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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT: MAY 13, 1998
(Date of Earliest Event Reported)
METAL MANAGEMENT, INC.
(Exact Name of Registrant as Specified in its Charter)
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DELAWARE 0-14836 94-2835068
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
500 N. DEARBORN STREET, SUITE 405
CHICAGO, ILLINOIS 60610
(Address of Principal Executive Offices) (Zip Code)
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(312) 645-0700
(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS
On May 13, 1998, Metal Management, Inc., a Delaware corporation (the
"Company"), sold, in a Rule 144A private offering and pursuant to Regulation S
under the Securities Act of 1933, as amended, $180 million of senior
subordinated notes (the "Notes"). The Notes mature on May 15, 2008 and bear
interest at the rate of 10% per annum. The proceeds of the offering were used in
part to repay indebtedness of the Company, with the remainder planned to be used
for acquisitions and general corporate purposes.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
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10.1 Purchase Agreement, dated May 8, 1998, among Metal
Management, Inc., the Guarantors (as defined in the
Indenture), Goldman, Sachs & Co., BT Alex. Brown
Incorporated and Salomon Brothers Inc.
10.2 Indenture, dated as of May 13, 1998, among Metal Management,
Inc., the Guarantors and LaSalle National Bank, as Trustee,
including Forms of Notes issued pursuant to such Indenture.
10.3 Exchange and Registration Rights Agreement, dated as of May
13, 1998, by and among Metal Management, Inc., the
Guarantors, Goldman, Sachs & Co., BT Alex. Brown
Incorporated and Salomon Brothers Inc.
99.1 Press Release dated May 14, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METAL MANAGEMENT, INC.
By: /s/ DAVID A. CARPENTER
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David A. Carpenter
Vice President, General Counsel and
Secretary
Dated: May 22, 1998
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EXHIBIT 10.1
METAL MANAGEMENT, INC.
10% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
May 8, 1998
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Salomon Brothers Inc
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Metal Management, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$180,000,000 principal amount of its 10% Senior Subordinated Notes due 2008 (the
"Securities"). The Securities and the Exchange Securities (as defined below)
will be fully and unconditionally guaranteed (the "Guarantees") on an unsecured,
senior subordinated basis, jointly and severally, by the Company's current
Restricted Subsidiaries (as defined in the within-mentioned Indenture) and
certain of the Company's future Restricted Subsidiaries (each a "Guarantor,"
and, collectively, the "Guarantors"), as shall be set forth more fully in the
Indenture.
1. Each of the Company and each of the Guarantors represents and warrants
to, and agrees with, each of the Purchasers that:
(a) A preliminary offering circular, dated April 24, 1998 (the
"Preliminary Offering Circular") and an offering circular, dated May 8,
1998 (the "Offering Circular"), in each case including the international
supplement thereto which is attached to and made a part of the Preliminary
Offering Circular and the Offering Circular, have been prepared in
connection with the offering of the Securities. Any reference to the
Preliminary Offering Circular or the Offering Circular shall be deemed to
refer to and include any Additional Issuer Information (as defined in
Section 5(f)) furnished by the Company prior to the completion of the
initial distribution of the Securities. The Preliminary Offering Circular
or the Offering Circular and any amendments or supplements thereto did not
and will not, as of their respective dates, contain an untrue statement of
a material fact or omit 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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
and the Guarantors by a Purchaser through Goldman, Sachs & Co. expressly
for use therein;
(b) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements of the Company
included in the Offering Circular any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Offering Circular; and, since the
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respective dates as of which information is given in the Offering Circular,
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), in each case
otherwise than as set forth or contemplated in the Offering Circular;
(c) The Company and its subsidiaries have good title in fee simple to
all real property and good title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects, except
such liens, encumbrances or defects that, individually or in the aggregate,
have not resulted and could not reasonably be expected to result in a
Material Adverse Effect; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as do not materially
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(d) The Company has been duly incorporated and each of the Company and
each of its subsidiaries is validly existing as a corporation, limited
partnership or limited liability company, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or
organization, as the case may be, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Offering Circular, and has been duly qualified as a foreign corporation,
limited partnership or limited liability company, as the case may be, for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which its ownership or leasing of properties or
conduct of business requires such qualification, or is subject to no
liabilities or disabilities by reason of the failure to be so qualified in
any such jurisdiction that, individually or in the aggregate, have resulted
or could reasonably be expected to result in a Material Adverse Effect;
(e) The Company had an authorized capitalization as of December 31,
1997 as set forth in the Offering Circular, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; all of the issued shares of
capital stock of each corporate subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims, except for those shares pledged
under the Senior Credit Facility (as defined in the Offering Circular) and
other liens, encumbrances, equities or claims that, individually or in the
aggregate, have not resulted or could not reasonably be expected to result
in a Material Adverse Effect;
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture to be dated the date on which the Time of Delivery (as defined
below) occurs (the "Indenture") among the Company, the Guarantors and
LaSalle National Bank, as Trustee (the "Trustee"), under which they are to
be issued; the Exchange Securities have been duly authorized and, when
issued and delivered pursuant to the Registration Rights Agreement (as
defined below), will be duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; the Indenture has been
duly authorized and, when executed and delivered by the Company, the
Guarantors and the Trustee, will constitute a valid and legally binding
instrument, enforceable against the Company and the Guarantors in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; the
Guarantees of the Securities have been duly authorized by each of the
Guarantors and, when executed and delivered in accordance with the terms of
the Indenture and when the Securities have been
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issued, delivered and paid for pursuant to the terms of this Agreement,
will constitute valid and legally binding instruments, enforceable against
the Guarantors in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; the Guarantees of the Exchange Securities have been duly
authorized by each of the Guarantors and, when executed and delivered
pursuant to the Registration Rights Agreement, will constitute valid and
legally binding instruments, enforceable against the Guarantors in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and the
Securities, the Indenture and the Guarantees will conform in all material
respects to the descriptions thereof in the Offering Circular;
(g) The Senior Credit Facility has been duly authorized, executed and
delivered by the Company and the Guarantors party thereto and constitutes a
valid and legally binding instrument, enforceable against the Company and
such Guarantors in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Registration Rights Agreement has been duly
authorized and, when executed and delivered by the Company, the Guarantors
and the other parties thereto, will constitute a valid and legally binding
instrument, enforceable against the Company and the Guarantors in
accordance with its terms (other than the provisions of Section 8 thereof
insofar as such provisions may be unenforceable as against the policy of
the United States Securities and Exchange Commission (the "Commission")),
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(h) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
United States Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System promulgated thereunder;
(i) The issuance and sale of the Securities, the issuance of the
Guarantees, the compliance by the Company with all of the provisions of the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement, the compliance by the Guarantors with all of the provisions of
the Guarantees, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, other than conflicts, breaches, violations or defaults that,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter, by-laws or other similar
organizational or governing document of the Company or any of its
subsidiaries or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties other than violations that,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issuance and sale
of the Securities, the issuance of the Guarantees or the consummation by
the Company or any Guarantor of the transactions contemplated by this
Agreement, the Registration Rights Agreement or the Indenture, except as
may be required in connection with the transactions contemplated by the
Registration Rights Agreement and except for such consents,
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approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers;
(j) Neither the Company nor any of its subsidiaries is in violation of
its respective charter, by-laws or other similar organizational or
governing document or in default in the performance or observance of any
material obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them is bound, or to which any of the property or assets of
the Company or any of its subsidiaries is subject, other than defaults
that, individually or in the aggregate, have not resulted and could not
reasonably be expected to result in a Material Adverse Effect;
(k) The statements set forth in the Offering Circular under the
caption "Description of the Notes," insofar as they purport to constitute a
summary of the terms of the Securities, the Guarantees, the Indenture, the
Exchange Securities and the Registration Rights Agreement and under the
captions "Management," "Certain Relationships and Related Transactions,"
"Certain United States Federal Tax Consequences" and "Description of the
Senior Credit Facility," insofar as they purport to describe the matters
referred to therein, are accurate and complete in all material respects;
(l) Other than proceedings that are set forth in the Offering
Circular, there are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, could
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(m) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities that are 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;
(n) The Company is subject to Section 13 or 15(d) of the Exchange Act;
(o) Other than as described in the Offering Circular, each of the
Company and its subsidiaries is (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) has received all permits, licenses or other approvals required
of it under applicable Environmental Laws to conduct its business and (iii)
is in compliance with all material terms and conditions of any such permit,
license or approval, in each case, other than matters that, individually or
in the aggregate, have not resulted and could not reasonably be expected to
result in a Material Adverse Effect;
(p) (i) Each of the Company and its subsidiaries has all certificates,
consents, exemptions, orders, permits, licenses, authorizations or other
approvals (each, an "Authorization") of and from, and has made all
declarations and filings with, all Federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, necessary or required to own, lease, license and use
its properties and assets and to conduct its business in the manner
described in the Offering Circular, and all such Authorizations are in full
force and effect, and (ii) the Company and its subsidiaries are in
compliance with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities and governing
bodies having jurisdiction with respect thereto, in each case, other
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than matters that, individually or in the aggregate, have not resulted or
could not reasonably be expected to result in a Material Adverse Effect;
(q) Except as contemplated by the Registration Rights Agreement, no
holder of any security of the Company has or will have any right to require
the registration of such security by virtue of any transaction contemplated
by this Agreement;
(r) Except as disclosed in the Offering Circular, there are no
business relationships or related party transactions that would be required
to be disclosed therein by Item 404 of Regulation S-K of the Commission and
each business relationship or related party transaction described therein
is a fair and accurate description of the relationships and transactions so
described;
(s) Except as disclosed in the Offering Circular, there is (i) no
material unfair labor practice complaint pending against the Company or any
Guarantor, or, to the best knowledge of the Company, threatened against any
of them, before the National Labor Relations Board or any state or local
labor relations board, and no material grievance or material arbitration
proceeding arising out of or under any collective bargaining agreement is
so pending against the Company or any Guarantor, or, to the best knowledge
of the Company, threatened against any of them; (ii) no material strike,
labor dispute, slowdown or stoppage pending against the Company or any
Guarantor nor, to the best knowledge of the Company, threatened against the
Company or any Guarantor; and (iii) to the best knowledge of the Company,
no union organizing activities are taking place;
(t) Neither the Company nor any of the Guarantors is, or after giving
effect to the offer and sale of the Securities will be, an "investment
company," or an entity "controlled" by an "investment company," as such
terms are defined in the United States Investment Company Act of 1940, as
amended (the "Investment Company Act");
(u) Neither the Company, any affiliate of the Company nor any person
acting on its or their behalf has offered or sold the Securities by means
of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act or, with respect to Securities sold
outside the United States to non-U.S. persons (as defined in Rule 902 under
the Securities Act), by means of any directed selling efforts within the
meaning of Rule 902 under the Securities Act, and the Company, any
affiliate of the Company and any person acting on its or their behalf has
complied with and will implement the "offering restriction" within the
meaning of such Rule 902, provided, that for purposes of this paragraph
(u), the representations and warranties of the Purchasers in Section 3 and
Annex I are assumed to be true and correct;
(v) Within the preceding six months, none of the Company, the
Guarantors or any other person acting on behalf of the Company or any
Guarantor has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than the
Securities offered or sold to the Purchasers hereunder. The Company and the
Guarantors will take reasonable precautions designed to insure that any
offer or sale, direct or indirect, in the United States or to any U.S.
person of any Securities or any security substantially similar thereto
issued by the Company or any Guarantor, within six months subsequent to the
date on which the distribution of the Securities has been completed (as
notified to the Company by Goldman, Sachs & Co.), is made under
restrictions and other circumstances reasonably designed not to affect the
status of the offer and sale of the Securities (the "Offering") in the
United States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Securities Act;
(w) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
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(x) The firms of public accountants that have certified any financial
statements in the Preliminary Offering Circular or the Offering Circular
are independent public accountants as defined in the rules and regulations
of the Commission under the Securities Act;
2. Subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to each of the Purchasers, and each of the Purchasers agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
97% of the principal amount thereof, plus accrued interest, if any, from May 13,
1998 to the Time of Delivery, the principal amount of Securities set forth
opposite the name of such Purchaser in Schedule I hereto. Subject to the terms
and conditions herein set forth, each of the Guarantors agrees to issue its
Guarantee of the Securities.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company and the
Guarantors that:
(a) It will offer and sell the Securities only: (i) to persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within
the meaning of Rule 144A under the Securities Act in transactions meeting
the requirements of Rule 144A or (ii) upon the terms and conditions set
forth in Annex I to this Agreement;
(b) It is an "accredited investor" within the meaning of Rule 501
under the Securities Act; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Securities Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will be
represented by one or more definitive global Securities in book-entry form,
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer to the account of the Company designated by the Company reasonably in
advance of the Time of Delivery in Federal (same day) funds by causing DTC to
credit the Securities to the account of Goldman, Sachs & Co. at DTC. The Company
will cause the global certificates representing the Securities to be made
available to Goldman, Sachs & Co. for checking at least twenty-four hours prior
to the Time of Delivery at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of such delivery and payment shall be
8:30 a.m., Chicago time, on May 13, 1998 or such other time and date as Goldman,
Sachs & Co. and the Company may agree upon in writing. Such time and date are
herein called the "Time of Delivery."
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7(n) hereof, will be delivered at such time and date at the
offices of Mayer, Brown & Platt (the "Closing Location"), and the Securities
will be delivered at the Designated Office, all at the Time of Delivery.
5. The Company and the Guarantors agree with each of the Purchasers as
follows:
(a) To prepare the Offering Circular in a form approved by you; to
make no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish
you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the
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distribution of the Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering
Circular and each amendment or supplement thereto, with signed copies of
each report of independent accountants in the Offering Circular, and any
amendment or supplement containing amendments to the financial statements
covered by such reports, and additional copies thereof in such quantities
as you may from time to time reasonably request; and if, at any time prior
to the earlier of the effectiveness of any registration statement required
to be filed pursuant to Section 4 of the Registration Rights Agreement or
the expiration of six months after the date of the Offering Circular, any
event shall have occurred as a result of which the Offering Circular as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Offering Circular is delivered, not misleading, or, if
for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon
your request to prepare and furnish without charge to each Purchaser and to
any dealer in securities as many copies as you may from time to time
reasonably request of an amended Offering Circular or a supplement to the
Offering Circular that will correct such statement or omission or effect
such compliance;
(d) During the period beginning from the date hereof and continuing
until the date that is 60 days after the date of the Offering Circular, not
to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder or under the Registration Rights Agreement, any
securities of the Company that are substantially similar to the Securities
or the Exchange Securities, or any securities of the Company convertible
into or exchangeable for, or that otherwise represent a right to acquire,
securities of the Company substantially similar to the Securities or the
Exchange Securities;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of
Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of Securities information (the
"Additional Issuer Information") satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Securities Act;
(g) To use its best efforts to cause the Securities to be eligible for
the PORTAL trading system of the National Association of Securities
Dealers, Inc.;
(h) During a period of three years from the date of the Offering
Circular, to furnish to you copies of such information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (including, if the Company is not subject to the
reporting requirements of the Exchange Act, (i) as soon as practicable
after the end of each fiscal year, an annual report (including a balance
sheet and statements of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent
public accountants), (ii) as soon as practicable after the end of each of
the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date the Company is not subject to the reporting
requirements of the Exchange Act), consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail and (iii) during the period of five years from the date
of the Offering Circular,
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copies of all reports or other communications (financial or other)
furnished to stockholders of the Company);
(i) During the period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined
in Rule 144 under the Securities Act) to, resell any of the Securities that
constitute "restricted securities" under Rule 144 that have been reacquired
by any of them;
(j) To comply with the provisions of the Registration Rights
Agreement; and
(k) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Offering Circular under the caption "Use of Proceeds."
6. The Company and the Guarantors covenant and agree with the several
Purchasers that the Company and the Guarantors will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company's and the
Guarantors' counsel and accountants in connection with the issue of the
Securities and all other expenses in connection with the preparation, printing
and filing of the Preliminary Offering Circular and the Offering Circular and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Purchasers and dealers; (ii) the cost of printing or producing
this Agreement, the Indenture and the Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Purchasers in connection with such
qualification and in connection with Blue Sky surveys; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost of preparing
the Securities; (vi) the fees and expenses of the Trustee and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Securities; (vii) any cost incurred in connection
with the designation of the Securities for trading on the PORTAL market; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder that are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Purchasers will pay all of their own costs and
expenses, including the fees, disbursements and expenses of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and the Guarantors herein are, at and as of the Time
of Delivery, true and correct, the condition that the Company and the Guarantors
shall have performed all of their respective obligations hereunder theretofore
to be performed, and the following additional conditions:
(a) Sidley & Austin, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated the Time of Delivery, with respect
to certain matters covered in paragraphs (i), (iv), (v), (vi), (vii),
(viii), (ix), (xi), (xiv), (xv) and (xvi) of subsection (b) below as well
as such other related matters as you may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(b) Mayer, Brown & Platt, counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority
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(corporate and other) to own its properties and conduct its business as
described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in
the Offering Circular;
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of the jurisdictions listed in a schedule to such opinion, such
jurisdictions being those certified by the Company in which it owns or
leases properties or conducts business so as to require such
qualification, except for jurisdictions as to which the failure to be so
qualified, individually or in the aggregate, have not resulted or could
not reasonably be expected to result in a Material Adverse Effect
(provided that such counsel shall state that they believe that both you
and they are justified in relying upon such certificate);
(iv) This Agreement has been duly authorized, executed and
delivered by the Company;
(v) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company, and the holders thereof will be
entitled to the benefits provided by the Indenture; and the Securities
conform in all material respects to the descriptions thereof in the
Offering Circular;
(vi) The Indenture has been duly authorized, executed and delivered
by the Company and the Guarantors and, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes
a valid and legally binding instrument, enforceable against the Company
and the Guarantors in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture conforms in all material
respects to the descriptions thereof in the Offering Circular;
(vii) The Exchange Securities have been duly authorized and, when
authenticated, issued and delivered pursuant to the Registration Rights
Agreement and the Indenture, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture;
(viii) The Guarantees of the Securities have been duly authorized,
executed and delivered by each of the Guarantors and constitute valid
and legally binding instruments, enforceable against the Guarantors in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Guarantees of the Securities conform in all material
respects to the descriptions thereof in the Offering Circular;
(ix) The Guarantees of the Exchange Securities have been duly
authorized and, when executed and delivered by each of the Guarantors
pursuant to the Registration Rights Agreement and the Indenture, will
constitute valid and legally binding instruments, enforceable against
the Guarantors in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(x) The Senior Credit Facility has been duly authorized, executed
and delivered by the Company and the Guarantors and constitutes a valid
and legally binding instrument, enforceable against the Company and the
Guarantors in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the
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<PAGE> 10
Senior Credit Facility conforms in all material respects to the
descriptions thereof in the Offering Circular;
(xi) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Guarantors and, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a valid and legally binding instrument,
enforceable against the Company and the Guarantors in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Registration Rights Agreement conforms in all material respects to the
descriptions thereof in the Offering Circular;
(xii) The issuance and sale of the Securities, the issuance of the
Guarantees, the compliance by the Company with all of the provisions of
the Securities, the Indenture, the Registration Rights Agreement and
this Agreement, the compliance by the Guarantors with all of the
provisions of the Guarantees, the Indenture, the Registration Rights
Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not violate, result in a breach or
violation of or create a default under any of the terms or provisions of
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument listed on an attachment to such opinion, which
constitute all of the agreements or instruments made available to such
counsel by the Company in response to such counsel's request for copies
of agreements or other instruments to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject that are material to the
Company and its subsidiaries taken as a whole (provided that such
counsel shall state that they believe that both you and they are
justified in relying on such inquiry), nor will such actions result in
any violation of the provisions of the charter or by-laws of the Company
or any Federal, Illinois or New York statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties;
(xiii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issuance and sale of the Securities, the issuance of
the Guarantees or the consummation by the Company or any Guarantor of
the transactions contemplated by this Agreement, the Registration Rights
Agreement or the Indenture, except as may be required in connection with
the transactions contemplated by the Registration Rights Agreement and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Purchasers;
(xiv) The statements set forth in the Offering Circular under the
caption "Description of the Notes," insofar as they purport to
constitute a summary of the terms of the Securities, the Guarantees, any
Exchange Securities and the Registration Rights Agreement and under the
captions "Management," "Certain Relationships and Related Transactions,"
"Certain United States Tax Consequences" and "Description of the Senior
Credit Facility," insofar as they purport to describe the provisions of
the legal or contractual matters referred to therein, are accurate in
all material respects;
(xv) No registration of the Securities or the Guarantees under the
Securities Act, and no qualification of an indenture under the United
States Trust Indenture Act of 1939 with respect thereto, is required for
the offer, sale and initial resale of the Securities and the Guarantees
by the Purchasers in the manner contemplated by this Agreement,
provided,
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<PAGE> 11
that for purposes of this clause (xv), counsel may assume the
representations and warranties of the Purchasers in Section 3 and Annex
I are true and correct;
(xvi) Nothing has come to our attention that has led us to believe
that the Offering Circular and any further amendments or supplements
thereto made by the Company prior to the Time of Delivery (other than
the financial data therein, including the financial statements and
related footnotes and schedules, as to which such counsel need express
no opinion) contained as of the date of the Offering Circular or
contains as of the Time of Delivery an untrue statement of a material
fact or omitted or omits, as the case may be, to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(xvii) Neither the Company nor any of the Guarantors is, or after
giving effect to the offer and sale of the Securities will be, an
"investment company," or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act;
(c) Shefsky & Froelich Ltd., counsel for the Company, shall have
furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable;
(ii) Each subsidiary of the Company is validly existing as a
corporation, limited partnership or limited liability company, as the
case may be, in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be; and all of the issued
shares of capital stock of each corporate subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims, except for those shares pledged
under the Senior Credit Facility (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and
in respect of matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying upon such
opinions and certificates); and
(iii) To the best of such counsel's knowledge and other than as set
forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its subsidiaries
is the subject which, if determined adversely to the Company or any of
its subsidiaries, could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(d) On the date of the Offering Circular prior to the execution of
this Agreement and also at the Time of Delivery, Price Waterhouse LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you; and, on the
date of the Offering Circular prior to the execution of this Agreement,
each of the independent accountants whose report(s) on the audited
financial statements of any of the Guarantors that are included in the
Offering Circular shall have furnished to you a letter, dated the date of
delivery thereof, in form and substance satisfactory to you, to the extent
relevant to the financial statements covered by such report(s);
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the Offering Circular any loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular, and (ii) since the respective dates
as of which information is given in the
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Offering Circular there shall not have been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Offering Circular, the effect of which,
in any such case described in clause (i) or (ii), is in the judgment of
Goldman, Sachs & Co., after consultation with the Company, so material and
adverse as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the terms and in the manner
contemplated in this Agreement and in the Offering Circular;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the Nasdaq
National Market; (ii) a suspension or material limitation in trading in the
Company's securities on the Nasdaq National Market; (iii) a general
moratorium on commercial banking activities declared by either Federal or
New York or Illinois state authorities; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of Goldman, Sachs & Co.,
after consultation with the Company, makes it impracticable or inadvisable
to proceed with the offering or the delivery of the Securities on the terms
and in the manner contemplated in the Offering Circular; (v) the occurrence
of any material adverse change in the existing financial, political or
economic conditions in the United States or elsewhere that, in the judgment
of Goldman, Sachs & Co., after consultation with the Company, would
materially and adversely affect the financial markets or the markets for
the Securities and other debt securities;
(h) The Securities shall have been designated for trading on PORTAL;
(i) The Company and the Guarantors shall have furnished or caused to
be furnished to you at the Time of Delivery certificates of officers of the
Company and the Guarantors reasonably satisfactory to you as to the
accuracy of the representations and warranties of the Company and the
Guarantors herein at and as of such Time of Delivery, as to the performance
by the Company and the Guarantors of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in the first paragraph of this Section 7 and in
subsections (e) and (f) of this Section 7 and as to such other matters as
you may reasonably request;
(j) The Company, the Guarantors and the Trustee shall have entered
into the Indenture and the Purchasers shall have received counterparts,
conformed as executed, thereof;
(k) The Company, the Guarantors and the Purchasers shall have entered
into the Registration Rights Agreement dated as of the date on which the
Time of Delivery occurs (the "Registration Rights Agreement") and the
Purchasers shall have received counterparts, conformed as executed,
thereof;
(l) There shall exist at and as of the Time of Delivery no conditions
that would constitute a default (or an event that with notice or the lapse
of time, or both, would constitute a default) under the Senior Credit
Facility;
(m) The creditors of the Company who are being repaid with the net
proceeds of the Offering as described in the Offering Circular under "Use
of Proceeds" (other than in respect of
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<PAGE> 13
the Senior Credit Facility) shall have delivered canceled notes (or other
evidence of repayment satisfactory to the Purchasers) to the Company in
connection with the Company's repayment of the related indebtedness and the
Company shall have delivered copies of such notes (or such other evidence)
to the Purchasers; and
(n) Prior to the Time of Delivery, the Company and the Guarantors
shall have furnished to the Purchasers such further information,
certificates and documents as the Purchasers may reasonably request.
8. (a) The Company and the Guarantors will, jointly and severally,
indemnify and hold harmless each Purchaser against any losses, claims, damages
or liabilities, joint or several, to which it may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
neither the Company nor any of the Guarantors shall be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company or any of the Guarantors by or
on behalf of any Purchaser through Goldman, Sachs & Co. expressly for inclusion
in the Preliminary Offering Circular or the Offering Circular.
(b) Each Purchaser will, severally and not jointly, indemnify and hold
harmless the Company and the Guarantors against any losses, claims, damages or
liabilities to which the Company or any of the Guarantors may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact 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 the Preliminary Offering Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Purchaser
expressly for inclusion in the Preliminary Offering Circular or the Offering
Circular and will reimburse the Company and the Guarantors for any legal or
other expenses reasonably incurred by the Company or the Guarantors in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case
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<PAGE> 14
subsequently incurred by such indemnified party in connection with the defense
thereof (other than reasonable costs of investigation) unless (i) the
indemnifying party has agreed to pay such fees and expenses, (ii) the
indemnifying party shall have failed to employ counsel reasonably satisfactory
to the indemnified party in a timely manner or (iii) the indemnified party shall
have been advised by counsel that there are actual or potential conflicting
interests between the indemnifying party and the indemnified party, including
situations in which there are one or more legal defenses available to the
indemnified party that are different from or additional to those available to
the indemnifying party, provided, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all indemnified parties, except to the extent that
local counsel, in addition to its regular counsel, is required in order to
effectively defend against such action or proceeding. No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party 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 the relative benefits received
by the Company and the Guarantors on the one hand and the Purchasers on the
other from the offering of the Securities. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Guarantors on the one hand and Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Guarantors on the one hand and Purchasers on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Purchasers, in
each case as set forth in the Offering Circular. The relative fault 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 the Purchasers on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Guarantors and the
Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total underwriting discounts and commissions in respect of the Securities
exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or
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<PAGE> 15
alleged untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Guarantors under this Section 8
shall be in addition to any liability which the Company and the Guarantors may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Purchaser within the meaning of the Securities
Act; and the obligations of the Purchasers under this Section 8 shall be in
addition to any liability which the respective Purchaser may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director
of the Company and the Guarantors and to each person, if any, who controls the
Company and the Guarantors within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than ten days, in order to effect
whatever changes may thereby be made necessary in the Offering Circular, or in
any other documents or arrangements, and the Company agrees to prepare promptly
any amendments to the Offering Circular which in your opinion may thereby be
made necessary. The term "Purchaser" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser, the Company or any Guarantor, except for the expenses to be borne by
the Company and the Purchasers as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the Guarantors and the Purchasers, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of
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any Purchaser or any controlling person of any Purchaser, or the Company or any
Guarantor or any officer or director or controlling person of the Company or any
Guarantor, and shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company and the Guarantors shall not then be under any liability to any
Purchaser, except as provided in Sections 6 and 8 hereof; but if for any other
reason the Securities are not delivered by or on behalf of the Company and the
Guarantors as provided herein, the Company and the Guarantors will reimburse the
Purchasers for all out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company and the
Guarantors shall then be under no further liability to any Purchaser, except as
provided in Sections 6 and 8 hereof.
12. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to Goldman, Sachs & Co., 85 Broad Street, New York, New
York 10004, Attention: Registration Department; and if to the Company or the
Guarantors shall be delivered or sent by mail, telex or facsimile transmission
to the address of the Company or the Guarantor, as the case may be, set forth in
the Offering Circular, Attention: Chief Executive Officer and General Counsel,
provided, however, that any notice to a Purchaser pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Purchaser at its address set forth in its Purchasers' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Purchasers upon request. Any such statements, requests, notices
or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company, the Guarantors and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and the
Guarantors and each person who controls the Company, any of the Guarantors or
any Purchaser, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Purchaser shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon the acceptance hereof, this letter
and such acceptance hereof shall constitute a binding agreement between each of
the Purchasers, the Company and the Guarantors. It is understood that your
acceptance of this letter on behalf of each of the Purchasers is pursuant to the
authority set forth in a form of Agreement among Purchasers, the form of which
shall be submitted to the Company for examination upon request.
Very truly yours,
METAL MANAGEMENT, INC.
By: /s/ DAVID A. CARPENTER
-----------------------------------
Name: David A. Carpenter
Title: Vice President
AEROSPACE METALS, INC.
AMERICAN SCRAP PROCESSING, INC.
BRIQUETTING CORPORATION OF AMERICA
C. SHREDDING CORP.
CALIFORNIA METALS RECYCLING, INC.
CIM TRUCKING, INC.
COMETCO CORP.
COZZI BUILDING CORPORATION
COZZI IRON & METAL, INC.
EMCO TRADING, INC.
FERREX TRADING CORPORATION
FIRMA, INC.
FIRMA PLASTIC CO., INC.
HOUSTON COMPRESSED STEEL CORP.
HOUTEX METALS COMPANY, INC.
THE ISAAC CORPORATION
P. JOSEPH IRON & METAL, INC.
KANKAKEE SCRAP CORPORATION
MACLEOD METALS CO.
METAL MANAGEMENT ARIZONA, INC.
METAL MANAGEMENT REALTY, INC.
138 SCRAP ACQUISITION CORP.
PAULDING RECYCLING, INC.
PROLER SOUTHWEST INC.
PROLER STEELWORKS L.L.C.
SALT RIVER RECYCLING, L.L.C.
SCRAP PROCESSING, INC.
SUPERIOR FORGE, INC.
TROJAN TRADING CO.
USA SOUTHWESTERN CARRIER, INC.
By: /s/ DAVID A. CARPENTER
-----------------------------------
Name: David A. Carpenter
Title: Vice President
17
<PAGE> 18
RESERVE IRON & METAL LIMITED PARTNERSHIP
By: P. JOSEPH IRON & METAL, INC.,
its general partner
By: /s/ DAVID A. CARPENTER
-------------------------------------
Name: David A. Carpenter
Title: Vice President
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
BT ALEX. BROWN INCORPORATED
SALOMON BROTHERS INC
By: /s/ GOLDMAN, SACHS & CO.
---------------------------------
(Goldman, Sachs & Co.)
18
<PAGE> 1
EXHIBIT 10.2
======================================
- ------------------------------------------------------------------
METAL MANAGEMENT, INC.
AND
THE GUARANTORS NAMED HEREIN
SENIOR SUBORDINATED NOTES DUE 2008
- ------------------------------------------------------------------
INDENTURE
DATED AS OF MAY 13, 1998
- ------------------------------------------------------------------
LASALLE NATIONAL BANK
TRUSTEE
- ------------------------------------------------------------------
======================================
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE 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)......................................................... 7.10
(c)......................................................... N.A.
311(a)...................................................... 7.11
(b)......................................................... 7.11
(c)......................................................... N.A.
312(a)...................................................... 2.05
(b)......................................................... 11.03
(c)......................................................... 11.03
313(a)...................................................... 7.06
(b)(1)...................................................... N.A.
(b)(2)...................................................... 7.07
(c)......................................................... 7.06; 11.02
(d)......................................................... 7.06
314(a)...................................................... 4.03; 11.02
(c)(1)...................................................... 11.04
(c)(2)...................................................... 11.04
(c)(3)...................................................... N.A.
(d)......................................................... N.A.
(e)......................................................... 11.05
(f)......................................................... N.A.
315(a)...................................................... 7.01
(b)......................................................... 7.05; 11.02
(c)......................................................... 7.01
(d)......................................................... 7.01
(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
(c)......................................................... N.A.
317(a)(1)................................................... 6.08
(a)(2)...................................................... 6.09
(b)......................................................... 2.04
318(a)...................................................... 11.01
(b)......................................................... N.A.
(c)......................................................... 11.01
</TABLE>
- -------------------------
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS................................................. 1
SECTION 1.02. OTHER DEFINITIONS........................................... 13
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT........... 14
SECTION 1.04. RULES OF CONSTRUCTION....................................... 14
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING............................................. 14
SECTION 2.02. EXECUTION AND AUTHENTICATION................................ 16
SECTION 2.03. REGISTRAR AND PAYING AGENT.................................. 16
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST......................... 17
SECTION 2.05. HOLDER LISTS................................................ 17
SECTION 2.06. TRANSFER AND EXCHANGE....................................... 17
SECTION 2.07. REPLACEMENT NOTES........................................... 23
SECTION 2.08. OUTSTANDING NOTES........................................... 24
SECTION 2.09. TREASURY NOTES.............................................. 24
SECTION 2.10. TEMPORARY NOTES............................................. 24
SECTION 2.11. CANCELLATION................................................ 24
SECTION 2.12. DEFAULTED INTEREST.......................................... 25
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.......................................... 25
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED........................... 25
SECTION 3.03. NOTICE OF REDEMPTION........................................ 25
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.............................. 26
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE................................. 26
SECTION 3.06. NOTES REDEEMED IN PART...................................... 27
SECTION 3.07. OPTIONAL REDEMPTION......................................... 27
SECTION 3.08. MANDATORY REDEMPTION........................................ 27
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS......... 27
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES............................................ 29
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY............................. 29
SECTION 4.03. REPORTS..................................................... 30
SECTION 4.04. COMPLIANCE CERTIFICATE...................................... 30
SECTION 4.05. TAXES....................................................... 31
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.............................. 31
SECTION 4.07. RESTRICTED PAYMENTS......................................... 31
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES................................................ 33
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED
STOCK....................................................... 34
SECTION 4.10. ASSET SALES................................................. 36
SECTION 4.11. TRANSACTIONS WITH AFFILIATES................................ 37
SECTION 4.12. LIENS....................................................... 37
SECTION 4.13. BUSINESS ACTIVITIES......................................... 38
</TABLE>
i
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 4.14. CORPORATE EXISTENCE......................................... 38
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.................. 38
SECTION 4.16. ANTI-LAYERING............................................... 39
SECTION 4.17. SALE AND LEASEBACK TRANSACTIONS............................. 39
SECTION 4.18. ADDITIONAL SUBSIDIARY GUARANTEES............................ 40
SECTION 4.19. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY
OWNED RESTRICTED SUBSIDIARIES............................... 40
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.................... 40
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED........................... 41
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT........................................... 41
SECTION 6.02. ACCELERATION................................................ 42
SECTION 6.03. OTHER REMEDIES.............................................. 43
SECTION 6.04. WAIVER OF PAST DEFAULTS..................................... 43
SECTION 6.05. CONTROL BY MAJORITY......................................... 43
SECTION 6.06. LIMITATION ON SUITS......................................... 44
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT............... 44
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.................................. 44
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM............................ 44
SECTION 6.10. PRIORITIES.................................................. 45
SECTION 6.11. UNDERTAKING FOR COSTS....................................... 45
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE........................................... 45
SECTION 7.02. RIGHTS OF TRUSTEE........................................... 46
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE................................ 47
SECTION 7.04. TRUSTEE'S DISCLAIMER........................................ 47
SECTION 7.05. NOTICE OF DEFAULTS.......................................... 47
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.................. 47
SECTION 7.07. COMPENSATION AND INDEMNITY.................................. 48
SECTION 7.08. REPLACEMENT OF TRUSTEE...................................... 48
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC............................ 49
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION............................... 49
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY........... 50
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.... 50
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.............................. 50
SECTION 8.03. COVENANT DEFEASANCE......................................... 50
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.................. 51
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS....................... 52
SECTION 8.06. REPAYMENT TO COMPANY........................................ 52
SECTION 8.07. REINSTATEMENT............................................... 52
</TABLE>
ii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES......................... 53
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES............................ 53
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT......................... 54
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS........................... 54
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES............................ 55
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC............................. 55
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.................................... 55
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY........................ 56
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT........................... 56
SECTION 10.04. ACCELERATION OF NOTES....................................... 57
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER......................... 57
SECTION 10.06. NOTICE BY COMPANY........................................... 57
SECTION 10.07. SUBROGATION................................................. 57
SECTION 10.08. RELATIVE RIGHTS............................................. 58
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY................ 58
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.................... 59
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.......................... 59
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION....................... 59
SECTION 10.13. THIRD PARTY BENEFICIARY, ETC................................ 60
ARTICLE 11
SUBSIDIARY GUARANTEES
SECTION 11.01. SUBSIDIARY GUARANTEES....................................... 60
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES............. 61
SECTION 11.03. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS........... 61
SECTION 11.04. RELEASES FOLLOWING SALE OF ASSETS........................... 62
SECTION 11.05. LIMITATION ON GUARANTOR LIABILITY........................... 62
SECTION 11.06. "TRUSTEE" TO INCLUDE PAYING AGENT........................... 62
SECTION 11.07. SUBORDINATION OF SUBSIDIARY GUARANTEE....................... 62
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS................................ 63
SECTION 12.02. NOTICES..................................................... 63
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES....................................................... 64
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.......... 64
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION............... 64
SECTION 12.06. RULES BY TRUSTEE AND AGENTS................................. 65
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS................................................ 65
SECTION 12.08. GOVERNING LAW............................................... 65
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS............... 65
SECTION 12.10. SUCCESSORS.................................................. 65
SECTION 12.11. SEVERABILITY................................................ 65
SECTION 12.12. COUNTERPART ORIGINALS....................................... 65
SECTION 12.13. TABLE OF CONTENTS; HEADINGS; ETC............................ 65
</TABLE>
iii
<PAGE> 6
EXHIBITS
<TABLE>
<S> <C>
Exhibit A-1 Form of Note
Exhibit A-2 Form of Regulation S Temporary Global Note
Exhibit B-1 Form of Certificate for Exchange or Registration of Transfer
from U.S. Global Note to Regulation S Global Note
Exhibit B-2 Form of Certificate for Exchange or Registration of Transfer
from Regulation S Global Note to U.S. Global Note
Exhibit B-3 Form of Certificate for Exchange or Registration of Transfer
of Definitive Notes
Exhibit B-4 Form of Certificate for Exchange or Registration of Transfer
from U.S. Global Note or Regulation S Permanent Global Note
to Definitive Note
Exhibit B-5 Form of Certificate for Exchange or Registration of Transfer
from Definitive Note to Rule U.S. Global Note or Regulation
S Permanent Global Note
Exhibit C Subsidiary Guarantee
Exhibit D Form of Certificate from Institutional Accredited Investors
</TABLE>
iv
<PAGE> 7
INDENTURE dated as of May 13, 1998 among Metal Management, Inc., a Delaware
corporation (the "Company"); Aerospace Metals, Inc., American Scrap Processing,
Inc., Briquetting Corporation of America, C Shredding Corp., California Metals
Recycling, Inc., CIM Trucking, Inc., Cometco Corp., Cozzi Building Corporation,
Cozzi Iron & Metal, Inc., EMCO Trading, Inc., Ferrex Trading Corporation, Firma,
Inc., Firma Plastic Co., Inc., Houston Compressed Steel Corp., HouTex Metals
Company, Inc., The Isaac Corporation, P. Joseph Iron & Metal, Inc., Kankakee
Scrap Corporation, Mac Leod Metals Co., Metal Management Arizona, Inc., Metal
Management Realty, Inc., 138 Scrap Acquisition Corp., Paulding Recycling, Inc.,
Proler Southwest Inc., Proler Steelworks L.L.C., Reserve Iron & Metal Limited
Partnership; Salt River Recycling, L.L.C., Scrap Processing, Inc., Superior
Forge, Inc., Trojan Trading Co., and USA Southwestern Carrier, Inc. and LaSalle
National Bank, a national banking association, as trustee (the "Trustee").
The Company, the Guarantors (as defined in Section 1.01 hereof) and the
Trustee agree as follows for the benefit of each other and for the equal and
ratable benefit of the Holders of the Senior Subordinated Notes due 2008 (the
"Subordinated Notes") and the Senior Subordinated Exchange Notes due 2008 (the
"Exchange Notes" and, together with the Subordinated Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured at
the time of acquisition thereof by a Lien encumbering any asset acquired by such
specified Person.
"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 purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means members of, or participants in, the Depositary.
"Applicable Procedures" means applicable procedures of the Depositary,
Euroclear or Cedel Bank, as the case may be.
"Asset Sale" means:
(i) the sale, conveyance, transfer or other disposition (whether in a
single transaction or a series of related transactions) of property or
assets (including by way of a sale and leaseback) of the Company or any
Restricted Subsidiary to any Person other than the Company or any
Restricted Subsidiary of the Company (each referred to in this definition
as a "disposition") or
(ii) the issuance or sale of Equity Interests of any Restricted
Subsidiary (other than directors' qualifying shares) to any Person other
than the Company or any Restricted
<PAGE> 8
Subsidiary of the Company (whether in a single transaction or a series of
related transactions), in each case set forth in these clauses (i) and
(ii), other than:
(a) a disposition of Cash Equivalents or tangible personal property
(including obsolete or redundant equipment) in the ordinary course of
business of the Company or the applicable Restricted Subsidiary;
(b) the disposition of all or substantially all of the assets of
the Company in a manner permitted pursuant to the provisions of Section
5.01 hereof or any disposition that constitutes a Change of Control
pursuant to this Indenture;
(c) any disposition that is a Restricted Payment or Permitted
Investment that is not prohibited under the provisions of Section 4.07
hereof; and
(d) any disposition, or related series of dispositions, of assets
with an aggregate Fair Market Value of less than $1.5 million.
"Attributable Debt" means, in respect of a sale and leaseback transaction,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet of the lessee
thereof in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person (excluding "earn-out" payments
pursuant to acquisition agreements of the Company or any Subsidiary).
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and time
deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any commercial bank having combined capital and
surplus in excess of $200.0 million (or the foreign currency equivalent thereof)
and whose short-term commercial paper rating, or that of its parent holding
company, is at least "A-1" or the equivalent by S&P and at least "Prime-1" or
the equivalent by Moody's, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses (ii)
and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) shares of money market or
similar funds which comply with Rule 2a-7 or any successor rule of the SEC and
(vi) commercial paper rated A-1 or higher by S&P or P-1 by Moody's and in each
case maturing within one year after the date of acquisition.
2
<PAGE> 9
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease or transfer, in one or a series of related transactions (other than
by merger or consolidation), of all or substantially all of the assets of the
Company and its Restricted Subsidiaries, taken as a whole, to any "person" (as
such term is used in Section 13(d)(3) of the Exchange Act); (ii) the adoption of
a plan relating to the liquidation or dissolution of the Company; (iii) (A) the
acquisition by any Person or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act), other than the Principals, of a direct or
indirect interest in more than 35% of the voting power of the voting stock of
the Company by way of acquisition, merger or consolidation or otherwise and (B)
the Principals beneficially owning, directly or indirectly, a lesser percentage
of the voting power of the Voting Stock of the Company than such Person or group
and the Principals not having the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of the Company; (iv) a majority of the members of the Board of
Directors of the Company ceasing to be Continuing Directors; or (v) any Person
or group effecting a "Rule 13e-3 transaction" (within the meaning of Rule 13e-3
under the Exchange Act) with respect to the Company.
"Company" has the meaning set forth in the preamble hereto.
"Company Preferred Stock" means the $25 million in aggregate liquidation
preference of the Series A Convertible Preferred Stock and the $20 million in
aggregate liquidation preference of the Series B Convertible Preferred Stock of
the Company outstanding on the date hereof.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary or non-recurring loss plus any net loss realized, in
each case, in connection with all Asset Sales (to the extent such losses were
deducted in computing such Consolidated Net Income), plus (ii) provision for
taxes based on income or profits of such Person and its Restricted Subsidiaries
for such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income, plus (iii) consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued and whether or not capitalized (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income, plus (iv)
any Consolidated Non-Cash Charges that were deducted in computing such
Consolidated Net Income, less (v) any non-cash items increasing Consolidated Net
Income for such period and plus (vi) any cash dividends received by the Company
or any of its Restricted Subsidiaries which are paid by an Unrestricted
Subsidiary.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the cumulative effect of a change in accounting principles
shall be excluded and (iv) the Net Income of any Unrestricted Subsidiary shall
be excluded, whether or not distributed to the Company or one of its
Subsidiaries.
3
<PAGE> 10
"Consolidated Net Worth" means, with respect to any Person as of any date,
the total of the following amounts of the Person and its Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP as of
such date: (i) the par or stated value of all outstanding Capital Stock of the
Person plus (ii) paid-in capital or capital surplus relating to such Capital
Stock plus (iii) any retained earnings or earned surplus less (A) any
accumulated deficit and (B) any amounts attributable to Disqualified Stock.
"Consolidated Non-Cash Charges" means, with respect to any Person, for any
period, the aggregate depreciation and amortization (including (a) amortization
of goodwill, (b) any incremental increase in amortization of account inventory
resulting from write-ups of such inventory in connection with the purchase
accounting treatment of an acquisition and (c) amortization of other intangibles
and other noncash charges or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period, in each case, determined on a consolidated basis in accordance with
GAAP.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Indenture or (ii) was nominated for election or
elected to such Board of Directors with, or whose election to such Board of
Directors was approved by, the affirmative vote of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof; provided, however, for the purpose of
presentation of Notes for payment, transfer or exchange and maintenance of the
registration books, such term shall mean the office at which the Trustee
conducts its corporate agency business, or such other address as to which the
Trustee may give notice to the Company.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes attached
hereto as Exhibit A-1, that do not include the information called for by
footnotes 1 and 2 thereof.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Debt" means so long as the Senior Bank Debt is
outstanding, the Senior Bank Debt.
"Disqualified Stock" means any Capital Stock that, 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, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Company's Senior Subordinated Exchange Notes due
2008 issuable in exchange for the Company's Senior Subordinated Notes due 2008.
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"Exchange Offer" means the offer that may be made by the Company pursuant
to the Registration Rights Agreement to issue and exchange the Exchange Notes
for the Subordinated Notes.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Senior Credit
Facility) in existence on the date of the Indenture, until such amounts are
repaid.
"Fair Market Value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, in cash,
between an informed and willing seller and an informed and willing and able
buyer, neither of whom is under undue pressure or compulsion to complete the
transaction. Fair Market Value shall be determined by the Board of Directors of
the Company acting reasonably and in good faith and, in the case of Fair Market
Value that exceeds $5 million, shall be evidenced by a Board Resolution
delivered to the Trustee; provided, however, that, in the case of any
determination of Fair Market Value for purposes of the covenant described under
Section 4.07 hereof, if the aggregate Fair Market Value could be reasonably
likely to exceed $10.0 million, the Fair Market Value shall be determined by 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.
"Fixed Charges" means, with respect to any Person for any period, the sum
of (i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations, imputed
interest with respect to Attributable Debt, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations, but
excluding amortization of deferred financing costs) and (ii) the consolidated
interest expense of such Person and its Restricted Subsidiaries that was
capitalized during such period and (iii) any interest expense on Indebtedness of
another Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon)
and (iv) all cash dividend payments (and non-cash dividend payments in the case
of a Person that is a Restricted Subsidiary) on any series of Preferred Stock of
such Person, in each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee or redemption
of Indebtedness, or such issuance or redemption of Preferred Stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. In addition, for purposes of making the computation referred to above,
(i) acquisitions that have been consummated by the Company or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date shall be deemed to have occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow and Fixed Charges for such reference
period shall be calculated giving pro forma effect (excluding any pro forma
increase in revenues other than historical revenue of the acquired business, but
including any pro forma expense and cost reductions, in each case calculated on
a
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<PAGE> 12
basis consistent with Regulation S-X under the Securities Act) to such
acquisition and related financing transactions, (ii) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date,
calculated giving pro forma effect to such disposition, shall be excluded, and
(iii) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"Foreign Subsidiaries" means any Subsidiary of the Company incorporated or
organized under the laws of a jurisdiction outside of the United States of
America and which, individually or together with all other such Subsidiaries
outside of the United States of America, represents less than 10% of the assets
or revenues of the Company and its Restricted Subsidiaries for any period, on a
consolidated basis and determined in accordance with GAAP.
"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 have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Notes" means, individually and collectively, the Regulation S
Temporary Global Note, the Regulation S Permanent Global Note and the Rule 144A
Global Note.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means (i) each of Aerospace Metals, Inc., American Scrap
Processing, Inc., Briquetting Corporation of America, C Shredding Corp.,
California Metals Recycling, Inc., CIM Trucking, Inc., Cometco Corp., Cozzi
Building Corporation, Cozzi Iron & Metal, Inc., EMCO Trading, Inc., Ferrex
Trading Corporation, Firma, Inc., Firma Plastic Co., Inc., Houston Compressed
Steel Corp., HouTex Metals Company, Inc., The Isaac Corporation, P. Joseph Iron
& Metal, Inc., Kankakee Scrap Corporation, Mac Leod Metals Co., Metal Management
Arizona, Inc., Metal Management Realty, Inc., 138 Scrap Acquisition Corp.,
Paulding Recycling, Inc., Proler Southwest Inc., Proler Steelworks L.L.C., Salt
River Recycling, L.L.C., Scrap Processing, Inc., Superior Forge, Inc., Trojan
Trading Co., USA Southwestern Carrier, Inc. and Reserve Iron & Metal Limited
Partnership; and (ii) each other direct or indirect Restricted Subsidiary of the
Company that executes a Subsidiary Guarantee or supplemental indenture in
accordance with the provisions of this Indenture, and their respective
successors and assigns.
"Hedging Obligations" means, with respect to any Person, the net
obligations of such Person under (i) currency exchange or interest rate swap
agreements, currency exchange or interest rate cap agreements and currency
exchange or interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange or interest rates or commodity prices.
"Holder" means a holder of any of the Notes.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or
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<PAGE> 13
banker's acceptances or representing Capital Lease Obligations or the maximum
fixed redemption or repurchase price of Redeemable Interests of such Person at
the time of determination or the balance deferred and unpaid of the purchase
price of any property (other than contingent or "earnout" payment obligations)
or representing any net Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP as well as all indebtedness of others secured by a Lien on
any asset of such Person (whether or not such indebtedness is assumed by such
Person) and, to the extent not otherwise included, the Guarantee by such Person
of any indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Subsidiary of the Company sells or otherwise disposes of
any Equity Interests of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Company, the Company shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
Fair Market Value of the Equity Interests of such Subsidiary not sold or
disposed of. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, New York, Chicago, Illinois or at a place
of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Loan Reductions" means permanent commitment reductions with respect to
revolving loans under the Senior Credit Facility (or any Permitted Refinancing
Indebtedness relating thereto) that have been made since the date hereof.
"Maturity" means, with respect to any Note, the date on which the principal
of such Note becomes due and payable as provided in such Note or this Indenture,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.
"Moody's" means Moody's Investor Service, Inc. and its successors.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
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<PAGE> 14
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and brokerage and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness (other than Senior Bank Debt) in connection with
such Asset Sale, distributions and payments to minority interest holders in
connection with such Asset Sale and any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they shall not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company pursuant to the
Offering Circular.
"Offering Circular" means the Offering Circular, dated May 8, 1998,
relating to the Notes.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officer's Certificate" means a certificate signed on behalf of the Company
by the principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of the Company, that meets the
requirements set forth in Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Pari Passu Indebtedness" means Indebtedness that ranks pari passu in right
of payment to the Notes.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in cash and Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (A) such Person
becomes a Restricted Subsidiary of the Company or (B) such Person, in one
transaction or a series of related transactions, is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company; (d) any Restricted Investment made as a result of the
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<PAGE> 15
receipt of consideration not constituting cash or Cash Equivalents from an Asset
Sale that was made pursuant to and in compliance with the provisions set forth
in Section 4.10 hereof; (e) any Investment existing on the date of this
Indenture, and any renewals or replacements thereof; (f) any Investment by
Restricted Subsidiaries in other Restricted Subsidiaries and Investments by
Subsidiaries that are not Restricted Subsidiaries in other Subsidiaries that are
not Restricted Subsidiaries; (g) any Investment acquired by the Company or any
of its Restricted Subsidiaries (A) in exchange for any other Investment or
receivable held by the Company or any such Restricted Subsidiary in connection
with or as a result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other Investment or receivable or (B) as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect to
any secured Investment or other transfer of title with respect to any secured
Investment in default; (h) Hedging Obligations; (i) any acquisition of assets,
Equity Interests or other securities by the Company for consideration consisting
of common Equity Interests of the Company; (j) loans and advances to officers,
directors and employees for business-related travel expenses, moving expenses
and other similar expenses, in each case, incurred in the ordinary course of
business; (k) Investments the payment for which consists exclusively of Equity
Interests (exclusive of Disqualified Stock) of the Company; (l) repurchases of
Notes by the Company or any Restricted Subsidiary in open market purchase
transactions; (m) Investments not to exceed $15 million in the aggregate at any
time outstanding in Unrestricted Subsidiaries or Permitted Joint Ventures; (n)
any Investment by the Company or any Restricted Subsidiary in any of its
suppliers in the form of "take or pay" or "requirements" contracts entered into
by the Company or such Restricted Subsidiary in the ordinary course of business;
and (o) the making of other Investments not to exceed $15 million in the
aggregate at any time outstanding.
"Permitted Joint Venture" means, with respect to any Person, any
corporation, partnership, limited liability company or other business entity of
which at least 25% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof).
"Permitted Junior Securities" means equity securities of the Company or
debt securities of the Company that are subordinated in right of payment to all
Senior Debt and all securities issued in exchange for Senior Debt that may at
the time be outstanding, to substantially the same extent as, or to a greater
extent than, the Notes.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of any premium required
to be paid in connection therewith and plus reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a final
maturity date no earlier than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity date no
earlier than the final maturity date of, and is subordinated in right of payment
to, the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
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"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock", as to any Person, means any Equity Interest with
preferential right of payment of dividends or upon liquidation, dissolution or
winding up over Equity Interests of any other class of such Person.
"Principal Business" means any business in the metals industry and
businesses reasonably related thereto.
"Principals" mean, collectively, (i) Samstock, L.L.C. and its affiliates
and successors and (ii) T. Benjamin Jennings, Gerard M. Jacobs, Albert A. Cozzi,
Frank J. Cozzi and Gregory P. Cozzi, and the respective spouses, parents and
lineal descendants (by blood, adoption or marriage) of the foregoing, trusts the
sole beneficiaries of which (other than contingent beneficiaries) are any of the
foregoing, or corporations, partnerships or limited liability companies the sole
shareholders, sole partners or sole members of which are any of the foregoing.
"Pro Forma Basis" means, with respect to any additional Indebtedness
incurred or Disqualified Stock issued, as the case may be, the Fixed Charge
Coverage Ratio for the Company for the most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date of such occurrence, as adjusted to reflect the incurrence of
such additional Indebtedness or the issuance of such Disqualified Stock, as the
case may be, and the application of the net proceeds therefrom, as of the
beginning of such four-quarter period.
"Purchase Money Indebtedness" means Indebtedness the net proceeds of which
are used for the purchase of property or assets acquired in the ordinary course
of business by the Person incurring such Indebtedness.
"Redeemable Interest" of any Person means any equity security of or other
ownership interest in such Person that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or
otherwise (including upon the occurrence of an event) matures or is required to
be redeemed (pursuant to any sinking fund obligation or otherwise) or is
convertible into or exchangeable for Indebtedness or is redeemable at the option
of the holder thereof, in whole or in part, at any time prior to the final
stated maturity of the Notes.
"Registration Rights Agreement" means the Exchange and Registration Rights
Agreement, dated as of the date hereof, by and among the Company, the Guarantors
and the other parties named on the signature pages thereof, as such agreement
may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global note that
contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 2 to the form of the Note attached hereto as Exhibit
A-1, and that is deposited with and registered in the name of the Depositary,
representing a series of Notes sold in reliance on Regulation S.
"Regulation S Temporary Global Note" means a single temporary global note
in the form of the Note attached hereto as Exhibit A-2 that is deposited with
and registered in the name of the Depositary, representing a series of Notes
sold in reliance on Regulation S.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
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"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee assigned to
perform the duties of Trustee hereunder and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of any such Person
that is not (i) an Unrestricted Subsidiary or (ii) a direct or indirect
Subsidiary of an Unrestricted Subsidiary; provided, however, that upon the
occurrence of any Unrestricted Subsidiary ceasing to be an Unrestricted
Subsidiary, such Subsidiary shall be included in the definition of Restricted
Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A-1, and that is
deposited with the Depositary or the Trustee as custodian for the Depositary and
registered in the name of the Depositary, representing a series of Notes sold in
reliance on Rule 144A.
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
Inc., a New York corporation, and its successors.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Bank Debt" means all Obligations under or in respect of the Senior
Credit Facility, together with any refunding, refinancing or replacement, in
whole or part, of such Indebtedness.
"Senior Credit Facility" means that certain credit facility dated as of
March 31, 1998, by and among the Company, certain subsidiaries of the Company,
BT Commercial Corporation, as agent for the lenders, and certain commercial
lending institutions party thereto, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended (including any amendment and restatement
thereof), modified, renewed, refunded, replaced or refinanced from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted by Section
4.09 hereof) or adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"Senior Debt" means (i) the Senior Bank Debt and (ii) any other
Indebtedness permitted to be incurred by the Company or a Guarantor under the
terms of this Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in right
of payment to the Notes (including interest after the filing of any petition in
bankruptcy or insolvency proceeding at the rate specified in the documents
relating to the applicable Senior Debt). Notwithstanding anything to the
contrary in the foregoing, Senior Debt shall not include (1) any liability for
federal, state, local or other taxes owed or owing by the Company, (2) any
Indebtedness of the Company to any of its Restricted Subsidiaries or other
Affiliates, (3) any trade payables, (4) that portion of any Indebtedness that is
incurred in violation of this Indenture, (5) Indebtedness which, when incurred
and without respect to any election under Section 1111(b) of the Title 11,
United States Code, is without recourse to the Company, (6) Indebtedness
evidenced by the Notes and (7) Capital Stock.
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"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Significant Subsidiary Guarantee" means the Subsidiary Guarantee of a
Significant Subsidiary.
"Subordinated Indebtedness" means any Indebtedness of the Company or any of
its Restricted Subsidiaries which is expressly by its terms subordinated in
right of payment to any other Indebtedness.
"Stated Maturity," when used with respect to any Note or any installment of
interest thereof, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subsidiary" means, with respect to any Person, (i) any corporation,
limited liability company, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"Subsidiary Guarantees" means the Guarantees of the Notes by each of the
Guarantors pursuant to this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. sec.sec.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Transfer Restricted Securities" means securities that bear or are required
to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as such in the preamble hereto until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, which designation may only be made if such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company; (c) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional Equity Interests or (y) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; and (d) has not guaranteed
or otherwise directly or indirectly provided credit support for any Indebtedness
of the Company or any of its Restricted Subsidiaries. Any such designation by
the Board of Directors shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the foregoing conditions and was permitted pursuant to and in
accordance with the provisions set forth in Section 4.07 hereof. If, at any
time, any Unrestricted Subsidiary would fail to meet the foregoing requirements
as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date pursuant to and in accordance with the provisions set
forth in Section 4.09 hereof, the Company
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<PAGE> 19
shall be in violation of such covenant). The Board of Directors of the Company
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted to be incurred pursuant to and
in accordance with the provisions set forth in Section 4.09 hereof, and (ii) no
Default or Event of Default would be in existence following such designation.
"Voting Stock" means, with respect to any Person, any class or series of
capital stock of such Person that is ordinarily entitled to vote in the election
of directors thereof at a meeting of stockholders called for such purpose,
without the occurrence of any additional event or contingency.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary that is
a Restricted Subsidiary.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person and one or
more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
---- ----------
<S> <C>
"Affiliate Transaction"..................................... 4.11
"Asset Sale Offer".......................................... 4.10
"Cedel Bank"................................................ 2.01
"Change of Control Offer"................................... 4.15
"Change of Control Payment"................................. 4.15
"Change of Control Payment Date"............................ 4.15
"Covenant Defeasance"....................................... 8.03
"Custodian"................................................. 6.01
"DTC"....................................................... 2.03
"Euroclear"................................................. 2.01
"Event of Default".......................................... 6.01
"Excess Proceeds"........................................... 4.10
"incur"..................................................... 4.09
"Legal Defeasance".......................................... 8.02
"Note Custodian"............................................ 2.03
"Offer"..................................................... 4.15
"Offer Amount".............................................. 3.09
"Offer Period".............................................. 3.09
"Paying Agent".............................................. 2.03
"Payment Blockage Notice"................................... 10.03
"Purchase Date"............................................. 3.09
"QIB"....................................................... 2.01
"Registrar"................................................. 2.03
"Restricted Payments"....................................... 4.07
"Shelf Registration Statement".............................. 7.03
"U.S. Global Notes"......................................... 2.01
</TABLE>
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<PAGE> 20
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes and the Subsidiary Guarantees means the Company
and the Guarantors, respectively, and any successor obligor upon the Notes
and the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
SECTION 1.04. 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 in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of (i) in the case of the Notes other than a
Regulation S Temporary Global Note, Exhibit A-1 attached hereto, and (ii) in the
case of a Regulation S Temporary Global Note, Exhibit A-2 attached hereto. The
Notes 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 Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its issuance and shall show the date of its authentication.
The Notes shall be issued in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The terms and provisions contained in the
Notes shall constitute, and are hereby expressly made, a part of this Indenture
and 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.
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<PAGE> 21
(a) Global Notes. Notes offered and sold to qualified institutional buyers
as defined in Rule 144A ("QIBs") in reliance on Rule 144A shall be issued
initially in the form of Rule 144A Global Notes (the "U.S. Global Notes"), which
shall be deposited on behalf of the purchasers of the Notes represented thereby
with the Depositary at its New York office (or with the Trustee as custodian for
the Notes), and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the U.S. Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as hereinafter
provided.
Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of the Regulation S Temporary Global Note, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the Depositary or the nominee of the Depositary for the accounts
of designated agents holding on behalf of the Euroclear System ("Euroclear") or
CEDEL, S.A. ("Cedel Bank"), duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The "40-day restricted period" (as defined
in Regulation S) shall be terminated upon the receipt by the Trustee of (i) a
written certificate from the Depositary, together with copies of certificates
from Euroclear and Cedel Bank certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note (except to the extent of any
beneficial owners thereof who acquired an interest therein pursuant to another
exemption from registration under the Securities Act and who will take delivery
of a beneficial ownership interest in a U.S. Global Note, all as contemplated by
Section 2.06(a)(ii) hereof), and (ii) an Officer's Certificate from the Company.
Following the termination of the 40-day restricted period, beneficial interests
in the Regulation S Temporary Global Note shall be exchanged for beneficial
interests in Regulation S Permanent Global Notes pursuant to the Applicable
Procedures. Simultaneously with the authentication of Regulation S Permanent
Global Notes, the Trustee shall cancel the Regulation S Temporary Global Note.
The aggregate principal amount of the Regulation S Temporary Global Note
and the Regulation S Permanent Global Notes may from time to time be increased
or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Notes represented thereby shall be made by
the Trustee or the Note Custodian (as hereinafter defined), at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel Bank shall be
applicable to interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by the Agent Members through
Euroclear or Cedel Bank.
Except as set forth in Section 2.06 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to U.S.
Global Notes and the Regulation S Permanent Global Notes deposited with or on
behalf of the Depositary.
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<PAGE> 22
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(b), authenticate and deliver the Global Notes that (i) shall be
registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Agent Members shall have no rights either under this Indenture with respect
to any Global Note held on their behalf by the Depositary or by the Trustee as
custodian for the Depositary or under such Global Note, and the Depositary may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Note 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 Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of
an owner of a beneficial interest in any Global Note.
(c) Definitive Notes. Notes issued in certificated form shall be
substantially in the form of Exhibit A-1 attached hereto (but without including
the text referred to in footnotes 1 and 2 thereto).
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by one
Officer, authenticate Notes for original issue up to $300,000,000 in aggregate
principal amount. The Trustee shall, upon a written order of the Company,
authenticate Exchange Notes for original issue up to the aggregate principal
amount of Subordinated Notes exchanged in the Exchange Offer or otherwise
exchanged for Subordinated Notes pursuant to the terms of the Registration
Rights Agreement. The aggregate principal amount of Notes outstanding at any
time may not exceed $300,000,000 except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes 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 or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency within the City and State of New York where Notes may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more co-
registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of the Guarantors may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
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<PAGE> 23
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as custodian with respect to the Global Notes (the "Note
Custodian").
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal
of and premium, interest and Liquidated Damages, if any, on the Notes, and will
notify the Trustee of any default by the Company or any Guarantor in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a Guarantor)
shall have no further liability for the money delivered to the Trustee. If the
Company or a Guarantor acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company or any Guarantor, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA sec. 312(a). If the Trustee is
not the Registrar, the Company and/or the Guarantors shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company and the Guarantors shall otherwise
comply with TIA sec. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Beneficial
interests in a Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the legend in subsection
(g) of this Section 2.06. Transfers of beneficial interests in the Global Notes
to Persons required to take delivery thereof in the form of an interest in
another Global Note shall be permitted as follows:
(i) U.S. Global Note to Regulation S Global Note. If, at any time, an
owner of a beneficial interest in a U.S. Global Note deposited with the
Depositary (or the Trustee as custodian for the Depositary) wishes to
transfer its interest in such U.S. Global Note to a Person who is required
or permitted to take delivery thereof in the form of an interest in a
Regulation S Global Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a Regulation S Global Note as provided in
this Section 2.06(a)(i). Upon receipt by the Trustee of (1) instructions
given in accordance with the Applicable Procedures from an Agent Member
directing the Trustee to credit or cause to be credited a beneficial
interest in the Regulation S Global Note in an amount equal to the
beneficial interest in the U.S. Global Note to be exchanged, (2) a written
order given in accordance with the Applicable Procedures containing
information regarding the participant account of the Depositary and the
Euroclear or Cedel Bank account to be credited with such increase, and (3)
a certificate in the form of Exhibit B-1 hereto given by the owner of such
beneficial interest stating that the transfer of such interest has been
made in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with
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<PAGE> 24
Rule 903 or Rule 904 of Regulation S, then the Trustee, as Registrar, shall
instruct the Depositary to reduce or cause to be reduced the aggregate
principal amount of the applicable U.S. Global Note and to increase or
cause to be increased the aggregate principal amount of the applicable
Regulation S Global Note by the principal amount of the beneficial interest
in the U.S. Global Note to be exchanged, to credit or cause to be credited
to the account of the Person specified in such instructions a beneficial
interest in the Regulation S Global Note equal to the reduction in the
aggregate principal amount at maturity of the applicable U.S. Global Note,
and to debit, or cause to be debited, from the account of the Person making
such exchange or transfer the beneficial interest in the U.S. Global Note
that is being exchanged or transferred.
(ii) Regulation S Global Note to U.S. Global Note. If, at any time, an
owner of a beneficial interest in a Regulation S Global Note deposited with
the Depositary or with the Trustee as custodian for the Depositary wishes
to transfer its interest in such Regulation S Global Note to a Person who
is required or permitted to take delivery thereof in the form of an
interest in a U.S. Global Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a U.S. Global Note or as provided in this
Section 2.06(a)(ii). Upon receipt by the Trustee of (1) instructions from
Euroclear or Cedel Bank, if applicable, and the Depositary, directing the
Trustee, as Registrar, to credit or cause to be credited a beneficial
interest in the U.S. Global Note, equal to the beneficial interest in the
Regulation S Global Note to be exchanged, such instructions to contain
information regarding the participant account with the Depositary to be
credited with such increase, (2) a written order given in accordance with
the Applicable Procedures containing information regarding the participant
account of the Depositary and (3) a certificate in the form of Exhibit B-2
attached hereto given by the owner of such beneficial interest stating (A)
if the transfer is pursuant to Rule 144A, that the Person transferring such
interest in a Regulation S Global Note reasonably believes that the Person
acquiring such interest in a U.S. Global Note is a QIB and is obtaining
such beneficial interest in a transaction meeting the requirements of Rule
144A and any applicable blue sky or securities laws of any state of the
United States or (B) if the transfer is pursuant to the requirements of the
Securities Act, that the Person transferring such interest in a Regulation
S Global Note reasonably believes that the Person acquiring such interest
in a U.S. Global Note is an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act and that the transfer complies with any applicable blue sky
or securities laws of any state of the United States or (C) if the transfer
is pursuant to any other exemption from the registration requirements of
the Securities Act, that the transfer of such interest has been made in
compliance with the transfer restrictions applicable to the Global Notes
and pursuant to and in accordance with the requirements of the exemption
claimed, such statement to be supported by an Opinion of Counsel from the
transferee or the transferor in form reasonably acceptable to the Company
and to the Registrar, then the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal amount
at maturity of such Regulation S Global Note and to increase or cause to be
increased the aggregate principal amount of the U.S. Global Note by the
principal amount of the beneficial interest in the Regulation S Global Note
to be exchanged, and the Trustee, as Registrar, shall instruct the
Depositary, concurrently with such reduction, to credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in the U.S. Global Note, equal to the reduction in the
aggregate principal amount of such Regulation S Global Note and to debit or
cause to be debited from the account of the Person making such transfer the
beneficial interest in the Regulation S Global Note that is being
transferred.
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<PAGE> 25
(b) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal amount of
Definitive Notes of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested; provided, however,
that the Definitive Notes presented or surrendered for register of transfer
or exchange:
(i) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Registrar duly executed by such
Holder or by his or her attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer Restricted
Security, such request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of such
Holder, without transfer, or such Transfer Restricted Security is
being transferred to the Company, a certification to that effect from
such Holder (in substantially the form of Exhibit B-3 hereto);
(B) if such Transfer Restricted Security is being transferred to
a QIB in accordance with Rule 144A or pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto);
(C) if such Transfer Restricted Security is being transferred to
an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act,
a certification to that effect from such Holder (in substantially the
form of Exhibit B-3 hereto); or
(D) if such Transfer Restricted Security is being transferred in
reliance on any other exemption from the registration requirements of
the Securities Act, a certification to that effect from such Holder
(in substantially the form of Exhibit B-3 hereto) and an Opinion of
Counsel from such Holder or the transferee reasonably acceptable to
the Company and to the Registrar to the effect that such transfer is
in compliance with the Securities Act.
(c) Transfer of a Beneficial Interest in a Global Note for a Definitive
Note.
(i) Any Person having a beneficial interest in a Global Note (other
than a Regulation S Temporary Global Note) may upon request, subject to the
Applicable Procedures, exchange such beneficial interest for a Definitive
Note. Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depositary (or Euroclear or
Cedel Bank, if applicable) from the Depositary or its nominee on behalf of
any Person having a beneficial interest in such Global Note, and, in the
case of a Transfer Restricted Security, the following additional
information and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a
certification to that effect from such Person (in substantially the form
of Exhibit B-4 hereto);
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A or pursuant to an exemption from registration
in accordance with Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from the transferor (in substantially the
form of Exhibit B-4 hereto);
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<PAGE> 26
(C) if such beneficial interest is being transferred to an
institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, a
certification to that effect from the transferor (in substantially the
form of Exhibit B-4 hereto), or
(D) if such beneficial interest is being transferred in reliance on
any other exemption from the registration requirements of the Securities
Act, a certification to that effect from the transferor (in
substantially the form of Exhibit B-4 hereto) and an Opinion of Counsel
from the transferee or the transferor reasonably acceptable to the
Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act,
the Trustee or the Note Custodian, at the direction of the Trustee, shall,
in accordance with the standing instructions and procedures existing
between the Depositary and the Note Custodian, cause the aggregate
principal amount of the applicable Global Note (e.g., the U.S. Global Note
or the Regulation S Permanent Global Note) to be reduced accordingly and,
following such reduction, the Company and the Guarantors shall execute and,
the Trustee shall authenticate and deliver to the transferee a Definitive
Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial interest in
a Global Note (other than a Regulation S Temporary Global Note), as
applicable, pursuant to this Section 2.06(c) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Following any such
issuance of Definitive Notes, the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal amount
at maturity of the applicable Global Note to reflect the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding
any other provision of this Indenture (other than the provisions set forth in
subsection (f) of this Section 2.06), a Global Note may not be transferred as a
whole except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(e) Transfer and Exchange of a Definitive Note for a Beneficial Interest in
a Global Note. A Definitive Note may not be exchanged for a beneficial interest
in a Global Note except, subject to the Applicable Procedures, upon satisfaction
of the requirements set forth below. Upon receipt by the Trustee of a Definitive
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, and, in the case of a Transfer Restricted
Security, the following additional information and documents (all of which may
be submitted by facsimile):
(i) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a certification
to that effect from such Person (in substantially the form of Exhibit B-5
hereto);
(ii) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A or pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act, a certification
to that effect from the transferor (in substantially the form of Exhibit
B-5 hereto);
(iii) if such beneficial interest is being transferred to an
institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act, a certification
to that effect from the transferor (in substantially the form of Exhibit
B-5 hereto); or
(iv) if such beneficial interest is being transferred in reliance on
any other exemption from the registration requirements of the Securities
Act, a certification to that effect from the
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<PAGE> 27
transferor (in substantially the form of Exhibit B-5 hereto) and an Opinion
of Counsel from the transferee or the transferor reasonably acceptable to
the Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act,
the Trustee shall cancel such Definitive Note in accordance with Section 2.11
hereof and cause, or direct the Note Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depositary and the
Note Custodian, the aggregate principal amount of Notes represented by the
applicable Global Note (e.g., the U.S. Global Note or the Regulation S Permanent
Global Note, as the case may be) to be increased accordingly. If none of the
applicable Global Notes are then outstanding, the Company shall issue and, upon
receipt of an authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate a new applicable Global Note in the appropriate
principal amount.
(f) Authentication of Definitive Notes in Absence of Depositary. If at any
time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Notes and a successor Depositary for the Global Notes is not appointed by
the Company within 90 days after delivery of such notice;
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Notes under this
Indenture; or
(iii) there shall have occurred and be continuing an Event of Default
or any event which after notice or lapse of time or both would be an Event
of Default with respect to the Notes,
then the Company and the Guarantors shall execute, and the Trustee shall, upon
receipt of an authentication order in accordance with Section 2.02 hereof,
authenticate and deliver, Definitive Notes in an aggregate principal amount
equal to the principal amount of the Global Notes in exchange for such Global
Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii) and (iii),
each Note certificate evidencing Global Notes and Definitive Notes (and all
Notes issued in exchange therefor or substitution thereof) shall bear
legends in substantially the following form:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND
(A) MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(1) BY THE INITIAL INVESTOR (a) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (d) TO THE COMPANY OR (e) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (2) BY SUBSEQUENT
INVESTORS AS SET FORTH IN (1) ABOVE AND, IN ADDITION, TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND, IN EACH CASE,
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTES EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
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<PAGE> 28
(A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF
THE EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF THE NOTES.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Note that
does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security upon
receipt of a certification from the transferring holder substantially in
the form of Exhibit B-3 hereto; and
(B) in the case of any Transfer Restricted Security represented by
a Global Note, such Transfer Restricted Security shall not be required
to bear the legend set forth in (i) above, but shall continue to be
subject to the provisions of Section 2.06(a) and (b) hereof; provided,
however, that with respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global Note for a
Definitive Note that does not bear the legend set forth in (i) above,
which request is made in reliance upon Rule 144, the Holder thereof
shall certify in writing to the Registrar that such request is being
made pursuant to Rule 144 (such certification to be substantially in the
form of Exhibit B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
in reliance on any exemption from the registration requirements of the
Securities Act (other than exemptions pursuant to Rule 144A or Rule 144
under the Securities Act) in which the Holder or the transferee provides an
Opinion of Counsel to the Company and the Registrar in form and substance
reasonably acceptable to the Company and the Registrar (which Opinion of
Counsel shall also state that the transfer restrictions contained in the
legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Note that
does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security represented by
a Global Note, such Transfer Restricted Security shall not be required
to bear the legend set forth in (i) above, but shall continue to be
subject to the provisions of Section 2.06(a) and (b) hereof.
(iv) Notwithstanding the foregoing, upon consummation of the Exchange
Offer in accordance with the Registration Rights Agreement, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate the Exchange Notes in
exchange for the Notes accepted for exchange in the Exchange Offer, which
Exchange Notes shall not bear the legend set forth in (i) above, and the
Registrar shall rescind any restriction on the transfer of such Exchange
Notes, in each case unless the Holder of such Notes is either (A) a
broker-dealer, (B) a Person participating in the distribution of the
Subordinated Notes or (C) a Person who is an affiliate (as defined in Rule
144) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or canceled, all Global Notes shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for Definitive Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be
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<PAGE> 29
made on such Global Note, by the Trustee or the Note Custodian, at the direction
of the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
and the Guarantors shall execute and the Trustee shall authenticate
Definitive Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder 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 exchange or transfer pursuant to Sections
3.07, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes
shall be the valid obligations of the Company and the Guarantors,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to exchange Notes
during a period beginning at the opening of business 15 days before the
day of any selection of Notes for redemption under Section 3.02 hereof
and ending at the close of business on the day of selection; or
(B) to register the transfer of or to exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest,
premium and Liquidated Damages, if any, on such Notes, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Definitive Notes and Global Notes
in accordance with the provisions of Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by one Officer of the Company, shall authenticate a
replacement Note if the Trustee's requirements and the requirements of Section
8-405(a)(1) of the Uniform Commercial Code are met. If required by the Trustee
or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the reasonable judgment of the Trustee and the Company to protect
the Company, the Trustee, any Agent and any authenticating agent from any loss
that any of them may suffer if a Note is replaced. The Company may charge such
Holder for its expenses in replacing a Note.
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<PAGE> 30
Every replacement Note is an additional obligation of the Company and the
Guarantors and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note.
If a Note is replaced pursuant to Section 2.07 hereof (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.07 hereof.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company or a Restricted Subsidiary)
holds, on a redemption date or maturity date, money sufficient to pay Notes
payable on that date, then on and after that date such Notes shall be deemed to
be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, by any Guarantor or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Guarantor, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that a Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by one Officer of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
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<PAGE> 31
SECTION 2.12. DEFAULTED INTEREST.
If the Company or any Guarantor defaults in a payment of interest on the
Notes, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Note and the date of the proposed payment. The Company shall fix or cause
to be fixed each such special record date and payment date, provided that no
such special record date shall be less than 10 days prior to the related payment
date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Trustee in
the name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45
days (unless the Trustee consents to a shorter period) but not more than 60 days
before a redemption date, an Officer's Certificate setting forth (i) the clause
of this Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the
redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or such method as the Trustee shall deem fair and
appropriate. In the event of partial redemption by lot, the particular Notes to
be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price and the amount of accrued interest and
Liquidated Damages, if any;
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<PAGE> 32
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest and Liquidated Damages, if any, on Notes called for
redemption ceases to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes;
and
(i) if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or portions thereof) to be redeemed as well as the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the redemption
date, an Officer's Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before 10:00 a.m. Eastern Time on the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest and Liquidated Damages, if any, on
all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest and Liquidated Damages, if any, on all
Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest and Liquidated Damages, if any, shall
cease to accrue on the Notes or the portions of Notes called for redemption
whether or not such Notes are presented for payment. If a Note is redeemed on or
after an interest record date but on or prior to the related interest payment
date, then any accrued and unpaid interest and Liquidated Damages, if any, shall
be paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest and Liquidated Damages, if any,
shall be paid on the unpaid principal from the redemption date until such
principal is paid, and, to the extent lawful, on any interest and Liquidated
Damages, if any, not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.01 hereof.
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<PAGE> 33
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
Except as described below, the Notes are not redeemable, in whole or in
part, at the Company's option prior to May 15, 2003. From and after May 15,
2003, the Company may redeem all or any portion of the Notes at a redemption
price (expressed as a percentage of the principal amount thereof), as set forth
in the immediately succeeding paragraph, plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date.
The redemption price as a percentage of the principal amount shall be as
follows, if the Notes are redeemed during the twelve-month period commencing on
May 15 of each of the years indicated below, plus, in each case, accrued and
unpaid interest and Liquidated Damages, if any, thereon to the redemption date:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ----------------
<S> <C>
2003........................................................ 105.000%
2004........................................................ 103.333%
2005........................................................ 101.667%
2006 and thereafter......................................... 100.000%
</TABLE>
Prior to May 15, 2001, the Company may, at its option, on any one or more
occasions, redeem up to 35% of the aggregate principal amount of Notes
originally offered in the Offering at a redemption price equal to 110% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date, with the net proceeds of one or
more sales of Common Stock, par value $.01 per share ("Common Stock"), of the
Company; provided that at least 65% of the original aggregate principal amount
of Notes remains outstanding immediately after the occurrence of each such
redemption; and provided, further, that any such redemption shall occur within
60 days of the date of the closing of the corresponding sale of Common Stock of
the Company.
Any redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Section 3.01 through 3.06 hereof.
For purposes of this Article III, a repurchase by the Company or a
Restricted Subsidiary of the Notes in open market purchase transactions shall
not be deemed to be a redemption.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company shall
not be required to make mandatory or sinking fund redemption payments with
respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes, it shall follow
the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount
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<PAGE> 34
has been tendered, all Notes tendered in response to the Asset Sale Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest or Liquidated Damages, if any, shall be payable to Holders who tender
Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price, the amount of accrued and
unpaid interest and Liquidated Damages, if any, as of the Purchase Date and
the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest and Liquidated Damages, if any;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to
accrete or accrue interest and Liquidated Damages, if any, after the
Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may
not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer the Note by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his or her election to have such
Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On the Purchase Date for any Asset Sale Offer, the Company shall (i) accept
for payment the maximum principal amount of Notes tendered pursuant to such
Asset Sale Offer than can be purchased out of Excess Proceeds from such Asset
Sales, (ii) deposit with the Paying Agent the aggregate purchase price of all
Notes accepted for payment and any accrued and unpaid interest and Liquidated
Damages, if any, on such Notes as of the Purchase Date, and (iii) deliver or
cause to be delivered to the Trustee all Notes tendered pursuant to the Asset
Sale Offer. If less than all Notes
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<PAGE> 35
tendered pursuant to any Asset Sale Offer are accepted for payment by the
Company for any reason, selection of the Notes to be purchased by the Trustee
shall be in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not so listed, by lot or by such method as the Trustee shall deem fair and
appropriate; provided that Notes accepted for payment in part shall only be
purchased in integral multiples of $1,000. The Paying Agent shall promptly mail
to each Holder of Notes accepted for payment an amount equal to the purchase
price for such Notes plus any accrued and unpaid interest and Liquidated Damages
thereon, if any, and the Trustee shall promptly authenticate and mail to such
Holder of Notes accepted for payment in part a new Note equal in principal
amount to any unpurchased portion of the Notes, and any Note not accepted for
payment in whole or in part shall be promptly returned to the Holder of such
Note. On and after a Purchase Date, interest and Liquidated Damages, if any,
shall cease to accrue on the Notes accepted for payment. The Company shall
announce the results of the Offer to Holders of the Notes on or as soon as
practicable after the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or any Guarantor, holds
as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest on overdue principal at the rate equal to
the rate set forth in the Notes to the extent lawful; it shall pay interest on
overdue installments of interest and Liquidated Damages, if any, (without regard
to any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes 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 shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
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<PAGE> 36
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Trustee (i)
all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the SEC,
commencing immediately after the consummation of the Exchange Offer contemplated
by the Registration Rights Agreement, the Company shall file a copy of all such
information and reports with the SEC (which may be contained in Forms 10-K, 10-Q
and 8-K) for public availability (unless the SEC will not accept such a filing).
(b) For so long as any Notes remain outstanding, the Company and the
Guarantors shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4).
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year, an Officer's Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officer with a view to
determining whether each of the Company and the Guarantors has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to such Officer signing such certificate, that to the best of his or
her knowledge each of the Company and the Guarantors has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest or Liquidated Damages, if
any, on the Notes is prohibited or if such event has occurred, a description of
the event and what action the Company is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer of the Company or any Guarantor
becoming aware of any Default or Event of Default, an Officer's Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
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SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's Equity Interests
(other than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company); (ii) purchase, redeem, defease or otherwise
acquire or retire for value any Equity Interests of the Company or any direct or
indirect parent of the Company; (iii) make any principal payment on, or
purchase, redeem, defease or otherwise acquire or retire for value any
Subordinated Indebtedness, except at final maturity or scheduled installment or
sinking fund payments; or (iv) make any Restricted Investment (all such payments
and other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company shall, at the time of such Restricted Payment and
immediately after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09 hereof; and
(c) the amount of such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date hereof (including Restricted
Payments permitted by clauses (i), (vi) and (viii) of the next succeeding
paragraph, but excluding all other Restricted Payments permitted by the
next succeeding paragraph), is less than the sum of (i) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the fiscal quarter immediately
following the date hereof to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus (ii) 100% of the
aggregate net cash proceeds received by the Company from the issue or sale
since the date hereof of Equity Interests of the Company (including the net
cash proceeds of any exercise or conversion payments with respect to Equity
Interests) or of Disqualified Stock or debt securities of the Company that
have been converted into such Equity Interests (other than Equity
Interests, Disqualified Stock or convertible debt securities of the Company
sold to a Restricted Subsidiary of the Company and other than Disqualified
Stock or debt securities that have been converted into Disqualified Stock),
plus (iii) 100% of the
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aggregate amounts contributed to the capital of the Company since the date
hereof, plus (iv) to the extent that any Restricted Investment that was
made after the date hereof was sold for cash or was repaid, the lesser of
(A) the cash return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (B) the initial amount of such
Restricted Investment, plus (v) without duplication, to the extent that any
Unrestricted Subsidiary is designated by the Company as a Restricted
Subsidiary, an amount equal to the lesser of (A) the net book value of the
Company's Investment in such Unrestricted Subsidiary at the time of such
designation and (B) the Fair Market Value of such Investment at the time of
such designation, plus (vi) 50% of any cash dividends received by the
Company or a Restricted Subsidiary of the Company (except to the extent
that such dividends were already included in Consolidated Net Income and,
in the case of a Restricted Subsidiary, only to the extent of the Company's
ownership interest in such Restricted Subsidiary) after the date hereof
from an Unrestricted Subsidiary of the Company.
The foregoing provisions shall not prohibit:
(i) the payment of any dividend or redemption payment within 60
days after the date of declaration thereof, if at the date of
declaration such payment would have complied with the provisions of this
Indenture;
(ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company or any Restricted Subsidiary or any
Subordinated Indebtedness of the Company in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of Equity Interests of the Company
(other than any Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition shall be excluded from
clause (c)(ii) of this Section;
(iii) the defeasance, redemption, repurchase, retirement or other
acquisition of Subordinated Indebtedness with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness;
(iv) the redemption, repurchase, retirement or other acquisition of
Subordinated Indebtedness; provided that the aggregate price paid for
all such redemptions, repurchases, retirements or other acquisitions
since the date hereof does not exceed the principal amount (or, in the
case of Indebtedness issued with original issue discount, the
consideration received by the Company or any Restricted Subsidiary) of
such Subordinated Indebtedness incurred by the Company or any of its
Restricted Subsidiaries since the date hereof; and provided further,
that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition shall be
excluded from the immediately preceding clause (iii) and from clause
(c)(ii) of this Section;
(v) repurchases of Equity Interests deemed to occur upon exercise
of stock options if such Equity Interests represent a portion of the
exercise price of such options;
(vi) repurchases or redemptions of Equity Interests of the Company
held by officers or employees or former officers or employees of the
Company or any of its Restricted Subsidiaries pursuant to any employment
agreement or other written agreement in an aggregate amount not to
exceed $2.0 million in any fiscal year, and any such repurchases or
redemptions funded by life insurance proceeds received by the Company
upon the death of an insured officer or employee;
(vii) the acquisition by the Company of Equity Interests previously
issued and delivered to an escrow agent pursuant to an escrow agreement
or previously issued but never delivered pursuant to a contingent or
"earn-out" payment, in each case in connection with acquisition
agreements of the Company or any Subsidiary;
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(viii) the payment of any dividend on, or the redemption of, the
Company Preferred Stock, in each case in accordance with the terms
thereof as in effect on the date hereof; provided that (other than in
the case of a dividend payable solely in Equity Interests of the
Company) the Fixed Charge Coverage Ratio for the Company for the most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date of such payment,
redemption, repurchase, retirement or other acquisition would have been
at least 2.0 to 1.0 determined on a pro forma basis, as if such payment,
redemption, repurchase, retirement or other acquisition, together with
any other payments, redemptions, repurchases, retirements and other
acquisitions permitted by this clause (viii) occurring during the
preceding twelve-month period, had occurred at the beginning of the
applicable four-quarter period;
(ix) guarantees of obligations of Unrestricted Subsidiaries or
Permitted Joint Ventures by the Company or a Restricted Subsidiary
(other than Obligations constituting Indebtedness of the Company or a
Restricted Subsidiary) to the extent that a cash Investment by the
Company or such Restricted Subsidiary would be permitted in such
Unrestricted Subsidiaries under this covenant; provided, however, that
the extension of any such guarantees shall be deemed to be an Investment
by the Company or such Restricted Subsidiary in an amount equal to the
Obligations subject to the guarantees and shall be deemed to be made at
the time of such extension; and
(x) the making of other Restricted Payments not to exceed $10.0
million in the aggregate.
provided, further, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (iv), (v), (viii) or (ix) above, no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof; and provided further that for purposes of determining
the aggregate amount expended for Restricted Payments in accordance with clause
(c) of this Section, only the amounts expended under clauses (i), (vi) and
(viii) shall be included.
As of the date hereof, all of the Company's Subsidiaries shall be
Restricted Subsidiaries. The Company shall not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the last
sentence of the definition of "Unrestricted Subsidiary." For purposes of
designating any Restricted Subsidiary as an Unrestricted Subsidiary, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid) in the Subsidiary so designated shall be deemed to be
Restricted Payments in an amount equal to the Fair Market Value of such
Investment at the time of such designation. Such designation shall only be
permitted if a Restricted Payment in such amount would be permitted to be made
at such time and if such Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the Fair
Market Value (evidenced by a resolution of the Board of Directors set forth in
an Officer's Certificate delivered to the Trustee) on the date of the Restricted
Payment of the asset(s) proposed to be transferred by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
Not later than the date of making any Restricted Payment with a Fair Market
Value in excess of $5.0 million, the Company shall deliver to the Trustee an
Officer's Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, which calculations may be based upon the Company's latest
available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or
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restriction on the ability of any Restricted Subsidiary to (i)(a) pay dividends
or make any other distributions to the Company or any of its Restricted
Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest
or participation in, or measured by, its profits, or (b) pay any indebtedness
owed to the Company or any of its Restricted Subsidiaries, (ii) make loans or
advances to the Company or any of its Restricted Subsidiaries or (iii) sell,
lease or transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the date hereof,
(b) the Senior Credit Facility as in effect as of the date hereof, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, in whole or in part, provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more restrictive in
any material respect with respect to such dividend and other payment
restrictions than those contained in the Senior Credit Facility as in effect on
the date hereof, (c) this Indenture and the Notes, (d) applicable law, (e)
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
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 the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (f) by reason of nonassignment or net worth maintenance provisions
in leases entered into in the ordinary course of business, (g) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, or (h) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive in any material respect than those
contained in the agreements governing the Indebtedness being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur" and correlatively, an "incurrence" of)
any Indebtedness (including Acquired Debt) and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries to
issue any shares of Preferred Stock; provided, however, that the Company may
incur Indebtedness (including Acquired Debt) or issue shares of Disqualified
Stock if the Fixed Charge Coverage Ratio for the Company for the most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date of such incurrence would have been at
least 2.0 to 1.0 determined on a Pro Forma Basis.
The foregoing provisions shall not apply to:
(a) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness under the Senior Credit Facility and
Guarantees thereof by the Guarantors so long as, immediately after any such
incurrence, the aggregate principal amount outstanding under the Senior
Credit Facility (together with any Permitted Refinancing Indebtedness
incurred to refund, replace or refinance any Indebtedness incurred pursuant
to the Senior Credit Facility) pursuant to this paragraph (a) does not
exceed an amount equal to the greater of (x) $200.0 million, less the
aggregate amount of all Loan Reductions, and (y) the sum of (i) 85% of the
consolidated book value of the accounts receivable of the Company and its
Restricted Subsidiaries, (ii) 70% of the consolidated book value of the
inventory of the Company and its Restricted Subsidiaries and (iii) the
orderly liquidation value of the Company's property, plant and equipment
(initially $40.0 million), subject to automatic and permanent reduction by
$1.4 million each quarter, commencing July 1, 1998 and subject to increases
(but not in excess
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of $40.0 million) based on increases in the orderly liquidation value of
the Company's property, plant and equipment resulting from acquisitions
completed by the Company (as set forth in the appraisals accepted by the
agent under the Senior Credit Facility and provided that the automatic and
permanent reduction described above shall be increased by the amount of any
such increase divided by 28); provided, however, that in no event may the
aggregate principal amount outstanding under the Senior Credit Facility
pursuant to this paragraph (a) exceed $300.0 million; and provided,
further, that the amount of Indebtedness which may be incurred under the
Senior Credit Facility pursuant to this paragraph (a) shall be reduced by
the principal amount of any Acquired Debt incurred solely pursuant to
paragraph (j) below;
(b) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by the Notes and the Subsidiary
Guarantees in an amount not to exceed $180.0 million;
(c) Guarantees by the Company or a Guarantor of Indebtedness incurred
by the Company or a Restricted Subsidiary of the Company so long as the
incurrence of such Indebtedness by the primary obligor thereon was
permitted under the terms of this Indenture;
(d) the incurrence by the Company or a Restricted Subsidiary of the
Company of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that (i) all such
intercompany Indebtedness is expressly subordinate to the prior payment in
full of all Obligations with respect to the Notes and the Subsidiary
Guarantees and (ii)(A) any subsequent issuance or transfer of Equity
Interests that results in any such intercompany Indebtedness being held by
a Person other than the Company or a Restricted Subsidiary and (B) any sale
or transfer of any such intercompany Indebtedness to a Person that is not
either the Company or a Restricted Subsidiary of the Company shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
the Company or such Restricted Subsidiary, as the case may be, that is not
permitted by this clause (d);
(e) the incurrence by the Company or any Restricted Subsidiary of
Indebtedness (including reimbursement obligations relating thereto) in
respect of bid, payment or performance bonds, bankers' acceptances, letters
of credit and surety or appeal bonds, or guarantees of such obligations of
others, in the ordinary course of business;
(f) the issuance by a Restricted Subsidiary of the Company of any
shares of Preferred Stock to the Company or any of its Restricted
Subsidiaries; provided, however, that (i) all such Preferred Stock is
expressly subordinate to the prior payment in full of all Obligations with
respect to the Notes and the Subsidiary Guarantees and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any
such Preferred Stock being held by a Person other than the Company or a
Restricted Subsidiary and (B) any sale or transfer of any such shares of
Preferred Stock to a Person that is not either the Company or a Restricted
Subsidiary of the Company shall be deemed, in each case, to constitute an
issuance of such Preferred Stock by such Restricted Subsidiary that is not
permitted by this clause (f);
(g) Hedging Obligations of the Company or a Restricted Subsidiary that
are incurred (1) for the purpose of fixing or hedging interest rate risk
with respect to any Indebtedness that is permitted by the terms of this
Indenture to be outstanding or (2) for the purpose of fixing or hedging
currency exchange rate risk with respect to any currency exchanges or
commodity price risk with respect to commodities utilized by the Company in
the ordinary course of business;
(h) subject to paragraph (a) above, the incurrence by the Company or
any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund, Indebtedness that was permitted by this
Indenture to be incurred;
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(i) the incurrence of Indebtedness (but excluding any funded
Indebtedness) arising from agreements providing for indemnification,
adjustment of purchase price or similar Obligations, incurred or assumed in
connection with the acquisition or disposition of any business by the
Company or any Restricted Subsidiary;
(j) the incurrence of any Acquired Debt in an aggregate principal
amount permitted solely by this clause (j) not to exceed $25 million at any
one time outstanding;
(k) Capital Lease Obligations and Purchase Money Indebtedness of the
Company or any of its Restricted Subsidiaries (including any Permitted
Refinancing Indebtedness incurred to refund, replace or refinance any
Capital Lease Obligations or Purchase Money Indebtedness incurred pursuant
to this clause (k)) not to exceed $10.0 million at any one time
outstanding; and
(l) additional Indebtedness of the Company or any of its Restricted
Subsidiaries (including any Permitted Refinancing Indebtedness incurred to
refund, replace or refinance any Indebtedness incurred pursuant to this
clause (l)) in an aggregate principal amount not to exceed $30.0 million at
any one time outstanding (which Indebtedness may, but need not, be incurred
under the Senior Credit Facility).
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, cause or make an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value (evidenced by a
resolution of the Board of Directors, which in the case of an Asset Sale with a
Fair Market Value exceeding $5 million, shall be set forth in an Officer's
Certificate delivered to the Trustee) of the assets or Equity Interests issued
or sold or otherwise disposed of and (ii) at least 75% of the consideration
therefor received by the Company or such Restricted Subsidiary is in the form of
cash or Cash Equivalents; provided that the amount of (x) any liabilities (as
shown on the Company's or such Restricted Subsidiary's most recent balance
sheet) of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes or
any Guarantee thereof) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability and (y) any notes or other
Obligations received by the Company or any such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received), shall be deemed to be
cash for purposes of this provision.
Within 270 days after the Company's or any Restricted Subsidiary's receipt
of the Net Proceeds of any Asset Sale, the Company or such Restricted
Subsidiary, at its option, may apply (or in the case of clause (ii) or (iii)
below, enter into a binding, definitive agreement within such time period to
apply) the Net Proceeds from such Asset Sale (i) to permanently reduce
Obligations under the Senior Credit Facility (and to correspondingly reduce
commitments with respect thereto) or other Senior Debt or Pari Passu
Indebtedness, (ii) to the acquisition of a controlling interest in any one or
more businesses, to the making of a capital expenditure (including the
construction or improvement of properties and capital assets) or the acquisition
of long-term assets, in each case, that is engaged in or that is used or useful
in a Principal Business and/or (iii) to an investment in properties or assets
that replace the properties and assets that are the subject of such Asset Sale.
Pending the final application of any such Net Proceeds, the Company or such
Restricted Subsidiary may temporarily reduce Indebtedness under a revolving
credit facility, if any, or otherwise invest such Net Proceeds in Cash
Equivalents. Any Net Proceeds from the Asset Sale that are not invested as
provided and within the time period set forth in the first sentence of this
paragraph shall be deemed to constitute "Excess Proceeds."
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When the aggregate amount of Excess Proceeds exceeds $10.0 million, the
Company shall be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes, that is an
integral multiple of $1,000, that may be purchased out of the Excess Proceeds at
an offer price in cash in an amount equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date fixed for the closing of such offer, in accordance with the
procedures set forth herein. The Company shall commence an Asset Sale Offer with
respect to Excess Proceeds within ten Business Days after the date that the
aggregate amount of Excess Proceeds exceeds $10.0 million by mailing the notice
required pursuant to the terms of this Indenture, with a copy to the Trustee. To
the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for any purpose not prohibited by this Indenture. If the aggregate
principal amount of Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro
rata basis. Upon completion of any such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of an Asset Sale.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that might reasonably have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $2.0 million, a
certificate of the Chief Executive Officer of the Company certifying that such
Affiliate Transaction complies with clause (i) above, (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, a resolution of the Board of
Directors set forth in an Officer's Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors and (c) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $10.0
million, an opinion as to the fairness to the Holders of the Notes of such
Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing.
The foregoing provisions shall not apply to the following: (i) transactions
between or among the Company and/or any of its Restricted Subsidiaries in which
no Affiliate of the Company owns Capital Stock (other than directors' qualifying
shares); (ii) Restricted Payments or Permitted Investments permitted under
Section 4.07 hereof; and (iii) the payment of reasonable and customary regular
fees and compensation (including compensation payable in Equity Interests) to,
and indemnity provided on behalf of, officers, directors, employees or
consultants of the Company or any Subsidiary or Permitted Joint Venture of the
Company.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien that secures obligations under any Pari Passu Indebtedness or
Subordinated Indebtedness on any asset or property now owned or
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hereafter acquired by the Company or any of its Restricted Subsidiaries, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, unless the Notes are equally and ratably secured with the obligations
so secured or until such time as such obligations are no longer secured by a
Lien; provided, that in any case involving a Lien securing Subordinated
Indebtedness, such Lien is subordinated to the Lien securing the Notes on a
basis no less favorable than such Subordinated Indebtedness is subordinated to
the Notes.
SECTION 4.13. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than a Principal Business, except to such extent as
would not be material to the Company and its Restricted Subsidiaries, taken as a
whole.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, 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 (i) its corporate existence, and the corporate, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company, any such Guarantor or any such Subsidiary and (ii) the
rights (charter and statutory), licenses and material franchises of the Company,
the Guarantors and any of the Company's Restricted Subsidiaries; provided,
however, that the Company and the Guarantors shall not be required to preserve
any such right, license or franchise, or the corporate, partnership or other
existence of any of their Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company or such Guarantor, as applicable, and the
Company's Restricted Subsidiaries, taken as a whole, and that the loss thereof
is not adverse in any material respect to the Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, and regardless of the
applicability of any other provision hereof, each Holder of Notes shall have the
right to require the Company to repurchase all or any part (of at least $1,000
principal amount or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash (the "Change of Control Payment") equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase. Within 30 days
following a Change of Control, the Company shall mail to each Holder of Notes at
such Holder's registered address a notice stating: (i) that an offer (an
"Offer") is being made pursuant to this Section 4.15 as a result of a Change of
Control, the length of time the Offer shall remain open, and the maximum
aggregate principal amount of Notes that will be accepted for payment pursuant
to such Offer; (ii) the purchase price, the amount of accrued and unpaid
interest and Liquidated Damages, if any, as of the purchase date, and the
purchase date (which will be no earlier than 30 days or later than 60 days from
the date such notice is mailed) (the "Change of Control Payment Date"); (iii)
the circumstances and material facts regarding such Change of Control to the
extent known to the Company (including, but not limited to, information with
respect to pro forma and historical financial information after giving effect to
such Change of Control and information regarding the Person or Persons acquiring
control); (iv) that any Note not tendered will continue to accrue interest and
Liquidated Damages, if any; (v) that, unless the Company defaults in the payment
of the Change of Control Payment, all Notes accepted for payment pursuant to the
Offer shall cease to accrue interest and Liquidated Damages, if any, after the
Change of Control Payment Date; (vii) that Holders electing to have any Notes
purchased pursuant to an Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change
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of Control Payment Date; (viii) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have the Notes purchased; and
(ix) that Holders whose Notes are being purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes in connection with a
Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee for cancellation the Notes so accepted together with an Officer's
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail to each
Holder of Notes so tendered the Change of Control Payment for such Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note shall be in a principal amount of $1,000 or an integral multiple
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date. Any amounts remaining after the purchase of Notes pursuant to the Change
of Control Offer shall be returned by the Paying Agent to the Company.
(c) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth herein applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
SECTION 4.16. ANTI-LAYERING.
The Company shall not directly or indirectly incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to any Senior Debt and senior in any respect in right
of payment to the Notes, and no Guarantor shall incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to its Senior Debt and senior in any respect in right
of payment to the Subsidiary Guarantees.
SECTION 4.17. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company may enter into a sale and leaseback transaction if (i) the Company
could have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof and
(b) incurred a Lien to secure such Indebtedness pursuant to Section 4.12 hereof,
(ii) the gross cash proceeds of such sale and leaseback transaction are at least
equal to the Fair Market Value (as determined in good faith by the Board of
Directors and, in the case of a sale and leaseback transaction having a Fair
Market Value in excess of $5 million, set forth in an Officer's Certificate
delivered to the Trustee) of the property that is the subject of such sale and
leaseback transaction and (iii) the transfer of
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assets in such sale and leaseback transaction is permitted by, and the Company
applies the proceeds of such transaction in compliance with, Section 4.10
hereof.
SECTION 4.18. ADDITIONAL SUBSIDIARY GUARANTEES.
If (i) the Company acquires or creates any additional Subsidiary that is a
Restricted Subsidiary and (A) any such Restricted Subsidiary has assets or
revenues in any fiscal year in excess of $200,000, (B) any such Restricted
Subsidiary previously in existence has assets or revenues in any fiscal year in
excess of $200,000, or (C) any such Restricted Subsidiary, together with all
other Restricted Subsidiaries which are not Guarantors, has assets or revenues
in any fiscal year in excess of $1.0 million in the aggregate, or (ii) any
Restricted Subsidiary of the Company that is not a Guarantor guarantees any
Indebtedness of the Company other than the Notes or is a borrower under the
Senior Credit Facility (in each case described in clauses (i) and (ii), except
for Foreign Subsidiaries), the Company shall cause such Restricted Subsidiary to
execute and deliver to the Trustee a supplemental indenture in form and
substance reasonably satisfactory to the Trustee pursuant to which such
Restricted Subsidiary shall unconditionally guarantee all of the Company's
Obligations under the Notes on the terms set forth in such supplemental
indenture.
SECTION 4.19. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
RESTRICTED SUBSIDIARIES
The Company (i) shall not, and shall not permit any Wholly Owned Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any Wholly Owned Restricted Subsidiary of the Company to
any Person (other than the Company or a Wholly Owned Restricted Subsidiary of
the Company), unless (a) such transfer, conveyance, sale, lease or other
disposition is of all the Capital Stock of such Wholly Owned Restricted
Subsidiary and (b) the cash Net Proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with Section 4.10 hereof
and (ii) shall not permit any Wholly Owned Restricted Subsidiary of the Company
to issue any of its Equity Interests (other than, if necessary, shares of its
Capital Stock constituting directors' qualifying shares) to any Person other
than to the Company or a Wholly Owned Restricted Subsidiary of the Company.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another corporation, Person or entity
unless (i) the Company is the surviving corporation or the entity or the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the entity or Person formed by or surviving any such consolidation or
merger (if other than the Company) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes and this
Indenture pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; and (iv) except in the case of a merger of the Company with or
into a Wholly Owned Restricted Subsidiary of the Company, the Company or the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) shall have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated
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Net Worth of the Company immediately prior to the transaction and (B) shall, at
the time of such transaction and after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 4.09 hereof. The
sale, assignment, transfer, lease, conveyance or other disposition by the
Company or its Restricted Subsidiaries of all or substantially all of their
respective property or assets to one or more of their Subsidiaries shall not
relieve either the Company or the Restricted Subsidiaries from their respective
obligations hereunder or under the Notes. Subject to the foregoing, any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company or any other Restricted Subsidiary
or other entity that becomes, by reason of such consolidation, merger or
transfer, a Restricted Subsidiary.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into which or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest and Liquidated Damages, if any, on the Notes except in
the case of a sale of all of the Company's assets that meets the requirements of
Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of interest or
Liquidated Damages, if any, on the Notes (whether or not prohibited by
Article 10 hereof);
(ii) default in payment when due of the principal of or premium, if
any, on the Notes (whether or not prohibited by Article 10 hereof);
(iii) failure by the Company to comply with the provisions described
under Sections 4.10, 4.15 or 5.01 hereof;
(iv) failure by the Company for 60 days after notice from the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes to comply with any of its other covenants, agreements or
warranties in this Indenture or the Notes;
(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date hereof, which default results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness the maturity of which has
been so accelerated, aggregates $10.0 million or more;
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(vi) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments for the payment of money damages aggregating in excess
of $10.0 million, which judgments are not paid, discharged or stayed for a
period of 60 days;
(vii) except as permitted by this Indenture, any Significant
Subsidiary Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force
and effect (except by its terms) or any Guarantor, or any Person acting on
behalf of any Guarantor, shall deny or disaffirm its obligations under its
Significant Subsidiary Guarantee, in each case if such default continues
for a period of ten days after notice to the Company from the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes; and
(viii) the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
(c) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(d) makes a general assignment for the benefit of its creditors, or
(e) generally is not paying its debts as they become due; or
(ix) a court of competent jurisdiction enters an order or decree in an
involuntary case or proceeding under any Bankruptcy Law that:
(a) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
(b) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as whole, would
constitute a Significant Subsidiary or for all or substantially all of
the Company or any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(c) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
The term "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
An Event of Default shall not be deemed to have occurred under clause (iv)
of this Section 6.01 until the Trustee notifies the Company, or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes notify
the Company and the Trustee, of the Default and the Company does not cure the
Default within 60 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."
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default under clause (viii)
or (ix) of Section 6.01 hereof with respect to the Company) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes, by notice to the Trustee and the Company, may
declare all the Notes to be due and payable immediately; provided, however, that
so long as the Senior Credit Facility shall be in full force and effect, if an
Event of Default shall have occurred and be continuing (other than an Event of
Default under clause (viii) or (ix) of Section 6.01 hereof with
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respect to the Company), any such acceleration shall not be effective until the
earlier to occur of (x) five days following the delivery of a notice of such
acceleration to the agent or other representative of the lenders under the
Senior Credit Facility and (y) acceleration of any Indebtedness under the Senior
Credit Facility. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency described in
clause (viii) or (ix) of Section 6.01 hereof, with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes shall ipso facto
become due and payable without further action or notice.
At any time after a declaration of acceleration with respect to the Notes,
the Holders of a majority in principal amount of the Notes may rescind and
cancel such declaration and its consequences (i) if the rescission would not
conflict with any judgment or decree, (ii) if all existing Events of Default
have been cured or waived except nonpayment of principal, interest or Liquidated
Damages that has become due solely because of the acceleration, (iii) if, to the
extent the payment of such interest is lawful, interest on overdue installments
of interest and overdue principal at a rate equal to the rate borne by the
Notes, which has become due otherwise than by such declaration of acceleration,
has been paid, (iv) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances and (v) if, in the event of the cure or waiver of an Event of Default
of the type described in clause (viii) or (ix) of Section 6.01 hereof, the
Trustee shall have received an Officer's Certificate and an Opinion of Counsel
that such Event of Default has been cured or waived. No such rescission shall
affect any subsequent Default or impair any right consequent thereto. If any
Event of Default exists solely by reason of any acceleration of Indebtedness
under clause (v) of Section 6.01, and such acceleration is rescinded by the
holders of Indebtedness affected thereby prior to the time the Obligations under
the Notes have been accelerated, such Event of Default shall cease to exist.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note 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. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the Notes then outstanding
by notice to the Trustee may on behalf of the Holders of all of the Notes waive
any existing Default or Event of Default and its consequences under this
Indenture, except, subject to the second paragraph of Section 6.02 hereof, a
continuing Default or Event of Default in the payment of interest or Liquidated
Damages, if any, on, or the principal of, the Notes (including in connection
with an offer to purchase) or a Default or Event of Default with respect to any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Note affected. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee
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or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture that
the Trustee determines may be unduly prejudicial to the rights of other Holders
of Notes or that may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), 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 specified in Section 6.01(i) or (ii) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of and premium, interest and Liquidated Damages, if any, remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and Liquidated Damages, if any, in each case at the rate per annum
borne by the Notes, and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
or any of the Guarantors (or any other obligor upon the Notes), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof.
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To the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for any amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, interest and Liquidated Damages, if any, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Notes for principal, premium, interest and Liquidated
Damages, if any, respectively; and
Third: to the Company, the Guarantors or to such party as a court of
competent jurisdiction shall direct.
The Trustee, upon prior notice to the Company, may fix a record date and
payment date for any payment to Holders of Notes 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 a
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 of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the duties, rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default actually known to
the Trustee:
(i) the Trustee shall not be liable hereunder except for such duties
of the Trustee which shall be determined solely by the express provisions
of this Indenture and the Trustee need
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perform only those duties that are specifically set forth in this Indenture
and no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. 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 shall not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) 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), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability whatsoever in the performance of any
of its duties hereunder or in the exercise of any of its rights or powers
hereunder. The Trustee shall be under no obligation to exercise any of its
duties under this Indenture at the request of any Holders, unless such Holder
shall have offered to the Trustee security or indemnity satisfactory to it in
its reasonable judgment against any loss, liability or expense that might be
incurred by it in compliance with such request or direction.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely 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 require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. The Trustee may consult with
counsel and other experts and the written advice of such counsel or expert or
any Opinion of Counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent (other than an agent
who is an employee of the Trustee) chosen in good faith.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it reasonably believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or Guarantor, as applicable.
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(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 or direction of any of
the Holders unless such Holders shall have offered to the Trustee security or
indemnity satisfactory to it in its reasonable judgment against any loss,
liability or expense that might be incurred by it in compliance with such
request 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 Notes and may otherwise deal with the Company, the Guarantors or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in accordance with the requirements of the TIA, in the event
that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
(in the event such conflict arises after consummation of the Exchange Offer, or
if a Shelf Registration Statement (as defined in the Registration Rights
Agreement) has been filed, after such Shelf Registration Statement has been
declared effective by the SEC) or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
The Trustee, in its capacity as Registrar hereunder, shall not be charged
with knowledge of the Applicable Procedures and may conclusively rely that
instructions and certificates presented to it are in accordance with such
Applicable Procedures in effecting transfers pursuant to Section 2.06 hereof.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes (with a copy to
the Representative under the Senior Credit Facility) a notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a Default
or Event of Default in payment of principal, premium, if any, or interest or
Liquidated Damages, if any, on any Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each November 1 beginning with the November 1
following the date hereof, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA sec. 313(a) (but if no event described in
TIA sec. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA
sec. 313(b)(2). The Trustee shall also transmit by mail all reports as required
by TIA sec. 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and, if such report is prepared after the
Exchange Offer Registration Statement or the Shelf Registration Statement has
been declared effective by the SEC, filed with the SEC and each stock exchange,
if any, on which the Notes are listed in accordance with TIA sec. 313(d). The
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Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guarantors shall pay to the Trustee upon demand from
time to time compensation for its acceptance of this Indenture and services
hereunder which shall be agreed to by the Company and the Trustee in a separate
fee agreement. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company and the Guarantors
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services, except any disbursements, expenses and advances
as may be attributable to the Trustee's negligence or willful misconduct. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents and counsel.
The Company and the Guarantors shall indemnify the Trustee against any and
all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the reasonable costs and expenses of enforcing this
Indenture against the Company and the Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company, the
Guarantors or any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or willful misconduct. The Trustee shall notify the Company and the
Guarantors promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company and the Guarantors shall not relieve the
Company or the Guarantors of their obligations hereunder. The Company and the
Guarantors shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company and the
Guarantors shall pay the reasonable fees and expenses of such counsel. The
Company and the Guarantors need not pay for any settlement made without their
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section 7.07
shall survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Guarantors' payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal of and interest and Liquidated Damages, if any, on particular Notes.
Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01 (viii) or (ix) hereof occurs, the expenses and
the compensation for the services (including the reasonable fees and expenses of
its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
As to notice of liens or charges, the Trustee shall comply with the
provisions of TIA sec. 313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company (with a copy to the agent under
the Senior Credit Facility). The Holders of Notes of a majority in principal
amount of the then outstanding Notes may remove the Trustee by
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so notifying the Trustee and the Company in writing (with a copy to the agent
under the Senior Credit Facility). The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
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 Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company (with a copy to the agent under the
Senior Credit Facility). Thereupon, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Holders of the Notes (with a
copy to the agent under the Senior Credit Facility). The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
provided all sums owing to the Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor 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.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has or has a corporate parent that has a combined capital
and surplus of at least $100.0 million as set forth in its most recent published
annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA sec. 310(a)(1), (2) and (5). The Trustee is subject to TIA sec. 310(b).
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA sec. 311(a), excluding any creditor
relationship listed in TIA sec. 311(b).
A Trustee who has resigned or been removed shall be subject to TIA sec.
311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officer's Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from their obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, interest and Liquidated Damages,
if any, on such Notes when such payments are due, (b) the Company's obligations
with respect to such Notes under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07,
2.10 and 2.12 and Section 4.02 hereof, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article 8. Subject to compliance with this
Article 8, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from their obligations under the covenants contained in Sections
4.03(a), 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.19, 5.01
and 11.01 hereof with respect to the outstanding Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Notes shall thereafter be deemed not "outstanding" for the purposes 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 (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company, its Subsidiaries and any Guarantor may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default
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or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01 (iii) through
6.01 (vii) hereof and Sections 6.01 (viii) and (ix) (but, in the case of Section
6.01 (viii) and (ix), only with respect to a Significant Subsidiary) hereof
shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the outstanding Notes on the stated
maturity or on the applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased to maturity or to
a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date hereof, there has been a change in
the applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the Holders
of the outstanding Notes 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;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of
the outstanding Notes 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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Sections 6.01 (viii) or 6.01 (ix) hereof are
concerned, at any time in the period ending on the 91st day after the date
of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under the Senior Credit
Facility or any other material agreement or instrument (other than this
Indenture) to which the Company or any of its Restricted Subsidiaries is a
party or by which the Company or any of its Restricted Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (assuming no intervening bankruptcy or
insolvency of the Company between the date of such deposit and the 91st day
after such deposit and that no Holder is an insider of the Company) after
the 91st day following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Notes over
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the other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company and the Guarantors shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section 8.04 hereof 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 Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of and premium or
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
one year after such principal and premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter, as a creditor, look only to the Company or
Guarantors for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
written request and expense of the Company cause to be published once, in The
New York Times or The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company or the Guarantors under
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this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that,
if either the Company or any Guarantor makes any payment of principal of and
premium or Liquidated Damages, if any, or interest on any Note following the
reinstatement of its obligations, the Company or any Guarantor shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Notes in the case of a merger or consolidation
pursuant to Article 5 or Article 11 hereof, as applicable;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Note; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its Board of
Directors of the Company and each of the Guarantors authorizing the execution of
any such amended or supplemental Indenture, and upon receipt by the Trustee of
the documents described in Section 7.02 hereof, the Trustee shall join with the
Company and each of the Guarantors in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, this Indenture or the Notes
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes), and, subject to Sections 6.02, 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of principal of, premium or Liquidated Damages, if
any, or interest on the Notes) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes).
In addition, any amendment to the provisions of Article 10 hereof will
require the consent of the Holders of at least 66 2/3% in aggregate principal
amount of the Notes then outstanding if such amendment would adversely affect
the rights of the Holders of the Notes.
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Upon the request of the Company accompanied by a resolution of the Board of
Directors of the Company and each of the Guarantors authorizing the execution of
any such amended or supplemental Indenture, and upon the filing with the Trustee
of evidence satisfactory to the Trustee of the consent of the Holders of Notes
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Company and each of the
Guarantors in the execution of such amended or supplemental Indenture unless
such amended or supplemental Indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may
in its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment 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 of Notes 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 amended or supplemental
Indenture or waiver. Subject to Sections 6.02, 6.04 and 6.07 hereof, the Holders
of a majority in aggregate principal amount of the Notes then outstanding may
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Notes. However, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes;
(iii) reduce the rate of or change the time for payment of interest or
Liquidated Damages, if any, on any Note;
(iv) waive a Default or Event of Default in the payment of principal
of or premium or Liquidated Damages, if any, or interest on the Notes
(except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver of
the payment default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, if any, interest or Liquidated
Damages, if any, on the Notes;
(vii) waive a redemption payment with respect to any Note; or
(viii) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of
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the consent is not made on any Note. However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to his/her Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Notes entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then notwithstanding
the provisions of the second sentence of the preceding paragraph, those Holders
of Notes who were Holders on such record date (or their duly designated
proxies), and only those Holders, shall be entitled to revoke any consent
previously given, whether or not such Holder of Notes continues to be a Holder
of Notes 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 Holder of Notes, unless it makes a change described in clauses (i) though
(viii) of Section 9.02 hereof, in which case, the amendment, supplement or
waiver shall bind only each Holder of Notes who has consented to it; provided
that any such waiver shall not impair or affect the right of any Holder to
receive payment of principal of and interest and Liquidated Damages, if any, on
the Notes, on or after the respective due dates expressed in such Notes, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder of Notes.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. If an amendment,
supplement or waiver changes the terms of the Notes, the Company may require the
Holders of the Notes to deliver the Notes to the Trustee. The Company may place
an appropriate notation on the Notes and return them to the Holders.
Alternatively, the Company in exchange for all Notes may issue and the Trustee
shall authenticate new Notes (accompanied by a notation of the Subsidiary
Guarantees duly endorsed by the Guarantors) that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. The Company and the Guarantors may not
sign an amendment or supplemental Indenture until their respective Board of
Directors approves it. In executing any amended or supplemental indenture, the
Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall
be fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
Each of the Company and the Guarantors agrees, and each Holder of Notes by
accepting a Note agrees, that the payment of principal of, interest, premium and
Liquidated Damages, if any, on and all other Obligations in respect of, the
Notes (including, without limitation, by redemption or purchase of any Notes as
provided by Sections 3.07, 4.10 and 4.15 hereof) will be subordinated in
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right of payment, to the extent and in the manner as set forth in this Article
10 and Article 11, to the prior payment in full in cash or Cash Equivalents of
all Senior Debt, whether outstanding on the date hereof or hereafter incurred.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company or any Guarantor in a
liquidation or dissolution of the Company or such Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or such Guarantor or their respective property, an assignment for the
benefit of creditors or any marshaling of the Company's or such Guarantor's
assets and liabilities:
(1) the holders of Senior Debt shall be entitled to receive payment in
full in cash or Cash Equivalents of all Obligations due in respect of such
Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the documents relating to the
applicable Senior Debt, whether or not the claim for such interest is
allowed as a claim in such proceeding) before the Holders of Notes shall be
entitled to receive any payment on account of any Obligations with respect
to the Notes (except that all Holders of Notes may receive (i) Permitted
Junior Securities and (ii) payments and other distributions made from any
defeasance trust created pursuant to Article 8 hereof); and
(2) until all Obligations with respect to Senior Debt (as provided in
subsection (1) above) are paid in full in cash or Cash Equivalents, any
distribution to which Holders of Notes would be entitled but for this
Article 10 shall be made to holders of Senior Debt (except that Holders of
Notes may receive (i) Permitted Junior Securities and (ii) payments and
other distributions made from any defeasance trust created pursuant to
Article 8 hereof), as their interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company and the Guarantors may not make any payment or distribution to
the Trustee or any Holder of Notes on account of any Obligations in respect of
the Notes and may not acquire from the Trustee or any Holder of Notes any Notes
for cash or property (other than (i) Permitted Junior Securities and (ii)
payments and other distributions made from any defeasance trust created pursuant
to Article 8 hereof) until all principal and other Obligations with respect to
the Senior Debt have been paid in full in cash or Cash Equivalents if:
(i) a default in the payment of any principal or other Obligations
with respect to Designated Senior Debt occurs and is continuing (including
any default in payment upon the maturity of any Designated Senior Debt by
lapse of time, acceleration or otherwise) in the agreement, indenture or
other document governing such Designated Senior Debt, or any judicial
proceeding is pending to determine whether any such default has occurred;
or
(ii) any other default occurs and is continuing with respect to
Designated Senior Debt that then permits, or would permit, with the passage
of time or the giving of notice or both, holders of the Designated Senior
Debt as to which such default relates to accelerate its maturity and the
Trustee receives a notice of such default (a "Payment Blockage Notice")
from a Person who may give it pursuant to Section 10.11 hereof. If the
Trustee receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this Section unless and
until at least 360 days have elapsed since the first day of effectiveness
of the immediately prior Payment Blockage Notice. No nonpayment default
that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been
cured or waived for a period of not less than 180 days.
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The Company may and shall resume payments on and distributions in respect
of the Notes and may acquire them:
(1) in the case of a payment default referred to in clause (i) above,
upon the date on which the default is cured or waived or otherwise ceases
to exist, unless another default, event of default or other event that
would prohibit such payment shall have occurred and be continuing, or all
Obligations in respect of such Designated Senior Debt shall have been paid
in full in cash or Cash Equivalents; or
(2) in the case of a nonpayment default referred to in clause (ii)
above, the earlier of the date on which such nonpayment default is cured or
waived or 179 days after the date on which the applicable Payment Blockage
Notice is received by the Trustee.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default, the
Trustee shall promptly notify the Representative for the Senior Debt of the
acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes at a time when such payment is prohibited
under the terms of this Indenture, such payment shall be held by the Trustee or
such Holder, as the case may be, in trust for the benefit of, and shall be paid
forthwith over and delivered to the holders of Senior Debt as their interests
may appear or their Representative under the indenture or other agreement (if
any) pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in cash or Cash Equivalents in accordance with their terms,
after giving effect to any payment or distribution to or for the holders of
Senior Debt made concurrently with such payment received by the Trustee or such
Holder. Any distribution to the holders of Senior Debt or their Representatives
of assets other than cash may be held by such holders or such Representatives as
additional collateral without any duty to the Holder of Notes to liquidate or
otherwise realize on such assets or to apply such assets to any Senior Debt or
other Obligations relating thereto.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of Notes or the
Company or any other Person money or assets to which any holders of Senior Debt
shall be entitled by virtue of this Article 10, except if such payment is made
as a result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of any Obligations with
respect to the Notes to violate this Article 10, but failure to give such notice
shall not affect the subordination of the Notes to the Senior Debt as provided
in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full in cash or Cash Equivalents and until
the Notes are paid in full, Holders shall be subrogated (equally and ratably
with all other Indebtedness pari passu with the Notes) to the rights of holders
of Senior Debt to receive distributions applicable to Senior Debt to
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the extent that distributions otherwise payable to the Holders have been applied
to the payment of Senior Debt. A distribution made under this Article 10 to
holders of Senior Debt that otherwise would have been made to Holders is not, as
between the Company and Holders, a payment by the Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes and holders
of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and
interest and Liquidated Damages, if any, on the Notes in accordance with
their terms;
(2) affect the relative rights of Holders and creditors of the Company
other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Debt to receive distributions and payments otherwise
payable to or received by Holders.
If the Company fails because of this Article 10 to pay principal of or
interest or Liquidated damages, if any, on a Note on the due date, the failure
is nevertheless a Default or Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture regardless of any knowledge thereof that any such
Holder of Notes or holder of Senior Debt, as the case may be, may have or be
otherwise charged with. The holders of Senior Debt may extend, renew, restate,
supplement, modify or amend the terms of the Senior Debt or any Obligations with
respect thereto or any security therefor and release, sell or exchange such
security and otherwise deal freely with the Company and its Subsidiaries and
Affiliates all without incurring responsibility to any Holder or the Trustee,
without impairing or releasing the obligations of any Holder or the Trustee to
the holders of Senior Debt, and without affecting the liabilities and
obligations of the parties to this Indenture or the Holders.
Each Holder of the Notes by its acceptance thereof: (a) acknowledges and
agrees that the holders of any Senior Debt or their Representative, in its or
their discretion, and without affecting any rights of any holder of Senior Debt
under this Article 10, may foreclose any mortgage or deed of trust covering
interest in real property securing such Senior Debt or any guarantee thereof by
judicial or nonjudicial sale, even though such action may release the Company or
any guarantor of such Senior Debt from further liability under such Senior Debt
or any guarantee thereof or may otherwise limit the remedies available to the
holders thereof; and (b) hereby waives any defense that such Holder may
otherwise have to the enforcement by any holder of any Senior Debt or any
Representative of such holder against such Holder of this Article 10 after or as
a result of any action, including any such defense based on any loss or
impairment of rights of subrogation.
If at any time any payment of Obligations with respect to any Senior Debt
is rescinded or must otherwise be returned upon the insolvency, bankruptcy,
reorganization or liquidation of the Company or any Guarantor or otherwise, the
provisions of this Article 10 shall continue to be effective or reinstated, as
the case may be, to the same extent as though such payments had not been made.
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SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment or distribution by
the Trustee, or the taking of any action by the Trustee, and the Trustee and the
Paying Agent may continue to make payments on the Notes, unless the Trustee
shall have received at its Corporate Trust Office at least five Business Days
prior to the date of such payment written notice of facts that would cause the
payment of any Obligations with respect to the Notes to violate this Article 10.
Only the Company or a Representative or a holder of Senior Debt that has no
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
Nothing in this Section 10.11 is intended to or shall relieve any Holder from
the obligations imposed under Section 10.05 hereof with respect to monies or
other distributions received in violation of the provisions hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes, including, in the event of any insolvency, bankruptcy
or receivership case or proceeding or any dissolution, winding-up, liquidation,
reorganization or other similar proceedings relative to the Company (whether
voluntary or involuntary and whether in bankruptcy, insolvency or receivership
proceedings or otherwise), the timely filing of a claim for the unpaid balance
of the Notes of such Holder in the form required in such proceedings and the
causing of such claim to be approved. If the Trustee does not file a proper
proof of claim or proof of debt in the form required in any proceeding referred
to in Section 6.09 hereof at least 30 days before the expiration of the time to
file such claim, the holders of Senior Debt and any Representative are hereby
authorized, and shall have the right (without any duty), to demand, sue for,
collect, and receive the payments and distributions in respect of the Notes
which are required to be paid or delivered to the holders of the Senior Debt as
provided in this Article 10, and to file and prove all claims therefor.
The Company, the Trustee and each Holder by their acceptance of the Notes,
acknowledge that damages would be inadequate to compensate the holders of Senior
Debt for any breach or default by the Company, the Trustee or any such Holder of
its obligations under this Article 10, and, therefore, agree that the holders of
Senior Debt and their Representatives shall be entitled to equitable relief,
including injunctive relief and specific performance, in the enforcement
thereof.
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SECTION 10.13. THIRD PARTY BENEFICIARY, ETC.
The foregoing provisions regarding subordination are solely for the purpose
of defining the relative rights of the holders of Senior Debt on the one hand
and the Holders of Notes on the other hand. Such provisions are for the benefit
of the holders of Senior Debt (and their successors and assigns) and shall be
enforceable by them directly against the Holders (and their successors and
assigns). This Article 10 shall constitute a continuing offer to all Persons who
become holders of, or who continue to hold, Senior Debt (whether such Senior
Debt was created or acquired before or after the issuance of the Notes).
ARTICLE 11
SUBSIDIARY GUARANTEES
SECTION 11.01. SUBSIDIARY GUARANTEES.
Each of the Guarantors hereby, jointly and severally, unconditionally
guarantees 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 Notes or the Obligations of the
Company hereunder or thereunder, that: (a) the principal of and interest and
premium and Liquidated Damages, if any, on the Notes shall be promptly paid in
full when due, whether at maturity, by acceleration, redemption, repurchase or
otherwise, and interest on the overdue principal of and interest and Liquidated
Damages, if any, on the Notes, if lawful, and all other Obligations of the
Company to the Holders or the Trustee hereunder or thereunder 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 Notes 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 stated maturity, by acceleration, redemption, repurchase or otherwise,
subject, however, to the limitations set forth in Section 11.05 hereof. Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to
pay the same immediately. The Guarantors hereby agree that their Obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, and action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives 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 this Subsidiary Guarantee shall not be
discharged except by complete performance of the Obligations contained in the
Notes and this Indenture. If any Holder of Notes or the Trustee is required by
any court or otherwise to return to the Company or Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company or Guarantors, any amount paid by the Company or any Guarantor either to
the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor agrees
that it shall not be entitled to any right of subrogation in relation to the
Holders of Notes in respect of any Obligations guaranteed hereby until payment
in full of all Obligations guaranteed hereby. Each Guarantor further agrees
that, as between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Article 6 hereof for the purposes of
this Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this
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Subsidiary Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Subsidiary Guarantees.
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
To evidence its Subsidiary Guarantee set forth in Section 11.01 hereof,
each Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form of Exhibit C (executed by the manual or facsimile
signature of one of its Officers) shall be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture shall be executed on behalf of such Guarantor by an Officer of such
Guarantor.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 hereof shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Guarantors.
SECTION 11.03. GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture or in any of the Notes 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.
(b) Except as provided in Section 11.03(a) hereof or in a transaction
referred to in Section 11.04 hereof, no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless: (i) subject to the provisions of Section 11.04 hereof, the Person formed
by or surviving any such consolidation or merger (if other than such Guarantor)
shall assume all the Obligations of such Guarantor, pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee, under
the Notes and this Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; and (iii) the Company would
be permitted to incur, immediately after giving effect to such transaction, at
least $1.00 of additional Indebtedness (other than Permitted Refinancing
Indebtedness) pursuant to the Fixed Charge Coverage Ratio Test set forth in
Section 4.09 hereof. Subject to Section 11.04 hereof, in case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor. Such
successor corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.
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SECTION 11.04. RELEASES FOLLOWING SALE OF ASSETS.
Concurrently with any sale of assets of any Guarantor (including, if
applicable, all of the Capital Stock of any Guarantor), any Liens in favor of
the Trustee in the assets sold thereby shall be released; provided that in the
event of an Asset Sale, the Net Proceeds from such sale or other disposition are
treated in accordance with the provisions of Section 4.10 hereof. In the event
of a sale or other disposition of all of the assets of any Guarantor, by way of
merger, consolidation or otherwise, or a sale or other disposition of all of the
Capital Stock of any Guarantor, then such Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise, of all
of the Capital Stock of such Guarantor in accordance with the provisions of this
Indenture) or the corporation acquiring the property (in the event of a sale or
other disposition of all of the assets of such Guarantor), shall be released and
relieved of its Obligations under its Subsidiary Guarantee and Section 11.03
hereof; provided that in the event of an Asset Sale, the Net Proceeds from such
sale or other disposition are treated in accordance with the provisions of
Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officer's
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Guarantor from its Obligations under its Subsidiary Guarantee. Any Guarantor
not released from its Obligations under its Subsidiary Guarantee shall remain
liable for the full amount of principal of and interest and Liquidated Damages,
if any, on the Notes and for the other Obligations of any Guarantor under this
Indenture as provided in this Article 11. The release of any Guarantor pursuant
to this Section 11.04 shall be effective whether or not such release shall be
noted on any Note then outstanding or thereafter authenticated and delivered.
SECTION 11.05. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be that amount from
time to time equal to the aggregate liability of such Guarantor thereunder, but
shall be limited to the lesser of (i) the aggregate amount of the Obligations of
the Company under the Notes and this Indenture and (ii) the amount, if any,
which would not have (A) rendered such Guarantor "insolvent" (as such term is
defined in the federal Bankruptcy Law and in the Debtor and Creditor Law of the
State of New York) or (B) left it with unreasonably small capital at the time
its Subsidiary Guarantee was entered into, after giving effect to the incurrence
of existing Indebtedness immediately prior to such time; provided that, it shall
be a presumption in any lawsuit or other proceeding in which such Guarantor is a
party that the amount guaranteed pursuant to its Subsidiary Guarantee is the
amount set forth in clause (i) above unless any creditor, or representative of
creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of
such Guarantor, otherwise proves in such a lawsuit that the aggregate liability
of such Guarantor is limited to the amount set forth in clause (ii). In making
any determination as to the solvency or sufficiency of capital of a Guarantor in
accordance with the previous sentence, the right of such Guarantor to
contribution from other Guarantors and any other rights such Guarantor may have,
contractual or otherwise, shall be taken into account.
SECTION 11.06. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 11 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully and for all intents and purposes as if such Paying Agent were
named in this Article 11 in place of the Trustee.
SECTION 11.07. SUBORDINATION OF SUBSIDIARY GUARANTEE.
The obligations of each Guarantor under its Subsidiary Guarantee pursuant
to this Article 11 shall be junior and subordinated to the Senior Debt of such
Guarantor on the same basis as the
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Notes are junior and subordinated to Senior Debt. For the purposes of the
foregoing sentence, the Trustee and the Holders of Notes shall have the right to
receive and/or retain payments by any of the Guarantors only at such times as
they may receive and/or retain payments in respect of the Notes pursuant to this
Indenture, including Article 10 hereof.
Each Holder of a Note by its acceptance thereof (a) agrees to and shall be
bound by the provisions of this Section 11.07, (b) authorizes and directs the
Trustee on its behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee its
attorney-in-fact for any and all such purposes.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA sec.318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company or any Guarantor:
Metal Management, Inc.
500 North Dearborn Street
Chicago, Illinois 60610
Telecopier No.: (312) 645-0714
Attention: Chief Financial Officer
General Counsel
With a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Suite 3100
Chicago, Illinois 60603
Telecopier No.: (312) 701-7711
Attention: Paul W. Theiss
If to the Trustee:
LaSalle National Bank
135 South LaSalle Street
Suite 1825
Chicago, Illinois 60603
Telecopier No.: (312) 904-2236
Attention: Corporate Trust Administration
Notice by the Trustee to the agent under the Senior Credit Facility
provided for herein shall be delivered or mailed to BT Commercial Corporation,
233 South Wacker Drive, Chicago, Illinois 60606, Attention: Credit Department
and to any other person who hereafter becomes an agent under the Senior Credit
Facility, provided the Trustee has been notified by the Company or the agent of
the names and mailing addressees of such persons.
63
<PAGE> 70
The Company, any Guarantor or the Trustee by written notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if sent by registered or certified mail; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA sec. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA sec. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Guarantors, the Trustee, the Registrar and any other Person shall have the
protection of TIA sec. 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, the Company or such Guarantor
shall furnish to the Trustee, at the request of the Trustee:
(a) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
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 (other than a certificate provided
pursuant to TIA sec. 314(a)(4) and the Officer's Certificate required by Section
4.08 hereof) shall comply with the provisions of TIA sec. 314(e) and shall
include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she 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 satisfied; and
64
<PAGE> 71
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied; provided, however, that with
respect to matters of fact, an Opinion of Counsel may rely on an Officer's
Certificate or certificates of public officials.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the Company
or any Guarantor, as such, shall have any liability for any obligations of the
Company or the Guarantors under the Notes, the Subsidiary Guarantees or this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind their respective successors. All agreements of the Trustee in
this Indenture shall bind its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes 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 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS; HEADINGS; ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page.]
65
<PAGE> 72
SIGNATURES
Dated as of May 13, 1998 METAL MANAGEMENT, INC.
By: /s/ DAVID A. CARPENTER
----------------------------------
Name: David A. Carpenter
Title: Vice President
AEROSPACE METALS, INC.
AMERICAN SCRAP PROCESSING, INC.
BRIQUETTING CORPORATION OF AMERICA
C SHREDDING CORP.
CALIFORNIA METALS RECYCLING, INC
CIM TRUCKING, INC.
COMETCO CORP.
COZZI BUILDING CORPORATION
COZZI IRON & METAL, INC.
EMCO TRADING, INC.
FERREX TRADING CORPORATION
FIRMA, INC.
FIRMA PLASTIC CO., INC.
HOUSTON COMPRESSED STEEL CORP.
HOUTEX METALS COMPANY, INC.
THE ISAAC CORPORATION
P. JOSEPH IRON & METAL, INC.
KANKAKEE SCRAP CORPORATION
MAC LEOD METALS CO.
METAL MANAGEMENT ARIZONA, INC.
METAL MANAGEMENT REALTY, INC.
138 SCRAP ACQUISITION CORP.
PAULDING RECYCLING, INC.
PROLER SOUTHWEST INC.
PROLER STEELWORKS L.L.C.
SALT RIVER RECYCLING L.L.C.
SCRAP PROCESSING, INC.
SUPERIOR FORGE, INC.
TROJAN TRADING CO.
USA SOUTHWESTERN CARRIER, INC.
By: /s/ DAVID A. CARPENTER
-----------------------------------
Name: David A. Carpenter
Title: Vice President
RESERVE IRON & METAL LIMITED
PARTNERSHIP
By: P. JOSEPH IRON & METAL, INC.,
its general partner
By: /s/ DAVID A. CARPENTER
-----------------------------------
Name: David A. Carpenter
Title: Vice President
LASALLE NATIONAL BANK
By: /s/ ESTELITA E. TUCKER
---------------------------------
Name: Estelita E. Tucker
Title: Assistant Vice President
66
<PAGE> 73
================================================================================
EXHIBIT A-1
(FACE OF NOTE)
% SENIOR SUBORDINATED NOTES DUE 2008
No. $
METAL MANAGEMENT, INC.
promises to pay to or
registered assigns, the principal sum of Dollars on May
15, 2008.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
CUSIP Number:
Dated: , 1998
METAL MANAGEMENT, INC.
By:
------------------------------------
Name:
Title:
This is one of the Notes referred to
in the within-mentioned indenture:
Dated: , 1998
LASALLE NATIONAL BANK
as Trustee
By:
----------------------------------
================================================================================
A-1-1
<PAGE> 74
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC") to
the issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be 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.](1)
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND (A)
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) BY
THE INITIAL INVESTOR (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (B) IN AN OFFSHORE TRANSACTION COMPLYING WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (D) TO THE COMPANY OR
(E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (2) BY SUBSEQUENT INVESTORS AS SET FORTH IN (1) ABOVE AND, IN
ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND, IN
EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTES
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 FOR RESALES OF THE NOTES.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
- ---------------
(1) This paragraph should be included only if the Note is issued in global
form.
A-1-2
<PAGE> 75
(BACK OF NOTE)
METAL MANAGEMENT, INC.
% SENIOR SUBORDINATED NOTES DUE 2008
1. INTEREST. Metal Management, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
% per annum from , 1998 until May 15, 2008 and shall pay the
Liquidated Damages, if any, payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company shall pay interest and
Liquidated Damages, if any, semi-annually in arrears on May 15 and November 15
of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
November 15, 1998. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate equal to the per annum
rate on the Notes then in effect; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages, if any, (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company shall make payments in respect of the
Notes represented by the Global Notes (including principal, premium, interest
and Liquidated Damages, if any) by wire transfer of immediately available funds
to the accounts specified by the Global Note custodian. With respect to Notes
issued in definitive form, the Company shall make all payments of principal,
premium, interest and Liquidated Damages, if any, by mailing a check to each
such Holder's registered address, provided that all payments with respect to
Notes having an aggregate principal amount of $100,000 or more, the Holders of
which have given written wire transfer instructions to the Company at least ten
business days prior to the applicable payment date, will be required to be made
by wire transfer of immediately available funds to the accounts specified by the
Holders thereof. Except for trades involving only Euroclear or CEDEL
participants, the Notes represented by the Global Notes are expected to be
eligible to trade in DTC's Same-Day Funds Settlement System, and any permitted
secondary market trading activity in such Notes will, therefore, be required by
DTC to be settled in immediately available funds. The Company expects that
secondary trading in the Definitive Notes also will be settled in immediately
available funds.
3. PAYING AGENT AND REGISTRAR. Initially, LaSalle National Bank, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Notes
may be presented for registration of transfer and exchange at the offices of the
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of the Guarantors may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
May 13, 1998 ("Indenture") among the Company, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code sec.sec. 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are obligations of the Company limited to $300,000,000 in
aggregate principal amount.
A-1-3
<PAGE> 76
5. OPTIONAL REDEMPTION.
(a) Except as described below, the Notes are not redeemable, in whole or in
part, at the Company's option prior to May 15, 2003. From and after May 15,
2003, the Company may redeem all or any portion of the Notes at a redemption
price (expressed as a percentage of the principal amount thereof), as set forth
in the immediately succeeding paragraph, plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date.
The redemption price as a percentage of the principal amount shall be as
follows, if the Notes are redeemed during the twelve-month period commencing on
May 15 of each of the years indicated below, plus, in each case, accrued and
unpaid interest and Liquidated Damages, if any, thereon to the redemption date:
<TABLE>
<CAPTION>
PERCENTAGE OF
YEAR PRINCIPAL AMOUNT
---- ----------------
<S> <C>
2003........................................................ 105.000%
2004........................................................ 103.333%
2005........................................................ 101.667%
2006 and thereafter......................................... 100.000%
</TABLE>
(b) Prior to May 15, 2001, the Company may, at its option, on any one or
more occasions, redeem up to 35% of the aggregate principal amount of Notes
originally offered in the Offering at a redemption price equal to 110% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date, with the net proceeds of one or
more sales of Common Stock of the Company; provided that at least 65% of the
original aggregate principal amount of Notes remains outstanding immediately
after the occurrence of each such redemption; and provided, further, that any
such redemption shall occur within 60 days of the date of the closing of the
corresponding sale of Common Stock of the Company.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be required
to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase,
which date shall be no fewer than 30 and no more than 60 days from the date such
notice is mailed (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.
(b) As soon as practical, but in no event later than 10 Business Days after
any date that the aggregate amount of Excess Proceeds exceeds $10.0 million, the
Company shall commence an Asset Sale Offer to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an Asset
Sale offer price in cash in an amount equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages thereon, if
any, to the date fixed for the closing of such offer. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for any
purpose not prohibited by the Indenture. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled
A-1-4
<PAGE> 77
"Option of Holder to Elect Purchase" on the reverse of the Notes. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds will be reset
to zero.
8. 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 whose
Notes are to be redeemed at its registered address. Notes may be redeemed in
part but only in whole multiples of $1,000. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in minimum denominations of $1,000 and integral multiples of
$1,000 in excess thereof. The transfer of Notes may be registered and Notes may
be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of Definitive Notes, to provide
for the assumption of the Company's and Guarantors' obligations to Holders of
the Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, or to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest or
Liquidated Damages, if any, on the Notes (whether or not prohibited by Article
10 of the Indenture); (ii) default in payment when due of the principal of or
premium, if any, on the Notes (whether or not prohibited by Article 10 of the
Indenture); (iii) failure by the Company to comply with the provisions described
under Sections 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company
for 60 days after notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes to comply with any of
its other covenants, agreements or warranties in the Indenture or the Notes; (v)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the date
of the Indenture, which default results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated, aggregates $10.0
million or more; (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $10.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days;
(vii) except as permitted by the Indenture, any Significant Subsidiary Guarantee
shall be held in any judicial
A-1-5
<PAGE> 78
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect (except by its terms) or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations under
its Significant Subsidiary Guarantee, in each case if such default continues for
a period of ten days after notice to the Company from the Trustee or the Holders
of at least 25% in aggregate principal amount of the then outstanding Notes; and
(viii) certain events of bankruptcy or insolvency with respect to the Company or
any of its Significant Subsidiaries.
If any Event of Default (other than an Event of Default under clause (viii)
of the preceding paragraph with respect to the Company) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately; provided, however, that so long as the Senior Credit Facility shall
be in full force and effect, if an Event of Default shall have occurred and be
continuing (other than an Event of Default under clause (viii) of the preceding
paragraph with respect to the Company), any such acceleration shall not be
effective until the earlier to occur of (x) five days following the delivery of
a notice of such acceleration to the agent or other representative of the
lenders under the Senior Credit Facility and (y) acceleration of any
Indebtedness under the Senior Credit Facility. Notwithstanding the foregoing, in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency described in clause (viii) of the preceding paragraph, with respect
to the Company, any Significant Subsidiary or any group of Subsidiaries that,
taken together, would constitute a Significant Subsidiary, all outstanding Notes
shall ipso facto become due and payable without further action or notice on the
part of the Trustee or any Holder. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal, interest or Liquidated Damages, if any) if it determines that
withholding notice is in their interest.
At any time after a declaration of acceleration with respect to the Notes,
the Holders of a majority in aggregate principal amount of the Notes may rescind
and cancel such declaration and its consequences (i) if the rescission would not
conflict with any judgment or decree, (ii) if all existing Events of Default
have been cured or waived except nonpayment of principal, interest or Liquidated
Damages, if any, that has become due solely because of the acceleration, (iii)
if, to the extent the payment of such interest is lawful, interest on overdue
installments of interest and Liquidated Damages, if any, and overdue principal
at a rate equal to the rate borne by the Notes, which has become due otherwise
than by such declaration of acceleration, has been paid, (iv) if the Company has
paid the Trustee its reasonable compensation and reimbursed the Trustee for its
expenses, disbursements and advances and (v) if, in the event of the cure or
waiver of an Event of Default of the type described in clauses (viii) or (ix) of
Section 6.01 of the Indenture, the Trustee shall have received an Officer's
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived. No such rescission shall affect any subsequent Default or impair any
right consequent thereto. If any Event of Default exists solely by reason of any
acceleration of Indebtedness under clause (v) of Section 6.01 of the Indenture,
and such acceleration is rescinded by the holders of Indebtedness affected
thereby prior to the time the Obligations under the Notes have been accelerated,
such Event of Default shall cease to exist.
Subject to the second paragraph of Section 6.02 of the Indenture, Holders
of a majority in aggregate principal amount of the Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture,
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes or a default with respect to any covenant or
provision which cannot be modified or amended without the consent of the Holder
of each outstanding Note affected.
A-1-6
<PAGE> 79
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required, upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
13. SUBORDINATION. Each Holder by accepting a Note agrees that the payment
of principal of, premium and Liquidated Damages, if any, and interest on, and
all other Obligations in respect of, each Note is subordinated in right of
payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Debt (whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of the Senior Debt.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator
or stockholder, of the Company or the Guarantors, as such, shall not have any
liability for any obligations of the Company or the Guarantors under the Notes,
the Subsidiary Guarantees or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TENENT (= 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).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transfer Restricted Securities shall have all the rights set forth in the
Exchange and Registration Rights Agreement, dated as of May 13, 1998 (the
"Registration Rights Agreement"), among the Company, the Guarantors and the
parties named on the signature pages thereof.
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Metal Management, Inc.
500 North Dearborn Street
Chicago, Illinois 60610
Attention: Chief Financial Officer
A-1-7
<PAGE> 80
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
- --------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:
- ------------------------------------
Your Signature:
- --------------------------------------------------------------------------------
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee:
A-1-8
<PAGE> 81
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$
- ------------------
Date:
- ------------------------ Your Signature:
--------------------------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:
------------------------------------------------------------------
Signature Guarantee:
A-1-9
<PAGE> 82
SCHEDULE OF EXCHANGES OF NOTES(2)
The following exchanges of a part of this Global Note for other Notes have
been made:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF PRINCIPAL AMOUNT SIGNATURE OF
DECREASE IN INCREASE IN OF THIS GLOBAL AUTHORIZED
PRINCIPAL AMOUNT PRINCIPAL AMOUNT NOTE FOLLOWING OFFICER OF
OF THIS OF THIS SUCH DECREASE TRUSTEE OR
DATE OF EXCHANGE GLOBAL NOTE GLOBAL NOTE (OR INCREASE) NOTE CUSTODIAN
---------------- ---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
</TABLE>
- -------------------------
(2) This should be included only if the Note is issued in global form.
A-1-10
<PAGE> 83
================================================================================
EXHIBIT A-2
(FACE OF REGULATION S TEMPORARY GLOBAL NOTE)
% SENIOR SUBORDINATED NOTES DUE 2008
No. $
METAL MANAGEMENT, INC.
promises to pay to or
registered assigns, the principal sum of Dollars on May
15, 2008.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
CUSIP Number:
Dated: , 1998
METAL MANAGEMENT, INC.
By:
------------------------------------
Name:
Title:
This is one of the Notes referred to
in the within-mentioned indenture:
Dated: , 1998
LASALLE NATIONAL BANK
as Trustee
By:
----------------------------------
================================================================================
A-2-1
<PAGE> 84
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC") to
the issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be 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.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND (A)
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) BY
THE INITIAL INVESTOR (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (B) IN AN OFFSHORE TRANSACTION COMPLYING WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (D) TO THE COMPANY OR
(E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (2) BY SUBSEQUENT INVESTORS AS SET FORTH IN (1) ABOVE AND, IN
ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND, IN
EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTES
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 FOR RESALES OF THE NOTES.
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST
HEREON.
A-2-2
<PAGE> 85
(BACK OF REGULATION S TEMPORARY GLOBAL NOTE)
METAL MANAGEMENT, INC.
% SENIOR SUBORDINATED NOTE DUE 2008
Subject to the provisions hereof, Metal Management, Inc., a Delaware
corporation, (the "Company"), promises to pay to the
principal sum of UNITED STATES DOLLARS (U.S. $ ) on
May 15, 2008, and to pay interest on the principal amount of this Note beginning
, 1998 at the rate of % per annum. Upon exchange of this
Regulation S Temporary Global Note for a Regulation S Permanent Global Note as
set forth below, interest shall be payable in cash semi-annually in arrears on
May 15 and November 15, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"); provided that the
first Interest Payment Date shall be November 15, 1998. Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
This Regulation S Temporary Global Note is issued in respect of an issue
of % Senior Subordinated Notes due 2008 (the "Notes") of the Company,
limited to the aggregate principal amount of U.S. $300,000,000 issued pursuant
to an Indenture (the "Indenture") dated as of May 13, 1998, among the Company,
the Guarantors and LaSalle National Bank, as trustee (the "Trustee"), and is
governed by the terms and conditions of the Indenture governing the Notes, which
terms and conditions are incorporated herein by reference and, except as
otherwise provided herein, shall be binding on the Company, the Guarantors and
the Holder hereof as if fully set forth herein. Unless the context otherwise
requires, the terms used herein shall have the meanings specified in the
Indenture.
Until this Regulation S Temporary Global Note is exchanged for a Regulation
S Permanent Global Note, the Holder hereof shall not be entitled to receive
payments of interest hereon; until so exchanged in full, this Regulation S
Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.
This Regulation S Temporary Global Note is exchangeable in whole or in part
for one or more Regulation S Permanent Global Notes or U.S. Global Notes only
(i) on or after the termination of the 40-day restricted period (as defined in
Regulation S) and (ii) upon presentation of certificates (accompanied by an
Opinion of Counsel, if applicable) required by Article 2 of the Indenture. Upon
exchange of this Regulation S Temporary Global Note for one or more Regulation S
Permanent Global Notes or U.S. Global Notes, the Trustee shall cancel this
Regulation S Temporary Global Note.
This Regulation S Temporary Global Note shall not become valid or
obligatory until the certificate of authentication hereon shall have been duly
manually signed by the Trustee in accordance with the Indenture. This Regulation
S Temporary Global Note shall be governed by and construed in accordance with
the laws of the State of the New York. All references to "$," "Dollars,"
"dollars" or "U.S. $" are to such coin or currency of the United States of
America as at the time shall be legal tender for the payment of public and
private debts therein.
A-2-3
<PAGE> 86
SCHEDULE OF EXCHANGES OF NOTES
The following exchanges of a part of this Regulation S Temporary Global
Note for other Global Notes have been made:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF PRINCIPAL AMOUNT SIGNATURE OF
DECREASE IN INCREASE IN OF THIS GLOBAL AUTHORIZED
PRINCIPAL AMOUNT PRINCIPAL AMOUNT NOTE FOLLOWING OFFICER OF
OF THIS OF THIS SUCH DECREASE TRUSTEE OR
DATE OF EXCHANGE GLOBAL NOTE GLOBAL NOTE (OR INCREASE) NOTE CUSTODIAN
---------------- ---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
</TABLE>
A-2-4
<PAGE> 87
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(PURSUANT TO SECTION 2.06(A)(I) OF THE INDENTURE)
LaSalle National Bank
135 S. LaSalle Street
Suite 1825
Chicago, Illinois 60603
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2008 of Metal Management, Inc.
Reference is hereby made to the Indenture, dated as of May 13, 1998 (the
"Indenture"), among Metal Management, Inc., as issuer (the "Company"), the
Guarantors and LaSalle National Bank, 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 Notes which are
evidenced by one or more Rule 144A Global Notes (CUSIP No. 591097 AA8) and held
with the Depositary in the name of (the "Transferor"). The Transferor
has requested a transfer of such beneficial interest in the Notes to a Person
(the "Transferee") who will take delivery thereof in the form of an equal
principal amount of Notes evidenced by one or more Regulation S Global Notes
(CUSIP No. U5918G AA9), which amount, immediately after such transfer, is to be
held with the Depositary through Euroclear or Cedel Bank or both (Common Code
8730873).
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with Rule 903 or Rule 904 under the United States Securities
Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor
hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United
States;
(2) either:
(a) 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 and believes that the transferee was outside
the United States; or
(b) 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
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
(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 Depositary through
Euroclear or Cedel Bank or both (Common Code 8730873).
Upon giving effect to this request to exchange a beneficial interest in
such Rule 144A Global Note for a beneficial interest in a Regulation S Global
Note, the resulting beneficial interest shall be
B-1-1
<PAGE> 88
subject to the restrictions on transfer applicable to Regulation S Global Notes
pursuant to the Indenture and the Securities Act and, if such transfer occurs
prior to the end of the 40-day restricted period associated with the initial
offering of Notes, the additional restrictions applicable to transfers of
interest in the Regulation S Temporary Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Guarantors and Goldman, Sachs &
Co., BT Alex. Brown Incorporated and Salomon Brothers Inc (collectively, the
"Initial Purchasers"), the Initial Purchasers of such Notes being transferred.
Each of the foregoing is entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings with respect to the materials covered
hereby. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
--------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated:
------------------------------- ,
-------------
cc: Metal Management, Inc.
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Salomon Brothers Inc
B-1-2
<PAGE> 89
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO U.S. GLOBAL NOTE
(PURSUANT TO SECTION 2.06(A)(II) OF THE INDENTURE)
LaSalle National Bank
135 S. LaSalle Street
Suite 1825
Chicago, Illinois 60603
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2008 of Metal Management, Inc.
Reference is hereby made to the Indenture, dated as of May 13, 1998 (the
"Indenture"), among Metal Management, Inc., as issuer (the "Company"), the
Guarantors and LaSalle National Bank, 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 Notes which are
evidenced by one or more Regulation S Global Notes (CUSIP No. U5918G AA9) and
held with the Depositary through Euroclear or Cedel Bank or both (Common Code
8730873) in the name of (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Notes to a Person (the
"Transferee") who will take delivery thereof in the form of an equal principal
amount of Notes evidenced by one or more Rule 144A Global Notes (CUSIP No.
591097 AA8) to be held with the Depositary.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that:
[CHECK ONE]
[ ] such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Notes 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 a transaction meeting the requirements of Rule 144A;
or
[ ] such transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;
or
[ ] such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
[ ] such transfer is being effected pursuant to and in accordance with the
requirements of the Securities Act, and the Transferor hereby certifies
that the Notes are being transferred to a Person that the Transferor
reasonably believes is purchasing the Notes for its 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 an
institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities
B-2-1
<PAGE> 90
Act; and the Transferee agrees to provide a signed letter containing
certain representations and agreements regarding the transfer in a form
available from the Trustee;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Notes
are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements
of the exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and such Notes are being transferred in compliance with any applicable blue sky
securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in Rule 144A Global Notes
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Rule 144A Global Notes pursuant to the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Guarantors and Goldman, Sachs &
Co., BT Alex. Brown Incorporated and Salmon Brothers Inc (collectively, the
"Initial Purchasers"), the Initial Purchasers of such Notes being transferred.
Each of the foregoing is entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings with respect to the materials covered
hereby. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
--------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
Dated:
- ------------------------,
- ---------
cc: Metal Management, Inc.
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Salomon Brothers Inc
B-2-2
<PAGE> 91
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(PURSUANT TO SECTION 2.06(B) OF THE INDENTURE)
LaSalle National Bank
135 S. LaSalle Street
Suite 1825
Chicago, Illinois 60603
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2008 of Metal Management, Inc.
Reference is hereby made to the Indenture, dated as of May 13, 1998 (the
"Indenture"), among Metal Management, Inc., as issuer (the "Company"), the
Guarantors and LaSalle National Bank, 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 Notes which are
evidenced by one or more Definitive Notes (CUSIP No. ) and registered
with the Registrar in the name of (the "Transferor"). The Transferor has
requested an exchange or transfer of such Definitive Note(s) in the form of an
equal principal amount of Notes evidenced by one or more Definitive Notes (CUSIP
No. ), to be delivered to the Transferor or, in the case of a transfer
of such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of such
Surrendered Notes hereby certifies that:
[CHECK ONE]
[ ] the Surrendered Notes are being acquired for the Transferor's own
account, without transfer;
or
[ ] the Surrendered Notes are being transferred to the Company;
or
[ ] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes 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;
or
[ ] the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
[ ] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
B-3-1
<PAGE> 92
[ ] the Surrendered Notes are being transferred pursuant to and in
accordance with the requirements of the Securities Act, and the
Transferor hereby certifies that the Surrendered Notes are being
transferred to a Person that the Transferor reasonably believes is
purchasing the Surrendered Notes for its 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 an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act; and the transferee agrees
to provide a signed letter containing certain representations and
agreements regarding the transfer in a form available from the Trustee;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Notes
are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements
of the exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the Transferor or the transferee (a
copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky 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, the Guarantors and Goldman, Sachs & Co.,
BT Alex. Brown Incorporated and Salomon Brothers Inc (collectively, the "Initial
Purchasers"), the Initial Purchasers of such Notes being transferred. Each of
the foregoing is entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings with respect to the materials covered
hereby.
--------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
Dated:
- ------------------------,
- ---------
cc: Metal Management, Inc.
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Salomon Brothers Inc
B-3-2
<PAGE> 93
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE TO DEFINITIVE NOTE
(PURSUANT TO SECTION 2.06(C) OF THE INDENTURE)
LaSalle National Bank
135 S. LaSalle Street
Suite 1825
Chicago, Illinois 60603
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2008 of Metal Management, Inc.
Reference is hereby made to the Indenture, dated as of May 13, 1998 (the
"Indenture"), among Metal Management, Inc., as issuer (the "Company"), the
Guarantors and LaSalle National Bank, 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 Notes which are
evidenced by one or more (check one) [ ] Rule 144A Global Notes (CUSIP No.
591097 AA8) or [ ] Regulation S Permanent Global Notes (CUSIP No. U5918G AA9)
and held with the Depositary through Euroclear or Cedel Bank or both in the name
of (the "Transferor"). The Transferor has requested a transfer of
such beneficial interest in the Notes to a Person (the "Transferee") who will
take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Definitive Notes (CUSIP No. ) to be
registered with the Registrar in the name of .
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of such
Surrendered Notes hereby certifies that:
[CHECK ONE]
[ ] the Surrendered Notes are being transferred to the beneficial owner of
such Notes;
or
[ ] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes 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;
or
[ ] the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
[ ] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
B-4-1
<PAGE> 94
[ ] the Surrendered Notes are being transferred pursuant to and in
accordance with the requirements of the Securities Act, and the
Transferor hereby certifies that the Surrendered Notes are being
transferred to a Person that the Transferor reasonably believes is
purchasing the Surrendered Notes for its 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 an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act; and the Transferee agrees
to provide a signed letter containing certain representations and
agreements regarding the transfer in a form available from the Trustee;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Notes
are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements
of the exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky 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, the Guarantors and Goldman, Sachs & Co.,
BT Alex. Brown Incorporated and Salomon Brothers Inc (collectively, the "Initial
Purchasers"), the Initial Purchasers of such Notes being transferred. Each of
the foregoing is entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings with respect to the materials covered
hereby. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
--------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------
Name:
Title:
Dated:
- ------------------------,
- ---------
cc: Metal Management, Inc.
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Salomon Brothers Inc
B-4-2
<PAGE> 95
EXHIBIT B-5
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM DEFINITIVE NOTE TO U.S. GLOBAL NOTE
OR REGULATION S PERMANENT GLOBAL NOTE
(PURSUANT TO SECTION 2.06(E) OF THE INDENTURE)
LaSalle National Bank
135 S. LaSalle Street
Suite 1825
Chicago, Illinois 60603
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2008 of Metal Management, Inc.
Reference is hereby made to the Indenture, dated as of May 13, 1998 (the
"Indenture"), among Metal Management, Inc., as issuer (the "Company"), the
Guarantors and LaSalle National Bank, 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 Notes which are
evidenced by one or more Definitive Notes (CUSIP No. and registered
with the Registrar in the name of (the "Transferor"). The Transferor has
requested a transfer of such Definitive Notes to a Person who will take delivery
thereof in the form of an equal beneficial interest in Global Notes evidenced by
one or more (check one) [ ] Rule 144A Global Notes (CUSIP No. 591097 AA8) or [ ]
Regulation S Permanent Global Notes (CUSIP No. U5918G AA9), which amount,
immediately after such transfer, is to be held with the Depositary through
Euroclear or Cedel Bank or both (Common Code 8730873).
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of such
Surrendered Notes hereby certifies that:
[CHECK ONE]
[ ] the Surrendered Notes are being transferred to the beneficial owner of
such Notes;
or
[ ] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes 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;
or
[ ] the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
[ ] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
B-5-1
<PAGE> 96
[ ] the Surrendered Notes are being transferred pursuant to and in
accordance with the requirements of the Securities Act, and the
Transferor hereby certifies that the Surrendered Notes are being
transferred to a Person that the Transferor reasonably believes is
purchasing the Surrendered Notes for its 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 an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act; and the transferee agrees
to provide a signed letter containing certain representations and
agreements regarding the transfer in a form available from the Trustee;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Notes
are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements
of the exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the Transferor or the transferee (a
copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
or
[ ] such transfer is being effected pursuant to and in accordance with Rule
903 or Rule 904 under the Securities Act, and accordingly the
Transferor hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United
States;
(2) either:
(a) 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 and believes that the
transferee was outside the United States; or
(b) 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 prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
(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 Depositary
through Euroclear or Cedel Bank or both (Common Code 8730873).
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
Upon giving effect to this request to exchange a Definitive Note for a
beneficial interest in such Rule 144A Global Note or Regulation S Global
Note, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Global Notes pursuant to the
Indenture and the Securities Act and, if such transfer occurs prior to the
end of the 40-day restricted period associated with the initial offering of
Notes, the additional restrictions applicable to transfers of interest in
the Regulation S Temporary Global Note.
B-5-2
<PAGE> 97
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantors and Goldman, Sachs & Co.,
BT Alex. Brown Incorporated and Salomon Brothers Inc (collectively, the "Initial
Purchasers"), the Initial Purchasers of such Notes being transferred. Each of
the foregoing is entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings with respect to the materials covered
hereby. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
--------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated:
-------------------------------,
----------------
cc: Metal Management, Inc.
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Salomon Brothers Inc
B-5-3
<PAGE> 98
EXHIBIT C
SUBSIDIARY GUARANTEE
Each Guarantor hereby, jointly and severally, unconditionally guarantees to
each Holder of Notes authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the Obligations of the Company to
the Holders or the Trustee under the Notes or under the Indenture, that: (a) the
principal of, and premium and Liquidated Damages, if any, and interest on the
Notes shall be promptly paid when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on overdue principal of and interest and
Liquidated Damages, if any, on any Note, if lawful, and all other Obligations of
the Company to the Holders or the Trustee under the Indenture or under the Notes
shall be promptly paid in full or performed, all in accordance with the terms
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise (subject to the last paragraph of
this Subsidiary Guarantee). Failing payment when due of any amount so
guaranteed, for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately.
The Obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 11 of the Indenture, and reference is hereby made to the
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article 11 of the Indenture are incorporated herein by reference.
No director, officer, employee, incorporator or stockholder, as such, past,
present or future, of each of the Guarantors shall have any personal liability
under this Subsidiary Guarantee by reason of its status as such director,
officer, employee, incorporator or stockholder.
Each of the Guarantors agrees, and each Holder by accepting a Note and the
related Subsidiary Guarantees agrees, that the payment of principal of, premium,
if any, and interest and Liquidated Damages, if any, on, and all other
Obligations in respect of, the Notes pursuant to the Subsidiary Guarantees is
subordinated in right of payment, to the extent and in the manner provided in
Articles 10 and 11 of the Indenture, to the prior payment in full in cash or
Cash Equivalents of all Senior Debt of such Guarantor and the subordination set
forth herein is for the benefit of and enforceable by the holders of Senior
Debt. Each Holder by accepting a Note authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Holders and the holders of Senior Debt
as provided in the Indenture and appoints the Trustee as attorney-in-fact for
any and all such purposes.
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company's Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders of Notes and, in the event of any transfer or assignment
of rights by any Holder of Notes or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
In certain circumstances more fully described in the Indenture, any
Guarantor may be released from its liability under this Subsidiary Guarantee,
and any such release will be effective whether or not noted hereon.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability will be that amount from
time to time equal to the aggregate liability of such Guarantor thereunder, but
shall be limited to the lesser of (i) the
C-1
<PAGE> 99
aggregate amount of the Obligations of the Company under the Notes and the
Indenture and (ii) the amount, if any, which would not have (A) rendered such
Guarantor "insolvent" (as such term is defined in the federal Bankruptcy Law and
in the Debtor and Creditor Law of the State of New York) or (B) left it with
unreasonably small capital at the time its Subsidiary Guarantee was entered
into, after giving effect to the incurrence of existing Indebtedness immediately
prior to such time; provided that, it shall be a presumption in any lawsuit or
other proceeding in which such Guarantor is a party that the amount guaranteed
pursuant to its Subsidiary Guarantee is the amount set forth in clause (i) above
unless any creditor, or representative of creditors of such Guarantor, or debtor
in possession or trustee in bankruptcy of such Guarantor, otherwise proves in
such a lawsuit that the aggregate liability of such Guarantor is limited to the
amount set forth in clause (ii). The Indenture provides that, in making any
determination as to the solvency or sufficiency of capital of a Guarantor in
accordance with the previous sentence, the right of such Guarantor to
contribution from other Guarantors and any other rights such Guarantor may have,
contractual or otherwise, shall be taken into account.
C-2
<PAGE> 100
Capitalized terms used herein have the same meanings given in the Indenture
unless otherwise indicated.
AEROSPACE METALS, INC.
AMERICAN SCRAP PROCESSING, INC.
BRIQUETTING CORPORATION OF AMERICA
C SHREDDING CORP.
CALIFORNIA METALS RECYCLING, INC
CIM TRUCKING, INC.
COMETCO CORP.
COZZI BUILDING CORPORATION
COZZI IRON & METAL, INC.
EMCO TRADING, INC.
FERREX TRADING CORPORATION
FIRMA, INC.
FIRMA PLASTIC CO., INC.
HOUSTON COMPRESSED STEEL CORP.
HOUTEX METALS COMPANY, INC.
THE ISAAC CORPORATION
P. JOSEPH IRON & METAL, INC.
KANKAKEE SCRAP CORPORATION
MAC LEOD METALS CO.
METAL MANAGEMENT ARIZONA, INC.
METAL MANAGEMENT REALTY, INC.
138 SCRAP ACQUISITION CORP.
PAULDING RECYCLING, INC.
PROLER SOUTHWEST INC.
PROLER STEELWORKS L.L.C.
SALT RIVER RECYCLING L.L.C.
SCRAP PROCESSING, INC.
SUPERIOR FORGE, INC.
TROJAN TRADING CO.
USA SOUTHWESTERN CARRIER, INC.
By:
------------------------------------
Name:
Title:
RESERVE IRON & METAL LIMITED
PARTNERSHIP
By: P. JOSEPH IRON & METAL, INC.,
its general partner
By:
------------------------------------
Name:
Title:
C-3
<PAGE> 101
EXHIBIT D
FORM OF LETTER TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
LaSalle National Bank
135 S. LaSalle Street
Suite 1825
Chicago, Illinois 60603
Attention: Corporate Trust Administration
Re: % Senior Subordinated Notes due 2008 of Metal Management, Inc.
Reference is hereby made to the Indenture, dated as of May 13, 1998 (the
"Indenture"), among Metal Management, Inc., as issuer (the "Company"), the
Guarantors and LaSalle National Bank, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
We understand that the % Senior Subordinated Notes due 2008 (the
"Notes") of the Company have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and we agree, on our own behalf and on
behalf of each account for which we acquire any Notes, that if we decide to
offer, resell or otherwise transfer such Notes, such Notes may be offered,
resold or otherwise transferred only (a) to a person whom we reasonably believe
is a qualified institutional buyer within the meaning of Rule 144A under the
Securities Act purchasing for its own account or for the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule 144A, (b)
in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S
under the Securities Act, (c) pursuant to an exemption from registration under
the Securities Act provided by Rule 144 thereunder (if available), (d) to the
Company, (e) pursuant to an effective registration statement under the
Securities Act or (f) to an institutional "accredited investor" in a transaction
exempt from the registration requirements of the Securities Act, and, in each
case, in accordance with all applicable securities laws of the states of the
United States. We further agree to provide any person purchasing any of the
Notes from us a notice advising such purchaser that resales of such securities
are restricted as stated herein.
We confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act or an entity in which all of
the equity owners are accredited investors within the meaning of Rule
501(a)(1), (2) and (3) under the Securities Act (an "Institutional
Accredited Investor");
(ii) (A) any purchase of Notes by us will be for our own account or
for the account of one or more other Institutional Accredited Investors or
as fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment discretion
or (B) we are a "bank," within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(a)(5)(A) of the Securities Act that is acquiring
Notes as fiduciary for the account of one or more institutions for which we
exercise sole investment discretion;
(iii) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of an
investment in the Notes;
(iv) we are not acquiring Notes with a view to resale or distribution
thereof or with any present intention of offering or selling Notes, except
as permitted above; provided that the disposition of our property and
property of any accounts for which we are acting as fiduciary shall remain
at all times within our control; and
D-1
<PAGE> 102
(v) we have received a copy of the Offering Circular dated May 8,
1998, relating to the offering of the Notes and acknowledge that we have
had access to such financial and other information and have been afforded
the opportunity to ask such questions of representatives of the Company and
receive answers thereto, as we deem necessary in connection with our
decision to purchase Notes.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantors and Goldman, Sachs & Co.,
BT Alex. Brown Incorporated and Salomon Brothers Inc (collectively, the "Initial
Purchasers"), the Initial Purchasers of such Notes being transferred. Each of
the foregoing is entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings with respect to the materials covered
hereby.
--------------------------------------
[Insert Name of Transferee]
By:
------------------------------------
Name:
Title:
Dated:
-------------------------------,
----------------
cc: Metal Management, Inc.
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Salomon Brothers Inc
D-2
<PAGE> 1
EXHIBIT 10.3
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
DATED AS OF MAY 13, 1998
BY AND AMONG
METAL MANAGEMENT, INC.,
AS ISSUER,
Aerospace Metals, Inc., American Scrap Processing, Inc., Briquetting Corporation
of America, C. Shredding Corp., California Metals Recycling, Inc., CIM Trucking,
Inc., Cometco Corp., Cozzi Building Corporation, Cozzi Iron & Metal, Inc., EMCO
Trading, Inc., Ferrex Trading Corporation, Firma, Inc., Firma Plastic Co., Inc.,
Houston Compressed Steel Corp., HouTex Metals Company, Inc., The Isaac
Corporation, P. Joseph Iron & Metal, Inc., Kankakee Scrap Corporation, MacLeod
Metals Co., Metal Management Arizona, Inc., Metal Management Realty, Inc., 138
Scrap Acquisition Corp., Paulding Recycling, Inc., Proler Southwest Inc., Proler
Steelworks L.L.C., Reserve Iron & Metal Limited Partnership, Salt River
Recycling, L.L.C., Scrap Processing, Inc., Superior Forge, Inc., Trojan Trading
Co., USA Southwestern Carriers, Inc.,
as Guarantors,
and
Goldman, Sachs & Co.
BT Alex. Brown Incorporated
Salomon Brothers Inc,
as Initial Purchasers
<PAGE> 2
This Exchange and Registration Rights Agreement (this "Agreement") is made
and entered into as of May 13, 1998, by and among Metal Management, Inc., (the
"Company"); Aerospace Metals, Inc., American Scrap Processing, Inc., Briquetting
Corporation of America, C Shredding Corp., California Metals Recycling, Inc.,
CIM Trucking, Inc., Cometco Corp., Cozzi Building Corporation, Cozzi Iron &
Metal, Inc., EMCO Trading, Inc., Ferrex Trading Corporation, Firma, Inc., Firma
Plastic Co., Inc., Houston Compressed Steel Corp., HouTex Metals Company, Inc.,
The Isaac Corporation, P. Joseph Iron & Metal, Inc., Kankakee Scrap Corporation,
MacLeod Metals Co., Metal Management Arizona, Inc., Metal Management Realty,
Inc., 138 Scrap Acquisition Corp., Paulding Recycling, Inc., Proler Southwest
Inc., Proler Steelworks L.L.C., Reserve Iron & Metal Limited Partnership, Salt
River Recycling, L.L.C., Scrap Processing, Inc., Superior Forge, Inc., Trojan
Trading Co. and USA Southwestern Carriers, Inc. (each a "Guarantor" and
collectively, the "Guarantors"); and Goldman, Sachs & Co., BT Alex. Brown
Incorporated and Salomon Brothers Inc (each an "Initial Purchaser" and,
collectively, the "Initial Purchasers"), each of whom has agreed to purchase the
Company's 10% Senior Subordinated Notes due 2008 (the "Subordinated Notes")
pursuant to the Purchase Agreement dated May 8, 1998 (the "Purchase Agreement"),
by and among the Company, the Guarantors and the Initial Purchasers. In order to
induce the Initial Purchasers to purchase the Subordinated Notes, the Company
and the Guarantors have agreed to provide the exchange and registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 2 of
the Purchase Agreement. The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Business Day: Any day, except a Saturday, Sunday or other day in The
City of New York, or in the city of the Corporate Trust Office (as defined
in the Indenture) of the Trustee, on which banks are authorized to close.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Exchange Notes that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for
Subordinated Notes that such Broker-Dealer acquired for its own account as
a result of market-making activities or other trading activities (other
than Subordinated Notes acquired directly from the Company or any of its
affiliates).
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
declaration of effectiveness under the Act of the Exchange Offer
Registration Statement relating to the Exchange Notes to be issued in the
Exchange Offer and the related Guarantees, (b) the maintenance of such
Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof and (c) the delivery by the Company to the
registrar under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Subordinated Notes
tendered by Holders thereof pursuant to the Exchange Offer and the issuance
of the related Guarantees by the Guarantors.
Damages Payment Date: With respect to the Subordinated Notes, each
Interest Payment Date.
2
<PAGE> 3
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The Company's 10% Senior Subordinated Notes due 2008
to be issued pursuant to the Indenture in the Exchange Offer.
Exchange Offer: The registration by the Company and the Guarantors
under the Act of the Exchange Notes and the related Guarantees pursuant to
the Exchange Offer Registration Statement pursuant to which the Company
shall offer the Holders of all outstanding Transfer Restricted Securities
the opportunity to exchange all such outstanding Transfer Restricted
Securities for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered
in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Subordinated Notes (i) to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act,
and/or (ii) in one or more offshore transactions complying with Rule 903 or
904 of Regulation S under the Act.
Global Note Holder: As defined in the Indenture.
Guarantees: The guarantees of the Notes to be issued by the Guarantors
pursuant to the Indenture.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of the Closing Date, among the
Company, the Guarantors and LaSalle National Bank, as trustee (the
"Trustee"), pursuant to which the Notes and the Guarantees are to be
issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Subordinated Notes and the Exchange Notes.
Person: An individual, partnership, limited liability company,
corporation, trust, unincorporated organization or a government or agency
or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated
by reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder of Notes on the record date with respect to the Interest
Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities and the related Guarantees pursuant to the Shelf Registration
Statement, in each case, (i) which is filed pursuant to the provisions of
this Agreement and (ii) including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments)
and all exhibits and material incorporated by reference therein.
3
<PAGE> 4
Restricted Broker-Dealer: Any Broker-Dealer that holds Broker-Dealer
Transfer Restricted Securities.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939, as in effect on the date of the
Indenture.
Transfer Restricted Securities: Each Note until (i) the date on which
such Note has been exchanged by a Person other than a Broker-Dealer for an
Exchange Note in the Exchange Offer, (ii) following the exchange by a
Broker-Dealer in the Exchange Offer of a Note for an Exchange Note, the
date on which such Exchange Note is sold to a purchaser who receives from
such Broker-Dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement, (iii)
the date on which such Note has been effectively registered under the Act
and disposed of in accordance with the Shelf Registration Statement or (iv)
the date on which such Note is distributed to the public pursuant to Rule
144 under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering
to the public.
2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the benefits
of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities.
3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable federal
law (after the procedures set forth in Section 6(a) below have been complied
with), the Company and the Guarantors shall (i) cause to be filed with the
Commission on or prior to 60 days after the Closing Date, the Exchange Offer
Registration Statement, (ii) use their respective commercially reasonable
efforts to cause such Exchange Offer Registration Statement to be declared
effective on or prior to 135 days after the date on which such Exchange Offer
Registration Statement is filed with the Commission (which 135-day period shall
be extended for a number of days equal to the number of Business Days, if any,
that the Commission is officially closed during such period), (iii) in
connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
Exchange Notes and the related Guarantees to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange Offer
and (iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer Registration
Statement shall be on the appropriate form promulgated by the Commission under
the Act permitting registration of the Exchange Notes and the related Guarantees
to be offered in exchange for the Subordinated Notes that are Transfer
Restricted Securities and the related Guarantees and to permit sales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers as
contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective commercially
reasonable efforts to cause the Exchange Offer Registration Statement to be
effective continuously, and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however,
4
<PAGE> 5
that in no event shall such period be less than 20 Business Days. The Company
and the Guarantors shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Exchange Notes
and the related Guarantees shall be included in the Exchange Offer Registration
Statement. The Company and the Guarantors shall use their respective
commercially reasonable efforts to cause the Exchange Offer to be Consummated on
or prior to 25 Business Days after date the Exchange Offer Registration
Statement has become effective.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer who holds Subordinated Notes that are
Transfer Restricted Securities and that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities may exchange such Subordinated Notes (other than Transfer Restricted
Securities acquired directly from the Company or any affiliate of the Company)
pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be
an "underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its initial
sale of each Exchange Note received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers that the Commission may require in order
to permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer, except to the extent required by the Commission.
The Company and the Guarantors shall use their respective commercially
reasonable efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) below to the extent necessary to ensure that it is available for
sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-
Dealers, and to ensure that such Registration Statement conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time for a period of one year from
the date on which the Exchange Offer is declared effective.
The Company and the Guarantors shall provide sufficient copies of the
latest version of the Prospectus included in the Exchange Offer Registration
Statement to such Restricted Broker-Dealers promptly upon request at any time
during such one-year period in order to facilitate such sales.
4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement with respect to the Exchange Notes or
permitted to Consummate the Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures set forth
in Section 6(a) below have been complied with) or (ii) any Holder of Transfer
Restricted Securities shall notify the Company within 10 Business Days following
the Consummation of the Exchange Offer that (A) such Holder was prohibited by
law or Commission policy from participating in the Exchange Offer or (B) such
Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer and holds
Subordinated Notes acquired directly from the Company or one of its affiliates,
then the Company and the Guarantors shall (x) use their respective best efforts
to cause to be filed on or prior to 60 days after the date on which the Company
determines that it is not required to file the Exchange Offer Registration
Statement pursuant to clause (i) above or 60 days after the date on which the
Company receives the notice specified in clause (ii) above a shelf registration
statement pursuant to Rule 415 under the Act (which may be an amendment to the
Exchange Offer Registration Statement) (in either
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<PAGE> 6
event, the "Shelf Registration Statement") relating to all Transfer Restricted
Securities the Holders of which shall have provided the information required
pursuant to Section 4(b) hereof and shall (y) use their respective commercially
reasonable efforts to cause such Shelf Registration Statement to become
effective as promptly as possible, but in no event later than 135 days after the
date on which the Company becomes obligated to file such Shelf Registration
Statement. The Company and the Guarantors shall use their respective
commercially reasonable efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended as required by and subject to
the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for sales of Transfer Restricted Securities by the Holders
thereof entitled to the benefit of this Section 4(a) and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time for a
period of at least two years following the Closing Date or such shorter period
that will terminate when all Transfer Restricted Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within five days after receipt of a request therefor,
such information specified in item 507 of Regulation S-K under the Act for use
in connection with any Shelf Registration statement or Prospectus or preliminary
Prospectus included therein. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information so required to be disclosed in order to make the information
previously furnished to the Company by such Holder not materially misleading. No
Holder as to which any Shelf Registration Statement is being effected shall be
entitled to the benefits of Section 5 below unless it has complied with its
obligations under this Section 4(b).
5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the date specified for such filing in this
Agreement, (ii) any such Registration Statement has not been declared effective
by the Commission on or prior to the date specified for such effectiveness in
this Agreement (the "Effectiveness Target Date"), (iii) the Exchange Offer has
not been Consummated within 25 Business Days after the Effectiveness Target Date
with respect to the Exchange Offer Registration Statement or (iv) subject to the
provisions of Section 6(d) below, any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter cease to be
effective or fail to be usable for its intended purpose without being succeeded
immediately by a post-effective amendment to such Registration Statement that
cures such failure and that is itself declared effective immediately (each such
event referred to in clauses (i) through (iv), a "Registration Default"), then
the Company and the Guarantors hereby jointly and severally agree to pay
liquidated damages to each Holder of Transfer Restricted Securities affected by
such Registration Default with respect to the first 90-day period immediately
following the occurrence of such Registration Default, in an amount equal to
$.05 per week per $1,000 principal amount of Transfer Restricted Securities
affected by such Registration Default held by such Holder for each week or
portion thereof that the Registration Default continues. The amount of the
liquidated damages shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities affected by such Registration
Default with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages of $.50
per week per $1,000 principal amount of Transfer Restricted Securities. All
accrued Liquidated Damages will be paid by the Company in cash on each Damages
Payment Date to the Global Note Holder (and any Holder of Certified Securities
who has given wire transfer instructions to the Company prior to the Damages
Payment Date) by wire transfer of immediately available funds and to all other
Holders of Certified Securities by mailing checks to their registered addresses.
Following the cure of all Registration Defaults relating to any particular
Transfer
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<PAGE> 7
Restricted Securities, the accrual of liquidated damages with respect to such
Transfer Restricted Securities will cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
security shall have been satisfied in full.
6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall comply with all applicable
provisions of Section 6(c) below, shall use their respective commercially
reasonable efforts to effect such exchange and to permit the sale of
Broker-Dealer Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall comply with all of
the following provisions:
(i) If, following the date hereof there has been promulgated a change
in Commission policy with respect to exchange offers such as the Exchange
Offer, such that in the reasonable opinion of counsel to the Company there
is a substantial question as to whether the Exchange Offer is permitted by
applicable federal law, the Company and the Guarantors hereby agree to seek
a no-action letter or other favorable decision from the Commission allowing
the Company and the Guarantors to Consummate an Exchange Offer for such
Subordinated Notes. The Company and the Guarantors hereby agree to pursue
the issuance of such a decision to the Commission staff level, but shall
not be required to take commercially unreasonable action to obtain such
no-action letter or favorable decision. In connection with the foregoing,
the Company and the Guarantors hereby agree to take all such other actions
as are reasonably requested by the Commission or otherwise reasonably
required in connection with the issuance of such decision, including,
without limitation, (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which
such counsel believes that such an Exchange Offer should be permitted and
(C) diligently pursuing a resolution by the Commission staff of such
submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the Company
and the Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect
that (A) it is not an affiliate of the Company, (B) it is not engaged in,
and does not intend to engage in, and has no arrangement or understanding
with any Person to participate in, a distribution of the Exchange Notes to
be issued in the Exchange Offer, (C) it is acquiring the Exchange Notes in
its ordinary course of business and (D) if it is a Broker-Dealer holding
Subordinated Notes acquired for its own account as a result of
market-making activities or other trading activities, then it will deliver
a prospectus meeting the requirements of the Act in connection with any
resale of Exchange Notes received in respect of such Subordinated Notes
pursuant to the Exchange Offer; provided, however, that by so representing
and by delivering a prospectus, such Broker-Dealer will not be deemed to
admit that it is an "underwriter" of the Notes within the meaning of the
Act. Each Holder hereby acknowledges and agrees that any Broker-Dealer and
any such Holder using the Exchange Offer to participate in a distribution
of the securities to be acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this Agreement rely on the
position of the Commission enunciated in Morgan Stanley & Co. Incorporated
(available June 5, 1991) and Exxon Capital Holdings Corporation (available
May 13, 1988), as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and similar no-action letters (including, if
applicable, any no-action letter obtained pursuant to clause (i) above),
and (2) must comply with the registration and prospectus
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<PAGE> 8
delivery requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction must be covered by
an effective registration statement containing required information with
respect to the selling securityholder if the resales are of Exchange Notes
obtained by such Holder in exchange for Subordinated Notes acquired by such
Holder directly from the Company or an affiliate thereof or as a result of
market-making activities or other trading activities.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement and except to the extent that the Commission may otherwise
require, the Company and the Guarantors shall provide a supplemental letter
to the Commission (A) stating that the Company and the Guarantors are
registering the Exchange Offer in reliance on the position of the
Commission enunciated in Morgan Stanley & Co. Incorporated (available June
5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988),
as interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and similar no-action letters (including, if applicable, any
no-action letter obtained pursuant to clause (i) above), (B) including
representations that (1) neither the Company nor any Guarantor has entered
into any arrangement or understanding with any Person to distribute the
Exchange Notes to be received in the Exchange Offer, (2) to the best of the
Company's and each Guarantor's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in its
ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the Exchange Notes
received in the Exchange Offer and (3) the Company and the Guarantors will
make each Person participating in the Exchange Offer aware (through the
Exchange Offer Prospectus) that any Broker-Dealer who holds Subordinated
Notes acquired for its own account as a result of market-making activities
or other trading activities, and who receives Exchange Notes in exchange
for such Subordinated Notes pursuant to the Exchange Offer, may be a
statutory underwriter and must deliver a prospectus meeting the
requirements of the Act in connection with any resale of such Exchange
Notes and (C) any other undertaking or representation required by the
Commission as set forth in any no-action letter obtained pursuant to clause
(i) above.
(b) Shelf Registration Statement. In connection with any Shelf Registration
Statement required to be filed by the Company and the Guarantors, the Company
and the Guarantors shall comply with all the provisions of Section 6(c) below
and shall use their respective commercially reasonable efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to Section 4(b)
hereof), and pursuant thereto the Company and the Guarantors will prepare and
file with the Commission a Registration Statement relating to the registration
on any appropriate form under the Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof within the time periods and otherwise
in accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities (including, without limitation, any Exchange
Offer Registration Statement and the related Prospectus, to the extent that the
same are required to be available to permit sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers), the Company and the
Guarantors shall:
(i) use their respective commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements (including, if required by the Act or any regulation
thereunder, financial statements of any Guarantor) for the period specified
in Section 3 or 4 of this Agreement, as applicable. Upon the occurrence of
any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain a material misstatement or
omission or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement, the
Company and
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<PAGE> 9
the Guarantors shall file promptly an appropriate amendment to such
Registration Statement, (1) in the case of clause (A), correcting any such
misstatement or omission and (2) in the case of clauses (A) and (B), use
their respective commercially reasonable efforts to cause such amendment or
Registration Statement to be declared effective and such Registration
Statement and the related Prospectus to become usable for their intended
purpose(s) as soon as practicable thereafter.
(ii) prepare and file with the Commission such amendments to the
Registration Statement as may be necessary to keep the Registration
Statement effective for the applicable period set forth in Section 3 or 4
hereof, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been
sold; cause the Prospectus to be supplemented by any required Prospectus
supplement and, as so supplemented, filed pursuant to Rule 424 under the
Act, and to comply fully with Rules 424, 430A and 462, as applicable, under
the Act in a timely manner; and comply with the provisions of the Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended
method or methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the Trustee and, if requested, confirming such advice in
writing, when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed and, with respect to any Registration Statement or
any post-effective amendment thereto, when the same has become effective;
and advise the underwriter(s), if any, and selling Holders promptly and, if
requested by such Persons, confirming such advice in writing, (A) of any
request by the Commission for any post-effective amendment to the
Registration Statement or any amendment or supplement to the Prospectus,
(B) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes or (C)
of the happening of any event or the existence of any state of facts that
makes any statement of a material fact made in the Registration Statement,
the Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue (which has not been corrected by
the filing of a document incorporated by reference therein), or that
requires the making of any additions to or changes in the Registration
Statement in order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If at anytime the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement under the Act, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company and the Guarantors shall use
their respective commercially reasonable efforts to obtain the withdrawal
or lifting of such order at the earliest possible time;
(iv) furnish to each selling Holder specifically named in any
Registration Statement or Prospectus and each of the underwriter(s) in
connection with such sale, if any, on or before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein or
any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders and underwriter(s) in
connection with such sale, if any, for a period of at least two Business
Days, and the Company will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by
reference) to which such selling Holders of the Transfer Restricted
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<PAGE> 10
Securities covered by such Registration Statement or the underwriter(s) in
connection with such sale, if any, shall reasonably object within two
Business Days after the receipt thereof;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Shelf Registration Statement or related
Prospectus, provide copies of such document to each selling Holder
specifically named therein and to the underwriter(s) in connection with
such sale, if any, make the Company's and the Guarantors' representatives
available for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the filing
thereof as such selling Holders or underwriter(s), if any, reasonably may
request;
(vi) make available at reasonable times for inspection by any
Restricted Broker-Dealers, any selling Holders named in any Shelf
Registration Statement, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such selling Holders, Restricted Broker-Dealers or any of such
underwriter(s) all relevant financial and other records, pertinent
corporate documents and properties of the Company and the Guarantors and
cause the Company's and the Guarantors' officers, directors and employees
to supply all relevant information reasonably requested by any such Holder,
Restricted Broker-Dealer, underwriter, attorney or accountant in connection
with such Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness;
(vii) if requested by any selling Holders named in any Shelf
Registration Statement or the underwriter(s) in connection with such sale,
if any, promptly include in any such Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein relating to such Holders and
underwriter(s), if any, and the disposition of the related Transfer
Restricted Securities, including, without limitation, information relating
to the "Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being paid
therefor and any other terms of the offering of the Transfer Restricted
Securities to be sold in such offering; and make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be included in
such Prospectus supplement or post-effective amendment;
(viii) deliver to each selling Holder and each of the underwriter(s)
in connection with such sale, if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request in writing; the
Company and the Guarantors hereby consent to the use of any preliminary
prospectus, the Prospectus and any amendment or supplement thereto by each
of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement thereto
but only in a manner consistent with the matters set forth under "Plan of
Distribution" therein;
(ix) enter into such agreements (including, in the case of an
Underwritten Registration, an underwriting agreement) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement as may be reasonably requested by any Holder
of Transfer Restricted Securities or underwriter in connection with any
sale or resale pursuant to any Registration Statement contemplated by this
Agreement, and in such connection, whether or not an underwriting agreement
is entered into and whether or not the registration is an Underwritten
Registration, the Company and the Guarantors shall upon request:
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<PAGE> 11
(A) furnish to each selling Holder specifically named in any Shelf
Registration Statement and each underwriter, if any, in such substance
and scope as they may reasonably request and (in the case of any
Underwritten Registration) as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the effectiveness
of any Shelf Registration Statement and to any Restricted Broker-Dealer
who so requests upon Consummation of the Exchange Offer:
(1) a certificate, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, signed on behalf of the Company and
each Guarantor by (x) the Chief Executive Officer, the President or
any Vice President and (y) a principal financial or accounting
officer of the Company and such Guarantor, confirming, as of the date
thereof, the matters set forth in the first paragraph and in
subsections (d) and (e) of Section 7 of the Purchase Agreement, as
the same apply to any Registration Statement or Prospectus and the
other matters addressed in such paragraph and subsections, and such
other similar matters as such Holders, underwriter(s) and/or
Restricted Broker-Dealers may reasonably request;
(2) an opinion, dated the date of Consummation of the Exchange
Offer or the date of effectiveness of the Shelf Registration
Statement, as the case may be, of counsel for the Company and the
Guarantors covering matters similar to those set forth in paragraph
(b) of Section 7 of the Purchase Agreement, as the same apply to any
Registration Statement or Prospectus and the other matters addressed
in such paragraph, and such other matters as such Holders,
underwriter(s) and/or Restricted Broker-Dealers may reasonably
request, and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement or the date of
Consummation of the Exchange Offer, as the case may be, from the
Company's and the Guarantors' independent accountants, in the
customary form and covering matters of the type customarily covered
in comfort letters to underwriters in connection with primary
underwritten offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Section 7 of the Purchase
Agreement, without exception, as the same apply to any Registration
Statement or Prospectus and the other matters addressed in such
Section;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or resale
pursuant to any Shelf Registration Statement relating to an Underwritten
Offering the indemnification provisions and procedures of Section 8
hereof with respect to all parties to be indemnified pursuant to said
Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by the selling Holders specifically named in any
Shelf Registration Statement, the underwriter(s), if any, and Restricted
Broker-Dealers, if any, to evidence compliance with clause (A) above and
with any customary conditions contained in any underwriting agreement or
other agreement entered into by the Company and the Guarantors pursuant
to this clause (ix). The above shall be done at each closing under such
underwriting or similar agreement, as and to the extent required
thereunder, and if at any time the representations and warranties of the
Company and the Guarantors contemplated in (A)(1) above cease to be true
and correct, the Company and the Guarantors shall so advise the
underwriter(s), if any, the selling Holders and any Restricted Broker-
Dealer promptly and, if requested by such Persons, shall confirm such
advice in writing;
(x) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s),
if any, and their respective counsel in connection with the
registration and qualification of the Transfer Restricted Securities
under the securities or Blue Sky laws of such jurisdictions as the
selling Holders or
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<PAGE> 12
underwriter(s), if any, may request and do any and all other acts or
things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that neither
the Company nor any Guarantor shall be required to register or
qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to the service of process in
suits or to taxation, other than as to matters and transactions
relating to the Registration Statement, in any jurisdiction where it
is not now so subject;
(xi) issue, upon the request of any Holder of Subordinated Notes
covered by any Shelf Registration Statement contemplated by this
Agreement and the surrender for cancellation of the Subordinated
Notes held by such Holder, Exchange Notes having an aggregate
principal amount equal to the aggregate principal amount of
Subordinated Notes surrendered to the Company by such Holder in
exchange therefor or being sold by such Holder; such Exchange Notes
to be registered in the name of such Holder or in the name of the
purchaser(s) of such Notes, as the case may be;
(xii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being
Transfer Restricted Securities (other than with respect to the
consummation of the Exchange Offer), cooperate with the selling
Holders and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the Holders or the underwriter(s), if
any, may request at least two Business Days prior to such sale of
Transfer Restricted Securities;
(xiii) use their respective commercially reasonable efforts to
cause the disposition of the Transfer Restricted Securities covered
by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof or the underwriter(s), if
any, to consummate the disposition of such Transfer Restricted
Securities;
(xiv) if any fact or event contemplated by Section 6(c)(iii)(C)
above shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light
of the circumstances under which they we remade, not misleading;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide
the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for
deposit with The Depository Trust Company;
(xvi) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified
independent underwriter") that is required to be retained in
accordance with the rules and regulations of the NASD, and use their
respective commercially reasonable efforts to cause such Registration
Statement to become effective and approved by such governmental
agencies or authorities as may be necessary to enable the Holders
selling Transfer Restricted Securities to consummate the disposition
of such Transfer Restricted Securities;
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(xvii) otherwise use their respective commercially reasonable
efforts to comply with all applicable rules and regulations of the
Commission and make generally available to its security holders with
regard to any applicable Registration Statement, a consolidated
earnings statement meeting the requirements of Rule 158 covering a
twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of
Rule 158 under the Act);
(xviii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate
with the Trustee and the Holders of Notes to effect such changes to
the 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 commercially reasonable efforts to cause the Trustee to
execute, all documents that may be required to effect such changes
and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely
manner; and
(xix) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13
or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of any notice from the Company
of the happening of any event or the existence of any state of facts of the kind
described in Section 6(c)(iii)(C) hereof, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof, or
until it is advised in writing by the Company (the "Advice") that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of any such notice. In the
event the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
6(c)(iii)(C) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xiv) hereof or
shall have received the Advice.
7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors' performance
of or compliance with this Agreement will be borne by the Company and the
Guarantors, regardless of whether a Registration Statement becomes effective,
including, without limitation: (i) all registration and filing fees and expenses
(other than filings made by any Initial Purchaser or Holder with the NASD and,
if applicable, the fees and expenses of any "qualified independent underwriter"
and its counsel that may be required by the rules and regulations of the NASD);
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the Exchange Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company, the Guarantors and,
subject to Section 7(b) below, the Holders of Transfer Restricted Securities;
(v) all application and filing fees in connection with causing the Notes to be
eligible for the PORTAL trading system of the National Association of Securities
Dealers, Inc.; and (vi) all fees and disbursements of independent certified
public accountants of the
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Company and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the
"Plan of Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel chosen by the
Holders of a majority in principal amount of the Transfer Restricted Securities
for whose benefit such Registration Statement is being prepared, provided that
such fees and disbursements shall not exceed $20,000 in the aggregate.
8. INDEMNIFICATION
(a) The Company and the Guarantors will, jointly and severally, indemnify
and hold harmless each Holder against any losses, claims, damages or
liabilities, joint or several, to which it may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) (i) arise out of or are based upon an untrue statement or
alleged untrue statement of material fact contained in any Registration
Statement or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading or (ii) arise out of or are base
upon an untrue statement or alleged untrue statement of material fact contained
in any preliminary Prospectus or Prospectus or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and will
reimburse each Holder for any legal or other expenses reasonably incurred by it
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that neither the Company nor any of
the Guarantors shall be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Registration Statement, preliminary Prospectus or Prospectus, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company or any of the Guarantors by or on behalf of
any of the Holders expressly for inclusion therein.
(b) Each Holder and each underwriter named in any underwriting agreement
entered into in connection with an Underwritten Offering will, severally and not
jointly, indemnify and hold harmless the Company and the Guarantors against any
losses, claims, damages or liabilities to which the Company or any of the
Guarantors may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) (i) arise
out of or are based upon an untrue statement or alleged untrue statement of
material fact contained in any Registration Statement or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading or (ii) arise out of or are based upon an untrue
statement or alleged untrue statement of material fact contained in any
preliminary Prospectus or Prospectus or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, 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 any Registration
Statement, preliminary Prospectus or Prospectus, or any such amendment or
supplement, in reliance
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<PAGE> 15
upon and in conformity with written information furnished to the Company or any
of the Guarantors by such Holder or such underwriter expressly for use therein;
and will reimburse the Company and the Guarantors for any legal or other
expenses reasonably incurred by the Company or the Guarantors in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
thereunder unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party 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 the relative fault of the
Company and the Guarantors, on the one hand, and of such Holder, on the other,
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault 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 the Holders, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Guarantors and each Holder agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Holder shall be required to contribute any
amount in excess of the amount by which the dollar amount of the proceeds
received by such Holder from the sale of any Transfer Restricted Securities
(after deducting any fees, discounts and commissions applicable thereto) exceeds
the amount of any damages which such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission, and no
15
<PAGE> 16
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Transfer Restricted Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. The Holders' and any underwriters' obligations in this
Section 8(d) to contribute shall be several in proportion to the respective
principal amounts of Transfer Restricted Securities held or underwritten, as the
case may be, by them and not joint.
(e) The obligations of the Company and the Guarantors under this Section 8
shall be in addition to any liability that the Company and the Guarantors may
otherwise have and shall extend, upon the same terms and conditions, to each
officer, director and partner of each Holder, agent and underwriter, if any, and
each Person, if any, who controls any Holder, agent or underwriter within the
meaning of the Act; and the obligations of the Holders and any underwriters
contemplated by this Section 8 shall be in addition to any liability which the
respective Holder or underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company or any
Guarantor and to each Person, if any, who controls the Company or any Guarantor
within the meaning of the Act.
9. RULE 144A
The Company and the Guarantors hereby agree with each Holder, for so long
as any Transfer Restricted Securities remain outstanding and during any period
during which the Company or any Guarantor is not subject to Section 13 or 15(d)
of the Exchange Act, to make available, upon request of any Holder of Transfer
Restricted Securities, to any Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in customary underwriting arrangements entered into in
connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney and other documents required under the terms
of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment bankers
and manager or managers for any Underwritten Offering that will administer such
offering will be selected by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities included in such offering;
provided, that such investment bankers and managers must be reasonably
satisfactory to the Company. Such investment bankers and managers are referred
to herein as the "underwriters." Neither the Company nor any Guarantor shall be
liable for the payment of any underwriting fee or commission in connection with
any Underwritten Offering.
12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise all
rights provided herein, in the Indenture, the Purchase Agreement or granted by
law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Company and the
Guarantors agree that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by them of the provisions of this
Agreement and hereby
16
<PAGE> 17
agree to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any Guarantor will,
on or after the date of this Agreement, enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders 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 the Company's and the
Guarantors' securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. Neither the Company nor any Guarantor
will take any action intended to materially and adversely affect the ability of
the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given, unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect, directly or indirectly, the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or the Guarantors:
c/o Metal Management, Inc.
500 N. Dearborn Street
Suite 405
Chicago, IL 60610
Telecopier No.: (312) 645-0714
Attention: Gerard M. Jacobs, Chief Executive Officer
David A. Carpenter, General Counsel
With a copy to:
Mayer, Brown & Platt
190 S. LaSalle Street, Suite 3100
Chicago, IL 60603
Telecopier No.: (312) 701-7711
Attention: Paul W. Theiss, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged orally by recipient, if telecopied; and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
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<PAGE> 18
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 specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without limitation, and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder.
(g) 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.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws rules thereof.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. Except as to those matters governed, expressly as set
forth herein, by the Indenture or the Purchase Agreement, this Agreement is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings other than those set forth or
referred to herein with respect to the exchange and registration rights granted
with respect to the Transfer Restricted Securities. This Agreement supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
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<PAGE> 19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
METAL MANAGEMENT, INC.
By: /s/ GERARD M. JACOBS
-----------------------------------
Name: Gerard M. Jacobs
Title: Chief Executive Officer
AEROSPACE METALS, INC.
AMERICAN SCRAP PROCESSING, INC.
BRIQUETTING CORPORATION OF AMERICA
C. SHREDDING CORP.
CALIFORNIA METALS RECYCLING, INC.
CIM TRUCKING, INC.
COMETCO CORP.
COZZI BUILDING CORPORATION
COZZI IRON & METAL, INC.
EMCO TRADING, INC.
FERREX TRADING CORPORATION
FIRMA, INC.
FIRMA PLASTIC CO., INC.
HOUSTON COMPRESSED STEEL CORP.
HOUTEX METALS COMPANY, INC.
THE ISAAC CORPORATION
P. JOSEPH IRON & METAL, INC.
KANKAKEE SCRAP CORPORATION
MACLEOD METALS CO.
METAL MANAGEMENT ARIZONA, INC.
METAL MANAGEMENT REALTY, INC.
138 SCRAP ACQUISITION CORP.
PAULDING RECYCLING, INC.
PROLER SOUTHWEST INC.
PROLER STEELWORKS L.L.C.
SALT RIVER RECYCLING, L.L.C.
SCRAP PROCESSING, INC.
SUPERIOR FORGE, INC.
TROJAN TRADING CO.
USA SOUTHWESTERN CARRIER, INC.
By: /s/ DAVID A. CARPENTER
-----------------------------------
Name: David A. Carpenter
Title: Vice President
RESERVE IRON & METAL LIMITED
PARTNERSHIP
By: P. JOSEPH IRON & METAL, INC.,
its general partner
By: /s/ DAVID A. CARPENTER
-----------------------------------
Name: David A. Carpenter
Title: Vice President
GOLDMAN, SACHS & CO.
BT ALEX. BROWN INCORPORATED
SALOMON BROTHERS INC
By: /s/ GOLDMAN, SACHS & CO.
---------------------------------
Goldman, Sachs & Co.
19
<PAGE> 1
EXHIBIT 99.1
LOGO
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION CONTACT:
Xavier Hermosillo, Vice President of Investor Relations
& Corporate Communications:
Midwest/East - Call (312) 645-0445 -- West Coast - Call (310) 832-2999
METAL MANAGEMENT ANNOUNCES
SALE OF $180-MILLION IN
SENIOR SUBORDINATED NOTES
Chicago, IL -- May 14, 1998 - Metal Management, Inc. (NASDAQ symbol-MTLM)
("Metal Management" or "MTLM") today announced that it has sold, in a Rule 144A
private offering and pursuant to Regulation S, $180-Million of Senior
Subordinated Notes. The Senior Subordinated Notes mature on May 15, 2008 and
bear interest at a rate of 10%. The proceeds of the offering were used in part
to repay indebtedness, with the remainder planned to be used for acquisitions
and general corporate purposes.
T. Benjamin Jennings, Chairman of the Board said, "This offering, together
with the $200-Million senior credit facility that we entered into on March 31,
gives Metal Management a permanent capital structure that is vital to our
continued development and the implementation of our acquisition strategy."
Robert C. Larry, Vice President of Finance and Chief Financial Officer,
said, "The capital raised in this offering provides substantial liquidity for
Metal Management to advance its consolidation strategy and is an effective
component of our capital structure."
Metal Management is one of the largest and fastest-growing full service
metals recyclers in the United States, with 47 recycling facilities in 11
states. Metal Management is primarily engaged in the collection and processing
of ferrous and non-ferrous metals for resale to metals brokers, steel producers,
and producers and processors of other metals.
All of the statements in this release, other than historical facts, are
forward-looking statements made in reliance upon the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. As such, they involve
risks and uncertainties and are subject to change at any time. These statements
reflect the Company's current expectations regarding the future profitability of
the Company and its subsidiaries and the benefits to be derived from the
Company's execution of its industry consolidation strategy. As discussed in the
Company's current report on Form 8-K, filed May 1, 1998, some of the factors
which could affect the Company's performance include, among other things the
effects of substantial leverage on the Company, immediate and future capital
requirements, risk of substantial dilution to existing shareholders, potential
inability to control growth or to successfully integrate acquired businesses,
limited operating history, cyclicality of the metals recycling industry
potential inability to complete pending acquisitions, commodity price
fluctuations, compliance with environmental, health and safety and other
regulatory requirements applicable to the Company, potential environmental
liability, risk of deterioration in relations with labor unions, control by
principal stockholders and dependence on key management, dependence on suppliers
of scrap metals, concentration of customer risk, competition in the scrap metals
industry, availability of scrap alternatives, stock market volatility and year
2000 compliance.
