a state, municipality or other governmental authority to
purchase, or to designate a purchaser or order a sale of such property and
the amount of the proceeds of such sale, and that all conditions precedent
herein provided for relating to such release have been complied with;
(b) any Net Award, to be held as Trust Moneys subject to the
disposition thereof pursuant to Article Eleven and the applicable
Collateral Documents; provided, however, that in lieu of all or any part of
such Net Award, the Company shall have the right to deliver to the Trustee
a certificate of the trustee, mortgagee or other holder of a Prior Lien on
all or any part of the property to be released, stating that such Net
Award, or a specified portion thereof, has been deposited with such
trustee,
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mortgagee or other holder pursuant to the requirements of such Prior
Lien, in which case the balance of the award, if any, shall be
delivered to the Trustee; and
(c) an Opinion of Counsel substantially to the effect:
(i) that a Taking has occurred with respect to such property or
such property has been sold pursuant to the exercise of a right vested
in the United States of America or a State, municipality or other
governmental authority to purchase, or to designate a purchaser or
order a sale of, such property;
(ii) in the case of any Taking, that the Net Award for the
property so taken has become final or that the Board of Directors of
the Company has determined that an appeal from such award is not
advisable in the interests of the Company or the Holders of the
Securities;
(iii) in the case of any such sale, that the amount of the
proceeds of the property so sold is not less than the amount to which
the Company is legally entitled under the terms of such right to
purchase or designate a purchaser, or under the order or orders
directing such sale, as the case may be;
(iv) in the event that, pursuant to Section 10.05(b), the Net
Award for such property or the proceeds of such sale, or a specified
portion thereof, shall be certified to have been deposited with the
trustee, mortgagee or other holder of a Prior Lien, that the property
to be released, or a specified portion thereof, is or immediately
before such Taking or purchase was subject to such Prior Lien, and
that such deposit is required by such Prior Lien; and
(v) that the instrument or the instruments and the Net Award or
proceeds of such sale which have been or are therewith delivered to
and deposited with the Trustee conform to the requirements of this
Indenture and any of the Collateral Documents and that, upon the basis
of such application, the Collateral Agent and the Trustee are
permitted by the terms hereof and of the Collateral Documents to
execute and deliver the release requested, and that all conditions
precedent herein provided for relating to such release have been
complied with.
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In any proceedings for the Taking or purchase or sale of any part of
the Collateral, by eminent domain or by virtue of any such right to purchase or
designate a purchaser or to order a sale, the Trustee may be represented by
counsel who may be counsel for the Company. Subject to the provisions of the
Collateral Documents, all cash or Cash Equivalents received by the Trustee
pursuant to this Section 10.05 shall be held by the Trustee as Trust Moneys
under Article Eleven subject to application as therein provided. Subject to the
provisions of the Collateral Documents, all purchase money and other obligations
received by the Trustee pursuant to this Section 10.05 shall be held by the
Trustee as Collateral subject to application as provided in Section 10.13.
SECTION 10.06. Trust Indenture Act Requirements.
The release of any Collateral, whether pursuant to any provision of
this Article Ten or Article Eleven, from any of the Collateral Documents or the
release of, in whole or in part, the Liens created by any of the Collateral
Documents, will not be deemed to impair the Lien of the Collateral Documents in
contravention of the provisions hereof if and to the extent the Collateral or
Liens are released pursuant to the applicable Collateral Documents and pursuant
to the terms hereof. The Trustee and each of the Holders acknowledge that a
release of Collateral or Liens strictly in accordance with the terms of the
Collateral Documents and the terms hereof will not be deemed for any purpose to
be an impairment of the Liens created pursuant to the Collateral Documents in
contravention of the terms of this Indenture. Without limitation, the Company
and each other obligor on the Securities shall cause TIA Section 314(d) relating
to the release of property or securities from the Liens of each hereof and of
the Collateral 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 which TIA Section 314(d) requires that such certificate or opinion be
made by an independent person.
SECTION 10.07. Suits To Protect Collateral.
Subject to the provisions of the Collateral Documents, 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 acts which
may be unlawful or in violation of any of the Collateral Documents 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 power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
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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 Collateral or be prejudicial to the interests of the Holders or
the Trustee).
SECTION 10.08. Purchaser Protected.
In no event shall any purchaser in good faith of any property
purported to be released hereunder be bound to ascertain the authority of the
Collateral Agent or the Trustee to execute the release or to inquire as to the
satisfaction of any conditions required by the provisions hereof for the
exercise of such authority or to see to the application of any consideration
given by such purchaser or other transferee; nor shall any purchaser or other
transferee of any property or rights permitted by this Article Ten to be sold be
under obligation to ascertain or inquire into the authority of the Company to
make any such sale or other transfer.
SECTION 10.09. Powers Exercisable by Receiver or Trustee.
In case the Collateral shall be in the possession of a receiver or
trustee, lawfully appointed, the powers conferred in this Article Ten upon the
Company with respect to the release, sale or other disposition of such property
may be exercised by such receiver or trustee, and an instrument signed by such
receiver or trustee shall be deemed the equivalent of any similar instrument of
the Company or of any officer or officers thereof required by the provisions of
this Article Ten.
SECTION 10.10. Determinations Relating to Collateral.
In the event (i) the Trustee or the Collateral Agent shall receive any
written request from the Company under any Collateral Document for consent or
approval with respect to any matter or thing relating to any Collateral or the
Company's obligations with respect thereto (including, without limitation, the
determination as to whether any portion of the Collateral constitutes Released
Collateral) or (ii) there shall be due to or from the Trustee or the Collateral
Agent under the provisions of any Collateral Document any performance or the
delivery of any instrument or (iii) the Trustee or the Collateral Agent shall
become aware of any nonperformance by the Company of any covenant or any breach
of any representation or warranty of the Company set forth in any Collateral
Document, then, in each such event, the Trustee or the Collateral Agent, as
applicable, shall be entitled to hire experts, consultants, agents and attorneys
to advise the Trustee on the manner in which the Trustee should respond to such
request or render any requested performance or response to such nonperformance
or breach. The
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Trustee shall be fully protected in the taking of any action recommended or
approved by any such expert, consultant, agent or attorney or agreed to by a
majority of Holders pursuant to Section 6.05.
SECTION 10.11. Form and Sufficiency of Release.
In the event that the Company has sold, exchanged, or otherwise
disposed of or proposed to sell, exchange or otherwise dispose of any portion of
the Collateral which under the provisions of Sections 10.03 and 10.05 may be
sold, exchanged or otherwise disposed of by the Company, and the Company
requests the Trustee or the Collateral Agent to furnish a written disclaimer,
release or quitclaim of any interest in such property under any of the
Collateral Documents, the Collateral Agent shall promptly execute (or, if so
requested by the Company, shall promptly instruct the Trustee to execute) such
an instrument promptly after satisfaction of the conditions set forth herein for
delivery of 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 purposes of this Indenture and as constituting a good and
valid release of the property therein described from the Lien of this Indenture
and the Collateral Documents.
SECTION 10.12. Possession and Use of Collateral.
Subject to and in accordance with the provisions of this Indenture and
the Collateral Documents, so long as no Default or Event of Default shall have
occurred and be continuing, the Company shall have the right to remain in
possession and retain exclusive control of the Collateral, to operate, manage,
develop, use and enjoy the Collateral and to collect, receive, use, invest and
dispose of the reversions, remainders, rates, interest, rents, issues, profits,
revenues, proceeds and other income thereof (other than Trust Moneys).
SECTION 10.13. Disposition of Obligations Received.
All purchase money or other obligations received by the Trustee under
this Article Ten shall be held by the Trustee, as a part of the Collateral. Upon
payment in cash or Cash Equivalents by or on behalf of the Company or the
obligor thereof to the Trustee of the entire unpaid principal amount of any such
obligation, to the extent not constituting Net Cash Proceeds from an Asset Sale
which may possibly be required, through the passage of time or otherwise, to be
used to purchase Securities pursuant to Section 4.16, the Trustee shall promptly
release and transfer such obligation and any mortgage
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securing the same upon receipt of any documentation that the Trustee may
reasonably require. Any cash or Cash Equivalents received by the Trustee in
respect of the principal of any such obligations shall be held by the Trustee as
Trust Moneys under Article Eleven subject to application as therein provided.
Unless and until the Securities are accelerated pursuant to Section 6.02, all
interest and other income on any such obligations, when received by the Trustee,
shall be paid to the Company from time to time in accordance with Section 11.07.
If the Securities have been accelerated pursuant to Section 6.02, any such
interest or other income not theretofore paid, when collected by the Trustee,
shall be applied by the Trustee, as the case may be, in accordance with Section
6.10.
SECTION 10.14. Release upon Termination of the Company's Obligations.
In the event that the Company delivers an Officers' Certificate
certifying that the provisions of Sections 8.01 or 8.02 have been complied with,
the Trustee shall (i) execute and deliver such releases, termination statements
and other instruments as the Company may reasonably request evidencing the
termination of the Liens created by the Collateral Documents and (ii) not be
deemed to hold the Liens for the benefit of the Holders.
ARTICLE ELEVEN
APPLICATION OF TRUST MONEYS
SECTION 11.01. "Trust Moneys" Defined.
Subject to the provisions of the Intercreditor Agreement, all cash or
Cash Equivalents received by the Trustee in accordance with the terms of this
Indenture and the Collateral Documents:
(a) upon the release of property from the Lien of the Collateral
Documents, including, without limitation, all moneys received in respect of
the principal of all purchase money, governmental or other obligations; or
(b) as Net Proceeds upon the Destruction of all or any part of the
Collateral (other than any liability insurance proceeds payable to the
Trustee for any loss, liability or expense incurred by it); or
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(c) as a Net Award or Net Awards upon the Taking of all or any part of
the Collateral; or
(d) as proceeds of any other 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 the Collateral Documents or otherwise;
or
(e) pursuant to the Mortgage; or
(f) for application under this Article Eleven as elsewhere provided in
this Indenture or the Collateral Documents, or whose disposition is not
elsewhere otherwise specifically provided for herein or in the Collateral
Documents;
(all such moneys being herein sometimes called "Trust Moneys"; provided,
however, that Trust Moneys shall not include any property deposited with the
Trustee pursuant to Section 3.06 or Article Eight or delivered to or received by
the Trustee for application in accordance with Section 6.10) 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 the Collateral Documents, said Trust Moneys shall be applied
in accordance with Section 6.10; 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, from time to time as provided in this
Article Eleven.
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 offices. All Trust Moneys which
are received by the Trustee shall be deposited in the Collateral Account and
thereafter shall be held, applied and/or disbursed by the Trustee in accordance
with the terms of this Article Eleven.
SECTION 11.02. Withdrawals of Insurance Proceeds and Condemnation Awards.
Subject to the provisions of the Collateral Documents, to the extent
that any Trust Moneys consist of either (i) any Net Proceeds or (ii) any Net
Award or the proceeds for any of the Collateral subject to a Taking sold
pursuant to the
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exercise by the United States of America or any State, municipality or other
governmental authority of any right which it may then have to purchase, or to
designate a purchaser or to order a sale of any part of the Collateral, such
Trust Moneys may be withdrawn by the Company and shall be paid by the Trustee
upon a request by a Company Order to reimburse the Company for expenditures
made, or to pay costs incurred, by the Company to repair, rebuild or replace the
property destroyed, damaged or taken, upon receipt by the Trustee of the
following:
(a) an Officers' Certificate of the Company, dated not more than 30
days prior to the date of the application for the withdrawal and payment of
such Trust Moneys stating that:
(i) payments have been made, or costs incurred, by the Company in
a specified amount for the purpose of making certain repairs,
rebuildings and replacements of the Collateral, which shall be briefly
described, and stating the fair value thereof to the Company at the
date of the expenditure or incurrence thereof by the Company;
(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 11.02;
(iii) that there is no outstanding Indebtedness, other than costs
for which payment is being requested, 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 basis of a vendors',
mechanics', laborers', materialmen's, statutory or other similar Lien
upon any of such repairs, rebuildings or replacements, which Lien
might, in the opinion of the signers of such certificate, materially
impair the security afforded by such repairs, rebuildings or
replacements;
(iv) that the property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct of the Company's business;
(v) 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 any person other than the Company
in a business similar to that in which such property
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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,
and 1% of the aggregate principal amount of the outstanding Securities
and, if all of such facts are present, such part of said repairs,
rebuildings or replacements shall be separately described and it shall
be stated that an Appraiser's or Independent Financial Adviser's
certificate as to the fair value to the Company of such separately
described repairs, rebuildings or replacements will be furnished under
paragraph (b) of this Section 11.02;
(vi) that no Default or Event of Default shall have occurred and
be continuing; and
(vii) that all conditions precedent herein provided for relating
to such withdrawal and payment have been complied with;
(b) all documentation required under TIA Section 314(d);
(c) (i) In case any part of such repairs, rebuildings or replacements
constitutes Real Property:
(1) with respect to any such repairs, rebuildings or replacements
that are not encompassed within or are not erected upon Mortgaged
Property, an instrument or instruments in recoverable form sufficient
for the Lien of this Indenture and any mortgage to cover such repairs,
rebuildings or replacements which, if such repairs, rebuildings or
replacements include leasehold or easement interests, shall include
normal and customary provisions with respect thereto and evidence of
the filing of all such documents as may be necessary to perfect such
Liens;
(2) a policy of title insurance (or a commitment to issue title
insurance) insuring that the Lien of this Indenture and any Mortgage
constitutes a direct and valid and perfected mortgage Lien (of the
priority contemplated in Section 10.01(a) hereof) on such repairs,
rebuildings or replacements in an aggregate amount equal to the fair
value of such repairs, rebuildings or replacements, together with such
endorsements and other opinions as are contemplated in Section
10.02(b), or with respect to any such repairs, rebuildings or
replacements that are encompassed within or erected upon Mortgaged
Property
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an endorsement to the title insurance policy issued pursuant to
Section 10.02 regarding the affected Mortgaged Property confirming
that such repairs, rebuildings or replacements are encumbered by the
Lien of the applicable Mortgage;
(3) in the event that such repairs, rebuildings or replacements
have a fair value in excess of $250,000, a Survey with respect
thereto; and
(4) evidence of payment or a closing statement indicating
payments to be made by the Company of all title premiums, recording
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 such repairs, rebuildings or replacements to the
Lien of any applicable Collateral Document and to perfect such Lien;
and
(ii) in case any part of such repairs, rebuildings or replacements
constitutes personal property interests:
(1) an instrument in recoverable form sufficient for the Lien of
the Security Agreement to cover such repairs, rebuildings or
replacements; and
(2) evidence of payment or a closing statement indicating
payments to be made by the Company of all filing fees, recording
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 such repairs, rebuildings or replacements to the
Lien of any Collateral Document; 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 Collateral Documents, and that, upon the basis of such request
of the Company and the accompanying documents specified in this
Section 11.02, all conditions precedent herein provided for relating
to such withdrawal and payment have been complied with, and the Trust
Moneys whose withdrawal is then requested may be lawfully paid over
under this Section 11.02;
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(ii) that the Company has acquired title to said repairs,
rebuildings and replacements at least equivalent to its title to the
property destroyed, damaged or taken, and that the same and every part
thereof are free and clear of all Liens prior to the Lien of any
Collateral Documents, except Liens of the type permitted under the
applicable Collateral Document to which the property so destroyed,
damaged or taken shall have been subject at the time of such
destruction, damage or taking; and
(iii) that all of the Company's right, title and interest in and
to said repairs, rebuildings or replacements, or combination thereof,
are then subject to the Lien of the Collateral Documents.
Upon compliance with the foregoing provisions of this Section 11.02,
the Trustee shall pay on the written request of the Company 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 subsection
(a) of this Section 11.02, or the fair value to the Company of such repairs,
rebuildings and replacements stated in such Officers' Certificate (or in such
Appraiser's or Independent Financial Advisor's certificate, if required),
whichever is less.
SECTION 11.03. Withdrawal of Trust Moneys on Basis of Retirement of Securities.
(a) Except with respect to Trust Moneys received pursuant to Section
10.03(b) and subject to release pursuant to Section 11.03(b) and Section 11.04,
and as otherwise permitted or required by the Collateral Documents, the Trustee
shall apply Trust Moneys from time to time to the payment of the principal of
and interest on any Securities, on the Maturity Date or to the redemption
thereof or the purchase thereof upon tender or in the open market or at private
sale or upon any exchange or in any one or more of such ways, including, without
limitation, pursuant to a Change of Control Offer under Section 4.15 or an Asset
Sale Offer pursuant to Section 4.16, as the Company shall request in writing,
upon receipt by the Trustee of the following:
(i) a Board Resolution of the Company directing the application
pursuant to this Section 11.03 of a specified amount of Trust Moneys and,
if any such moneys are to be applied to payment, designating the Securities
so to be paid and, in case any such moneys are to be applied to the
purchase of Securities, prescribing the method of purchase, the price or
prices
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to be paid and the maximum principal amount of Securities to be purchased
and any other provisions of this Indenture governing such purchase;
(ii) cash in the maximum amount of the accrued interest, if any,
required to be paid in connection with any such purchase, which cash shall
be held by the Trustee, in trust for such purpose;
(iii) an Officers' Certificate, dated not more than 5 Business Days
prior to the date of the relevant application, stating (A) that no Default
or Event of Default exists unless such Default or Event of Default would be
cured thereby, and (B) that all conditions precedent and covenants herein
provided for relating to such application of Trust Moneys have been
complied with; and
(iv) an Opinion of Counsel stating that the documents and the
cash or Cash Equivalents, if any, which have been or are therewith
delivered to and deposited with the Trustee 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.
Upon compliance with the foregoing provisions of this Section
11.03(a), the Trustee shall apply Trust Moneys as directed and specified by such
Board Resolution, up to, but not exceeding, the principal amount of the
Securities so paid or purchased, using the cash deposited pursuant to paragraph
(ii) of this Section 11.03(a), to the extent necessary, to pay any accrued
interest required in connection with such purchase.
(b) To the extent that any Trust Moneys consist of Trust Moneys
received by the Trustee pursuant to the provisions of Section 4.16 and the
Company has made an Asset Sale Offer which is not fully subscribed to by the
Holders, the Trust Moneys remaining after completion of the Asset Sale Offer may
be withdrawn by the Company and shall be paid by the Trustee to the Company (or
as otherwise directed by the Company) upon a Company Order to the Trustee and
upon receipt by the Trustee of the following:
(i) A notice which shall (A) refer to this Section 11.03(b) and (B)
describe with particularity the Asset Sale from which such Trust Moneys
were held as Collateral, the amount of Trust Moneys applied to the purchase
of Securities pursuant to the Asset Sale Offer and the remaining amount of
Trust Moneys to be released to the Company;
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(ii) An Officer's Certificate certifying that (A) the release of the
Trust Moneys complies with the terms and conditions of Section 4.16, (B)
there is no Default or Event of Default in effect or continuing on the date
thereof, (C) the release of the Trust Moneys will not result in a Default
or Event of Default hereunder, and (D) all conditions precedent and
covenants herein provided relating to such release have been complied with;
(iii) All documentation required under TIA 314(d); and
(iv) An Opinion of Counsel stating that the documents that have been
or are therewith delivered to the Collateral Agent and the Trustee 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.
SECTION 11.04. Withdrawal of Trust Moneys for Reinvestment.
To the extent that any Trust Moneys consist of Net Cash Proceeds
received by the Trustee pursuant to the provisions of Section 4.16, and the
Company intends to reinvest such Net Cash Proceeds in a Related Business
Investment (the "Released Trust Moneys"), such 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) upon a Company Order to the Trustee and upon receipt by
the Trustee of the following:
(a) A notice which shall (i) refer to this Section 11.04, (ii) contain
all documents referred to below, (iii) describe with particularity the
Released Trust Moneys and the Asset Sale from which such Released Trust
Moneys were held as Collateral, (iv) describe with particularity the
Related Business Investment to be made 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 Officer's Certificate certifying that (i) the release of the
Released Trust Moneys complies with the terms and conditions of Section
4.16, (ii) there is no Default or Event of Default in effect or continuing
on the date thereof, (iii) the release of the Released Trust Moneys will
not result in a Default or Event of Default hereunder and (iv) all
conditions precedent and covenants herein provided for relating to such
release and application of the Released Trust Moneys have been complied
with;
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(c) If the Related Business Investment to be made is an investment in
Real Property:
(i) an instrument or instruments in recordable form sufficient
for the Lien of any Mortgage to cover such Real Property which, if the
Real Property is a leasehold or easement interest, shall include
normal and customary provisions with respect thereto and evidence of
the filing of all such financing statements and other instruments as
may be necessary to perfect such Liens;
(ii) a policy of title insurance (or a commitment to issue title
insurance) insuring that the Lien of this Indenture and any Mortgage
constitutes a direct and valid and perfected mortgage Lien of the
priority contemplated in Section 10.01(a) on such Real Property in an
aggregate amount equal to the fair value of the Real Property,
together with an Officers' Certificate stating that any specific
exceptions to such title insurance are Permitted Liens, together with
such endorsements and other opinions as are contemplated by Section
10.02;
(iii) in the event such Real Property has a fair value in excess
of $250,000, a Survey with respect thereto; and
(iv) evidence of payment or a closing statement indicating
payments to be made by the Company of all title premiums, recording
charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of one counsel for the Trustee
(and any local counsel), that may be incurred to validly and
effectively subject the Real Property to the Lien of any applicable
Collateral Document to perfect such Lien;
(d) If the Related Business Investment is a personal property
interest:
(i) an instrument in recordable form, if necessary, sufficient
for the Lien of any applicable Collateral Document to cover such
personal property interest; and
(ii) evidence of payment or a closing statement indicating
payments to be made by the Company of all filing fees, recording
charges, transfer taxes and other costs and expenses, including
reasonable legal
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fees and disbursements of one counsel for the Trustee (and any local
counsel), that may be incurred to validly and effectively subject the
Related Business Investment to the Lien of any Collateral Document;
(e) All documentation required under TIA Section 314(d); and
(f) An opinion of counsel stating that the documents that have been or
are therewith delivered to the Collateral Agent and the Trustee 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.
Upon compliance with the foregoing provisions of this Section 11.04,
the Trustee shall apply the Released Trust Moneys as directed and specified by
the Company.
SECTION 11.05. Powers Exercisable Notwithstanding Default or Event of Default.
In case a Default or an Event of Default shall have occurred and shall
be continuing, the Company, while in possession of the Collateral (other than
cash, Cash Equivalents, securities and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder or under the
Collateral Documents), may do any of the things enumerated in Sections 11.02,
11.03 and 11.04 if the Holders of a majority in aggregate principal amount of
the Securities outstanding, by appropriate action of such Holders, shall consent
to such action, in which event any certificate filed under any of such Sections
shall omit the statement to the effect that no Default or Event of Default has
occurred and is continuing. This Section 11.05 shall not apply, however, during
the continuance of an Event of Default of the type specified in Section 6.01(1)
or (2).
SECTION 11.06. Powers Exercisable by Trustee or Receiver.
In case the Collateral (other than any cash, Cash Equivalents,
securities and other personal property held by, or required to be deposited or
pledged with, the Trustee hereunder or under the Collateral Documents) shall be
in the possession of a receiver or trustee lawfully appointed, the powers
hereinbefore in this Article Eleven conferred upon the Company with respect to
the withdrawal or application of Trust Moneys may be exercised by such receiver
or trustee, in which case a certificate signed by such receiver or trustee shall
be deemed the equivalent of any Officers' Certificate required by this
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Article Eleven. If the Trustee shall be in possession of any of the Collateral
hereunder or under any of the Collateral Documents, such powers may be exercised
by the Trustee, in its discretion.
SECTION 11.07. Investment of Trust Moneys.
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 the written direction of the Company, which shall specify the Cash
Equivalents in which such Trust Moneys shall be invested and the maturity date
of such investment. Unless an Event of Default occurs and is continuing, any
interest on such Cash Equivalents (in excess of any accrued interest 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 grossly negligent action,
its own grossly negligent failure to act or its own willful misconduct in
complying with this Section 11.07.
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
SECTION 12.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, or overnight courier addressed as follows:
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if to the Company or any Guarantor:
The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attention: Marvin K. Kaiser
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: Michael C. Ryan, Esq.,
c/o Managing Attorneys' Office
if to the Trustee:
State Street Bank and Trust Company
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Each of the Company, the Guarantors and the Trustee by written notice
to each other such person may designate additional or different addresses for
notices to such person. Any notice or communication to the Company, the
Guarantors or the Trustee shall be deemed to have been given or made as of the
date so delivered, if personally delivered; when answered back, if telexed; when
receipt is acknowledged, if faxed; and five (5) calendar days after mailing, if
sent by registered or certified mail, postage prepaid (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee).
Any notice or communication mailed to a Securityholder, 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 to him by first class
mail or other equivalent means at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
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SECTION 12.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture 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 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or the Guarantors to
the Trustee to take any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, 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
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.05. 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:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) 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
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(4) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with.
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Securityholders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 12.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 12.08. Governing Law.
THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. Each of the parties hereto agrees 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.
SECTION 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company, the Guarantors, or any of their Subsidiaries. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10. No Recourse Against Others.
A director, officer, employee, stockholder or Affiliate, as such, of
the Company or the Guarantors shall not have any liability for any obligations
of the Company or the Guarantors under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. Such waiver and
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release are part of the consideration for the issuance of the Securities.
SECTION 12.11. Successors.
All agreements of the Company and the Guarantors in this Indenture and
the Securities shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 12.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 12.13. Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, in any respect for any reason, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
ARTICLE THIRTEEN
GUARANTEE OF SECURITIES
SECTION 13.01. Unconditional Guarantee.
Subject to the provisions of this Article Thirteen, each of the
Guarantors hereby, jointly and severally, unconditionally and irrevocably
guarantees, on a senior basis, except as described in Section 6.12 (such
guarantee to be referred to herein as a "Guarantee"), to each Holder of a Note
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 or the obligations of the Company or any other Guarantors to the
Holders or the Trustee hereunder or thereunder, that: (a) the principal of,
premium, if any, and interest on the Securities shall be duly and punctually
paid in full when due, whether at maturity, upon redemption at the option of
Holders pursuant to the provisions of the Securities relating thereto, by
acceleration 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 or the Guarantors to the Holders or the Trustee
hereunder or thereunder (including
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amounts due the Trustee under Section 7.07 hereof) and all other obligations
shall 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 or any of such other obligations, the same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed, or failing performance of any
other obligation of the Company to the Holders under this Indenture or under the
Securities, for whatever reason, each Guarantor shall be obligated 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 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 that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities 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,
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 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 that its Guarantee shall not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture 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
that, as between it, on the one hand, and the Holders of Securities and the
Trustee, on the other hand, (a) subject to this Article Eleven, 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
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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.
No stockholder, officer, director, employee or incorporator, past,
present or future, or any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in an
amount pro rata based on the net assets of each Guarantor, determined in
accordance with GAAP.
SECTION 13.02. Limitations on Guarantees.
The obligations of each Guarantor under its Guarantee are limited to
the maximum amount which, 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 or pursuant to its
contribution obligations under this Indenture, will result in the obligations of
such Guarantor under the Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under any laws of the United States, any state of the United
States, the District of Columbia, the Republic of Peru or the Cayman Islands or
any political subdivisions or territories therein or any other jurisdiction
under which a Guarantor is organized.
SECTION 13.03. Execution and Delivery of Guarantee.
To further evidence the Guarantee set forth in Section 13.01, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form of Exhibit M herein, shall be endorsed on each Security authenticated and
delivered by the Trustee. Such Guarantee shall be executed on behalf of each
Guarantor by either manual or facsimile signature of two Officers of each
Guarantor, each of whom, in each case, shall have been duly authorized to so
execute by all requisite corporate action. The validity and enforceability of
any Guarantee shall not be affected by the fact that it is not affixed to any
particular Security.
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Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 13.01 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 is on this Indenture or a
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which such Guarantee is endorsed 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.
SECTION 13.04. Release of a Guarantor.
(a) If no Default exists or would exist under this Indenture, upon the
sale or disposition of all of the Capital Stock of a Guarantor by the Company,
in a transaction constituting an Asset Sale the Net Cash Proceeds of which are
applied in accordance with Section 4.16, or upon the consolidation or merger of
a Guarantor with or into any person in compliance with Article Five (in each
case, other than to the Company or an Affiliate of the Company), or if any
Guarantor is dissolved or liquidated in accordance with this Indenture, such
Guarantor's Guarantee shall be released, and such Guarantor and each Subsidiary
of such Guarantor that is also a Guarantor shall be deemed released from all
obligations under this Article Eleven without any further action required on the
part of the Trustee or any Holder. Any Guarantor not so released or the entity
surviving such Guarantor, as applicable, shall remain or be liable under its
Guarantee as provided in this Article Eleven.
(b) The Trustee shall deliver an appropriate instrument evidencing the
release of a Guarantor upon receipt of a request by the Company or such
Guarantor accompanied by an Officers' Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 13.04, provided the legal
counsel delivering such Opinion of Counsel may rely as to matters of fact on one
or more Officers Certificates of the Company.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Securities and under this
Article Eleven.
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Except as set forth in Articles Four and Five and this Section 13.04,
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 or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
SECTION 13.05. Waiver of Subrogation.
Until this Indenture is discharged and all of the Securities are
discharged and paid in full, each Guarantor hereby irrevocably waives and agrees
not to exercise 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 the Company's obligations under the Securities or this Indenture
and such Guarantor's obligations under this Guarantee and this Indenture, in any
such instance including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy of the Holders 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 any amounts owing to the Trustee or the Holders of
Securities under the Securities, this Indenture, or any other document or
instrument delivered under or in connection with such agreements or instruments,
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 Trustee or the Holders and shall forthwith be paid to the
Trustee for the benefit of itself or such Holders to be credited and applied to
the obligations in favor of the Trustee or the Holders, as the case may be,
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 13.05 is knowingly made in contemplation of
such benefits.
SECTION 13.06. Immediate Payment.
Each Guarantor agrees to make immediate payment to the Trustee on
behalf of the Holders of all Obligations owing or payable to the respective
Holders upon receipt of a demand
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<PAGE>
for payment therefor by the Trustee to such Guarantor in writing.
SECTION 13.07. No Set-Off.
Each payment to be made by a Guarantor hereunder in respect of the
Obligations shall be payable in the currency or currencies in which such
Obligations are denominated, and shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.
SECTION 13.08. Obligations Continuing.
The obligations of each Guarantor hereunder shall be continuing and
shall remain in full force and effect until all the obligations have been paid
and satisfied in full. Each Guarantor agrees with the Trustee that it will from
time to time deliver to the Trustee suitable acknowledgments of this continued
liability hereunder.
SECTION 13.09. Obligations Reinstated.
The obligations of each Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the obligations of any Guarantor hereunder
(whether such payment shall have been made by or on behalf of the Company or by
or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders
upon the insolvency, bankruptcy, liquidation or reorganization of the Company or
any Guarantor or otherwise, all as though such payment had not been made. If
demand for, or acceleration of the time for, payment by the Company is stayed
upon the insolvency, bankruptcy, liquidation or reorganization of the Company,
all such Indebtedness otherwise subject to demand for payment or acceleration
shall nonetheless be payable by each Guarantor as provided herein.
SECTION 13.10. Obligations Not Affected.
The obligations of each Guarantor hereunder shall not be affected,
impaired or diminished in any way by any act, omission, matter or thing
whatsoever, occurring before, upon or after any demand for payment hereunder
(and whether or not known or consented to by any Guarantor or any of the
Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such
126
<PAGE>
obligations, whether occasioned by default of any of the Holders or otherwise.
SECTION 13.11. Waiver.
Without in any way limiting the provisions of Section 11.01 hereof,
each Guarantor hereby waives notice or proof of reliance by the Holders upon the
obligations of any Guarantor hereunder, and diligence, presentment, demand for
payment on the Company, protest or notice of dishonor of any of the Obligations,
or other notice or formalities to the Company of any kind whatsoever.
SECTION 13.12. No Obligation To Take Action Against the Company.
Neither the Trustee nor any other person shall have any obligation to
enforce or exhaust any rights or remedies or to take any other steps under any
security for the Obligations or against the Company or any other person or any
property of the Company or any other person before the Trustee is entitled to
demand payment and performance by any or all Guarantors of their liabilities and
obligations under their Guarantees or under this Indenture.
SECTION 13.13. Dealing with the Company and Others.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
hereunder and without the consent of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise deal
with or do any act or thing in respect of (with or without consideration)
any and all collateral, mortgages or other security given by the Company or
any third party with respect to the obligations or matters contemplated by
this Indenture or the Securities;
(d) accept compromises or arrangements from the Company;
127
<PAGE>
(e) apply all monies at any time received from the Company or from any
security upon such part of the Obligations as the Holders may see fit or
change any such application in whole or in part from time to time as the
Holders may see fit; and
(f) otherwise deal with, or waive or modify their right to deal with,
the Company and all other persons and any security as the Holders or the
Trustee may see fit.
SECTION 13.14. Default and Enforcement.
If any Guarantor fails to pay in accordance with Section 13.06 hereof,
the Trustee may proceed in its name as trustee hereunder in the enforcement of
the Guarantee of any such Guarantor and such Guarantor's obligations thereunder
and hereunder by any remedy provided by law, whether by legal proceedings or
otherwise, and to recover from such Guarantor the obligations.
SECTION 13.15. Amendment, Etc.
No amendment, modification or waiver of any provision of this
Indenture relating to any Guarantor or consent to any departure by any Guarantor
or any other person from any such provision will in any event be effective
unless it is signed by such Guarantor and the Trustee.
SECTION 13.16. Acknowledgment.
Each Guarantor hereby acknowledges communication of the terms of this
Indenture and the Securities and consents to and approves of the same.
SECTION 13.17. Costs and Expenses.
Each Guarantor shall pay on demand by the Trustee any and all costs,
fees and expenses (including, without limitation, legal fees on a solicitor and
client basis) incurred by the Trustee, its agents, advisors and counsel or any
of the Holders in enforcing any of their rights under any Guarantee.
SECTION 13.18. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, remedy, power or privilege hereunder or under
this Indenture or the Securities, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder or under this Indenture or the Securities preclude
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<PAGE>
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges in the
Guarantee and under this Indenture, the Securities and any other document or
instrument between a Guarantor and/or the Company and the Trustee are cumulative
and not exclusive of any rights, remedies, powers and privilege provided by law.
SECTION 13.19. Survival of Obligations.
Without prejudice to the survival of any of the other obligations of
each Guarantor hereunder, the obligations of each Guarantor under Section 13.01
and shall be enforceable against such Guarantor without regard to and without
giving effect to any right of offset or counterclaim available to or which may
be asserted by the Company or any Guarantor.
SECTION 13.20. Guarantee in Addition to Other Obligations.
The obligations of each Guarantor under its Guarantee and this
Indenture are in addition to and not in substitution for any other obligations
to the Trustee or to any of the Holders in relation to this Indenture or the
Securities (including the Purchase Agreement, the Registration Rights Agreement
and the Collateral Documents).
SECTION 13.21. Severability.
Any provision of this Article Thirteen which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction
unless its removal would substantially defeat the basic intent, spirit and
purpose of this Indenture and this Article Thirteen.
SECTION 13.22. Successors and Assigns.
Each Guarantee shall be binding upon and inure to the benefit of each
Guarantor and the Trustee and the other Holders and their respective successors
and permitted assigns, except that no Guarantor may assign any of its
obligations hereunder or thereunder.
[Remainder of Page Intentionally Left Blank]
129
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
THE DOE RUN RESOURCES CORPORATION,
as Issuer
By:/s/ Marvin K. Kaiser
------------------------------------
Name: Marvin K. Kaiser
Title: Vice President and Chief
Financial Officer
FABRICATED PRODUCTS, INC.,
as Guarantor
By:/s/ Marvin K. Kaiser
------------------------------------
Name: Marvin K. Kaiser
Title: Vice President--Finance
DOE RUN MINING S.R.L.,
as Guarantor
By:/s/ Marvin K. Kaiser
------------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
DOE RUN PERU S.R.L.,
as Guarantor
By:/s/ Marvin K. Kaiser
------------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
DOE RUN CAYMAN LTD.,
as Guarantor
By:/s/ Marvin K. Kaiser
------------------------------------
Name: Marvin K. Kaiser
Title: Vice President
130
<PAGE>
DOE RUN AIR S.A.C.,
as Guarantor
By:/s/ Marvin K. Kaiser
------------------------------------
Name: Marvin K. Kaiser
Title: Attorney-in-Fact
DOE RUN DEVELOPMENT S.A.C.,
as Guarantor
By:/s/ Marvin K. Kaiser
------------------------------------
Name: Marvin K. Kaiser
Title: Attorney-in-Fact
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:/s/ Robert L. Reynolds
------------------------------------
Name: Robert L. Reynolds
Title: Vice President
131
<PAGE>
Exhibit A
[FORM OF SERIES A NOTE]
OID LEGEND TO BE INSERTED
ON THE FACE OF THE NOTE:
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS NOTE IS
BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF
THIS NOTE, (1) THE ISSUE PRICE IS $894.25; (2) THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT IS $105.75; (3) THE ISSUE DATE IS SEPTEMBER 1, 1998; AND (4) THE YIELD
TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS 13.750%.
[If a restricted security, then insert -- THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (C) IT IS AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT
PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY
RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER THEREOF OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUST FOR THIS SECURITY), (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY,
A-1
<PAGE>
IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[If a Temporary Regulation S Global Security, then insert -- THIS SECURITY IS A
TEMPORARY REGULATION S GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
REFERRED TO HEREINAFTER. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN SECTION 2.06
OF THE INDENTURE, INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY
NOT BE OFFERED OR SOLD TO A U.S. PERSON OR FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (AS DEFINED IN THE
INDENTURE), AND NO TRANSFER OR EXCHANGE OF AN INTEREST IN THIS TEMPORARY
REGULATION S GLOBAL SECURITY MAY BE MADE FOR AN INTEREST IN A RESTRICTED GLOBAL
SECURITY OR IN A PERMANENT REGULATION S GLOBAL SECURITY UNTIL AFTER THE LATER OF
THE DATE OF EXPIRATION OF THE RESTRICTED PERIOD AND THE DATE ON WHICH THE OWNER
SECURITIES CERTIFICATION AND THE DEPOSITORY SECURITIES CERTIFICATION RELATING TO
SUCH INTEREST HAVE BEEN PROVIDED IN ACCORDANCE WITH THE TERMS OF THE INDENTURE,
TO THE EFFECT THAT THE BENEFICIAL OWNER OR OWNERS OF SUCH INTEREST ARE NOT U.S.
PERSONS.]
[If a Permanent Regulation S Security, then insert -- THE SECURITIES
EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, OR DELIVERED IN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON,
UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.]
A-2
<PAGE>
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Secured Note
due 2005, Series A
CUSIP No.
No. $
The Doe Run Resources Corporation, a New York corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum
of Dollars, on March 15, 2005.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated: September 1, 1998
THE DOE RUN RESOURCES CORPORATION
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
A-4
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Series A Notes described in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------------
Authorized Signatory
A-5
<PAGE>
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Secured Note
due 2005, Series A
1. Interest.
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company"), promises to pay cash interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on March 15 and September 15 of each year (the
"Interest Payment Date"), commencing September 15, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
Commencing on the 91st day after the Issue Date, the interest rate on
the aggregate principal amount of the Securities shall increase by 1.0% per
annum for each 90-day period that the Securities are not secured by all of the
Collateral pursuant to the Collateral Documents; provided that the interest rate
on the Securities shall in no event exceed 18 1/4% per annum and upon the date
that the Securities are so secured, such additional interest shall cease to
accrue.
The Company shall pay interest on overdue principal and interest on
overdue installments of interest, to the extent lawful, at a rate equal to
13.25% per annum.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
its check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address. Notwithstanding the foregoing, the Company shall pay or cause to be
paid all amounts payable with respect to Restricted Securities or non-DTC
eligible Securities by wire transfer of Federal funds to the account of the
Holders of such Securities. If this Security is a Global Security, all payments
A-6
<PAGE>
in respect of this Security will be made to the Depository or its nominee in
immediately available funds in accordance with customary procedures established
from time to time by the Depository.
3. Paying Agent and Registrar.
Initially, STATE STREET BANK AND TRUST COMPANY (the "Trustee"), will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
September 1, 1998 (the "Indenture"), by and among the Company, the Guarantors
and the Trustee. This Security is one of a duly authorized issue of Securities
of the Company designated as its 11 1/4% Senior Secured Notes due 2005, Series A
(the "Series A Notes"), limited (except as otherwise provided in the Indenture)
in aggregate principal amount to $50,000,000. Capitalized terms herein are used
as defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders of Securities are referred to the Indenture and said Act for a
statement of them. The Securities are general obligations of the Company limited
in aggregate principal amount to $50,000,000.
5. Registration Rights.
Pursuant to the Registration Rights Agreement by and between the
Company, the Guarantors and the Initial Purchaser of the Series A Notes, the
Company and the Guarantors will be obligated to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Security for 11 1/4% Senior Secured Notes due 2005, Series B, of the
Company (the "Series B Notes"), which have been registered under the Securities
Act, in like principal amount and having identical terms as the Series A Notes.
The Holders of Series A Notes shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
A-7
<PAGE>
6. Optional Redemption.
The Securities will be subject to redemption, in whole or in part, at
the option of the Company, at any time on or after March 15, 2002, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued interest to the redemption date, if redeemed during the 12-month
period beginning on March 15 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2002............................................. 105.625%
2003............................................. 102.813%
2004 and thereafter.............................. 100.000%
</TABLE>
In addition, at any time prior to March 15, 2001, the Company may
redeem up to 35% of the Notes with the proceeds of one or more Equity Offerings
at a redemption price (expressed as a percentage of principal amount) of 111.25%
plus accrued interest to the redemption date; provided that at least 65% of the
Notes remains outstanding immediately after any such redemption. In order to
effect the foregoing redemption with the proceeds of any Equity Offering, the
Company shall make such redemption not more than 120 days after the consummation
of any such Equity Offering. "Equity Offering" means an offering of Qualified
Capital Stock of the Company (other than any Subsidiary of the Company).
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at such Holder's registered address. Securities in denominations larger than
$1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption
Date, then, unless the Company defaults in the payment of such Redemption Price,
the Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price.
8. Change of Control Offer.
Upon the occurrence of a Change of Control, upon the satisfaction of
the conditions set forth in the Indenture, the Company shall be required to
offer to purchase all of the then
A-8
<PAGE>
outstanding Securities pursuant to a Change of Control Offer at a purchase price
equal to 101% of the principal amount thereof plus accrued interest, if any, to
the date of purchase. Holders of Securities which are the subject of such an
offer to repurchase shall receive an offer to repurchase and may elect to have
such Securities repurchased in accordance with the provisions of the Indenture
pursuant to and in accordance with the terms of the Indenture.
9. Limitation on Disposition of Assets.
Under certain circumstances, the Company is required to apply the net
proceeds from Asset Sales to repurchase Securities at a price equal to 100% of
the aggregate principal amount thereof, plus accrued interest to the date of
purchase.
10. Collateral Documents.
In order to secure the due and punctual payment of the principal of
and interest on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same will be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Company has granted, and will
grant, security interests in and Liens on the Collateral owned by it to the
Trustee for the benefit of the Holders of Securities pursuant to the Indenture
and the Collateral Documents. The Securities will be secured by Liens on and
security interests in the Collateral with the priority contemplated in Section
10.01(a) of the Indenture and are subject to certain permitted encumbrances.
Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Collateral Documents, as the same may be amended from time to
time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
the Collateral Documents and the terms and provisions of the Indenture will not
be deemed for any purpose to be an impairment of the security under the
Indenture.
11. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate
A-9
<PAGE>
endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any registration of transfer or exchange or redemption
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
12. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
With respect to Global Securities, the Depository may grant proxies
and otherwise authorize Holders of Book-Entry Securities to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder of a Security is entitled to give or take under the
Indenture.
13. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent will pay the money back to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
14. Discharge Prior to Redemption or Maturity.
The Company's obligations pursuant to the Indenture will be
discharged, except for obligations pursuant to certain sections thereof, subject
to the terms of the Indenture, upon the payment of all the Securities or upon
the irrevocable deposit with the Trustee of money or U.S. Government Obligations
sufficient to pay when due principal of, and premium, if any, and interest on
the Securities to maturity or redemption, as the case may be.
15. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto
A-10
<PAGE>
may amend, waive or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities, comply with Article Five of the Indenture or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not adversely affect the
rights of any Holder of a Security.
16. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of certain of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
17. Successors.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
18. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
19. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities
A-11
<PAGE>
and may otherwise deal with the Company, the Guarantors, their Subsidiaries or
their respective Affiliates as if it were not the Trustee.
20. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such,
of the Company or the Guarantors shall have any liability for any obligation of
the Company or the Guarantors under the Securities or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Security by accepting a Security waives and releases
all such liability. The waiver and release are part of the consideration for the
issuance of the Securities.
21. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
22. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
23. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
24. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
25. Guarantees.
This Security will be entitled to the benefits of certain Guarantees
made for the benefit of the Holders. Reference
A-12
<PAGE>
is hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.
26. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to: THE
DOE RUN RESOURCES CORPORATION, 1801 Park 270 Drive, St. Louis, Missouri 63146,
Attn.: Chief Financial Officer.
27. Certain Information Obligations.
At any time when the Company is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, upon the request of a Holder of a Series A
Fixed Rate Note, the Company will promptly furnish or cause to be furnished such
information as is specified pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto) to such Holder or to a prospective
purchaser of such Series A Fixed Rate Security designated by such Holder, as the
case may be, in order to permit compliance by such Holder with Rule 144A under
the Securities Act.
[The form of reverse of a Temporary Regulation S Global Security shall
be as set forth below --
Until this Temporary Regulation S Global Security is exchanged for a
Permanent Regulation S Global Security, the Holder hereof shall not be entitled
to receive payments of interest hereon; until so exchanged in full, this
Temporary Regulation S Global Security shall in all other respects be entitled
to the same benefits as other Securities under the Indenture.
This Temporary Regulation S Global Security is exchangeable in whole
or in part for one or more Permanent Regulation S Global Securities or
Restricted Global Securities only (i) on or after the expiration of the
Restricted Period and (ii) upon presentation of certificates (accompanied by an
Opinion of Counsel, if applicable) required by Article II of the Indenture. Upon
exchange of this Temporary Regulation S Global Security for one or more
Permanent Regulation S Global Securities or Restricted Global Securities, the
Trustee shall cancel this Temporary Regulation S Global Security.
A-13
<PAGE>
This Temporary Regulation S Global Security shall not become valid or
obligatory until the certificate of authentication hereon shall have been duly
manually signed by the Trustee in accordance with the Indenture. This Temporary
Regulation S Global Security shall be governed by and construed in accordance
with the laws of the State of New York.
A-14
<PAGE>
SCHEDULE OF EXCHANGES FOR GLOBAL SECURITIES
The following exchanges of a part of this Temporary Regulation S
Global Security for other Global Securities have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount of
decrease in increase in this Global Signature of
Principal Amount Principal Amount Security following authorized
of this Global of this Global such decrease (or officer of
Date of Exchange Security Security increase) Trustee
- ---------------- ---------------- ---------------- ------------------- ------------
<S> <C> <C> <C> <C>
</TABLE>
A-15
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security to
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
- ----------------------------------------
and irrevocably appoint _______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Dated:____________________ Signed:_____________________________________________
- --------------------------------------------------------------------------------
(Sign exactly as your name appears on
the front of this Security)
Signature Guarantee:
------------------------------------------------------------
A-16
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of
this Security purchased by the Company pursuant to Section 4.15 or Section 4.16
of the Indenture, state the amount:
$
Date:__________ Signature:_____________________________
(Sign exactly as your
name appears on the front
of this Security)
Signature Guarantee:
------------------------------------------------------------
A-17
<PAGE>
EXHIBIT B
[FORM OF SERIES B NOTE]
OID LEGEND TO BE INSERTED
ON THE FACE OF THE NOTE:
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS NOTE IS
BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF
THIS NOTE, (1) THE ISSUE PRICE IS $894.25; (2) THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT IS $105.75; (3) THE ISSUE DATE IS SEPTEMBER 1, 1998; AND (4) THE YIELD
TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS 13.750%.
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Secured Note
due 2005, Series B
CUSIP No.
No. $
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company," which term includes any successor entity), for value received
promises to pay to or registered assigns, the principal sum of Dollars, on March
15, 2005.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated:
B-1
<PAGE>
THE DOE RUN RESOURCES CORPORATION
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
B-2
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Series B Notes described in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-----------------------------------
Authorized Signatory
B-3
<PAGE>
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Secured Note
due 2005, Series B
1. Interest.
THE DOE RUN RESOURCES CORPORATION, a New York corporation (the
"Company"), promises to pay cash interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on March 15 and September 15 of each year (the
"Interest Payment Date"), commencing September 15, 1998. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
Commencing on the 91st day after the Issue Date, the interest rate on
the aggregate principal amount of the Securities shall increase by 1.0% per
annum for each 90-day period that the Securities are not secured by all of the
Collateral pursuant to the Collateral Documents; provided that the interest rate
on the Securities shall in no event exceed 18 1/4% per annum and upon the date
that the Securities are so secured, such additional interest shall cease to
accrue.
The Company shall pay interest on overdue principal and interest on
overdue installments of interest, to the extent lawful, at a rate equal to
13.25% per annum.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
its check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
B-4
<PAGE>
3. Paying Agent and Registrar.
Initially, STATE STREET BANK AND TRUST COMPANY (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
September 1, 1998 (the "Indenture"), by and among the Company, the Guarantors
and the Trustee. This Security is one of a duly authorized issue of Securities
of the Company designated as its 11 1/4% Senior Secured Notes due 2005, Series B
(the "Series B Notes"), limited (except as otherwise provided in the Indenture)
in aggregate principal amount to $50,000,000. Capitalized terms herein are used
as defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders of Securities are referred to the Indenture and said Act for a
statement of them. The Securities are general obligations of the Company limited
in aggregate principal amount to $50,000,000.
5. Exchange Offer.
The Series B Notes were issued pursuant to an exchange offer pursuant
to which 11 1/4% Senior Secured Notes due 2005, Series A, of the Company (the
"Series A Notes"), in like principal amount and having substantially identical
terms as the Series B Notes, were exchanged for the Series B Notes. The Series A
Notes and the Series B Notes are together referred to herein as the
"Securities."
6. Optional Redemption.
The Securities will be subject to redemption, in whole or in part, at
the option of the Company, at any time on or after March 15, 2002, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued interest to the redemption date, if redeemed during the 12-month
period beginning on March 15 of the years indicated below:
B-5
<PAGE>
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2002..................................................... 105.625%
2003..................................................... 102.813%
2004 and thereafter...................................... 100.000%
</TABLE>
In addition, at any time prior to March 15, 2001, the Company may
redeem up to 35% of the Notes with the proceeds of one or more Equity Offerings
at a redemption price (expressed as a percentage of principal amount) of 111.25%
plus accrued interest to the redemption date; provided that at least 65% of the
Notes remains outstanding immediately after any such redemption. In order to
effect the foregoing redemption with the proceeds of any Equity Offering, the
Company shall make such redemption not more than 120 days after the consummation
of any such Equity Offering. "Equity Offering" means an offering of Qualified
Capital Stock of the Company (other than any Subsidiary of the Company).
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at such Holder's registered address. Securities in denominations larger than
$1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption
Date, then, unless the Company defaults in the payment of such Redemption Price,
the Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price.
8. Change of Control Offer.
Upon the occurrence of a Change of Control, upon the satisfaction of
the conditions set forth in the Indenture, the Company shall be required to
offer to purchase all of the then outstanding Securities pursuant to a Change of
Control Offer at a purchase price equal to 101% of the principal amount thereof
plus accrued interest, if any, to the date of purchase. Holders of Securities
which are the subject of such an offer to repurchase shall receive an offer to
repurchase and may elect to have such Securities repurchased in accordance with
the provisions of the Indenture pursuant to and in accordance with the terms of
the Indenture.
B-6
<PAGE>
9. Limitation on Disposition of Assets.
Under certain circumstances, the Company is required to apply the net
proceeds from Asset Sales to repurchase Securities at a price equal to 100% of
the aggregate principal amount thereof, plus accrued interest to the date of
purchase.
10. Collateral Documents.
In order to secure the due and punctual payment of the principal of
and interest on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same will be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Company has granted security
interests in and Liens on the Collateral owned by it to the Trustee for the
benefit of the Holders of Securities pursuant to the Indenture and the
Collateral Documents. The Securities will be secured by Liens on and security
interests in the Collateral with the priority contemplated in Section 10.01(a)
of the Indenture and are subject to certain permitted encumbrances.
Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Collateral Documents, as the same may be amended from time to
time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
the Collateral Documents and the terms and provisions of the Indenture will not
be deemed for any purpose to be an impairment of the security under the
Indenture.
11. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption. No service
charge shall be made for any registration of transfer or exchange or redemption
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
B-7
<PAGE>
12. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
With respect to Global Securities, the Depository may grant proxies
and otherwise authorize Holders of Book-Entry Securities to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder of a Security is entitled to give or take under the
Indenture.
13. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent will pay the money back to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
14. Discharge Prior to Redemption or Maturity.
The Company's obligations pursuant to the Indenture will be
discharged, except for obligations pursuant to certain sections thereof, subject
to the terms of the Indenture, upon the payment of all the Securities or upon
the irrevocable deposit with the Trustee of money or U.S. Government Obligations
sufficient to pay when due principal of, and premium, if any, and interest on
the Securities to maturity or redemption, as the case may be.
15. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend, waive or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities, comply with Article Five of the Indenture or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not adversely affect the
rights of any Holder of a Security.
B-8
<PAGE>
16. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other person and sell, lease, transfer or otherwise
dispose of substantially all of certain of its properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Trustee on compliance with such
limitations.
17. Successors.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
18. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
19. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
20. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such,
of the Company or the Guarantors shall have any liability for any obligation of
the Company or the Guarantors
B-9
<PAGE>
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
21. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
22. Governing Law.
The Laws of the State of New York shall govern this Security and the
Indenture.
23. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
24. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
25. Guarantees.
This Security will be entitled to the benefits of certain Guarantees
made for the benefit of the Holders. Reference is hereby made to the Indenture
for a statement of the respective rights, limitations of rights, duties and
obligations thereunder of the Guarantors, the Trustee and the Holders.
26. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
B-10
<PAGE>
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to: THE
DOE RUN RESOURCES CORPORATION, 1801 Park 270 Drive, St. Louis, Missouri 63146,
Attn.: Chief Financial Officer.
B-11
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security to
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other
identifying number of assignee
- ---------------------------------------
and irrevocably appoint _______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Dated: Signed:
-------------------- ----------------------------------------------
- --------------------------------------------------------------------------------
(Sign exactly as your name appears on
the front of this Security)
Signature Guarantee:
------------------------------------------------------------
B-12
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount:
$
Date: Signature:
----------------------------- -----------------------------
(Sign exactly as your name
appears on the front
of this Security)
Signature Guarantee:
------------------------------------------------------------
B-13
<PAGE>
EXHIBIT C
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
C-1
<PAGE>
EXHIBIT D
Transferee Letter of Representation
The Doe Run Resources Corporation
1801 Park 270 Drive
St. Louis, Missouri 63146
Attn.: Chief Financial Officer
Dear Sirs:
In connection with our proposed purchase of $50,000,000 aggregate
principal amount of the 11 1/4% Senior Secured Notes due 2005, Series A and 11
1/4% Senior Secured Notes due 2005, Series B (the "Securities") of The Doe Run
Resources Corporation, a New York corporation (the "Company"), we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and, unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such Securities prior
to the date which is three years after the later of the date of original issue
and the last date on which the Company or any affiliate of the Company was the
owner of such Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to the Company, (b) pursuant to a registration
statement which has been declared effective under the Securities Act, (c) so
long as the Securities are eligible for resale pursuant to Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act that is purchasing
for his own account or for the account of such an institutional "accredited
investor," in each case in a minimum principal amount of Securities of $500,000,
(f) in an offshore transaction pursuant to Regulation S of the Securities Act or
(g) pursuant to any other available exemption from the registration requirements
of the Securities Act, subject in each of the foregoing cases to any requirement
of law that the disposition of our property or the property of such investor
account
D-1
<PAGE>
or accounts be at all times within our or their control and to compliance with
any applicable state securities laws. The foregoing restrictions on resale will
not apply subsequent to the Resale Restriction Termination Date. If any resale
or other transfer of the Securities is proposed to be made pursuant to clause
(e) above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Securities pursuant to clause (c), (d) or
(f) above to require the delivery of an opinion of counsel, certifications
and/or other information satisfactory to the Company and the Trustee.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Securities for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
3. We are acquiring at least $500,000 principal amount of the
Securities and we are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy
D-2
<PAGE>
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
---------------------------------------
(Name of Purchaser)
By:
----------------------------------
Date:
----------------------------------
D-3
<PAGE>
Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:
----------------------------------
Address:
----------------------------------
Taxpayer ID Number:
--------------------
D-4
<PAGE>
EXHIBIT E
[FORM OF CERTIFICATION TO BE GIVEN BY HOLDERS OF
BENEFICIAL INTEREST IN A TEMPORARY
REGULATION S GLOBAL SECURITY
TO EUROCLEAR OR CEDEL]
OWNER SECURITIES CERTIFICATION
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Secured Notes due 2005
CUSIP No.______
Reference is hereby made to the Indenture, dated as of September 1,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein, and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This is to certify that, as of the date hereof, $_____________ of the
above-captioned Securities (the "Securities") are beneficially owned by non-U.S.
person(s). As used in this paragraph, the term "U.S. person" has
the meaning given to it by Regulation S under the Securities Act of 1933, as
amended.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the Securities
held by you for our account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such
E-1
<PAGE>
proceedings. This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchaser.
Dated: __________, ____
By:___________________________
As, or as agent for, the beneficial
owner(s) of the Securities to which this
certificate relates.
E-2
<PAGE>
EXHIBIT F
[FORM OF CERTIFICATION TO BE GIVEN
BY THE EUROCLEAR OPERATOR OR
CEDEL BANK, SOCIETE ANONYME]
DEPOSITORY SECURITIES CERTIFICATION
THE DOE RUN RESOURCES CORPORATION
11 1/4% Senior Secured Notes due 2005
CUSIP No. ________
Reference is hereby made to the Indenture, dated as of September 1, 1998 (the
"Indenture"), by and among The Doe Run Resources Corporation., a New York
corporation, as issuer, the Guarantors named therein, and State Street Bank and
Trust Company, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This is to certify that, with respect to U.S.$ principal amount of the
above-captioned Securities (the "Securities"), except as set forth below, we
have received in writing, by tested telex or by electronic transmission, from
member organizations appearing in our records as persons being entitled to a
portion of the principal amount of the Securities (our "Member Organizations"),
certifications with respect to such portion, substantially to the effect set
forth in the Indenture.*
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the Temporary Regulation S Global Security (as defined in the
Indenture) excepted in such certifications and (ii) that as of the date hereof
we have not received any notification from any of our Member Organizations to
the effect that the statements made by such Member Organizations with respect to
any portion of the part submitted herewith for exchange (or, if relevant,
exercise of any rights or collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
- ----------
* Unless Morgan Guaranty Trust Company of New York, London Branch is
otherwise informed by the Agent, the long form certificate set out in the
Operating Procedures will be deemed to meet the requirements of this
sentence.
F-1
<PAGE>
We understand that this certification is required in connection with certain
securities laws of the United States. In connection therewith, if administrative
or legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification to any interested party in such proceedings. This certificate
and the statements contained herein are made for your benefit and the benefit of
the Company and the Initial Purchaser.
Dated: ___________, ____
Yours faithfully,
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as operator of the
Euroclear System
or
[CEDEL BANK, SOCIETE ANONYME]
By:
-----------------------------------
F-2
<PAGE>
EXHIBIT G
[FORM OF CERTIFICATION TO BE GIVEN BY
TRANSFEREE OF BENEFICIAL INTEREST IN A
TEMPORARY REGULATION S GLOBAL SECURITY]
TRANSFEREE SECURITIES CERTIFICATION
THE DOE RUN RESOURCES CORPORATION.
11 1/4% Senior Secured Notes due 2005
CUSIP No._________
Reference is hereby made to the Indenture, dated as of September 1, 1998 (the
"Indenture"), by and among The Doe Run Resources Corporation., a New York
corporation, as issuer, the Guarantors named therein, and State Street Bank and
Trust Company, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
For purposes of acquiring a beneficial interest in the Temporary Regulation S
Global Security, the undersigned certifies that it is not a U.S. person as
defined by Regulation S under the Securities Act of 1933, as amended.
We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certification relating to the Securities held by
you in which we intend to acquire a beneficial interest in accordance with your
operating procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
We understand that this certificate is required in connection with certain
securities laws of the United States. In connection therewith, if administrative
or legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate to any interested party in such proceeding. This certificate
and the statements contained herein are made for your benefit and the benefit of
the Company and the Initial Purchaser.
Dated: _____________, ____
By:
----------------------------------
As, or as agent for, the beneficial
acquiror of the Securities to which this
certificate relates.
G-1
<PAGE>
EXHIBIT H
FORM OF CERTIFICATION FOR TRANSFER OR
EXCHANGE OF RESTRICTED GLOBAL SECURITY
TO TEMPORARY REGULATION S GLOBAL SECURITY
State Street Bank and Trust Company
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
11 1/4% Senior Secured Notes due 2005
(the "Securities")
Reference is hereby made to the Indenture, dated as of September 1,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to U.S. $_____________ aggregate principal amount
of Securities which are held in the form of the Restricted Global Security
(CUSIP No. ) with the Depository in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Securities to a person who will take delivery thereof in the
form of an equal aggregate principal amount of Securities evidenced by the
Temporary Regulation S Global Security (CUSIP No. ) to be held with the
Depository in the name of [Euroclear] [Cedel Bank, societe anonyme].
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Securities and
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and accordingly the Transferor does
hereby certify that:
(1) the offer of the Securities was not made to a person in the United
States;
[(2) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the transferee was outside the United
States;]
H-1
<PAGE>
[(2) the transaction was executed in, on or through the facilities of
a designated offshore securities market and neither the Transferor nor any
person acting on our behalf knows that the transaction was pre-arranged
with a buyer in the United States;]*
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903 (b) or 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depository in the
name of [Euroclear] [Cedel Bank, societe anonyme].
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company and the Initial Purchaser.
[Insert Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated:
---------------------------------
cc: The Doe Run Resources Corporation
- ----------
* Insert one of these two provisions, which come from the definition of
"offshore transaction" in Regulation S.
H-2
<PAGE>
EXHIBIT I
FORM OF CERTIFICATION FOR TRANSFER OR EXCHANGE OF
RESTRICTED GLOBAL SECURITY TO
PERMANENT REGULATION S GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
11 1/4% Senior Secured Notes due 2005
(the "Securities")
Reference is hereby made to the Indenture, dated as of September 1,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to U.S.$____________ aggregate principal amount of
Securities which are held in the form of the Restricted Global Security (CUSIP
No. ) with the Depository in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Securities to a person who will take delivery thereof in the
form of an equal aggregate principal amount of Securities evidenced by the
Permanent Regulation S Global Security (CUSIP No. ).
In connection with such request, and in respect of such Securities,
the Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Securities and,
(1) with respect to transfers made in reliance on Regulation S under
the Securities Act of 1933, as amended (the "Securities Act"), the
Transferor does hereby certify that:
(A) the offer of the Securities was not made to a person in the
United States;
[(B) (at the time the buy order was originated, the transferee
was outside the United States or the Transferor
I-1
<PAGE>
and any person acting on its behalf reasonably believed that the
transferee was outside the United States;]
[(C) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither the
Transferor nor any person acting on our behalf knows that the
transaction was pre-arranged with a buyer in the United States;]*
(D) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or 904(b) of Regulation S, as
applicable; and
(E) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(2) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Securities are
being transferred in a transaction permitted by Rule 144 under the
Securities Act.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company and the Initial Purchaser.
[Insert Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated:
---------------------------------
cc: The Doe Run Resources Corporation.
- ----------
* Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S.
I-2
<PAGE>
EXHIBIT J
FORM OF CERTIFICATION FOR TRANSFER OR EXCHANGE OF
TEMPORARY REGULATION S GLOBAL SECURITY
OR PERMANENT REGULATION S GLOBAL SECURITY TO
RESTRICTED GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
11 1/4% Senior Secured Notes due 2005
(the "Securities")
Reference is hereby made to the Indenture, dated as of September 1,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to U.S.$ principal amount of Securities
which are evidenced by an aggregate [Temporary Regulation S Global Security
(CUSIP No. ] [Permanent Regulation S Global Security (CUSIP No. ] and
held with the Depository through [Euroclear] [Cedel] (Common Code ) in the
name of [insert name of transferor] (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in Securities to a person that
will take delivery thereof in the form of an equal principal amount of
Securities evidenced by a Restricted Global Security of the same series and of
like tenor as the Securities (CUSIP No. ).
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that such transfer is being effected pursuant to
and in accordance with Rule 144A under the Securities Act and, accordingly, the
Transferor does hereby further certify that the Securities are being transferred
to a person that the Transferor reasonably believes is purchasing the Securities
for its own account, or for one or more accounts with respect to which such
person exercises sole investment discretion, and such person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting the requirements of
J-1
<PAGE>
Rule 144A and in accordance with any applicable securities laws of any state of
the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchaser.
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Dated:
----------------------------
cc: The Doe Run Resources Corporation
J-2
<PAGE>
EXHIBIT K-1
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL RESTRICTED SECURITY TO
RESTRICTED GLOBAL SECURITY
State Street Bank and Trust Company
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
11 1/4% Senior Secured Notes due 2005
(the "Securities")
Reference is hereby made to the Indenture, dated as of September 1,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $ principal amount of Restricted
Securities held in definitive form (CUSIP No. ) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A or Rule 144 under the
United States Securities Act of 1933, as amended (the "Securities Act") and
accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 144A:
(A) the Securities are being transferred to a person that the
Transferor reasonably believes is purchasing the Securities for its
own account, or for one or more accounts with respect to which such
person exercises sole investment discretion;
K-1-1
<PAGE>
(B) such person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A; and
(C) the Securities have been transferred in a transaction meeting
the requirements of Rule 144A and in accordance with any applicable
securities laws of any state of the United States; or
(2) if the transfer has been effected pursuant to Rule 144:
(A) more than two years has elapsed since the date of the closing
of the initial placement of the Securities pursuant to the Purchase
Agreement; and
(B) the Securities have been transferred in a transaction
permitted by Rule 144 and made in accordance with any applicable
securities laws of any state of the United States.
K-1-2
<PAGE>
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company and the Initial Purchaser.
Dated: _____________, ____
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
cc: The Doe Run Resources Corporation.
K-1-3
<PAGE>
EXHIBIT K-2
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL RESTRICTED SECURITY TO
PERMANENT REGULATION S GLOBAL SECURITY
OR TEMPORARY REGULATION S GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
11 1/4% Senior Secured Notes due 2005
(the "Securities")
Reference is hereby made to the Indenture, dated as of September 1,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $ principal amount of Restricted
Securities held in definitive form (CUSIP No. ) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with (a) Rule 903 or Rule 904 under
the Securities Act of 1933, as amended (the "Act"), or (b) Rule 144 under the
Act, and accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 903 or Rule
904:
(A) the offer of the Securities was not made to a person in the United
States;
(B) either;
K-2-1
<PAGE>
(i) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on
its behalf reasonably believed that the transferee was outside the
United States, or
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither the
Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(C) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(D) the transaction is not part of a plan or scheme to evade the
registration requirements of the Act; and
(E) if such transfer is to occur during the Restricted Period, upon
completion of the transaction, the beneficial interest being transferred as
described above was held with the Depository through [Euroclear] [CEDEL];
or
(2) if the transfer has been effected pursuant to Rule 144:
(A) more than two years has elapsed since the date of the closing of
the initial placement of the Securities pursuant to the Purchase Agreement;
and
(B) the Securities have been transferred in a transaction permitted by
Rule 144 and made in accordance with any applicable securities laws of any
state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company and the Initial Purchaser.
Dated: ____________, ____
[Insert Name of Transferor]
K-2-2
<PAGE>
By:
-----------------------------------
Name:
Title:
cc: The Doe Run Resources Corporation
K-2-3
<PAGE>
EXHIBIT L-1
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL PERMANENT REGULATION S
SECURITY TO RESTRICTED GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
11 1/4% Senior Secured Notes due 2005
(the "Securities")
Reference is hereby made to the Indenture, dated as of September 1,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, and State Street Bank and Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
This letter relates to $ principal amount of Restricted
Securities held in definitive form (CUSIP No. ) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended, and accordingly the Transferor does
hereby further certify that the Securities are being transferred to a person
that the Transferor reasonably believes is purchasing the Securities for its own
account, or for one or more accounts with respect to which such person exercises
sole investment discretion, and such person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in each case in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States.
L-1-1
<PAGE>
In connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate to any interested party in
such proceeding. This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Initial Purchaser.
Dated: _______________, ____
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
cc: The Doe Run Resources Corporation
L-1-2
<PAGE>
EXHIBIT L-2
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL PERMANENT REGULATION S
SECURITY TO PERMANENT REGULATION S GLOBAL SECURITY
State Street Bank and Trust Company,
as Trustee
Goodwin Square
225 Asylum, 23rd Floor
Hartford, CT 06103
Attention: Corporate Trust Administration
Re: The Doe Run Resources Corporation
11 1/4% Senior Secured Notes due 2005
(the "Securities")
Reference is hereby made to the Indenture, dated as of September 1,
1998 (the "Indenture"), by and among The Doe Run Resources Corporation, a New
York corporation, as issuer, the Guarantors named therein and State Street Bank
and Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $______________ principal amount of Restricted
Securities held in definitive form (CUSIP No. ) by __________ [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with (a) Rule 903 or Rule 904 under
the Securities Act of 1933, as amended (the "Act"), or (b) Rule 144 under the
Act, and accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 903 or Rule
904:
(A) the offer of the Securities was not made to a person in the
United States;
L-2-1
<PAGE>
(B) either;
(i) at the time the buy order was originated, the transferee
was outside the United States or the Transferor and any person
acting on its behalf reasonably believed that the transferee was
outside the United States, or
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither
the Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(C) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or 904 (b) of Regulation S, as
applicable;
(D) the transaction is not part of a plan or scheme to evade the
registration requirements of the Act; and
(E) if such transfer is to occur during the Restricted Period,
upon completion of the transaction, the beneficial interest being
transferred as described above was held with the Depository through
[Euroclear] [CEDEL]; or
(2) if the transfer has been effected pursuant to Rule 144:
(A) more than two years has elapsed since the date of the closing
of the initial placement of the Securities pursuant to the Purchase
Agreement; and
(B) the Securities have been transferred in a transaction
permitted by Rule 144 and made in accordance with any applicable
securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained
L-2-2
<PAGE>
herein are made for your benefit and the benefit of the Company and the Initial
Purchaser.
Dated: ______________, ____
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
cc: The Doe Run Resources Corporation
L-2-3
<PAGE>
EXHIBIT M
GUARANTEE
For value received, the undersigned hereby unconditionally guarantees,
as principal obligor and not only as a surety, to the Holder of this Security
the cash payments in United States dollars of principal of, premium, if any, and
interest on this Security in the amounts and at the times when due and interest
on the overdue principal, premium, if any, and interest, if any, of this
Security, if lawful, and the payment or performance of all other obligations of
the Company under the Indenture (as defined below) or the Securities, to the
Holder of this Security and the Trustee, all in accordance with and subject to
the terms and limitations of this Security, Article Thirteen of the Indenture
and this Guarantee. This Guarantee will become effective in accordance with
Article Thirteen of the Indenture and its terms shall be evidenced therein. The
validity and enforceability of any Guarantee shall not be affected by the fact
that it is not affixed to any particular Security. Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the Indenture
dated as of September 1, 1998, by and among The Doe Run Resources Corporation, a
New York corporation, as issuer, the Guarantors named therein and State Street
Bank and Trust Company, as trustee, as amended or supplemented (the
"Indenture").
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article Thirteen of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Guarantee and all of the other provisions
of the Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. Each Guarantor hereby agrees to submit to the jurisdiction of
any federal or state court in the Borough of Manhattan of the City of New York
for purposes of any legal suit, action or proceeding against it arising out of
or related to this Indenture, the Securities and the Guarantees (a "Related
Proceeding"). The Company hereby consents to the jurisdiction of each such court
for the purposes of any Related Proceeding, and irrevocably waives, to the
fullest extent it may effectively do so, any objection to the laying of venue of
any Related Proceeding in any such court and the defense of an inconvenient
forum to the maintenance of any Related Proceedings in any such court.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly
executed.
Date:____________________
FABRICATED PRODUCTS, INC.,
as Guarantor
By:
-----------------------------------
Name:
Title:
DOE RUN CAYMAN LTD.,
as Guarantor
By:
-----------------------------------
Name:
Title:
DOE RUN MINING S.R.L.,
as Guarantor
By:
-----------------------------------
Name:
Title:
DOE RUN PERU S.R.L.,
as Guarantor
By:
-----------------------------------
Name:
Title:
DOE RUN AIR S.A.C.,
as Guarantor
By:
-----------------------------------
Name:
Title:
M-2
<PAGE>
DOE RUN DEVELOPMENT S.A.C.,
as Guarantor
By:
-----------------------------------
Name:
Title:
M-3
<PAGE>
Exhibit 4.3
The Doe Run Resources Corporation
$50,000,000 11 1/4% Senior Secured Notes due 2005
PURCHASE AGREEMENT
August 26, 1998
JEFFERIES & COMPANY, INC.
11100 Santa Monica Blvd.
Los Angeles, CA 90025
Ladies and Gentlemen:
The Doe Run Resources Corporation, a New York corporation (the
"Company"), hereby confirms its agreement with Jefferies & Company, Inc. (the
"Initial Purchaser"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
$50,000,000 aggregate principal amount of its 11 1/4% Senior Secured Notes due
2005, Series A (the "Notes"). The Notes will be guaranteed (collectively, the
"Guarantees" and, together with the Notes, the "Securities") by Fabricated
Products, Inc., a Delaware corporation ("Fabricated Products"), Doe Run Cayman
Ltd., a Cayman Islands company ("Doe Run Cayman"), Doe Run Mining S.R.L., a
Peruvian company ("Doe Run Mining") and Doe Run Peru S.R.L., a Peruvian company
(collectively with its subsidiaries, "Doe Run Peru") (collectively, the
"Guarantors" and, together with the Company, the "Issuers"). The Notes are to be
issued under an indenture (the "Indenture") dated as of September 1, 1998 by and
among the Company, the Guarantors, and State Street Bank and Trust Company as
Trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Act"), in
reliance on exemptions therefrom.
In connection with the sale of the Notes, the Issuers have prepared a
final offering circular dated August 26, 1998 (the "Memorandum") setting forth
or including a description of the terms of the Securities, the terms of the
offering of the Securities, a description of the Company and the Guarantors and
<PAGE>
any material developments relating to the Company and the Guarantors occurring
after the date of the most recent historical financial statements included
therein.
The Initial Purchaser and its direct and indirect transferees of the
Notes will be entitled to the benefits of the Registration Rights Agreement to
be dated as of the Closing Date (as defined in Section 3 below), (the
"Registration Rights Agreement"), pursuant to which the Issuers have agreed,
among other things, to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Notes or the Exchange Notes (as defined in the Registration
Rights Agreement) under the Act. The Initial Purchaser and its direct and
indirect transferees of the Notes will also be entitled to the benefits of the
Security Agreement to be dated as of the Closing Date (the "Security Agreement")
pursuant to which the Company has agreed, among other things to grant a first
priority security interest in the property, plant and equipment of ASARCO
Incorporated's ("ASARCO") Missouri Lead Division (the "ASARCO MLD") in
accordance with the terms of the Indenture.
2. Representations and Warranties. Each of the Issuers represent and
warrant to and agree with the Initial Purchaser that:
(a) Neither the Memorandum nor any amendment or supplement thereto as
of the date thereof and at all times subsequent thereto up to the Closing
Date contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
Section 2(a) do not apply to statements or omissions made in reliance upon
and in conformity with information relating to the Initial Purchaser
furnished to the Company in writing by the Initial Purchaser expressly for
use in the Memorandum or any amendment or supplement thereto.
(b) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Memorandum; all of
the subsidiaries of the Company are listed in Schedule 2 attached hereto
(each, a "Subsidiary" and collectively, the "Subsidiaries"); all of the
outstanding shares of capital stock or equity interests, as the case may be,
of the Company and the Subsidiaries have been, and as of the Closing Date
will be, duly
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authorized and validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights; all of the
outstanding shares of capital stock or equity interests, as the case may be,
of the Company and of each of the Subsidiaries will be free and clear of all
liens, encumbrances, equities and claims or restrictions on transferability
(other than those imposed by the Act and the securities or "Blue Sky" laws
of certain jurisdictions) or voting; except as set forth in the Memorandum,
there are no (i) options, warrants or other rights to purchase, (ii)
agreements or other obligations to issue or (iii) other rights to convert
any obligation into, or exchange any securities for, shares of capital stock
of or ownership interests in the Company or any of the Subsidiaries
outstanding. Except for the Subsidiaries or as disclosed in the Memorandum,
the Company and the Subsidiaries do not own, directly or indirectly, any
shares of capital stock or any other equity or long-term debt securities or
have any equity interest in any firm, partnership, joint venture or other
entity.
(c) Each of the Company and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of its respective jurisdiction
of organization and has all requisite power and authority to own its
properties and conduct its business as now conducted and as described in the
Memorandum; each of the Company and the Subsidiaries is duly qualified to do
business as a foreign entity in good standing in all other jurisdictions
where the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a material
adverse effect on the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the Company
and the Subsidiaries, taken as a whole (any such event, a "Material Adverse
Effect").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, when issued, will be in the form
contemplated by the Indenture. The Notes, the Exchange Notes and the Private
Exchange Notes have each been duly and validly authorized by the Company
and, when executed by the Company and authenticated by the Trustee in
accordance with the provisions of the Indenture and, in
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<PAGE>
the case of the Notes, when delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, will constitute
valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in accordance
with their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, restructuring, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (iii) any limitation
on a waiver of rights under any usury laws.
(e) Each of the Issuers has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Indenture. The
Indenture meets the requirements for qualification under the Trust Indenture
Act of 1939, as amended (the "TIA"). The Indenture has been duly and validly
authorized by each of the Issuers and, when executed and delivered by each
of the Issuers (assuming the due authorization, execution and delivery by
the Trustee), will constitute a valid and legally binding agreement of each
of the Issuers, enforceable against each of the Issuers in accordance with
its terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, restructuring, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (iii) any limitation
on a waiver of rights under any usury laws.
(f) Each of the Issuers has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and
validly authorized by each of the Issuers and, when executed and delivered
by each of the Issuers, will constitute a valid and legally binding
agreement of each of the Issuers enforceable against each of the Issuers in
accordance with its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought and (B) any rights
to indemnity or contribution
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<PAGE>
thereunder may be limited by federal, state or foreign securities laws
and public policy considerations.
(g) Each of the Guarantors has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Guarantees. The Guarantees have been duly and validly authorized for
issuance to the Initial Purchaser by the Guarantors and, when the Notes are
duly and validly authorized, executed, issued and authenticated in
accordance with the terms of the Indenture and delivered against payment
therefor in accordance with the terms hereof, will be the legally valid and
binding obligations of each of the Guarantors, enforceable against each of
the Guarantors in accordance with their terms and entitled to the benefits
of the Indenture, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, restructuring, reorganization, moratorium or other
similar laws now or hereinafter in effect relating to creditors' rights
generally, (ii) general principles of equity regardless of the discretion of
the court before which any proceeding therefor may be brought and (iii) any
limitation on a waiver of rights under any usury laws.
(h) Each of the Issuers has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized by each of the Issuers, and
when executed and delivered by each of the Issuers, will constitute a valid
and legally binding agreement of each of the Issuers enforceable against
each of the Issuers in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in
effect relating to creditors' rights generally, and (ii) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or contribution
thereunder may be limited by federal, state or foreign securities laws and
public policy considerations.
(i) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Security Agreement.
The Security Agreement has been duly and validly authorized by the Company
and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Trustee), will constitute a
valid and legally binding agreement of the Company, enforceable against the
Company in
5
<PAGE>
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, restructuring, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought
and (iii) any limitation on a waiver of rights under any usury laws.
(j) The Company has all requisite corporate power and authority to
perform its obligations under the Asset Purchase and Sale Agreement between
ASARCO and the Company for the Missouri Lead Division and the Sugar Creek
Project dated July 28, 1998 (the "Asset Purchase Agreement"). The Asset
Purchase Agreement has been duly and validly authorized, executed and
delivered by the Company and (assuming the due authorization and execution
by ASARCO) constitutes a valid and legally binding agreement of the Company
and ASARCO enforceable against the Company and ASARCO in accordance with its
terms, except that (A) the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditor's rights generally, (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought and (B) any rights to indemnity or
contribution may be limited by federal, state or foreign securities laws and
public policy consideration.
(k) No consent, approval, license, validation of, filing, recording or
registration with, or exemption by, authorization or order of any court or
of any foreign or domestic governmental agency or body, or third party is
required for the issuance and sale by the Issuers of the Securities to the
Initial Purchaser or the consummation by each of the Issuers of the other
transactions contemplated hereby, except such as have been obtained and such
as may be required under state securities or "Blue Sky" laws in connection
with the purchase and resale of the Notes by the Initial Purchaser. None of
the Company or the Subsidiaries is (i) in violation of any provision of the
charter, "Estatuto" or bylaws (or similar organizational documents), (ii) in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective properties
or assets, except for any such breach or violation which would not,
individually or in the aggregate, have a Material Adverse Effect, or (iii)
in breach of or default under (nor
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<PAGE>
has any event occurred which, with notice or passage of time or both,
would constitute a default under) or in violation of any of the terms or
provisions of any indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, permit, certificate, contract or other
agreement or instrument to which any of them is a party or to which any of
them or their respective properties or assets is subject (collectively,
"Contracts"), except for any such breach, default, violation or event which
would not, individually or in the aggregate, have a Material Adverse Effect.
(l) (A) The execution, delivery and performance by (i) each of the
Issuers of this Agreement, the Indenture and the Registration Rights
Agreement, (ii) the Guarantors of the Guarantees and (iii) the Company of
the Security Agreement and (B) the consummation by each of the Issuers of
the transactions contemplated hereby and thereby (including, without
limitation, the issuance and sale of the Securities to the Initial
Purchaser) will not conflict with or constitute or result in a breach of or
a default under (or an event which with notice or passage of time or both
would constitute a default under) or violation of any of (i) the terms or
provisions of any Contract, except for any such conflict, breach, violation,
default or event which would not, individually or in the aggregate, have a
Material Adverse Effect, (ii) the provisions of the charter, "Estatuto" or
bylaws (or similar organizational documents) of the Company or any of the
Subsidiaries, or (iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchaser in Section 8 hereof)
any statute, judgment, decree, order, rule or regulation applicable to the
Company or any of the Subsidiaries or any of their respective properties or
assets, except for any such conflict, breach or violation which would not,
individually or in the aggregate, have a Material Adverse Effect.
(m) The execution, delivery and performance by the Company of the Asset
Purchase Agreement and the consummation by the Company of the transactions
contemplated thereby has not and will not conflict with or constitute or
result in a breach of or a default under (or an event which with notice or
passage of time or both would constitute a default under) or violation of
any of (i) the terms or provisions of any Contract, except for any such
conflict, breach, violation, default or event which would
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<PAGE>
not, individually or in the aggregate, have a Material Adverse Effect, (ii)
the provisions of the charter, "Estatuto" or bylaws (or similar
organizational documents) of the Company or any of the Subsidiaries, or
(iii) (assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 hereof) any statute, judgment, decree,
order, rule or regulation applicable to the Company or any of the
Subsidiaries or any of their respective properties or assets, except for any
such conflict, breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect.
(n) The audited consolidated financial statements of the Company and
the Subsidiaries included in the Memorandum present fairly in all material
respects the financial position, results of operations and cash flows of the
Company and the Subsidiaries at the dates and for the periods to which they
relate and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except as otherwise
stated therein. The unaudited financial statements and the summary and
selected financial and statistical data in the Memorandum present fairly in
all material respects the information shown therein and have been prepared
and compiled on a basis consistent with the audited financial statements
included therein, except as otherwise stated therein. KPMG Peat Marwick LLP,
PricewaterhouseCoopers LLP and Medina, Zaldivar y Asociados S. Civ. R.L., a
member firm of Andersen Worldwide SC, (the "Independent Accountants") are
independent public accounting firms within the meaning of the Act and the
rules and regulations promulgated thereunder.
(o) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Memorandum (i)
comply as to form in all material respects with the applicable requirements
of Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (ii) have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, and (iii) have been properly computed on the bases described
therein; the assumptions used in the preparation of the pro forma financial
data and other pro forma financial information included in the Memorandum
are reasonable and the adjustments used therein are appro-
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priate to give effect to the transactions or circumstances referred to
therein.
(p) Except as described in the Memorandum, there is not pending or, to
the knowledge of the Issuers, threatened any action, suit, proceeding,
inquiry or investigation to which the Company or any of the Subsidiaries is
a party, or to which the property or assets of the Company or any of the
Subsidiaries are subject, before or brought by any court, arbitrator or
governmental agency or body which, if determined adversely to the Company or
any of the Subsidiaries, would, individually or in the aggregate, have a
Material Adverse Effect or which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Notes to
be sold hereunder or the consummation of the other transactions described in
the Memorandum.
(q) Each of the Company and the Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state,
local and other foreign and domestic governmental authorities, all
self-regulatory organizations and all courts and other tribunals, presently
required or necessary to own or lease, as the case may be, and to operate
its respective properties and to carry on its respective businesses as now
or proposed to be conducted as set forth in the Memorandum ("Permits"),
except where the failure to obtain such Permits would not, individually or
in the aggregate, have a Material Adverse Effect; each of the Company and
the Subsidiaries has fulfilled and performed all of its obligations with
respect to such Permits, and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any
such Permit; and none of the Company or the Subsidiaries has received any
notice of any proceeding relating to revocation or modification of any such
Permit, except as described in the Memorandum or except where such
revocation or modification would not, individually or in the aggregate, have
a Material Adverse Effect.
(r) Since the date of the most recent financial statements appearing in
the Memorandum, except as described therein, (i) none of the Company or the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any
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transactions or contracts (written or oral) not in the ordinary course of
business which liabilities, obligations, transactions or contracts would,
individually or in the aggregate, be material to the general affairs,
management, business, condition (financial or otherwise), prospects or
results of operations of the Company and its Subsidiaries, taken as a whole,
(ii) none of the Company or the Subsidiaries has purchased any of its
outstanding equity interests, nor declared, paid or otherwise made any
dividend or distribution of any kind on its equity interests (other than
with respect to any of such Subsidiaries, the purchase of, or dividend or
distribution on, equity interests owned by the Company) and (iii) there
shall not have been any material change in the equity interests or long-term
indebtedness of the Company or the Subsidiaries.
(s) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where
the failure to so file such returns would not, individually or in the
aggregate, have a Material Adverse Effect, and has paid all taxes shown as
due thereon; and other than tax deficiencies which the Company or any
Subsidiary is contesting in good faith and for which the Company or such
Subsidiary has provided adequate reserves, there is no tax deficiency that
has been asserted against the Company or any of the Subsidiaries that would
have, individually or in the aggregate, a Material Adverse Effect.
(t) The statistical and market-related data included in the Memorandum
are based on or derived from sources which the Issuers believe to be
reliable and accurate.
(u) None of the Issuers or any agent acting on their behalf has taken
or will take any action that might cause this Agreement or the sale of the
Notes to violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date.
(v) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property described
in the Memorandum as being owned by it and good and marketable title to a
leasehold estate in the real and personal property described in the
Memorandum as being leased by it free and clear of all liens, charges,
encumbrances or restrictions, except as described in the Memorandum or to
the extent the
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failure to have such title or the existence of such liens, charges,
encumbrances or restrictions would not, individually or in the aggregate,
have a Material Adverse Effect. All leases, contracts and agreements to
which the Company or any of the Subsidiaries is a party or by which any of
them is bound are valid and enforceable against the Company or such
Subsidiary, and are valid and enforceable against the other party or parties
thereto and are in full force and effect with only such exceptions as would
not, individually or in the aggregate, have a Material Adverse Effect. The
Company and the Subsidiaries own or possess adequate licenses or other
rights to use all patents, trademarks, service marks, trade names,
copyrights and know-how necessary to conduct the businesses now or proposed
to be operated by them as described in the Memorandum, and none of the
Company or the Subsidiaries has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect.
(w) There are no legal or foreign or domestic governmental proceedings
involving or affecting the Company or any Subsidiary or any of their
respective properties or assets which would be required to be described in a
prospectus pursuant to the Act that are not described in the Memorandum, nor
are there any material contracts or other documents which would be required
to be described in a prospectus pursuant to the Act that are not described
in the Memorandum.
(x) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, or as described in the Memorandum (A) each of the
Company and the Subsidiaries is in compliance with and not subject to
liability under applicable Environmental Laws (as defined below), (B) each
of the Company and the Subsidiaries has made all filings and provided all
notices required under any applicable Environmental Law, and has and is in
compliance with all Permits required under any applicable Environmental
Laws, and each of them is in full force and effect, (C) there is no civil,
criminal or administrative action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter or request for
information pending or, to the knowledge of the Issuers,
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threatened against the Company or any of the Subsidiaries under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Company or any of the
Subsidiaries, (E) none of the Company or the Subsidiaries has received
notice that it has been identified as a potentially responsible party under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA") or any comparable state law, (F) no property or
facility of the Company or any of the Subsidiaries is (i) listed or proposed
for listing on the National Priorities List under CERCLA or is (ii) listed
in the Comprehensive Environmental Response, Compensation, Liability
Information System List promulgated pursuant to CERCLA, or on any comparable
list maintained by any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable foreign, federal, state and local laws or regulations,
codes, orders, decrees, judgments or injunctions issued, promulgated, approved
or entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
hazardous materials into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, (iii) underground and
above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom and (iv) including, without
limitation, Programa de Adecuacion y Manejo Ambiental, dated as of October 16,
1997 between Empresa Metalurgica La Oroya S.A., a Peruvian corporation, and
Ministry of Energy and Mines ("PAMA").
(y) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of the Subsidiaries which is pending or,
to the knowledge of the Issuers, threatened.
(z) Each of the Company and the Subsidiaries carries insurance in such
amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties.
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(aa) None of the Company or the Subsidiaries has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other
plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any of the Subsidiaries
makes or ever has made a contribution and in which any employee of the
Company or of any Subsidiary is or has ever been a participant. With respect
to such plans, the Company and each Subsidiary is in compliance in all
material respects with all applicable provisions of ERISA.
(bb) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at reasonable
intervals.
(cc) None of the Issuers is, or will be, an "investment company" or
"promoter" or "principal underwriter" for an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder.
(dd) The Notes, the Guarantees, the Asset Purchase Agreement, the
Security Agreement, the Indenture and the Registration Rights Agreement will
or do conform in all material respects to the descriptions thereof in the
Memorandum.
(ee) No holder of securities of the Issuers will be entitled to have
such securities registered under the registration statements required to be
filed by the Company pursuant to the Registration Rights Agreement other
than as expressly permitted thereby.
(ff) None of the Issuers or any of their respective Affiliates (as
defined in Rule 501(b) of Regulation D under the Act) has directly, or
through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any "security" (as defined in the
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Act) of the same class as the Notes within the six month period immediately
prior to the date hereof or (ii) engaged in any form of general solicitation
or general advertising (as those terms are used in Regulation D under the
Act) in connection with the offering of the Notes or in any manner involving
a public offering within the meaning of Section 4(2) of the Act. Assuming
the accuracy of the representations and warranties of the Initial Purchaser
in Section 8 hereof, it is not necessary in connection with the offer, sale
and delivery of the Securities to the Initial Purchaser in the manner
contemplated by this Agreement to register any of the Securities under the
Act or to qualify the Indenture under the TIA.
(gg) No securities of the Issuers are of the same class (within the
meaning of Rule 144A under the Act ("Rule 144A")) as the Securities and
listed on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.
(hh) None of the Issuers has taken, nor will any of them take, directly
or indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Notes.
(ii) None of the Issuers, any of their respective Affiliates or any
person acting on its or their behalf (other than the Initial Purchaser) has
engaged in any directed selling efforts (as that term is defined in
Regulation S under the Act ("Regulation S")) with respect to the Securities;
the Issuers and their respective Affiliates and any person acting on its or
their behalf (other than the Initial Purchaser) have complied with the
offering restrictions requirement of Regulation S.
(jj) None of the Issuers or any of its or their properties or assets
has any sovereign immunity or any other immunity from the jurisdiction of
any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in and of judgment, execution or
otherwise) under the laws of Peru or the Cayman Islands.
(kk) Under current Peruvian law and Cayman Islands law and regulations,
there is no tax, duty, levy, impost, deduction, charge or withholding
(including, without limitation,
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any registration or transfer tax, stamp duty (except stamp duty payable in
the Cayman Islands on original documents executed in or brought into the
jurisdiction) or similar levy) imposed or, to the knowledge of the Issuers,
pending or proposed, by Peru or the Cayman Islands or any political
subdivision thereof or taxing authority therein or any federation or
organization or similar entity of which Peru or the Cayman Islands is a
member either (i) on or by virtue of the Issuers' execution, delivery,
performance or enforcement of this Agreement, the Notes, the Exchange Notes,
the Guarantees, the Security Agreement, the Indenture or any other document
to be furnished hereunder or thereunder, or (ii) on any payment to be made
pursuant to this Agreement, the Indenture, the Guarantees or on payment to
any holder of the Notes. Under current and, to the knowledge of the Issuers,
proposed or pending, Peruvian and Cayman Islands law and regulations,
interest payments by the Company on the Notes and the Exchange Notes are not
and will not be subject to any Peruvian or Cayman Islands withholding or
other tax.
Any certificate signed by any officer of any of the Issuers and
delivered to the Initial Purchaser or to counsel for the Initial Purchaser shall
be deemed a joint and several representation and warranty by each of the Issuers
to the Initial Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to issue
and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase
the Notes (and the Guarantees) in the amount set forth on Schedule 1 hereto from
the Company at 86.800% of their principal amount. One or more certificates in
definitive form for the Notes that the Initial Purchaser has agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Initial Purchaser requests upon notice to the Company at least
36 hours prior to the Closing Date, shall be delivered by or on behalf of the
Issuers to the Initial Purchaser, against payment by or on behalf of the Initial
Purchaser of the purchase price therefor by wire transfer (same day funds) to
such account or accounts as the Company shall specify prior to the Closing Date,
or by such means as the parties hereto shall agree prior to the Closing Date.
Such delivery of and payment for the Notes shall be made at the offices of
Cahill Gordon & Reindel, 80 Pine Street, New York, New York at 10:00 A.M., New
York time, on September 1, 1998, or at
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such other place, time or date as the Initial Purchaser, on the one hand, and
the Issuers, on the other hand, may agree upon, such time and date of delivery
against payment being herein referred to as the "Closing Date." The Company will
make such certificate or certificates for the Notes available for checking and
packaging by the Initial Purchaser at its offices in New York, New York, or at
such other place as the Initial Purchaser may designate, at least 24 hours prior
to the Closing Date.
4. Offering by the Initial Purchaser. The Initial Purchaser propose to
make an offering of the Notes at the price and upon the terms set forth in the
Memorandum, as soon as practicable after this Agreement is entered into and as
in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Issuers. Each of the Issuers covenants and agrees
with the Initial Purchaser that:
(a) Each of the Issuers will not amend or supplement the Memorandum or
any amendment or supplement thereto of which the Initial Purchaser shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the
Initial Purchaser shall not have given its consent. Each of the Issuers will
promptly, upon the reasonable request of the Initial Purchaser or counsel
for the Initial Purchaser, make any amendments or supplements to the
Memorandum that may be necessary in connection with the resale of the Notes
by the Initial Purchaser.
(b) Each of the Issuers will cooperate with the Initial Purchaser in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of which jurisdictions as the
Initial Purchaser may designate and will continue such qualifications in
effect for as long as may be necessary to complete the resale of the
Securities; provided, however, that in connection therewith, each of the
Issuers shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or
subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution by the
Initial Purchaser of the Notes or the Private Exchange Notes, any event
occurs or information
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becomes known as a result of which the Memorandum as then amended or
supplemented would include any untrue statement of a material fact, or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if
for any other reason it is necessary at any time to amend or supplement the
Memorandum to comply with applicable law, the Issuers will promptly notify
the Initial Purchaser thereof and will prepare, at the expense of the
Issuers, an amendment or supplement to the Memorandum that corrects such
statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial Purchaser
and to counsel for the Initial Purchaser as many copies of the Memorandum or
any amendment or supplement thereto as the Initial Purchaser may reasonably
request.
(e) The Issuers will apply the net proceeds from the sale of the Notes
as set forth under "Use of Proceeds" in the Memorandum.
(f) In accordance with the terms of the Indenture, the Initial
Purchaser and the Trustee shall have received each of the following
documents which shall be satisfactory in form and substance to the Initial
Purchaser, the Trustee and each of their respective counsel with respect to
the Mortgaged Property (as defined in the Indenture):
A. one or more Mortgages (as defined in the Indenture), duly
executed and acknowledged by the owner or holder of the fee
interest constituting the Mortgaged Property, in form for
recording in the appropriate recording office of the political
subdivision where the Mortgaged Property is situated, together
with such certificates, affidavits, questionnaires or returns as
shall be required in connection with the recording or filing
thereof and such UCC-1 financing statements and other similar
statements as are contemplated in respect of the Mortgage(s) by
the local counsel opinion referred to in subparagraph L. below,
and any other instruments necessary to grant the interests
purported to be granted by the Mortgage(s) under the laws of any
applicable jurisdiction, which Mortgage(s) and financing
statements and other instruments shall
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be effective to create a lien on the Mortgaged Property in favor
of the Trustee, subject to no liens other than liens permitted to
be outstanding pursuant to the Mortgage or permitted to be pari
passu pursuant to Article 10 of the Indenture;
B. such consents, approvals, amendments, supplements,
estoppels, tenant subordination agreements or other instruments as
shall be necessary in order for the owner or holder of the fee
interest to grant the lien contemplated by the Mortgage with
respect to the Mortgaged Property;
C. with respect to the Mortgage, a policy of title insurance
(or commitment to issue such a policy) insuring (or committing to
insure) the lien of the Mortgage as a valid mortgage lien on the
real property and fixtures described therein with the priority
contemplated in Article 10 of the Indenture in respect of the
Securities in an amount not less than 100% of the fair market
value thereof which policy (or commitment) shall (a) be issued by
a title company reasonably acceptable to the Initial Purchaser,
(b) include such reinsurance arrangements (with provisions for
direct access) as shall be acceptable to the Initial Purchaser,
(c) have been supplemented by such endorsements, or, where such
endorsements are not available at commercially reasonable premium
costs, opinion letters of special counsel, architects or other
professionals, which counsel, architects or other professionals
shall be acceptable to the Initial Purchaser, as shall be
requested by the Initial Purchaser (including, without limitation,
endorsements or opinion letters on matters relating to usury,
first loss, zoning, non-imputation, public road access, contiguity
(where appropriate), cluster, survey, variable rate and so-called
comprehensive coverage over covenants and restrictions) and (d)
contain only such exceptions to title as shall be agreed to by the
Initial Purchaser in accordance with the terms of the Indenture
with respect to the Mortgaged Property;
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D. a survey of the Mortgaged Property complying with the
minimum detail requirements of the American Land Title Association
(as such requirements are in effect on the date of delivery of
such survey) certified to the Trustee and dated (or redated) not
earlier than six months prior to the date of delivery thereof,
unless there shall have occurred any exterior change in the
property affected thereby during such period, in which event such
survey shall be dated or redated to a date after the completion of
such change, which survey shall locate all improvements, public
streets and recorded easements affecting the Mortgaged Property;
E. policies or certificates of insurance as required by the
Mortgage, which policies or certificates shall bear mortgagee
endorsements of the character required by the Mortgage;
F. UCC, judgment and tax lien searches confirming that the
personal property comprising a part of the Mortgaged Property is
subject to no liens other than Prior Liens (as defined in the
Mortgage);
G. such affidavits, certificates and instruments of
indemnification as shall be required to induce the title company
to issue the policy or policies (or commitment) contemplated in
subparagraph (C) above;
H. checks payable to the appropriate public officials in
payment of all recording costs and transfer taxes (or checks or
wire transfers to the title insurance company in respect of such
amounts) due in respect of the execution, delivery or recording of
the Mortgage, together with a check or wire transfer for the title
insurance company in payment of its premium, search and
examination charges, survey costs and any other amounts due in
connection with the issuance of its policies (or commitments);
I. copies of all Leases (as defined in the Mortgage), all of
which Leases shall be satisfactory to the Initial Purchaser;
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J. a certificate of an officer of the Company certifying
that, as of the date of delivery of such certificate, there is not
outstanding any citation, violation or similar notice indicating
that such real property contains conditions which are not in
compliance with local codes or ordinances relating to building or
fire safety or structural soundness (other than any provisions of
such codes or ordinances the validity or applicability of which is
being contested in good faith by appropriate proceedings
diligently prosecuted and as to which enforcement proceedings have
not been instituted or, if instituted, have been stayed);
K. a certificate of the Company, signed on behalf of the
Issuers by its Chairman of the Board, Chief Executive Officer,
President, any Vice President or any General Manager and the Chief
Financial Officer or Finance Manager, to the effect that: (i) the
Company has performed all covenants and agreements described in
this Section 5(f) and satisfied all conditions on its part to be
performed or satisfied hereunder and (ii) upon the execution of
the Collateral Documents (as defined in the Indenture), and, with
respect to Collateral (as defined in the Indenture), filings under
the UCC in all required jurisdictions and recording of the
Mortgages in the appropriate recording offices, the holders of
Securities will have a valid and perfected lien on the Collateral
with the priority contemplated in Article 10 of the Indenture
subject to no other lien, charge, encumbrance or interest (other
than as permitted by each Collateral Document); and
L. an opinion from local Missouri counsel that shall be
satisfactory to the Initial Purchaser and, among other things,
shall opine that when each of the Mortgages have been duly and
validly authorized by the Company and, when duly executed and
delivered by the Company (assuming the due authorization,
execution and delivery thereof by the other parties thereto), they
will be the legally valid and binding obligations of the Company
enforceable against the Company in accordance with its terms,
except that the
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enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally, (ii) general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought and (iii) any limitation on
a waiver of rights under any usury laws.
M. An opinion (satisfactory to Initial Purchaser and its
counsel) of Cadwalader, Wickersham & Taft or Missouri counsel to
the Company to the effect that the Company has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Mortgages for all Mortgaged Property and any
ancillary collateral documents, certificates or agreements to
which it is a party and that each of the Mortgages have been duly
and validly authorized, executed and delivered by the Company.
(g) For so long as any of the Notes remain outstanding, the Issuers
will furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Issuers to the
Trustee or to the holders of the Notes and, as soon as available, copies of
any reports or financial statements furnished to or filed by the Issuers
with the Commission or any national securities exchange on which any class
of securities of the Issuers may be listed.
(h) Prior to the Closing Date, each of the Issuers will furnish to the
Initial Purchaser, as soon as they have been prepared, a copy of any
unaudited interim financial statements, if any, of each of the Issuers, as
applicable, for any period subsequent to the period covered by the most
recent financial statements appearing in the Memorandum.
(i) None of the Issuers or any of their Affiliates will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale
of the Notes in a manner which would require the registration under the Act
of the Notes.
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(j) Each of the Issuers will not, and will not permit any of their
Affiliates to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Notes or in any manner involving a
public offering within the meaning of Section 4(2) of the Act.
(k) For so long as any of the Notes remain outstanding, the Company
will make available at its expense, upon request, to any holder of such
Notes and any prospective purchasers thereof the information specified in
Rule 144A(d)(4) under the Act, unless the Company is then subject, or
voluntarily filing reports pursuant, to Section 13 or 15(d) of the Exchange
Act.
(l) The Company will use its reasonable efforts to (i) permit the Notes
to be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the PORTAL Market and
(ii) permit the Notes to be eligible for clearance and settlement through
The Depository Trust Company.
(m) In connection with Notes offered and sold in an offshore
transaction (as defined in Regulation S), the Company will not register any
transfer of such Notes not made in accordance with the provisions of
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Notes in the form of definitive
securities.
6. Expenses. The Issuers agree to pay all costs and expenses incident
to the performance of its obligations under this Agreement (including those
costs and expenses relating to the execution and performance of the Collateral
Documents), whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 11 hereof, including all
costs and expenses incident to (i) the printing, word processing or other
production of documents with respect to the transactions contemplated hereby,
including any costs of printing the Memorandum and any amendment or supplement
thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating to the
delivery to the Initial Purchaser of copies of the foregoing documents, (iii)
the fees and disbursements of United States, Peruvian, Cayman Islands and
Missouri counsel, the accountants and any other experts or advisors retained by
the Issuers, (iv) preparation (including printing), issuance and delivery to the
Initial Purchaser of the Notes,
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(v) the qualification of the Notes under state securities and "Blue Sky" laws,
including filing fees and fees and disbursements of counsel for the Initial
Purchaser relating thereto, (vi) its expenses in connection with any meetings
with prospective investors in the Notes, (vii) fees and expenses of the Trustee
including fees and expenses of its counsel, (viii) all expenses and listing fees
incurred in connection with the application for quotation of the Notes on the
PORTAL Market and (ix) any fees charged by investment rating agencies for the
rating of the Notes. If the sale of the Notes provided for herein is not
consummated because any condition to the obligations of the Initial Purchaser
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated (except pursuant to clauses (ii), (iv), (v), (vii) or (viii) of
Section 11(a) of this Agreement) or because of any failure, refusal or inability
on the part of the Issuers to perform all obligations and satisfy all conditions
on their part to be performed or satisfied hereunder (other than solely by
reason of a default by the Initial Purchaser of its obligations hereunder after
all conditions hereunder have been satisfied in accordance herewith), the
Issuers agree to promptly reimburse the Initial Purchaser upon demand for all
out-of-pocket expenses (including all reasonable fees, disbursements and charges
of Cahill Gordon & Reindel, United States counsel for the Initial Purchaser)
that shall have been incurred by the Initial Purchaser in connection with the
proposed purchase and sale of the Notes.
7. Conditions of the Initial Purchaser's Obligations. The obligation of
the Initial Purchaser to purchase and pay for the Notes shall, in their sole
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have received the
opinion, dated as of the Closing Date and addressed to the Initial Purchaser
and Cadwalader, Wickersham & Taft, of Estudio Ferrero Abogados, special
Peruvian counsel for the Issuers, in form and substance satisfactory to
counsel for the Initial Purchaser to the effect that:
(i) Each of Doe Run Mining and Doe Run Peru is duly organized,
validly existing and in good standing under the laws of Peru and has
all requisite power and authority to own its properties and to conduct
its business as described in the Memorandum. Each of Doe Run Mining and
Doe Run Peru is duly qualified to do business as a foreign entity in
good standing in
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all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or
in the aggregate, have a Material Adverse Effect.
(ii) Each of Doe Run Mining and Doe Run Peru has all requisite
power and authority to execute, deliver and perform its obligations
under this Agreement, the Indenture, the Registration Rights Agreement
and the Guarantees and to consummate the transactions contemplated
hereby and thereby; this Agreement, the Indenture, the Registration
Rights Agreement and the Guarantees and the consummation by each of Doe
Run Mining and Doe Run Peru of the transactions contemplated hereby and
thereby have been duly and validly authorized by each of Doe Run Mining
and Doe Run Peru. This Agreement, the Indenture, the Registration
Rights Agreement and the Guarantees have been duly executed and
delivered by each of Doe Run Mining and Doe Run Peru.
(iii) No legal or governmental proceedings are pending or, to the
knowledge of such counsel, threatened to which any of Doe Run Mining or
Doe Run Peru is a party or to which the property or assets of Doe Run
Mining or Doe Run Peru is subject which, if determined adversely to Doe
Run Mining or Doe Run Peru, would result, individually or in the
aggregate, in a Material Adverse Effect, or which seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge the issuance
or sale of the Notes to be sold hereunder or the consummation of the
other transactions described in the Memorandum under the caption "Use
of Proceeds."
(iv) None of Doe Run Mining or Doe Run Peru is (i) in violation of
any provision of the charter, "Estatuto" or bylaws (or similar
organizational documents), (ii) to the knowledge of such counsel, in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective
properties or assets, except for any such breach or violation which
would not, individually or in the aggregate, have a Material Adverse
Effect, or (iii) in breach or default under (nor has any event occurred
which, with notice or passage of time or both, would constitute a
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default under) or in violation of any of the terms or provisions of any
Contract known to such counsel, except for any such breach, default,
violation or event which would not, individually or in the aggregate,
have a Material Adverse Effect.
(v) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby (including,
without limitation, the issuance and sale of the Notes to the Initial
Purchaser) will not conflict with or constitute or result in a breach
or a default under (or an event which with notice or passage of time or
both would constitute a default under) or violation of any of (i) the
terms or provisions of any Contract known to such counsel, except for
any such conflict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse Effect, (ii)
the provisions of the Charter, "Estatutos" or bylaws (or similar
organizational document) of Doe Run Mining or Doe Run Peru, or (iii)
any statute, judgment, decree, order, rule or regulation known to such
counsel to be applicable to Doe Run Mining or Doe Run Peru or any of
their respective properties or assets, except for any such conflict,
breach or violation which would not, individually or in the aggregate,
have a Material Adverse Effect.
(vi) Doe Run Mining and Doe Run Peru have obtained all Permits
necessary to conduct the businesses now or proposed to be conducted by
them as described in the Memorandum, the lack of which would,
individually or in the aggregate, have a Material Adverse Effect; each
of Doe Run Mining and Doe Run Peru has fulfilled and performed all of
its obligations with respect to such Permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such Permit.
(vii) To such counsel's knowledge, Doe Run Mining and Doe Run Peru
own or possess adequate licenses or other rights to use all patents,
trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by
them as described in the Memorandum, and to
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such counsel's knowledge, none of Doe Run Mining or Doe Run Peru has
received any notice of infringement of or conflict with asserted rights
of others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how which, if such assertion of infringement
or conflict were sustained, would have a Material Adverse Effect.
(viii) To the knowledge of such counsel, there are no legal or
governmental proceedings involving or affecting Doe Run Mining and Doe
Run Peru or any of their respective properties or assets.
(ix) None of Doe Run Mining, Doe Run Peru or any of its or their
properties or assets has any sovereign immunity or any other immunity
from the jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in
and of judgment, execution or otherwise) under the laws of Peru.
(x) The choice of law provisions in the Indenture, this Agreement
and the Registration Rights Agreement will be recognized in the courts
of Peru; under the laws of Peru, the submission of Doe Run Mining and
Doe Run Peru in such agreements to the jurisdiction of any New York
Court (as defined in Section 14 hereto) is legal, valid and binding;
and any judgment against Doe Run Mining and Doe Run Peru obtained in a
New York Court arising out of or in relation to the obligations of Doe
Run Mining or Doe Run Peru under such agreements would be recognized
and enforced by the courts of Peru.
(xi) Under current Peruvian law and regulations there is no tax,
duty, levy, impost, deduction, charge or withholding (including,
without limitation, any registration or transfer tax, stamp duty or
similar levy) imposed or, as such counsel is aware pending or proposed,
by Peru or any political subdivision thereof or taxing authority
therein or any federation or organization or similar entity of which
Peru is a member either (i) on or by virtue of Doe Run Mining's or Doe
Run Peru's execution, delivery, performance or enforcement of this
Agreement, the Guarantees, the Indenture or any other document to be
furnished hereunder or thereunder, or (ii) on any payment to be made
pursuant to this Agreement, the Indenture, the
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Guarantees of Doe Run Mining and Doe Run Peru or on payment to any
holder of the Notes. Under current and, as such counsel is aware,
proposed or pending, Peruvian law and regulations, interest payments by
the Company on the Notes and the Exchange Notes are not and will not be
subject to any Peruvian withholding or other tax.
(xii) The statements made in the Memorandum under the headings
"Industry," "Business" and "Enforceability of Civil Liabilities,"
insofar as such statements purport to summarize certain provisions of
Peruvian law, are fair summaries and accurate in all material respects.
(xiii) Such other opinions as the Initial Purchaser or their
counsel may reasonably request.
At the time the foregoing opinion is delivered, Estudio Ferrero
Abogados shall additionally state that it has participated in conferences with
officers and other representatives of Doe Run Mining and Doe Run Peru,
representatives of the independent public accountants for Doe Run Mining and Doe
Run Peru, representatives of the Initial Purchaser and counsel for the Initial
Purchaser, at which conferences the contents of the Memorandum and related
matters were discussed, and, although it has not independently verified and is
not passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Memorandum, no facts have come to
its attention which lead it to believe that the Memorandum, on the date thereof
or at the Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading (it being understood that such firm need express
no opinion with respect to the financial statements and related notes thereto
and the other financial, statistical and accounting data included in the
Memorandum). The opinions of Estudio Ferrero Abogados described in this Section
shall be rendered to the Initial Purchaser at the request of the Company and
shall so state therein.
References to the Memorandum in this subsection (a) shall include any
amendment or supplement thereto prepared in accordance with the provisions of
this Agreement at the Closing Date.
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(b) On the Closing Date, the Initial Purchaser shall have received the
opinion, dated as of the Closing Date and addressed to the Initial Purchaser
and Cadwalader, Wickersham & Taft, of Maples and Calder, Special Cayman
Islands counsel for the Company, in form and substance satisfactory to
counsel for the Initial Purchaser which as to matters other than under
Cayman Islands law, may rely on or be supplemented by an opinion from
another law firm reasonably satisfactory to the Initial Purchaser, to the
effect that:
(i) Doe Run Cayman is duly incorporated, validly existing and in
good standing under the laws of the Cayman Islands and has all
requisite corporate power and authority to own its properties and to
conduct its business as described in the Memorandum.
(ii) Doe Run Cayman has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, the Indenture, the Registration Rights Agreement and the
Guarantee to which it is a party and to consummate the transactions
contemplated hereby and thereby; this Agreement, the Indenture, the
Registration Rights Agreement and the Guarantee to which it is a party
and the consummation by Doe Run Cayman of the transactions contemplated
hereby and thereby have been duly and validly authorized by Doe Run
Cayman. This Agreement, the Indenture, the Registration Rights
Agreement and the Guarantee to which it is a party have been duly
executed by Doe Run Cayman.
(iii) No legal proceedings are pending to which Doe Run Cayman is
a party in the Cayman Islands.
(iv) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby (including,
without limitation, the issuance and sale of the Notes to the Initial
Purchaser) will not conflict with or constitute or result in a breach
or a default under (or an event which with notice or passage of time or
both would constitute a default under) or violation of any of (i) the
provisions of the memorandum and articles of association of Doe Run
Cayman, or (ii) any statute, judgment, decree, order, rule or
regulation known to such counsel to be applicable to Doe Run Cayman or
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any of its properties or assets in the Cayman Islands currently in
force.
(v) No authorizations, consents or approvals are required from,
and no notice to or filing or registration with, any governmental
authorities or agencies or other official bodies in the Cayman Islands
in connection with the execution or delivery of this Agreement, the
Indenture, the Registration Rights Agreement and the Guarantee or the
performance by Doe Run Cayman of its obligations thereunder.
(vi) Neither Doe Run Cayman nor any of its properties or assets
has any sovereign immunity or any other immunity from the jurisdiction
of any court or from any legal process (whether through service or
notice, attachment, execution or otherwise) under the laws of the
Cayman Islands.
(vii) The choice of law provisions in the Indenture, this
Agreement and the Registration Rights Agreement will be recognized in
the courts of the Cayman Islands, assuming evidence of such law is
pleaded; under the laws of the Cayman Islands, the submission of Doe
Run Cayman in such agreements to the jurisdiction of any New York Court
(as defined in Section 14 hereto) is legal, valid and binding assuming
this to be the case under the laws of the relevant jurisdiction; and
any judgment against Doe Run Cayman obtained in a New York Court
arising out of or in relation to the obligations of Doe Run Cayman
under such agreements would be recognized and enforced by the courts of
the Cayman Islands, provided such judgment is final for a liquidated
sum not in respect of taxes or a fine or penalty and which was not
obtained in a manner and is not of a kind the enforcement of which is
contrary to the public policy of the Cayman Islands.
(viii) Under current Cayman Islands law and regulations there is
no tax, duty, levy, impost, deduction, charge or withholding
(including, without limitation, any registration or transfer tax, stamp
duty (except stamp duty payable in the Cayman Islands on original
documents executed in or brought into the jurisdiction) or similar
levy) imposed by the Cayman Islands or any political subdivision
thereof or taxing authority therein or any federation or organization
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or similar entity of which the Cayman Islands is a member either (i) on
or by virtue of Doe Run Cayman's execution, delivery, performance or
enforcement of this Agreement, the Guarantees, the Indenture, or any
other document to be furnished hereunder or thereunder, or (ii) on any
payment to be made pursuant to this Agreement, the Indenture, or on
payment to any holder of the Notes. Under current Cayman Islands law
and regulations, interest payments by the Company on the Notes and the
Exchange Notes are not and will not be subject to any Cayman Islands
withholding or other tax.
(ix) The statements made in the Memorandum under the heading
"Enforceability of Civil Liabilities" insofar as such statements
purport to summarize certain provisions of Cayman Islands law, are fair
summaries and accurate in all material respects.
(x) Such other opinions as the Initial Purchaser or their counsel
may reasonably request.
References to the Memorandum in this subsection (b) shall include any
amendment or supplement thereto prepared in accordance with the provisions of
this Agreement at the Closing Date.
(c) On the Closing Date, the Initial Purchaser shall have received the
opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Cadwalader, Wickersham & Taft, special New York counsel for
the Company, in form and substance satisfactory to counsel for the Initial
Purchaser which as to matters other than under New York law, rely on the
Estudio Ferrero Abogados opinion delivered under Section 7(a) hereof, and
the Maples and Calder opinion delivered under Section 7(b) hereof to the
effect that:
(i) Each of the Company and Fabricated Products is organized and
validly existing as a corporation in good standing under the laws of
its respective jurisdiction of incorporation, has all requisite power
and authority to own, lease and operate its properties and to conduct
its business as it is currently being conducted and as described in the
Memorandum, and is duly qualified and in good standing as a foreign
corporation, authorized to do business in each jurisdiction in which
the ownership, leasing and operating of
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its property and the conduct of its business requires such
qualification, except where the failure to be so qualified would not
have a Material Adverse Effect;
(ii) Each of the Company and Fabricated Products has all requisite
corporate power and authority to execute, deliver and perform each of
its obligations under the Indenture, the Notes, the Exchange Notes and
the Private Exchange Notes; the Indenture meets the requirements for
qualification under the TIA; the Indenture has been duly and validly
authorized by the Company and Fabricated Products and, when duly
executed and delivered by the Company and Fabricated Products (assuming
the due authorization, execution and delivery thereof by Doe Run
Cayman, Doe Run Mining, Doe Run Peru and the Trustee), will constitute
the valid and legally binding agreement of the Company and the
Guarantors, enforceable against the Company and the Guarantors in
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally, (ii) general principles of equity and the discretion
of the court before which any proceeding therefor may be brought and
(iii) any limitation on a waiver of rights under any usury laws.
(iii) The Company has all requisite corporate power and authority
to execute deliver and perform each of its obligations under the
Security Agreement; the Security Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company (assuming due authorization, execution and delivery thereof by
the other parties thereto) will be the legally valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought and (iii) any
limitation on a waiver of rights under any usury laws.
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(iv) The Notes are in the form contemplated by the Indenture. The
Notes have each been duly and validly authorized by the Company and,
when duly executed and delivered by the Company and paid for by the
Initial Purchaser in accordance with its terms of this Agreement
(assuming the due authorization, execution and delivery of the
Indenture by the Trustee and due authentication and delivery of the
Notes by the Trustee in accordance with the Indenture), will constitute
the valid and legally binding obligations of the Company, entitled to
the benefits of the Indenture, and enforceable against the Company in
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally, (ii) general principles of equity and the discretion
of the court before which any proceeding therefor may be brought and
(iii) any limitation on a waiver of rights under any usury laws.
(v) The Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by the Company, and when the Exchange Notes
and the Private Exchange Notes have been duly executed and delivered,
if ever, by the Company in accordance with the terms of the
Registration Rights Agreement and the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the Trustee
and due authentication and delivery of the Exchange Notes and the
Private Exchange Notes by the Trustee in accordance with the
Indenture), will constitute the valid and legally binding obligations
of the Company, entitled to the benefits of the Indenture, and
enforceable against the Company in accordance with their terms, except
that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought and (iii) any limitation
on a waiver of rights under any usury laws.
(vi) Each of the Company and Fabricated Products has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement; the Registration
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Rights Agreement has been duly and validly authorized by each of the
Company and Fabricated Products and, when duly executed and delivered
by the Company and Fabricated Products (assuming due authorization,
execution and delivery thereof by each of the Initial Purchaser, Doe
Run Cayman, Doe Run Mining and Doe Run Peru), will constitute the valid
and legally binding agreement of the Company and the Guarantors
enforceable against the Company and the Guarantors in accordance with
its terms, except that (A) the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (B) any rights
to indemnity or contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
(vii) Fabricated Products has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Guarantee; the Guarantee has been duly and validly authorized by
Fabricated Products and, when duly executed and delivered by Fabricated
Products (assuming the due authorization, execution and delivery of the
Guarantees by each of the other Guarantors), the Guarantees will
constitute the valid and legally binding agreement of the Guarantors,
enforceable against the Guarantors in accordance with their terms,
except that (A) the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (B) any rights
to indemnity or contribution thereunder may be limited by federal,
state or foreign securities laws and public policy considerations.
(viii) The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Asset
Purchase Agreement and to consummate the transactions contemplated
thereby; the Asset Purchase Agreement and the consummation by the
Company of the transactions contemplated
33
<PAGE>
thereby have been duly and validly authorized by the Company. The Asset
Purchase Agreement has been duly executed and delivered by the Company
and (assuming the due authorization and execution by ASARCO),
constitutes the valid and legally binding agreement of the Company and
ASARCO, enforceable against the Company and ASARCO in accordance with
its terms, except that (A) the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (B) any rights
to indemnity or contribution thereunder may be limited by federal,
state or foreign securities laws and public policy considerations.
(ix) Each of the Company and Fabricated Products has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby; this Agreement and the consummation by each of the
Company and Fabricated Products of the transactions contemplated hereby
have been duly and validly authorized by each of the Company and
Fabricated Products. This Agreement has been duly executed and
delivered by each of the Company and Fabricated Products.
(x) The Indenture, the Notes and the Registration Rights Agreement
conform in all material respects to the descriptions thereof contained
in the Memorandum.
(xi) None of the Issuers is, or immediately after the sale of the
Notes to be sold hereunder and the application of the proceeds from
such sale (as described in the Memorandum under the caption "Use of
Proceeds) will be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(xii) Neither the consummation of the transactions contemplated by
this Agreement nor the sale, issuance, execution or delivery of the
Notes or the Exchange Notes will violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
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(xiii) No consent, approval, authorization or order of, or filing
or registration with, or other action by, any governmental agency or
body of the United States or the State of New York is necessary to be
obtained or made by the Issuers (1) for the due execution, delivery and
performance by the Issuers of the Indenture or (2) for the issuance,
sale or delivery of the Notes to the Initial Purchaser or the validity
or enforceability of the Notes.
(xiv) No registration under the Act of the Securities is required
in connection with the sale of the Securities to the Initial Purchaser
as contemplated by this Agreement and the Memorandum or in connection
with the initial resale of the Securities by the Initial Purchaser in
accordance with Section 8 of this Agreement, and prior to the
commencement of the Exchange Offer (as defined in the Registration
Rights Agreement) or the effectiveness of the Shelf Registration
Statement (as defined in the Registration Rights Agreement) and the
Indenture is not required to be qualified under the TIA, in each case
assuming the accuracy of the Initial Purchaser's representations in
Section 8 hereof and those of the Issuers contained in this Agreement
regarding the absence of a general solicitation or directed selling
efforts in connection with the sale of such Notes to the Initial
Purchaser and the initial resale thereof and the due performance by the
Initial Purchaser of the agreements set forth in Section 8 hereof.
(xv) The statements made in the Memorandum under the headings
"Description of the Notes," "Certain U.S. Federal Income Tax
Considerations," "Notice to Investors," "Exchange Offer; Registration
Rights," and "Plan of Distribution," insofar as such statements purport
to summarize certain provisions of the Notes, the Indenture and this
Agreement and federal laws of the United States referred to thereunder,
are fair summaries and accurate in all material respects.
(xvi) Such counsel does not know of any pending or threatened
action, suit or proceeding before any U.S. court or governmental
agency, authority or body or any arbitrator to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject other than proceedings
fairly and accurately
35
<PAGE>
described in all material respects in the Memorandum and proceedings
which such counsel believes are not likely to have a Material Adverse
Effect or a material adverse effect on the power or ability of the
Company to perform its obligations under the Notes, the Indenture or
this Agreement.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that no facts have come to the attention to
such counsel which cause them to believe that the Memorandum (except for the
financial statements and all other financial data contained therein, as to which
such counsel need not express any belief), or any amendment or supplement
thereto, as of the respective dates thereof and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. With
respect to such statement, such counsel may state that their belief is based
upon the procedures set forth therein, but is without independent check or
verification.
(d) On the Closing Date, the Initial Purchaser shall have received the
opinion, in form and substance satisfactory to the Initial Purchaser, dated
as of the Closing Date and addressed to the Initial Purchaser, of Cahill
Gordon & Reindel, counsel for the Initial Purchaser, with respect to certain
legal matters relating to this Agreement and such other related matters as
the Initial Purchaser may reasonably require. In rendering such opinion,
Cahill Gordon & Reindel shall have received and may rely upon such
certificates and other documents and information as it may reasonably
request to pass upon such matters.
(e) The Initial Purchaser shall have received from the Independent
Accountants comfort letters dated the date hereof and the Closing Date, in
form and substance satisfactory to counsel for the Initial Purchaser.
(f) The representations and warranties of each of the Issuers contained
in this Agreement shall be true and correct on and as of the date hereof and
on and as of the Closing Date as if made on and as of the Closing Date; the
statements of the Issuers' officers made pursuant to any certificate
delivered in accordance with the provisions hereof shall be true and correct
on and as of the date
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<PAGE>
made and on and as of the Closing Date; each of the Issuers shall have
performed all covenants and agreements and satisfied all conditions on their
part to be performed or satisfied hereunder at or prior to the Closing Date;
and, except as described in the Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), subsequent to the date of the
most recent financial statements in such Memorandum, there shall have been
no event or development, and no information shall have become known, that,
individually or in the aggregate, has or would be reasonably likely to have
a Material Adverse Effect.
(g) The sale of the Notes hereunder shall not be enjoined (temporarily
or permanently) on the Closing Date.
(h) Subsequent to the date of the most recent financial statements in
the Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), none of the Company or any of the Subsidiaries shall have
sustained any loss or interference with respect to its business or
properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any strike, labor dispute, slow down or
work stoppage or from any legal or governmental proceeding, order or decree,
which loss or interference, individually or in the aggregate, has or would
be reasonably likely to have a Material Adverse Effect.
(i) The Initial Purchaser shall have received a certificate of each of
the Issuers, dated the Closing Date, signed on behalf of the Issuers by its
Chairman of the Board, Chief Executive Officer, President, any Vice
President or any General Manager and the Chief Financial Officer or Finance
Manager, to the effect that:
(i) The representations and warranties of each of the Issuers
contained in this Agreement are true and correct on and as of the date
hereof and on and as of the Closing Date, and each of the Issuers has
performed all covenants except for Section 5(f) and agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date
of the most recent financial statements in the Memorandum (exclusive of
any amendment
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<PAGE>
or supplement thereto after the date hereof), no event or development
has occurred, and no information has become known, that, individually
or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect; and
(iii) The sale of the Notes hereunder has not been enjoined
(temporarily or permanently).
(j) On the Closing Date, the Initial Purchaser shall have received the
Registration Rights Agreement executed by each of the Issuers and such
agreement shall be in full force and effect.
(k) On the Closing Date, the Initial Purchaser shall have received:
(i) The Security Agreement (as defined in the Indenture), duly
executed by the Company and dated on or before the Closing Date,
together with:
A. original executed UCC-1 financing statements or other
documents under the provisions of the UCC or any other applicable
state law to be filed in each office where such filing is
necessary or appropriate to grant to the Trustee a lien of the
character contemplated by the Security Agreement and the priority
contemplated in Article 10 of the Indenture; and
B. evidence that all other actions necessary to perfect and
protect the liens created by the Security Agreement have been
taken.
(l) On the Closing Date, all material conditions to the consummation of
the transactions contemplated by the Asset Purchase Agreement shall have
occurred without waiver and the consummation of the transactions
contemplated by the Asset Purchase Agreement shall occur on the Closing
Date.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested from the Company.
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<PAGE>
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchaser and counsel for the Initial Purchaser. The Company shall
furnish to the Initial Purchaser such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchaser shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. (a) The Initial
Purchaser represents and warrants (as to itself only) that it is a qualified
institutional buyer (as defined in Rule 144A) (a "QIB"). The Initial Purchaser
agrees with the Company that (i) it has not and will not solicit offers for, or
offer or sell, the Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act; and (ii) it has and will solicit offers for the Notes only from, and will
offer the Notes only to (A) in the case of offers inside the United States,
persons whom the Initial Purchaser reasonably believe to be QIBs or, if any such
person is buying for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has represented to the
Initial Purchaser that each such account is a QIB, to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A, and, in each
case, in transactions under Rule 144A,(B) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign purchasers," which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)) and (C) a limited number of institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Act) that
execute and deliver a letter containing certain representations and agreements;
provided, however, that, in the case of each of the foregoing clauses, in
purchasing such Notes such persons are deemed to have represented and agreed as
provided under the caption "Notice to Investors" contained in the Memorandum
(or, if the Memorandum is not in existence, in the most recent preliminary or
final memorandum).
(b) The Initial Purchaser represents and warrants with respect to
offers and sales outside the United States that (i) it has and will comply
with all applicable laws and regulations in each jurisdiction in which it
acquires, offers, sells
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<PAGE>
or delivers Notes or has in its possession or distributes any Memorandum or
any such other material, in all cases at its own expense; (ii) the Notes
have not been and will not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S or pursuant to an exemption from the registration requirements
of the Act; (iii) it has offered the Notes and will offer and sell the Notes
(A) as part of its distribution at any time and (B) otherwise until 40 days
after the later of the commencement of the offering and the Closing Date,
only in accordance with Rule 903 of Regulation S and, accordingly, neither
it nor any persons acting on its behalf have engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with respect
to the Notes, and any such persons have complied and will comply with the
offering restrictions requirement of Regulation S; and (iv) it agrees that,
at or prior to confirmation of sales of the Notes, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may not
be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of the distribution of the
Securities at any time or (ii) otherwise until 40 days after the later
of the commencement of the offering and the closing date of the
offering, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them in Regulation S."
Terms used in this Section 8 and not defined in this Agreement have the
meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) Each of the Issuers, jointly
and severally, agrees to indemnify and hold harmless the Initial Purchaser, and
each person, if any, who controls any Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which any Initial Purchaser or such
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
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<PAGE>
(i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or
supplement thereto; or
(ii) the omission or alleged omission to state, in any Memorandum
or any amendment or supplement thereto, a material fact required to be
stated therein or necessary to make the statements therein not
misleading,
and will reimburse, as incurred, the Initial Purchaser and each such controlling
person for any legal or other expenses incurred by the Initial Purchaser or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, the Issuers will not be liable
in any such case to the extent that any such loss, claim, damage, or liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in any Memorandum or any amendment or
supplement thereto in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Issuers by the Initial
Purchaser specifically for use therein; provided, further, however, that the
Issuers will not be required to provide the indemnity hereunder if such untrue
statement or alleged untrue statement or omission or alleged omission was
contained or made in any Memorandum and corrected in a subsequent Memorandum and
any such loss, claim, damage or liability suffered or incurred by an indemnified
party resulted from any action, claim or suit by any purchaser of the Notes from
such indemnified party and such indemnified party failed to deliver or provide a
copy of such subsequent Memorandum to such person with or prior to the
confirmation of the sale of such Notes to such person; provided that the Issuers
will be required to provide the indemnity hereunder if any Issuer fails to
comply with Section 5(d) of this Agreement with respect to such subsequent
Memorandum. This indemnity agreement will be in addition to any liability that
the Issuers may otherwise have to the indemnified parties. The Issuers shall not
be liable under this Section 9 for any settlement of any claim or action
effected without its prior written consent, which shall not be unreasonably
withheld.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Issuers, their directors, their officers and each person, if any, who
controls any of the Issuers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or any such director, officer or
controlling person
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may become subject under the Act, the Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Memorandum or any amendment
or supplement thereto or any Application, or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in
any Memorandum or any amendment or supplement thereto or any Application, or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Initial Purchaser,
furnished to the Issuers by the Initial Purchaser specifically for use
therein; and subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses incurred by
the Issuers or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage,
liability or action in respect thereof. This indemnity agreement will be in
addition to any liability that the Initial Purchaser may otherwise have to
the indemnified parties. The Initial Purchaser shall not be liable under
this Section 9 for any settlement of any claim or action effected without
their consent, which shall not be unreasonably withheld. The Company shall
not, without the prior written consent of the Initial Purchaser, effect any
settlement or compromise of any pending or threatened proceeding in respect
of which any Initial Purchaser is or could have been a party, or indemnity
could have been sought hereunder by any Initial Purchaser, unless such
settlement (A) includes an unconditional written release of the Initial
Purchaser, in form and substance reasonably satisfactory to the Initial
Purchaser, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Initial
Purchaser.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action for which such indemnified party
is entitled to indemnification under this Section 9, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the
commencement thereof in writing; but the omission to so notify the
indemnifying party (i) will not relieve it from any liability under
paragraph (a) or (b) above unless and to the
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extent such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraphs (a) and (b) above. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it and/or
other indemnified parties that are different from or additional to those
available to the indemnifying party, or (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after receipt by
the indemnifying party of notice of the institution of such action, then, in
each such case, the indemnifying party shall not have the right to direct
the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party
or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the immediately
preceding sentence (it being understood, however, that in connection with
such action the indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to local counsel) in any one
action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchaser in the case of paragraph (a) of this
Section 9 or the Issuers in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph
(b), as the case may be, who are
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parties to such action or actions) or (ii) the indemnifying party has
authorized in writing the employment of counsel for the indemnified party at
the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will
not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld),
unless such indemnified party waived in writing its rights under this
Section 9, in which case the indemnified party may effect such a settlement
without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the offering of the Notes
or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
benefits received by the Issuers on the one hand and any Initial Purchaser
on the other shall be deemed to be in the same proportion as the total
proceeds from the offering (net of discounts and commissions but before
deducting expenses) received by the Company bear to the total discounts and
commissions received by such Initial Purchaser. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Issuers on the one hand, or such Initial Purchaser on the other, the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission or alleged statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Issuers and the Initial Purchaser agree that it would not
be equitable if the amount of such contribution were determined by pro rata
or per
44
<PAGE>
capita allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the first
sentence of this paragraph (d). Notwithstanding any other provision of this
paragraph (d), no Initial Purchaser shall be obligated to make contributions
hereunder that in the aggregate exceed the total discounts, commissions and
other compensation received by such Initial Purchaser under this Agreement,
less the aggregate amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact,
and no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of
this paragraph (d), each person, if any, who controls an Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Initial Purchaser, and
each director of the Issuers, each officer of the Issuers and each person,
if any, who controls the Issuers within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Issuers.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers, their
officers and the Initial Purchaser set forth in this Agreement or made by or on
behalf of them pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Issuers, any of
its officers or directors, the Initial Purchaser or any controlling person
referred to in Section 9 hereof and (ii) delivery of and payment for the Notes.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 6, 9 and 15 hereof shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchaser by notice to the Issuers given prior to the
Closing Date in the event that the Issuers shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or prior to the
Closing Date:
(i) any of the Company or the Subsidiaries shall have sustained
any loss or interference with respect to
45
<PAGE>
its businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any
strike, labor dispute, slow down or work stoppage or any legal or
governmental proceeding, which loss or interference, in the sole
judgment of the Initial Purchaser, has had or has a Material Adverse
Effect, or there shall have been, in the sole judgment of the Initial
Purchaser, any event or development that, individually or in the
aggregate, has or could be reasonably likely to have a Material Adverse
Effect (including without limitation a change in control of the Company
or the Subsidiaries), except in each case as described in the
Memorandum (exclusive of any amendment or supplement thereto);
(ii) trading in securities of any of the Issuers or in securities
generally on the New York Stock Exchange, American Stock Exchange or
the Nasdaq National Market shall have been suspended or minimum or
maximum prices shall have been established on any such exchange or
market;
(iii) there shall have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and the Subsidiaries, taken as a whole, from that set forth in the
Memorandum (without regard to any amendment thereto after the date
hereof) that is material and adverse and that makes it, in the Initial
Purchaser's judgment, impracticable to market the Notes on the terms
and in the manner contemplated in the Memorandum (without regard to any
amendment thereto after the date hereof).
(iv) a banking moratorium shall have been declared by New York or
United States authorities or the Peruvian authorities in Peru;
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States or Peru and any foreign power, or
(B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or Peru or any other national or
international calamity or emergency, or (C) any material change in the
financial markets of the United States or Peru which, in the case of
(A), (B) or (C) above and in the sole judgment of the Initial
Purchaser, makes it impracticable or inadvisable
46
<PAGE>
to proceed with the offering or the delivery of the Notes as
contemplated by the Memorandum; or
(vi) any securities of any of the Issuers shall have been
downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization.
(vii) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that
has a material adverse effect on the financial markets in the United
States or Peru, and would, in the sole judgment of the Initial
Purchaser, make it impracticable or inadvisable to market the Notes; or
(viii) the enactment, publication, decree, or other promulgation
of any federal or state statute, regulation, rule, order of any court
or other governmental authority which, in the judgment of the Initial
Purchaser, would have a Material Adverse Effect.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchaser. The statements set
forth in the last paragraph on the front cover page in the third paragraph under
the heading "Plan of Distribution" in the Memorandum (to the extent such
statements relate to the Initial Purchaser) constitute the only information
furnished by the Initial Purchaser to the Issuers for the purposes of Sections
2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and, if
sent to the Initial Purchaser, shall be mailed or delivered to (i) Jefferies &
Company, Inc., 11100 Santa Monica Blvd., Los Angeles, CA 90025, Ladies and
Gentlemen; if sent to the Issuers, shall be mailed or delivered to the Issuers
c/o The Doe Run Resources Corporation, 1801 Park 270 Drive, St. Louis, Missouri
63146, Attention: Chief Executive Officer; with a copy to Cadwalader, Wickersham
& Taft, 100 Maiden Lane, New York, N.Y. 10038, Attention: Michael C. Ryan, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; three business days
after being deposited in the
47
<PAGE>
mail, postage prepaid, if mailed; and one business day after being timely
delivered to a next-day air courier.
14. Consent to Jurisdiction. Each of the parties hereto irrevocably
agrees that any legal dispute, action or proceeding arising out of or based upon
this Agreement or the transactions contemplated hereby by the Initial Purchaser,
directors, officers, employees or agents of the Initial Purchaser or by each
person, if any, who controls the Initial Purchaser, may be instituted in any New
York State or U.S. Federal court sitting in the Borough of Manhattan, New York
City, New York, U.S.A. (each a "New York Court" and collectively, the "New York
Courts"), and irrevocably waives, to the extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of venue to any such
proceeding and irrevocably submits to the non-exclusive jurisdiction of such
courts in any such suit, action or proceeding.
15. Waiver of Jury Trial; Waiver of Immunity. (a) Each of the parties
to this Agreement hereby irrevocably waives all right to a trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) arising out of or relating to this Agreement or the transactions
contemplated hereby.
(b) To the extent that the Issuers or any of their revenues, assets or
properties shall be entitled, with respect to any proceeding at any time
brought against the Issuers or any of their revenues, assets or properties
or with respect to any suit, action or proceeding at any time brought for
the purpose of enforcing or executing any judgment in any jurisdiction in
which any specified court or other court is located, to any immunity from
suit, from the jurisdiction of any such court, from attachment prior to
judgment, from attachment in aid of execution of judgment, from execution of
a judgment or from any other legal or judicial process or remedy, and to the
extent of such immunity, the Issuers irrevocably agree not to claim and
irrevocably waive such immunity to the fullest extent permitted by the laws
of such jurisdiction (including, without limitation, the Foreign Sovereign
Immunities Act of 1976 of the United States).
16. Payments. All payments hereunder shall be made without defense,
setoff or counterclaim of any kind and shall be made freely available in U.S.
dollars in New York without any deduction on account of taxes. If any amount is
required to be withheld on account of taxes, then the Company shall pay to the
Initial
48
<PAGE>
Purchaser such additional amounts as shall be required to be paid so
that the net amount received by the Initial Purchaser, after all such deductions
or withholdings, shall not be less than the Initial Purchaser would have
received had no such deductions or withholdings been made or required and shall
promptly deliver to the Initial Purchaser all relevant tax receipts.
17. Currency Indemnity. The obligation of the Company in respect of any
sum due to the Initial Purchaser shall, notwithstanding any judgment in a
currency other than United States dollars, not be discharged until the first
business day following receipt by the Initial Purchaser of any sum adjudged to
be so due in such other currency, on which (and only to the extent that) the
Initial Purchaser may in accordance with normal banking procedures purchase
United States dollars with such other currency; if the United States dollars so
purchased are less than the sum originally due to the Initial Purchaser
hereunder, the Company agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Initial Purchaser against such loss. If the
United States dollars so purchased are greater than the sum originally due to
the Initial Purchaser hereunder, the Initial Purchaser agrees to pay to the
Company an amount equal the excess of the dollars so purchased over the sum
originally due to the Initial Purchaser hereunder.
18. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Issuers contained in Section 9 of this Agreement shall also be for the
benefit of any person or persons who control the Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchaser contained in Section 9 of this Agreement
shall also be for the benefit of the directors of the Issuers, their officers
and any person or persons who control the Issuers within the meaning of Section
15 of the Act or Section 20 of the Exchange Act. No purchaser of Notes from the
Initial Purchaser will be deemed a successor because of such purchase.
19. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH
49
<PAGE>
HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS
OF LAW.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
50
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Issuers and
the Initial Purchaser.
Very truly yours,
THE DOE RUN RESOURCES
CORPORATION, as Issuer
By: /s/Marvin K. Kaiser
-----------------------------------
Name: Marvin K. Kaiser
Title: VP and CFO
FABRICATED PRODUCTS, INC.,
as Guarantor
By: /s/Marvin K. Kaiser
-----------------------------------
Name: Marvin K. Kaiser
Title: CFO
DOE RUN CAYMAN LTD.,
as Guarantor
By: /s/Marvin K. Kaiser
-----------------------------------
Name: Marvin K. Kaiser
Title: VP and CFO
DOE RUN MINING S.R.L.,
as Guarantor
By: /s/Marvin K. Kaiser
-----------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
DOE RUN PERU S.R.L.,
as Guarantor
By: /s/Marvin K. Kaiser
-----------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
<PAGE>
DOE RUN AIR S.A.C.,
as Guarantor
By: /s/Marvin K. Kaiser
-----------------------------------
Name: Marvin K. Kaiser
Title: Attorney in Fact
DOE RUN DEVELOPMENT S.A.C.,
as Guarantor
By: /s/Marvin K. Kaiser
-----------------------------------
Name: Marvin K. Kaiser
Title: Attorney in Fact
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
JEFFERIES & COMPANY, INC.
By:/s/Andrew R. Whittaker
--------------------------
Name: Andrew R. Whittaker
Title: Executive Vice President
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Principal
Amount of
Initial Purchaser Notes
- ----------------- ----------
<S> <C>
Jefferies & Company, Inc............................................. $50,000,000
------------
Total...................................................... $50,000,000
</TABLE>
<PAGE>
SCHEDULE 2
Subsidiaries of the Company
<TABLE>
<CAPTION>
Jurisdiction of
Name Organization
- ---- ------------
<S> <C>
Fabricated Products, Inc. Delaware
Doe Run Cayman Ltd. Cayman Islands
Doe Run Mining S.R.L. Peru
Doe Run Peru S.R.L. Peru
Doe Run Air S.A.C. Peru
Doe Run Development S.A.C. Peru
Doe Run Exploration SA (Proprietary) South Africa
Limited
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of September 1, 1998
-----------
By and Among
THE DOE RUN RESOURCES CORPORATION,
FABRICATED PRODUCTS, INC., DOE RUN CAYMAN LTD., DOE RUN
MINING S.R.L., DOE RUN PERU S.R.L.,
-----------------------------------
DOE RUN AIR S.A.C., DOE RUN DEVELOPMENT S.A.C.
----------------------------------------------
and
---
JEFFERIES & COMPANY, INC.,
--------------------------
as Initial Purchaser
--------------------
$50,000,000 11 1/4% Senior Secured Notes due 2005
-------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Definitions................................................................................................1
2. Exchange Offer.............................................................................................5
3. Shelf Registration........................................................................................10
4. Additional Interest.......................................................................................12
5. Registration Procedures...................................................................................14
6. Registration Expenses.....................................................................................26
7. Indemnification...........................................................................................27
8. Rules 144 and 144A........................................................................................32
9. Underwritten Registrations................................................................................32
10. Miscellaneous............................................................................................33
(a) No Inconsistent Agreements..................................................................33
(b) Adjustments Affecting Registrable Notes.....................................................33
(c) Amendments and Waivers......................................................................33
(d) Notices.....................................................................................34
(e) Successors and Assigns......................................................................35
(f) Counterparts................................................................................35
(g) Headings....................................................................................36
(h) Governing Law...............................................................................36
(i) Severability................................................................................36
(j) Securities Held by the Company, Guarantors
or Their Affiliates........................................................................36
(k) Third Party Beneficiaries...................................................................36
</TABLE>
i
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated
as of September 1, 1998, by and among The Doe Run Resources Corporation, a New
York corporation (the "Company"), and Fabricated Products, Inc., a Delaware
corporation, Doe Run Cayman, Ltd., a Cayman Islands company, Doe Run Mining
S.R.L., a Peruvian company, Doe Run Peru S.R.L., a Peruvian company, Doe Run Air
S.A.C., a Peruvian corporation and Doe Run Development S.A.C., a Peruvian
corporation, (each individually, a "Guarantor" and collectively, the
"Guarantors") and Jefferies & Company, Inc. (the "Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated August 26, 1998, among the Company, the Guarantors and the
Initial Purchaser (the "Purchase Agreement"), which provides for the sale by the
Company to the Initial Purchaser of $50,000,000 aggregate principal amount of
its 11 1/4% Senior Secured Notes due 2005 (the "Notes") and the Guarantors'
guarantees thereof. In order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Company and the Guarantors have agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial
Purchaser and any subsequent holder or holders of the Notes. The execution and
delivery of this Agreement is a condition to the Initial Purchaser's obligation
to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
-----------
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a) hereof.
-------------------
Advice: See the last paragraph of Section 5 hereof.
------
Agreement: See the introductory paragraphs hereto.
---------
Applicable Period: See Section 2(b) hereof.
-----------------
Company: See the introductory paragraphs hereto.
-------
Effectiveness Date: With respect to (i) the Exchange Offer
------------------
Registration Statement, the 150th day after the Issue
<PAGE>
Date, (ii) the Initial Shelf Registration Statement, the 150th day after
delivery of the Shelf Notice and (iii) all other Shelf Registration Statements,
the 60th day after the filing date thereof.
Effectiveness Period: See Section 3(a) hereof.
--------------------
Event Date: See Section 4(b) hereof.
----------
Exchange Act: The Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a) hereof.
--------------
Exchange Offer: See Section 2(a) hereof.
--------------
Exchange Offer Registration Statement: See Section 2(a)
-------------------------------------
hereof.
Filing Date: (A) If no Registration Statement has been filed
-----------
by the Company and the Guarantors pursuant to this Agreement, the 60th day after
the Issue Date; and (B) in any other case (which may be applicable
notwithstanding the consummation of the Exchange Offer), the 60th day after the
delivery of a Shelf Notice.
Guarantors: See the introductory paragraphs hereto.
----------
Holder: Any holder of a Registrable Note or Registrable Notes.
------
Indemnified Person: See Section 7(c) hereof.
------------------
Indemnifying Person: See Section 7(c) hereof.
-------------------
Indenture: The Indenture, dated as of September 1, 1998, by
---------
and among the Company, the Guarantors and State Street Bank and Trust Company,
as trustee, pursuant to which the Notes are being issued, as the same may be
amended or supplemented from time to time in accordance with the terms thereof.
Initial Purchaser: See the introductory paragraphs hereto.
-----------------
2
<PAGE>
Initial Shelf Registration: See Section 3(a) hereof.
--------------------------
Inspectors: See Section 5(o) hereof.
----------
Issue Date: September 1, 1998, the date of original issuance
----------
of the Notes.
NASD: See Section 5(s) hereof.
----
Notes: See the introductory paragraphs hereto.
-----
Participant: See Section 7(a) hereof.
-----------
Participating Broker-Dealer: See Section 2(b) hereof.
---------------------------
Person: An individual, trustee, corporation, partnership,
------
joint stock company, trust, unincorporated association, union, business
association, firm or other legal entity.
Private Exchange: See Section 2(b) hereof.
----------------
Private Exchange Notes: See Section 2(b) hereof.
----------------------
Prospectus: The prospectus included in any Registration
----------
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A under the Securities Act and any term sheet filed pursuant to Rule 434
under the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereof.
------------------
Records: See Section 5(n) hereof.
-------
Registrable Notes: Each Note upon its original issuance and at
-----------------
all times subsequent thereto, each Exchange Note as to which Section 2(c)(iv)
hereof is applicable upon original issuance and at all times
3
<PAGE>
subsequent thereto and each Private Exchange Note upon original issuance thereof
and at all times subsequent thereto, until (i) a Registration Statement (other
than, with respect to any Exchange Note as to which Section 2(c)(iv) hereof is
applicable, the Exchange Offer Registration Statement) covering such Note,
Exchange Note or Private Exchange Note has been declared effective by the SEC
and such Note, Exchange Note or such Private Exchange Note, as the case may be,
has been disposed of in accordance with such effective Registration Statement,
(ii) such Note has been, or could have been, exchanged pursuant to the Exchange
Offer for an Exchange Note or Exchange Notes that may be resold without
restriction under federal securities laws, (iii) such Note, Exchange Note or
Private Exchange Note, as the case may be, ceases to be outstanding for purposes
of the Indenture or (iv) such Note, Exchange Note or Private Exchange Note, as
the case may be, may be resold without restriction pursuant to Rule 144 under
the Securities Act.
Registration Statement: Any registration statement of the
---------------------
Company and the Guarantors that covers any of the Notes, the Exchange Notes or
the Private Exchange Notes filed with the SEC under the Securities Act,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as
--------
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of the Company or the Guarantors of
such securities being free of the registration and prospectus delivery
requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as
---------
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as
--------
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
---
4
<PAGE>
Securities Act: The Securities Act of 1933, as amended, and
--------------
the rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(b) hereof.
------------
Shelf Registration: See Section 3(b) hereof.
------------------
Shelf Registration Statement: Any Registration Statement
----------------------------
relating to a Shelf Registration.
Subsequent Shelf Registration: See Section 3(b) hereof.
-----------------------------
TIA: The Trust Indenture Act of 1939, as amended.
---
Trustee: The trustee under the Indenture.
-------
Underwritten registration or underwritten offering: A
--------------------------------------------------
registration in which securities of the Company and the Guarantors are sold to
an underwriter for reoffering to the public.
2. Exchange Offer
--------------
(a) To the extent not prohibited by applicable law or
applicable interpretation of the staff of the Division of Corporation Finance of
the SEC, the Company and the Guarantors shall file with the SEC, no later than
the Filing Date, a Registration Statement (the "Exchange Offer Registration
Statement") on an appropriate registration form with respect to a registered
offer (the "Exchange Offer") to exchange any and all of the Registrable Notes
for a like aggregate principal amount of notes (the "Exchange Notes") of the
Company, guaranteed by the Guarantors, that are identical in all material
respects to the Notes except that the Exchange Notes shall contain no
restrictive legend thereon. The Exchange Offer shall comply with all applicable
tender offer rules and regulations under the Exchange Act and other applicable
laws. The Company and the Guarantors shall use their reasonable efforts to (x)
cause the Exchange Offer Registration Statement to be declared effective under
the Securities Act on or before the Effectiveness Date; (y) keep the Exchange
Offer open for at least 20 business days (or longer if required by applicable
law) after the date that notice of the Exchange Offer is mailed to Holders; and
(z) consummate the Exchange Offer on or prior to the 180th day after the Issue
Date. If, after the Exchange Offer Registra-
5
<PAGE>
tion Statement is initially declared effective by the SEC, the Exchange Offer or
the issuance of the Exchange Notes thereunder is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, the Exchange Offer Registration Statement shall be
deemed not to have become effective for purposes of this Agreement.
Each Holder that participates in the Exchange Offer will be
required to represent that any Exchange Notes to be received by it will be
acquired in the ordinary course of its business, that at the time of the
consummation of the Exchange Offer such Holder will have no arrangement or
understanding with any Person to participate in the distribution of the Exchange
Notes in violation of the provisions of the Securities Act, and that such Holder
is not an affiliate of the Company or the Guarantors within the meaning of the
Securities Act.
Upon consummation of the Exchange Offer in accordance with
this Section 2, the provisions of this Agreement shall continue to apply, solely
with respect to Registrable Notes that are Private Exchange Notes, Exchange
Notes as to which Section 2(c)(iv) is applicable and Exchange Notes held by
Participating Broker-Dealers, and the Company and the Guarantors shall have no
further obligation to register Registrable Notes (other than Private Exchange
Notes and other than in respect of any Exchange Notes as to which clause
2(c)(iv) hereof applies) pursuant to Section 3 hereof. No securities other than
the Exchange Notes shall be included in the Exchange Offer Registration
Statement.
(b) The Company and the Guarantors shall include within the
Prospectus contained in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," reasonably acceptable to the Holders, which
shall contain a summary statement of the positions taken or policies made by the
staff of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange
Offer (a "Participating Broker-Dealer"), whether such positions or policies have
been publicly disseminated by the staff of the SEC or such positions or policies
represent the prevailing views of the staff of the SEC. Such "Plan of
Distribution" section shall also expressly permit, to the extent permitted by
applicable policies and regulations of the SEC, the use of the Pro-
6
<PAGE>
spectus by all Persons subject to the prospectus delivery requirements of the
Securities Act, including, to the extent permitted by applicable policies and
regulations of the SEC, all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may resell
the Exchange Notes in compliance with the Securities Act.
The Company and Guarantors shall use their reasonable efforts
to keep the Exchange Offer Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such Prospectus
to be lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as is necessary to
comply with applicable law in connection with any resale of the Exchange Notes
covered thereby; provided, however, that such period shall not exceed 180 days
after such Exchange Offer Registration Statement is declared effective (or such
longer period if extended pursuant to the last paragraph of Section 5 hereof)
(the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial
Purchaser hold any Notes acquired by it that have, or that are reasonably likely
to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Exchange
Offer, the Company and the Guarantors upon the request of any such Holder shall
simultaneously with the delivery of the Exchange Notes in the Exchange Offer,
issue and deliver to any such Holder, in exchange (the "Private Exchange") for
such Notes held by any such Holder, a like principal amount of notes (the
"Private Exchange Notes") of the Company, guaranteed by the Guarantors, that are
identical in all material respects to the Exchange Notes (except that they may
bear a customary legend with respect to restrictions on transfer). The Private
Exchange Notes shall be issued pursuant to the same indenture as the Exchange
Notes and bear the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes
will accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or (ii) if the
Notes are surrendered for exchange on a date subsequent to the record date for
an interest payment date to occur on or after the date of such exchange and as
to which interest will be paid, the date
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<PAGE>
of such interest payment or (B) if no interest has been paid on the Notes, from
the date of the original issuance of the Notes.
In connection with the Exchange Offer, the Company and the
Guarantors shall:
(1) mail, or cause to be mailed, to each Holder entitled to
participate in the Exchange Offer a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(2) keep the Exchange Offer open for not less than 20 business
days after the date that notice of the Exchange Offer is mailed to
Holders (or longer if required by applicable law);
(3) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of New
York;
(4) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York time, on the last business day
on which the Exchange Offer shall remain open; provided, however, that
withdrawal rights may be terminated upon any extension of the Exchange
Offer; and
(5) otherwise comply in all material respects with all
applicable laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer
and the Private Exchange, if any, the Company and the Guarantors shall:
(1) accept for exchange all Registrable Notes validly tendered
and not validly withdrawn pursuant to the Exchange Offer and the
Private Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable
Notes so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to
each Holder of Registrable Notes, Exchange Notes or Private Exchange
Notes, as the case may be, equal in principal amount to the Registrable
Notes of such Holder so accepted for exchange.
8
<PAGE>
The Exchange Offer and the Private Exchange shall not be
subject to any conditions, other than that (i) the Exchange Offer or Private
Exchange, as the case may be, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) no action or proceeding shall have
been instituted or threatened in any court or by any governmental agency which
might materially impair the ability of the Company and the Guarantors to proceed
with the Exchange Offer or the Private Exchange, and no material adverse
development shall have occurred in any existing action or proceeding with
respect to the Company and the Guarantors and (iii) all governmental approvals
shall have been obtained, which approvals the Company and the Guarantors deem
necessary for the consummation of the Exchange Offer or Private Exchange.
The Exchange Notes and the Private Exchange Notes shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture and which, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the Exchange
Notes shall not be subject to the transfer restrictions set forth in the
Indenture. The Indenture or such indenture shall provide that the Exchange
Notes, the Private Exchange Notes and the Notes shall vote and consent together
on all matters as one class and that none of the Exchange Notes, the Private
Exchange Notes or the Notes will have the right to vote or consent as a separate
class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the staff of the SEC, the Company and the
Guarantors are not permitted to effect the Exchange Offer, (ii) the Exchange
Offer is not consummated within 195 days of the Issue Date, (iii) the Initial
Purchaser or any holder of Private Exchange Notes so requests in writing to the
Company and the Guarantors at any time after the consummation of the Exchange
Offer, or (iv) in the case of any Holder that participates in the Exchange
Offer, such Holder does not receive Exchange Notes on the date of the exchange
that may be sold without restriction under federal securities laws (other than
due solely to the status of such Holder as an affiliate of any of the Company or
the Guarantors within the meaning of the Securities Act) and so notifies the
Company and the Guarantors within 30 days after such Holder first becomes aware
of such restrictions, in the case of each of clauses (i) to and including (iv)
of this sentence, then the Company and the Guarantors shall promptly deliver to
the Holders and the Trustee written
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<PAGE>
notice thereof (the "Shelf Notice") and shall file a Shelf Registration pursuant
to Section 3 hereof.
3. Shelf Registration
------------------
If at any time a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Company and the Guarantors shall
------------------
file with the SEC a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable Notes not
permitted to be exchanged in the Exchange Offer in accordance with the terms of
this Agreement, Private Exchange Notes and Exchange Notes as to which Section
2(c)(iv) is applicable (the "Initial Shelf Registration"). The Company and the
Guarantors shall use their reasonable efforts to file with the SEC the Initial
Shelf Registration on or before the applicable Filing Date. The Initial Shelf
Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Notes for resale by Holders in the reasonable
manner or manners designated by them (including, without limitation, one or more
underwritten offerings). The Company and the Guarantors shall not permit any
securities other than the Registrable Notes to be included in the Initial Shelf
Registration or any Subsequent Shelf Registration (as defined below).
The Company and the Guarantors shall use their reasonable
efforts to cause the Initial Shelf Registration to be declared effective under
the Securities Act on or prior to the Effectiveness Date and to keep the Initial
Shelf Registration continuously effective under the Securities Act until the
date which is two years from the Issue Date, subject to extension pursuant to
the last paragraph of Section 5 hereof (the "Effectiveness Period"), or such
shorter period ending when all Registrable Notes covered by the Shelf
Registration have been sold in the manner set forth and as contemplated in the
Initial Shelf Registration or, if applicable, a Subsequent Shelf Registration;
provided, however, that the Effectiveness Period in respect of the Initial Shelf
Registration shall be extended to the extent required to permit dealers to
comply with the applicable prospectus delivery requirements of Rule 174 under
the Securities Act and as otherwise provided herein and shall be subject to
reduction to the extent that the applicable provisions of Rule 144(k) are
amended or revised to reduce the two
10
<PAGE>
year holding period set forth therein or any similar rule providing for a
shorter holding period.
No holder of Registrable Notes may include any of its
Registrable Notes in any Shelf Registration Statement pursuant to this Agreement
unless and until such holder furnishes to the Company and the Guarantors in
writing, within 15 business days after receipt of a request therefor, such
information as the Company and the Guarantors may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
prospectus included therein. No holder of Registrable Notes shall be entitled to
Additional Interest pursuant to Section 4 hereof unless and until such holder
shall have provided all such reasonably requested information. Each holder of
Registrable Notes as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company and the Guarantors all information
required to be disclosed in order to make information previously furnished to
the Company and the Guarantors by such Holder not a material misstatement or
omission.
(b) Subsequent Shelf Registrations. If the Initial Shelf
------------------------------
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), the Company and the
Guarantors shall use their reasonable efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event shall within 30
days of such cessation of effectiveness amend the Initial Shelf Registration in
a manner to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement pursuant to Rule 415
covering all of the Registrable Notes covered by and not sold under the Initial
Shelf Registration or an earlier Subsequent Shelf Registration (each, a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed,
the Company and the Guarantors shall use their reasonable efforts to cause the
Subsequent Shelf Registration to be declared effective under the Securities Act
as soon as practicable after such filing and to keep such subsequent Shelf
Registration continuously effective for a period equal to the number of days in
the Effectiveness Period (subject to reduction as provided herein) less the
aggregate number of days during which the Initial Shelf Registration or any
Subsequent Shelf Registration was previously continuously effective. As used
11
<PAGE>
herein the term "Shelf Registration" means the Initial Shelf Registration and
any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Company and the Guarantors
--------------------------
shall promptly supplement and amend any Shelf Registration if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Registration Statement or by any underwriter
of such Registrable Notes.
(d) Withdrawal of Stop Orders. If the Shelf Registration
-------------------------
ceases to be effective for any reason at any time during the Effectiveness
Period (other than because of the sale of all of the securities registered
thereunder), the Company and the Guarantors shall use their reasonable efforts
to obtain the prompt withdrawal of any order suspending the effectiveness
thereof.
4. Additional Interest
-------------------
(a) The Company, the Guarantors and the Initial Purchaser
agree that the Holders will suffer damages if the Company and the Guarantors
fail to fulfill their obligations under Section 2 or Section 3 hereof and that
it would not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Company and the Guarantors agree to pay, as liquidated damages,
additional interest on the Notes ("Additional Interest") under the circumstances
and to the extent set forth below (each of which shall be given independent
effect):
(i) if (A) neither the Exchange Offer Registration Statement nor
the Initial Shelf Registration has been filed on or prior to the Filing
Date applicable thereto (i.e., 60 days after the Issue Date or delivery
of the Shelf Notice, as applicable) or (B) notwithstanding that the
Company and the Guarantors have consummated or will consummate the
Exchange Offer, the Company and the Guarantors are required to file a
Shelf Registration and such Shelf Registration is not filed on or prior
to the Filing Date applicable thereto, then, commencing on the day
after any such Filing Date, Additional Interest shall accrue on the
principal amount of the Notes at a rate of 0.50% per annum for the
first 90 days immediately follow-
12
<PAGE>
ing such applicable Filing Date, and such Additional Interest rate
shall increase by an additional 0.50% per annum at the beginning of
each subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor
the Initial Shelf Registration is declared effective by the SEC on or
prior to the Effectiveness Date applicable thereto (i.e., 150 days
after the Issue Date or delivery of the Shelf Notice, as applicable) or
(B) notwithstanding that the Company and the Guarantors have
consummated or will consummate the Exchange Offer, the Company and the
Guarantors are required to file a Shelf Registration and such Shelf
Registration is not declared effective by the SEC on or prior to the
Effectiveness Date applicable to such Shelf Registration, then,
commencing on the day after such Effectiveness Date, Additional
Interest shall accrue on the principal amount of the Notes at a rate of
0.50% per annum for the first 90 days immediately following the day
after such Effectiveness Date, and such Additional Interest rate shall
increase by an additional 0.50% per annum at the beginning of each
subsequent 90-day period;
(iii) if (A) the Company and the Guarantors have not exchanged
Exchange Notes for all Notes validly tendered in accordance with the
terms of the Exchange Offer on or prior to the 195th day after the
Issue Date or (B) if applicable, a Shelf Registration has been declared
effective and such Shelf Registration ceases to be effective at any
time during the Effectiveness Period, then Additional Interest shall
accrue on the principal amount of the Notes at a rate of 0.50% per
annum for the first 90 days commencing on the (x) 196th day after the
Issue Date, in the case of (A) above, or (y) the day such Shelf
Registration ceases to be effective in the case of (B) above, and such
Additional Interest rate shall increase by an additional 0.50% per
annum at the beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not exceed
at any one time in the aggregate 1.0% per annum; provided, further, however,
that (1) upon the filing of the applicable Exchange Offer Registration Statement
or the applicable Shelf Registration as required hereunder (in the case of
clause (i) above of this Section 4), (2) upon the effectiveness of the Exchange
Offer Registration Statement or the appli-
13
<PAGE>
cable Shelf Registration Statement as required hereunder (in the case of clause
(ii) of this Section 4), or (3) upon the exchange of the Exchange Notes for all
Notes tendered (in the case of clause (iii)(A) of this Section 4), or upon the
effectiveness of the applicable Shelf Registration Statement which had ceased to
remain effective (in the case of (iii)(B) of this Section 4), Additional
Interest on the Notes in respect of which such events relate as a result of such
clause (or the relevant subclause thereof), as the case may be, shall cease to
accrue.
(b) The Company and the Guarantors shall notify the Trustee
within one business day after each and every date on which an event occurs in
respect of which Additional Interest is required to be paid (an "Event Date").
Any amounts of Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii)
of this Section 4 will be payable in cash semi-annually on each March 15 and
September 15 (to the holders of record on the March 1 and September 1
immediately preceding such dates), commencing with the first such date occurring
after any such Additional Interest commences to accrue. The amount of Additional
Interest will be determined by multiplying the applicable Additional Interest
rate by the principal amount of the Registrable Notes, multiplied by a fraction,
the numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
composed of twelve 30-day months and, in the case of a partial month, the actual
number of days elapsed), and the denominator of which is 360.
5. Registration Procedures
-----------------------
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Company and the Guarantors shall effect
such registrations to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by the
Company and the Guarantors hereunder the Company and Guarantors shall:
(a) Prepare and file with the SEC prior to the applicable
Filing Date, a Registration Statement or Registration Statements as
prescribed by Sections 2 or 3 hereof, and use its reasonable efforts to
cause each such Registration Statement to become effective and remain
ef-
14
<PAGE>
fective as provided herein; provided, however, that, if (1) such
filing is pursuant to Section 3 hereof or (2) a Prospectus contained in
the Exchange Offer Registration Statement filed pursuant to Section 2
hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the
Company and the Guarantors shall furnish to and afford the Holders of
the Registrable Notes covered by such Registration Statement or
Jefferies & Company, Inc. (the "Representative") on behalf of such
Participating Broker-Dealer, as the case may be, their or its counsel
and the managing underwriters, if any, a reasonable opportunity to
review copies of all such documents (including copies of any documents
to be incorporated by reference therein and all exhibits thereto)
proposed to be filed (in each case at least five business days prior to
such filing, or such later date as is reasonable under the
circumstances). The Company and the Guarantors shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto if the Holders of a majority in aggregate principal amount of
the Registrable Notes covered by such Registration Statement, their
counsel, or the managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration Statement or
Exchange Offer Registration Statement, as the case may be, as may be
necessary to keep such Registration Statement continuously effective
for the Effectiveness Period or the Applicable Period or until
consummation of the Exchange Offer, as the case may be; cause the
related Prospectus to be supplemented by any Prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) promulgated under
the Securities Act; and comply with the provisions of the Securities
Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as
so amended or in such Prospectus as so supplemented and with respect to
the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus. The Company and the
Guarantors shall be deemed not to have used their reasonable efforts to
keep a
15
<PAGE>
Registration Statement effective during the Effective Period or
the Applicable Period, as the case may be, relating thereto if the
Company and the Guarantors voluntarily take any action that would
result in selling Holders of the Registrable Notes covered thereby or
Participating Broker-Dealers seeking to sell Exchange Notes not being
able to sell such Registrable Notes or such Exchange Notes during that
period unless (i) such action is required by applicable law or (ii) the
Company and the Guarantors comply with this Agreement, including
without limitation, the provisions of Section 5(k) or the last
paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period relating thereto from whom the Company and the Guarantors have
received written notice that it will be a Participating Broker-Dealer
in the Exchange Offer, notify the selling Holders of Registrable Notes,
or the Representative on behalf of such Participating Broker-Dealer, as
the case may be, their or its counsel and the managing underwriters, if
any, promptly (but in any event within two business days), and confirm
such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment,
when the same has become effective under the Securities Act (including
in such notice a written statement that any Holder may, upon request,
obtain, at the sole expense of the Company and the Guarantors, one
conformed copy of such Registration Statement or post-effective
amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference therein and
exhibits), (ii) of the issuance by the SEC of any stop order suspending
the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) if at any time
when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange
Notes by Participating Broker-Dealers the representations and
warranties of the Company and the Guarantors
16
<PAGE>
contained in any agreement (including any underwriting agreement)
contemplated by Section 5(m) hereof cease to be true and correct in
all material respects, (iv) of the receipt by the Company and the
Guarantors of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration
Statement or any of the Registrable Notes or the Exchange Notes to be
sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction, or the initiation or threatening of any proceeding for
such purpose, (v) of the happening of any event, the existence of any
condition or any information becoming known that makes any statement
made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making
of any changes in or amendments or supplements to such Registration
Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and that in the case of the Prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and (vi) of any of the Company's and the Guarantors'
determination that a post-effective amendment to a Registration
Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, use its reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending
the qualification (or exemption from qualification) of any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is
issued, to use its reasonable efforts to obtain the
17
<PAGE>
withdrawal of any such order at the earliest possible date.
(e) If a Shelf Registration is filed pursuant to Section 3 and
if requested by the managing underwriter or underwriters (if any), the
Holders of a majority in aggregate principal amount of the Registrable
Notes being sold in connection with an underwritten offering or any
Participating Broker-Dealer, (i) promptly as practicable incorporate in
a prospectus supplement or post-effective amendment such information as
the managing underwriter or underwriters (if any), such Holders, any
Participating Broker-Dealer or counsel for any of them reasonably
request to be included therein, (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as
practicable after the Company and the Guarantors have received
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and (iii) supplement or make
amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, furnish to each selling Holder of Registrable Notes and the
Representative on behalf of such Participating Broker-Dealer and to
counsel and each managing underwriter, if any, at the sole expense of
the Company and the Guarantors, one conformed copy of the Registration
Statement or Registration Statements and each post-effective amendment
thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, deliver to each selling Holder of Registrable Notes, or each
such Participating Broker-Dealer, as the case may be, their respective
counsel, and the underwriters, if any, at the
18
<PAGE>
sole expense of the Company and the Guarantors, as many copies of the
Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, the
Company and the Guarantors hereby consent to the use of such
Prospectus and each amendment or supplement thereto by each of the
selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if
any, and dealers (if any), in connection with the offering and sale of
the Registrable Notes covered by, or the sale by Participating
Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and
any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Offer Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, to use its reasonable efforts to
register or qualify, and to cooperate with the selling Holders of
Registrable Notes or the Representative on behalf of such Participating
Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with
the registration or qualification (or exemption from such registration
or qualification) of such Registrable Notes for offer and sale under
the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the
managing underwriter or underwriters reasonably request in writing;
provided, however, that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered other than through an
underwritten offering, the Company and the Guarantors agree to cause
its counsel to perform Blue Sky investigations and file registrations
and qualifications required to be filed pursuant to this Section 5(h);
keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to
be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions
of the Exchange Notes held by Participating Broker-Dealers or the
Registrable Notes covered by the applicable Registration Statement;
provided, however, that the Company and the
19
<PAGE>
Guarantors shall not be required to (A) qualify generally to do
business in any jurisdiction where it is not then so qualified, (B)
take any action that would subject it to general service of process in
any such jurisdiction where it is not then so subject or (C) subject
itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3
hereof, cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold, which certificates shall not bear any restrictive legends
and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such denominations
and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request.
(j) Use its reasonable efforts to cause the Registrable Notes
covered by the Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be reasonably
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Notes, except as may be required solely as a consequence of the nature
of such selling Holder's business, in which case the Company and the
Guarantors will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and
(subject to Section 5(a) hereof) file with the SEC, at the sole expense
of the Company and the Guarantors, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated
therein
20
<PAGE>
by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Notes being
sold thereunder or to the purchasers of the Exchange Notes to whom
such Prospectus will be delivered by a Participating Broker-Dealer,
any such Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(l) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee
with certificates for the Registrable Notes or Exchange Notes, as the
case may be, in a form eligible for deposit with The Depository Trust
Company and (ii) provide a CUSIP number for the Registrable Notes or
Exchange Notes, as the case may be.
(m) In connection with any underwritten offering of
Registrable Notes pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings of
debt securities similar to the Notes in form and substance reasonably
satisfactory to the Company and the Guarantors and take all such other
actions as are reasonably requested by the managing underwriter or
underwriters in order to expedite or facilitate the registration or the
disposition of such Registrable Notes and, in such connection, (i) make
such representations and warranties to, and covenants with, the
underwriters with respect to the business of the Company, the
Guarantors and their subsidiaries and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings of debt
securities similar to the Notes, and confirm the same in writing if and
when requested in form and substance reasonably satisfactory to the
Company and the Guarantors; (ii) obtain the written opinions of counsel
to the Company and the Guarantors and written updates thereof in form,
scope and substance reasonably satisfactory to the managing underwriter
or underwriters, addressed to the underwriters covering the matters
customarily covered in opinions reasonably requested in underwritten
offerings and such other matters as may be reasonably requested by the
managing underwriter or underwriters;
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<PAGE>
(iii) use its reasonable efforts to obtain "cold comfort" letters and
updates thereof in form, scope and substance reasonably satisfactory
to the managing underwriter or underwriters from the independent
certified public accountants of the Company and the Guarantors (and,
if necessary, any other independent certified public accountants of
any subsidiary of the Company, the Guarantors or of any business
acquired by the Company or the Guarantors for which financial
statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to
the underwriter, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings of debt securities similar to
the Notes and such other matters as reasonably requested by the
managing underwriter or underwriters as permitted by the Statement on
Auditing Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable to the sellers and underwriters, if any,
than those set forth in Section 7 hereof (or such other provisions and
procedures acceptable to Holders of a majority in aggregate principal
amount of Registrable Notes covered by such Registration Statement and
the managing underwriter or underwriters or agents, if any). The above
shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, make available for inspection by any selling Holder of such
Registrable Notes being sold, or each such Participating Broker-Dealer,
as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant
or other agent retained by any such selling Holder or each such
Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and instruments of the Company, the
Guarantors and their
22
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subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of
the Company, the Guarantors and their subsidiaries to supply all
information reasonably requested by any such Inspector in connection
with such Registration Statement and Prospectus. Each Inspector shall
agree in writing that it will keep the Records confidential and that
it will not disclose any of the Records unless (i) the disclosure of
such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement or Prospectus, (ii) the
release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, or (iii) the information
in such Records has been made generally available to the public. Each
selling Holder of such Registrable Notes and each such Participating
Broker-Dealer will be required to agree that information obtained by
it as a result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market transactions in
the securities of the Company and the Guarantors unless and until such
information is made generally available to the public. Each selling
Holder of such Registrable Notes and each such Participating
Broker-Dealer will be required to further agree that it will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and the Guarantors
and allow the Company and the Guarantors to undertake appropriate
action to prevent disclosure of the Records deemed confidential at the
Company's and the Guarantors' expense.
(o) Provide an indenture trustee for the Registrable Notes or
the Exchange Notes, as the case may be, and cause the Indenture or the
trust indenture provided for in Section 2(a) hereof, as the case may
be, to be qualified under the TIA not later than the effective date of
the first Registration Statement relating to the Registrable Notes; and
in connection therewith, cooperate with the trustee under any such
indenture and the Holders of the Registrable Notes, to effect such
changes to such indenture as may be required for such indenture to be
so qualified in accordance with the terms of the TIA; and execute, and
use its reasonable efforts to cause such trustee to execute, all
documents as may be required to effect such changes, and all other
forms and documents required to be filed with
23
<PAGE>
the SEC to enable such indenture to be so qualified in a timely manner.
(p) Comply with all applicable rules and regulations of the
SEC and make generally available to their respective securityholders
earnings statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if
such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Notes are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company and the Guarantors after the
effective date of a Registration Statement, which statements shall
cover said 12-month periods.
(q) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the
Company and the Guarantors (or to such other Person as directed by the
Company and the Guarantors) in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be, the Company and the
Guarantors shall mark, or cause to be marked, on such Registrable Notes
that such Registrable Notes are being cancelled in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be; in no
event shall such Registrable Notes be marked as paid or otherwise
satisfied.
(r) Use its reasonable efforts to cause the Registrable Notes
covered by a Registration Statement to be rated with the appropriate
rating agencies, if so requested by the managing underwriter or
underwriters, if any.
(s) Cooperate with the managing underwriter, if any,
participating in the disposition of Registrable Notes and its counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD").
24
<PAGE>
(t) Use its reasonable efforts to take all other steps
reasonably necessary to effect the registration of the Exchange Notes
and/or Registrable Notes covered by a Registration Statement
contemplated hereby.
The Company and the Guarantors may require each seller of
Registrable Notes as to which any registration is being effected to furnish to
the Company and the Guarantors such information regarding such seller and the
distribution of such Registrable Notes as the Company and the Guarantors may,
from time to time, reasonably request. The Company and the Guarantors may
exclude from such registration the Registrable Notes of any seller so long as
such seller fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Company and the Guarantors all
information required to be disclosed in order to make the information previously
furnished to the Company and the Guarantors by such seller not to contain a
material misstatement or omission.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by its acquisition of such Registrable Notes or Exchange
Notes to be sold by such Participating Broker-Dealer, as the case may be, that,
upon actual receipt of any notice from the Company and the Guarantors of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition
of such Registrable Notes covered by such Registration Statement or Prospectus
or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as
the case may be, and the dissemination of the applicable Prospectus until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until
it is advised in writing (the "Advice") by the Company and the Guarantors that
the use of the applicable Prospectus may be resumed. In the event that the
Company and the Guarantors shall give any such notice, each of the Effectiveness
Period and the Applicable Period shall be extended by the number of days during
such periods from and including the date of the giving of such notice to and
including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or
25
<PAGE>
amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice.
6. Registration Expenses
---------------------
All fees and expenses incident to the performance of or
compliance with this Agreement by the Company and the Guarantors shall be borne
by the Company and the Guarantors whether or not the Exchange Offer Registration
Statement or any Shelf Registration Statement is filed or becomes effective or
the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Notes or Exchange Notes and determination of the eligibility of the
Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes are located, in the
case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the
case of Registrable Notes or Exchange Notes to be sold by a Participating
Broker-Dealer during the Applicable Period)), (ii) printing expenses, including,
without limitation, expenses of printing certificates for Registrable Notes or
Exchange Notes in a form eligible for deposit with The Depository Trust Company
and of printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any Registration
Statement or in respect of Exchange Notes to be sold by any Participating
Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and the Guarantors and, in the case of a Shelf Registration, reasonable
fees and disbursements of one special counsel for all of the sellers of
Registrable Notes (exclusive of any counsel retained pursuant to Section 7
hereof), (v) fees and disbursements of all independent certified public
accountants referred to in Section 5(m)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) Securities Act liability
insurance, if the Company and the Guarantors desire such insurance, (vii) fees
and expenses of all other Persons retained by the Company and the Guarantors,
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<PAGE>
(viii) internal expenses of the Company and the Guarantors (including, without
limitation, all salaries and expenses of officers and employees of the Company
and the Guarantors performing legal or accounting duties), (ix) the expense of
any annual audit, (x) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange, and the
obtaining of a rating of the securities, in each case, if applicable, and (xi)
the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, indentures and any other
documents necessary in order to comply with this Agreement.
7. Indemnification
---------------
(a) The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer selling Exchange Notes during the Applicable Period,
the officers, directors, employees and agents of each such Person, and each
Person, if any, who controls any such Person within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a
"Participant"), from and against any and all losses, claims, damages, judgments,
liabilities and expenses (including, without limitation, the reasonable legal
fees and other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) or Prospectus (as amended or
supplemented if the Company and the Guarantors shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the case of the Prospectus in the light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by, arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Participant furnished to
the Company or the Guarantors in writing by such Participant expressly for use
therein; provided, however, that the Company and the Guarantors will not be
liable if such untrue statement or omission or alleged untrue statement or
omission was contained or made in any
27
<PAGE>
preliminary prospectus and corrected in the final Prospectus or any amendment or
supplement thereto and any such loss, liability, claim, or damage or expense
suffered or incurred by the Participants resulted from any action, claim or suit
by any Person who purchased Registrable Notes or Exchange Notes which are the
subject thereof from such Participant and such Participant failed to deliver or
provide a copy of the final Prospectus (as amended or supplemented) to such
Person with or prior to the confirmation of the sale of such Registrable Notes
or Exchange Notes sold to such Person if required by applicable law, unless such
failure to deliver or provide a copy of the final Prospectus (as amended or
supplemented) was a result of noncompliance by the Company and the Guarantors
with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Guarantors, their respective
directors, their respective officers who sign the Registration Statement and
each Person who controls the Company or the Guarantors within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company and the Guarantors to each
Participant, but only with reference to information relating to such Participant
furnished to the Company or the Guarantors in writing by such Participant
expressly for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus. The liability of any
Participant under this paragraph shall in no event exceed the proceeds received
by such Participant from sales of Registrable Notes or Exchange Notes giving
rise to such obligations.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such Person (the "Indemnified
Person") shall promptly notify the Persons against whom such indemnity may be
sought (the "Indemnifying Persons") in writing, and the Indemnifying Persons
shall be entitled to, and upon request of the Indemnified Person shall, retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Persons may reasonably
designate in such proceeding and shall pay the reasonable fees and expenses
actually incurred by such counsel related to such proceeding; provided, however,
that the failure to so notify
28
<PAGE>
the Indemnifying Persons shall not relieve any of them of any obligation or
liability which any of them may have hereunder or otherwise except to the extent
it is materially prejudiced by such failure. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Persons and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Persons shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both any Indemnifying Person and the
Indemnified Person or any affiliate thereof and representation of both parties
by the same counsel would be inappropriate due to actual or potential
conflicting interests between them. It is understood that, unless there exists a
conflict among Indemnified Persons, the Indemnifying Persons shall not, in
connection with such proceeding or separate but substantially similar related
proceeding in the same jurisdiction arising out of the same general allegations,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed promptly as they are incurred. Any such separate
firm for the Participants and such control Persons of Participants shall be
designated in writing by Participants who sold a majority in interest of
Registrable Notes and Exchange Notes sold by all such Participants and shall be
reasonably acceptable to the Company and any such separate firm for the Company
or the Guarantors, their respective directors, their respective officers and
such control Persons of the Company and the Guarantors shall be designated in
writing by the Company and the Guarantors and shall be reasonably acceptable to
the Holders. The Indemnifying Persons shall not be liable for any settlement of
any proceeding effected without its prior written consent (which consent shall
not be unreasonably withheld or delayed), but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
each of the Indemnifying Persons agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for reasonable fees and expenses actually incurred by
counsel as contemplated by the third sen-
29
<PAGE>
tence of this paragraph, the Indemnifying Person agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement; provided, however, that the Indemnifying
Person shall not be liable for any settlement effected without its consent
pursuant to this sentence if the Indemnifying Person is contesting, in good
faith, the request for reimbursement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Persons (which consent shall not be
unreasonably withheld or delayed), effect any settlement or compromise of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party, or indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement (A) includes an unconditional
written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of such
Indemnified Person.
(d) If the indemnification provided for in clauses (a) and (b)
of this Section 7 is for any reason unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the misstatements
or omissions or alleged misstatements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative fault of the parties shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the
Guarantors on the one hand or such Participant or such
30
<PAGE>
other Indemnified Person, as the case may be, on the other, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such misstatement or omission, and any other equitable considerations
appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages, judgments, liabilities and expenses referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses actually
incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall a Participant be required to contribute any amount
in excess of the amount by which proceeds received by such Participant from
sales of Registrable Notes or Exchange Notes, as the case may be, exceeds the
amount of any damages that such Participant has otherwise been required to pay
or has paid by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for
which an Indemnified Person is entitled to indemnification or contribution under
this Section 7 shall be paid by the Indemnifying Person to the Indemnified
Person as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company and the Guarantors set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Holder or any person who
controls a Holder, the Company or the Guarantors and their respective directors,
officers, employees or agents or any person controlling the Company or the
Guarantors, and (ii) any termination of this Agreement.
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(g) The indemnity and contribution agreements contained in
this Section 7 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
------------------
The Company and the Guarantors covenant and agree that, so
long as Registrable Notes remain outstanding, it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner in accordance
with the requirements of the Securities Act and the Exchange Act and, if at any
time the Company and the Guarantors are not permitted to file such reports, the
Company and the Guarantors will, upon the request of any Holder or beneficial
owner of Registrable Notes, make publicly available annual reports and such
information, documents and other reports of the type specified in Sections 13
and 15(d) of the Exchange Act. The Company and the Guarantors further covenant
for so long as any Registrable Notes remain outstanding, to make available to
any Holder or beneficial owner of Registrable Notes in connection with any sale
thereof and any prospective purchaser of such Registrable Notes from such Holder
or beneficial owner the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Registrable Notes pursuant to
Rule 144A.
9. Underwritten Registrations
--------------------------
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Company and the Guarantors and shall be reasonably acceptable
to the Holders of a majority in aggregate principal amount of such Registrable
Notes included in such offering.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
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<PAGE>
10. Miscellaneous
-------------
(a) No Inconsistent Agreements. As of the date hereof, the
Company and the Guarantors will not enter into any agreement with respect to any
of its securities that is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of any of
the Company's and the Guarantors' other issued and outstanding securities. As of
the date hereof, the Company and the Guarantors have not entered and the Company
and Guarantors will not enter into any agreement with respect to any of its
securities which will grant to any Person piggy-back registration rights with
respect to any Registration Statement required to be filed by the Company and
the Guarantors pursuant to this Agreement.
(b) Adjustments Affecting Registrable Notes. The Company and
the Guarantors shall not, directly or indirectly, take any action with respect
to the Registrable Notes as a class that would adversely affect the ability of
the Holders of Registrable Notes to include such Registrable Notes in a
registration undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, otherwise than with the
prior written consent of (I) the Company and the Guarantors and (II)(A) the
Holders of not less than a majority in aggregate principal amount of the then
outstanding Registrable Notes and (B) in circumstances that would adversely
affect the Participating Broker-Dealers, the Participating Broker-Dealers
holding not less than a majority in aggregate principal amount of the Exchange
Notes held by all Participating Broker-Dealers; provided, however, that Section
7 and this Section 10(c) may not be amended, modified or supplemented without
the prior written consent of each Holder and each Participating Broker-Dealer
(including any person who was a Holder or Participating Broker-Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are be-
33
<PAGE>
ing sold pursuant to a Registration Statement and that does not directly or
indirectly affect, impair, limit or compromise the rights of other Holders of
Registrable Notes may be given by Holders of at least a majority in aggregate
principal amount of the Registrable Notes being sold pursuant to such
Registration Statement.
(d) Notices. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or
Participating Broker-Dealer, as the case may be, set forth on the
records of the registrar under the Indenture, with a copy in like
manner to the Initial Purchaser as follows:
Jefferies & Company, Inc.
-------------------------
11100 Santa Monica Blvd.
------------------------
Los Angeles, CA 90025
----------------------
Facsimile No:
-------------
Attention: [ ]
-------------------------
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No: (212) 269-5420
Attention: William M. Hartnett, Esq.
(ii) if to the Initial Purchaser, at the address
specified in Section 10(d)(i);
(iii) if to the Company and the Guarantors, at the address as
follows:
c/o The Doe Run Resources Corporation
1801 Park 270 Drive, Suite 300
St. Louis, Missouri 63146
Facsimile No.: (314) 453-7178
Attention: Chief Financial Officer
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<PAGE>
with a copy to:
The Renco Group, Inc.
30 Rockefeller Plaza, Suite 4225
New York, New York 10112-4296
Facsimile No.: (212) 541-6197
Attention: Dennis A. Sadlowski, Esq.
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Facsimile No.: (212) 504-6666
Attention: Michael C. Ryan, Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely delivered to a next-day air courier; and upon receiving
confirmation of receipt by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address and in the manner specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto, the Holders and the Participating Broker-Dealers, provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Registrable Notes in violation of the terms of the Purchase Agreement or the
Indenture.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
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<PAGE>
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(i) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Company, Guarantors or their
Affiliates. Whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable Notes held by
the Company or the Guarantors or any of their affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(k) Third Party Beneficiaries. Holders of Registrable Notes
and Participating Broker-Dealers are intended third party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
36
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THE DOE RUN RESOURCES
CORPORATION,
By: /s/ Marvin K. Kaiser
----------------------------------
Name: Marvin K. Kaiser
Title: VP & CFO
FABRICATED PRODUCTS, INC.,
as a Guarantor
By: /s/ Marvin K. Kaiser
----------------------------------
Name: Marvin K. Kaiser
Title: Vice President
DOE RUN CAYMAN LTD.,
as a Guarantor
By: /s/ Marvin K. Kaiser
----------------------------------
Name: Marvin K. Kaiser
Title: Vice President
DOE RUN MINING S.R.L.,
as a Guarantor
By: /s/ Marvin K. Kaiser
----------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
DOE RUN PERU S.R.L.,
as a Guarantor
By: /s/ Marvin K. Kaiser
----------------------------------
Name: Marvin K. Kaiser
Title: Finance Manager
<PAGE>
DOE RUN AIR S.A.C.,
as a Guarantor
By: /s/ Marvin K. Kaiser
----------------------------------
Name: Marvin K. Kaiser
Title: Attorney-in-Fact
DOE RUN DEVELOPMENT S.A.C.,
as a Guarantor
By: /s/ Marvin K. Kaiser
----------------------------------
Name: Marvin K. Kaiser
Title: Attorney-in-Fact
JEFFERIES & COMPANY, INC.,
as Initial Purchaser
By:/s/Andrew R. Whittaker
----------------------------------
Name: Andrew R. Whittaker
Title: Executive Vice President
<PAGE>
Exhibit 10.1
AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT
---------------------------
AMENDMENT dated as of September 1, 1998 by and among The Doe Run Resources
Corporation, a New York corporation ("Doe Run") and Fabricated Products, Inc., a
Delaware corporation ("Fabricated Products" and together with Doe Run, each a
"Borrower" and collectively, "Borrowers") and Congress Financial Corporation, a
Delaware corporation, as successor by merger to Congress Financial Corporation,
a California corporation ("Lender").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Lender and Borrowers have entered into financing arrangements
pursuant to which Lender may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Loan and Security Agreement,
dated March 12, 1998, by and among Lender and Borrowers (as amended by this
Amendment and as the same may be further amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement") and the
agreements, documents and instruments at any time executed and/or delivered in
connection therewith or related thereto (collectively, together with the Loan
Agreement, the "Financing Agreements");
WHEREAS, Doe Run has entered into certain arrangements to purchase the
Missouri Lead Division of ASARCO Incorporated as set forth in the ASARCO
Purchase Agreements (as hereinafter defined);
WHEREAS, in connection with the acquisition by Doe Run of the Missouri Lead
Division of ASARCO Incorporated, Doe Run is issuing the Senior Secured Notes (as
hereinafter defined), the proceeds of which, together with the Loans (as that
term is defined in the Loan Agreement), are to be used to fund such acquisition,
and related transactions; and
WHEREAS, in connection with such acquisition and the issuance of the Senior
Secured Notes, Borrowers have requested certain amendments to the Loan Agreement
and Lender is willing to agree to such amendments, subject to the terms and
conditions contained herein;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
and covenants set forth herein, and for other good and valuable consideration,
the adequacy and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS.
1.1. ADDITIONAL DEFINITIONS. As used herein, the following terms shall
have the respective meanings given to them below and the Loan Agreement shall be
deemed and is
<PAGE>
hereby amended to include, in addition and not in limitation of, each of the
following definitions:
(a) "ASARCO PURCHASE AGREEMENTS" shall mean, individually and
collectively, the Asset Purchase and Sale Agreement, dated July 20, 1998, by and
between Seller and Doe Run, together with bills of sale, quitclaim deeds,
assignment and assumption agreements and such other instruments of transfer as
are referred to therein and all side letters with respect thereto, and all
agreements, documents and instruments executed and/or delivered in connection
therewith, as all of the foregoing now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced; PROVIDED, THAT,
the term "ASARCO Purchase Agreements" as such term is defined herein shall not
include any of the "Financing Agreements" as such term is defined herein.
(b) "ASARCO PURCHASED ASSETS" shall mean all of the assets and
properties acquired by Doe Run from Seller pursuant to the ASARCO Purchase
Agreements.
(c) "DOE RUN AIR" shall mean Doe Run Air S.A.C., a Peruvian
corporation, and its successors and assigns.
(d) "DOE RUN DEVELOPMENT" shall mean Doe Run Development S.A.C., a
Peruvian corporation, and its successors and assigns.
(e) "SECURED NOTE INITIAL PURCHASER" shall mean Jefferies & Company,
Inc. and its respective successors and assigns.
(f) "SELLER" shall mean ASARCO Incorporated, a New Jersey corporation,
and its successors and assigns.
(g) "SENIOR SECURED NOTE AGREEMENTS" shall mean, individually and
collectively, each and all of the following (as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced): (a) the Senior Secured Notes, (b) the Senior Secured Note Indenture,
(c) the Senior Secured Note Security Agreement, (d) the Purchase Agreement,
dated August 26, 1998, between the Secured Note Initial Purchaser, the Senior
Secured Note Guarantors and Doe Run with respect to the purchase from Doe Run of
all of the Senior Secured Notes, and (e) the Senior Secured Note Registration
Agreement.
(h) "SENIOR SECURED NOTE COLLATERAL" shall mean the ASARCO Purchased
Assets consisting of Real Property, Equipment and the related assets described
on Exhibit A hereto, and all products and proceeds thereof, PROVIDED, THAT, the
term "Senior Secured Note Collateral" shall not include any of the Accounts or
Inventory.
(i) "SENIOR SECURED NOTE GUARANTORS" shall mean, collectively,
Fabricated Products, Doe Run Cayman, Doe Run Mining, Doe Run Peru, Doe Run Air
and Doe Run Development.
(j) "SENIOR SECURED NOTE INDENTURE" shall mean the Indenture, dated as
of September 1, 1998, by and among Doe Run, the Senior Secured Note Guarantors
and the Senior Secured Note Trustee with respect to the Senior Secured Notes, as
the same now exists
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<PAGE>
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.
(k) "SENIOR SECURED NOTE REGISTRATION AGREEMENT" shall mean the
Registration Rights Agreement, dated as of September 1, 1998, by and among Doe
Run, the Senior Secured Note Guarantors and the Secured Note Initial Purchaser,
as the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(l) "SENIOR SECURED NOTES" shall mean, individually and collectively,
each and all of the following (as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced):
(i) the 11 1/4% Senior Secured Notes due 2005, Series A (the "Series A Secured
Notes") issued by Doe Run on September 1, 1998 and guaranteed by the Senior
Secured Note Guarantors pursuant to the Senior Secured Note Indenture in the
original principal amount of $50,000,000 and (ii) the 11 1/4% Senior Secured
Notes due 2005, Series B (the "Series B Secured Notes") to be issued by Doe Run
after the date hereof, guaranteed by the Senior Secured Note Guarantors which
have terms identical to the terms of the Series A Secured Notes and are offered
to the holders of the Series A Secured Notes pursuant to a registration
statement to be filed by Doe Run and the Senior Secured Note Guarantors with the
Securities and Exchange Commission in exchange for the Series A Secured Notes
held by such holder.
(m) "SENIOR SECURED NOTE SECURITY AGREEMENT" shall mean the Security
Agreement, dated as of September 1, 1998 made by Doe Run in favor of State
Street Bank and Trust Company, as collateral agent, as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(n) "SENIOR SECURED NOTE TRUSTEE" shall mean State Street Bank and
Trust Company, and its successors and assigns, and any replacement or other
trustee under the Senior Secured Note Indenture.
(o) "SUGAR CREEK ASSETS" shall mean the assets and properties of Doe
Run transferred by Doe Run to Seller pursuant to the ASARCO Purchase Agreements
as part of the consideration for the ASARCO Purchased Assets payable under the
ASARCO Purchase Agreements and as described on Exhibit B hereto.
1.2. INTERPRETATION. For purposes of this Amendment, unless otherwise
defined herein, all terms used herein, including, but not limited to, those
terms used and/or defined in the recitals hereto, shall have respective meanings
assigned thereto in the Loan Agreement.
2. CONSENTS. Subject to the terms and conditions contained herein, Lender
hereby consents to and waives the provisions in the Financing Agreements to the
extent such provisions prohibit or restrict the following: (a) the purchase by
Doe Run of the ASARCO Purchased Assets pursuant to the ASARCO Purchase
Agreements as in effect on the date hereof, PROVIDED, THAT, such purchase shall
be consummated and effective by no later than September 5, 1998,(b) the issuance
and sale by Doe Run of the Senior Secured Notes pursuant to the Senior Secured
Note Agreements as in effect on the date hereof, (c) the Indebtedness of Doe Run
evidenced by the Senior Secured Notes, (d) the grant by Doe Run to the Senior
Secured Note Trustee of a first priority security interest in and lien upon the
Senior Secured Note Collateral pursuant to the Senior Secured Note Security
Agreement as in
- 3 -
<PAGE>
effect on the date hereof to secure the Indebtedness of Doe Run evidenced by the
Senior Secured Notes (as in effect on the date hereof),(e) the guarantee by
Fabricated Products and the other Senior Secured Note Guarantors of the
Indebtedness of Doe Run evidenced by the Senior Secured Notes, (f) the
compliance with the provisions of Section 5.7 of the Loan Agreement regarding
prior notice of new locations of Collateral acquired by Doe Run pursuant to the
ASARCO Purchase Agreement, (g) the amendment of the Senior Note Indenture to
include Doe Run Air and Doe Run Development as guarantors of the Senior Secured
Notes and (h) the transfer by Doe Run to Seller of the Sugar Creek Assets as
part of the consideration payable by Doe Run to Seller for the ASARCO Purchased
Assets under the ASARCO Purchase Agreements.
3. AMENDMENTS.
3.1. INDEBTEDNESS.
(a) Section 6.3 of the Loan Agreement is hereby amended by deleting
only clause (bb) of Section 6.3(d)(ii)(2) and replacing it with the following:
"(bb) changes in control of Doe Run and certain of its affiliates
and"
(b) Section 6.3 of the Loan Agreement is hereby amended by adding a
new Section 6.3(m) as follows:
"(m) Indebtedness of Doe Run up to the principal amount of
$50,000,000 evidenced by the Senior Secured Notes as reduced by
payments of principal in respect thereof, plus interest thereon at the
rate provided for in the Senior Secured Notes as in effect on the date
of the issuance thereof; PROVIDED, THAT: (i) Doe Run shall only make
regularly scheduled payments of principal and interest or other
mandatory payments in respect of such Indebtedness in accordance with
the terms of the Senior Secured Notes as in effect on the date of the
issuance thereof, EXCEPT THAT Doe Run may prepay, in whole or in part,
the Senior Secured Notes as in effect on the date of the issuance
thereof, so long as (A) Borrowers provides Lender with two (2)
Business Days' prior written notice of the intention of Doe Run to
make any such prepayment, (B) as of the date of such prepayment and
after giving effect thereto, no Obligations (other than pursuant to
Letter of Credit Accommodations and the costs, expenses and other
charges relating thereto) shall be then outstanding, (C) as of the
date of such prepayment and after giving effect thereto, there shall
be Excess Availability of not less than $10,000,000, and (D) no Event
of Default, or act, condition or event which with notice or passage of
time or both would constitute an Event of Default, exists or has
occurred and is continuing, (ii) Doe Run shall not, directly or
indirectly, (A) amend, modify, alter or change the terms of the Senior
Secured Note Agreements or any agreements, documents or instruments
executed and/or delivered in connection therewith as in effect on the
original date of the execution and delivery thereof or (B) redeem,
retire, defease, purchase or otherwise deposit or invest any sums for
such purpose, EXCEPT for (1) prepayments permitted under Section
6.3(m)(i) above, (2) mandatory repurchases of Senior Secured Notes
required in accordance with the terms of the Senior Secured Note
Indenture (as in effect
- 4 -
<PAGE>
on the date of the execution and delivery thereof) in connection with
(aa) the sales of certain assets of Doe Run and its Subsidiaries (other
than the Collateral) and (bb) changes in control of Doe Run and certain of
its affiliates and (3) the exchange of the Senior Secured Notes consisting
of the Series A Secured Notes for the Series B Secured Notes, (iii) Doe Run
shall furnish to Lender copies of all notices, demands or other materials
either received from the Senior Secured Note Trustee or any of the holders
of the Senior Secured Notes, or on its or their behalf, promptly after
receipt thereof, or sent by Doe Run or any of its Affiliates, or on its or
their behalf, to the Senior Secured Note Trustee or any other
representative of the holders of the Senior Secured Notes, concurrently
with the sending thereof, as the case may be, and (iv) such Indebtedness
evidenced by the Senior Secured Notes is and shall at all times only be
secured by the Senior Secured Note Collateral;"
3.2. LIMITATION ON LIENS. Section 6.4 of the Loan Agreement is hereby
amended by adding a new Section 6.4(o) as follows:
"(o) the first priority security interests in, and mortgages and liens
upon, and the filing of financing statements covering, the Senior Secured
Note Collateral to secure the Indebtedness of Doe Run evidenced by the
Senior Secured Notes permitted under Section 6.3(m) hereof, PROVIDED, THAT,
Lender shall have received, in form and substance satisfactory to Lender,
an agreement from the Senior Secured Note Trustee permitting Lender to
enter and use the Equipment and Real Property and other assets and
properties of Doe Run subject to such security interests, mortgages and
liens permitted hereunder to exercise the rights and remedies of Lender
with respect to the Collateral;"
3.3. LOANS, INVESTMENTS, GUARANTEES. Section 6.5 of the Loan Agreement is
hereby amended by adding new Sections 6.5(p) and 6.5(q) as follows:
"(p) the guarantee by Fabricated Products and the other Secured
Note Guarantors of the Indebtedness of Doe Run evidenced by the Senior
Secured Notes to the extent such Indebtedness is permitted under
Section 6.3 hereof; and
(r) the purchase by Doe Run of the ASARCO Purchased Assets pursuant to
the ASARCO Purchase Agreements."
3.4. SCHEDULES. Schedules 5.3, 5.7, 5.8, 5.10, 5.14, 5.15, 5.21, 5.22 and
5.24 of the Loan Agreement are hereby supplemented by adding thereto the
material set forth on the Supplement to Schedules 5.3, 5.7, 5.8, 5.10, 5.14,
5.15, 5.21, 5.22 and 5.24 to this Amendment.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by each Borrower to Lender pursuant to the other Financing Agreements,
Borrowers hereby jointly and severally represent, warrant and covenant with and
to Lender as follows (which representations, warranties and covenants are
continuing and shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Financing Agreements):
- 5 -
<PAGE>
4.1. ACQUISITION OF ASARCO PURCHASED ASSETS.
(a) The ASARCO Purchase Agreements and the transactions contemplated
thereunder have been duly executed, delivered and performed in accordance with
their terms by the respective parties thereto in all respects, including the
fulfillment (not merely the waiver, except as have been disclosed to Lender and
consented to in writing by Lender) of all conditions precedent set forth therein
and after giving effect to the ASARCO Purchase Agreements, Doe Run has acquired
good and marketable title to the ASARCO Purchased Assets, free and clear of all
claims, liens, pledges and encumbrances of any kind, except for the security
interests in and mortgages and liens upon the Senior Secured Note Collateral to
the extent permitted under Section 6.4(o) of the Loan Agreement. All amounts
paid by Doe Run pursuant to the ASARCO Purchase Agreements have been paid with
the proceeds received by Doe Run from the issuance and sale of the Senior
Secured Notes, the existing cash balances of Doe Run, and the proceeds of the
Loans.
(b) All actions and proceedings required by the ASARCO Purchase
Agreements, applicable law or regulation have been taken and the transactions
contemplated thereunder have been duly and validly consummated. Borrowers have
received all necessary consents and approvals of third parties to the
transactions contemplated by the ASARCO Purchase Agreements.
(c) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the ASARCO Purchase Agreements and no governmental or
other action or proceeding has been threatened or commenced, seeking any
injunction, restraining order or other order which seeks to void or otherwise
modify the transactions described in the ASARCO Purchase Agreements.
(d) Borrowers have delivered, or caused to be delivered, to Lender
true, correct and complete copies of the ASARCO Purchase Agreements.
4.2. SENIOR SECURED NOTES.
(a) The Senior Secured Notes have been duly authorized, issued and
delivered by Doe Run and all agreements, documents and instruments related
thereto, including, but not limited to, the Senior Secured Note Indenture, have
been duly authorized, executed and delivered by Doe Run and the transactions
contemplated thereunder performed in accordance with their terms by the
respective parties thereto in all respects, including the fulfillment (not
merely the waiver, except as may have been disclosed to Lender and consented to
by Lender in writing) of all conditions precedent set forth therein. All
actions and proceedings contemplated by the Senior Secured Note Agreements, the
agreements, documents and instruments related thereto, applicable law or
regulation have been taken and the transactions required thereunder have been
duly and validly consummated. Neither the execution and delivery of the Senior
Secured Notes, any of the other Senior Secured Note Agreements or any of the
instruments and documents to be delivered pursuant thereto, nor the consummation
of the transactions therein contemplated, nor compliance with the provisions
therein contemplated, has violated or will violate any law or regulation or any
order or decree of any court or governmental instrumentality in any respect or
does or will conflict with or result in the breach of, or constitute a default
in any respect under, any indenture, mortgage, deed of trust, agreement or
instrument to which Borrowers are a party or may be bound (other than
- 6 -
<PAGE>
the Banco de Credito Agreements), or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property of Borrowers (except as
specifically contemplated hereunder or under the other Financing Agreements) or
violate any provision of the Certificate of Incorporation or By-Laws of
Borrowers.
(b) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the issuance of
the Senior Secured Notes and the transactions described therein and no
governmental or other action or proceeding has been threatened, to the knowledge
of the Borrowers, or commenced, seeking any injunction, restraining order or
other order which seeks to void or otherwise modify the issuance of the Senior
Secured Notes.
(c) Borrowers have delivered, or caused to be delivered, to Lender
true, correct and complete copies of the Senior Secured Note Agreements and all
other agreements, documents and instruments existing as of the date hereof
relating thereto.
(d) For purposes of this Section 4.2, the representations, warranties
and covenants contained herein shall not apply to the Series B Secured Notes
until such time as the Series B Secured Notes have been issued by Doe Run
pursuant to the Senior Secured Note Indenture.
4.3. NO DEFAULT. No Event of Default exists on the date of this Amendment
(after giving effect to the amendments to the Loan Agreement made by this
Amendment).
4.4. CORPORATE POWER AND AUTHORITY. This Amendment has been duly executed
and delivered by each Borrower and is in full force and effect as of the date
hereof, and the agreements and obligations of each Borrower contained herein
constitute legal, valid and binding obligations of each of Borrowers enforceable
against each of Borrowers in accordance with their respective terms.
4.5. USE OF PROCEEDS. All of the payments by Doe Run in connection with
the ASARCO Purchase Agreements and all other transaction fees and expenses
related thereto (other than the amendment fee hereunder, which fee shall be paid
using existing cash balances of Borrowers) shall be paid utilizing first the
proceeds of the Senior Secured Notes and existing cash balances of Doe Run, and,
therefore, to the extent necessary, proceeds of the Loans.
4.6. ADDITIONAL ITEMS TO BE DELIVERED. Each Borrower hereby agrees that,
in addition to all other terms, conditions and provisions set forth in the other
Financing Agreements, Borrowers shall deliver or cause to be delivered to
Lender, the following items, each in form and substance satisfactory to Lender,
as soon as possible, but in any event, by the date referred to below with
respect to each such item:
(a) on or before October 31, 1998, Collateral Access Agreements with
respect to any of the premises of Doe Run at locations acquired pursuant to the
ASARCO Purchase Agreements, in each case, duly executed and delivered by the
owner and lessor of such premises;
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<PAGE>
(b) on or before October 31, 1998, agreements in writing, from each
consignee, processor or other third party in possession of any Inventory or
other Collateral acquired pursuant to the ASARCO Purchase Agreements and
pursuant to which such consignee, processor or other third party acknowledges
the first priority lien of Lender on Inventory of Doe Run in the possession of
such consignee, processor or other third person, agrees to waive any and all
claims such person may at any time have against such Inventory, and agrees to
permit Lender access to, and the right to remain on, the premises of the
customer so as to exercise Lender's rights and remedies and otherwise deal with
the Collateral, in each case as duly authorized, executed and delivered by each
of such persons and Doe Run;
(c) on or before October, 31, 1998, UCC-1 financing statements between
Doe Run, as secured party/consignor and each person who has possession of any
Inventory or other assets of Doe Run (other than the Senior Secured Note
Collateral), as debtor/consignee, indicating Lender, as assignee, for filing in
the appropriate government recording offices, as determined by Lender, in each
case as duly authorized, executed and delivered by Doe Run and each of such
persons;
(d) on or before October 31, 1998, UCC, Federal and State tax lien and
judgment lien searches against Seller in the jurisdictions in which any of the
ASARCO Purchased Assets are located; and
(e) on or before October 31, 1998, UCC-1 financing statements between
Congress, as secured party and Doe Run, as debtor with respect to the Collateral
for filing in the appropriate
government recording offices, as determined by Lender, in each case as duly
authorized, executed and delivered by Doe Run.
5. CONDITIONS PRECEDENT. The effectiveness of the consents, waivers and
other terms and conditions contained herein shall be subject to the receipt by
Lender of each of the following, in form and substance satisfactory to Lender:
5.1. evidence that: (a) the Senior Secured Notes, the other Senior
Secured Note Agreements and all agreements, documents and instruments relating
thereto have been duly authorized, executed and delivered by the parties thereto
in accordance with their terms and (b) Doe Run has received from or on behalf of
the holders of the Senior Secured Notes cash or other immediately available
funds in the aggregate amount of approximately $50,000,000 (less underwriting
discounts and commissions and original issue discount thereof) constituting the
proceeds of the Senior Secured Notes;
5.2. evidence that the ASARCO Purchase Agreements have been duly executed
and delivered by and to the appropriate parties thereto and the transactions
contemplated under the terms of the ASARCO Purchase Agreements have been
consummated prior to or contemporaneously with the execution of this Amendment;
5.3. evidence that first the proceeds of the Senior Secured Notes and
existing cash balances of Doe Run and thereafter, to the extent necessary, the
proceeds of the Loans have been used by Doe Run to make payments under the
ASARCO Purchase Agreements, or in connection with the transactions contemplated
thereunder;
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<PAGE>
5.4. the intercreditor agreement between the Senior Secured Note Trustee on
behalf of the holders of the Senior Secured Notes and Lender, duly authorized,
executed and delivered by the Senior Secured Note Trustee and Borrowers;
5.5. the opinion letters of counsel to Borrowers with respect to the Senior
Secured Note Agreements and the ASARCO Purchase Agreements and the opinion
letter of counsel to Seller with respect to the ASARCO Purchase Agreements, upon
which Lender is permitted to rely, and such other matters as Lender may request;
and
5.6. an original of this Amendment, duly authorized, executed and delivered
by Borrowers.
6. ADDITIONAL EVENTS OF DEFAULT. The parties hereto acknowledge, confirm
and agree that the failure of Borrowers to comply with the covenants, conditions
and agreements contained herein shall constitute an Event of Default under the
Financing Agreements (subject to the applicable cure period, if any, with
respect thereto provided for in the Loan Agreement as in effect on the date
hereof).
7. EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto, no other
waivers, changes or modifications to the Financing Agreements are intended or
implied, and in all other respects, the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent of conflict between the terms of this
Amendment and the other Financing Agreements, the terms of this Amendment shall
control.
8. FURTHER ASSURANCES. The parties hereto shall execute and deliver such
additional documents and take such additional actions as may be necessary to
effectuate the provisions and purposes of this Amendment.
9. GOVERNING LAW. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
10. BINDING EFFECT. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns. Any acknowledgment or consent contained herein shall not be construed
to constitute a consent to any other or further action by Borrowers or to
entitle Borrowers to any other consent. The Loan Agreement and this Amendment
shall be read and construed as one agreement.
11. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties thereto.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the day and year
first above written.
Very truly yours,
THE DOE RUN RESOURCES CORPORATION
By: /s/ Marvin K. Kaiser
------------------------------
Title: Vice President - CFO
---------------------------
FABRICATED PRODUCTS, INC.
By: /s/ Marvin K. Kaiser
------------------------------
Title: Vice President - Finance
---------------------------
ACCEPTED AND AGREED:
CONGRESS FINANCIAL CORPORATION
By: /s/ Herbert Korn
------------------------------
Title: Assistant Vice President
---------------------------
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<PAGE>
Exhibit 10.2
SECURITY AGREEMENT
This SECURITY AGREEMENT (the "Agreement"), dated as of September 1, 1998,
made by the DOE RUN RESOURCES CORPORATION, a New York corporation, having an
office at 1801 Park 270 Drive, St Louis, Missouri 63146 (the "Pledgor"), in
favor of STATE STREET BANK AND TRUST COMPANY, having an office at Goodwin
Square, 225 Asylum, 23rd Floor, Hartford, Connecticut 06103, Attention:
Corporate Trust Administration, as trustee and collateral agent (in such
capacity and together with any successors in such capacity, the "Collateral
Agent") pursuant to the Indenture (as hereinafter defined).
R E C I T A L S:
A. Pledgor and Collateral Agent, as trustee, have entered into a certain
indenture (as amended from time to time, the "Indenture"; capitalized terms
used herein and not defined shall have the meaning assigned to them in the
Indenture), dated as of the date hereof, pursuant to which Pledgor has issued
11 1/4% Senior Secured Notes due 2005, Series A and, may issue, in exchange
therefore, on a dollar for dollar basis, 11 1/4% Senior Secured Notes due
2005, Series B (collectively, the "Notes") in the aggregate principal amount
of $50,000,000.
B. Pledgor is the owner of the Pledged Collateral (as hereinafter
defined).
C. Pledgor is executing and delivering this Agreement to grant to the
Collateral Agent for its benefit and the benefit of the Holders (collectively,
the "Secured Parties") liens of the character and priority contemplated
herein on the Pledged Collateral to secure the payment and performance of
Secured Obligations (as defined in Section 2).
A G R E E M E N T:
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Collateral Agent hereby agree as follows:
Section 1. Pledge. As collateral security for the payment and performance
when due of all the Secured Obligations, Pledgor hereby pledges, assigns,
transfers and grants to Collateral Agent for its benefit and the benefit of
the Secured Parties, a continuing security interest in and to all of the
right, title and interest of Pledgor in, to and under the following property,
whether now owned or hereafter acquired
<PAGE>
(collectively, the "Pledged Collateral"), securing the obligations of Pledgor
in respect of the Notes:
(a) all machinery, apparatus, equipment, fittings, fixtures, improvements
and articles of personal property of every kind and nature identified on
Schedule A hereto, including, without limitation, manufacturing equipment,
storage and handling equipment, automotive equipment, rolling stock,
overhead cranes, warehouses, tools, utility systems, fire sprinkler and
alarm systems, HVAC equipment, boiler, electronic monitoring, water or
lighting systems, power, sanitation, waste removal, window cleaning,
maintenance or other systems or equipment, all indoor or outdoor furniture,
appliances or supplies used or useful in connection with the use, operation,
maintenance or repair of any part of the premises located at the locations,
all of the foregoing as identified on Schedule A, all modifications,
alterations, repairs, additions and accessions thereto and parts therefor,
and all Proceeds (as defined under the Uniform Commercial Code as in effect
in any relevant jurisdiction, the "Code") constituting replacements and
substitutions therefor up to an amount not in excess of the fair market
value of such Equipment being substituted or replaced (collectively, the
"Equipment"); and
(b) all funds from time to time on deposit in the Collateral Account;
all investments of such funds and all certificates and instruments from time
to time representing or evidencing such investments; all notes, certificates
of deposit, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by Collateral Agent for or on behalf
of Pledgor in substitution for or in addition to any or all of the Pledged
Collateral described above; and all interest, dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the items
described above;
(c) all Proceeds of any of the foregoing, and in any event, including,
without limitation, any and all (i) proceeds of any insurance (except
proceeds of business interruption insurance or payments made to a Person
that is not a party to this Agreement), indemnity, warranty or guarantee
payable to Collateral Agent or to Pledgor from time to time with respect
to any of the Pledged Collateral, (ii) payments (in any
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form whatsoever) made or due and payable to Pledgor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Pledged Collateral by any governmental
authority (or any person acting under color of a governmental authority),
(iii) products of the Pledged Collateral and (iv) other amounts from time
to time paid or payable under or in connection with any of the Pledged
Collateral.
Notwithstanding the foregoing, the Pledged Collateral shall not include
(i) "Collateral" as defined in the U.S. Revolving Credit Agreement as in
effect on the Issue Date and whether or not such U.S. Revolving Credit
Agreement remains in effect, (ii) Excluded Assets or (iii) items of personal
property hereafter acquired by Mortgagor in accordance with Section 4.12 of
the Indenture for so long as such items of personal property are subject to
any Capitalized Lease Obligation, Lien or security interest; provided that
upon the release of any Capitalized Lease Obligation, Lien or security
interest affecting any such item of personal property, such item of personal
property shall constitute Pledged Collateral hereunder.
Section 2. Secured Obligations. This Agreement secures, and the Pledged
Collateral is collateral security for, the payment and performance in full
when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, the payment of interest and other amounts
which would accrue and become due but for the filing of a petition in
bankruptcy or the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. Section 362(a)), of (i) all Obligations of
Pledgor now existing or hereafter arising under or in respect of the
Indenture and the Notes (including, without limitation, Pledgor's obligations
to pay principal of, premium if any, and interest on the Notes), (ii) all
Obligations of Pledgor now existing or hereafter arising under or in respect
of this Agreement and other Collateral Documents and (iii) all interest,
charges, fees, costs, expenses, reimbursements, premiums, indemnities or
other payments of any kind or nature which are owed in respect of amounts or
instruments referred to in any of clauses (i) and (ii) above (the obligations
described in clauses (i) through (iii), collectively, the "Secured
Obligations").
Section 3. No Release. Nothing set forth in this Agreement shall relieve
Pledgor from the performance of any term, covenant, condition or agreement on
Pledgor's part to be performed or observed under or in respect of any of the
Pledged Collateral or from any liability to any Person under or in respect of
any of the Pledged Collateral or shall impose any ob-
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ligation on Collateral Agent or any Secured Party to perform or observe any
such term, covenant, condition or agreement on Pledgor's part to be so
performed or observed or shall impose any liability on Collateral Agent or
any Secured Party for any act or omission on the part of Pledgor relating
thereto or for any breach of any representation or warranty on the part of
Pledgor contained in this Agreement, or under or in respect of the Pledged
Collateral or made in connection herewith or therewith. The obligations of
Pledgor contained in this Section 3 shall survive the termination of this
Agreement and the discharge of Pledgor's other obligations under this
Agreement.
Section 4. Supplements; Further Assurances.
(a) Pledgor agrees that it will execute and, at its sole cost and expense,
file and refile, and permit Collateral Agent to file and refile, such
financing statements, continuation statements and other documents (including,
without limitation, this Agreement), in such offices as Collateral Agent
may reasonably request, wherever required or permitted by law in order to
perfect and preserve the rights and interests granted to Collateral Agent
hereunder.
(b) Pledgor hereby authorizes Collateral Agent to file financing
statements, continuation statements and other documents relative to all or
any part thereof, without the signature of Pledgor where permitted by law,
and Pledgor agrees to do such further acts and things, and to execute and
deliver to Collateral Agent such additional assignments, agreements, powers
and instruments, as Collateral Agent may reasonably request to carry into
effect the purposes of this Agreement or better to assure and confirm unto
Collateral Agent its respective rights, powers and remedies hereunder.
Pledgor shall, upon the request of Collateral Agent, and hereby authorizes
Collateral Agent to, take any and all such actions as Collateral Agent may
reasonably request to perfect and preserve the rights and interests granted
to Collateral Agent with respect to the Pledged Collateral wherever located.
All of the foregoing shall be at the sole cost and expense of Pledgor.
Section 5. Representations, Warranties and Covenants. Pledgor represents,
warrants and covenants as follows:
(a) Necessary Filings. All filings, registrations and recordings
necessary, appropriate or requested by Collateral Agent to create,
preserve, protect and perfect the security interest granted by Pledgor to
Collateral Agent hereby in respect of the Pledged Collateral have been
accomplished (except to the extent that separate filings are required under
motor vehicle lien laws). The security
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<PAGE>
interest granted to Collateral Agent for the benefit of the Secured Parties
pursuant to this Agreement in and to the Pledged Collateral constitutes
and hereafter will constitute a first priority perfected Lien, pledge and
security interest therein, superior and prior to the rights of all other
Persons therein and subject to no other Liens.
(b) No Liens. Pledgor is as of the date hereof, and, as to Pledged
Collateral acquired by it from time to time after the date hereof, Pledgor
will be, the owner of all Pledged Collateral free from any Lien or other
right, title or interest of any Person other than the Lien and security
interest granted by Pledgor to Collateral Agent pursuant to this Agreement
and Pledgor shall defend the Pledged Collateral against all claims and
demands of all Persons at any time claiming any interest therein adverse
to Collateral Agent or any Secured Party.
(c) Other Financing Statements. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in
the Pledged Collateral and so long as any of the Secured Obligations
remain unpaid, Pledgor shall not execute or authorize to be filed in any
public office any financing statement (or similar statement or instrument
of registration under the law of any jurisdiction) or statements relating
to the Pledged Collateral, except financing statements filed or to be
filed in respect of and covering the security interest granted by Pledgor
to Collateral Agent pursuant to this Agreement and the other Collateral
Documents.
(d) Chief Executive Office; Records. The chief executive office of
Pledgor is located at 1801 Park 270 Drive, St. Louis, Missouri 63146.
Pledgor shall not move its chief executive office, except to such new
location as Pledgor may establish in accordance with the last sentence of
this Section 5(d). Pledgor shall not establish a new location for its
chief executive office nor shall it change its name until (i) it shall
have given Collateral Agent not less than 30 days' prior written notice of
its intention so to do, clearly describing such new location or name and
providing such other information in connection therewith as Collateral
Agent may reasonably request, and (ii) with respect to such new location
or name, Pledgor shall have taken all action reasonably necessary to
maintain the perfection and proof of the security interest of Collateral
Agent for the benefit of the Secured Parties in the Pledged Collateral
intended to be granted hereby, in-
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<PAGE>
cluding, without limitation, using best efforts to obtain waivers of
landlord's or warehouseman's liens with respect to such new location.
(e) Location of Equipment. All Equipment held on the date hereof by
Pledgor is located at one of the locations shown on Schedule A hereto. All
Equipment now held or subsequently acquired in substitution or replacement
therefor shall be kept at one of the locations shown on Schedule A hereto, or
such new location as Pledgor may establish if (i) it shall have given to
Collateral Agent at least 30 days' prior written notice of its intention so
to do, clearly describing such new location and providing such other
information in connection therewith as Collateral Agent may reasonably
request, and (ii) with respect to such new location, Pledgor shall have taken
all action necessary to maintain the perfection and proof of the security
interest of Collateral Agent for the benefit of the Secured Parties in the
Pledge Collateral intended to be granted hereby, including, without
limitation, using best efforts to obtain waivers of landlord's or
warehouseman's liens with respect to such new location.
(f) Authorization, Enforceability. Pledgor has full corporate power,
authority and legal right to pledge and grant the security interest in all
the Pledged Collateral pursuant to this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Pledgor, enforceable
against Pledgor in accordance with its terms.
(g) No Consents, etc. No consent of any party, other than the lender
under the U.S. Revolving Credit Facility (including, without limitation,
stockholders or creditors of Pledgor), and no consent, authorization,
approval, or other action by, and no notice to or filing with, any
Governmental Authority or regulatory body or other Person is required either
(x) for the pledge by Pledgor of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement by
Pledgor, or (y) for the exercise by Collateral Agent of the rights provided
for in this Agreement, or (z) for the exercise by Collateral Agent of the
remedies in respect of the Pledged Collateral pursuant to this Agreement.
(h) Pledged Collateral. All information set forth herein relating to
the Pledged Collateral is accurate and complete in all respects.
Section 6. Provisions Concerning Pledged Collateral.
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(a) Protection of Collateral Agent's Security.
Pledgor shall not take any action that impairs the rights of Collateral Agent
or any Secured Party in the Pledged Collateral. Pledgor shall at all times
keep the Equipment insured in favor of Collateral Agent, at Pledgor's own
expense, to Collateral Agent's reasonable satisfaction against fire, theft
and all other risks to which the Pledged Collateral may be subject, in such
amounts and with such deductibles as would be maintained by operators of
businesses similar to the business of Pledgor or as Collateral Agent may
otherwise require. Pledgor may self-insure in reasonable amounts. Each policy
or certificate with respect to such insurance shall be endorsed for the
benefit of Collateral Agent (including, without limitation, by naming
Collateral Agent as an additional named insured and/or loss payee, as
applicable, as Collateral Agent may request) and such policy or certificate
shall be delivered to Collateral Agent. Each such policy shall state that it
cannot be canceled without 30 days' prior written notice to Collateral Agent.
At least 30 days prior to the expiration of any such policy of insurance,
Pledgor shall deliver to Collateral Agent an extension or renewal policy or
an insurance certificate evidencing renewal or extension of such policy. If
Pledgor shall fail to insure such Pledged Collateral or if Pledgor shall fail
to so endorse and deposit, or to extend or renew, all such insurance policies
or certificates with respect thereto, Collateral Agent shall have the right
(but shall be under no obligation) to advance funds to procure or renew or
extend such insurance and Pledgor agrees to reimburse Collateral Agent for
all costs and expenses thereof, with interest on all such funds from the date
advanced at the highest rate then in effect under the Indenture.
(b) Pledgor acknowledges that any proceeds of insurance in respect of the
Pledged Collateral are hereby assigned to Collateral Agent. In case of any
loss or damage to any of the Pledged Collateral, all proceeds of insurance
maintained by Pledgor shall be paid to Collateral Agent as Trust Moneys
pursuant to Article 11 of the Indenture and shall be subject to retention and
disbursement by Collateral Agent in accordance with the terms of the
Indenture.
(c) Maintenance of Equipment. Pledgor shall cause the Equipment to be
maintained and preserved in the same condition, repair and working order as
when new, ordinary wear and tear excepted, and to the extent consistent with
current business practice in accordance with any manufacturer's manual, and
shall forthwith, or in the case of any loss or damage which (individually or
in the aggregate) exceeds $100,000 to any of the Equipment (of which prompt
notice shall be given to Collateral Agent) as quickly as practicable after
the occurrence
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<PAGE>
thereof, make or cause to be made all repairs, replacements and other
improvements in connection therewith which are necessary or desirable to such
end.
(d) Payment of Taxes; Claims. Pledgor shall pay promptly when due all
property and other taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for labor, materials and
supplies) against, the Pledged Collateral. Notwithstanding the foregoing,
Pledgor may at its own expense contest the amount or applicability of any
such taxes, assessments, governmental charges or levies by appropriate legal
proceedings; provided, that (i) any such contest shall be conducted in good
faith by appropriate proceedings promptly instituted and diligently conducted
and (ii) in connection with such contest, Pledgor shall have made provision
for the payment of such contested amount on Pledgor's books if and to the
extent required by generally accepted accounting principles then used by
Pledgor in the preparation of its financial statements or deposited with
Collateral Agent a sum sufficient to pay and discharge such obligation and
Collateral Agent's estimate of all interest and penalties related thereto.
(e) Further Actions. Pledgor shall, at its sole cost and expense, make,
execute, endorse, acknowledge, file and/or deliver to Collateral Agent from
time to time such lists, descriptions and designations of the Pledged
Collateral, copies of warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, supplements, additional security agreements,
conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Pledged Collateral and other property or
rights covered by the security interest hereby granted, which is appropriate
or advisable to exercise and enforce its rights and remedies hereunder with
respect to any Pledged Collateral and to perfect, preserve or protect the
security interest in the Pledged Collateral created by this Agreement.
(f) Financing Statements. Pledgor shall sign and deliver to collateral
Agent such financing and continuation statements, in form acceptable to
Collateral Agent, as may from time to time be required to continue and
maintain a valid, enforceable, security interest in the Pledged Collateral
having the priority provided herein and the other rights, as against third
parties, provided hereby, all in accordance with the Code or any other
relevant law. Pledgor shall pay any applicable filing fees and other expenses
related to the filing of such financing and continuation statements. Pledgor
authorizes Collateral
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Agent to file any such financing or continuation statements without the
signature of Pledgor where permitted by law.
Section 7. Transfers and Other Liens. Except in accordance with the
Indenture, Pledgor shall not (i) sell, convey, assign or otherwise dispose
of, or grant any option with respect to, any of the Pledged Collateral or (ii)
create or permit to exist any Lien upon or with respect to any of the Pledged
Collateral other than the Lien and security interest granted to Collateral
Agent under this Agreement.
Section 8. Reasonable Care. Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equivalent to that which Collateral Agent, in its individual
capacity, accords its own property, it being understood that Collateral Agent
shall not have responsibility for taking any necessary steps to preserve
rights against any Person with respect to any Pledged Collateral.
Section 9. Remedies Upon Default; Obtaining the Pledged Collateral Upon
Event of Default. (a) If an Event of Default shall have occurred and be
continuing, then and in every such case, Collateral Agent shall, in
accordance with the terms of and at the times specified in the Indenture:
(i) Personally, or by agents or attorneys, immediately take
possession of the Pledged Collateral or any part thereof, from Pledgor or
any other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon Pledgor's
premises where any of the Pledged Collateral is located and remove such
Pledged Collateral and use in connection with such removal any and all
services, supplies, aids and other facilities of Pledgor.
(ii) Sell, assign or otherwise liquidate, or direct Pledgor to sell,
assign or otherwise liquidate, any or all investments made in whole or in
part with the Pledged Collateral or any part thereof, and take possession
of the proceeds of any such sale, assignment or liquidation.
(iii) Take possession of the Pledged Collateral or any part thereof,
by directing Pledgor in writing to deliver the same to Collateral Agent at
any place or places designated by Collateral Agent and reasonably convenient
to Pledgor and Collateral Agent, in which event Pledgor shall at its own
expense: (a) forthwith cause the same to
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be moved to the place or places so designated by Collateral Agent and
there to be delivered to Collateral Agent; (b) store and keep any Pledged
Collateral so delivered to Collateral Agent at such place or places pending
further action by Collateral Agent; and (c) while the Pledged Collateral
shall be so stored and kept, provide such guards and maintenance services as
shall be necessary to protect the same and to preserve and maintain them in
good condition. Pledgor's obligation to deliver the Pledged Collateral is of
the essence of this Agreement. Upon application to a court of equity having
jurisdiction, Collateral Agent shall be entitled to a decree requiring
specific performance by Pledgor of such obligation.
(b) Remedies; Disposition of the Pledged Collateral.
(i) during the continuance of an Event of Default, Collateral Agent
may, in accordance with the terms of and at the times specified in the
Indenture, from time to time exercise in respect of the Pledged Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party under the
Code at the time of an event of default, and Collateral Agent may also,
without notice except as specified below, sell the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as Collateral Agent may deem commercially
reasonable.
(ii) the Collateral Agent, any Secured Party or any of their respective
Affiliates may be the purchaser of any or all of the Pledged Collateral at
any such sale and shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold at such sale, to use and apply any of the Secured
Obligations owed to such Person as a credit on account of the purchase price
of any Pledged Collateral payable by such Person at such sale. Each purchaser
at any such sale shall acquire the property sold absolutely free from any
claim or right on the part of Pledgor, and Pledgor hereby waives, to the
fullest extent permitted by law, all rights of redemption, stay or appraisal
hereafter enacted. Collateral Agent shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given.
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor,
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and such sale may, without further notice, be made at the time and place
to which it was so adjourned. Pledgor hereby waives, to the fullest
extent permitted by law, any claims against Collateral Agent arising by
reason of the fact that the price at which any Pledged Collateral may
have been sold at such a private sale was less than the price which might
have been obtained at a public sale, even if Collateral Agent accepts the
first offer received and does not offer such Pledged Collateral to more
than one offeree.
(iii) Pledgor agrees that, to the extent notice of sale shall be
required by law, 10 days' notice from Collateral Agent of the time and
place of any public sale or of the time after which a private sale or
other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to
Pledgor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or
other intended disposition. In addition to the rights and remedies
provided in this Agreement, the Indenture and the other Collateral
Documents, Collateral Agent shall have all the rights and remedies of a
secured party under the Code.
(c) Waiver of Notice and Claims. Except as otherwise provided herein,
Pledgor hereby waives, to the fullest extent permitted by applicable law,
notice or judicial hearing in connection with Collateral Agent's taking
possession or Collateral Agent's disposition of any of the Pledged
Collateral, including, without limitation, any and all prior notice and
hearing for any prejudgment remedy or remedies and any such right which
Pledgor would otherwise have under law, and Pledgor hereby further waives, to
the fullest extent permitted by applicable law: (i) all damages occasioned by
such taking of possession; (ii) all other requirements as to the time, place
and terms of sale or other requirements with respect to the enforcement of
Collateral Agent's rights hereunder; and (iii) all rights of redemption,
appraisal, valuation, stay, extension or moratorium now or hereafter in force
under any applicable law. Any sale of, or the grant of options to purchase,
or any other realization upon, any Pledged Collateral shall operate to divest
all right, title, interest, claim and demand, either at law or in equity, of
Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against Pledgor and against any and all Persons claiming or attempting
to claim the Pledged Collateral so sold, optioned or realized upon, or any
part thereof, from, through or under Pledgor.
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(d) Certain Sales of Pledged Collateral. Pledgor recognizes that, by
reason of certain prohibitions contained in law, rules, regulations or orders
of any Governmental Authority, Collateral Agent may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to limit
purchasers to those who meet the requirements of such Governmental Authority.
Pledgor acknowledges that any such sales may be at prices and on terms less
favorable to Collateral Agent than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agrees
that any such restricted sale shall be deemed to have been made in a
commercially reasonable manner.
(e) Exercise of Remedies. Notwithstanding any other provision of this
Agreement to the contrary, Collateral Agent shall exercise, or shall refrain
from exercising, any remedy provided for in this Section 9 in accordance with
the terms of and at the times specified in the Indenture.
(f) Unsatisfied Obligations. Notwithstanding any other provision of this
Agreement to the contrary, if, after giving effect to any sale, transfer or
other disposition of any or all of the Pledged Collateral pursuant hereto and
after the application of the proceeds hereunder to the Secured Obligations,
if any Secured Obligations remain unpaid or unsatisfied, Pledgor shall remain
liable for the unpaid and unsatisfied amount of such Secured Obligations.
Section 10. Application of Proceeds. The proceeds received by Collateral
Agent in respect of any sale of, collection from or other realization upon
all or any part of the Pledged Collateral pursuant to the exercise by
Collateral Agent of its remedies as a secured creditor as provided in Section
9 hereof shall be applied, together with any other sums then held by
Collateral Agent pursuant to this Agreement, promptly by Collateral Agent in
accordance with the terms of the Indenture and the Intercreditor Agreement.
Section 11. Expenses. Pledgor will upon demand pay, without limitation,
to Collateral Agent the amount of any and all reasonable expenses, including
the fees and expenses of its counsel and the allocated costs of Collateral
Agent's internal counsel and the fees and expenses of any experts and agents
which Collateral Agent may incur in connection with (i) the collection of
the Secured Obligations, (ii) the enforcement and administration of this
Agreement, (iii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Pledged Collateral, (iv) the
exercise or enforcement of any of the rights of Collateral Agent or any
Secured Party hereunder or (v) the failure by Pledgor to perform
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or observe any of the provisions hereof. All amounts payable by Pledgor under
this Section 11 shall be due upon demand and shall be part of the Secured
Obligations. Pledgor's obligations under this Section 11 shall survive the
termination of this Agreement and the discharge of Pledgor's other
obligations hereunder.
Section 12. No Waiver; Cumulative Remedies.
(a) No failure on the part of Collateral Agent to exercise, no course of
dealing with respect to, and no delay on the part of Collateral Agent in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise thereof or the excise
of any other right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law.
(b) In the event Collateral Agent shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to
Collateral Agent, then and in every such case, Pledgor, Collateral Agent and
each holder of any of the Secured Obligations shall be restored to their
respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights, remedies and powers of Collateral Agent and the
Secured Parties shall continue as if no such proceeding had been instituted.
Section 13. Collateral Agent. Collateral Agent has been appointed as
collateral agent pursuant to the Indenture. The actions of Collateral Agent
hereunder are subject to the provisions of the Indenture. Collateral Agent
shall have the right hereunder to make demands, to give notices, to exercise
or refrain from exercising any rights, and to take or refrain from taking
action (including, without limitation, the release or substitution of Pledged
Collateral), in accordance with the Indenture. Collateral Agent may resign
and a successor Collateral Agent may be appointed in the manner provided in
the Indenture. Upon the acceptance of any appointment as Collateral Agent by
a successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Collateral Agent under this Agreement, and the
retiring Collateral Agent shall thereupon be discharged from its duties and
obligations under this Agreement. After any retiring Collateral Agent's
resignation, the provisions of this Agreement
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shall inure to its benefit as to any actions taken or omitted to be taken by
it under this Agreement while it was Collateral Agent.
Section 14. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact. If Pledgor shall fail to do any act or thing that it has
covenanted to do hereunder or if any warranty on the part of Pledgor
contained herein shall be breached, Collateral Agent or any Secured Party may
(but shall not be obligated to) do the same or cause it to be done or remedy
any such breach, and may expend funds for such purpose. Any and all amounts
so expended by Collateral Agent or such Secured party shall be paid by
Pledgor promptly upon demand therefor, with interest at the highest rate then
in effect under the Indenture during the period from the including the date
on which such funds were so expended to the date of repayment. Pledgor's
obligations under this Section 14 shall survive the termination of this
Agreement and the discharge of Pledgor's other obligations under this
Agreement. Pledgor hereby appoints Collateral Agent its attorney-in-fact with
an interest, with full authority in the place and stead of Pledgor and in the
name of Pledgor, or otherwise, from time to time in Collateral Agent's
discretion to take any action and to execute any instrument consistent with
the terms of this Agreement which the Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Agreement. The foregoing grant
of authority is a power of attorney coupled with an interest and such
appointment shall be irrevocable for the term of this Agreement. Pledgor
hereby ratifies all that such attorney shall lawfully do or cause to be done
by virtue hereof.
Section 15. Indemnity.
(a) Indemnity. Pledgor agrees to indemnify, pay and hold harmless
Collateral Agent and the officers, directors, employees, agents and
affiliates of Collateral Agent (collectively called the "Indemnitees") from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs (including, without limitation,
settlement costs), expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of
counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Indemnitee shall be designated a party thereto), which may be imposed
on, incurred by, or asserted against that Indemnitee, in any manner relating
to or arising our of this Agreement, the Indenture or the Notes (including,
without limitations, any misrepresentation by Pledgor in this Agreement, the
Indenture or the Notes) (the "indemnified liabilities"); provided
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<PAGE>
that pledgor shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities if it has been determined by a final
decision (after all appeals and the expiration of time to appeal) by a court
of competent jurisdiction that such indemnified liability arose from the
negligence or bad faith of that Indemnitee. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, Pledgor shall contribute the maximum portion which it is permitted to
pay and satisfy under applicable law, to the payment and satisfaction of all
indemnified liabilities incurred by the Indemnitees or any of them.
Collateral Agent shall give Pledgor prompt notice of the assertion of any
alleged indemnified liabilities and allow Pledgor to assist in defending same.
The Collateral Agent shall also have all the rights, benefits, immunities
and indemnities as described in the last paragraph of Section 7.07 of the
Indenture.
(b) Survival. The obligations of Pledgor contained in this section 15
shall survive the termination of this Agreement and the discharge of
Pledgor's other obligations under this agreement.
(c) Reimbursement. Any amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Pledged Collateral.
Section 16. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision of this Agreement,
nor consent to any departure by Pledgor therefrom, shall be effective unless
the same shall be done in accordance with the terms of the Indenture and
unless the same shall be in writing and signed by Collateral Agent. Any
amendment, modification or supplement of or to any provision of this
Agreement, any waiver of any provision of this Agreement, and any consent to
any departure by Pledgor from the terms of any provision of this Agreement,
shall be effective only in the specific instance and for the specific purpose
for which made or given. Except where notice is specifically required by this
Agreement, no notice to or demand on Pledgor in any case shall entitle
Pledgor to any other or further notice or demand in similar or other
circumstances.
Section 17. Termination; Release. (a) Except as otherwise provided in
Sections 3, 11, 12(b) and 15, this Agreement shall terminate upon compliance
by Pledgor with all of the conditions precedent set forth in Article 8 of the
Indenture
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<PAGE>
for satisfaction and discharge of the Indenture. Upon termination of this
Agreement or any release of Pledged Collateral in accordance with the
provisions of the Indenture, Collateral Agent shall, upon the request and at
the sole cost and expense of Pledgor, forthwith assign, transfer and deliver
to Pledgor, against receipt and without recourse to or warranty by Collateral
Agent, such of the Pledged Collateral to be released (in the case of a
release) as may be in possession of Collateral Agent and as shall not have
been sold or otherwise applied pursuant to the terms hereof, on the order of
and at the sole cost and expense of Pledgor, and proper instruments
(including Uniform Commercial Code termination statements on Form UCC-3)
acknowledging the termination of this Agreement or the release of such
Pledged Collateral, as the case may be.
(b) In the event that any Asset Sale made by a Pledgor in accordance
with Section 4.16 of the Indenture involves the sale of an asset which
constitutes Pledged Collateral, Pledgor shall deliver all Net Cash Proceeds
received in respect of such item of Pledged Collateral to Collateral Agent to
be held by Collateral Agent as Trust Moneys pursuant to the Indenture until
such time as such Net Cash Proceeds are applied to an Asset Sale Offer or
invested in a Related Business Investment in accordance with Article 11 of
the Indenture.`
Section 18. Notices. Unless otherwise provided herein, any notice or
other communication herein required or permitted to be given shall be given
in the manner set forth in the Indenture, if to Pledgor, addressed to it at
the address set forth in the Indenture, if to Collateral Agent, addressed to
it at the address set forth on the signature page of this Agreement, or as to
any any party at such other address as shall be designated by such party in a
written notice to the other party complying as to delivery with the terms of
this Section 18. All such notices and other communications shall be deemed
to have been given when delivered in person, or received by telecopy or
telex; or 1 Business Day after delivery to the office of an overnight courier
service; or 4 Business Days after deposit in the United States mail,
registered or certified, with postage prepaid and properly addressed;
provided that notices to Collateral Agent shall not be effective until
received by Collateral Agent.
Section 19. Continuing Security Interest; Assignment. This Agreement
shall create continuing security interests in the Pledged Collateral and
shall (i) be binding upon Pledgor, its successors and assigns, and (ii)
inure, together with the rights and remedies of Collateral Agent hereunder,
to the benefit of Collateral Agent and the other Secured Parties and each of
their respective successors, transferees and assigns;
16
<PAGE>
no other Persons (including, without limitation, any other creditor of
Pledgor) shall have any interest herein or any right or benefit with respect
hereto. Without limiting the generality of the foregoing clause (ii), any
Secured Party may assign or otherwise transfer any Note held by it secured by
this Agreement to any other Person, an such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such person,
herein or otherwise, subject, however, to the provisions of the Indenture.
Section 20. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 21. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE COUNTY
OF NEW YORK. IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY AN JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. PLEDGOR HEREBY IRREVOCABLY WAIVES TRIAL BY
JURY, AND PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. A COPY OF ANY
PROCESS SERVED ON PLEDGOR SHALL BE MAILED BY REGISTERED MAIL TO PLEDGOR AT
ITS ADDRESS PROVIDED FOR IN SECTION 18 HEREOF EXCEPT THAT UNLESS OTHERWISE
PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT
THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY PLEDGOR REFUSES
TO RECEIVE AND FORWARD SUCH SERVICE, PLEDGOR HEREBY AGREES THAT SERVICE UPON
IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT OF COLLATERAL AGENT TO BRING PROCEEDINGS AGAINST PLEDGOR IN THE
COURTS OF ANY OTHER JURISDICTION.
Section 22. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective
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<PAGE>
to the extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
Section 23. Execution in Counterparts. This Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same
agreement.
Section 24. Headings. The Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
Section 25. Obligations Absolute. All obligations of Pledgor hereunder
shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Pledgor;
(ii) any lack of validity or enforceability of the Indenture or the
Notes or any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from
the Indenture or the Notes or any other agreement or instrument
relating thereto;
(iv) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to any departure from
any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any right, remedy,
power or privilege under or in respect of this Agreement, Indenture or the
Notes except as specifically set forth in a waiver granted pursuant to the
provisions of Section 16 hereof; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, Pledgor.
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<PAGE>
Section 26. Collateral Agent's Right to Sever Indebtedness.
(a) Pledgor acknowledges that (i) the Pledgor Collateral does not
constitute the sole source of security for the payment and performance of the
Secured Obligations and that the Secured Obligations are also secured by
other types of property of Pledgor and its Affiliates (all such property,
collectively, the "Collateral"), (ii) the number of jurisdictions and the
nature of the transaction of which this instrument is a part are such that it
would have been impracticable for the parties to allocate to each item of
Collateral a specific loan amount and to execute in respect of such item a
separate indenture and (iii) Pledgor intends that Collateral Agent have the
same rights with respect to the Pledged Collateral, in any judicial
proceeding relating to the exercise of any right or remedy hereunder or
otherwise, that Collateral Agent would have had if each item of collateral
had been pledged or encumbered pursuant to a separate indenture and security
agreement. In furtherance of such intent, Pledgor agrees to the greatest
extent permitted by law that Collateral Agent may at any time by notice (an
"Allocation Notice") to Pledgor allocate a portion of the Secured Obligations
(the "Allocated Indebtedness") to the Pledged Collateral and sever from the
remaining Secured Obligations the Allocated Indebtedness. From and after the
giving of an Allocation Notice with respect to the Pledged Collateral, the
Secured Obligations hereunder shall be limited to the extent set forth in the
Allocation Notice and (as so limited) shall, for all purposes, be construed
as a separate credit obligation of Pledgor unrelated to the other
transactions contemplated by the Indenture. To the extent that the proceeds
of any judicial proceeding relating to the exercise of any right or remedy
hereunder of the Pledged Collateral shall exceed the Allocated Indebtedness,
such proceeds shall belong to Pledgor and shall not be available hereunder to
satisfy any Secured Obligations of Pledgor other than the Allocated
Indebtedness. In any action or proceeding to exercise any right or remedy
under this Agreement which is commenced after the giving by Collateral Agent
of an Allocation Notice, the Allocation Notice shall be conclusive proof of
the limits of the Secured Obligations hereby secured, and Pledgor may
introduce, by way of defense or counterclaim, evidence thereof in any such
action or proceeding. Nothwithstanding any provision of this Section 26, the
proceeds received by Collateral Agent pursuant to this Agreement shall be
applied by Collateral Agent in accordance with the provisions of Section 10
hereof.
(b) Pledgor hereby waives to the greatest extent permitted under law the
right to a discharge of any of the Secured Obligations under any statute or
rule of law now or hereafter in
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<PAGE>
effect which provides that the exercise of any particular right or remedy as
provided for herein (by judicial proceedings or otherwise) constitutes the
exclusive means for satisfaction of the Secured Obligations or which makes
unavailable any further judgment or any other right or remedy provided for
herein because Collateral Agent elected to proceed with the exercise of such
initial right or remedy or because of any failure by Collateral Agent to
comply with laws that prescribe conditions to the entitlement to such
subsequent judgment or the availability of such subsequent right or remedy.
In the event that, notwithstanding the foregoing waiver, any court shall for
any reason hold that such subsequent judgment or action is not available to
Collateral Agent, Pledgor shall not (i) introduce in any other jurisdiction
any judgment so holding as a defense to enforcement against Pledgor of any
remedy in the Indenture or in any agreement executed in connection with the
Indenture or (ii) seek to have such judgment recognized or entered in any
other jurisdiction, and any such judgment shall in all events be limited in
application only to the state or jurisdiction where rendered and only with
respect to the Collateral referred to in such judgment.
(c) In the event any instrument in addition to the Allocation Notice is
necessary to effectuate the provisions of this Section 26, including, without
limitation, any amendment to this Agreement, any substitute promissory note
or affidavit or certificate of any kind, Collateral Agent may execute and
deliver such instrument as the attorney-in-fact of Pledgor.
(d) Notwithstanding anything set forth herein to the contrary, the
provisions of this Section 26 shall be effective only to the maximum extent
permitted by law.
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IN WITNESS WHEREOF, Pledgor has caused this Agreement to be executed and
delivered by its duly authorized officer as of the date first above written.
THE DOE RUN RESOURCES CORPORATION,
as Pledgor
By /s/ Marvin K. Kaiser
------------------------------------
Name: Marvin K. Kaiser
Title: Vice President and
Chief Financial Officer
STATE STREET BANK AND TRUST COMPANY,
as Collateral Agent
By /s/ Robert L. Reynolds
------------------------------------
Name: Robert L. Reynolds
Title: Vice President
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Schedule A
LOCATION OF EQUIPMENT*
[to be completed by drr]
- -------------------
* Please confirm Ohio address where pledged Equipment is located.
<PAGE>
Exhibit 10.3
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of September 1, 1998 (this
"Intercreditor Agreement") between STATE STREET BANK AND TRUST COMPANY as Note
Trustee (as defined in the recitals hereto) and CONGRESS FINANCIAL CORPORATION,
a Delaware corporation, as successor by merger to Congress Financial
Corporation, a California corporation, as Lender (as defined in the recitals
hereto).
R E C I T A L S :
A. Pursuant to an Indenture dated as of September 1, 1998 (as amended,
modified and supplemented and in effect from time to time, the "Indenture"),
among The Doe Run Resources Corporation, a New York corporation ("Doe Run"), and
Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run Mining S.R.L., Doe Run
Peru S.R.L., Doe Run Air S.A.C. and Doe Run Development S.A.C., as guarantors,
and State Street Bank and Trust Company, as trustee under the Indenture (in such
capacity and together with any successors and assigns in such capacity, the
"Note Trustee"), Doe Run is concurrently with the execution and delivery of this
Intercreditor Agreement issuing 11 1/4% Senior Secured Notes due 2005 (the
"Notes").
B. Pursuant to the Indenture, the Note Trustee may take certain
actions under the Collateral Documents (as defined in the Indenture) with
respect to the collateral pledged thereunder (such collateral whether now
existing or hereafter arising as granted in the Indenture and the Collateral
Documents collectively referred to herein as the "Note Trustee Collateral").
C. Doe Run is a party to a certain Loan and Security Agreement, dated
as of March 12, 1998 (as amended, modified and supplemented and in effect from
time to time, the "Revolving Credit Agreement") with Congress Financial
Corporation, as lender (together with any successors or assigns in such
capacity, the "Lender").
D. Pursuant to the Revolving Credit Agreement, Doe Run has entered
into revolving credit and letter of credit financing arrangements with the
Lender and pursuant to the Revolving Credit Agreement and the other Financing
Agreements (as defined in the Revolving Credit Agreement) (collectively, as
amended, modified and supplemented and in effect from time to time, the "Loan
Documents"), Doe Run has secured its obligations in connection therewith by
pledging certain collateral to
<PAGE>
the Lender (such collateral whether now existing or hereafter arising
as granted in the Loan Documents collectively referred to herein as the "Lender
Collateral").
E. The Note Trustee has been authorized and directed to enter into
this Intercreditor Agreement pursuant to the Indenture.
F. The Lender has been authorized and directed to enter into this
Intercreditor Agreement pursuant to the Revolving Credit Agreement.
G. The Lender and the Note Trustee desire to execute and deliver this
Intercreditor Agreement to set forth certain agreements between them in respect
of their respective rights and the respective rights of the Lender with respect
to certain of the Lender Collateral and the holders of the Notes with respect to
certain of the Note Trustee Collateral.
A G R E E M E N T:
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
Section 1. Use of Note Trustee Collateral for Work-in-Process. If the
Note Trustee has obtained possession or control of any or all of the Note
Trustee Collateral, the Note Trustee shall notify the Lender and the Lender may
elect, by written notice to the Note Trustee delivered to it within twenty (20)
calendar days of its receipt of such notice from the Note Trustee, to utilize,
at the sole cost, expense, liability and risk of the Lender each item of Note
Trustee Collateral of which the Note Trustee has obtained possession or control
to finish work as promptly as practicable on any of the Lender Collateral that
is work-in-process to the extent permitted by applicable law; provided that (i)
such right to use the Note Trustee Collateral for purposes of completing
work-in-process shall continue for a period of ninety (90) days after the date
of the written notice by the Lender to the Note Trustee of the election of the
Lender to utilize the Note Trustee Collateral as set forth above, but in no
event shall such period extend beyond the date immediately prior to a sale,
lease of one year or more in duration or other disposition of a significant
portion of the Note Trustee Collateral or interests therein being used by the
Lender for such purpose; provided that the Lender is given at least thirty (30)
days prior writ-
2
<PAGE>
ten notice of such sale, lease or other disposition by the Note Trustee,
(ii) all such work shall be conducted (a) with the standard of care
consistent with the most recent past practices of Doe Run and (b) in compliance
with all applicable laws unless such failure to comply would not have a material
adverse effect on the value of the Note Trustee Collateral and would not result
in any liability to the Note Trustee and (iii) the Lender shall, prior to the
commencement of any work by the Lender, provide to the Note Trustee an indemnity
agreement in the form annexed hereto as Exhibit A. During the period referred to
in clause (i) of this Section 1, the Lender may not use the Note Trustee
Collateral to perform any work on any part of Lender Collateral that is raw
materials except: (A) to the extent any such raw materials may be necessary to
complete work-in-process and (B) to the extent such raw materials may be
necessary to complete an order from a customer received by Doe Run prior to the
date of the written notice by the Lender to the Note Trustee of the election of
the Lender to utilize the Note Trustee Collateral as set forth above. The Lender
shall compensate the Note Trustee for all the Note Trustee's reasonable direct
and allocated costs related to use of the Note Trustee Collateral by the Lender
during the period provided for above, including reasonable attorney's fees,
which the Note Trustee would not otherwise have had to incur or pay but for the
use of the Note Trustee Collateral by the Lender pursuant to the terms hereof
and directly incident to or attributable or allocated to such use consistent
with the most recent past practices of Doe Run. Any time periods referred to in
this Section 1 or Section 2 below shall be tolled so long as the Lender is
effectively stayed from enforcing its rights against Doe Run or any of the
Lender Collateral during the pendency of any proceeding of Doe Run under the
U.S. Bankruptcy Code or other proceeding or otherwise pursuant to any court
order or other applicable law.
Section 2. Access to Note Trustee Collateral. If the Note Trustee has
obtained possession or control of any or all of the Note Trustee Collateral,
upon reasonable notice to the Note Trustee, the Note Trustee shall permit the
Lender, its employees, agents, advisers and representatives to enter upon the
Note Trustee Collateral solely for purposes of repossessing, removing or selling
the Lender Collateral. The Lender shall compensate the Note Trustee in cash for
any damage to the Note Trustee Collateral directly as a result of such
repossession, removal or sale upon such repossession, removal or sale, and shall
pay the Note Trustee for all the Note Trustee's reasonable direct and
incremental costs, including its reasonable attorney's fees, related to the
provision and supervision of
3
<PAGE>
such access to the Note Trustee Collateral necessary for the repossession,
removal or sale of the Lender Collateral. At any time after the
expiration of the applicable time period provided for in clause (i) of the
proviso to the first sentence of Section 1 above, upon seven business days'
notice from the Note Trustee requesting that the Lender Collateral be removed
from the Note Trustee's Collateral, the Lender shall at its sole cost, expense,
liability and risk either remove that portion of the Lender Collateral from the
Note Trustee Collateral, or pay the Note Trustee its reasonable storage costs as
provided in such notice, but only if after such seven business day period
expires no stay or other order prohibiting the Lender's removal of such Lender
Collateral has been entered.
Section 3. Use of Certain Note Trustee Collateral. If the Note Trustee
has obtained possession or control of any or all of the Note Trustee Collateral,
the Lender may: (i) enter and use any of the Note Trustee Collateral consisting
of trademarks or other general intangibles marked or stamped on any inventory or
otherwise required to sell or dispose of any of such inventory and (ii) use any
of the Note Trustee Collateral consisting of computers or other data processing
equipment relating to the storage or processing of records, documents or files
pertaining to any accounts and/or inventory of Doe Run to deal with or dispose
of any of such assets constituting Lender Collateral.
Section 4. Books and Records. In the event that in the exercise of
their respective rights, the Note Trustee or the Lender shall receive possession
or control of any books and records which contain information relating to any of
the property of Doe Run in which the other party has been granted a security
interest or lien, it shall notify the other party hereto that it has received
such books and records and shall, as promptly as practicable thereafter, make
available to the other party hereto such books and records for inspection and
duplication.
Section 5. Acknowledgment. The Note Trustee acknowledges and agrees
that as of the date hereof it does not have any security interest in or lien
upon any of the assets and properties of Doe Run or Fabricated Products, Inc.
constituting Lender Collateral including but not limited to accounts and
inventory of Doe Run and Fabricated Products, Inc. and the proceeds and products
thereof. Lender acknowledges and agrees that as of the date hereof it does not
have any security interest in or lien upon any of the property, plant or
equipment,
4
<PAGE>
and the proceeds thereof, of Doe Run constituting Note Trustee Collateral.
Section 6. Transfer of Note Trustee Collateral. (a) The Note Trustee
shall promptly notify the Lender of the sale or assignment by the Note Trustee
during the period during which the Lender is entitled to access pursuant hereto
of any portion of the Note Trustee Collateral if any part of the Lender
Collateral is located in or upon any portion of the Note Trustee Collateral sold
or assigned.
(b) If the Note Trustee sells or assigns during any period
during which the Lender is entitled to access pursuant hereto, all or any
portion of the Note Trustee Collateral containing any Lender Collateral, the
Note Trustee shall require the purchaser or assignee thereof to agree with the
Lender or for the benefit of the Lender that it has acquired that portion of the
Note Trustee Collateral subject to the Lender's rights hereunder by delivering
an acknowledgment to that effect to the Lender.
Section 7. Insurance. Doe Run has agreed to insure the Note Trustee's
interest in the Note Trustee Collateral pursuant to the Indenture and the
Collateral Documents and has agreed to insure the Lender's interest in the
Lender Collateral pursuant to the Loan Documents. To the extent that the
insurance coverage which Doe Run is required to maintain is carried under a
blanket policy which insures both the Lender Collateral and the Note Trustee
Collateral, the Lender and the Note Trustee agree that (i) the insurance
proceeds of any loss solely involving the Lender Collateral shall be paid
directly to the Lender, (ii) the insurance proceeds of any loss solely involving
the Note Trustee Collateral shall be paid directly to the Note Trustee, and
(iii) the insurance proceeds of any loss involving both the Lender Collateral
and the Note Trustee Collateral (a "Combined Loss") shall be paid to a mutually
acceptable third party to be invested in Cash Equivalents (as defined in the
Revolving Credit Agreement) for allocation in accordance with the interest of
the Lender and the Note Trustee as provided herein, or if not provided herein,
as they may mutually agree, with interest earned on such invested proceeds
allocated in the same manner as principal; provided that if the Note Trustee and
the Lender cannot agree on the proper allocation of the insurance proceeds, such
determination shall be made by a court of competent jurisdiction. If after a
Default under either the Revolving Credit Agreement or the Indenture, either the
Lender or the Note Trustee pays any insurance premiums on behalf of Doe Run and
a Combined Loss occurs during an insur-
5
<PAGE>
ance period for which such premiums were paid by either the Lender or
the Note Trustee, the party that paid such insurance premiums shall be
reimbursed for the payment of such premiums from the insurance proceeds prior to
the distribution of the balance of such proceeds pursuant to the provisions of
this Section 6.
Section 8. Cooperation; Notices. The Lender and the Note Trustee agree
to use their best efforts to cooperate with each other to (a) provide notice of,
and any information regarding, any release of any of the Note Trustee Collateral
or the Lender Collateral, as the case may be, and (b) give to each other copies
of any notice of the occurrence or existence of an Event of Default under the
Revolving Credit Agreement or the Indenture, respectively, but the failure to
give such notice shall not affect the effectiveness of any notice of an Event of
Default as against Doe Run or the validity of this Intercreditor Agreement or
create a cause of action against the party failing to give such notice or create
any claim or right on behalf of any third party. The sending of such notice
shall not give the recipient any obligation to cure such Event of Default.
Section 9. Successor and Assigns. The Lender and the Note Trustee will
cause any of their respective successors and assigns (other than by merger with
or into, or as a result of the transfer of all or substantially all of the
corporate trust assets of the Note Trustee, or assets of the Lender, to another
corporation, in which case the surviving entity or transferee with respect
thereto shall be deemed to have automatically succeeded to all the rights,
benefits and obligations of the Note Trustee or the Lender, as the case may be,
under this Intercreditor Agreement), and Doe Run will cause any successor,
assign, replacement or other party that succeeds to or substitutes for or
otherwise acquires either the Lender's or the Note Trustee's respective rights
and interest in the Lender Collateral or the Note Trustee Collateral (other than
by merger with or into, or as a result of the transfer of all or substantially
all of the corporate trust assets of the Note Trustee, or assets of the Lender,
to another corporation, in which case the surviving entity or transferee with
respect thereto shall be deemed to have automatically succeeded to all the
rights, benefits and obligations of the Note Trustee or the Lender, as the case
may be, under this Intercreditor Agreement), as the case may be, or in any
significant portion thereof, to assume and incur all of the obligations of the
Lender or the Note Trustee hereunder, as the case may be, and regardless of
whether the obligations of Doe Run to such replacement party
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are greater or less than Doe Run's obligations to the Lender or the
Note Trustee, as the case may be. Upon so assuming or incurring all of such
obligations of the Lender or the Note Trustee, as the case may be, such party
shall succeed to all the rights and benefits of the Lender or the Note Trustee,
as the case may be, under this Intercreditor Agreement. This Intercreditor
Agreement shall not be amended, supplemented or modified without the written
consent of the Lender, the Note Trustee, or with respect to any replacement
party that has assumed obligations hereunder, the written consent of such
replacement party, as applicable.
Section 10. Further Assurances. The parties hereto will use all
reasonable efforts to execute such certificates and other documents and to take
such other actions as may be reasonably necessary to consummate the transactions
contemplated hereby.
Section 11. Severability. Any provision of this Intercreditor
Agreement which is prohibited or unenforceable in any jurisdiction, the
substantive laws of which are held to be applicable hereto, shall not invalidate
the remaining provisions hereof, and any such prohibition or unenforceability in
any such jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
Section 12. Execution in Counterparts. This Intercreditor Agreement
may be executed in counterparts, each of which shall be deemed to be an original
but all of which together shall constitute a single agreement.
Section 13. Choice of Law. This Intercreditor Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and performed wholly in the State of New York.
Section 14. Captions; Gender and Number. The captions and section
headings of this Intercreditor Agreement are for convenience only and are not to
be used to define the provisions hereof. All terms contained herein shall be
construed, whenever the context of this Intercreditor Agreement requires, so
that the singular includes the plural and so that the masculine includes the
feminine.
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IN WITNESS WHEREOF, the parties hereto have caused this Intercreditor
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first written above.
STATE STREET BANK AND TRUST COMPANY,
as Note Trustee
By: /s/ Robert L. Reynolds
----------------------------------
Name: Robert L. Reynolds
Title: Vice President
CONGRESS FINANCIAL CORPORATION,
as Lender
By: /s/ Herb Korn
----------------------------------
Name: Herb Korn
Title: Assistant Vice President
Acknowledged and Accepted:
THE DOE RUN RESOURCES CORPORATION
By: /s/ Marvin K. Kaiser
--------------------------------
Name: Marvin K. Kaiser
Title: Vice President and Chief Financial
Officer
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EXHIBIT A
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of ____________, ____ (the
"Indemnification Agreement") between STATE STREET BANK AND TRUST COMPANY, as
trustee (the "Note Trustee") and CONGRESS FINANCIAL CORPORATION, a California
corporation, as agent (the "Lender").
R E C I T A L S :
A. The Note Trustee, the Lender and The Doe Run Resources Corporation,
a New York corporation, entered into an Intercreditor Agreement, dated as of
September 1, 1998 (as amended, modified and supplemented and in effect from time
to time, the "Intercreditor Agreement"; capitalized terms used herein and not
defined shall have the meanings assigned to such term in the Intercreditor
Agreement) pursuant to which the Note Trustee has agreed to permit the Lender to
have access to and utilize certain Note Trustee Collateral for the purposes set
forth in the Intercreditor Agreement.
B. It is a condition precedent to the Note Trustee's obligation to
permit the Lender to utilize the Note Trustee Collateral to finish Lender
Collateral that the Lender shall execute and deliver this Indemnification
Agreement.
A G R E E M E N T:
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration receipt which is hereby acknowledged, the parties hereto
hereby agree as follows:
Section 1. Indemnity. The Lender shall indemnify and hold harmless the
Note Trustee and its officers, directors, employees and agents (each such party,
an "Indemnified Party") from and against any and all losses, claims,
liabilities, damages (other than consequential damages) and expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted against such Indemnified Party (collectively,
"Losses"), suffered or incurred by such Indemnified Party and which are caused
by any act or omission by the Lender pursuant to the exercise by the Lender of
its right to utilize any Note Trustee Collateral to finish work-in-process with
respect to any Lender Collateral pursuant to the Intercreditor Agreement. The
foregoing indemnification shall not include Losses which have been finally
ju-
<PAGE>
dicially determined by a court of competent jurisdiction to have been caused
solely by the gross negligence or willful misconduct of the Note Trustee or any
other Indemnified Party acting on behalf of and with the approval of the Note
Trustee.
Section 2. Miscellaneous.
(a) This Indemnification Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and performed wholly in the State of New York.
(b) This Indemnification Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute a single agreement.
(c) Any provision of this Indemnification Agreement which is
prohibited or unenforceable in any jurisdiction, the substantive laws of which
are held to be applicable hereto, shall not invalidate the remaining provisions
hereof, and any such prohibition or unenforceability in any such jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
(d) No amendment or termination of this Indemnification Agreement
shall be binding on any party hereto unless in writing and signed by the party
sought to be charged therewith.
(e) This Indemnification Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors or
assigns under this Indemnification Agreement or the Intercreditor Agreement.
(f) The Note Trustee's acceptance of this Indemnification Agreement is
not intended to create, and shall not be construed as, any release, waiver or
modification of any right or remedy of the Note Trustee under or pursuant to the
Intercreditor Agreement or otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indemnification Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
STATE STREET BANK AND TRUST COMPANY,
as Note Trustee
By:
-----------------------------------
Name:
Title:
CONGRESS FINANCIAL CORPORATION,
as Lender
By:
----------------------------------
Name:
Title:
