<PAGE>1
As filed with the Securities and Exchange Commission on July 27, 1995
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
WEIRTON STEEL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
3312
(Primary Standard Industrial Classification Code Number)
Delaware 06-1075442
(State or Other Jurisdiction (I.R.S. Employer
of Identification No.)
Incorporation or Organization)
400 Three Springs Drive
Weirton, West Virginia
Weirton, West Virginia 26062-4989
(304) 797-2000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
William R. Kiefer, Esq.
400 Three Springs Drive
Weirton, West Virginia
Weirton, West Virginia 26062-4989
(304) 797-2000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies To:
Harvey L. Sperry, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
(212) 821-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFER TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed maximum
Amount maximum aggregate Amount of
Title of each class of securities to be offering offering Registration
to be registered registered price(1) price Fee
--------------------------------- ---------- -------- --------- ------------
<S> <C> <C> <C> <C>
10-3/4% Senior Due 2005 . . . . . . . . . . . . . . . . . . . $125,000,000 100% $125,000,000 $43,103
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>2
WEIRTON STEEL CORPORATION
CROSS-REFERENCE SHEET PURSUANT TO ITEM 501(b) OF REGULATION S-K
Form S-4 Item Number Location in Prospectus
-------------------- ----------------------
1. Forepart of the Registration
Statement and Outside Forepart of the Registration
Front Cover Page Statement and Outside Front
of Prospectus . . . . . . . . Cover Page of Prospectus
2. Inside Front and Outside Back
Cover Pages Inside Front and Outside Back
of Prospectus . . . . . . . . Cover Pages of Prospectus
3. Risk Factors, Ratio of
Earnings to Fixed Charges Summary; Selected Historical
and Other Information . . . . and Pro Forma Combined
Financial Data; Risk Factors
4. Terms of the Transaction . . Summary; The Exchange Offer;
Capitalization
5. Pro Forma Financial Not Applicable
Information . . . . . . . . . . .
6. Material Contracts with the Not Applicable
Company Being Acquired . . . . .
7. Additional Information
Required for Reoffering by Not Applicable
Persons and Parties Deemed to
be Underwriters . . . . . . .
8. Interests of Named Experts and Not Applicable
Counsel . . . . . . . . . . . . .
9. Disclosure of Commission
Position on Indemnification Not Applicable
for Securities Act Liabilities
10. Information with Respect
to S-3 Registrants . . . . . . . . Summary: Available
Information; Incorporation of
Documents by Reference
11. Incorporation of Certain
Information Incorporation of Documents by
by Reference . . . . . . . . Reference
12. Information with Respect
to S-2 or S-3 Registrants . . . . Not Applicable
13. Incorporation of Certain
Information by Reference. . . . . Not Applicable
14. Information with Respect
to Registrants Other than Not Applicable
S-3 or S-2 Registrants . . .
15. Information with Respect Available Information;
to S-3 Companies . . . . . . . . Incorporation of Documents by
Reference
16. Information with Respect
to S-2 or S-3 Companies Not Applicable
17. Information with Respect
to Companies Other Than Not Applicable
S-3 or S-2 Companies . . . .
<PAGE>3
Form S-4 Item Number Location in Prospectus
-------------------- ----------------------
18. Information if Proxies,
Consents or Authorizations Not Applicable
are to be Solicited . . . . .
19. Information if Proxies,
Consents or Authorizations
are not to be Incorporation of Documents by
Solicited or in an Exchange Reference; Summary
Offer . . . . . . . . . . . .
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>4
SUBJECT TO COMPLETION, DATED JULY 27, 1995
PROSPECTUS
WEIRTON STEEL CORPORATION
Offer to Exchange $1,000 in principal amount of 10-3/4% Senior Notes Due 2005
for each $1,000 in principal amount of outstanding 10-3/4% Senior Notes Due
2005 that were issued and sold in
a transaction exempt from registration under the Securities Act of 1933, as
amended
_______________
Weirton Steel Corporation, a Delaware corporation (the "Company"), hereby
offers to exchange (the "Exchange Offer") $125,000,000 in aggregate principal
amount of its 10-3/4% Senior Notes Due 2005 (the "Exchange Notes") for
$125,000,000 in aggregate principal amount of its outstanding 10-3/4% Senior
Notes Due 2005 that were issued and sold in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Senior Notes"
and, together with the Exchange Notes, the "Notes").
The terms of the Exchange Notes are the same in all respects (including
principal amount, interest rate, maturity and ranking) as the terms of the
Senior Notes for which they may be exchanged pursuant to the Exchange Offer,
except that the Exchange Notes (i) are freely transferable by holders thereof
(except as provided below) and are issued without any covenant regarding their
registration. The Exchange Notes will be issued under the indenture governing
the Senior Notes. The Exchange Notes will be, and the Senior Notes are,
unsecured obligations of the Company and will be senior to all subordinated
indebtedness and pari passu with all existing and future senior unsecured
indebtedness of the Company. As of June 30, 1995, after giving effect to the
offering of the Senior Notes, the Company had $351.9 million of outstanding
senior unsecured indebtedness. The Company and its subsidiary have no senior
secured indebtedness. For a complete description of the terms of the Exchange
Notes, including provisions relating to the ability of the Company to create
indebtedness that is senior or pari passu to the Exchange Notes, see
"Description of the Notes." There will be no cash proceeds to the Company
from the Exchange Offer.
The Exchange Notes will bear interest from and including their respective
dates of issuance. Holders whose Senior Notes are accepted for exchange will
receive accrued interest thereon to, but not including, the date of issuance
of the Exchange Notes, such interest to be payable with the first interest
payment on the Exchange Notes, but will not receive any payment in respect of
interest on the Senior Notes accrued after the issuance of the Exchange Notes.
The Senior Notes were originally issued and sold on June 12, 1995 in a
transaction not registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon the exemption provided in Section 4(2) of
the Securities Act and Rule 144A of the Securities Act (the "Initial
Offering"). Accordingly, the Senior Notes may not be reoffered, resold or
otherwise pledged, hypothecated or transferred in the United States unless so
registered or unless an applicable exemption from the registration
requirements of the Securities Act is available. Based upon its view of
interpretations provided to third parties by the Staff (the "Staff") of the
Securities and Exchange Commission (the "Commission"), the Company believes
that the Exchange Notes issued pursuant to the Exchange Offer in exchange for
the Senior Notes may be offered for resale, resold and otherwise transferred
by holders thereof (other than any holder which is (i) an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act (an
"Affiliate"), (ii) a broker-dealer who acquired Senior Notes directly from the
Company or (iii) a broker-dealer who acquired Senior Notes as a result of
market making or other trading activities) without compliance with the
registration and prospectus delivery provisions of the Securities Act provided
that such Exchange Notes are acquired in the ordinary course of such holders'
business and such holders are not engaged in, and do not intend to engage in,
and have no arrangement or understanding with any person to participate in, a
distribution of such Exchange Notes. Each broker-dealer that receives
Exchange Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. The Letter of
<PAGE>5
Transmittal that is filed as an exhibit to the Registration Statement of which
this Prospectus is a part (the "Letter of Transmittal") states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. Broker-dealers who acquired Senior Notes as a result of
market making or other trading activities may use this Prospectus, as
supplemented or amended, in connection with resales of the Exchange Notes.
The Company has agreed that, for a period of 120 days after this Registration
Statement is declared effective by the Commission, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. Any holder that cannot rely upon such interpretations must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction.
The Senior Notes and the Exchange Notes constitute new issues of
securities with no established public trading market. Any Senior Notes not
tendered and accepted in the Exchange Offer will remain outstanding. To the
extent that Senior Notes are tendered and accepted in the Exchange Offer, a
holder's ability to sell untendered, and tendered but unaccepted, Senior Notes
could be adversely affected. Following consummation of the Exchange Offer,
the holders of Senior Notes will continue to be subject to the existing
restrictions on transfer thereof and the Company will have no further
obligation to such holders to provide for the registration under the
Securities Act of the Senior Notes except under certain limited circumstances.
(See "Senior Notes Registration Rights.") No assurance can be given as to the
liquidity of the trading market for either the Senior Notes or the Exchange
Notes.
The Exchange Offer is not conditioned upon any minimum aggregate
principal amount of Senior Notes being tendered or accepted for exchange. The
Exchange Offer will expire at 5:00 p.m., New York City time, on _____________,
1995, unless extended (the "Expiration Date"). The date of acceptance for
exchange of the Senior Notes (the "Exchange Date") will be the first business
day following the Expiration Date, upon surrender of the Senior Notes. Senior
Notes tendered pursuant to the Exchange Offer may be withdrawn at any time
prior to the Expiration Date; otherwise such tenders are irrevocable.
_______________
SEE "RISK FACTORS" FOR A DESCRIPTION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
_______________
The date of this Prospectus is July 27, 1995
<PAGE>6
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on
Form S-4 (the "Registration Statement," which term shall include all
amendments, exhibits, annexes and schedules thereto) pursuant to the
Securities Act, and the rules and regulations promulgated thereunder, covering
the Exchange Notes being offered hereby. This Prospectus does not contain all
the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to in the Registration
Statement are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference.
The Company is subject to the periodic reporting and other informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Periodic reports, proxy statements and other information filed by the
Company with the Commission may be inspected at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, or at its regional offices located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can be obtained from the Company upon request. The Company's
Common Stock is listed on the New York Stock Exchange. Periodic reports,
proxy statements and other information filed by the Company can be inspected
at the offices of the New York Stock Exchange, 11 Wall Street, New York, New
York 10005.
The Company is required by the terms of the indenture dated as of June
12, 1995 between the Company and Bankers Trust Company, as trustee (the
"Trustee"), under which the Senior Notes were issued, and under which the
Exchange Notes are to be issued (the "Indenture"), to furnish the Trustee with
annual reports containing consolidated financial statements audited by its
independent certified public accountants and with quarterly reports containing
unaudited condensed consolidated financial statements for each of the first
three quarters of each fiscal year.
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE EXCHANGE OFFER COVERED BY THIS PROSPECTUS.
IF GIVEN OR MADE SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE EXCHANGE NOTES IN
ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATIONS THAT
THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference: (1) the
Company's Annual Report on Form 10-K for the year ended December 31, 1994; (2)
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995; (3) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995; (4) the Company's Current Report on Form 8-K, filed January 30,
1995; and (5) the Company's Current Report on Form 8-K, filed June 23, 1995.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the termination of the exchange offer made herein shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein, or in any other subsequently filed document
that also is or is deemed to be incorporated by reference herein, modifies
<PAGE>7
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. These documents (other than exhibits
to such documents unless such exhibits are specifically incorporated by
reference herein) are available, without charge, from the Company. Written or
telephone requests should be directed to Weirton Steel Corporation, 400 Three
Springs Drive, Weirton, West Virginia 26062-4989, Attention: William R.
Kiefer, Vice President-Law and Secretary (Telephone 304-797-2000).
<PAGE>8
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . 3
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Consequences of Failure to Exchange . . . . . . . . . . . . . . . . 17
Factors Relating to the Steel Industry . . . . . . . . . . . . . . . 17
Cyclicality . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Capacity Utilization and Price Sensitivity . . . . . . . . . . 17
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Environmental Concerns . . . . . . . . . . . . . . . . . . . . 18
Factors Relating to the Company . . . . . . . . . . . . . . . . . . 18
Financial Results . . . . . . . . . . . . . . . . . . . . . . . 18
Collective Bargaining Agreements . . . . . . . . . . . . . . . 19
Voting Power . . . . . . . . . . . . . . . . . . . . . . . . . 19
Deficiency of Earnings to Fixed Charges . . . . . . . . . . . . 19
Leverage . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Limitations on Raising Equity . . . . . . . . . . . . . . . . . 20
No Prior Market . . . . . . . . . . . . . . . . . . . . . . . . 20
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
THE EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Purpose of the Exchange Offer . . . . . . . . . . . . . . . . . . . 21
Terms of the Exchange . . . . . . . . . . . . . . . . . . . . . . . 21
Expiration Date; Extensions; Termination; Amendments . . . . . . . . 22
How to Tender . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
General Procedures . . . . . . . . . . . . . . . . . . . . . . 23
Book-Entry Transfer . . . . . . . . . . . . . . . . . . . . . . 24
Guarantee Delivery Procedures . . . . . . . . . . . . . . . . . 24
Terms and Conditions of the Letter of Transmittal . . . . . . . . . 25
Withdrawal Rights . . . . . . . . . . . . . . . . . . . . . . . . . 25
Acceptance of Senior Notes for Exchange; Delivery of Exchange Notes 26
Conditions to the Exchange Offer . . . . . . . . . . . . . . . . . . 26
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Solicitation of Tenders; Express . . . . . . . . . . . . . . . . . . 27
Appraisal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . 28
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
<PAGE>9
DESCRIPTION OF THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . 30
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Optional Redemption . . . . . . . . . . . . . . . . . . . . . . 30
Selection and Notice of Redemption . . . . . . . . . . . . . . 30
Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . 31
Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 31
Limitations on Indebtedness . . . . . . . . . . . . . . . . . . 31
Limitations on Restricted Payments . . . . . . . . . . . . . . 31
Limitations on Mergers, Consolidations and Sales of Assets . . 32
Limitations on Transactions with Affiliates . . . . . . . . . . 32
Restrictions on Disposition of Assets of the Company . . . . . 33
Limitations on Liens . . . . . . . . . . . . . . . . . . . . . 33
Limitations on Sale and Leaseback Transactions . . . . . . . . 34
Limitations on Dividend and Other Payment Restrictions
Affecting Subsidiaries . . . . . . . . . . . . . . . . . . 34
Change of Control Option . . . . . . . . . . . . . . . . . . . 34
Reports to Holders of the Notes . . . . . . . . . . . . . . . . 35
Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . 36
Events of Default and Notice Thereof . . . . . . . . . . . . . . . . 42
Modification and Waiver . . . . . . . . . . . . . . . . . . . . . . 43
Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . 43
Concerning the Trustee . . . . . . . . . . . . . . . . . . . . . . . 44
Book-entry; Delivery and Form . . . . . . . . . . . . . . . . . . . 44
Global Note . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Certificated Securities . . . . . . . . . . . . . . . . . . . . 45
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SENIOR NOTES REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . 46
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . 47
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
<PAGE>10
SUMMARY
The following is a brief summary of certain information contained
elsewhere in this Prospectus. Unless the context otherwise requires, the term
"Company" refers to Weirton Steel Corporation and its subsidiary, Weirton
Receivables, Inc. Certain capitalized terms used in this summary are defined
elsewhere in this Prospectus.
THE COMPANY
General
The Company is a major integrated producer of flat rolled carbon steel
which has been in the steelmaking and finishing business for more than 80
years. The Company focuses on higher value-added products with demanding
specifications, such as tin mill products ("TMP") and coated sheet. TMP are
sold primarily to manufacturing and packaging companies for use as food,
beverage and general line cans and coated sheet is sold primarily to the
construction industry for use in a broad variety of building products and to
service centers. For the five-year period ended December 31, 1994, these
value-added product lines accounted for approximately 74% of the Company's
revenues and 62% of its shipments. The remainder of the Company's revenues is
derived from the sale of hot and cold rolled sheet, which is used for
machinery, construction products and other durable goods. The Company
believes that its percentage of value-added products to total production is
among the highest of integrated steel producers in the United States and
provides it with a competitive advantage against both domestic producers and
foreign commodity imports.
In order to modernize operations, the Company embarked in 1988 on an
extensive capital improvement program, spending in excess of $550 million,
primarily to upgrade its steelmaking and hot rolling facilities. This
program, substantially completed in 1992, included, among other things,
enhancing the Company's capacity to make "clean" steel (steel with fewer
impurities), rebuilding its multi-strand continuous caster and upgrading its
hot strip rolling mill to be one of the most modern in the world.
The Company's strategic objective is to be a leading domestic producer of
high value-added flat rolled carbon steel products. With the completion of
the capital improvement program, the Company's strategy is to: (i) increase
revenues and margins through the development and marketing of high value-added
products and services; (ii) achieve productivity improvements and significant
reductions in conversion costs through advanced steelmaking and rolling
technology and savings in manpower and production processes; and (iii) reduce
financial leverage and financial costs.
Incorporated in Delaware in November 1982, the Company acquired the
principal assets of National Steel Corporation's former Weirton Steel Division
in January 1984 through an employee stock ownership plan (the "1984 ESOP").
In the third quarter of 1994, the Company completed a public offering of 15
million shares of its common stock. In June 1989, the 1984 ESOP completed a
public offering of 4.5 million shares of common stock of the Company and the
Company also sold 1.8 million shares of Convertible Voting Preferred Stock,
Series A to a new employee stock ownership plan ( the "1989 ESOP").
Substantially all the Company's employees participate in the 1984 and 1989
ESOPs (the "ESOPs"), which, after giving effect to such public offerings, own
approximately 31% of the common stock and 100% of the outstanding preferred
stock of the Company, which accounts for approximately 49% of the total voting
power.
<PAGE>11
Business
Tin Mill Products. The Company believes it is one of the largest
domestic producers of TMP and that it is considered to be the leading
innovator of TMP in the United States. In April 1994, a fire substantially
damaged the Company's No. 9 Tandem Mill, which usually processes 70% to 80% of
the coils required to manufacture TMP. The No. 9 Tandem Mill was out of
operation until October 1994 and was returned to full production in the first
quarter of 1995. As a result, the Company's market share for TMP was 15% for
1994 as compared to 23% in 1993 and for the year ended December 31, 1994, TMP
represented 31% of the Company's revenues compared to an average of 48% over
the past five years. The Company's TMP are sold primarily to the food and
general packaging industries for use in cans and other containers. The market
for TMP is characterized by a relative balance between supply and demand
factors, a comparatively high cost of entry, and a limited number of suppliers
and major customers who traditionally have established in advance a
significant portion of their annual purchase requirements. As a result, TMP
have enjoyed more stable pricing, a greater resistance to recession and a
higher level of revenue predictability from year to year than the steel
industry as a whole.
Sheet Products. The Company's sheet products include hot rolled, cold
rolled and galvanized steel, which are used in a variety of industrial
applications, including construction and consumer durables. The Company has
sought to emphasize its higher value-added galvanized and coated product lines
by developing new products and by offering a wide range of gauges, finishes
and performance specifications. The Company emphasizes increasingly important
clean steel quality and produces sheets in narrow and medium widths. These
factors have helped the Company achieve a higher degree of uniformity in its
sheet products and have allowed it to specialize in orders with demanding
specifications. As a result of strong demand for the Company's hot rolled and
coated sheet products and the Company changing its product mix because of the
Tandem Mill disruption, sheet sales represented 69% of the Company's total
revenues for the year ended December 31, 1994, compared to an average of 52%
over the past five years. Less than 3% of the Company's sales during the past
five years have been directly to auto manufacturers, and the Company does not
produce bars, rods, wire or structural products.
Capital Improvement Program. In order to modernize operations, the
Company embarked in 1988 on an extensive capital improvement program, spending
in excess of $550 million, primarily to upgrade its steelmaking, hot rolling
and pickeling facilities. This program included enhancing the Company's
capacity to make clean steel, rebuilding the Company's multi-strand caster and
upgrading the Company's hot strip rolling mill so that it is among the most
modern in the world. These improvements have enabled the Company to
continuously cast 100% of its steel requirements (versus 62% in prior years
and an average of approximately 90% for the industry as a whole) and has
increased the Company's yield from raw steel to finished production to an
overall rate of greater than 80% compared to 74% historically. The Company
believes this measure of productivity will compare favorably with its
competitors. As a result of its modernization efforts, the Company has
improved its product quality and mix, enhanced its ability to broaden its
customers base and has reduced its average cost per ton of steel shipped.
Business Strategy. The Company's business strategy focuses on achieving
production efficiencies, taking initiatives to develop new markets for higher
value-added products and attaining significant cost reductions designed to
lower the Company's break-even level of operations. The Company announced a
program in July 1992 which includes a goal of reducing its workforce by 25%
through 1997, primarily through retirements. In addition to cost reductions
already achieved, the Company has initiated new efforts, among other things,
to reduce energy costs, restructure production and maintenance procedures,
reduce inventories and improve yields. The Company is also striving to
enhance sales by improving on-time delivery, with the goal of achieving a
level of performance superior to the Company's competitors and by expanding
the higher value-added segments of its product range.
<PAGE>12
The Company's executive offices are located at 400 Three Springs Drive,
Weirton, West Virginia 26062-4989, and its telephone number is (304) 797-2000.
THE EXCHANGE OFFER
The Exchange Offer . . . . . . The Company is offering to exchange (the
"Exchange Offer") $125,000,000 aggregate
principal amount of 10-3/4% Senior Notes
due 2005 (the "Exchange Notes") for
$125,000,000 aggregate principal amount of
its outstanding 10-3/4% Senior Notes due
2005 that were issued and sold in a
transaction exempt from registration under
the Securities Act (the "Senior Notes").
The form and terms of the Exchange Notes
are the same (including principal amount,
interest rate, maturity and ranking) as the
form and terms of the Senior Notes for
which they may be exchanged pursuant to the
Exchange Offer, except that the Exchange
Notes are freely transferable by holders
thereof except as provided herein (see "The
Exchange Offer--Terms of the Exchange" and
"--Terms and Conditions of the Letter of
Transmittal") and are not subject to any
covenant regarding registration under the
Securities Act.
Exchange Notes issued pursuant to the
Exchange Offer in exchange for the Senior
Notes may be offered for resale, resold and
otherwise transferred by holders thereof
(other than any holder which is (i) an
Affiliate of the Company, (ii) a broker-
dealer who acquired Senior Notes directly
from the Company or (iii) a broker-dealer
who acquired Senior Notes as a result of
market making or other trading activities),
without compliance with the registration
and prospectus delivery provisions of the
Securities Act provided that such Exchange
Notes are acquired in the ordinary course
of such holders' business and such holders
are not engaged in, and do not intend to
engage in, and have no arrangement or
understanding with any person to
participate in, a distribution of such
Exchange Notes.
Minimum Condition . . . . . . . The Exchange Offer is not conditioned upon
any minimum aggregate principal amount of
Senior Notes being tendered or accepted for
exchange.
Expiration Date . . . . . . . . The Exchange Offer will expire at 5:00
p.m., New York City time, on
, 1995 unless extended (the "Expiration
Date").
<PAGE>13
Exchange Date . . . . . . . . . The first date of acceptance for exchange
for the Senior Notes will be the first
business day following the Expiration Date.
Conditions to the Exchange
Offer . . . . . . . . . . . . The obligation of the Company to consummate
the Exchange Offer is subject to certain
conditions. See "The Exchange Offer--
Conditions to the Exchange Offer." The
Company reserves the right to terminate or
amend the Exchange Offer at any time prior
to the Expiration Date upon the occurrence
of any such condition.
Withdrawal Rights . . . . . . . Tenders may be withdrawn at any time prior
to the Expiration Date. Any Senior Notes
not accepted for any reason will be
returned without expense to the tendering
holders thereof as promptly as practicable
after the expiration or termination of the
Exchange Offer.
Procedures for Tendering
Senior Notes . . . . . . . . See "The Exchange Offer--How to Tender."
Federal Income Tax
Consequences . . . . . . . . The exchange for Exchange Notes by holders
of Senior Notes will not be a taxable
exchange for federal income tax purposes,
and such holders should not recognize any
taxable gain or loss or any interest income
as a result of such exchange.
Effect on Holders of
Senior Notes . . . . . . . . As a result of the making of this Exchange
Offer, and upon acceptance for exchange of
all validly tendered Senior Notes pursuant
to the terms of this Exchange Offer, the
Company will have fulfilled a covenant
contained in the terms of the Senior Notes
and the Registration Rights Agreement (the
"Registration Rights Agreement") dated as
of June 12, 1995 between the Company and
Lazard Freres & Co. LLC, as initial
purchaser ("Lazard"), and, accordingly, the
holders of the Senior Notes will have no
further registration or other rights under
the Registration Rights Agreement, except
under certain limited circumstances. See
"Senior Notes Registration Rights."
Holders of the Senior Notes who do not
tender their Senior Notes in the Exchange
Offer will continue to hold such Senior
Notes and will be entitled to all the
rights and limitations applicable thereto
under the Indenture. All untendered, and
tendered but unaccepted, Senior Notes will
continue to be subject to the
<PAGE>14
restrictions on transfer provided for in the
Senior Notes and the Indenture. To the
extent that Senior Notes are tendered and
accepted in the Exchange Offer, the
trading market, if any, for the Senior
Notes could be adversely affected. See
"Risk Factors--Consequences of Failure to
Exchange."
TERMS OF THE NOTES
The Exchange Offer applies to $125,000,000 aggregate principal amount of
Senior Notes. The form and terms of the Exchange Notes are the same as the
form and terms of the Senior Notes except that the Exchange Notes have been
registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof. The Exchange Notes will evidence the same
debt as the Senior Notes and will be entitled to the benefits of the
Indenture. See "Description of the Notes."
Notes Offered . . . . . . . . . $125,000,000 principal amount of 10-3/4%
Senior Notes Due 2005.
Maturity . . . . . . . . . . . June 1, 2005.
Interest Payment Dates . . . . Interest on the Notes will be payable in
cash semiannually on June 1 and December 1
of each year, commencing December 1, 1995.
Ranking . . . . . . . . . . . . The Notes will be unsecured obligations of
the Company and will be senior to all
subordinated indebtedness of the Company
and pari passu with all existing and future
senior unsecured indebtedness of the
Company.
Optional Redemption . . . . . . The Notes are not redeemable prior to
June 1, 2000. On and after June 1, 2000,
the Notes are redeemable at the option of
the Company, in whole or in part, at the
redemption prices set forth herein,
together with accrued interest thereon to
the redemption date. See "Description of
the Notes Redemption Optional Redemption."
Mandatory Redemption . . . . . There are no mandatory redemption
provisions for the Notes.
Change of Control . . . . . . . Upon a Change of Control (as defined
herein), each holder of Notes will have the
right to require the Company to repurchase
all or any part of such holder's
outstanding Notes at 101% of the principal
amount thereof, together with accrued
interest thereon to the repurchase date.
See "Description of the Notes Certain
Covenants Change of Control Option."
<PAGE>15
Certain Covenants . . . . . . . The Indenture contains covenants including,
but not limited to, covenants with respect
to the following matters: (i) limitations
on indebtedness; (ii) limitations on
restricted payments; (iii) limitations on
mergers, consolidations and sales of
assets; (iv) limitations on transactions
with affiliates; (v) restrictions on
disposition of assets of the Company; (vi)
limitations on liens; (vii) limitations on
sale and leaseback transactions; and (viii)
limitations on dividend and other payments
restrictions affecting subsidiaries. See
"Description of the Notes Certain
Covenants."
Risk Factors . . . . . . . . . Holders of Senior Notes should carefully
consider the matters set forth under the
caption "Risk Factors" prior to making a
decision with respect to the Exchange
Offer. See "Risk Factors."
<PAGE>16
SUMMARY FINANCIAL DATA
(Dollars in millions, except per share and per ton data)
Set forth below is certain summary financial data of the Company for the
periods indicated. The summary financial data set forth below is qualified in
its entirety by reference to and should be read in conjunction with
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" and the financial information incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, its
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 and its
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995, which are
incorporated by reference in the Registration Statement of which this
Prospectus is a part.
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30,
---------------- -----------------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales . . . . . . . . $673.7 $660.6 $1,260.9 $1,201.1 $1,078.7 $1,036.3 $1,190.9
Operating costs:
Cost of sales . . . . . 573.1 600.3 1,136.9 1,105.6 1,010.0 1,109.3 1,113.9
Selling, general and
administrative expense . 16.9 15.6 31.5 32.5 30.5 29.1 30.4
Depreciation . . . . . . 30.0 25.3 46.4 49.1 38.6 34.3 29.0
Provision for profit
sharing (1) . . . . . . 19.1 - 17.6 - - - -
Special items (2). . . . (41.5) - (20.0) 17.3 - - -
Income (loss) from
operations . . . . . . . 76.1 19.4 48.5 (3.4) (0.4) (46.4) 17.6
Unusual gain (3) . . . . - 32.5 44.8 - - - -
Net interest expense (4) 18.9 24.1 44.2 50.2 37.9 29.7 15.0
ESOP contributions (5). . 1.3 1.3 2.6 2.6 2.6 2.6 1.5
Income (loss) before income
taxes . . . . . . . . . 55.9 26.5 46.5 (56.2) (40.9) (78.7) 1.1
Income tax provision
(benefit). . . . . . . . . 10.9 (5.0) 7.5 13.3 4.8 4.0 (0.8)
Income (loss) before
extraordinary item
and cumulative effect of
changes in accounting
principles . . . . . . 45.0 21.5 39.0 (42.9) (36.1) (74.7) 0.3
Extraordinary item (6) . (6.7) - (3.8) (6.5) - - -
Cumulative effect of
changes in accounting
principles (7). . . . . . - - - (179.8) 4.3 - -
Net income (loss) . . . . 38.3 21.5 35.2 (229.2) (31.8) (74.7) 0.3
Less: Preferred stock
dividend requirement. . . - (1.6) (2.4) (3.1) (3.1) - -
Net income (loss)
applicable to
common shares. . . . . . . 38.3 $19.9 $32.8 $(232.3) $(34.9) $(74.7) $0.3
</TABLE>
<PAGE>17
<TABLE>
<CAPTION>
(Dollars in millions, except per share and per ton data)
Six Months Ended
June 30, Year Ended December 31,
------------------ --------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Per Common Share Data:
Income (loss) per common
share before
extraordinary item . . . $1.03 $ 0.70 $ 1.06 $(1.74) $(1.57) $(3.49) $ 0.01
Income (loss) per common
share before cumulative
effect of accounting
changes . . . . . . . . 0.88 0.70 0.95 (1.99) (1.57) (3.49) 0.01
Net income (loss) per
common share . . . . . . 0.88 0.70 0.95 (8.78) (1.40) (3.49) 0.01
Cash dividends paid . . . - - - - - - $0.64
Balance Sheet Data (at end
of period):
Cash, equivalents, and
marketable securities. $ 103.0 $ 172.2 $ 62.9 $ 89.0 $ 61.2 $ 84.2 $ 56.2
Working capital . . . . . 349.8 317.6 256.5 262.2 237.7 273.5 264.6
Total assets . . 1,261.7 1,259.9 1,230.9 1,240.7 1,005.4 1,038.0 965.2
Long term debt, incl.
current portion . . . . . 407.8 495.3 394.5 495.3 503.2 505.3 398.9
Redeemable preferred stock,
net . . . . . . . . . . 15.7 38.0 14.5 36.7 34.2 31.0 3.9
Stockholders' equity
(deficit) . . . . . . . . 187.5 18.6 149.2 (1.4) 231.3 257.3 316.5
Other Data (for the period,
except where noted):
Ratio of earnings to fixed
charges (8) . . . . . . 3.35 1.93 1.85 - - - -
EBITDA (9) . . . . . . . $ 99.9 $ 86.2 $143.7 $ 92.5 $ 45.7 $ (2.1) $ 60.5
Capital expenditures (10) $ 19.2 $ 7.3 $112.1 $ 14.4 $ 44.6 $ 113.9 $ 181.9
Shipments in thousands of
tons . . . . . . . . . . 1,335 1,358 2,606 2,431 2,102 1,939 2,206
Average sales per ton
shipped $505 $486 $ 484 $ 494 $ 513 $ 534 $ 540
Average cost of sales per
ton shipped . . . . . $429 $442 $ 436 $ 455 $ 480 $ 526 $ 505
Gross margin per ton
shipped $ 76 $ 44 $ 48 $ 39 $ 33 $ 8 $ 35
Operating income (loss) per
ton shipped before
special items . . . . . $ 40 $ 14 $ 18 $ 6 $ - $ (24) $ 8
</TABLE>
<PAGE>18
<TABLE>
<CAPTION>
(Dollars in millions, except per share and per ton data)
Six Months Ended Year Ended December 31,
June 30,
---------------- --------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
(Unaudited)
Active employees (at end of
period). . . . . . . . 5,612 5,953 5,565 6,026 6,542 6,979 7,582
Employee hours per ton of
hot band produced . . . . . 1.76 1.83 1.83 1.95 2.07 2.38 2.45
Employee hour per ton
shipped . . . . . . . . 4.69 4.59 4.89 5.31 6.53 7.55 7.48
Capacity utilization . . 97% 90% 91% 91% 83% 68% 79%
Percentage of raw steel
continuously cast . . . 100% 100% 100% 100% 100% 97% 64%
Yield (raw steel to
finished production). . 80.0% 81.7% 83.0% 77.9% 72.3% 72.3% 69.7%
</TABLE>
__________________
(1) The provision for employee profit sharing is calculated in accordance with
the profit sharing plan agreement. The provision is based upon 33 % of net
income.
(2) During the first half of 1995 and for the year ended 1994, the Company's
results of operations included the recognition of $34 million and $20
million, respectively, of insurance recoveries relating to a business
interruption claim regarding a fire which damaged the Company's No. 9
Tandem Mill in April 1994. The Company's results of operations for the
first half of 1995 also include the favorable effect of a $7.5 million
business interruption insurance recovery from the settlement of a claim
related to an explosion of a reversing rougher roller that caused an outage
of the Company's hot strip mill in the first quarter of 1991. The Company
recognized a pretax restructuring charge of $17.3 million in the first
quarter of 1993 associated with an enhanced early retirement package as
part of the Company's on-going cost reduction program.
(3) The Company was required to recognize a new cost basis for property damage
insurance recoveries related to the No. 9 Tandem Mill which resulted in the
recognition of a pretax gain in 1994 in the amount of $44.8 million, $32.5
million of which was recognized in the first half of 1994.
(4) Net interest expense has been reduced by capitalized interest of $2.3
million, $0.8 million, $6.1 million, $12.8 million and $14.8 million for
the years 1994 through 1990, respectively.
(5) Does not involve a net outflow of cash as these contributions are returned
to the Company in the form of payments on loans from the Company to the
ESOPs.
(6) Reflects certain costs incurred in connection with the early extinguishment
of debt.
(7) Effective January 1, 1992, the Company changed its method of accounting for
the depreciation of its steelmaking facilities from a straight-line to a
production-variable method. Effective January 1, 1993, the Company adopted
the provisions of Statement of Financial Accounting Standards ("SFAS") No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," and SFAS No. 109, "Accounting for Income Taxes." The cumulative
effect of the 1993 accounting changes reflects the collective
implementation of the following accounting changes. The change in
accounting under SFAS No. 106 required the Company to recognize a pretax
charge of $303.9 million to account for the prior service cost of retiree
health care and life insurance benefits as well as an additional noncash
expense each quarter which began in the first quarter of 1993. The Company
also recorded a pretax charge of $4 million relating to the implementation
of SFAS No. 112, and a net income tax benefit of $128.2 million, of which
$115.5 million relates to the adoption of SFAS No. 106, representing the
cumulative effect of the accounting change for income taxes in accordance
with SFAS No. 109.
<PAGE>19
(8) For purposes of calculating the ratio of earnings to fixed charges, (i)
earnings consist of income before taxes plus fixed charges and (ii) fixed
charges consist of interest expense incurred, amortization of debt
expense and one-third of rental payments under operating leases (an
amount estimated by management to be the interest portion of such
rentals). Earnings did not cover fixed charges by $56.1 million, $49
million, $89.3 million and $12.2 million for the years 1993, 1992, 1991
and 1990, respectively. For the first half of 1995 and for the year
1994, the Company's earnings were sufficient to cover fixed charges, with
the ratio of earnings to fixed charges at 3.43 and 1.85. The ratio of
EBITDA to fixed charges, as computed under the Indenture, for the first
half of 1995 and the years 1994, 1993, 1992 and 1990 was 5.13, 2.94,
1.71, 1.00 and 2.03, respectively. Under this computation, the Company's
EBITDA was insufficient to cover fixed charges by $45 million in 1991.
The ratio of earnings to fixed charges is not expected to be affected by
this offering.
(9) EBITDA represents the earnings of the Company before income taxes, net
interest expense, depreciation and amortization and other noncash items
reducing net income, calculated in accordance with the covenants under the
Notes. The ratio of EBITDA to fixed charges is used to determine the
Company's ability to incur indebtedness under the restrictive covenants
governing the Notes. EBITDA is not a measure of financial performance
under generally accepted accounting principles ("GAAP"). Accordingly, it
does not represent net income or cash flows from operations as defined by
GAAP and does not necessarily indicate that cash flows will be sufficient
to fund cash needs. As a result, EBITDA should not be considered as an
alternative to net income as an indicator of operating performance or to
cash flows as a measure of liquidity.
(10) For 1994, capital expenditures included $74.6 million for rebuilding the
No. 9 Tandem Mill due to fire damage, with respect to which the Company
received insurance recoveries of $45 million to date.
<PAGE>20
RISK FACTORS
In addition to the other information contained in this Prospectus, before
tendering their Senior Notes for the Exchange Notes offered hereby, holders of
Senior Notes should consider carefully the following factors, which may be
generally applicable to the Senior Notes as well as the Exchange Notes:
Consequences of Failure to Exchange
Holders of Senior Notes who do not exchange their Senior Notes for
Exchange Notes pursuant to the Exchange Offer will continue to be subject to
the restrictions on transfer of such Senior Notes as set forth in the legend
thereon as a consequence of the issuance of the Senior Notes pursuant to
exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, the Senior Notes may not be offered or sold, unless registered under
the Securities Act and applicable state securities laws, or pursuant to an
exemption therefrom. Except under certain limited circumstances, the Company
does not intend to register the Senior Notes under the Securities Act. In
addition, any holder of Senior Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the Exchange Notes may be deemed
to have received restricted securities and, if so, will be required to comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with any resale transaction. To the extent Senior Notes are
tendered and accepted in the Exchange Offer, the trading market, if any, for
the Senior Notes could be adversely affected. See "The Exchange Offer" and
"Senior Notes Registration Rights."
Factors Relating to the Steel Industry
Cyclicality. The domestic steel industry is a cyclical business
characterized by intense competition. Within the industry, the first half of
the 1980s was marked by significant restructurings and downsizing,
unprecedented losses and bankruptcies. Factors such as overcapacity,
increased domestic and international competition, including high levels of
imported steel coupled with a strong dollar, high labor costs, inefficient
plants and reduced levels of steel demand caused major disruptions to the
industry. This was followed in the late 1980s by increased demand, lower
levels of steel imports, the decline of the dollar, capacity reductions and
increased efficiency through modernization of plants. As a result, industry
profits were substantial in 1988. Steel prices and demand began to decline in
the latter half of 1989, however, and a number of domestic producers reported
losses in 1990 and 1991. These losses continued for many producers throughout
1992. With stronger demand in 1993, the industry demonstrated improved
performance. Although the recovery in steel markets has continued into 1995,
there have been recent reductions in the price of sheet products and there can
be no assurance that the recovery will continue.
Capacity Utilization and Price Sensitivity. According to the American
Iron and Steel Institute (the "AISI"), annual U.S. raw steel production
capacity has been reduced from approximately 151 million tons in 1983 to
approximately 108 million tons in 1994. The reduction in domestic capacity
generally resulted in higher utilization rates, although overcapacity remains
a problem in certain product lines and may become a problem in other product
lines, particularly coated steels. The average utilization of domestic
industry capacity was 64% from 1983 through 1986 compared to 83% from 1987
through 1993, and 91% for the year 1994. During the three-year period ending
in 1998, an additional 12 million to 14 million tons of sheet capacity is
expected to be brought into operation by mini-mills. The results of
operations of major domestic integrated steelmakers, including the Company,
are affected substantially by relatively small variations in selling prices of
products. Overcapacity relative to demand, particularly in downcycles, has
resulted in an extremely competitive environment which limits the ability of
producers to raise prices. Competitive pressures in the industry limit the
<PAGE>21
ability of producers to obtain price increases and can lead to declines in
prices, both of which may have a material adverse effect on the industry
generally and on the Company specifically.
Competition. Competition among domestic steelmakers is intense with
respect to price, service and quality. Domestic integrated steel producers
have lost market share to domestic mini-mills in recent years as these mills
have expanded their product lines from commodity type items to include larger-
size structural products and flat-rolled products. Mini-mills have enjoyed
certain cost advantages compared to integrated producers because of lower
costs in converting scrap to raw steel, lower employment and environmental
costs and the targeting of regional markets. In the past few years, mini-
mills also have substantially improved the quality of their products,
particularly thin cast steel, through the use of new technology which has
allowed them to retain overall conversion cost advantages. In recent years,
competitive pressures among domestic producers, including mini-mills, have
extended to higher value-added products, putting further pressure on prices
and margins. In addition, certain domestic integrated steelmakers have gone
through reorganizations under Chapter 11 of the U.S. Bankruptcy Code.
Following their reorganizations, these companies generally have reduced costs
and become more effective competitors. In addition, domestic steel producers
have invested heavily in new plant and equipment that, when combined with the
implementation of manning and other work rule changes, have enabled many
domestic companies to improve efficiency and increase productivity. Finally,
demand for certain of the industry's products continues to be under pressure
from products made with aluminum, plastics, cardboard, glass, wood, concrete
and ceramics, which may offer substitutes for steel in certain applications.
Domestic producers face competition from foreign producers over a broad
range of products. Many foreign steel producers are owned, controlled or
subsidized by their governments, making these producers subject to influence
by political and economic policy considerations as well as the prevailing
market conditions. From 1983 to 1993, imported steel represented 21% of all
steel sold in the United States. Factors such as attractive world export
prices, a lower U.S. dollar exchange rate and improved international
competitiveness of the domestic steel industry have recently contributed to
reduced import levels. The reversal of any one of these factors, or the
failure otherwise to control steel imports, may cause foreign competition to
increase.
Environmental Concerns. The facilities and operations of domestic
steelmakers are subject to a number of federal, state and local laws,
regulations and permits relating to environmental protection. The costs for
environmental compliance may serve to put domestic steelmakers at a relative
competitive disadvantage compared to foreign producers not subject to
similarly extensive regulation or producers of competitive materials which may
not be required to undergo equivalent compliance costs.
Factors Relating to the Company
Financial Results. The Company reported net income of $38.3 million for
the first half of 1995, net income of $35.2 million for 1994 and net losses of
$229.2 million for 1993 and $31.8 million for 1992. The net results for the
first half of 1995 include pretax favorable adjustments related to recoveries
under claims for business interruption insurance. Damage to the Company's No.
9 Tandem Mill due to a fire early in the second quarter of 1994 resulted in
the Company filing claims under both its property damage and business
interruption insurance. The net results for the first half of 1995 include
$34.0 million of insurance recoveries for business interruption related to the
damage to the No. 9 Tandem Mill bringing total recoveries under this claim to
$54.0 million. The results for the first half of 1995 also include the
favorable effect of a $7.5 million business interruption insurance recovery
from the settlement of a claim related to an explosion of a reversing rougher
roller that caused an outage of the Company's hot strip mill in the first
quarter of 1991. The net results for 1994 included a pretax favorable
adjustment to the carrying value of the No. 9 Tandem Mill of $44.8 million
<PAGE>22
and a pretax provision for employee profit sharing of $17.6 million.
Operating and net results for 1994 were adversely affected by the No. 9 Tandem
Mill fire. Notwithstanding the disruption to the Company's operations caused
by the fire, revenues in 1994 of $1,261 million were $59.8 million, or 5%,
higher than in 1993 and reached their highest level over the last five years.
The Company's operating profit of $48.5 million in 1994, which included
insurance recoveries of $20 million for business interruption, reflected
higher operating costs caused by the No. 9 Tandem Mill outage. Nevertheless,
the Company's operating performance in 1994 exceeded that for 1993 when the
Company recognized an operating loss of $3.4 million. Prior to the No. 9
Tandem Mill fire in the second quarter of 1994, the Company had achieved five
consecutive quarters of improved operating performance. The Company's net
results for 1993 were significantly affected by the net after-tax effect of
required changes in certain accounting principles, primarily related to
retiree healthcare and income taxes, which totaled $179.8 million, a pretax
restructuring charge of $17.3 million, and an after-tax extraordinary charge
of $6.5 million. Management attributes the losses in 1992 to production
disruptions stemming from the Company's implementation of a $550 million
capital improvement program and to recessionary conditions affecting the
industry.
Collective Bargaining Agreements. The Company has collective bargaining
agreements effective through September 25, 1996 with the Independent
Steelworkers Union, which, as of December 31, 1994, represented 4,524
employees in bargaining units covering production and maintenance workers,
clerical workers and nurses, and with the Independent Guard Union, which, as
of December 31, 1994, represented 47 employees. The Company believes that its
compensation structure places a heavier emphasis on profit sharing compared to
other major integrated steel producers. This emphasis tends to cause the wage
portion of the Company's employment costs to be relatively higher during
periods of profitability and relatively lower during periods of low earnings
or losses. The Company has not experienced work stoppages in the course of
prior labor negotiations, although there can be no assurance that work
stoppages will not occur in the future in connection with negotiations or
otherwise.
Voting Power. The 1984 and 1989 ESOPs own 31% of the Company's
outstanding common and 100% of the outstanding preferred stock which accounts
for 49% of the Company's total voting power. Employee voting power could
increase by approximately 3% if the 5 million shares of common stock reserved
for an employee purchase program over the next five years are acquired by
employees. At the end of each quarter, participants in the 1984 ESOP may
elect to receive distributions of common stock from the ESOP, which, to the
extent such distributed shares are then sold, reduces employee voting power.
The participants in the ESOPs, all of whom are present or former employees of
the Company, could, if they were to act collectively in the voting of their
shares, elect a majority of the Company's directors. However, management does
not believe it is likely that any such collective voting would occur. The
interests of ESOP participants may differ from those of public stockholders
and holders of the Company's indebtedness. Under the terms of the Notes, a
Change of Control (as defined) would require the Company to offer to
repurchase the Notes. See "Description of the Notes -- Certain Covenants --
Change of Control Option."
Deficiency of Earnings to Fixed Charges. For years 1993, 1992, 1991 and
1990, the Company's earnings were insufficient to cover fixed charges by
approximately $56.1 million, $49 million, $89.3 million and $12.2 million,
respectively. For the first half of 1995 and the year 1994, the Company's
earnings were sufficient to cover fixed charges, with the ratio of earnings to
fixed charges at 3.35 and 1.85.
Leverage. Beginning in 1989, the Company incurred substantially
increased levels of indebtedness as one of the funding sources for its capital
improvement program. As a result of the capital program financing, net losses
prior to the recent economic upturn and the unfavorable effect of required
changes in accounting methods, as of June 30, 1995, the Company's indebtedness
comprised 67.0% of its total capitalization. The
<PAGE>23
Company has no immediate plans to incur additional debt following completion
of the offering of the Notes. From time to time, however, the Company may be
required to utilize outside financing for working capital purposes. Such
financing may involve the incurrence of debt. The Company will be permitted
to incur additional debt only if, at the time, it is able to comply with
restrictions under the Notes and any other applicable debt instruments. See
"Description of the Notes -- Certain Covenants."
Limitations on Raising Equity. The Company's Restated Certificate of
Incorporation (the "Restated Certificate") imposes restrictions on the
Company's ability to raise additional equity. The authorization of shares of
capital stock under the Restated Certificate (beyond the 50 million shares of
common stock and 7.5 million shares of preferred stock presently authorized)
generally requires for approval a majority of voting power if such shares are
to be used only for bona fide public offerings or in connection with certain
employee benefit plans. However, if shares are to be used for any other
purpose, their authorization must be approved by the vote of 80% of total
voting power. Limitations on the future use of shares, if applicable, would
deny the Company access to private markets for its shares and could deprive
the Company of needed capital at times when the permitted types of issuance
are not feasible or have less favorable terms. In addition, the Restated
Certificate provides that the specific terms and conditions of each issuance
of capital stock by the Company, with limited exceptions, must be approved by
the vote of at least 90% of the Company's directors. The Company's Board of
Directors is required to be composed of 14 members. A dissent by more than
one director could prevent the Company from issuing capital stock, even though
the authorization of shares for such issuance was approved by the Company's
stockholders. Notwithstanding such limitations, in August 1994, the Company
sold 15 million shares of common stock in a public offering. The net proceeds
from such sale, of approximately $116 million, were used primarily to reduce
indebtedness and other Company liabilities.
No Prior Market. There is no existing market for the Exchange Notes, and
there can be no assurance as to (i) the liquidity of any such market that may
develop, (ii) the ability of holders of Exchange Notes to sell their Exchange
Notes, or (iii) the price at which the holders of Exchange Notes would be able
to sell their Exchange Notes. If such a market were to exist, the Exchange
Notes could trade at prices that may be higher or lower than their principal
amount or purchase price, depending on many factors, including prevailing
interest rates, the Company's operating results and the market for similar
debt securities.
USE OF PROCEEDS
There will be no proceeds to the Company from the exchange pursuant to
the Exchange Offer. The net proceeds to the Company from the issuance of the
Senior Notes were approximately $121 million. The Company used a portion of
these net proceeds to repurchase, concurrently with the consummation of the
purchase of the Senior Notes, approximately $30 million aggregate principal
amount of its 11-1/2% Senior Notes due 1998 (the "11-1/2% Senior Notes") and
approximately $82 million principal amount of its 10-7/8% Senior Notes due
1999 (the "10-7/8% Senior Notes") for an aggregate purchase price of
approximately $118.8 million. The Company added the remaining net proceeds to
working capital.
<PAGE>24
THE EXCHANGE OFFER
Purpose of the Exchange Offer
The sole purpose of the Exchange Offer is to fulfill the obligations of
the Company with respect to the registration of the Senior Notes.
The Senior Notes were originally issued and sold on June 12, 1995 (the
"Issue Date"). Such sales were not registered under the Securities Act in
reliance upon the exemption provided by Section 4(2) of the Securities Act and
Rule 144A of the Securities Act. In connection with the sale of the Senior
Notes, the Company agreed to file with the Commission a registration statement
relating to an exchange offer (the "Exchange Offer Registration Statement")
pursuant to which the Exchange Notes, another series of senior notes of the
Company covered by such registration statement and containing the same terms
as the Senior Notes, except as set forth in this Prospectus, would be offered
in exchange for Senior Notes tendered at the option of the holders thereof.
If (i) the Company determines in reasonably good faith that (x) any changes in
the law or the applicable interpretations of the Staff of the Commission do
not permit the Company to effect the Exchange Offer, or (y) that the Exchange
Notes would not be tradeable upon receipt by the holders of Senior Notes that
participate in the Exchange Offer without restriction under state and federal
securities laws (other than due solely to the status of a holder of Senior
Notes as an Affiliate of the Company), (ii) the Exchange Offer is not
consummated within 165 days of the Issue Date, (iii) in certain circumstances,
certain holders of unregistered Exchange Notes so request within 135 days
after the consummation of the Exchange Offer or (iv) in the case of any holder
of Senior Notes that participates in the Exchange Offer, such holder of Senior
Notes does not receive Exchange Notes on the date of the exchange that may be
sold without restriction under state and federal securities laws (other than
due solely to the status of such holder of Senior Notes as an Affiliate of the
Company) and so notifies the Company within 60 days after such holder of
Senior Notes first becomes aware of such restriction and provides the Company
with a reasonable basis for its conclusion, in the case of each of clauses
(i)-(iv) of this sentence, the Company will file with the Commission a
registration statement (the "Shelf Registration Statement") to cover resales
of the Senior Notes by the holders thereof who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement. In the event that (i) the Company fails to file the
Exchange Offer Registration Statement, (ii) the Exchange Offer Registration
Statement or, if applicable, the Shelf Registration Statement, is not declared
effective by the Commission, or (iii) the Exchange Offer is not consummated or
the Shelf Registration Statement ceases to be effective, in each case within
specified time periods, the interest rate borne by the Senior Notes will be
increased. See "Senior Notes Registration Rights."
Terms of the Exchange
The Company hereby offers to exchange, upon the terms and subject to the
conditions set forth herein and in the Letter of Transmittal accompanying this
Registration Statement of which this Prospectus is a part (the "Letter of
Transmittal"), $1,000 in principal amount of Exchange Notes for each $1,000 in
principal amount of Senior Notes. The terms of the Exchange Notes are the
same as the terms of the Senior Notes for which they may be exchanged pursuant
to this Exchange Offer, except that the Exchange Notes will generally be
freely transferable by holders thereof, and the holders of the Exchange Notes
(as well as remaining holders of any Senior Notes) will not be entitled to
registration rights under the Registration Rights Agreement. The Exchange
Notes will evidence the same debt as the Senior Notes and will be entitled to
the benefits of the Indenture. See "Description of the Notes."
The Exchange Offer is not conditioned upon any minimum aggregate
principal amount of Senior Notes being tendered or accepted for exchange.
<PAGE>25
Based on its view of interpretations set forth in no-action letters
issued by the Staff to third parties, the Company believes that Exchange Notes
issued pursuant to the Exchange Offer in exchange for the Senior Notes may be
offered for resale, resold and otherwise transferred by holders thereof (other
than any holder which is (i) an Affiliate of the Company, (ii) a broker-dealer
who acquired Senior Notes directly from the Company or (iii) a broker-dealer
who acquired Senior Notes as a result of market making or other trading
activities) without compliance with the registration and prospectus delivery
provisions of the Securities Act provided that such Exchange Notes are
acquired in the ordinary course of such holders' business, and such holders
are not engaged in, and do not intend to engage in, and have no arrangement or
understanding with any person to participate in, a distribution of such
Exchange Notes. Each broker-dealer that receives Exchange Notes pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging, and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Broker-dealers who acquired Senior Notes as a
result of market making or other trading activities may use this Prospectus,
as supplemented or amended, in connection with resales of the Exchange Notes.
The Company has agreed that, for a period of 120 days after this Registration
Statement is declared effective, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. Any holder that
cannot rely upon such interpretations must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction.
Tendering holders of Senior Notes will not be required to pay brokerage
commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of the Senior Notes
pursuant to the Exchange Offer.
The Exchange Notes will bear interest from and including their respective
dates of issuance. Holders whose Senior Notes are accepted for exchange will
receive accrued interest thereon to, but not including, the date of issuance
of the Exchange Notes, such interest to be payable with the first interest
payment on the Exchange Notes, but will not receive any payment in respect of
interest on the Senior Notes accrued after the issuance of the Exchange Notes.
Expiration Date; Extensions; Termination; Amendments
The Exchange Offer expires on the Expiration Date. The term "Expiration
Date" means 5:00 p.m., New York City time, on , 1995 unless
the Company in its sole discretion extends the period during which the
Exchange Offer is open, in which event the term "Expiration Date" means the
latest time and date on which the Exchange Offer, as so extended by the
Company, expires. The Company reserves the right to extend the Exchange Offer
at any time and from time to time prior to the Expiration Date by giving
written notice to Bankers Trust Company (the "Exchange Agent") and by timely
public announcement communicated by no later than 5:00 p.m. on the next
business day following the Expiration Date, unless otherwise required by
applicable law or regulation, by making a release to the Dow Jones News
Service. During any extension of the Exchange Offer, all Senior Notes
previously tendered pursuant to the Exchange Offer will remain subject to the
Exchange Offer.
The initial Exchange Date will be the first business day following the
Expiration Date. The Company expressly reserves the right to (i) terminate
the Exchange Offer and not accept for exchange any Senior Notes for any
reason, including if any of the events set forth below under "--Conditions to
the Exchange Offer" shall have occurred and shall not have been waived by the
Company and (ii) amend the terms of the Exchange Offer in any manner, whether
before or after any tender of the Senior Notes. If any such termination or
amendment occurs, the Company will notify the Exchange Agent in writing and
will either issue a press release or give written notice to the holders of the
Senior Notes as promptly as practicable. Unless the Company terminates the
<PAGE>26
Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date,
the Company will exchange the Exchange Notes for the Senior Notes on the
Exchange Date.
If the Company waives any material condition to the Exchange Offer, or
amends the Exchange Offer in any other material respect, and if at the time
that notice of such waiver or amendment is first published, sent or given to
holders of Senior Notes in the manner specified above, the Exchange Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the fifth business day from, and including, the date that such notice is
first so published, sent or given, then the Exchange Offer will be extended
until the expiration of such period of five business days.
This Prospectus and the related Letter of Transmittal and other relevant
materials will be mailed by the Company to record holders of Senior Notes and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the lists of holders for subsequent
transmittal to beneficial owners of Senior Notes.
How to Tender
The tender to the Company of Senior Notes by a holder thereof pursuant to
one of the procedures set forth below will constitute an agreement between
such holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
General Procedures. A holder of a Senior Note may tender the same by (i)
properly completing and signing the Letter of Transmittal or a facsimile
thereof (all references in this Prospectus to the Letter of Transmittal shall
be deemed to include a facsimile thereof) and delivering the same, together
with the certificate or certificates representing the Senior Notes being
tendered and any required signature guarantees (or a timely confirmation of a
book-entry transfer (a "Book-Entry Confirmation") pursuant to the procedure
described below), to the Exchange Agent at its address set forth on the back
cover of this Prospectus on or prior to the Expiration Date or (ii) complying
with the guaranteed delivery procedures described below.
If tendered Senior Notes are registered in the name of the signer of the
Letter of Transmittal and the Exchange Notes to be issued in exchange therefor
are to be issued (and any untendered Senior Notes are to be reissued) in the
name of the registered holder, the signature of such signer need not be
guaranteed. In any other case, the tendered Senior Notes must be endorsed or
accompanied by written instruments of transfer in form satisfactory to the
Company and duly executed by the registered holder and the signature on the
endorsement or instrument of transfer must be guaranteed by a bank, broker,
dealer, credit union, savings association, clearing agency or other
institution (each an "Eligible Institution") that is a member of a recognized
signature guarantee medallion program within the meaning of Rule 17Ad-15 under
the Exchange Act. If the Exchange Notes and/or Senior Notes not exchanged are
to be delivered to an address other than that of the registered holder
appearing on the note register for the Senior Notes, the signature on the
Letter of Transmittal must be guaranteed by an Eligible Institution.
Any beneficial owner whose Senior Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender Senior Notes should contact such holder promptly and instruct such
holder to tender Senior Notes on such beneficial owner's behalf. If such
beneficial owner wishes to tender such Senior Notes himself, such beneficial
owner must, prior to completing and executing the Letter of Transmittal and
delivering such Senior Notes, either make appropriate arrangements to register
ownership of the Senior Notes in such beneficial owner's name or follow the
procedures described in the immediately preceding paragraph. The transfer of
record ownership may take considerable time.
<PAGE>27
Book-Entry Transfer. The Exchange Agent will make a request to establish
an account with respect to the Senior Notes at The Depository Trust Company
(the "Book-Entry Transfer Facility") for purpose of the Exchange Offer within
two business days after receipt of this Prospectus, and any financial
institution that is a participant in the Book-Entry Transfer Facility's
systems may make book-entry delivery of Senior Notes by causing the Book-Entry
Transfer Facility to transfer such Senior Notes into the Exchange Agent's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Senior Notes may be effected through book-entry transfer at the Book-Entry
Transfer Facility, the Letter of Transmittal, with any required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received by the Exchange Agent at the address specified on the back
cover page of this Prospectus on or prior to the Expiration Date or the
guaranteed delivery procedures described below must be complied with.
The method of delivery of Senior Notes and all other documents is at the
election and risk of the holder. If sent by mail, it is recommended that
registered mail, return receipt requested, be used, proper insurance be
obtained, and the mailing be made sufficiently in advance of the Expiration
Date to permit delivery to the Exchange Agent on or before the Expiration
Date.
Unless an exemption applies under the applicable law and regulations
concerning "backup withholding" of federal income tax, the Exchange Agent will
be required to withhold, and will withhold, 31% of the gross proceeds
otherwise payable to a holder pursuant to the Exchange Offer if the holder
does not provide his taxpayer identification number (social security number or
employer identification number) and certify that such number is correct. Each
tendering holder should complete and sign the main signature form and the
Substitute Form W-9 included as part of the Letter of Transmittal, so as to
provide the information and certification necessary to avoid backup
withholding, unless an applicable exemption exists and is proved in a manner
satisfactory to the Company and the Exchange Agent.
Guarantee Delivery Procedures. If a holder desires to accept the
Exchange Offer and time will not permit a Letter of Transmittal or Senior
Notes to reach the Exchange Agent before the Expiration Date, a tender may be
effected if the Exchange Agent has received at its office listed on the back
cover hereof on or prior to the Expiration Date a letter, telegram or
facsimile transmission from an Eligible Institution setting forth the name and
address of the tendering holder, the principal amount of the Senior Notes
being tendered, the names in which the Senior Notes are registered and, if
possible, the certificate numbers of the Senior Notes to be tendered, and
stating that the tender is being made thereby and guaranteeing that within
three New York Stock Exchange trading days after the date of execution of such
letter, telegram or facsimile transmission by the Eligible Institution, the
Senior Notes, in proper form for transfer, will be delivered by such Eligible
Institution together with a properly completed and duly executed Letter of
Transmittal (and any other required documents). Unless Senior Notes being
tendered by the above-described method (or a timely Book-Entry Confirmation)
are deposited with the Exchange Agent within the time period set forth above
(accompanied or preceded by a properly completed Letter of Transmittal and any
other required documents), the Company may, at its option, reject the tender.
Copies of a Notice of Guaranteed Delivery which may be used by Eligible
Institutions for the purposes described in this paragraph are available from
the Exchange Agent.
A tender will be deemed to have been received as of the date when the
tendering holder's properly completed and duly signed Letter of Transmittal
accompanied by the Senior Notes (or a timely Book-Entry Confirmation) is
received by the Exchange Agent. Issuances of Exchange Notes in exchange for
Senior Notes tendered pursuant to a Notice of Guaranteed Delivery or letter,
telegram or facsimile transmission to similar effect (as provided above) by an
Eligible Institution will be made only against deposit of the Letter of
Transmittal (and any other required documents) and the tendered Senior Notes
(or a timely Book-Entry Confirmation).
<PAGE>28
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for exchange of any tender of Senior Notes will be
determined by the Company, whose determination will be final and binding. The
Company reserves the absolute right to reject any or all tenders not in proper
form or the acceptances for exchange of which may, in the opinion of counsel
to the Company, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Exchange Offer or any defect or
irregularities in tenders of any particular holder whether or not similar
defects or irregularities are waived in the case of other holders. Neither
the Company, the Exchange Agent nor any other person will be under any duty to
give notification of any defects or irregularities in tenders or shall incur
any liability for failure to give any such notification. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
Terms and Conditions of the Letter of Transmittal
The Letter of Transmittal contains, among other things, the following
terms and conditions, which are part of the Exchange Offer.
The party tendering Senior Notes for exchange (the "Transferor")
exchanges, assigns and transfers the Senior Notes to the Company and
irrevocably constitutes and appoints the Exchange Agent as the Transferor's
agent and attorney-in-fact to cause the Senior Notes to be assigned,
transferred and exchanged. The Transferor represents and warrants that it has
full power and authority to tender, exchange, assign and transfer the Senior
Notes and to acquire Exchange Notes issuable upon the exchange of such
tendered Senior Notes, and that, when the same are accepted for exchange, the
Company will acquire good and unencumbered title to the tendered Senior Notes,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim. The Transferor also warrants that it will, upon
request, execute and deliver any additional documents deemed by the Company to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Senior Notes. The Transferor further agrees that acceptance of any
tendered Senior Notes by the Company and the issuance of Exchange Notes in
exchange therefor shall constitute performance in full by the Company of its
obligations under the Registration Rights Agreement and that the Company shall
have no further obligations or liabilities thereunder (except in certain
limited circumstances). All authority conferred by the Transferor will
survive the death or incapacity of the Transferor and every obligation of the
Transferor shall be binding upon the heirs, legal representatives, successors,
assigns, executors and administrators of such Transferor.
By tendering Senior Notes and executing the Letter of Transmittal, the
Transferor certifies that (a) it is not an Affiliate of the Company, that it
is not a broker-dealer that owns Senior Notes acquired directly from the
Company or an affiliate of the Company, that it is acquiring the Exchange
Notes offered hereby in the ordinary course of such Transferor's business and
that such Transferor has no arrangement with any person to participate in the
distribution of such Exchange Notes or (b) that it is an Affiliate of the
Company or of the initial purchaser of the Senior Notes in the Initial
Offering and that it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable to it.
Withdrawal Rights
Senior Notes tendered pursuant to the Exchange Offer may be withdrawn at
any time prior to the Expiration Date.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Exchange Agent at its
address set forth on the back cover of this Prospectus prior to the Expiration
Date. Any such notice of withdrawal must specify the person named in the
Letter of Transmittal as
<PAGE>29
having tendered Senior Notes to be withdrawn, the certificate numbers of
Senior Notes to be withdrawn, the principal amount of Senior Notes to be
withdrawn, a statement that such holder is withdrawing his election to have
such Senior Notes exchanged, and the name of the registered holder of such
Senior Notes, and must be signed by the holder in the same manner as the
original signature on the Letter of Transmittal (including any required
signature guarantees) or be accompanied by evidence satisfactory to the
Company that the person withdrawing the tender has succeeded to the beneficial
ownership of the Senior Notes being withdrawn. The Exchange Agent will return
the properly withdrawn Senior Notes promptly following receipt of notice of
withdrawal. All questions as to the validity of notices of withdrawals,
including time of receipt, will be determined by the Company, and such
determination will be final and binding on all parties.
Acceptance of Senior Notes for Exchange; Delivery of Exchange Notes
Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of Senior Notes validly tendered and not withdrawn and
the issuance of the Exchange Notes will be made on the Exchange Date. For the
purposes of the Exchange Offer, the Company shall be deemed to have accepted
for exchange validly tendered Senior Notes when, as and if the Company has
given written notice thereof to the Exchange Agent.
The Exchange Agent will act as agent for the tendering holders of Senior
Notes for the purposes of receiving Exchange Notes from the Company and
causing the Senior Notes to be assigned, transferred and exchanged. Upon the
terms and subject to the conditions of the Exchange Offer, delivery of
Exchange Notes to be issued in exchange for accepted Senior Notes will be made
by the Exchange Agent promptly after acceptance of the tendered Senior Notes.
Senior Notes not accepted for exchange by the Company will be returned without
expense to the tendering holders (or in the case of Senior Notes tendered by
book-entry transfer into the Exchange Agent's account at the Book-Entry
Transfer Facility pursuant to the procedures described above, such non-
exchanged Senior Notes will be credited to an account maintained with such
Book-Entry Transfer Facility) promptly following the Expiration Date or, if
the Company terminates the Exchange Offer prior to the Expiration Date,
promptly after the Exchange Offer is so terminated.
Conditions to the Exchange Offer
Notwithstanding any other provision of the Exchange Offer, or any
extension of the Exchange Offer, the Company will not be required to issue
Exchange Notes in respect of any properly tendered Senior Notes not previously
accepted and may terminate the Exchange Offer (by oral or written notice to
the Exchange Agent and by timely public announcement communicated by no later
than 5:00 p.m. on the next business day following the Expiration Date, unless
otherwise required by applicable law or regulation, by making a release to the
Dow Jones News Service) or, at its option, modify or otherwise amend the
Exchange Offer, if (a) there shall be threatened, instituted or pending any
action or proceeding before, or any injunction, order or decree shall have
been issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission, (i) seeking to restrain or
prohibit the making or consummation of the Exchange Offer or any other
transaction contemplated by the Exchange Offer, (ii) assessing or seeking any
damages as a result thereof, or (iii) resulting in a material delay in the
ability of the Company to accept for exchange or exchange some or all of the
Senior Notes pursuant to the Exchange Offer; (b) any statute, rule,
regulation, order or injunction shall be sought, proposed, introduced,
enacted, promulgated or deemed applicable to the Exchange Offer or any of the
transactions contemplated by the Exchange Offer by any government or
governmental authority, domestic or foreign, or any action shall have been
taken, proposed or threatened, by any government, governmental authority,
agency or court, domestic or foreign, that in the sole judgment of the Company
might directly or indirectly result in any of the consequences referred to in
clauses (a)(i) or (ii) above or, in the sole judgment of the Company, might
result in the holders of Exchange Notes having obligations with respect to
resales and
<PAGE>30
transfers of Exchange Notes which are greater than those described in the
interpretations of the Commission referred to on the cover page of this
Prospectus, or would otherwise make it inadvisable to proceed with the
Exchange Offer; or (c) a material adverse change shall have occurred in the
business, condition (financial or otherwise), operations, or prospects of the
Company.
The foregoing conditions are for the sole benefit of the Company and may
be asserted by it with respect to all or any portion of the Exchange Offer
regardless of the circumstances (including any action or inaction by the
Company) giving rise to such condition or may be waived by the Company in
whole or in part at any time or from time to time in their sole discretion.
The failure by the Company at any time to exercise any of the foregoing rights
will not be deemed a waiver of any such right, and each right will be deemed
an ongoing right which may be asserted at any time or from time to time. In
addition, the Company has reserved the right, notwithstanding the satisfaction
of each of the foregoing conditions, to terminate or amend the Exchange Offer.
Any determination by the Company concerning the fulfillment or non-
fulfillment of any conditions will be final and binding upon all parties.
In addition, the Company will not accept for exchange any Senior Notes
tendered and no Exchange Notes will be issued in exchange for any such Senior
Notes, if at such time any stop order shall be threatened or in effect with
respect to the Registration Statement of which this Prospectus constitutes a
part or qualification of the Indenture under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act").
Exchange Agent
Bankers Trust Company has been appointed as the Exchange Agent for the
Exchange Offer. Letters of Transmittal must be addressed to the Exchange
Agent at its address set forth on the back cover page of this Prospectus.
Delivery to an address other than as set forth herein, or transmissions
of instructions via a facsimile or telex number other than the ones set forth
herein, will not constitute a valid delivery.
Solicitation of Tenders; Express
The Company has not retained any dealer-manager or similar agent in
connection with the Exchange Offer and will not make any payments to brokers,
dealers or others for soliciting acceptances of the Exchange Offer. The
Company will, however, pay the Exchange Agent reasonable and customary fees
for its services and will reimburse it for reasonable out-of-pocket expenses
in connection therewith. The Company will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding tenders for their customers. The expenses to
be incurred in connection with the Exchange Offer, including the fees and
expenses of the Exchange Agent and printing, accounting, investment banking
and legal fees, will be paid by the Company and are estimated at approximately
$ .
No person has been authorized to give any information or to make any
representations in connection with the Exchange Offer other than those
contained in this Prospectus. If given or made, such information or
representations should not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any exchange made
hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the respective dates as
of which information is given herein. The Exchange Offer is not being made to
(nor will tenders be accepted from or on behalf of) holders of Senior Notes in
any jurisdiction in which the making of the Exchange Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction.
However, the Company may, at its discretion,
<PAGE>31
take such action as it may deem necessary to make the Exchange Offer in any
such jurisdiction and extend the Exchange Offer to holders of Senior Notes in
such jurisdiction. In any jurisdiction the securities laws or blue sky laws
of which require the Exchange Offer to be made by a licensed broker or dealer,
the Exchange Offer is being made on behalf of the Company by one or more
registered brokers or dealers which are licensed under the laws of such
jurisdiction.
Appraisal Rights
HOLDERS OF SENIOR NOTES WILL NOT HAVE DISSENTERS' RIGHTS OR APPRAISAL
RIGHTS IN CONNECTION WITH THE EXCHANGE OFFER.
Federal Income Tax Consequences
The exchange for Exchange Notes by holders of Senior Notes will not be a
taxable exchange for federal income tax purposes, and such holders should not
recognize any taxable gain or loss or any interest income as a result of such
exchange.
Other
Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Senior Notes are urged
to consult their financial and tax advisors in making their own decisions on
what action to take.
As a result of the making of, and upon acceptance for exchange of all
validly tendered Senior Notes pursuant to the terms of this Exchange Offer,
the Company will have fulfilled a covenant contained in the terms of the
Senior Notes and the Registration Rights Agreement. Holders of the Senior
Notes who do not tender their certificates in the Exchange Offer will continue
to hold such certificates and will be entitled to all the rights, and
limitations applicable thereto, under the Indenture, except for any such
rights under the Registration Rights Agreement, which by their terms terminate
or cease to have further effect as a result of the making of this Exchange
Offer. See "Description of the Notes." All untendered Senior Notes will
continue to be subject to the restriction on transfer set forth in the
Indenture. To the extent that Senior Notes are tendered and accepted in the
Exchange Offer, the trading market, if any, for the Senior Notes could be
adversely affected. See "Risk Factors -- Consequences of Failure to
Exchange."
The Company may in the future seek to acquire untendered Senior Notes in
open market or privately negotiated transactions, through subsequent exchange
offers or otherwise. The Company has no present plan to acquire any Senior
Notes which are not tendered in the Exchange Offer.
<PAGE>32
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
June 30, 1995. Consummation of the Exchange Offer will not affect the
Company's principal amount of outstanding indebtedness.
<TABLE>
<CAPTION>
(In thousands) June 30,
1995
-------
<S> <C>
Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $102,999
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ --
Long-term debt:
10-3/4% Senior Notes Due 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $125,000
11-1/2% Senior Notes Due 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,150
10-7/8% Senior Notes Due 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,749
8-5/8% Pollution Control Bonds Due 2014 . . . . . . . . . . . . . . . . . . . . . . . . . 56,300
Unamortized debt discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (407)
Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407,792
Redeemable preferred stock, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,710
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,478
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 610,980
</TABLE>
<PAGE>33
DESCRIPTION OF THE NOTES
The Exchange Notes will be issued, and the Senior Notes were issued,
under the Indenture dated June 12, 1995, between the Company 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, as in effect on
the date of the Indenture. The Notes are subject to all such terms, and
prospective investors are referred to the Indenture and the Trust Indenture
Act for a statement of such terms.
The statements under this caption relating to the Notes and the Indenture
are summaries and do not purport to be complete. Such summaries make use of
certain terms defined in the Indenture and are qualified in their entirety by
express reference to the Indenture, a copy of which is available upon request
from the Company or the Trustee and has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
General
The Exchange Notes will bear 10-3/4% interest from and including the date
such Exchange Notes are first issued under the Indenture, payable semiannually
on June 1 and December 1 of each year, commencing December 1, 1995, to holders
of record ("Holders") at the close of business on May 15 or November 15
immediately preceding each such interest payment date. Holders whose Senior
Notes are accepted for exchange will receive accrued interest thereon to, but
not including, the date of issuance of the Exchange Notes. The Notes will be
due on June 1, 2005, and will be issued only in registered form, without
coupons, in denominations of $1,000 and integral multiples thereof.
The interest rate on the Notes is subject to increase in certain
circumstances if the Company does not meet its registration requirements with
respect to the Notes. See "Senior Notes Registration Rights."
The Notes are unsecured obligations of the Company limited to an
aggregate amount of $125 million. The Notes are senior to all subordinated
indebtedness of the Company and pari passu with all existing and future senior
unsecured indebtedness of the Company.
Redemption
Optional Redemption. The Notes may not be redeemed at the option of the
Company prior to June 1, 2000. The Notes will be subject to redemption at any
time on or after June 1, 2000, at the option of the Company, in whole or in
part, at the following redemption prices (expressed as percentages of the
principal amount), plus accrued and unpaid interest to the redemption date, if
redeemed during the 12-month period beginning June 1, of the years indicated
below:
Year Redemption Price
2000 . . . . . . . . . 105.3750%
2001 . . . . . . . . . 102.6875%
2002 and thereafter . . 100.0000%
<PAGE>34
Selection and Notice of Redemption. In the event that less than all of
the Notes are to be redeemed at any time, selection of Notes for redemption
will be made by the Trustee 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 listed on a national securities exchange, on a pro
rata basis, provided, however, that the Notes will be redeemed only in the
amount of $1,000 or integral multiples thereof. Notice of redemption to the
Holders of Notes to be redeemed as a whole or in part shall be given by
mailing notice of such redemption by first-class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed for redemption
to such Holders of Notes at their last addresses as they shall appear upon the
registry books. On and after the redemption date, interest ceases to accrue
on Notes or portions thereof called for redemption.
Sinking Fund. There will be no sinking fund for the Notes.
Certain Covenants
The following is a summary of certain covenants that are contained in the
Indenture. Such covenants will be applicable (unless waived or amended as
permitted by the Indenture) so long as any of the Notes are outstanding.
Limitations on Indebtedness. The Company will not, and will not permit
any Subsidiary to, create, incur, assume, become liable for or guarantee the
payment of (collectively, an "incurrence") any Indebtedness (including
Acquired Indebtedness), other than Permitted Indebtedness, or permit any
Subsidiary to issue any Preferred Stock; provided the Company may incur, and
may permit any Subsidiary to incur, Indebtedness (including Acquired
Indebtedness) if (a) at the time of such event and after giving effect
thereto, on a pro forma basis, the ratio of Consolidated EBITDA to
Consolidated Fixed Charges for the four fiscal quarters immediately preceding
such event for which financial information is available consistent with the
Company's prior practice, taken as one period and calculated on the assumption
that such Indebtedness had been incurred on the first day of such four-quarter
period and, in the case of Acquired Indebtedness, on the assumption that the
related acquisition (whether by means of purchase, merger or otherwise) also
had occurred on such date with the appropriate adjustments with respect to
such acquisition being included in such pro forma calculation, would have been
greater than 1.75 to 1, and (b) no Default or Event of Default shall have
occurred and be continuing at the time or as a consequence of the incurrence
of such Indebtedness.
Notwithstanding the foregoing, the Company will not permit any Subsidiary
to incur Indebtedness (including Acquired Indebtedness) unless, at the time of
the incurrence of such Indebtedness and after giving effect thereto, on a pro
forma basis, without duplication, the sum of (i) the aggregate amount of
Indebtedness (including Acquired Indebtedness and Permitted Indebtedness) of
all Subsidiaries of the Company plus (ii) the aggregate amount of all
outstanding Indebtedness secured by Liens, issued, assumed or guaranteed by
the Company or any Subsidiary (excluding Indebtedness secured by Permitted
Liens) plus (iii) the aggregate amount of Attributable Debt incurred by the
Company or any Subsidiary in respect of sale and leaseback transactions does
not at such time exceed 10% of Consolidated Net Tangible Assets.
Limitations on Restricted Payments. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly, make any Restricted
Payment unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment;
<PAGE>35
(b) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments (the fair market value of any such
Restricted Payment if other than cash as determined in good faith by the
Company's Board of Directors and evidenced by a resolution of such Board)
declared or made after the Issue Date does not exceed the greater of (i)
$5 million or (ii) the sum of (A) 50% of the Consolidated Net Income of
the Company on a cumulative basis during the period (taken as one
accounting period) from and including April 1, 1993 and ending on the
last day of the Company's last fiscal quarter ending prior to the date of
such Restricted Payment (or in the event such Consolidated Net Income
shall be a deficit, minus 100% of such deficit), plus (B) 100% of the
aggregate net cash proceeds of, and the fair market value of marketable
securities (as determined in good faith by the Company's Board of
Directors and evidenced by a resolution of such Board) received by the
Company from, the issue or sale after March 1, 1993 of Capital Stock of
the Company (other than the issue or sale of (x) Disqualified Stock, (y)
Capital Stock of the Company to any Subsidiary of the Company or (z)
Capital Stock convertible (whether at the option of the Company or the
holder thereof or upon the happening of any event) into any security
other than its Capital Stock) and any Indebtedness or other securities of
the Company convertible into or exercisable for Capital Stock (other than
Disqualified Stock) of the Company which has been so converted or
exercised, as the case may be, minus (C) $25 million in respect of the
redemption of the Company's Preferred Stock, Series B, in September 1994
plus (D) $5 million;
provided that, notwithstanding the foregoing, (I) the Company shall be
permitted to make Permitted Payments and (II) the Company and any Subsidiary
shall be permitted to make Investments in Permitted Joint Ventures if at the
time of such Investment and after giving effect thereto, on a pro forma basis,
(X) the Company could incur at least $1.00 of Indebtedness (other than
Permitted Indebtedness) pursuant to clause (a) of the "Limitations on
Indebtedness" covenant (assuming for purposes of such calculation, if such
Investment is made other than with borrowed funds or funds obtained from the
issuance of Capital Stock specifically for the purpose of such Investment,
that the Company incurred Indebtedness in an amount equal to such Investment
bearing interest at the weighted average rate of interest paid by the Company
on its outstanding Indebtedness during the four fiscal quarters most recently
ended), (Y) the aggregate amount of Investments made pursuant to this clause
(II), less the aggregate amount of dividends, other distributions of earnings
and returns of capital received by the Company from such Permitted Joint
Ventures in cash, does not exceed $50 million and (Z) no Default or Event of
Default shall have occurred and be continuing; and provided further that the
foregoing clause (b) shall not prevent the payment of any dividend within 60
days of its declaration if such dividend could have been made on the date of
its declaration without violation of the provisions of this covenant.
Limitations on Mergers, Consolidations and Sales of Assets. The Company
will not consolidate or merge with or into, or sell, lease, convey or
otherwise dispose of all or substantially all of its assets (as an entirety or
substantially an entirety in one transaction or a series of related
transactions) to any Person (other than a merger with or into a Wholly Owned
Subsidiary; provided that such Wholly Owned Subsidiary is not organized in a
foreign jurisdiction), unless: (a) the entity formed by or surviving any such
consolidation or merger (if other than the Company), or to which sale, lease,
conveyance or other disposition shall have been made (the "Surviving Entity"),
is a corporation organized and existing under the laws of the United States,
any state thereof or the District of Columbia; (b) the Surviving Entity
assumes by supplemental indenture all of the obligations of the Company on the
Notes and the Indenture; (c) immediately after the transaction, no Default or
Event of Default shall have occurred and be continuing; (d) immediately after
giving effect to such transaction, the Consolidated Net Worth of the Surviving
Entity would be at least equal to the Consolidated Net Worth of the Company
immediately prior to such transaction; and (e) immediately after giving effect
to such transaction on a pro forma basis, the Surviving Entity could incur at
least $1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to
clause (a) of the "Limitations on Indebtedness" covenant.
<PAGE>36
Limitations on Transactions with Affiliates. So long as any of the Notes
remain outstanding, neither the Company nor any of its Subsidiaries will
directly or indirectly enter into any transaction or series of related
transactions involving aggregate consideration in excess of $1 million in any
fiscal year with any Affiliate or holder of 5% or more of any class of Capital
Stock of the Company (including any Affiliates of such holders) except for any
transaction (including any loans or advances by or to any Affiliate) (i) the
terms of which are fair and reasonable to the Company or such Subsidiary, as
the case may be, and are at least as favorable as the terms which could be
obtained by the Company or such Subsidiary, as the case may be, in a
comparable transaction made on an arm's length basis with Persons who are not
such a holder, an Affiliate of such holder or Affiliate of the Company and
(ii) which has been approved by a majority of the Company's directors
(including a majority of the Company's independent directors, if any) in the
exercise of their fiduciary duties; provided that any such transaction shall
be conclusively deemed to be on terms which are fair and reasonable to the
Company or any of its Subsidiaries and on terms which are at least as
favorable as the terms which could be obtained on an arm's length basis with
Persons who are not such a holder, an Affiliate of such holder or Affiliate of
the Company if such transaction is approved by a majority of the Board of
Directors (including a majority of the Company's independent directors, if
any). This covenant does not apply to (a) any transaction between the Company
and any of its Wholly Owned Subsidiaries or between any of its Wholly Owned
Subsidiaries, (b) any Restricted Payment not otherwise prohibited by the
"Limitations on Restricted Payments" covenant or (c) any transaction pursuant
to an agreement in existence on the date of the Indenture and included as an
exhibit to the Company's Exchange Act Reports.
Restrictions on Disposition of Assets of the Company. (a) Subject to the
provisions of Section 8.1 of the Indenture, entitled "Covenant Not to Merge,
Consolidate, Sell or Convey Property Except Under Certain Conditions," the
Company will not, and will not permit any of its Subsidiaries to, make any
Asset Disposition unless (i) the Company (or the Subsidiary, as the case may
be) receives consideration at the time of such sale or other disposition at
least equal to the fair market value thereof (as determined in good faith by
the Company's management if the consideration is less than $200,000 or, if the
consideration is greater than $200,000, as determined in good faith by the
Company's Board of Directors and evidenced by a resolution of such Board;
provided, that no resolution of the Board shall be required in connection with
the disposition of approximately 200 contiguous acres adjacent to the
Company's headquarters at 400 Three Springs Drive, Weirton, West Virginia,
(ii) not less than 75% of the consideration received by the Company (or the
Subsidiary, as the case may be) is in the form of cash or Cash Equivalents and
(iii) the Net Cash Proceeds of the Asset Disposition are within 270 days, at
the Company's election, (A) invested in the business or businesses of the
Company as of the Issue Date or any related business, or (B) to the extent not
so invested are applied (1) to make an Asset Disposition Offer to purchase the
Notes (on a pro rata basis if the amount available for such repurchase is less
than the outstanding principal amount of the Notes) or (2) to any other
Indebtedness which is pari passu with the Notes, at a purchase price of 100%
of the principal amount thereof plus accrued interest to the date of
repayment. Notwithstanding the foregoing, the Company and its Subsidiaries
will not be required to apply any Net Cash Proceeds in accordance with this
provision except to the extent that the aggregate gross proceeds from all
Asset Dispositions which are not applied in accordance with this provision
exceed $25 million.
Limitations on Liens. The Company will not, and will not permit any
Subsidiary to, issue, assume or guarantee any Indebtedness secured by a Lien
(other than a Permitted Lien) of or upon any Property of the Company or any
Subsidiary or any shares of stock or debt of any Subsidiary which owns
Property, whether such Property is owned at the date of the Indenture or
thereafter acquired, without making effective provision whereby the Securities
(together with, if the Company shall so determine, any other debt of the
Company ranking equally with the Securities and then existing or thereafter
created) shall be secured by such Lien equally and ratably with such
Indebtedness, so long as such Indebtedness shall be so secured; provided that
the foregoing prohibition shall not apply to (i) liens with respect to
accounts receivable or inventory securing
<PAGE>37
Permitted Working Capital Indebtedness or (ii) liens with respect to sale and
leaseback transactions regarding the No. 9 Tandem Mill or the Foster Wheeler
Steam Generating Facility.
Notwithstanding the foregoing, and subject to the provisions of the
"Limitations on Indebtedness" covenant, the Company or any Subsidiary may
issue, assume or guarantee Indebtedness secured by Liens without equally and
ratably securing the Securities, provided that, after giving effect thereto,
without duplication, the sum of (i) the aggregate amount of all outstanding
Indebtedness secured by Liens so issued, assumed or guaranteed (excluding
Indebtedness secured by Permitted Liens) plus (ii) the aggregate amount of
Attributable Debt incurred by the Company or any Subsidiary in respect of sale
and leaseback transactions plus (iii) the aggregate amount of Indebtedness
(including Acquired Indebtedness and Permitted Indebtedness) of all
Subsidiaries of the Company does not at such time exceed 10% of Consolidated
Net Tangible Assets.
Limitations on Sale and Leaseback Transactions. The Company will not and
will not permit any Subsidiary to enter into any sale and leaseback
transaction with respect to any Property (whether now owned or hereafter
acquired) unless the net proceeds of the sale or transfer of the property to
be leased are at least equal to the fair market value (as determined by the
Board of Directors of the Company) of such Property and unless the Company or
such Subsidiary would be entitled under the "Limitations on Indebtedness" and
"Limitations on Liens" covenants, without equally and ratably securing the
Notes, to issue, assume or guarantee debt secured by a mortgage on such
Property in an amount at least equal to the Attributable Debt in respect of
such sale and leaseback transaction; provided, however, that the foregoing
prohibition does not apply to leases between the Company and a Subsidiary or
between Subsidiaries or to sales and leasebacks with respect to the
No. 9 Tandem Mill or the Foster Wheeler Steam Generating Facility; provided,
that the Company must be able to incur, in respect of such sale and leaseback
transactions, debt in an amount at least equal to the present value
(discounted at the rate of interest implicit in the terms of the lease) of the
obligation of the lessee for net rental payments during the remaining term of
the lease (including any period for which such lease has been extended or may,
at the option of the lessor, be extended) under the "Limitations on
Indebtedness" covenant.
Limitations on Dividend and Other Payment Restrictions
Affecting Subsidiaries. The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Company to (a)(i) pay dividends or make any
other distributions on its Capital Stock, or any other interest or
participation in or measured by its profits, owned by the Company or a
Subsidiary of the Company, or (ii) pay any Indebtedness owed to the Company or
a Subsidiary of the Company, (b) make loans or advances to the Company or a
Subsidiary of the Company or (c) transfer any of its properties or assets to
the Company or a Subsidiary of the Company, except for Permitted Liens and
Liens permitted under the second paragraph of the "Limitations on Liens"
covenant and such other encumbrances or restrictions existing under or by
reason of (i) any restrictions, with respect to a Subsidiary that is not a
Subsidiary on the date of this Indenture, under any agreement in existence at
the time such Subsidiary becomes a Subsidiary (unless such agreement was
entered into in connection with, or in contemplation of, such entity becoming
a Subsidiary on or after the date of the Indenture), (ii) any restrictions
under any agreement evidencing any Acquired Indebtedness of a Subsidiary of
the Company incurred pursuant to the provisions described under the
"Limitations on Indebtedness" covenant; provided that such restrictions shall
not restrict or encumber any assets of the Company or its Subsidiaries other
than such Subsidiary, (iii) terms relating to the nonassignability of any
operating lease, (iv) any encumbrance or restriction existing under any
agreement that refinances or replaces the agreements containing restrictions
described in clauses (i)-(iii), provided that the terms and conditions of any
such restrictions are no less favorable to the holders of the Securities than
those under the agreement so refinanced or replaced, or (v) any encumbrance or
restriction due to applicable law.
<PAGE>38
Change of Control Option. In the event that there shall occur a Change
of Control, each Holder of Securities shall have the right, at such Holder's
option, to require the Company to purchase all or any part of such Holder's
Securities, on the date (the "Repurchase Date") that is 90 days after notice
of the Change of Control, at 101% of the principal amount thereof, plus
accrued interest to the Repurchase Date.
On or before the thirtieth day after the Change of Control, the Company
is obligated to mail, or cause to be mailed, to all Holders of record of such
Notes a notice regarding the Change of Control and the repurchase right.
Substantially simultaneously with mailing of the notice, the Company shall
cause a copy of such notice to be published in the Wall Street Journal or
another newspaper of general circulation in the Borough of Manhattan, the City
of New York. To exercise a repurchase right, the holder of such Notes must
deliver, at least two Business Days prior to the Repurchase Date, written
notice to the Company (or an agent designated by the Company for such purpose)
of the Holder's exercise of such right, together with the Securities with
respect to which the right is being exercised, duly endorsed for transfer.
Such written notice from the Holder shall be irrevocable unless the rescission
thereof is duly approved by the Continuing Directors (as defined herein).
The Company will comply with all applicable tender offer rules and
regulations, including Section 14(e) of the Exchange Act and the rules
thereunder, if the Company is required to give a notice of right of repurchase
as a result of a Change of Control.
"Change of Control" means (i) any sale, lease or other transfer (in one
transaction or a series of transactions) of more than 75% of the assets of the
Company to any Person (other than a Wholly Owned Subsidiary of the Company);
(ii) a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Exchange Act (other than the 1984 ESOP, the 1989 ESOP or any other
employee benefit plan of the Company) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of Capital Stock of the Company
representing more than 50% of the voting power of such Capital Stock; (iii)
Continuing Directors cease to constitute at least a majority of the Board of
Directors of the Company; or (iv) the stockholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company.
"Continuing Director" means a director who either was a member of the
Board of Directors of the Company on the date of the Indenture or who became a
director of the Company subsequent to such date and whose election, or
nomination for election by the Company's stockholders, was duly approved by a
majority of the Continuing Directors then on the Board of Directors of the
Company.
Because the events described above could be expected to occur in
connection with certain forms of takeover attempts, these provisions could
deter hostile or friendly acquisitions of the Company where the person
attempting the acquisition views itself as unable to finance the purchase of
the principal amount of Notes which may be tendered to the Company upon
occurrence of a Change of Control.
The Company's 10-7/8% Notes, which rank pari passu with the Notes and of
which approximately $149.7 million was outstanding as of June 30, 1995,
contain substantially similar provisions relating to the definition of Change
of Control. Such notes, however, also require a Change of Control to be
accompanied by a downgrading of the Company's credit rating for the holder
repurchase option to be exercised. Nevertheless, the exercise of the
repurchase option by holders of the Notes, to the extent that it causes or
leads to a downgrading of the Company's credit rating under the 10-7/8% Notes,
could effectively trigger the repurchase option by the holders of those notes.
In either event, the ability of Holders to have their Notes repurchased
pursuant to the Change of Control provision effectively may be limited by the
Company's financial ability to make any required repurchases at such time.
<PAGE>39
Reports to Holders of the Notes. So long as the Company is subject to
the periodic reporting requirements of the Exchange Act, it will continue to
furnish the information required thereby to the Commission and to the Trustee.
The Indenture provides that even if the Company is entitled under the Exchange
Act not to furnish such information to the Commission, it will nonetheless
continue to furnish information under Section 13 of the Exchange Act to the
Trustee as if it were subject to such periodic reporting requirements so long
as at least 10% of the Notes remain outstanding.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms as well as any other capitalized terms used herein for which not
definition is provided.
"Acquired Indebtedness" means Indebtedness or Preferred Stock of any
Person existing at the time such Person became a Subsidiary of the Company (or
such Person is merged into the Company or one of the Company's Subsidiaries)
or assumed in connection with the acquisition of assets from any such Person
(other than assets acquired in the ordinary course of business), excluding
Indebtedness or Preferred Stock incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary of the Company.
"Affiliate" means, when used with reference to a specified Person, any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Person specified. For the purposes of this
definition, "control," when used with respect to any Person, means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.
"Asset Disposition" means, with respect to any Person, any sale,
transfer, conveyance, lease or other disposition (including, without
limitation, by way of merger, consolidation or sale and leaseback or sale of
shares of Capital Stock in any Subsidiary) by such Person or any of its
Subsidiaries to any Person (other than to such Person or a Wholly Owned
Subsidiary of such Person and other than in the ordinary course of business)
of any Property. For purposes of this definition, the term "Asset
Disposition" shall not include any sale, transfer, conveyance, lease or other
disposition of assets and properties of the Company that is governed by the
provision relating to "Limitations on Mergers, Consolidations and Sales of
Assets."
"Attributable Debt" means, with respect to any sale and leaseback
transaction, at the date of determination, the present value (discounted at
the rate of interest implicit in the terms of the lease) of the obligation of
the lessee for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended); provided, however, there shall not be
deemed to be any Attributable Debt in respect of any sale and leaseback
transaction if the Company or a Subsidiary would be entitled pursuant to the
provisions of clauses (a) through (f) under the definition of "Permitted
Liens" to issue, assume or guarantee debt secured by a mortgage upon the
property involved in such transaction without equally and ratably securing the
Securities. "Net rental payments" under any lease for any period means the
sum of such rental and other payments required to be paid in such period by
the lessee thereunder, not including, however, any amount required to be paid
by such lessee (whether or not designated as rent or additional rent) on
account of maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges required to be paid by such lessee thereunder or any
amounts required to be paid by such lessee thereunder contingent upon the
amount of sales, maintenance and repairs, insurance, taxes, assessments, water
rates or similar charges.
<PAGE>40
"Cash Equivalents" means (i) obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof or
obligations issued by any agency or instrumentality thereof and backed by the
full faith and credit of the United States of America, (ii) commercial paper
with a maturity of 180 days or less issued by a corporation organized under
the laws of any state of the United States of America or the District of
Columbia and rated at least A-2 by Standard and Poor's Corporation or at least
P-2 by Moody's Investors Service, Inc., (iii) time deposits with, and
certificates of deposits and banker's acceptances issued by, any bank having
capital surplus and undivided profits of not less than $100 million and
maturing not more than 180 days from the date of creation thereof, (iv)
repurchase agreements that are secured by a perfected security interest in an
obligation described in clause (i) and are with any bank described in clause
(iii), and (v) readily marketable direct obligations issued by any state of
the United States of America or any political subdivision thereof having one
of the two highest rating categories obtainable from either Moody's Investors
Service, Inc. or Standard and Poor's Corporation.
"Commodity Agreement" means any option or futures contract or similar
agreement or arrangement designed to protect the Company against fluctuations
in commodity prices.
"Consolidated EBITDA" means, for any period, on a consolidated basis for
the Company and its Subsidiaries, the sum for such period of (a) Consolidated
Net Income, (b) income taxes (other than income taxes positive or negative
attributable to extraordinary and non-recurring gains or losses on asset
sales) with respect to such period, determined in accordance with GAAP, (c)
net interest expense for such period, determined in accordance with GAAP, (d)
depreciation and amortization expenses (including, without duplication,
amortization of debt discount and debt issue costs), determined in accordance
with GAAP and (e) other non-cash items reducing Net Income, minus non-cash
items increasing Net Income, determined in accordance with GAAP.
"Consolidated Fixed Charges" means, for any period, the sum of (a) the
net interest expense of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP and (b) interest
incurred during the period and capitalized by the Company in accordance with
GAAP.
"Consolidated Net Income" of the Company for any period means (i) the Net
Income (or loss) of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded from this clause (i): (a) the Net Income of any Person
other than a Consolidated Subsidiary in which the Company or any of its
Consolidated Subsidiaries has a joint interest with a third party except to
the extent of the amount of dividends or distributions actually paid in cash
to the Company or a Consolidated Subsidiary during such period, (b) the Net
Income of any other Person accrued prior to the date it becomes a Subsidiary
with respect to which Consolidated Net Income is calculated, or is merged into
or consolidated with such Person or any of its Subsidiaries or that Person's
assets are acquired by such Person or any of its Subsidiaries, (c) the Net
Income (but only if positive) of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary to such Person or to any other Subsidiary of such Net Income is not
at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, and (d) without duplication, any
gains or losses attributable to the sale, lease, conveyance or other
disposition of assets (including without limitation Capital Stock of any
Subsidiary of such Person), whether owned on the date of issuance of the
Securities or thereafter acquired, in one or more related transactions outside
the ordinary course of business, (e) any non-cash charge reducing Net Income
resulting from the adoption by the Company of Statement of Financial
Accounting Standards No. 106 of the Financial Accounting Standards Board and
(f) any non-cash charge reducing Net Income required by Statement of Financial
Accounting Standards No. 5 of the Financial Accounting Standards Board which
relates to increased pension or retirement costs resulting from the
implementation of the Company's Efficiency Program less (ii) the aggregate
<PAGE>41
amount of net cash payments made during the period by the Company or any
Subsidiary not reflected in Net Income during such period which relate to the
increased pension and retirement costs of the Company resulting from the
implementation of the Company's Efficiency Program.
"Consolidated Net Tangible Assets" means, as of any particular time, the
total assets of the Company and its Consolidated Subsidiaries, as shown on the
audited consolidated balance sheet contained in the latest annual report to
stockholders of the Company after deducting therefrom:
(a) all current liabilities excluding any thereof which are by
their terms extendible or renewable at the option of the obligor thereon
to a time more than 12 months after the time as of which the amount
thereof is being computed and excluding current maturities of long-term
indebtedness;
(b) deferred income taxes and deferred pension liabilities to the
extent the related intangible asset, if any, is not otherwise deducted in
calculating Consolidated Net Tangible Assets, deferred income taxes
resulting from the adoption by the Company of Statement 106 of the
Financial Accounting Standards Board and deferred income taxes resulting
from the implementation of the Company's Efficiency Program;
(c) all reserves, including, without limitation, reserves for
liabilities, fixed or contingent, depreciation, amortization,
obsolescence, depletion, insurance and inventory valuation (but excluding
contingency reserves not allocated for any particular purpose) carried by
such corporation or other person and not deducted in computing such total
assets;
(d) any prepaid expenses, deferred charges or unamortized debt
discount and expense;
(e) minority interests in Subsidiaries, if any;
(f) any write-up in the book value of any asset resulting from a
revaluation thereof subsequent to December 31, 1994 (other than a write-
up of any assets constituting part of the assets and business of another
corporation made in connection with the acquisition, direct or indirect,
of the assets and business of such other corporation);
(g) the amount, if any, at which any stock of the Company appears
upon the asset side of such balance sheet; and
(h) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangible assets, all as shown
in such consolidated balance sheet;
plus an amount equal to Attributable Debt in respect of any sale and leaseback
transactions not capitalized on such balance sheet.
"Consolidated Net Worth" means, with respect to any Person engaged in a
merger, consolidation or sale of assets, the consolidated stockholder's equity
of such Person and its Subsidiaries, as determined in accordance with GAAP but
excluding the effect of the adoption by such Person of Statement of Financial
Accounting Standards No. 106 of the Financial Accounting Standards Board and
excluding any restructuring charges taken by such Person in connection with
such merger, consolidation or sale of assets.
<PAGE>42
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company against fluctuations in currency values.
"Disqualified Stock" means any Capital Stock (i) 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 is
redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final maturity date of the Securities or (ii) upon which the
Company or any of its Subsidiaries has a contractual obligation to compensate
the holder thereof for losses incurred upon the sale or other disposition
thereof; provided that any portion or series of such Capital Stock which by
its terms, or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund or otherwise, no earlier than the day
following the maturity date of the Securities shall not constitute
Disqualified Stock; and provided further, that any Capital Stock which would
not constitute Disqualified Stock but for provisions thereof giving holders
thereof the right to require the Company to repurchase or redeem such Capital
Stock upon the occurrence of a change in control occurring on or prior to the
maturity date of the Securities shall not constitute Disqualified Stock if (i)
the change in control provisions applicable to such Capital Stock are no more
favorable to the holders of such Capital Stock than the provisions of the
"Change of Control Option" and (ii) such Capital Stock specifically provides
that the Company will not repurchase or redeem any such stock pursuant to such
provisions prior to the Company's repurchase of such Securities as are
required to be repurchased pursuant to the provisions of the "Change of
Control Option."
"Efficiency Program" means the program announced by the Company in July
1992 involving manpower reductions to be achieved over a five year period.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the Issue Date.
"Indebtedness" means, without duplication, (i) any liability of any
entity (A) for borrowed money, or under any reimbursement obligation relating
to a letter of credit, (B) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with
the acquisition of any businesses, properties or assets of any kind or with
services incurred in connection with capital expenditures, or (C) in respect
of capitalized lease obligations, (ii) any liability of others described in
the preceding clause (i) that the entity has guaranteed or that is otherwise
its legal liability, (iii) to the extent not otherwise included, obligations
under Currency Agreements, Commodity Agreements or Interest Protection
Agreements, (iv) all Disqualified Stock valued at the greatest amount payable
in respect thereof on a liquidation (whether voluntary or involuntary) plus
accrued and unpaid dividends, and (v) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any liability of the types
referred to in clauses (i)-(iv) above, provided that Indebtedness shall not
include accounts payable (including, without limitation, accounts payable to
the Company by any Subsidiary or to any such Subsidiary by the Company or any
other Subsidiary, in each case, in accordance with customary industry
practice) or liabilities to trade creditors of any entity arising in the
ordinary course of business.
"Interest Protection Agreement" of any Person means any interest rate
swap agreement, interest rate collar agreement, option or future contract or
other similar agreement or arrangement designed to protect such Person or any
of its Subsidiaries against fluctuations in interest rates.
<PAGE>43
"Investments" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by
such Person, (iii) all purchases (or other acquisitions for consideration) by
such Person of Indebtedness, Capital Stock or other securities of any other
Person and (iv) all other items that would be classified as investments
(including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means June 12, 1995, the date on which the Notes are
originally issued under the Indenture.
"Lien" means, with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this definition, the Company shall be deemed to own
subject to a Lien any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Property.
"Net Cash Proceeds" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or instalment receivable or otherwise (including
any cash received upon sale or disposition of such note or receivable), but
only as and when received), excluding any other consideration received in the
form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the Property disposed of in such Asset Disposition or
received in any other non-cash form unless and until such non-cash
consideration is converted into cash therefrom, in each case, net of all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all federal, state, provincial, foreign and local taxes
required to be accrued as a liability under GAAP as a consequence of such
Asset Disposition, and in each case net of a reasonable reserve for the after-
tax cost of any indemnification payments (fixed and contingent) attributable
to seller's indemnities to the purchaser undertaken by the Company or any of
its Subsidiaries in connection with such Asset Disposition (but excluding any
payments, which by the terms of the indemnities will not, under any
circumstances, be made during the term of the Securities), and net of all
payments made on any Indebtedness which is secured by such Property, in
accordance with the terms of any Lien upon or with respect to such Property or
which must by its terms or by applicable law be repaid out of the proceeds
from such Asset Disposition, and net of all distributions and other payment
made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Disposition.
"Net Income" of any Person for any period means the consolidated net
income or loss, as the case may be, of such Person and its Subsidiaries for
such period determined in accordance with GAAP; provided that there shall be
excluded all extraordinary gains or losses net of respective tax effects
(less, without duplication, all fees and expenses relating thereto).
"Permitted Indebtedness" means (i) Indebtedness of the Company and its
Subsidiaries outstanding immediately following the issuance of the Securities
and the application of the proceeds of the Securities in the manner set forth
under "Use of Proceeds" in the Offering Memorandum, including Indebtedness of
the Company's 1989 ESOP guaranteed by the Company even if acquired by the
Company; (ii) the Securities; (iii) Indebtedness in respect of obligations of
the Company to the Trustee under this Indenture; (iv) Permitted Working
Capital indebtedness; (v) intercompany debt obligations (including
intercompany notes) of the Company and each of its Subsidiaries; provided,
however, that the obligations of the Company to any of its Subsidiaries with
respect to such Indebtedness shall be subject to a subordination agreement
between the Company and its Subsidiaries providing for the subordination of
such obligations in right of payment from and after such time as all
Securities issued and outstanding shall become due and payable (whether at
stated
<PAGE>44
maturity, by acceleration or otherwise) to the payment and performance of the
Company's obligations under the Indenture and the Securities; provided
further, that any Indebtedness of the Company or any Subsidiary owed to any
other Subsidiary that ceases to be a Subsidiary shall be deemed to be incurred
and shall be treated as an incurrence for purposes of the covenant described
under "Limitations on Indebtedness," at the time the Subsidiary in question
ceased to be a Subsidiary; (vi) Indebtedness of the Company under any Currency
Agreements, Commodity Agreements or Interest Protection Agreements; (vii)
additional Indebtedness of the Company or its Subsidiaries the aggregate
principal amount of which does not exceed $100 million; and (viii) any
renewals, extensions, substitutions, refundings, refinancings or replacements
of any Indebtedness described in each of the foregoing clauses (i)-(vii)
(collectively, "Refinancing Indebtedness"); provided that (A) the original
issue amount of the Refinancing Indebtedness shall not exceed the maximum
principal amount (following the date of the Indenture and the application of
the net proceeds of the Notes in accordance with the manner described under
"Use of Proceeds" in the Indenture) and accrued interest of this Indebtedness
to be repaid (or if such Indebtedness was issued at an original issue
discount, the original issue price plus amortization of the original issue
discount at the time of the incurrence of the Refinancing Indebtedness less
the amount of any prepayments on or prior to the date of the Indenture and any
prepayments made applying the net proceeds of the Notes), plus the reasonable
fees and expenses directly incurred in connection with such Refinancing
Indebtedness, (B) Refinancing Indebtedness incurred by any Subsidiary shall
not be used to repay or refund outstanding Indebtedness of the Company or any
other Subsidiary, and (C) with respect to any Refinancing Indebtedness that
refinances Indebtedness ranking junior in right of payment to the Notes, (1)
the Refinancing Indebtedness does not require any principal payments prior to
the maturity of the Notes and has an average weighted life that is equal to or
greater than the average weighted life of the Notes and (2) the Refinancing
Indebtedness is subordinated to the Notes to the same or greater extent and on
substantially the same terms or terms more favorable to the holder of the
Notes.
"Permitted Joint Venture" means the interest of the Company in any
corporation, association or other business entity of which 50% or less, but
not less than 10%, of the total Voting Stock or other interest is at the time
owned or controlled, directly or indirectly, by the Company or one or more of
its Subsidiaries or a combination thereof, provided that such corporation,
association or entity is engaged in the business or businesses of the Company
or any related business.
"Permitted Liens" means (a) Liens on Property of, or any shares of stock
of or debt of, any corporation existing at the time such corporation becomes a
Subsidiary or at the time such corporation is merged into the Company or a
Subsidiary, (b) Liens in favor of the Company or any Subsidiary, (c) Liens in
favor of governmental bodies to secure progress or advance payments, (d) Liens
securing industrial revenue or pollution control bonds, (e) Liens upon the
accounts receivable and related intangibles and inventory of the Company or
any Subsidiary securing Permitted Working Capital Indebtedness of the Company
or such Subsidiary, (f) statutory Liens or landlords' and carriers',
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other
like Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor or (g) any
extensions, renewals or replacements of Liens referred to in clauses (a)
through (f) above.
"Permitted Payments" means, with respect to the Company or any of its
Subsidiaries, (i) any dividend on shares of Capital Stock payable solely in
shares of Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to purchase Capital Stock (other than Disqualified
Stock); (ii) any dividend or other distribution with respect to Capital Stock
payable to the Company by any of its Subsidiaries or by a Subsidiary to
another Subsidiary; and (iii) payments made by the Company in satisfaction of
any put obligation imposed on the Company by Section 409 of the Internal
Revenue Code of 1986, as amended, and any successor
<PAGE>45
provision, relating to shares of the Company's Preferred Stock, Series A,
authorized and issued on or before the Issue Date and held in the Company's
1989 ESOP.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such Person
which has a preference in liquidation or a preference with respect to the
payment of dividends.
"Prohibited Investment" means, with respect to any Person, any Investment
by such Person in any Person that is not a Subsidiary of such Person, other
than (i) an Investment in Cash Equivalents, (ii) to the extent not included in
clause (i), (a) negotiable instruments held for collection, (b) outstanding
travel, moving or other similar advances to officers, employees and
consultants of such Person, (c) lease or utility deposits or other similar
deposits or (d) Capital Stock, debt obligations or similar securities received
in settlement of debts owed to such Person or its Subsidiaries as a result of
the foreclosure, perfection or enforcement of any Liens by such Person or any
of its Subsidiaries, but, in each case, only to the extent such Investments
are made in the ordinary course of business, and (iii) sales of goods on trade
credit terms consistent with the past practices of such Person or otherwise
consistent with trade credit terms in common use in the industry.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution on Capital Stock of the
Company or any Subsidiary of the Company or any payment made to the direct or
indirect holders (in their capacities as such) of Capital Stock of the Company
or any Subsidiary of the Company (other than (x) dividends or distributions
payable solely in Capital Stock (other than Disqualified Stock) and (y) in the
case of Subsidiaries of the Company, dividends or distributions payable to the
Company or to a Subsidiary of the Company); (ii) the purchase, redemption or
other acquisition or retirement for value of any Capital Stock, or any option,
warrant, or other right to acquire shares of Capital Stock, of the Company or
any of its Subsidiaries; (iii) the making of any principal payment on, or the
purchase, defeasance, repurchase, redemption or other acquisition or
retirement for value, prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, of any Indebtedness which is subordinated in
right of payment to the Securities; (iv) the making of any Prohibited
Investment or guarantee of any Prohibited Investment in any Person and (v) the
making of any payment to a holder of Capital Stock of the Company to reimburse
such holder for losses incurred by such holder upon the disposition of such
Capital Stock by such holder.
"Subsidiary" means, with respect of any Person, any corporation or other
entity of which a majority of the Capital Stock or other ownership interests
having ordinary voting power to elect a majority of the Board of Directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person.
"Wholly Owned Subsidiary" means, at any time, a Subsidiary all of the
Capital Stock of which (except directors' qualifying shares) are at the time
owned directly or indirectly by the Company.
<PAGE>46
Events of Default and Notice Thereof
The term "Event of Default" when used in the Indenture means any one of
the following: (i) failure of the Company to pay interest for 30 days or
principal when due; (ii) failure of the Company to perform any other covenant
in the Indenture for 60 days after notice from the Trustee or the Holders of
25% in principal amount of the Notes outstanding; (iii) acceleration of the
maturity of other indebtedness of the Company in excess of $25 million which
acceleration is not rescinded or annulled, or which indebtedness is not
discharged, within 10 days after notice; and (iv) certain events of
bankruptcy, insolvency or reorganization of the Company.
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of any Default (the term "Default" to include the events specified
above without grace or notice) known to it, give to the Holders of Notes
notice of such Default; provided that, except in the case of a Default in the
payment of principal of or interest on any of the Notes, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interest of the Holders of Notes. The
Indenture requires the Company to certify to the Trustee annually as to
whether any Default occurred during such year.
In case an Event of Default shall occur and be continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Company (and to the Trustee if given
by the holders of Notes), may declare all unpaid principal and accrued
interest on the Notes then outstanding to be due and payable immediately.
Such acceleration may be annulled and past Defaults (except, unless
theretofore cured, a Default in payment of principal of or interest on the
Notes) may be waived by the Holders of a majority in principal amount of the
Notes then outstanding, upon the conditions provided in the Indenture.
The Indenture provides that no Holder of a Note may pursue any remedy
under the Indenture unless the Trustee shall have failed to act after notice
of an Event of Default and request by Holders of at least 25% in principal
amount of the Notes and the offer to the Trustee of indemnity satisfactory to
it; provided, however, that such provision does not affect the right to sue
for enforcement of any overdue payment on the Notes.
Modification and Waiver
Modification and amendment of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
principal amount of the outstanding Notes, provided that no such modification
or amendment may, without the consent of the Holder of each Note affected
thereby, (i) reduce the rate, or change the time or place for payment, of
interest on any Note, or reduce any amount payable on the redemption hereof,
(ii) reduce the principal, or change the fixed maturity or place of payment,
of any Note, (iii) change the currency of payment of principal of or interest
on any Note, (iv) reduce the principal amount of outstanding Notes necessary
to modify or amend the Indenture, (v) impair the right to institute suit for
the enforcement of any payment on or with respect to any Note or (vi) modify
any of the foregoing provisions or reduce the principal amount of outstanding
Notes necessary to waive any covenant or past Default. Holders of not less
than a majority in principal amount of the outstanding Notes may waive certain
past Defaults. See "Events of Default and Notice Thereof."
Satisfaction and Discharge of Indenture
The Indenture will be discharged upon payment in full of all the Notes
outstanding thereunder, or upon the deposit with the Trustee, in trust, of
cash and/or direct obligations of the United States of America backed by its
full faith and credit which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, and each installment of interest on, the
Notes, on the stated maturity of such payments in accordance with the terms of
the Indenture and the Notes. In the case of any such deposit, certain of the
Company's obligations under the Indenture, including the
<PAGE>47
obligation to pay the principal of and any interest on such Notes, shall
continue until the Notes are paid in full. The Company will be entitled to
make such deposit if the Company has delivered to the Trustee (i)(A) a ruling
directed to the Trustee from the Internal Revenue Service to the effect that
the holders of the Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance of the
Indenture and will be subject to federal income tax on the same amount and in
the same manner and at the same times, as would have been the case if such
deposit and defeasance had not occurred, or (B) an opinion of counsel (who may
be an employee of or counsel for the Company), reasonably satisfactory to the
Trustee, to the same effect as clause (i)(A) above accompanied by a ruling to
the same effect published by the Internal Revenue Service, and (ii) an opinion
of counsel (who may be an employee of or counsel for the Company), reasonably
satisfactory to the Trustee, to the effect that, after the passage of 90 days
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.
Concerning the Trustee
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; provided, however, if it acquires any conflicting
interest (as defined in Section 310(b) of the Trust Indenture Act), it must
eliminate such conflict or resign.
The Holders of a majority in principal amount of all outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy or power available to the Trustee,
provided that such direction does not conflict with any rule of law or with
the Indenture.
In case an Event of Default shall occur (and shall not be cured or
waived), the Trustee will be required to exercise its powers with the degree
of care and skill of a prudent person in the conduct of his own affairs.
Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
of the Holders of Notes, unless they shall have offered to the Trustee
security and indemnity satisfactory to it.
Book-entry; Delivery and Form
The certificates representing the Exchange Notes will be issued in fully
registered form and may, if agreed by the Company and the Holder, be issued in
the form of a permanent global certificate in fully registered form (the
"Global Note") and will be deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of a nominee of
DTC.
Global Note. The Company expects that upon the issuance of the Global
Note, DTC or its custodian will credit, on its book-entry registration and
transfer system, the respective principal amount of Exchange Notes of the
individual beneficial interests represented by such Global Note to the
accounts of Persons who have accounts with such depositary. Such accounts
initially will be designated by or on behalf of the Initial Purchaser.
Ownership of beneficial interests in the Global Note will be limited to
Persons who have accounts with DTC ("participants") or Persons who hold
interests through participants. Ownership of beneficial interests in the
Global Note will be shown on, and the transfer of that ownership will be
effected only through, records maintained by DTC or its nominee (with respect
to interests of participants) and the records of participants (with respect to
interests of Persons other than participants).
<PAGE>48
So long as DTC, or its nominee, is the registered owner or holder of the
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the Exchange Notes represented by such Global Note for
all purposes under the Indenture and the Exchange Notes. No beneficial owner
of an interest in the Global Note will be able to transfer that interest
except in accordance with DTC's applicable procedures, in addition to those
provided for under the Indenture.
Payments of the principal of, premium (if any) and interest on, the
Global Note will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. Neither the Company, the Trustee nor any Paying
Agent will have any responsibility or liability for any aspect of the record
relating to or payments made on account of beneficial ownership interests in
the Global Note or for maintaining, supervising or reviewing any record
relating to such beneficial ownership interest.
The Company expects that DTC or its nominee, upon receipt of any payment
of principal, premium, if any, or interest in respect of the Global Note, will
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Note as
shown on the records of DTC or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global Note
held through such participants will be governed by standing instructions and
customary practice, as is now the case with securities held for the accounts
of customers registered in the names of nominees for such customers. Such
payments will be the responsibility of such participants.
The Company expects that transfers between participants in DTC will be
effected in the ordinary way in accordance with DTC rules and will be settled
in clearinghouse funds. If a holder requires physical delivery of a
Certificated Note for any reason, including to sell Senior Notes to Persons in
states which require physical delivery of such Senior Notes or to pledge such
Senior Notes, such holder must transfer its interest in the Global Note in
accordance with the normal procedures of DTC and the procedures set forth in
the Indenture.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Exchange Notes (including the presentation of Exchange
Notes for exchange as described below) only at the direction of one or more
participants to whose account the DTC interests in the Global Note is credited
and only in respect of such portion of the aggregate principal amount of
Exchange Notes as to which such participant or participants has or have given
such direction. However, if there is an Event of Default under the Exchange
Notes or the Indenture, DTC will exchange the Global Note for Exchange Notes
in definitive form, which it will distribute to its participants.
To the Company's knowledge, DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code and a "Clearing Agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC was created to hold securities for
its participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Initial Purchaser), banks, trust companies and clearing
corporations and certain other organizations. Indirect access to the DTC
system is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly ("indirect participants").
Although DTC customarily agrees to the foregoing procedures in order to
facilitate transfers of interests in global notes among participants of DTC,
it is under no obligation to perform such procedures, and such procedures may
be discontinued at any time. Neither the Company nor the Trustee will have
any responsibility
<PAGE>49
for the performance by DTC or its participants or indirect participants of
their respective obligations under the rules and procedures governing their
operations.
Certificated Securities. If DTC is at any time unwilling or unable to
continue as a depositary for the Global Note and a successor depositary is not
appointed by the Company within 90 days, Exchange Notes in definitive form
will be issued in exchange for the Global Note.
Governing Law
The Indenture and the Notes are governed by and construed in accordance
with the laws of the State of New York.
SENIOR NOTES REGISTRATION RIGHTS
The Company and Lazard entered into the Registration Rights Agreement
dated June 12, 1995 pursuant to which the Company agreed, for the benefit of
the holders of the Senior Notes, at the Company's cost, (i) within 45 days
after the Issue Date, file this Exchange Offer Registration Statement pursuant
to which the Senior Notes will be exchanged for the Exchange Notes, which will
have the same terms as the Senior Notes (except that the Exchange Notes will
not contain terms with respect to transfer restrictions), and (ii) cause this
Exchange Offer Registration Statement to be declared effective under the
Securities Act within 135 days after the Issue Date. Upon this Exchange Offer
Registration Statement being declared effective, the Company will offer the
Exchange Notes in exchange for surrender of the Senior Notes. The Company
agreed to keep the Exchange Offer open for 20 business days (or longer if
required by applicable law) after the date notice of the Exchange Offer is
mailed to the holders of the Senior Notes. For each Senior Note surrendered
to the Company pursuant to the Exchange Offer, the holder of such Senior Note
will receive an Exchange Note having a principal amount equal to that of the
surrendered Senior Note. Interest on each Exchange Note will accrue from (A)
the later of (i) the last interest payment date on which interest was paid on
the Senior Note surrendered in exchange therefor, or (ii) if the Senior Note
is surrendered for exchange on a date in a period which includes the record
date for an interest payment date to occur on or after the date of such
exchange and as to which interest will be paid, the date of such interest
payment date or (B) if no interest has been paid on the Senior Note, from the
date of original issuance. See "The Exchange Offer."
In the event that (i) the Company determines in reasonably good faith
that (x) any changes in the law or the applicable interpretations of the Staff
of the Commission do not permit the Company to effect the Exchange Offer, or
(y) that the Exchange Notes would not be tradeable upon receipt by the Holders
that participate in the Exchange Offer without restriction under state and
federal securities laws (other than due solely to the status of a Holder as an
Affiliate of the Company), (ii) the Exchange Offer is not consummated without
165 days of the Issue Date (iii) in certain circumstances, certain holders of
unregistered Exchange Notes so request within 135 days after the consummation
of the Exchange Offer or (iv) in the case of any holder of Senior Notes that
participates in the Exchange Offer, such holder of Senior Notes does not
receive Exchange Notes on the date of the exchange that may be sold without
restriction under state and federal securities laws (other than due solely to
the status of such holder of Senior Notes as an affiliate of the Company) and
so notifies the Company within 60 days after such holder of Senior Notes first
becomes aware of such restriction and provides the Company with a reasonable
basis for its conclusion, in the case of each of clauses (i)-(iv) of this
sentence, then the Company will promptly deliver to the holders of Senior
Notes and the Trustee written notice thereof and, at its cost, (a) as promptly
as practicable, file the Shelf Registration Statement, (b) use all reasonable
efforts to cause the Shelf Registration Statement to be declared effective
under the Securities Act by the 165th day after the Issue Date and (c) use all
reasonable efforts to keep the Shelf Registration Statement effective until
three years after its effective date, or such shorter period ending when (i)
all Senior Notes covered by the Shelf Registration
<PAGE>50
Statement have been sold in the manner set forth and as contemplated therein
or (ii) a subsequent Shelf Registration Statement covering all unregistered
Senior Notes has been declared effective under the Securities Act. The
Company will, in the event of the filing of a Shelf Registration Statement,
provide to each holder of the Senior Notes copies of the prospectus which is a
part of the Shelf Registration Statement, notify each such holder when the
Shelf Registration Statement for the Senior Notes has become effective and
take certain other actions as are required to permit unrestricted resales of
the Senior Notes. A holder of Senior Notes that sells such Senior Notes
pursuant to the Shelf Registration Statement generally will be required to be
named as a selling securityholder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and will be
bound by the provisions of the Registration Rights Agreement which are
applicable to such a holder (including certain indemnification obligations).
In addition, each holder of the Senior Notes will be required to deliver
information to be used in connection with the Shelf Registration Statement and
to provide comments on the Shelf Registration Statement within the time
periods set forth in the Registration Rights Agreement in order to have its
Senior Notes included in the Shelf Registration Statement and to benefit from
the provisions regarding liquidated damages set forth in the following
paragraph.
In the event that either (i) the Exchange Offer Registration Statement is
not filed with the Commission on or prior to the 45th calendar day following
the Issue Date, (ii) the Exchange Offer Registration Statement is not declared
effective on or prior to the 135th calendar day following the Issue Date or
(iii) the Exchange Offer is not consummated or the Shelf Registration
Statement is not declared effective on or prior to the 165th calendar day
following the Issue Date or the Shelf Registration Statement ceases to be
effective (each such event referred to in clauses (i) through (iii), a
"Registration Default"), the Company will pay increased cash interest to each
holder of the Senior Notes during the period following the occurrence of such
Registration Default in an amount equal to 0.50% per annum until the
Registration Statement is filed, the Exchange Offer Registration Statement is
declared effective, the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective or again becomes effective, as
the case may be. All accrued cash interest shall be paid to record holders of
the Senior Notes by wire transfer of immediately available funds or by federal
funds check by the Company on each interest payment date. Upon (x) the filing
of the Exchange Offer Registration Statement in the case of clause (i) above,
(y) the effectiveness of the Exchange Offer Registration Statement in the case
of clause (ii) above or (z) the consummation of the Exchange Offer or the
effectiveness of a Shelf Registration Statement, as the case may be, in the
case of clause (iii) above, and provided that none of the conditions set forth
in clauses (i), (ii) and (iii) above continues to exist, such additional
interest shall cease to accrue on the Senior Notes from the date of such
filing, effectiveness or consummation.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part.
PLAN OF DISTRIBUTION
Based on interpretations by the Staff set forth in no-action letters
issued to third parties, the Company believes that Exchange Notes issued
pursuant to the Exchange Offer in exchange for the Senior Notes may be offered
for resale, resold and otherwise transferred by holders thereof (other than
any holder which is (i) an Affiliate of the Company, (ii) a broker-dealer who
acquired Senior Notes directly from the Company or (iii) a broker-dealer who
acquired Senior Notes as a result of market-making or other trading
activities) without compliance with the registration and prospectus delivery
provisions of the Securities Act provided that such Exchange Notes are
acquired in the ordinary course of such holders' business, and such holders
are not engaged in, and do not intend to engage in, and have no arrangement or
understanding with any person to participate in,
<PAGE>51
a distribution of such Exchange Notes; provided that broker-dealers
("Participating Broker-Dealers") receiving Exchange Notes in the Exchange
Offer will be subject to a prospectus delivery requirement with respect to
resales of such Exchange Notes. To date, the Staff has taken the position
that Participating Broker-Dealers may fulfill their prospectus delivery
requirements with respect to transactions involving an exchange of securities
such as the exchange pursuant to the Exchange Offer (other than a resale of an
unsold allotment from the sale of the Senior Notes to Lazard, the initial
purchaser) with the prospectus contained in the Exchange Offer Registration
Statement. Pursuant to the Registration Rights Agreement, the Company has
agreed to permit Participating Broker-Dealers and other persons, if any,
subject to similar prospectus delivery requirements to use this Prospectus in
connection with the resale of such Exchange Notes. The Company has agreed
that, for a period of 120 days after the Exchange Date, it will make this
Prospectus, and any amendment or supplement to this Prospectus, available to
any broker-dealer that requests such documents in the Letter of Transmittal.
Each holder of the Senior Notes who wishes to exchange its Senior Notes
for Exchange Notes in the Exchange Offer will be required to make certain
representations to the Company as set forth in "The Exchange Offer--Terms and
Conditions of the Letter of Transmittal." In addition, each holder who is a
broker-dealer and who receives Exchange Notes for its own account in exchange
for Senior Notes that were acquired by it as a result of market-making
activities or other trading activities, will be required to acknowledge that
it will deliver a prospectus in connection with any resale by it of such
Exchange Notes.
The Company will not receive any proceeds from any sale of Exchange Notes
by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or at negotiated prices. Any
such resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer and/or the purchasers of any such Exchange Notes.
Any broker-dealer that resells Exchange Notes that were received by it for its
own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
The Company has agreed to pay all expenses incidental to the Exchange
Offer other than commissions and concessions of any brokers or dealers and
will indemnify holders of the Notes (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act, as set
forth in the Registration Rights Agreement.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Exchange Notes
will be passed upon for the Company by Willkie Farr & Gallagher, New York, New
York.
EXPERTS
The consolidated financial statements incorporated in this Prospectus and
Registration Statement by reference to the Annual Report on Form 10-K of the
Company for the year ended December 31, 1994 has been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect
<PAGE>52
thereto, and are included herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
<PAGE>53
WEIRTON STEEL CORPORATION
All tendered Senior Notes, executed Letters of Transmittal, and other
related documents should be directed to the Exchange Agent. Requests for
assistance and for additional copies of the Prospectus, the Letter of
Transmittal and other related documents should be directed to the Exchange
Agent.
The Exchange Agent
for the Exchange Offer is
BANKERS TRUST COMPANY
By Facsimile:
(212) 250-6275
(212) 250-3290
Confirm By Telephone:
(212) 250-6270
By Mail:
Bankers Trust Company
Corporate Trust and Agency Group
Reorganization Dept.
P.O. Box 1458
Church Street Station
New York, New York 10008-1458
By Hand/Overnight Delivery:
Bankers Trust Company
Corporate Trust and Agency Group
Receipt & Delivery Window
123 Washington Street, 1st Floor
New York, New York 10006
<PAGE>54
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Company, which is a Delaware corporation, is empowered by the
Delaware General Corporation Law, subject to the procedures and limitations
stated therein, to indemnify any person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with any threatened, pending or completed
action, suit or proceeding in which such person is made a party by reason of
his being or having been a director, officer, employee or agent of the
Company. The statute provides that indemnification pursuant to its provisions
is not exclusive of other rights of indemnification to which a person may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors, or otherwise. The Certificate of Incorporation and By-Laws of the
Company provide for indemnification of the directors and officers of such
entities to the full extent permitted by the Delaware General Corporation Law.
Article Twelve of the Company's Certificate of Incorporation provides as
follows:
"TWELFTH. No director of the Corporation shall be personally liable to
the Corporation or to any stockholder for monetary damages for a breach of
fiduciary duty as a director, except liability (i) for any breach of a
director's duty of loyalty to the Corporation or to its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) for unlawful payments of dividends or
unlawful purchases by the Corporation of its capital stock pursuant to Section
174 of the Delaware General Corporation Law or (iv) for any transaction from
which a director receives an improper personal benefit, except to the extent
any such liability is subsequently authorized by the law of Delaware to be
reduced or eliminated. No amendment to or repeal of any of the provisions of
this Article TWELFTH shall eliminate or reduce the effect of this Article
TWELFTH in respect of any matter occurring, or any cause of action, suit or
claim that, but for this Article TWELFTH would accrue or arise, prior to such
amendment or repeal of an inconsistent provision."
Article IX of the Company's By-Laws provides as follows:
Section 1. Each current or former director, officer, employee or agent
of the Corporation, or any person who may have served at its request as a
director or officer of another corporation in which it owns stock or of which
it is a creditor (or in a comparable position in another form of entity in
which the Corporation owns an equity interest or with which it is a joint
venturer or of which it is a creditor), and such person's heirs, executors,
and administrators (each, an "Indemnitee"), shall be indemnified by the
Corporation against all expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the Corporation), to which he or she may be made a party by reason of any
alleged acts or omissions in such capacity if such person acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Corporation and, with respect to any criminal action or
proceeding, such person had no reasonable cause to believe his or her conduct
was unlawful.
Section 2. Each Indemnitee shall be indemnified by the Corporation
against all expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection with any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of
<PAGE>55
any alleged acts or omissions in such capacity if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Corporation, and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been finally adjudged to be liable to the Corporation unless and
only to the extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine upon
application that despite the adjudication of liability but in view of all of
the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 3. Expenses incurred by an Indemnitee in defending any civil or
criminal action may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such Indemnitee to repay such amount if it shall ultimately
be determined that he or she is not entitled to be indemnified by the
Corporation.
Section 4. The foregoing rights of indemnification and advancement of
expenses shall be in addition to and not exclusive of any and all other rights
to which such Indemnitee might be entitled as a matter of law.
The Company maintains an insurance policy provided for indemnification of
its officers, directors and certain other persons against liabilities and
expenses incurred by any of them in certain stated proceedings and under
certain stated conditions.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits:
3.1 Restated Certificate of Incorporation of the Company.(a)
3.2 Certificate of Amendment to Restated Certificate of Incorporation of the
Company.(d)
3.3 By-laws of the Company.(a)
3.4 Amendment to By-laws of the Company.(d)
3.5 Certificate of the Designation, Powers, Preferences and Rights of the
Convertible Voting Preferred Stock, Series A.(b)
4.1 Indenture dated October 17, 1989 between the Company and First Bank
(N.A.), as trustee, relating to the Company's 10-7/8% Senior Notes Due
1999, including form of Note.(b)
4.2 Indenture dated March 1, 1993 between the Company and Bankers Trust
Company, as trustee, relating to the Company's 11-1/2% Senior Notes Due
1998, including form of Note.(j)
4.3 First Supplemental Indenture relating to the Company's 11-1/2% Senior
Notes due 1998, dated July 25, 1995.
4.4 Indenture, dated as of June 12, 1995, between the Company and Bankers
Trust Company, as trustee, relating to $125,000,000 principal amount of
10-3/4% Senior Notes due 2005, including form of Senior Note.
<PAGE>56
4.5 Registration Rights Agreement, dated as of June 12, 1995, between the
Company and Lazard Freres & Co. LLC.
5 Opinion of Willkie Farr & Gallagher.*
10.1 Pellet Sale Agreement dated June 25, 1991, between USX Corporation and
the Company.(k)
10.2 1984 Employee Stock Ownership Plan, as amended and restated.(b)
10.3 1989 Employee Stock Ownership Plan.(b)
10.4 1987 Stock Option Plan.(a)
10.5 Employment Agreement between Herbert Elish and the Company dated as of
July 1, 1990.(g)
10.6 Employment Agreement between James B. Bruhn and the Company.(a)
10.7 Employment Agreement between Thomas W. Evans and the Company dated April
21, 1987.(d)
10.8 Employment Agreement between Richard K. Riederer and the Company.(a)
10.9 Amendment dated July 19, 1993 to the Employment Agreement dated April 21,
1987 between Thomas W. Evans and the Company.(i)
10.10 Redacted Pellet Sale and Purchase Agreement dated as of September 30,
1991 between Cleveland-Cliffs Iron Company and the Company.(f)
10.11 Deferred Compensation Plan for Directors effective as of January 1,
1991, for all directors who are not officers or other employees of
the Company.(g)
10.12 Coke Sale Agreement dated January 1, 1993 and signed July 13, 1993
between the Company and USX Corporation.(h)
10.13 Employment Agreement between Craig T. Costello and the Company dated
July 20, 1993.(i)
10.14 Employment Agreement between William R. Kiefer and the Company dated
July 21, 1993.(i)
10.15 Employment Agreement between John H. Walker and the Company dated
July 21, 1993.(i)
10.16 Employment Agreement between Narendra M. Pathipati and the Company
dated December 16, 1993.(i)
10.17 Employment Agreement between Mac S. White and the Company dated July
28, 1993.(i)
10.18 Amendment dated August 5, 1993 to the Employment Agreement dated July
1, 1990 between Herbert Elish and the Company.(i)
10.19 Amendment dated July 19, 1993 to the Employment Agreement dated June
8, 1987 between David M. Gould and the Company.(i)
<PAGE>57
10.20 Amendment dated July 21, 1993 to the Employment Agreement dated June
8, 1987 between William C. Brenneisen and the Company. (i)
12 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiary of the Registrant.
23.1 Consent of Arthur Andersen LLP, independent public accountants.
23.2 Consent of Willkie Farr & Gallagher (included within Exhibit 5).*
24 Powers of Attorney (included herein on Signature Page).
25 Statement on Form T-1 of Eligibility of Trustee (bound separately).*
99.1 Form of Letter of Transmittal.*
99.2 Form of Notice of Guaranteed Delivery.*
99.3 Letter to Clients.*
99.4 Letter to Nominees.*
____________________________
* To be filed by amendment.
(a) Incorporated herein by reference to the Company's Registration Statement
on Form S-1, filed May 3, 1989, Commission File No. 33-28515.
(b) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1989, filed March 27, 1990,
Commission File No. 1-10244.
(c) Incorporated herein by reference to the Company's Current Report on Form
10-Q for the quarter ended June 30, 1995, Commission File No. 1-10244.
(d) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994, filed March 30, 1995,
Commission File No. 1-10244.
(e) Incorporated herein by reference to the Company's Current Report on Form
8-K, filed October 9, 1991, Commission File No. 1-10244.
(f) Incorporated herein by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1992, filed August 14, 1992,
Commission File No. 1-10244.
(g) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990, filed April 1, 1991,
Commission File No. 1-10244.
<PAGE>58
(h) Incorporated herein by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1993, filed August 13, 1993,
Commission File No. 1-10244.
(i) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, filed March 30, 1994,
Commission File No. 1-10244.
(j) Incorporated herein by reference to Amendment No. 2 to the Company's
Registration Statement on Form S-2, filed February 9, 1993, Commission
No. 33-53476.
(k) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, filed March 27, 1992,
Commission File No. 1-10244.
(b) Financial Statement Schedules:
Incorporated herein by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1994.
Item 22. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Registrant pursuant to the provisions, described under Item 20 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the option of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into this Prospectus pursuant to
Item 4, 10(b), 11 or 13 of Form S-4 of the Securities Act, within one business
day of receipt of such request, and to send the incorporated documents by
first class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of this
Registration Statement through the date of responding to the request.
<PAGE>59
SIGNATURES
Pursuant to the requirements of the Securities Act the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Weirton, State of West
Virginia, on July 27, 1995.
WEIRTON STEEL CORPORATION
/s/ Herbert Elish
By: Herbert Elish
Title: Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of the Weirton Steel
Corporation, do hereby severally constitute and appoint Richard K. Riederer
and William R. Kiefer, and each of them, our true and lawful attorneys and
agents, to do any and all acts and things in our name and behalf in our
capacities as directors and officers and to execute any and all instruments
for us and in our names in the capacities indicated below, which said
attorneys and agents, or any of them, may deem necessary or advisable to
enable said Corporation to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and Exchange
Commission, in connection with this Registration Statement on Form S-4,
including specifically, but without limitation, power and authority to sign
for us or any of us, in our names in the capacities indicated below, any and
all amendments (including post-effective amendments) hereto; and we do each
hereby ratify and confirm all that said attorneys and agents, or any one of
them, shall do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Herbert Elish Chairman of the Board July 27, 1995
Herbert Elish and Chief Executive
Officer (Principal
Executive Officer
/s/ Richard K. Riederer President, Chief Operating July 27, 1995
Richard K. Riederer Officer and Chief Financial
Officer (Principal Financial
Officer)
/s/ Earl E. Davis, Jr. Controller (Principal July 27, 1995
Earl E. Davis, Jr. Accounting Officer)
/s/ Michael Bozic Director July 27, 1995
Michael Bozic
<PAGE>60
/s/ James B. Bruhn Director July 27, 1995
James B. Bruhn
/s/ Robert J. D'Anniballe, Jr. Director July 27, 1995
Robert J. D'Anniballe, Jr.
/s/ Mark G. Glyptis Director July 27, 1995
Mark G. Glyptis
/s/ Phillip A. Karber Director July 27, 1995
Phillip A. Karber
/s/ Joseph J. Nowak Director July 27, 1995
Joseph J. Nowak
/s/ Robert S. Reitman Director July 27, 1995
Robert S. Reitman
/s/ Richard F. Schubert Director July 27, 1995
Richard F. Schubert
/s/ Thomas R. Sturges Director July 27, 1995
Thomas R. Sturges
/s/ David I. J. Wang Director July 27, 1995
David I. J. Wang
/s/ Ronald C. Whitaker Director July 27, 1995
Ronald C. Whitaker
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
3.1 Restated Certificate of Incorporation of the Company.(a)
3.2 Certificate of Amendment to Restated Certificate of Incorporation of the
Company.(d)
3.3 By-laws of the Company.(a)
3.4 Amendment to By-laws of the Company.(d)
3.5 Certificate of the Designation, Powers, Preferences and Rights of the
Convertible Voting Preferred Stock, Series A.(b)
4.1 Indenture dated October 17, 1989 between the Company and First Bank
(N.A.), as trustee, relating to the Company's 10-7/8% Senior Notes Due
1999, including form of Note.(b)
4.2 Indenture dated March 1, 1993 between the Company and Bankers Trust
Company, as trustee, relating to the Company's 11-1/2% Senior Notes Due
1998, including form of Note.(j)
4.3 First Supplemental Indenture relating to the Company's 11-1/2% Senior
Notes due 1998, dated July 25, 1995.
4.4 Indenture, dated as of June 12, 1995, between the Company and Bankers
Trust Company, as trustee, relating to $125,000,000 principal amount of
10-3/4% Senior Notes due 2005, including form of Senior Note.
4.5 Registration Rights Agreement, dated as of June 12, 1995, between the
Company and Lazard Freres & Co. LLC.
5 Opinion of Willkie Farr & Gallagher.*
10.1 Pellet Sale Agreement dated June 25, 1991, between USX Corporation and
the Company.(k)
10.2 1984 Employee Stock Ownership Plan, as amended and restated.(b)
10.3 1989 Employee Stock Ownership Plan.(b)
10.4 1987 Stock Option Plan.(a)
10.5 Employment Agreement between Herbert Elish and the Company dated as of
July 1, 1990.(g)
10.6 Employment Agreement between James B. Bruhn and the Company.(a)
10.7 Employment Agreement between Thomas W. Evans and the Company dated April
21, 1987.(d)
<PAGE>
Exhibit
Number Description
- ------- -----------
10.8 Employment Agreement between Richard K. Riederer and the Company.(a)
10.9 Amendment dated July 19, 1993 to the Employment Agreement dated April 21,
1987 between Thomas W. Evans and the Company.(i)
10.10 Redacted Pellet Sale and Purchase Agreement dated as of September 30,
1991 between Cleveland-Cliffs Iron Company and the Company.(f)
10.11 Deferred Compensation Plan for Directors effective as of January 1,
1991, for all directors who are not officers or other employees of
the Company.(g)
10.12 Coke Sale Agreement dated January 1, 1993 and signed July 13, 1993
between the Company and USX Corporation.(h)
10.13 Employment Agreement between Craig T. Costello and the Company dated
July 20, 1993.(i)
10.14 Employment Agreement between William R. Kiefer and the Company dated
July 21, 1993.(i)
10.15 Employment Agreement between John H. Walker and the Company dated
July 21, 1993.(i)
10.16 Employment Agreement between Narendra M. Pathipati and the Company
dated December 16, 1993.(i)
10.17 Employment Agreement between Mac S. White and the Company dated July
28, 1993.(i)
10.18 Amendment dated August 5, 1993 to the Employment Agreement dated July
1, 1990 between Herbert Elish and the Company.(i)
10.19 Amendment dated July 19, 1993 to the Employment Agreement dated June
8, 1987 between David M. Gould and the Company.(i)
10.20 Amendment dated July 21, 1993 to the Employment Agreement dated June
8, 1987 between William C. Brenneisen and the Company. (i)
12 Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiary of the Registrant.
23.1 Consent of Arthur Andersen LLP, independent public accountants.
23.2 Consent of Willkie Farr & Gallagher (included within Exhibit 5).*
<PAGE>
Exhibit
Number Description
- ------- -----------
24 Powers of Attorney (included herein on Signature Page).
25 Statement on Form T-1 of Eligibility of Trustee (bound separately).*
99.1 Form of Letter of Transmittal.*
99.2 Form of Notice of Guaranteed Delivery.*
99.3 Letter to Clients.*
99.4 Letter to Nominees.*
____________________________
* To be filed by amendment.
(a) Incorporated herein by reference to the Company's Registration Statement
on Form S-1, filed May 3, 1989, Commission File No. 33-28515.
(b) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1989, filed March 27, 1990,
Commission File No. 1-10244.
(c) Incorporated herein by reference to the Company's Current Report on Form
10-Q for the quarter ended June 30, 1995, Commission File No. 1-10244.
(d) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994, filed March 30, 1995,
Commission File No. 1-10244.
(e) Incorporated herein by reference to the Company's Current Report on Form
8-K, filed October 9, 1991, Commission File No. 1-10244.
(f) Incorporated herein by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1992, filed August 14, 1992,
Commission File No. 1-10244.
(g) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990, filed April 1, 1991,
Commission File No. 1-10244.
<PAGE>
(h) Incorporated herein by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1993, filed August 13, 1993,
Commission File No. 1-10244.
(i) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, filed March 30, 1994,
Commission File No. 1-10244.
(j) Incorporated herein by reference to Amendment No. 2 to the Company's
Registration Statement on Form S-2, filed February 9, 1993, Commission
No. 33-53476.
(k) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, filed March 27, 1992,
Commission File No. 1-10244.
<PAGE>1
Conformed Copy
========================================================
WEIRTON STEEL CORPORATION
AND
BANKERS TRUST COMPANY, Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of July 25, 1995
____________________
11-1/2% Senior Notes Due 1998
____________________
Supplementing the Indenture Dated as of March 1, 1993
========================================================
<PAGE>2
FIRST SUPPLEMENTAL INDENTURE, dated as of July 25, 1995 between
Weirton Steel Corporation, a Delaware corporation (the "Issuer"), and Bankers
Trust Company, a New York banking corporation (the "Trustee").
WHEREAS, the Issuer and the Trustee executed the Indenture, dated as
of March 1, 1993 (the "Indenture"), providing for the issuance thereunder by
the Issuer, and the authentication and delivery by the Trustee, of the
Issuer's 11-1/2% Senior Notes due 1998 (the "Securities"); and
WHEREAS, the Issuer has decided to amend certain definitions and
covenants set forth in the Indenture; and
WHEREAS, the Issuer has determined that Section 7.2 of the Indenture
authorizes the Issuer and the Trustee, with the consent of not less than a
majority in aggregate principle amount outstanding of the Securities, to amend
the Indenture as provided herein; and
WHEREAS, the Issuer, by appropriate corporate action, has determined
to amend the Indenture in the manner described below and has completed all
acts and proceedings required by law, by the Indenture and by the Restated
Certificate of Incorporation and By-laws of the Issuer, including, without
limitation, the solicitation and receipt of the consent of a majority in
aggregate principal amount outstanding of the Securities (which are all of the
consents necessary for the execution and delivery of this First Supplemental
Indenture), to authorize and constitute this First Supplemental Indenture a
valid and binding agreement in accordance with the terms hereof.
NOW THEREFORE, in consideration of the foregoing, the Issuer covenants
and agrees with the Trustee, for the equal and proportional benefit of the
respective holders from time to time of the Securities, as follows:
1. Amendment to Section 1.1 of the Indenture:
(a) The definition of "Allowable Payment" shall be deleted in its
entirety.
(b) The definition of "Consolidated Fixed Charges" contained in
Section 1.1 of the Indenture, which currently provides:
"Consolidated Fixed Charges" means, for any period, the sum of
(a) the interest expense of the
2
<PAGE>3
Issuer and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, (b) interest incurred during the period and
capitalized by the Issuer in accordance with GAAP and (c) dividends in
respect of the Issuer's Preferred Stock, Series B, issued to
Cleveland-Cliffs Inc, to the extent such dividends constitute Permitted
Payments. For purposes of clause (c) of the preceding sentence, dividends
shall be deemed to be an amount equal to the actual dividends times a
fraction, the numerator of which is one and the denominator of which is one
minus the applicable actual combined federal, state and local income tax
rate (but without giving effect to any alternative minimum tax imposed by
Section 55 of the Internal Revenue Code of 1986, as amended) of the Issuer
and its Subsidiaries, on a consolidated basis (expressed as a decimal), for
the fiscal year immediately preceding the date of the transaction giving
rise to the need to calculate Consolidated Fixed Charges.
Is hereby amended to provide as follows:
"Consolidated Fixed Charges" means, for any period, the sum of
(a) the net interest expense of the Issuer and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP and (b)
interest incurred during the period and capitalized by the Issuer in
accordance with GAAP.
(c) the definition of "Disqualified Stock" contained in Section 1.1
of the Indenture, which currently provides:
"Disqualified Stock" means any Capital Stock (i) 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 is redeemable at the option of the holder thereof, in whole
or in part, on or prior to the final maturity date of the Securities or
(ii) upon which the Issuer or any of its Subsidiaries has a contractual
obligation to compensate the holder thereof for losses incurred upon the
sale or other disposition thereof; provided that any portion or series of
such Capital Stock which by its terms, or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund or
otherwise, no earlier than the day following the
3
<PAGE>4
maturity date of the Securities shall not constitute Disqualified Stock; and
provided further, that any Capital Stock which would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the
right to require the Issuer to repurchase or redeem such Capital Stock upon
the occurrence of a change in control occurring on or prior to the maturity
date of the Securities shall not constitute Disqualified Stock if (i) the
change in control provisions applicable to such Capital Stock are no more
favorable to the holders of such Capital Stock than the provisions of
Section 3.16 and (ii) such Capital Stock specifically provides that the
Issuer will not repurchase or redeem any such stock pursuant to such
provisions prior to the Issuer's repurchase of such Securities as are
required to be repurchased pursuant to the provisions of Section 3.16; and
provided further that any Rolling Preferred Stock shall not constitute
Disqualified Stock if the terms of such Rolling Preferred Stock satisfy the
requirements set forth in clauses (i) and (ii) in the second proviso of this
definition.
Is hereby amended to provide as follows:
"Disqualified Stock" means any Capital Stock (i) 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 is redeemable at the option of the holder thereof, in whole
or in part, on or prior to the final maturity date of the Securities or
(ii) upon which the Issuer or any of its Subsidiaries has a contractual
obligation to compensate the holder thereof for losses incurred upon the
sale or other disposition thereof; provided that any portion or series of
such Capital Stock which by its terms, or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund or
otherwise, no earlier than the day following the maturity date of the
Securities shall not constitute Disqualified Stock; and provided further,
that any Capital Stock which would not constitute Disqualified Stock but
for provisions thereof giving holders thereof the right to require the
Issuer to repurchase or redeem such Capital Stock upon the occurrence of a
change in control occurring on or prior to the maturity date of the
Securities shall not constitute Disqualified Stock if (i) the change in
control provisions applicable to such Capital Stock are no more favorable
to the holders
4
<PAGE>5
of such Capital Stock than the provisions of Section 3.16 and (ii) such
Capital Stock specifically provides that the Issuer will not repurchase or
redeem any such stock pursuant to such provisions prior to the Issuer's
repurchase of such Securities as are required to be repurchased pursuant to
the provisions of Section 3.16.
(d) The definition of "Permitted Indebtedness" contained in Section
1.1 of the Indenture, which currently provides:
"Permitted Indebtedness" means (i) Indebtedness of the Issuer and
its Subsidiaries outstanding immediately following the issuance of the
Securities and the application of the proceeds of the Securities in the
manner set forth under "Use of Proceeds" in the Prospectus, including
Indebtedness of the Issuer's 1989 ESOP guaranteed by the Issuer even if
acquired by the Issuer; (ii) the Securities; (iii) Indebtedness in respect
of obligations of the Issuer to the Trustee under this Indenture; (iv)
intercompany debt obligations (including intercompany notes) of the Issuer
and each of its Subsidiaries; provided, however, that the obligations of
the Issuer to any of its Subsidiaries with respect to such Indebtedness
shall be subject to a subordination agreement between the Issuer and its
Subsidiaries providing for the subordination of such obligations in right
of payment from and after such time as all Securities issued and
outstanding shall become due and payable (whether at stated maturity, by
acceleration or otherwise) to the payment and performance of the Issuer's
obligations under the Indenture and the Securities; provided further, that
any Indebtedness of the Issuer or any Subsidiary owed to any other
Subsidiary that ceases to be a Subsidiary shall be deemed to be incurred
and shall be treated as an incurrence for purposes of Section 3.9 at the
time the Subsidiary in question ceased to be a Subsidiary; (v) Indebtedness
of the Issuer under any Currency Agreements, Commodity Agreements or
Interest Protection Agreements; (vi) additional Indebtedness of the Issuer
or its Subsidiaries the aggregate principal amount of which does not exceed
$100,000,000; and (vii) any renewals, extensions, substitutions,
refundings, refinancings or replacements of any Indebtedness described in
each of the foregoing clauses (i)-(vi) (collectively, "Refinancing
Indebtedness"); provided that (A) the original issue amount of the
Refinancing Indebtedness shall not exceed the maximum principal amount
(following the date of the Indenture and the
5
<PAGE>6
application of the net proceeds of the Securities in accordance with the
manner described under "Use of Proceeds" in the Prospectus) and accrued
interest of this Indebtedness to be repaid (or if such Indebtedness was
issued at an original issue discount, the original issue price plus
amortization of the original issue discount at the time of the incurrence of
the Refinancing Indebtedness less the amount of any prepayments on or prior
to the date of the Indenture and any prepayments made applying the net
proceeds of the Securities), plus the reasonable fees and expenses directly
incurred in connection with such Refinancing Indebtedness, (B) Refinancing
Indebtedness incurred by any Subsidiary shall not be used to repay or refund
outstanding Indebtedness of the Issuer or any other Subsidiary, and (C)
with respect to any Refinancing Indebtedness that refinances Indebtedness
ranking junior in right of payment to the Securities, (1) the Refinancing
Indebtedness does not require any principal payments prior to the maturity
of the Securities and has an average weighted life that is equal to or
greater than the average weighted life of the Securities and (2) the
Refinancing Indebtedness is subordinated to the Securities to the same or
greater extent and on substantially the same terms or terms more favorable
to the holder of the Securities.
Is hereby amended to provide as follows:
"Permitted Indebtedness" means (i) Indebtedness of the Issuer and
its Subsidiaries outstanding immediately following the issuance of the
Securities and the application of the proceeds of the Securities in the
manner set forth under "Use of Proceeds" in the Prospectus, including
Indebtedness of the Issuer's 1989 ESOP guaranteed by the Issuer even if
acquired by the Issuer; (ii) the Securities; (iii) Indebtedness in respect
of obligations of the Issuer to the Trustee under this Indenture;
(iv) Permitted Working Capital indebtedness; (v) intercompany debt
obligations (including intercompany notes) of the Issuer and each of its
Subsidiaries; provided, however, that the obligations of the Issuer to any
of its Subsidiaries with respect to such Indebtedness shall be subject to a
subordination agreement between the Issuer and its Subsidiaries providing
for the subordination of such obligations in right of payment from and
after such time as all Securities issued and outstanding shall become due
and payable (whether at stated maturity, by acceleration or otherwise) to
the payment
6
<PAGE>7
and performance of the Issuer's obligations under the Indenture and the
Securities; provided further, that any Indebtedness of the Issuer or any
Subsidiary owed to any other Subsidiary that ceases to be a Subsidiary shall
be deemed to be incurred and shall be treated as an incurrence for purposes
of Section 3.9 at the time the Subsidiary in question ceased to be a
Subsidiary; (vi) Indebtedness of the Issuer under any Currency Agreements,
Commodity Agreements or Interest Protection Agreements; (vii) additional
Indebtedness of the Issuer or its Subsidiaries the aggregate principal
amount of which does not exceed $100,000,000; and (viii) any renewals,
extensions, substitutions, refundings, refinancings or replacements of any
Indebtedness described in each of the foregoing clauses (i)-(vii)
(collectively, "Refinancing Indebtedness"); provided that (A) the original
issue amount of the Refinancing Indebtedness shall not exceed the maximum
principal amount (following the date of the Indenture and the application of
the net proceeds of the Securities in accordance with the manner described
under "Use of Proceeds" in the Prospectus) and accrued interest of this
Indebtedness to be repaid (or if such Indebtedness was issued at an original
issue discount, the original issue price plus amortization of the original
issue discount at the time of the incurrence of the Refinancing Indebtedness
less the amount of any prepayments on or prior to the date of the Indenture
and any prepayments made applying the net proceeds of the Securities), plus
the reasonable fees and expenses directly incurred in connection with such
Refinancing Indebtedness, (B) Refinancing Indebtedness incurred by any
Subsidiary shall not be used to repay or refund outstanding Indebtedness of
the Issuer or any other Subsidiary, and (C) with respect to any Refinancing
Indebtedness that refinances Indebtedness ranking junior in right of payment
to the Securities, (1) the Refinancing Indebtedness does not require any
principal payments prior to the maturity of the Securities and has an
average weighted life that is equal to or greater than the average weighted
life of the Securities and (2) the Refinancing Indebtedness is subordinated
to the Securities to the same or greater extent and on substantially the
same terms or terms more favorable to the holder of the Securities.
(e) The definition of "Permitted Joint Venture" contained in Section
1.1 of the Indenture, which currently provides:
7
<PAGE>8
"Permitted Joint Venture" means the interest of the Issuer in any
corporation, association or other business entity of which 50% or less, but
not less than 10%, of the total Voting Stock or other interest is at the
time owned or controlled, directly or indirectly, by the Issuer or one or
more of its Subsidiaries or a combination thereof, provided that such
corporation, association or entity is engaged in the business or businesses
of the Issuer on the Issue Date or any related business.
Is hereby amended to provide as follows:
"Permitted Joint Venture" means the interest of the Issuer in any
corporation, association or other business entity of which 50% or less, but
not less than 10%, of the total Voting Stock or other interest is at the
time owned or controlled, directly or indirectly, by the Issuer or one or
more of its Subsidiaries or a combination thereof, provided that such
corporation, association or entity is engaged in the business or businesses
of the Issuer or any related business.
(f) The definition of "Permitted Liens" contained in Section 1.1 of
the Indenture, which currently provides:
"Permitted Liens" means (a) Liens on Property of, or any shares
of stock of or debt of, any corporation existing at the time such
corporation becomes a Subsidiary or at the time such corporation is merged
into the Issuer or a Subsidiary, (b) Liens in favor of the Issuer or any
Subsidiary, (c) Liens in favor of governmental bodies to secure progress or
advance payments, (d) Liens securing industrial revenue or pollution
control bonds, (e) Liens upon the accounts receivable and related
intangibles of the Issuer or any Subsidiary securing Indebtedness of the
Issuer or such Subsidiary, (f) statutory Liens or landlords' and carriers',
warehouseman's, mechanics', suppliers', materialmen's, repairmen's or other
like Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made therefor or (g)
any extensions, renewals or replacements of Liens referred to in clauses
(a) through (f) above.
Is hereby amended to provide as follows:
8
<PAGE>9
"Permitted Liens" means (a) Liens on Property of, or any shares
of stock of or debt of, any corporation existing at the time such
corporation becomes a Subsidiary or at the time such corporation is merged
into the Issuer or a Subsidiary, (b) Liens in favor of the Issuer or any
Subsidiary, (c) Liens in favor of governmental bodies to secure progress or
advance payments, (d) Liens securing industrial revenue or pollution
control bonds, (e) Liens upon the accounts receivable and related
intangibles and inventory of the Issuer or any Subsidiary securing
Permitted Working Capital Indebtedness of the Issuer or such Subsidiary,
(f) statutory Liens or landlords' and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate proceedings,
if a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made therefor or (g) any
extensions, renewals or replacements of Liens referred to in clauses (a)
through (f) above.
(g) The definition of "Permitted Payments" contained in Section 1.1
of the Indenture, which currently provides:
"Permitted Payments" means, with respect to the Issuer or any of
its Subsidiaries, (i) any dividend on shares of Capital Stock payable
solely in shares of Capital Stock (other than Disqualified Stock) or in
options, warrants or other rights to purchase Capital Stock (other than
Disqualified Stock); (ii) any dividend or other distribution with respect
to Capital Stock payable to the Issuer by any of its Subsidiaries or by a
Subsidiary to another Subsidiary; (iii) payments made by the Issuer in
satisfaction of any put obligation imposed on the Issuer by Section 409 of
the Internal Revenue Code of 1986, as amended, and any successor provision,
relating to shares of the Issuer's Preferred Stock, Series A, authorized
and issued on or before the Issue Date and held in the Issuer's 1989 ESOP;
and (iv) dividend payments on the Issuer's Preferred Stock, Series B,
issued to Cleveland-Cliffs Inc, to the extent such Preferred Stock is
issued and outstanding on the Issue Date and has only rights and privileges
with respect to dividends set forth in the Certificate of Designation
relating thereto on file with the Secretary of State of the State of
Delaware on the Issue Date.
9
<PAGE>10
Is hereby amended to provide as follows:
"Permitted Payments" means, with respect to the Issuer or any of
its Subsidiaries, (i) any dividend on shares of Capital Stock payable
solely in shares of Capital Stock (other than Disqualified Stock) or in
options, warrants or other rights to purchase Capital Stock (other than
Disqualified Stock); (ii) any dividend or other distribution with respect
to Capital Stock payable to the Issuer by any of its Subsidiaries or by a
Subsidiary to another Subsidiary; and (iii) payments made by the Issuer in
satisfaction of any put obligation imposed on the Issuer by Section 409 of
the Internal Revenue Code of 1986, as amended, and any successor provision,
relating to shares of the Issuer's Preferred Stock, Series A, authorized
and issued on or before the Issue Date and held in the Issuer's 1989 ESOP.
(h) Section 1.1 of the Indenture is hereby amended to add thereto the
following definition:
"Permitted Working Capital Indebtedness" means indebtedness of
the Issuer or any of its Subsidiaries pursuant to a credit facility, the
principal amount outstanding under which shall not exceed, on the date such
indebtedness is incurred, 80% of the accounts receivable as reflected on
the consolidated financial statements of the Issuer and 50% of the
inventory as reflected on the consolidated financial statements of the
Issuer and which indebtedness is secured by such accounts receivable or
inventory.
(i) The definition of "Rolling Preferred Stock" shall be deleted in
its entirety.
2. Amendment to Section 3.9 of the Indenture.
The first paragraph of Section 3.9 of the Indenture, which currently
provides:
SECTION 3.9 Limitations on Indebtedness. The Issuer will not,
and will not permit any Subsidiary to, create, incur, assume, become liable
for or guarantee the payment of (collectively, an "incurrence") any
Indebtedness (including Acquired Indebtedness), other than Permitted
Indebtedness, or permit any Subsidiary to issue any Preferred Stock;
provided the Issuer may incur, and may permit any
10
<PAGE>11
Subsidiary to incur, Indebtedness (including Acquired Indebtedness) if (a) at
the time of such event and after giving effect thereto, on a pro forma basis,
the ratio of Consolidated EBITDA to Consolidated Fixed Charges for the four
fiscal quarters immediately preceding such event for which financial
information is available consistent with the Issuer's prior practice, taken
as one period and calculated on the assumption that such Indebtedness had
been incurred on the first day of such four-quarter period and, in the case
of Acquired Indebtedness, on the assumption that the related acquisition
(whether by means of purchase, merger or otherwise) also had occurred on
such date with the appropriate adjustments with respect to such acquisition
being included in such pro forma calculation, would have been greater than
1.80 to 1, and (b) no Default or Event of Default shall have occurred and be
continuing at the time or as a consequence of the incurrence of such
Indebtedness.
Is hereby amended to read as follows:
SECTION 3.9 Limitations on Indebtedness. The Issuer will not,
and will not permit any Subsidiary to, create, incur, assume, become liable
for or guarantee the payment of (collectively, an "incurrence") any
Indebtedness (including Acquired Indebtedness), other than Permitted
Indebtedness, or permit any Subsidiary to issue any Preferred Stock;
provided the Issuer may incur, and may permit any Subsidiary to incur,
Indebtedness (including Acquired Indebtedness) if (a) at the time of such
event and after giving effect thereto, on a pro forma basis, the ratio of
Consolidated EBITDA to Consolidated Fixed Charges for the four fiscal
quarters immediately preceding such event for which financial information
is available consistent with the Issuer's prior practice, taken as one
period and calculated on the assumption that such Indebtedness had been
incurred on the first day of such four-quarter period and, in the case of
Acquired Indebtedness, on the assumption that the related acquisition
(whether by means of purchase, merger or otherwise) also had occurred on
such date with the appropriate adjustments with respect to such acquisition
being included in such pro forma calculation, would have been greater than
1.75 to 1, and (b) no Default or Event of Default shall have occurred and
be continuing at the time or as a consequence of the incurrence of such
Indebtedness.
11
<PAGE>12
3. Amendment to Section 3.10 of the Indenture.
Section 3.10 of the Indenture, which currently provides:
SECTION 3.10 Limitations on Restricted Payments. The Issuer
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, make any Restricted Payment unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment;
(b) immediately after giving effect to such Restricted Payment,
the aggregate of all Restricted Payments (the fair market value of any
such Restricted Payment if other than cash as determined in good faith
by the Issuer's Board of Directors and evidenced by a resolution of
such Board) declared or made after the Issue Date does not exceed the
greater of (i) $5,000,000 or (ii) the sum of (A) 50% of the
Consolidated Net Income of the Issuer on a cumulative basis during the
period (taken as one accounting period) from and including the first
full fiscal quarter of the Issuer after the Issue Date and ending on
the last day of the Issuer's last fiscal quarter ending prior to the
date of such Restricted Payment (or in the event such Consolidated Net
Income shall be a deficit minus 100% of such deficit), plus (B) 100%
of the aggregate net cash proceeds of, and the fair market value of
marketable securities (as determined in good faith by the Issuer's
Board of Directors and evidenced by a resolution of such Board)
received by the Issuer from, the issue or sale after the Issue Date of
Capital Stock of the Issuer (other than the issue or sale of (x)
Disqualified Stock, (y) Capital Stock of the Issuer to any Subsidiary
of the Issuer or (z) Capital Stock convertible (whether at the option
of the Issuer or the holder thereof or upon the happening of any
event) into any security other than its Capital Stock) and any
Indebtedness or other securities of the Issuer convertible into or
exercisable for Capital Stock (other than Disqualified Stock) of the
Issuer which has been so converted or exercised, as the case may be,
minus (C) the aggregate of all Allowable Payments
12
<PAGE>13
declared or made since the Issue Date plus (D) $5,000,000;
provided that, notwithstanding the foregoing, (I) the Issuer shall be
permitted to make Permitted Payments and Allowable Payments and (II) the
Issuer and any Subsidiary shall be permitted to make Investments in
Permitted Joint Ventures if at the time of such Investment and after giving
effect thereto, on a pro forma basis, (X) the Issuer could incur at least
$1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to
clause (a) of Section 3.9 (assuming for purposes of such calculation, if
such Investment is made other than with borrowed funds or funds obtained
from the issuance of Capital Stock specifically for the purpose of such
Investment, that the Issuer incurred Indebtedness in an amount equal to
such Investment bearing interest at the weighted average rate of interest
paid by the Issuer on its outstanding Indebtedness during the four fiscal
quarters most recently ended), (Y) the aggregate amount of Investments made
pursuant to this clause (II), less the aggregate amount of dividends, other
distributions of earnings and returns of capital received by the Issuer
from such Permitted Joint Ventures in cash, does not exceed $30,000,000 and
(Z) no Default or Event of Default shall have occurred and be continuing;
and provided further that the foregoing clause (b) shall not prevent the
payment of any dividend within 60 days of its declaration if such dividend
could have been made on the date of its declaration without violation of
the provisions of this covenant.
Is hereby amended to read as follows:
SECTION 3.10 Limitations on Restricted Payments. The Issuer
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, make any Restricted Payment unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment;
(b) immediately after giving effect to such Restricted Payment,
the aggregate of all Restricted Payments (the fair market value of any
such Restricted Payment if other than cash as determined in good faith
by the Issuer's Board of Directors and evidenced by a resolution of
such
13
<PAGE>14
Board) declared or made after the Issue Date does not exceed the
greater of (i) $5,000,000 or (ii) the sum of (A) 50% of the
Consolidated Net Income of the Issuer on a cumulative basis during the
period (taken as one accounting period) from and including April 1,
1993 and ending on the last day of the Issuer's last fiscal quarter
ending prior to the date of such Restricted Payment (or in the event
such Consolidated Net Income shall be a deficit, minus 100% of such
deficit), plus (B) 100% of the aggregate net cash proceeds of, and the
fair market value of marketable securities (as determined in good faith
by the Issuer's Board of Directors and evidenced by a resolution of
such Board) received by the Issuer from, the issue or sale after March
1, 1993 of Capital Stock of the Issuer (other than the issue or sale of
(x) Disqualified Stock, (y) Capital Stock of the Issuer to any
Subsidiary of the Issuer or (z) Capital Stock convertible (whether at
the option of the Issuer or the holder thereof or upon the happening of
any event) into any security other than its Capital Stock) and any
Indebtedness or other securities of the Issuer convertible into or
exercisable for Capital Stock (other than Disqualified Stock) of the
Issuer which has been so converted or exercised, as the case may be,
minus (C) $25 million in respect of the redemption of the Issuer's
Preferred Stock, Series B, in September 1994 plus (D) $5,000,000;
provided that, notwithstanding the foregoing, (I) the Issuer shall be
permitted to make Permitted Payments and (II) the Issuer and any Subsidiary
shall be permitted to make Investments in Permitted Joint Ventures if at
the time of such Investment and after giving effect thereto, on a pro forma
basis, (X) the Issuer could incur at least $1.00 of Indebtedness (other
than Permitted Indebtedness) pursuant to clause (a) of Section 3.9
(assuming for purposes of such calculation, if such Investment is made
other than with borrowed funds or funds obtained from the issuance of
Capital Stock specifically for the purpose of such Investment, that the
Issuer incurred Indebtedness in an amount equal to such Investment bearing
interest at the weighted average rate of interest paid by the Issuer on its
outstanding Indebtedness during the four fiscal quarters most recently
ended), (Y) the aggregate amount of Investments made pursuant to this
clause (II), less the aggregate amount of dividends, other
14
<PAGE>15
distributions of earnings and returns of capital received by the Issuer from
such Permitted Joint Ventures in cash, does not exceed $50,000,000 and (Z) no
Default or Event of Default shall have occurred and be continuing; and
provided further that the foregoing clause (b) shall not prevent the payment
of any dividend within 60 days of its declaration if such dividend could
have been made on the date of its declaration without violation of the
provisions of this covenant.
4. Amendment to Section 3.12 of the Indenture.
Subsections (a) and (b) of Section 3.12 of the Indenture, which
currently provide:
SECTION 3.12 Restrictions on Disposition of Assets of the
Issuer. (a) Subject to the provisions of Section 8.1, the Issuer will not,
and will not permit any of its Subsidiaries to, make any Asset Disposition
unless (i) the Issuer (or the Subsidiary, as the case may be) receives
consideration at the time of such sale or other disposition at least equal
to the fair market value thereof (as determined in good faith by the
Issuer's Board of Directors and evidenced by a resolution of such Board),
(ii) not less than 75% of the consideration received by the Issuer (or the
Subsidiary, as the case may be) is in the form of cash or Cash Equivalents
and (iii) the Net Cash Proceeds of the Asset Disposition are within 180
days, at the Issuer's election, (A) invested in the business or businesses
of the Issuer as of the Issue Date or any related business, or (B) to the
extent not so invested are applied (1) to make an Asset Disposition Offer
to purchase the Securities (on a pro rata basis if the amount available for
such repurchase is less than the outstanding principal amount of the
Securities) (2) or to the payment of principal of and interest on any other
Indebtedness which is pari passu with the Securities, at a purchase price
of 100% of the principal amount thereof plus accrued interest to the date
of repayment. Notwithstanding the foregoing, the Issuer and its
Subsidiaries will not be required to apply any Net Cash Proceeds in
accordance with this provision except to the extent that the aggregate
gross proceeds from all Asset Dispositions which are not applied in
accordance with this provision exceed $25,000,000.
15
<PAGE>16
(b) In the event that the Issuer elects to purchase Securities
pursuant to Section 3.12(a)(iii)(B)(1) above, the Issuer will purchase
Securities tendered pursuant to a tender offer by the Issuer for the
Securities (the "Asset Disposition Offer") at a purchase price of 100% of
the principal amount of the Securities plus accrued interest to the
Purchase Date (as defined below) in accordance with the procedures
(including prorationing in the event of oversubscription) set forth in
Section 3.12(c). If the aggregate purchase price of Securities tendered
pursuant to the Asset Disposition Offer is less than the Net Cash Proceeds
allotted to the purchase of the Securities, the Issuer shall apply the
remaining Net Cash Proceeds in accordance with clauses (A) and (B)(2) of
Section 3.12(a)(iii) above.
Are hereby amended to read as follows:
SECTION 3.12 Restrictions on Disposition of
Assets of the Issuer. (a) Subject to the provisions of Section 8.1, the
Issuer will not, and will not permit any of its Subsidiaries to, make any
Asset Disposition unless (i) the Issuer (or the Subsidiary, as the case may
be) receives consideration at the time of such sale or other disposition at
least equal to the fair market value thereof (as determined in good faith
by the Issuer's management if the consideration is less than $200,000 or,
if the consideration is greater than $200,000, as determined in good faith
by the Issuer's Board of Directors and evidenced by a resolution of such
Board; provided, that no resolution of the Board shall be required in
connection with the disposition of approximately 200 contiguous acres
adjacent to the Issuer's headquarters at 400 Three Springs Drive, Weirton,
West Virginia, as depicted on Exhibit H hereto, (ii) not less than 75% of
the consideration received by the Issuer (or the Subsidiary, as the case
may be) is in the form of cash or Cash Equivalents and (iii) the Net Cash
Proceeds of the Asset Disposition are within 270 days, at the Issuer's
election, (A) invested in the business or businesses of the Issuer as of
the Issue Date or any related business, or (B) to the extent not so
invested are applied (1) to make an Asset Disposition Offer to purchase the
Securities (on a pro rata basis if the amount available for such repurchase
is less than the outstanding principal amount of the Securities) or (2) to
any other Indebtedness which is pari passu with the Securities, at a
purchase price of 100% of the principal amount
16
<PAGE>17
thereof plus accrued interest to the date of repayment. Notwithstanding the
foregoing, the Issuer and its Subsidiaries will not be required to apply any
Net Cash Proceeds in accordance with this provision except to the extent that
the aggregate gross proceeds from all Asset Dispositions which are not applied
in accordance with this provision exceed $25,000,000.
(b) In the event that the Issuer elects to purchase Securities
pursuant to Section 3.12(a)(iii)(B)(1) above, the Issuer will purchase
Securities tendered pursuant to a tender offer by the Issuer for the
Securities (the "Asset Disposition Offer") in accordance with the
procedures (including prorationing in the event of oversubscription) set
forth in Section 3.12(c). If the aggregate purchase price of Securities
tendered pursuant to the Asset Disposition Offer is less than the Net Cash
Proceeds allotted to the purchase of the Securities, the Issuer shall apply
the remaining Net Cash Proceeds in accordance with clauses (A) and (B)(2)
of Section 3.12(a)(iii) above.
5. Amendment to Section 3.13 of the Indenture.
Section 3.13 of the Indenture, which currently provides:
SECTION 3.13 Limitations on Liens. The Issuer will not, and
will not permit any Subsidiary to, issue, assume or guarantee any
Indebtedness secured by a Lien (other than a Permitted Lien) of or upon any
Property of the Issuer or any Subsidiary or any shares of stock or debt of
any Subsidiary which owns Property, whether such Property is owned at the
date of the Indenture or thereafter acquired, without making effective
provision whereby the Securities (together with, if the Issuer shall so
determine, any other debt of the Issuer ranking equally with the Securities
and then existing or thereafter created) shall be secured by such Lien
equally and ratably with such Indebtedness, so long as such Indebtedness
shall be so secured.
Notwithstanding the foregoing, and subject to the provisions of
Section 3.9, the Issuer or any Subsidiary may issue, assume or guarantee
Indebtedness secured by a Lien without equally and ratably securing the
Securities, provided that, after giving effect thereto, without
duplication, the sum of (i) the aggregate
17
<PAGE>18
amount of all outstanding Indebtedness secured by Liens so issued, assumed or
guaranteed (excluding Indebtedness secured by Permitted Liens) plus (ii) the
aggregate amount of Attributable Debt incurred by the Issuer or any
Subsidiary in respect of sale and leaseback transactions plus (iii) the
aggregate amount of Indebtedness (including Acquired Indebtedness and
Permitted Indebtedness) of all Subsidiaries of the Issuer does not at such
time exceed 10% of Consolidated Net Tangible Assets.
Is hereby amended to read as follows:
SECTION 3.13 Limitation on Liens. The Issuer will not, and will
not permit any Subsidiary to, issue, assume or guarantee any Indebtedness
secured by a Lien (other than a Permitted Lien) of or upon any Property of
the Issuer or any Subsidiary or any shares or debt of any Subsidiary which
owns Property, whether such Property is owned at the date of the Indenture
or thereafter acquired, without making effective provision whereby the
Notes (together with, if the Issuer shall so determine, any other debt of
the Issuer ranking equally with the Notes and then existing or thereafter
created) shall be secured by such Lien equally and ratably with such
Indebtedness, so long as such Indebtedness shall be so secured; provided
that the foregoing prohibition shall not apply to (i) liens with respect to
accounts receivable or inventory securing Permitted Working Capital
Indebtedness or (ii) liens with respect to sale and leaseback transactions
regarding the facility known as the "Number 9 Tandem Mill" or the facility
known as the "Foster Wheeler Steam Generating Facility".
Notwithstanding the foregoing, the Issuer or any Subsidiary may issue,
assume or guarantee Indebtedness secured by a Lien without equally and
ratably securing the Securities, provided that, after giving effect
thereto, without duplication, the sum of (i) the aggregate amount of all
outstanding Indebtedness secured by Liens so issued, assumed or guaranteed
(excluding Indebtedness secured by Permitted Liens), plus (ii) the
aggregate amount of Attributable Debt incurred by the Issuer or any
Subsidiary in respect of sale and leaseback transactions, plus (iii) the
aggregate amount of Indebtedness (including Acquired Indebtedness and
Permitted Indebtedness) of all Subsidiaries of the Issuer does not at such
time exceed 10% of Consolidated Net Tangible Assets.
18
<PAGE>19
6. Amendment to Section 3.14 of the Indenture.
Section 3.14 of the Indenture, which currently provides:
SECTION 3.14 Limitations on Sale and Leaseback Transactions.
The Issuer will not and will not permit any Subsidiary to enter into any
sale and leaseback transaction with respect to any Property (whether now
owned or hereafter acquired) unless the net proceeds of the sale or
transfer of the property to be leased are at least equal to the fair market
value (as determined by the Board of Directors of the Issuer) of such
Property and unless the Issuer or such Subsidiary would be entitled under
Sections 3.9 and 3.13, without equally and ratably securing the Securities,
to issue, assume or guarantee debt secured by a mortgage on such Property
in an amount at least equal to the Attributable Debt in respect of such
sale and leaseback transaction; provided, however, that the foregoing
prohibition does not apply to leases between the Issuer and a Subsidiary or
between Subsidiaries.
Is hereby amended to provide as follows:
SECTION 3.14 Limitations on Sale and Leaseback Transactions.
The Issuer will not and will not permit any Subsidiary to enter into any
sale and leaseback transaction with respect to any Property (whether now
owned or hereafter acquired) unless the net proceeds of the sale or
transfer of the property to be leased are at least equal to the fair market
value (as determined by the Board of Directors of the Issuer) of such
Property and unless the Issuer or such Subsidiary would be entitled under
the "Limitations on Liens" covenant, without equally and ratably securing
the Notes, to issue, assume or guarantee debt secured by a mortgage on such
property in an amount at least equal to the Attributable Debt in respect of
such sale and leaseback transaction; provided, however, that the foregoing
prohibition does not apply to (i) leases between the Issuer and a
Subsidiary or between Subsidiaries or to sales and leasebacks with respect
to the facility known as the "Number 9 Tandem Mill" or the facility known
as the "Foster Wheeler Steam Generating Facility"; provided, that the
Company must be able to incur, in respect of such sale and leaseback
transactions, debt in an amount at least equal to the present value
(discounted at the rate of interest implicit in the terms of the lease) of
the obligation
19
<PAGE>20
of the lessee for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended) under Section 3.9 hereof.
7. Amendment to Section 3.16 of the Indenture.
The last two paragraphs of Section 3.16 of the Indenture, which currently
provide:
As used herein, "Change of Control" means (i) any sale, lease or
other transfer (in one transaction or a series of transactions) of 75% or
more of the assets of the Issuer to any Person (other than a Wholly Owned
Subsidiary of the Issuer); (ii) a "person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act (other than the 1984
ESOP, the 1989 ESOP or any other employee benefit plan of the Issuer)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of Capital Stock of the Issuer representing more than 50% of the
voting power of such Capital Stock; (iii) Continuing Directors cease to
constitute at least a majority of the Board of Directors of the Issuer; or
(iv) the stockholders of the Issuer approve any plan or proposal for the
liquidation or dissolution of the Issuer.
As used herein, "Continuing Director" means a director who either
was a member of the Board of Directors of the Issuer on the date of the
Indenture or who became a director of the Issuer subsequent to such date
and whose election, or nomination for election by the Issuer's
stockholders, was duly approved by a majority of the Continuing Directors
then on the Board of Directors of the Issuer, either by a specific vote or
by approval of the proxy statement issued by the Issuer on behalf of the
entire Board of Directors of the Issuer in which such individual is named
as nominee for director.
Are hereby amended to read as follows:
As used herein, "Change of Control" means (i) any sale, lease or other
transfer (in one transaction or a series of transactions) of more than 75%
of the assets of the Issuer to any Person (other than a Wholly Owned
Subsidiary of the Issuer); (ii) a "person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act (other than the 1984
ESOP, the 1989
20
<PAGE>21
ESOP or any other employee benefit plan of the Issuer) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
Capital Stock of the Issuer representing more than 50% of the voting power
of such Capital Stock; (iii) Continuing Directors cease to constitute at
least a majority of the Board of Directors of the Issuer; or (iv) the
stockholders of the Issuer approve any plan or proposal for the liquidation
or dissolution of the Issuer.
As used herein, "Continuing Director" means a director who either was
a member of the Board of Directors of the Issuer on the date of the
Indenture or who became a director of the Issuer subsequent to such date
and whose election, or nomination for election by the Issuer's
stockholders, was duly approved by a majority of the Continuing Directors
then on the Board of Directors of the Issuer.
8. New York Law to Govern. This First Supplemental Indenture shall
be deemed to be a contract under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State,
except as may otherwise be required by mandatory provisions of law.
9. Counterparts. This First Supplemental Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
10. Defined Terms and Effect of Headings. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned in the
Indenture. The Section headings herein are for convenience only and shall not
affect the construction hereof.
11. No Representation. The Trustee makes no representation as to the
validity or sufficiency of this First Supplemental Indenture. The recitals
contained herein shall be taken as statements of the Company and the Trustee
accepts no responsibility for their correctness.
12. Ratification. Except as expressly amended hereby, the Indenture
and all exhibits thereto are in all respects ratified and confirmed and all of
the terms, conditions and provisions therein shall remain in full force and
effect. This First Supplemental Indenture shall form a part of the Indenture
for all purposes and every holder of
21
<PAGE>22
Securities heretofore or hereafter authenticated and delivered shall be bound
hereby.
22
<PAGE>23
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the date first written
above.
WEIRTON STEEL CORPORATION
Attest: By: /s/ Richard K. Riederer
Name: Richard K. Riederer
Title: President
/s/ William R. Kiefer
Name: William R. Kiefer
Title: Vice President-Law
and Secretary
(SEAL)
BANKERS TRUST COMPANY,
as Trustee
Attest: By: /s/ Mark A. Woodward
Name: Mark A. Woodward
/s/ Susan Johnson Title: Assistant Vice
Name: Susan Johnson President
Title: Assistant Vice President
(SEAL)
23
<PAGE>1
========================================================
WEIRTON STEEL CORPORATION
AND
BANKERS TRUST COMPANY, Trustee
Indenture
Dated as of June 12, 1995
__________
$125,000,000
10 3/4% Senior Notes Due 2005
========================================================
<PAGE>2
TABLE OF CONTENTS
__________
Page
PARTIES . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS.
SECTION 1.1 Certain Terms Defined . . . . . . . . . . . . . . . . . 1
Acquired Indebtedness . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . 2
Asset Disposition . . . . . . . . . . . . . . . . . . 2
Asset Disposition Offer . . . . . . . . . . . . . . . 2
Attributable Debt . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . 3
Capital Stock . . . . . . . . . . . . . . . . . . . . 3
Cash Equivalents . . . . . . . . . . . . . . . . . . 3
Change of Control . . . . . . . . . . . . . . . . . . 4
Certificated Securities . . . . . . . . . . . . . . . 4
Commission . . . . . . . . . . . . . . . . . . . . . 4
Commodity Agreement . . . . . . . . . . . . . . . . . 4
Common Stock . . . . . . . . . . . . . . . . . . . . 4
Consolidated EBITDA . . . . . . . . . . . . . . . . . 4
Consolidated Fixed Charges . . . . . . . . . . . . . 4
Consolidated Net Income . . . . . . . . . . . . . . . 5
Consolidated Net Tangible Assets . . . . . . . . . . 5
Consolidated Net Worth . . . . . . . . . . . . . . . 7
Consolidated Subsidiary . . . . . . . . . . . . . . . 7
Continuing Director . . . . . . . . . . . . . . . . . 7
Corporate Trust Office . . . . . . . . . . . . . . . 7
Currency Agreement . . . . . . . . . . . . . . . . . 7
Default . . . . . . . . . . . . . . . . . . . . . . . 7
Depositary . . . . . . . . . . . . . . . . . . . . . 7
Disqualified Stock . . . . . . . . . . . . . . . . . 7
Efficiency Program . . . . . . . . . . . . . . . . . 8
Event of Default . . . . . . . . . . . . . . . . . . 8
Exchange Act . . . . . . . . . . . . . . . . . . . . 8
2
<PAGE>3
Exchange Act Reports . . . . . . . . . . . . . . . . 8
Exchange Offer . . . . . . . . . . . . . . . . . . . 8
Exchange Offer Registration Statement . . . . . . . . 8
Exchange Securities . . . . . . . . . . . . . . . . . 8
GAAP . . . . . . . . . . . . . . . . . . . . . . . . 9
Global Securities . . . . . . . . . . . . . . . . . . 9
Holder, holder of Securities, Securityholder . . . . 9
Indebtedness . . . . . . . . . . . . . . . . . . . . 9
Indenture . . . . . . . . . . . . . . . . . . . . . . 10
Initial Purchaser . . . . . . . . . . . . . . . . . . 10
Interest Protection Agreement . . . . . . . . . . . . 10
Investments . . . . . . . . . . . . . . . . . . . . . 10
Issue Date . . . . . . . . . . . . . . . . . . . . . 10
Issuer . . . . . . . . . . . . . . . . . . . . . . . 10
Institutional Accredited Investor . . . . . . . . . . 10
Legended Security . . . . . . . . . . . . . . . . . . 10
Lien . . . . . . . . . . . . . . . . . . . . . . . . 10
Net Cash Proceeds . . . . . . . . . . . . . . . . . . 11
Net Income . . . . . . . . . . . . . . . . . . . . . 11
Offer Amounts . . . . . . . . . . . . . . . . . . . . 11
Offer Period . . . . . . . . . . . . . . . . . . . . 11
Offering Memorandum . . . . . . . . . . . . . . . . . 11
Officers' Certificate . . . . . . . . . . . . . . . . 11
Opinion of Counsel . . . . . . . . . . . . . . . . . 12
Original issue date . . . . . . . . . . . . . . . . . 12
Outstanding . . . . . . . . . . . . . . . . . . . . . 12
Permitted Indebtedness . . . . . . . . . . . . . . . 13
Permitted Joint Venture . . . . . . . . . . . . . . . 14
Permitted Liens . . . . . . . . . . . . . . . . . . . 14
Permitted Payments . . . . . . . . . . . . . . . . . 14
Permitted Working Capital Indebtedness . . . . . . . 15
Person . . . . . . . . . . . . . . . . . . . . . . . 15
Preferred Stock . . . . . . . . . . . . . . . . . . . 15
Principal . . . . . . . . . . . . . . . . . . . . . . 15
Private Exchange Security . . . . . . . . . . . . . . 15
Prohibited Investment . . . . . . . . . . . . . . . . 15
Property . . . . . . . . . . . . . . . . . . . . . . 16
Purchase Date . . . . . . . . . . . . . . . . . . . . 16
QIB . . . . . . . . . . . . . . . . . . . . . . . . . 16
Registrar . . . . . . . . . . . . . . . . . . . . . . 16
Registration Default . . . . . . . . . . . . . . . . 16
Registration Rights Agreement . . . . . . . . . . . . 16
Repurchase Date . . . . . . . . . . . . . . . . . . . 16
Responsible Officer . . . . . . . . . . . . . . . . . 16
Restricted Payment . . . . . . . . . . . . . . . . . 17
3
<PAGE>4
Rule 144A . . . . . . . . . . . . . . . . . . . . . . 17
Rule 144A Global Security . . . . . . . . . . . . . . 17
Security or Securities . . . . . . . . . . . . . . . 17
Securities Act . . . . . . . . . . . . . . . . . . . 18
Securities Legend . . . . . . . . . . . . . . . . . . 18
Shelf Notice . . . . . . . . . . . . . . . . . . . . 18
Shelf Registration Statement . . . . . . . . . . . . 18
Subsidiary . . . . . . . . . . . . . . . . . . . . . 18
Trustee . . . . . . . . . . . . . . . . . . . . . . . 18
Trust Indenture Act of 1939 . . . . . . . . . . . . . 18
Unregistered Securities . . . . . . . . . . . . . . . 18
Voting Stock . . . . . . . . . . . . . . . . . . . . 18
Wholly Owned Subsidiary . . . . . . . . . . . . . . . 18
ARTICLE TWO
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES.
SECTION 2.1 Authentication and Delivery of Securities; Issuance of
Exchange Securities . . . . . . . . . . . . . . . . . 19
SECTION 2.2 Execution of Securities . . . . . . . . . . . . . . . . 21
SECTION 2.3 Certificate of Authentication . . . . . . . . . . . . . 22
SECTION 2.4 Form, Denomination and Date of Securities; Payments of
Interest . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.5 Restrictive Legends . . . . . . . . . . . . . . . . . . 24
SECTION 2.6 Registration, Transfer and Exchange . . . . . . . . . . 26
SECTION 2.7 Book-Entry Provisions for Global Securities . . . . . . 28
SECTION 2.8 Special Transfer Provisions . . . . . . . . . . . . . . 30
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.10 Cancellation of Securities; Destruction Thereof . . . . 35
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . . . . 36
SECTION 2.12 Wire Payments . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.13 Deposit of Moneys . . . . . . . . . . . . . . . . . . . 37
4
<PAGE>5
ARTICLE THREE
COVENANTS OF
THE ISSUER AND THE TRUSTEE.
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . . . 37
SECTION 3.2 Offices for Payments, etc. . . . . . . . . . . . . . . . 37
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee . . . 38
SECTION 3.4 Paying Agents . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.5 Certificate to Trustee . . . . . . . . . . . . . . . . . 39
SECTION 3.6 Securityholders' Lists . . . . . . . . . . . . . . . . . 39
SECTION 3.7 Reports to Holders of the Securities . . . . . . . . . . 39
SECTION 3.8 Reports by the Trustee . . . . . . . . . . . . . . . . . 40
SECTION 3.9 Limitations on Indebtedness . . . . . . . . . . . . . . 40
SECTION 3.10 Limitations on Restricted Payments . . . . . . . . . . 41
SECTION 3.11 Limitations on Transactions with Affiliates . . . . . . 42
SECTION 3.12 Restrictions on Disposition of Assets of the Issuer . . 43
SECTION 3.13 Limitations on Liens . . . . . . . . . . . . . . . . . 46
SECTION 3.14 Limitations on Sale and Leaseback Transactions . . . . 47
SECTION 3.15 Limitations on Dividend and Other Payment Restrictions
Affecting Subsidiaries . . . . . . . . . . . . . . . 48
SECTION 3.16 Change in Control Option . . . . . . . . . . . . . . . 48
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT.
SECTION 4.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default . . . . . . . . . . . . . . . . . . 50
SECTION 4.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt . . . . . . . . . . . . . . . 52
SECTION 4.3 Application of Proceeds . . . . . . . . . . . . . . . . 55
SECTION 4.4 Suits for Enforcement . . . . . . . . . . . . . . . . . 56
SECTION 4.5 Restoration of Rights on Abandonment of Proceedings . . 56
SECTION 4.6 Limitations on Suits by Securityholders . . . . . . . . 57
SECTION 4.7 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default . . . . . . . . . . . . . . . . . . 57
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SECTION 4.8 Control by Securityholders . . . . . . . . . . . . . . . 58
SECTION 4.9 Waiver of Past Defaults . . . . . . . . . . . . . . . . 58
SECTION 4.10 Notice of Defaults . . . . . . . . . . . . . . . . . . 59
SECTION 4.11 Rights of Holders to Receive Payment . . . . . . . . . 59
ARTICLE FIVE
CONCERNING THE TRUSTEE.
SECTION 5.1 Duties and Responsibilities of the
Trustee; During Default; Prior to Default . . . . . . 59
SECTION 5.2 Certain Rights of the Trustee . . . . . . . . . . . . . 61
SECTION 5.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds
Thereof . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 5.4 Trustee and Agents May Hold Securities;
Collections, etc. . . . . . . . . . . . . . . . . . . 63
SECTION 5.5 Moneys Held by Trustee . . . . . . . . . . . . . . . . . 63
SECTION 5.6 Compensation and Indemnification of Trustee and Its Prior
Claim . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 5.7 Right of Trustee to Rely on Officers' Certificate, etc. 64
SECTION 5.8 Persons Eligible for Appointment as Trustee . . . . . . 64
SECTION 5.9 Resignation and Removal; Appointment
of Successor Trustee . . . . . . . . . . . . . . . . 65
SECTION 5.10 Acceptance of Appointment by Successor Trustee . . . . 66
SECTION 5.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . . . . 67
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS.
SECTION 6.1 Evidence of Action Taken by Securityholders . . . . . . 67
SECTION 6.2 Proof of Execution of Instruments and
of Holding of Securities; Record Date . . . . . . . . 68
SECTION 6.3 Holders to Be Treated as Owners . . . . . . . . . . . . 68
SECTION 6.4 Securities Owned by Issuer Deemed Not Outstanding . . . 69
SECTION 6.5 Right of Revocation of Action Taken . . . . . . . . . . 69
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ARTICLE SEVEN
SUPPLEMENTAL INDENTURES.
SECTION 7.1 Supplemental Indentures Without
Consent of Securityholders . . . . . . . . . . . . . 70
SECTION 7.2 Supplemental Indentures With Consent of Securityholders 71
SECTION 7.3 Effect of Supplemental Indenture . . . . . . . . . . . . 72
SECTION 7.4 Documents to Be Given to Trustee . . . . . . . . . . . . 72
SECTION 7.5 Notation on Securities in Respect
of Supplemental Indentures . . . . . . . . . . . . . 73
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
SECTION 8.1 Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions . . . . . . 73
SECTION 8.2 Successor Corporation Substituted . . . . . . . . . . . 74
SECTION 8.3 Opinion of Counsel to Trustee . . . . . . . . . . . . . 74
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 9.1 Satisfaction and Discharge of Indenture . . . . . . . . 75
SECTION 9.2 Application by Trustee of Funds Deposited for Payment of
Securities . . . . . . . . . . . . . . . . . . . . . 76
SECTION 9.3 Repayment of Moneys Held by Paying Agent . . . . . . . . 76
SECTION 9.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Three Years . . . . . . . 76
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ARTICLE TEN
MISCELLANEOUS PROVISIONS.
SECTION 10.1 Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability . . . . . . . 77
SECTION 10.2 Provisions of Indenture for the Sole
Benefit of Parties and Securityholders . . . . . . . 77
SECTION 10.3 Successors and Assigns of Issuer Bound by Indenture . . 77
SECTION 10.4 Notices and Demands on Issuer,
Trustee and Securityholders . . . . . . . . . . . . . 78
SECTION 10.5 Officers' Certificates and Opinions
of Counsel; Statements to Be Contained Therein . . . 79
SECTION 10.6 Payments Due on Saturdays, Sundays and Holidays . . . . 80
SECTION 10.7 Trust Indenture Act of 1939 . . . . . . . . . . . . . . 80
SECTION 10.8 New York Law to Govern . . . . . . . . . . . . . . . . 81
SECTION 10.9 Counterparts . . . . . . . . . . . . . . . . . . . . . 81
SECTION 10.10 Effect of Headings . . . . . . . . . . . . . . . . . . 81
ARTICLE ELEVEN
REDEMPTION OF SECURITIES.
SECTION 11.1 Right of Optional Redemption; Prices . . . . . . . . . 81
SECTION 11.2 Notice of Redemption; Partial Redemptions . . . . . . . 81
SECTION 11.3 Payment of Securities Called for Redemption . . . . . . 83
SECTION 11.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption . . . . . . 84
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
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EXHIBIT A - Form of Rule 144A Global Security . . . . . . . . . . . . . . A-1
EXHIBIT B - Form of Certificated Security . . . . . . . . . . . . . . . . B-1
EXHIBIT C - Form of Exchange Security . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D - Form of Private Exchange Security . . . . . . . . . . . . . . D-1
EXHIBIT E - Trustee's Certificate of Authentication . . . . . . . . . . . E-1
EXHIBIT F - Form of Institutional Accredited Investor
Transfer Certificate . . . . . . . . . . . . . . . . . . . F-1
EXHIBIT G - Form of Private Exchange
Security Transfer Certificate . . . . . . . . . . . . . . . G-1
EXHIBIT H - Schedule of Certain Properties of
the Issuer . . . . . . . . . . . . . . . . . . . . . . . . H-1
9
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THIS INDENTURE, dated as of June 12, 1995 between Weirton Steel
Corporation, a Delaware corporation (the "Issuer"), and Bankers Trust Company,
a New York banking corporation (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue of its 10 3/4%
Senior Notes Due 2005 (the "Securities") and, to provide, among other things,
for the authentication, delivery and administration thereof, the Issuer has
duly authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make the Securities, when executed
by the Issuer and authenticated and delivered by the Trustee as in this
Indenture provided, the valid, binding and legal obligations of the Issuer,
and to constitute these presents a valid indenture and agreement according to
its terms, have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the holders thereof, the Issuer and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective holders from time to
time of the Securities as follows:
ARTICLE ONE
DEFINITIONS.
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture which are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933, as amended (the
"Securities Act"), are referred to in the Trust Indenture Act of 1939 (except
as herein otherwise expressly provided or unless the context otherwise clearly
requires), shall have the meanings assigned to such terms in said Trust
Indenture Act of 1939 and in said Securities Act as in force at the date of
this Indenture. All accounting terms used herein and not expressly defined
shall have the meanings given to them in accordance with generally accepted
accounting principles,
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and the term "GAAP" shall mean such accounting principles which are generally
accepted at the date or time of any computation or at the date hereof. The
words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision. The terms defined in this Article include the plural as
well as the singular.
"Acquired Indebtedness" means Indebtedness or Preferred Stock of any
Person existing at the time such Person became a Subsidiary of the Issuer (or
such Person is merged into the Issuer or one of the Issuer's Subsidiaries) or
assumed in connection with the acquisition of assets from any such Person
(other than assets acquired in the ordinary course of business), excluding
Indebtedness or Preferred Stock incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary of the Issuer.
"Affiliate" means, when used with reference to a specified Person,
any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Person specified. For the purposes of
this definition, "control," when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
"Asset Disposition" means, with respect to any Person, any sale,
transfer, conveyance, lease or other disposition (including, without
limitation, by way of merger, consolidation or sale and leaseback or sale of
shares of Capital Stock in any Subsidiary) by such Person or any of its
Subsidiaries to any Person (other than to such Person or a Wholly owned
Subsidiary of such Person and other than in the ordinary course of business)
of any Property. For purposes of this definition, the term "Asset
Disposition" shall not include any sale, transfer, conveyance, lease or other
disposition of assets and properties of the Issuer that is governed by Section
8.1.
"Asset Disposition Offer" has the meaning set forth in Section 3.12
hereof.
"Attributable Debt" means, with respect to any sale and leaseback
transaction, at the date of determination, the present value (discounted at
the rate of interest implicit in the terms of the lease) of the obligation of
the lessee for net rental payments during the remaining term of the lease
(including any period for which such lease has been extended or may, at the
option of the
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lessor, be extended); provided, however, there shall not be deemed to be any
Attributable Debt in respect of any sale and leaseback transaction if the
Issuer or a Subsidiary would be entitled pursuant to the provisions of clauses
(a) through (f) under the definition of "Permitted Liens" to issue, assume or
guarantee debt secured by a mortgage upon the property involved in such
transaction without equally and ratably securing the Securities. "Net rental
payments" under any lease for any period means the sum of such rental and
other payments required to be paid in such period by the lessee thereunder,
not including, however, any amount required to be paid by such lessee (whether
or not designated as rent or additional rent) on account of maintenance and
repairs, insurance, taxes, assessments, water rates or similar charges
required to be paid by such lessee thereunder or any amounts required to be
paid by such lessee thereunder contingent upon the amount of sales,
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges.
"Board of Directors" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act hereunder.
"Business Day" means a day which, in the City of New York or in any
of the cities, if more than one), where amounts are payable in respect of the
Securities, as specified on the face of the form of Securities set forth in
Exhibits A-D hereof, is neither a legal holiday nor a day on which banking
institutions are authorized or obligated by law or regulation to close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designed) of
such Person's capital stock whether now outstanding or issued after the Issue
Date, this including, without limitation, all Common Stock and Preferred
Stock.
"Cash Equivalents" means (i) obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof or
obligations issued by any agency or instrumentality thereof and backed by the
full faith and credit of the United States of America, (ii) commercial paper
with a maturity of 180 days or less issued by a corporation organized under
the laws of any state of the United States of America or the District of
Columbia and rated at least A-2 by Standard and Poor's Corporation or at least
P-2 by Moody's Investors Service, Inc., (iii) time deposits with, and
certificates of deposits and banker's acceptances issued by, any bank having
capital surplus and
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undivided profits of not less than $100,000,000 and maturing not more than 180
days from the date of creation thereof, (iv) repurchase agreements that are
secured by a perfected security interest in an obligation described in clause
(i) and are with any bank described in clause (iii), and (v) readily
marketable direct obligations issued by any state of the United States of
America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody's Investors Service, Inc. or
Standard and Poor's Corporation.
"Change of Control" has the meaning set forth in Section 3.16
hereof.
"Certificated Securities" has the meaning provided in Section 2.4.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act of
1939, then the body performing such duties at such time.
"Commodity Agreement" means any option or futures contract or
similar agreement or arrangement designed to protect the Issuer against
fluctuations in commodity prices.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations and other equivalents (however designated,
whether voting or non-voting) of such Person's common stock, whether now
outstanding or issued after the Issue Date,and includes, without limitation,
all series and classes of such common stock.
"Consolidated EBITDA" means, for any period, on a consolidated basis
for the Issuer and its Subsidiaries, the sum for such period of (a)
Consolidated Net Income, (b) income taxes (other than income taxes positive or
negative attributable to extraordinary and non-recurring gains or losses on
asset sales) with respect to such period, determined in accordance with GAAP,
(c) net interest expense for such period, determined in accordance with GAAP,
(d) depreciation and amortization expenses (including, without duplication,
amortization of debt discount and debt issue costs), determined in accordance
with GAAP and (e) other non-cash items reducing Net Income, minus non-cash
items increasing Net Income, determined in accordance with GAAP.
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"Consolidated Fixed Charges" means, for any period, the sum of (a)
the net interest expense of the Issuer and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP and (b) interest
incurred during the period and capitalized by the Issuer in accordance with
GAAP.
"Consolidated Net Income" of the Issuer for any period means (i) the
Net Income (or loss) of the Issuer and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded from this clause (i): (a) the Net Income of any Person
other than a Consolidated Subsidiary in which the Issuer or any of its
Consolidated Subsidiaries has a joint interest with a third party except to
the extent of the amount of dividends or distributions actually paid in cash
to the Issuer or a Consolidated Subsidiary during such period, (b) the Net
Income of any other Person accrued prior to the date it becomes a Subsidiary
with respect to which Consolidated Net Income is calculated, or is merged into
or consolidated with such Person or any of its Subsidiaries or that Person's
assets are acquired by such Person or any of its Subsidiaries, (c) the Net
Income (but only if positive) of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary to such Person or to any other Subsidiary of such Net Income is not
at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, and (d) without duplication, any
gains or losses attributable to the sale, lease, conveyance or other
disposition of assets (including without limitation Capital Stock of any
Subsidiary of such Person), whether owned on the date of issuance of the
Securities or thereafter acquired, in one or more related transactions outside
the ordinary course of business, (e) any non-cash charge reducing Net Income
resulting from the adoption by the Issuer of Statement 106 of the Financial
Accounting Standards Board and (f) any non-cash charge reducing Net Income
required by Statement 5 of the Financial Accounting Standards Board which
relates to increased pension or retirement costs resulting from the
implementation of the Issuer's Efficiency Program less (ii) the aggregate
amount of net cash payments made during the period by the Issuer or any
Subsidiary not reflected in Net Income during such period which relate to the
increased pension and retirement costs of the Issuer resulting from the
implementation of the Issuer's Efficiency Program.
"Consolidated Net Tangible Assets" means, as of any particular time,
the total assets of the Issuer and its
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<PAGE>15
Consolidated Subsidiaries, as shown on the audited consolidated balance sheet
contained in the latest annual report to stockholders of the Issuer after
deducting therefrom:
(a) all current liabilities excluding any thereof which are by
their terms extendible or renewable at the option of the obligor thereon
to a time more than 12 months after the time as of which the amount
thereof is being computed and excluding current maturities of long-term
indebtedness;
(b) deferred income taxes and deferred pension liabilities to the
extent the related intangible asset, if any, is not otherwise deducted in
calculating Consolidated Net Tangible Assets, deferred income taxes
resulting from the adoption by the Issuer of Statement 106 of the
Financial Accounting Standards Board and deferred income taxes resulting
from the implementation of the Issuer's Efficiency Program;
(c) all reserves, including, without limitation, reserves for
liabilities, fixed or contingent, depreciation, amortization,
obsolescence, depletion, insurance and inventory valuation (but excluding
contingency reserves not allocated for any particular purpose) carried by
such corporation or other person and not deducted in computing such total
assets;
(d) any prepaid expenses, deferred charges or unamortized debt
discount and expense;
(e) minority interests in Subsidiaries, if any;
(f) any write-up in the book value of any asset resulting from a
revaluation thereof subsequent to December 31, 1994 (other than a write-
up of any assets constituting part of the assets and business of another
corporation made in connection with the acquisition, direct or indirect,
of the assets and business of such other corporation);
(g) the amount, if any, at which any stock of the Issuer appears
upon the asset side of such balance sheet; and
(h) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangible assets, all as shown
in such consolidated balance sheet;
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<PAGE>16
plus an amount equal to Attributable Debt in respect of any sale and leaseback
transactions not capitalized on such balance sheet.
"Consolidated Net Worth" means, with respect to any Person engaged
in a merger, consolidation or sale of assets, the consolidated stockholder's
equity of such Person and its Subsidiaries, as determined in accordance with
GAAP but excluding the effect of the adoption by such Person of Statement 106
of the Financial Accounting Standards Board and excluding any restructuring
charges taken by such Person in connection with such merger, consolidation or
sale of assets.
"Consolidated Subsidiary" of any Person means a Subsidiary which for
financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such Person as a consolidated subsidiary.
"Continuing Director" has the meaning set forth in Section 3.16
hereof.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at Four Albany Street, New York, New York 10006,
Attention: Corporate Trust and Agency Group.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
the Issuer against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of
time,or both, would be,an Event of Default.
"Depositary" shall mean The Depositary Trust Company, its nominees,
and their respective successors.
"Disqualified Stock" means any Capital Stock (i) 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
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final maturity date of the Securities or (ii) upon which the
Issuer or any of its Subsidiaries has a contractual obligation to compensate
the holder thereof for losses
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<PAGE>17
incurred upon the sale or other disposition thereof; provided that any portion
or series of such Capital Stock which by its terms, or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund or
otherwise, no earlier than the day following the maturity date of the
Securities shall not constitute Disqualified Stock; and provided further, that
any Capital Stock which would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require the Issuer to
repurchase or redeem such Capital Stock upon the occurrence of a change in
control occurring on or prior to the maturity date of the Securities shall not
constitute Disqualified Stock if (i) the change in control provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions of Section 3.16 and (ii) such Capital Stock
specifically provides that the Issuer will not repurchase or redeem any such
stock pursuant to such provisions prior to the Issuer's repurchase of such
Securities as are required to be repurchased pursuant to the provisions of
Section 3.16.
"Efficiency Program" means the program announced by the Issuer in
July 1992 involving manpower reductions to be achieved over a five year
period.
"Event of Default" means any event or condition specified as such in
Section 4.1 which shall have continued for the period of time or after notice
thereof, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Act Reports" means the Issuer's Annual Report on Form 10-K
for the year ended December 31, 1994 and Quarterly Report on Form 10-Q for the
three months ended March 31, 1995, each filed with the Commission pursuant to
the Exchange Act.
"Exchange Offer" means an offer to exchange the Securities for
Exchange Securities.
"Exchange Offer Registration Statement" means a registration
statement under the Securities Act with respect to the Exchange Offer.
"Exchange Securities" means any securities of the Issuer containing
terms identical to the Securities (except that such Exchange Securities (i)
shall be registered under the Securities Act and (ii) shall have an interest
rate
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equal to 10 3/4% per annum, without provision for adjustment as provided in
the third paragraph of the Form of Reverse of Security set forth in each of
Exhibits A and B hereof) that are issued and exchanged for the Securities
pursuant to the Registration Rights Agreement and this Indenture. The
Exchange Securities shall be in the form attached hereto as Exhibit C.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect on the Issue
Date.
"Global Securities" has the meaning provided in Section 2.4.
"Holder", "holder of Securities", "Securityholder" or other similar
terms means the registered holder of any Security.
"Indebtedness" means, without duplication, (i) any liability of any
entity (A) for borrowed money, or under any reimbursement obligation relating
to a letter of credit, (B) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with
the acquisition of any businesses, properties or assets of any kind or with
services incurred in connection with capital expenditures, or (C) in respect
of capitalized lease obligations, (ii) any liability of others described in
the preceding clause (i) that the entity has guaranteed or that is otherwise
its legal liability, (iii) to the extent not otherwise included, obligations
under Currency Agreements, Commodity Agreements or Interest Protection
Agreements, (iv) all Disqualified Stock valued at the greatest amount payable
in respect thereof on a liquidation (whether voluntary or involuntary) plus
accrued and unpaid dividends, and (v) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any liability of the types
referred to in clauses (i)-(iv) above, provided that Indebtedness shall not
include accounts payable (including, without limitation, accounts payable to
the Issuer by any Subsidiary or to any such Subsidiary by the Issuer or any
other Subsidiary, in each case, in accordance with customary industry
practice) or liabilities to trade creditors of any entity arising in the
ordinary course of business.
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"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented.
"Initial Purchaser" means Lazard Freres & Co. LLC, the initial
purchaser of the Securities pursuant to a Purchase Agreement with the Issuer
dated June 5, 1995.
"Interest Protection Agreement" of any Person means any interest
rate swap agreement, interest rate collar agreement, option or future contract
or other similar agreement or arrangement designed to protect such Person or
any of its Subsidiaries against fluctuations in interest rates.
"Investments" of any Person means (i) all investments by such Person
in any other Person in the form of loans, advances or capital contributions,
(ii) all guarantees of Indebtedness or other obligations of any other Person
by such Person, (iii) all purchases (or other acquisitions for consideration)
by such Person of Indebtedness, Capital Stock or other securities of any other
Person and (iv) all other items that would be classified as investments
(including, without limitation, purchases of assets outside the ordinary
course of business) on a balance sheet of such Person prepared in accordance
with GAAP.
"Issue Date" means June 12, 1995, the date on which the Securities
are originally issued under this Indenture.
"Issuer" means (except as otherwise provided in Article Five)
Weirton Steel Corporation, a Delaware corporation and, subject to Article
Eight, its successors and assigns.
"Institutional Accredited Investor" shall mean an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act.
"Legended Security" means a Security bearing the Securities Legend.
"Lien" means, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such Property. For purposes of this definition, the Issuer shall be deemed to
own subject to a Lien any Property which it has acquired or holds subject to
the interest of a vendor or lessor under
19
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any conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Net Cash Proceeds" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or instalment receivable or otherwise (including
any cash received upon sale or disposition of such note or receivable), but
only as and when received), excluding any other consideration received in the
form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the Property disposed of in such Asset Disposition or
received in any other non-cash form unless and until such non-cash
consideration is converted into cash therefrom, in each case, net of all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all federal, state, provincial, foreign and local taxes
required to be accrued as a liability under GAAP as a consequence of such
Asset Disposition, and in each case net of a reasonable reserve for the after-
tax cost of any indemnification payments (fixed and contingent) attributable
to seller's indemnities to the purchaser undertaken by the Issuer or any of
its Subsidiaries in connection with such Asset Disposition (but excluding any
payments, which by the terms of the indemnities will not, under any
circumstances, be made during the term of the Securities), and net of all
payments made on any Indebtedness which is secured by such Property, in
accordance with the terms of any Lien upon or with respect to such Property or
which must by its terms or by applicable law be repaid out of the proceeds
from such Asset Disposition, and net of all distributions and other payment
made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Disposition.
"Net Income" of any Person for any period means the consolidated net
income or loss, as the case may be, of such Person and its Subsidiaries for
such period determined in accordance with GAAP; provided that there shall be
excluded all extraordinary gains or losses net of respective tax effects
(less, without duplication, all fees and expenses relating thereto).
"Offer Amounts" has the meaning set forth in Section 3.12 hereof.
"Offer Period" has the meaning set forth in Section 3.12 hereof.
"Offering Memorandum" means the Offering Memorandum dated June 5,
1995 relating to the Securities.
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<PAGE>21
"Officers' Certificate" means a certificate signed by the Chairman
of the Board of Directors or the President or any Vice President (whether or
not designated by a number or numbers or a word or words added before or after
the title "Vice President") and by the Treasurer or the Secretary or any
Assistant Secretary of the Issuer and delivered to the Trustee. Each such
certificate shall comply with Section 314 of the Trust Indenture Act of 1939
and include the statements provided for in Section 10.5.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or who may be other
counsel satisfactory to the Trustee and delivered to the Trustee. Each such
opinion shall comply with Section 314 of the Trust Indenture Act and include
the statements provided for in Section 10.5, if and to the extent required
hereby.
"Original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly)
on registration of transfer, exchange or substitution.
"Outstanding", when used with reference to Securities, shall,
subject to the provisions of Section 6.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption
of which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Issuer)
or shall have been set aside, segregated and held in trust by the Issuer
(if the Issuer shall act as its own paying agent), provided that if such
Securities are to be redeemed prior to the maturity thereof, notice of
such redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities in substitution for which other Securities shall
have been authenticated and delivered, or which shall have been paid,
pursuant to the terms of Section 2.6 (unless proof satisfactory to the
Trustee is presented that any of such Securities is held by a
21
<PAGE>22
person in whose hands such Security is a legal, valid and binding obligation
of the Issuer).
"Permitted Indebtedness" means (i) Indebtedness of the Issuer and
its Subsidiaries outstanding immediately following the issuance of the
Securities and the application of the proceeds of the Securities in the manner
set forth under "Use of Proceeds" in the Offering Memorandum, including
Indebtedness of the Issuer's 1989 ESOP guaranteed by the Issuer even if
acquired by the Issuer; (ii) the Securities; (iii) Indebtedness in respect of
obligations of the Issuer to the Trustee under this Indenture; (iv) Permitted
Working Capital indebtedness; (v) intercompany debt obligations (including
intercompany notes) of the Issuer and each of its Subsidiaries; provided,
however, that the obligations of the Issuer to any of its Subsidiaries with
respect to such Indebtedness shall be subject to a subordination agreement
between the Issuer and its Subsidiaries providing for the subordination of
such obligations in right of payment from and after such time as all
Securities issued and outstanding shall become due and payable (whether at
stated maturity, by acceleration or otherwise) to the payment and performance
of the Issuer's obligations under the Indenture and the Securities; provided
further, that any Indebtedness of the Issuer or any Subsidiary owed to any
other Subsidiary that ceases to be a Subsidiary shall be deemed to be incurred
and shall be treated as an incurrence for purposes of Section 3.9 at the time
the Subsidiary in question ceased to be a Subsidiary; (vi) Indebtedness of the
Issuer under any Currency Agreements, Commodity Agreements or Interest
Protection Agreements; (vii) additional Indebtedness of the Issuer or its
Subsidiaries the aggregate principal amount of which does not exceed
$100,000,000; and (viii) any renewals, extensions, substitutions, refundings,
refinancings or replacements of any Indebtedness described in each of the
foregoing clauses (i)-(vii) (collectively, "Refinancing Indebtedness");
provided that (A) the original issue amount of the Refinancing Indebtedness
shall not exceed the maximum principal amount (following the date of the
Indenture and the application of the net proceeds of the Securities in
accordance with the manner described under "Use of Proceeds" in the Offering
Memorandum) and accrued interest of this Indebtedness to be repaid (or if such
Indebtedness was issued at an original issue discount, the original issue
price plus amortization of the original issue discount at the time of the
incurrence of the Refinancing Indebtedness less the amount of any prepayments
on or prior to the date of the Indenture and any prepayments made applying the
net proceeds of the Securities), plus the reasonable fees and expenses
directly incurred in connection with such
22
<PAGE>23
Refinancing Indebtedness, (B) Refinancing Indebtedness incurred by any
Subsidiary shall not be used to repay or refund outstanding Indebtedness of
the Issuer or any other Subsidiary, and (C) with respect to any Refinancing
Indebtedness that refinances Indebtedness ranking junior in right of payment
to the Securities, (1) the Refinancing Indebtedness does not require any
principal payments prior to the maturity of the Securities and has an average
weighted life that is equal to or greater than the average weighted life of
the Securities and (2) the Refinancing Indebtedness is subordinated to the
Securities to the same or greater extent and on substantially the same terms
or terms more favorable to the holder of the Securities.
"Permitted Joint Venture" means the interest of the Issuer in any
corporation, association or other business entity of which 50% or less, but
not less than 10%, of the total Voting Stock or other interest is at the time
owned or controlled, directly or indirectly, by the Issuer or one or more of
its Subsidiaries or a combination thereof, provided that such corporation,
association or entity is engaged in the business or businesses of the Issuer
or any related business.
"Permitted Liens" means (a) Liens on Property of, or any shares of
stock of or debt of, any corporation existing at the time such corporation
becomes a Subsidiary or at the time such corporation is merged into the Issuer
or a Subsidiary, (b) Liens in favor of the Issuer or any Subsidiary, (c) Liens
in favor of governmental bodies to secure progress or advance payments, (d)
Liens securing industrial revenue or pollution control bonds, (e) Liens upon
the accounts receivable and related intangibles and inventory of the Issuer or
any Subsidiary securing Permitted Working Capital Indebtedness of the Issuer
or such Subsidiary, (f) statutory Liens or landlords' and carriers',
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other
like Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor or (g) any
extensions, renewals or replacements of Liens referred to in clauses (a)
through (f) above.
"Permitted Payments" means, with respect to the Issuer or any of its
Subsidiaries, (i) any dividend on shares of Capital Stock payable solely in
shares of Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to purchase Capital Stock (other
23
<PAGE>24
than Disqualified Stock); (ii) any dividend or other distribution with respect
to Capital Stock payable to the Issuer by any of its Subsidiaries or by a
Subsidiary to another Subsidiary; and (iii) payments made by the Issuer in
satisfaction of any put obligation imposed on the Issuer by Section 409 of the
Internal Revenue Code of 1986, as amended, and any successor provision,
relating to shares of the Issuer's Preferred Stock, Series A, authorized and
issued on or before the Issue Date and held in the Issuer's 1989 ESOP.
"Permitted Working Capital Indebtedness" means indebtedness of the
Issuer or any of its Subsidiaries pursuant to a credit facility, the principal
amount outstanding under which shall not exceed, on the date such indebtedness
is incurred, 80% of the accounts receivable as reflected on the consolidated
financial statements of the Issuer and 50% of the inventory as reflected on
the consolidated financial statements of the Issuer and which indebtedness is
secured by such accounts receivable or inventory.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Stock" of any Person means all Capital Stock of such
Person which has a preference in liquidation or a preference with respect to
the payment of dividends.
"principal", wherever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any".
"Private Exchange Security" has the meaning set forth in Section 2.4
hereof.
"Prohibited Investment" means, with respect to any Person, any
Investment by such Person in any Person that is not a Subsidiary of such
Person, other than (i) an Investment in Cash Equivalents, (ii) to the extent
not included in clause (i), (a) negotiable instruments held for collection,
(b) outstanding travel, moving or other similar advances to officers,
employees and consultants of such Person, (c) lease or utility deposits or
other similar deposits or (d) Capital Stock, debt obligations or similar
securities received in settlement of debts owed to such Person or its
Subsidiaries as a result of the foreclosure, perfection or enforcement of any
Liens by such Person or any of its Subsidiaries, but, in each case, only to
the extent
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<PAGE>25
such Investments are made in the ordinary course of business, and (iii) sales
of goods on trade credit terms consistent with the past practices of such
Person or otherwise consistent with trade credit terms in common use in the
industry.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Purchase Date" has the meaning set forth in Section 3.12 hereof.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registrar" means an office or agency maintained by the Issuer where
Securities may be presented for registration of transfer or for exchange,
which shall initially be maintained by the Trustee.
"Registration Default" means, the occurrence of any of the
following: (i) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 45th calendar day following the Issue Date, (ii)
the Exchange Offer Registration Statement is not declared effective on or
prior to the 135th calendar day following the Issue Date, or (iii) an Exchange
Offer is not consummated or the Shelf Registration Statement is not declared
effective on or prior to the 165th calendar day following the Issue Date or
the Shelf Registration Statement ceases to be effective (except as
specifically permitted therein) without being succeeded immediately by an
additional registration statement filed and declared effective, each of the
conditions set forth in clauses (i) - (iii) in accordance with the terms of
the Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of June 12, 1995, between the Issuer and Lazard Freres &
Co. LLC, and certain permitted assigns specified therein.
"Repurchase Date" has the meaning set forth in Section 3.16 hereof.
"Responsible Officer" when used with respect to the Trustee means
any officer within the Corporate Trust and Agency Group (or any successor
group) of the Trustee,
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<PAGE>26
including, without limitation, any vice president (whether or not designated
by numbers or words added before or after the title "vice president"), any
assistant vice president, any assistant secretary, or any other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by any of the above-designated officers who shall in any case,
be responsible for the administration of this document or have familiarity
with it, and also means with respect to particular corporate trust matters any
other officer to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Payment" means any of the following: (i) the
declaration or payment of any dividend or any other distribution on Capital
Stock of the Issuer or any Subsidiary of the Issuer or any payment made to the
direct or indirect holders (in their capacities as such) of Capital Stock of
the Issuer or any Subsidiary of the Issuer (other than (x) dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock)
and (y) in the case of Subsidiaries of the Issuer, dividends or distributions
payable to the Issuer or to a Subsidiary of the Issuer); (ii) the purchase,
redemption or other acquisition or retirement for value of any Capital Stock,
or any option, warrant, or other right to acquire shares of Capital Stock, of
the Issuer or any of its Subsidiaries; (iii) the making of any principal
payment on, or the purchase, defeasance, repurchase, redemption or other
acquisition or retirement for value, prior to any scheduled maturity,
scheduled repayment or scheduled sinking fund payment, of any Indebtedness
which is subordinated in right of payment to the Securities; (iv) the making
of any Prohibited Investment or guarantee of any Prohibited Investment in any
Person and (v) the making of any payment to a holder of Capital Stock of the
Issuer to reimburse such holder for losses incurred by such holder upon the
disposition of such Capital Stock by such holder.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Global Security" means Securities offered and sold in
reliance on Rule 144A issued initially in the form of a single permanent
global security in registered form.
"Security" or "Securities" means any 10 3/4% Senior Note Due 2005,
as the case may be, authenticated and delivered under this Indenture. For all
purposes of this Indenture, the term "Securities" shall include any Exchange
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<PAGE>27
Securities or Private Exchange Securities to be issued and exchanged for any
Securities pursuant to the Registration Rights Agreement and this Indenture
and, for purposes of this Indenture, all Securities, Exchange Securities and
Private Exchange Securities shall be considered, and vote together as, one
series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Legend" means the legend set forth in Section 2.5(a)
hereof.
"Shelf Notice" means a notice delivered to the Holders by the Issuer
pursuant to the Registration Rights Agreement with respect to its intention to
file a Shelf Registration Statement.
"Shelf Registration Statement" means a shelf registration statement
filed with the Commission pursuant to the Registration Rights Agreement
covering resales of the Securities.
"Subsidiary" means, with respect of any Person, any corporation or
other entity of which a majority of the Capital Stock or other ownership
interests having ordinary voting power to elect a majority of the Board of
Directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person.
"Trustee" means the entity identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Five, shall also
include any successor trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 7.1 and 7.2) means the Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was originally executed.
"Unregistered Securities" means the Rule 144A Global Security, the
Certificated Securities and the Private Exchange Securities.
"Voting Stock" means Capital Stock which ordinarily has voting power
for the election of directors (or persons performing similar functions),
whether at all times or only so long as no senior class of securities has such
voting power by reason of any contingency.
"Wholly Owned Subsidiary" means, at any time, a Subsidiary all of
the Capital Stock of which (except
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directors' qualifying shares) are at the time owned directly or indirectly by
the Issuer.
ARTICLE TWO
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES.
SECTION 2.1 Authentication and Delivery of Securities; Issuance of
Exchange Securities. Upon the execution and delivery of this Indenture, or
from time to time thereafter, Securities in an aggregate principal amount not
in excess of $125,000,000 (including the principal amount of any outstanding
Exchange Securities or Private Exchange Securities that may be issued pursuant
to the Registration Rights Agreement) (except as otherwise provided in Section
2.6), may be executed by the Issuer and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Securities to or upon the written order of the Issuer, signed by both (a) its
Chairman of the Board of Directors, or any Vice Chairman of the Board of
Directors, or its President or any Vice President (whether or not designated
by a number or numbers or a word or words added before or after the title
"Vice President") and (b) by its Treasurer or any Assistant Treasurer, any
Vice President or any Secretary without any further action by the Issuer.
In the case of the original issuance of Exchange Securities, the
Trustee shall be entitled to receive an Opinion of Counsel of the Issuer dated
the date thereof substantially to the effect that:
(a) The Exchange Securities have been duly authorized and, when
executed, authenticated and delivered to the Holders of the
Securities in exchange for the Securities and assuming due
authentication by the Trustee, will be (x) valid and binding
obligations of the Issuer enforceable in accordance with their
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and (B) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general
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applicability and (y) entitled to the benefits of the Indenture.
(b) No consent, approval, authorization or order of, or
qualification or filing with, any governmental body or agency is
required for the issuance of the Exchange Securities in exchange for
the Securities or the performance by the Issuer of its obligations
under the Exchange Securities, except such as have been obtained by
the date of such opinion and such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and exchange of Securities for Exchange Securities.
(c) The issuance and delivery of the Exchange Securities in
exchange for the Securities and the performance by the Issuer of its
obligations under the Exchange Securities will not contravene (i)
any provision of applicable law, (ii) the certificate of
incorporation or by-laws of the Issuer or (iii) to the knowledge of
such counsel, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Issuer.
(d) Such counsel has reviewed evidence that the Exchange Offer
Registration Statement or Shelf Registration Statement, as
applicable, relating to the Exchange Securities has been declared
effective under the Securities Act of 1933, as amended and the
Indenture qualified under the Trust Indenture Act of 1939, as
amended.
In connection with the initial issuance of Exchange Securities, the
Issuer shall, within five (5) Business Days after filing of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as applicable,
deliver a copy thereof to the Trustee. Upon the declaration of effectiveness
of the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, by the Commission, the Issuer shall, within five (5)
Business Days thereafter, deliver a notice of such declaration of
effectiveness to each Holder, which may take the form of a copy of the
prospectus included in such Exchange Offer Registration Statement or Shelf
Registration Statement, and an Officers' Certificate to the Trustee stating
that such Exchange Offer Registration Statement or Shelf Registration
Statement, as applicable, has been declared effective by the Commission,
together with a copy of the order of effectiveness, when available. If a
Global
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Security is to be issued in respect of the Exchange Securities, the Issuer
shall execute and deliver a letter of representation and other materials
requested by the Depositary in connection with the initial issuance of
Exchange Securities.
The Issuer and the Trustee may require, as a condition to the
issuance and authentication of any Exchange Security in exchange for an
Unregistered Security, such certificates, opinions or other evidence, in form
and substance reasonably satisfactory to the Issuer and the Trustee, that the
transfer or issuance of Exchange Securities will not violate applicable law or
any applicable interpretation of the Commission. Each Holder who wishes to
exchange Unregistered Securities for Exchange Securities in the Exchange Offer
will be required to make certain representations, including that (i) it is not
an Affiliate of the Issuer, (ii) any Exchange Securities to be received by it
were acquired in the ordinary course of its business and (iii) at the time of
consummation of the Exchange Offer, it has no arrangement or understanding
with any Person to participate in the distribution of the Exchange Securities
in violation of the provisions of the Securities Act. Each Holder of Private
Exchange Securities who wishes to transfer or exchange such Private Exchange
Securities for Exchange Securities pursuant to a Shelf Registration Statement
will be required to make certain representations set forth in Exhibit G
hereto.
SECTION 2.2 Execution of Securities. The Securities shall be
signed on behalf of the Issuer by both (a) its Chairman of the Board of
Directors or any Vice Chairman of the Board of Directors or its President or
any Vice President (whether or not designated by a number or numbers or a word
or words added before or after the title "Vice President") and (b) by its
Treasurer or any Assistant Treasurer or its Secretary or any Assistant
Secretary, under its corporate seal which may, but need not, be attested.
Such signatures may be the manual or facsimile signatures of the present or
any future such officers. The seal of the Issuer may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Securities. Typographical and other minor errors or defects
in any such reproduction of the seal or any such signature shall not affect
the validity or enforceability of any Security which has been duly
authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and
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delivered by the Trustee or disposed of by the Issuer, such Security
nevertheless may be authenticated and delivered or disposed of as though the
person who signed such Security had not ceased to be such officer of the
Issuer; and any Security may be signed on behalf of the Issuer by such persons
as, at the actual date of the execution of such Security, shall be the proper
officers of the Issuer, although at the date of the execution and delivery of
this Indenture, any such person was not such officer.
SECTION 2.3 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
set forth in Exhibit E hereof, executed by the Trustee by manual signature of
one of its authorized signatories, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Security executed by the Issuer shall be conclusive evidence
that the Security so authenticated has been duly authenticated and delivered
hereunder and that the holder is entitled to the benefits of this Indenture.
SECTION 2.4 Form, Denomination and Date of Securities; Payments of
Interest. The Securities and the Trustee's certificates of authentication
shall be substantially in the forms attached hereto as Exhibits A-E,
respectively. The Securities shall be issuable as registered securities
without coupons and in denominations provided for in the forms of Security
attached hereto as Exhibits A-D, as applicable. The Securities shall be
numbered, lettered, or otherwise distinguished in such manner or in accordance
with such plans as the officers of the Issuer executing the same may determine
with the approval of the Trustee.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of a single permanent global Security in registered
form, substantially in the form set forth as Exhibit A hereto (the "Rule 144A
Global Security"), deposited with the Trustee, as custodian for the
Depositary, duly executed by the Issuer and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Security
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Securities offered and sold in reliance on Regulation D under the
Securities Act shall be issued in the form of permanent certificated
Securities in registered form
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in substantially the form set forth as Exhibit B hereto (the "Certificated
Securities").
Exchange Securities shall be issued substantially in the form set
forth in Exhibit C hereto. Exchange Securities shall be issued in registered
form and may, if agreed by the Issuer and the Holder, be issued in the form of
a permanent global security (any such global security, together with the Rule
144A Global Security, "Global Securities"). Any Exchange Security issued in
the form of a Global Security shall be issued in a form substantially
identical to Exhibit C hereto (except that any such Global Security
representing Exchange Securities shall include on the face thereof the legend
set forth in Section 2.5(b)). Notwithstanding the foregoing, if, prior to
consummation of the Exchange Offer, the Initial Purchaser holds any Securities
acquired by it and having, or which are reasonably likely to be determined to
have, the status of an unsold allotment in the initial distribution, or any
other Holder is not entitled to participate in the Exchange Offer, the Issuer
upon the request of the Initial Purchaser or any such Holder pursuant to the
Registration Rights Agreement shall simultaneously with the delivery of the
Exchange Securities in the Exchange Offer, issue and deliver to the Initial
Purchaser and any such Holder, in exchange for such Securities held by the
Initial Purchaser and any such Holder, a like principal amount of debt
securities of the Issuer that are identical in all material respects to the
Exchange Securities (except for the inclusion of any such transfer
restrictions that may, in the opinion of counsel for the Issuer, be required
under the Securities Act) (the "Private Exchange Securities"); provided,
however, the Issuer shall not be required to effect such exchange if, in the
written opinion of counsel for the Issuer (a copy of which shall be delivered
to the Initial Purchaser and any Holder affected thereby), such exchange
cannot be effected without registration under the Securities Act. Any Private
Exchange Securities shall be issued in the form of permanent certificated
securities in registered form, substantially in the form set forth in Exhibit
D hereto.
Any of the Securities may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with the rules of any
securities market in which the Securities are admitted to trading, or to
conform to general usage. The Issuer shall furnish any such legends or
endorsements to the Trustee in writing. The Issuer shall
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<PAGE>33
approve the form of the Securities and any notation, legend or endorsement on
them.
Each Security shall be dated the date of its authentication, shall
bear interest from the date stated therein and shall be payable on the dates
specified on the face of the applicable form of Security.
The person in whose name any Security is registered at the close of
business on any record date with respect to any interest payment date shall be
entitled to receive the interest, if any, payable on such interest payment
date notwithstanding any transfer or exchange of such Security subsequent to
the record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date, in which case such defaulted interest shall be paid to
the persons in whose names outstanding Securities are registered at the close
of business on a subsequent record date (which shall be not less than five
business days prior to the date of payment of such defaulted interest)
established by notice given by mail by or on behalf of the Issuer to the
holders of Securities not less than 15 days preceding such subsequent record
date. The term "record date" as used with respect to any interest payment
date (except a date for payment of defaulted interest) shall mean if such
interest payment date is the first day of a calendar month, the fifteenth day
of the next preceding calendar month and shall mean, if such interest payment
date is the fifteenth day of a calendar month, the first day of such calendar
month, whether or not such record date is a business day.
SECTION 2.5 Restrictive Legends. (a) Unless and until a Security
is exchanged for an Exchange Security in connection with an effective Exchange
Offer Registration Statement or Shelf Registration Statement pursuant to the
Registration Rights Agreement, or unless otherwise agreed by the Issuer and
the Holder thereof, each Unregistered Security shall bear a legend on the face
thereof in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS (A) A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE
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SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL INVESTOR THAT IS AN
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7)
UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"),
(2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT, WITHIN
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY
OR THE LAST DATE ON WHICH THIS SECURITY WAS HELD BY AN AFFILIATE OF
THE ISSUER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF ANY CERTIFICATED SECURITY OR PRIVATE
EXCHANGE SECURITY WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THE SECURITY OR THE LAST DATE ON WHICH THE SECURITY WAS
HELD BY AN AFFILIATE OF THE ISSUER, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE OF SUCH SECURITY RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT SUCH SECURITY TO THE TRUSTEE.
IF ANY PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND
THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
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<PAGE>35
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) Each Global Security, whether or not an Exchange Security,
shall also bear the following legend on the face thereof:
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.8 OF THE INDENTURE.
SECTION 2.6 Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 a register or registers in which the transfer of Securities as
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<PAGE>36
in this Article provided. Such register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable time. At all reasonable times, such register or
registers shall be open for inspection by the Trustee.
The Securities are issuable only in registered form. A Holder may
transfer a Security by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of this
Indenture. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Registrar in the Security Register. Prior
to the registration of any transfer by a Holder as provided herein, the
Issuer, the Trustee, and any agent of the Issuer shall treat the person in
whose name the Security is registered as the owner thereof for all purposes
whether or not the Security shall be overdue, and neither the Issuer, the
Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, the Depositary shall, by acceptance of a Global Security, agree
that transfers of beneficial interests in such Global Security may be effected
only through a book-entry system maintained by the Depositary (or its agent),
and that ownership of a beneficial interest in the Global Security shall be
required to be reflected in a book entry. When Securities are presented to
the Registrar with a request to register the transfer or to exchange them for
an equal principal amount of Securities of other authorized denominations
(including on exchange of Securities for Exchange Securities or Private
Exchange Securities), the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met;
provided that no exchanges of Unregistered Securities for Exchange Securities
shall occur until an Exchange Offer Registration Statement or a Shelf
Registration Statement with respect to such Securities shall have been
declared effective by the Commission and provided, further, that any
Unregistered Securities that are exchanged for Exchange Securities shall be
cancelled by the Trustee. To permit registrations of transfers and exchanges
in accordance with the terms, conditions and restrictions hereof, the Issuer
shall execute and the Trustee shall authenticate Securities at the Registrar's
request. No service charge shall be made for any registration of transfer or
exchange or redemption of the Securities, but the Issuer 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 other
similar governmental charge payable upon exchanges pursuant to Section 2.11,
7.5 or 11.2).
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The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 11.2 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
Upon due presentation for registration of transfer of any Security
at each such office or agency, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities in authorized denominations for a like aggregate
principal amount.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the holder or his attorney duly authorized in writing.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
SECTION 2.7 Book-Entry Provisions for Global Securities. (a) Each
Global Security initially shall (i) be registered in the name of the
Depositary or the nominee of such Depositary and (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear legends as set forth
in Section 2.5(b).
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under any Global Security and the Depositary and/or its nominee may be treated
by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee or any agent of the Issuer 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
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<PAGE>38
operation of customary practices governing the exercise of the rights of a
holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Beneficial interests in the Global
Security may be transferred in accordance with the applicable rules and
procedures of the Depositary and the provisions of Section 2.8. In addition,
definitive Securities in physical form shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Global Security if
(i) the Depositary notifies the Issuer that it is unwilling or unable to
continue as Depositary for the Global Security and a successor depositary is
not appointed by the Issuer within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a
request from the Depositary.
(c) In connection with any transfer of a beneficial interest in a
Global Security to a transferee receiving definitive Securities in physical
form pursuant to paragraph (b) of this Section, the Registrar shall reflect on
its books and records the date and the decrease in the principal amount of the
Global Security in an amount equal to the principal amount of the beneficial
interest in the Global Security to be transferred, and the Issuer shall
execute, and the Trustee shall authenticate and deliver, one or more
definitive Securities in physical form of like tenor and amount (which
Securities shall be Certificated Securities in the case of a transfer of a
beneficial interest in the Rule 144A Global Security).
(d) In connection with the transfer of the entire Global Security
to beneficial owners pursuant to paragraph (b) of this Section, the Global
Security shall be deemed to be surrendered to the Trustee for cancellation,
and the Issuer shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the Global Security, an equal aggregate principal
amount of definitive Securities in physical form (which Securities shall be
Certificated Securities in the case of a transfer of a beneficial interest in
the Rule 144A Global Security) or of authorized denominations.
(e) Any Certificated Security received in exchange for an interest
in the Rule 144A Global Security pursuant to paragraph (b) or (c) of this
Section shall, except as otherwise provided by paragraph (e) of Section
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2.8, bear the legend regarding transfer restrictions applicable to the
Certificated Security set forth in Section 2.5(a).
(f) The registered holder of the Global Security may grant proxies
and otherwise authorize any person, including Agent Members and persons that
may hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.8 Special Transfer Provisions. Unless and until a
Security is exchanged for an Exchange Security in connection with an effective
Exchange Offer Registration Statement or Shelf Registration Statement pursuant
to the Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Security to any Institutional Accredited Investor
which is not a QIB:
(i) The Registrar shall register the transfer of any Security,
if (x) the requested transfer is at least three years after the
later of the Original issue date of the Securities and the last date
on which such Security was held by an affiliate of the Issuer or (y)
the proposed transferee has delivered to the Registrar a certificate
substantially in the Form of Institutional Accredited Investor
Certificate set forth in Exhibit F hereto.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Rule 144A Global Security, upon receipt
by the Registrar of (x) the documents, if any, required by paragraph
(i) and (y) instructions given in accordance with the Depositary's
and the Registrar's procedures, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of
the Rule 144A Global Security in an amount equal to the principal
amount of the beneficial interest in the Rule 144A Global Security
to be transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Certificated Securities
of like tenor and amount.
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(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security to a
QIB:
(i) If the Security to be transferred consists of Certificated
Securities or Private Exchange Securities, the Registrar shall
register the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of
Security stating, or has otherwise advised the Issuer and the
Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Issuer and the Registrar in writing, that it
is purchasing the Security for its own account or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a QIB within the meaning of Rule 144A, and
is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the
Issuer as it has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, and the
Security to be transferred consists of Certificated Securities, upon
receipt by the Registrar of the documents referred to in clause (i)
and instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Rule
144A Global Security in an amount equal to the principal amount of
the Certificated Security to be transferred, and the Trustee shall
cancel the Certificated Security.
(c) Exchange of Rule 144A Global Security or Certificated
Securities for Exchange Securities or Private Exchange Securities. The
following provisions shall apply with respect to the registration of any
proposed exchange of an interest in the Rule 144A Global Security or a
Certificated Security for an Exchange Security or a Private Exchange
Security, provided, that any such Exchange Securities or Private
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<PAGE>41
Exchange Securities, as applicable, shall be issued and authenticated in
accordance with the terms of Sections 2.1, 2.4 and 2.6 hereof:
(i) If the proposed transferor is an Agent Member holding a
beneficial interest in the Rule 144A Global Security, upon receipt
of instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the Rule
144A Global Security in an amount equal to the principal amount of
the beneficial interest in the Rule 144A Global Security to be
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Exchange Securities or Private
Exchange Securities, as applicable, of like tenor and amount.
(ii) If the proposed transferor is a Holder of a Certificated
Security, the Registrar shall cancel such Certificated Security on
its books and records and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Exchange Securities or
Private Exchange Securities, as applicable, of like tenor and
amount.
(d) Transfer and Exchange of Private Exchange Securities. The
following additional provisions will apply with respect to the
registration of any proposed transfer or exchange of an interest in a
Private Exchange Security:
(i) If the Private Exchange Security is submitted for
registration of transfer (i) in connection with a change of
beneficial ownership other than that resulting from a sale or other
transfer for value pursuant to an effective Shelf Registration
Statement or (ii) solely of record ownership not involving the
delivery of any consideration, upon receipt of the Holder's transfer
certification set forth on the reverse of the Private Exchange
Security, the Registrar shall cancel such Private Exchange Security
on its books and records and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Private Exchange
Securities of like tenor and amount.
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(ii) If the Private Exchange Security is submitted for
registration of transfer in connection with a change of beneficial
ownership resulting from a sale or other transfer for value pursuant
to an effective Shelf Registration Statement, upon receipt of the
Private Exchange Security Transfer Certificate set forth in Exhibit
G hereto (or such other documentation in form and substance
satisfactory to the Issuer and the Trustee), the Registrar shall
cancel such Private Exchange Security on its books and records and
the Company shall execute, and the Trustee shall authenticate and
deliver, one or more Exchange Securities of like tenor and amount,
provided, that any such Exchange Securities shall be issued and
authenticated in accordance with the terms of Sections 2.1, 2.4 and
2.6 hereof.
(e) Securities Legend. Upon the transfer, exchange or replacement
of Legended Securities, the Registrar shall deliver only Legended
Securities unless either (i) the transfer is at least three years after
the later of the Original issue date of the Securities and the last date
on which such Security was held by an affiliate of the Company or (ii)
there is delivered to the Registrar an opinion of counsel reasonably
satisfactory to the Issuer and the Registrar to the effect that neither
such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(f) Suspension of Effectiveness of Shelf Registration Statement.
Upon the issuance of a stop order or any other suspension of
effectiveness of the Shelf Registration Statement by the Commission, the
Issuer shall immediately deliver a notice of such suspension of
effectiveness to the Trustee and the Registrar, whereupon the Trustee
shall cease to authenticate and the Registrar shall cease to record the
transfer of additional Exchange Securities being sold pursuant to such
Shelf Registration Statement until it shall have received an Officers'
Certificate stating that the Shelf Registration Statement, or a
succeeding registration statement, has again been declared effective by
the Commission, together with a copy of the order of effectiveness, when
available. During the period of any suspension of effectiveness of the
Shelf Registration Statement, transfers of Unregistered Securities shall
be made only in accordance with an Exchange Offer Registration
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Statement, if available, or pursuant to Section 2.8(a) or (b).
(g) General. By its acceptance of any Security bearing the
Securities Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and
in the Securities Legend and agrees that it will transfer such Security
only as provided in this Indenture. The Registrar shall not register a
transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture.
In connection with any transfer of Securities, each Holder agrees by its
acceptance of the Securities to furnish the Registrar or the Issuer such
certifications, legal opinions or other information as either of them
may reasonably require to confirm that such transfer is being made
pursuant to an exemption from, or a transaction not subject to, the
registration requirements of the Securities Act, provided that the
Registrar shall not be required to determine (but may rely on a
determination made by the Issuer with respect to) the sufficiency of any
such certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.7 or this Section 2.8.
The Issuer shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Issuer in
its discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver, a new Security, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and substitution for the Security
so apparently destroyed, lost or stolen. In every case the applicant for a
substitute Security shall furnish to the Issuer and to the Trustee and any
agent of the Issuer or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless
and, in every case of destruction, loss or theft evidence to their
satisfaction of the apparent destruction, loss or theft of such Security and
of the ownership thereof.
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Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee and its counsel) connected therewith. In
case any Security which has matured or is about to mature, shall become
mutilated or defaced or be apparently destroyed, lost or stolen, the Issuer
may, instead of issuing a substitute Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated or
defaced Security), if the applicant for such payment shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as any of them may require to save each of them harmless
from all risks, however remote, and, in every case of apparent destruction,
loss or theft, the applicant shall also furnish to the Issuer and the Trustee
and any agent of the Issuer or the Trustee evidence to their satisfaction of
the apparent destruction, loss or theft of such Security and of the ownership
thereof.
Every substitute Security issued pursuant to the provisions of this
Section by virtue of the fact that any Security is apparently destroyed, lost
or stolen shall constitute an additional contractual obligation of the Issuer,
whether or not the apparently destroyed, lost or stolen Security shall be at
any time enforceable by anyone and shall be entitled to all the benefits of
(but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities duly
authenticated and delivered hereunder. All Securities shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, or apparently destroyed, lost or stolen Securities and
shall preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.10 Cancellation of Securities; Destruction Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, if surrendered to the Issuer or any agent of the Issuer or the
Trustee, shall be delivered to the Trustee for cancellation or, if surrendered
to the Trustee, shall be cancelled by it; and no Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall destroy cancelled Securities held by it and
deliver a certificate of
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destruction to the Issuer. If the Issuer shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to the
Trustee). Temporary Securities shall be issuable as registered Securities
without coupons, of any authorized denomination, and substantially in the form
of the definitive Securities but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee. Temporary
Securities may contain such reference to any provisions of this Indenture as
may be appropriate. Every Temporary Security shall be executed by the Issuer
and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities. Without unreasonable delay, the Issuer shall execute and shall
furnish definitive Securities and thereupon temporary Securities may be
surrendered in exchange therefor without charge at each office or agency to be
maintained by the Issuer for the purpose pursuant to Section 3.2, and the
Trustee shall authenticate and deliver in exchange for such temporary
Securities a like aggregate principal amount of definitive Securities of
authorized denominations. Until so exchanged, the temporary Securities shall
be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 2.12 Wire Payments. Notwithstanding any provisions of this
Indenture and the Securities to the contrary, if the Issuer and a Holder so
agree, payments of interest on, and any portion of the principal of any
Securities other than the final payment of principal on a Security, may be
made by the paying agent upon receipt from the Issuer of immediately available
funds by 10:00 A.M., New York City time, directly to the Holder of such
Security (whether by Federal funds, wire transfer or otherwise) if the Holder
has delivered written instructions to the Trustee 15 days prior to such
payment date requesting that such payment will be so made and designating the
bank account to which such payment shall be so made and in the case of
payments of principal surrenders the same to the Trustee in exchange for a
Security or Securities aggregating the same principal amount as the unredeemed
principal amount of the Securities surrendered. The Trustee shall be entitled
to
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rely on the last instruction delivered by the Holder pursuant to this Section
2.12 unless a new instruction is delivered 15 days prior to a payment date.
The Issuer will indemnify and hold the Trustee harmless against any loss,
liability or expense (including attorneys' fees) resulting from any act or
omission to act on the part of the Issuer or any such Holder in connection
with any such agreement or which the paying agent may incur as a result of
making any payment in accordance with any such agreement.
SECTION 2.13 Deposit of Moneys. On or before each payment date
(including a Repurchase Date), the Issuer shall deposit with the paying agent
(or if the Issuer or one of its Subsidiaries or any Affiliate of any thereof
is the paying agent, shall segregate and hold in trust) money sufficient to
make the payment of principal of and interest due hereunder on such payment
date which shall, to the extent wire payments are to be made pursuant to
Section 2.12 or otherwise pursuant to this Indenture be made in immediately
available funds by 10:00 a.m. Eastern Standard Time.
ARTICLE THREE
COVENANTS OF
THE ISSUER AND THE TRUSTEE.
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of, and interest on, each of the Securities at the place or
places, at the respective times and in the manner provided in the Securities.
Each instalment of interest on the Securities may be paid by mailing checks
for such interest payable to or upon the written order of the holders of
Securities entitled thereto as they shall appear on the registry books of the
Issuer. The Issuer shall pay interest on overdue principal at the rate borne
by the Securities and shall pay interest on overdue instalments of interest at
the same rate to the extent lawful.
SECTION 3.2 Offices for Payments, etc. So long as any of the
Securities remain outstanding, the Issuer will maintain in the Borough of
Manhattan, the City of New York, the following: (a) an office or agency where
the Securities may be presented for payment, (b) an office or agency where the
Securities may be presented for registration of transfer and for exchange as
in this Indenture provided and (c) an office or agency where notices and
demands to or upon the Issuer in respect of the Securities or of this
Indenture may
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be served. The Issuer will give to the Trustee written notice of the location
of any such office or agency and of any change of location thereof. The
Issuer hereby initially designates the Corporate Trust Office of the Trustee
as the office or agency for each such purpose. In case the Issuer shall fail
to maintain any such office or agency or shall fail to give such notice of the
location or of any change in the location thereof, presentations and demands
may be made and notices may be served at the Corporate Trust Office.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee.
The Issuer, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 5.9, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee, it will cause such paying agent to
execute and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities (whether such
sums have been paid to it by the Issuer or by any other obligor on the
Securities) in trust for the benefit of the holders of the Securities or
of the Trustee,
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities) to make any payment of
the principal of or interest on the Securities when the same shall be due
and payable, and
(c) pay any such sums so held in trust by it to the Trustee upon
the Trustee's written request at any time during the continuance of the
failure referred to in clause (b) above.
The Issuer will, prior to each due date of the principal of or
interest on the Securities, deposit with the paying agent a sum sufficient to
pay such principal or interest, and (unless such paying agent is the Trustee)
the Issuer will promptly notify the Trustee of any failure to take such
action.
If the Issuer shall act as its own paying agent, it will, on or
before each due date of the principal of or interest on the Securities, set
aside, segregate and hold in trust for the benefit of the holders of the
Securities a sum
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sufficient to pay such principal or interest so becoming due. The Issuer will
promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the Issuer
may at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by the Issuer or any paying agent hereunder, as
required by this Section, such sums to be held by the Trustee upon the trusts
herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section are subject to the
provisions of Sections 9.3 and 9.4.
SECTION 3.5 Certificate to Trustee. The Issuer will furnish to the
Trustee within 120 days after the end of each fiscal year a brief certificate
(which need not comply with Section 10.5) from the principal executive,
financial or accounting officer of the Issuer as to his or her knowledge of
the Issuer's compliance with all conditions and covenants under the Indenture
during such fiscal year (such compliance to be determined without regard to
any period of grace or requirement of notice provided under the Indenture).
SECTION 3.6 Securityholders' Lists. If and so long as the Trustee
shall not be the Security registrar, the Issuer will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the holders of the Securities pursuant
to Section 312 of the Trust Indenture Act (a) semiannually not more than 15
days after each record date for the payment of semiannual interest on the
Securities, as hereinabove specified, as of such record date, and (b) at such
other times as the Trustee may request in writing, within thirty days after
receipt by the Issuer of any such request as of a date not more than 15 days
prior to the time such information is furnished.
SECTION 3.7 Reports to Holders of the Securities. The Issuer
covenants to file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents, and other reports which the Issuer may be
required to file with the Commission pursuant to Section 13 or Section 15(d)
of the Exchange Act. If, during any period in which Securities with an
aggregate principal amount equal to or greater than ten percent of the
aggregate
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<PAGE>49
principal amount of Securities originally issued under this Indenture are
outstanding, the Issuer is not obligated to file annual reports, documents or
other reports with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act, the Issuer will furnish to the Trustee the same such annual
reports, documents or other reports as if the Issuer were so subject. In
addition, for so long as any Unregistered Securities remain outstanding, upon
the request of any Holder or any prospective purchaser of such Unregistered
Securities, the Company shall supply to such Holder or such prospective
purchaser the information required under Rule 144A under the Securities Act,
unless the Issuer is then subject to Section 13 or 15(d) of the Exchange Act
and reports filed thereunder satisfy the information requirements of Rule
144A(d)(4) as then in effect.
SECTION 3.8 Reports by the Trustee. Any Trustee's report required
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted
on or before the first date for the regular payment of semiannual interest on
the Securities next succeeding November 15 in each year, and shall be dated as
of a date convenient to the Trustee no more than 60 nor less than 45 days
prior thereto (unless such November 15 is less than 45 days prior to such
interest payment date, in which case such report shall be (a) so transmitted
on or before the second such interest payment date next succeeding such
November 15 and (b) as of a date determined as provided above).
SECTION 3.9 Limitations on Indebtedness. The Issuer will not, and
will not permit any Subsidiary to, create, incur, assume, become liable for or
guarantee the payment of (collectively, an "incurrence") any Indebtedness
(including Acquired Indebtedness), other than Permitted Indebtedness, or
permit any Subsidiary to issue any Preferred Stock; provided the Issuer may
incur, and may permit any Subsidiary to incur, Indebtedness (including
Acquired Indebtedness) if (a) at the time of such event and after giving
effect thereto, on a pro forma basis, the ratio of Consolidated EBITDA to
Consolidated Fixed Charges for the four fiscal quarters immediately preceding
such event for which financial information is available consistent with the
Issuer's prior practice, taken as one period and calculated on the assumption
that such Indebtedness had been incurred on the first day of such four-quarter
period and, in the case of Acquired Indebtedness, on the assumption that the
related acquisition (whether by means of purchase, merger or otherwise) also
had occurred on such date with the appropriate adjustments with respect to
such acquisition being included in such pro forma calculation, would have
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<PAGE>50
been greater than 1.75 to 1, and (b) no Default or Event of Default shall have
occurred and be continuing at the time or as a consequence of the incurrence
of such Indebtedness.
Notwithstanding the foregoing, the Issuer will not permit any
Subsidiary to incur Indebtedness (including Acquired Indebtedness) unless, at
the time of the incurrence of such Indebtedness and after giving effect
thereto, on a pro forma basis, without duplication, the sum of (i) the
aggregate amount of Indebtedness (including Acquired Indebtedness and
Permitted Indebtedness) of all Subsidiaries of the Issuer plus (ii) the
aggregate amount of all outstanding Indebtedness secured by Liens, issued,
assumed or guaranteed by the Issuer or any Subsidiary (excluding Indebtedness
secured by Permitted Liens) plus (iii) the aggregate amount of Attributable
Debt incurred by the Issuer or any Subsidiary in respect of sale and
leaseback transactions does not at such time exceed 10% of Consolidated Net
Tangible Assets.
SECTION 3.10 Limitations on Restricted Payments. The Issuer will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
make any Restricted Payment unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment;
(b) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments (the fair market value of any such
Restricted Payment if other than cash as determined in good faith by the
Issuer's Board of Directors and evidenced by a resolution of such Board)
declared or made after the Issue Date does not exceed the greater of (i)
$5,000,000 or (ii) the sum of (A) 50% of the Consolidated Net Income of
the Issuer on a cumulative basis during the period (taken as one
accounting period) from and including April 1, 1993 and ending on the
last day of the Issuer's last fiscal quarter ending prior to the date of
such Restricted Payment (or in the event such Consolidated Net Income
shall be a deficit, minus 100% of such deficit), plus (B) 100% of the
aggregate net cash proceeds of, and the fair market value of marketable
securities (as determined in good faith by the Issuer's Board of
Directors and evidenced by a resolution of such Board) received by the
Issuer from, the issue or sale after March 1, 1993 of Capital Stock of
the Issuer (other than the issue or sale of (x) Disqualified Stock, (y)
Capital Stock of the Issuer
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to any Subsidiary of the Issuer or (z) Capital Stock convertible (whether at
the option of the Issuer or the holder thereof or upon the happening of any
event) into any security other than its Capital Stock) and any Indebtedness or
other securities of the Issuer convertible into or exercisable for Capital
Stock (other than Disqualified Stock) of the Issuer which has been so
converted or exercised, as the case may be, minus (C) $25 million in respect
of the redemption of the Issuer's Preferred Stock, Series B, in September 1994
plus (D) $5,000,000;
provided that, notwithstanding the foregoing, (I) the Issuer shall be
permitted to make Permitted Payments and (II) the Issuer and any Subsidiary
shall be permitted to make Investments in Permitted Joint Ventures if at the
time of such Investment and after giving effect thereto, on a pro forma basis,
(X) the Issuer could incur at least $1.00 of Indebtedness (other than
Permitted Indebtedness) pursuant to clause (a) of Section 3.9 (assuming for
purposes of such calculation, if such Investment is made other than with
borrowed funds or funds obtained from the issuance of Capital Stock
specifically for the purpose of such Investment, that the Issuer incurred
Indebtedness in an amount equal to such Investment bearing interest at the
weighted average rate of interest paid by the Issuer on its outstanding
Indebtedness during the four fiscal quarters most recently ended), (Y) the
aggregate amount of Investments made pursuant to this clause (II), less the
aggregate amount of dividends, other distributions of earnings and returns of
capital received by the Issuer from such Permitted Joint Ventures in cash,
does not exceed $50,000,000 and (Z) no Default or Event of Default shall have
occurred and be continuing; and provided further that the foregoing clause (b)
shall not prevent the payment of any dividend within 60 days of its
declaration if such dividend could have been made on the date of its
declaration without violation of the provisions of this covenant.
SECTION 3.11 Limitations on Transactions with Affiliates. So long
as any of the Securities remain outstanding, neither the Issuer nor any of its
Subsidiaries will directly or indirectly enter into any transaction or series
of related transactions involving aggregate consideration in excess of
$1,000,000 in any fiscal year with any Affiliate or holder of 5% or more of
any class of Capital Stock of the Issuer (including any Affiliates of such
holders) except for any transaction (including any loans or advances by or to
any Affiliate) (i) the terms of which are fair and reasonable to the Issuer or
such Subsidiary, as the case may be, and are at least as
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favorable as the terms which could be obtained by the Issuer or such
Subsidiary, as the case may be, in a comparable transaction made on an arm's
length basis with Persons who are not such a holder, an Affiliate of such
holder or Affiliate of the Issuer and (ii) which has been approved by a
majority of the Issuer's directors (including a majority of the Issuer's
independent directors, if any) in the exercise of their fiduciary duties;
provided that any such transaction shall be conclusively deemed to be on terms
which are fair and reasonable to the Issuer or any of its Subsidiaries and on
terms which are at least as favorable as the terms which could be obtained on
an arm's length basis with Persons who are not such a holder, an Affiliate of
such holder or Affiliate of the Issuer if such transaction is approved by a
majority of the Board of Directors (including a majority of the Issuer's
independent directors, if any). This covenant does not apply to (a) any
transaction between the Issuer and any of its Wholly Owned Subsidiaries or
between any of its Wholly Owned Subsidiaries, (b) any Restricted Payment not
otherwise prohibited by Section 3.10 or (c) any transaction pursuant to an
agreement in existence on the date of the Indenture and included as an exhibit
to the Company's Exchange Act Reports.
SECTION 3.12 Restrictions on Disposition of Assets of the Issuer.
(a) Subject to the provisions of Section 8.1, the Issuer will not, and will
not permit any of its Subsidiaries to, make any Asset Disposition unless (i)
the Issuer (or the Subsidiary, as the case may be) receives consideration at
the time of such sale or other disposition at least equal to the fair market
value thereof (as determined in good faith by the Issuer's management if the
consideration is less than $200,000 or, if the consideration is greater than
$200,000, as determined in good faith by the Issuer's Board of Directors and
evidenced by a resolution of such Board; provided, that no resolution of the
Board shall be required in connection with the disposition of approximately
200 contiguous acres adjacent to the Issuer's headquarters at 400 Three
Springs Drive, Weirton, West Virginia, as depicted on Exhibit H hereto, (ii)
not less than 75% of the consideration received by the Issuer (or the
Subsidiary, as the case may be) is in the form of cash or Cash Equivalents and
(iii) the Net Cash Proceeds of the Asset Disposition are within 270 days, at
the Issuer's election, (A) invested in the business or businesses of the
Issuer as of the Issue Date or any related business, or (B) to the extent not
so invested are applied (1) to make an Asset Disposition Offer to purchase the
Securities (on a pro rata basis if the amount available for such repurchase is
less than the outstanding principal amount of the Securities) or (2) to any
other Indebtedness which is pari
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passu with the Securities, at a purchase price of 100% of the principal amount
thereof plus accrued interest to the date of repayment. Notwithstanding the
foregoing, the Issuer and its Subsidiaries will not be required to apply any
Net Cash Proceeds in accordance with this provision except to the extent that
the aggregate gross proceeds from all Asset Dispositions which are not applied
in accordance with this provision exceed $25,000,000.
(b) In the event that the Issuer elects to purchase Securities
pursuant to Section 3.12(a)(iii)(B)(1) above, the Issuer will purchase
Securities tendered pursuant to a tender offer by the Issuer for the
Securities (the "Asset Disposition Offer") in accordance with the procedures
(including prorationing in the event of oversubscription) set forth in Section
3.12(c). If the aggregate purchase price of Securities tendered pursuant to
the Asset Disposition Offer is less than the Net Cash Proceeds allotted to the
purchase of the Securities, the Issuer shall apply the remaining Net Cash
Proceeds in accordance with clauses (A) and (B)(2) of Section 3.12(a)(iii)
above.
(c) (i) In the event that the Issuer elects to purchase Securities
pursuant to Section 3.12(a)(iii)(B)(1) above, the Issuer shall be obligated to
deliver to the Trustee and send, by first-class mail to each Holder, a written
notice stating that:
(1) such Holder may elect to have his Securities purchased by the
Issuer either in whole or in part (subject to prorationing as hereinafter
described in the event the Asset Disposition Offer is oversubscribed) in
multiples of $1,000 principal amount, at the applicable purchase price,
plus accrued interest to the date of purchase by the Issuer;
(2) any Security not tendered or accepted for payment will continue
to accrue interest;
(3) any Security accepted for payment pursuant to the Asset
Disposition Offer shall cease to accrue interest after the Purchase Date;
and
(4) Holders will be entitled to withdraw their election in the
manner described in clause (iii) below.
The notice shall also specify a purchase date not less than 30 days
nor more than 60 days after the date of such notice (the "Purchase Date"),
shall include all instructions and materials necessary to enable each Holder
to tender Securities pursuant to the Asset Disposition
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Offer, and shall contain information concerning the business of the Issuer
which the Issuer in good faith believes will enable such Holders to make an
informed decision (which at a minimum will include (A) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial
statements) of the Issuer, the most recent subsequently filed Quarterly Report
on Form 10-Q and any Current Report on Form 8-K of the Issuer filed subsequent
to such Quarterly Report, other than Current Reports describing other asset
dispositions otherwise described in the offering materials, (B) corresponding
successor reports or reports otherwise required pursuant to Section 3.7 to be
delivered to Holders if the Issuer is no longer filing reports pursuant to the
Securities Exchange Act of 1934, (C) a description of material developments in
the Issuer's business subsequent to the date of the latest of such reports,
and (D) if material, appropriate pro forma financial information.
Substantially simultaneously with the mailing of the notice, the Issuer shall
cause a copy of such notice to be published in the Wall Street Journal or
another newspaper of general circulation in the Borough of Manhattan, the City
of New York.
(ii) Not later than the date upon which written notice of an Asset
Disposition Offer is delivered to the Trustee as provided above, the Issuer
shall deliver to the Trustee an Officers' Certificate as to (A) the amount of
the Asset Disposition Offer (the "Offer Amount"), (B) the allocation of the
Net Cash Proceeds pursuant to which such Asset Disposition Offer is being made
and (C) the compliance of such allocation with the provisions of Section
3.12(a). Not later than one Business Day prior to the Purchase Date, the
Issuer shall also irrevocably deposit with the Trustee or with a paying agent
(or, if the Issuer is acting as its own paying agent, segregate and hold in
trust) in immediately available funds an amount equal to the Offer Amount to
be held for payment in accordance with the provisions of this Section. Upon
the expiration of the period for which the Asset Disposition Offer remains
open (the "Offer Period"), the Issuer shall deliver to the Trustee the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Issuer. The Trustee or a paying agent (if any) shall, on
the Purchase Date, mail or deliver payment to each tendering Holder in the
amount of the purchase price. In the event that the aggregate purchase price
of the Securities delivered by the Issuer to the Trustee is less than the
Offer Amount, the Trustee shall deliver the excess to the Issuer immediately
after the expiration of the Offer Period.
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(iii) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed,
to the Trustee at the address specified in the notice at least one Business
Day prior to the Purchase Date. Holders will be entitled to withdraw their
election if the Trustee or paying agent (if any) receives not later than the
close of business on the Business Day prior to the Purchase Date a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder
and a statement that such Holder is withdrawing his election to have all or a
portion of his Securities purchased. If at the expiration of the Offer
Period, the aggregate principal amount of Securities surrendered by Holders
exceeds the Offer Amount, the Issuer shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Issuer so that only Securities in denominations of $1,000
or multiples thereof shall be purchased). Holders whose Securities are
purchased only in part will be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
(iv) At the time the Issuer delivers Securities to the Trustee
which are to be accepted for purchase, the Issuer will also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Issuer pursuant to and in accordance with the terms of this Section. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to
the surrendering Holder.
(d) In the event the Issuer is unable to purchase Securities from
Holders in an Asset Disposition Offer because such purchase is prohibited by
any provision of applicable law, the Issuer need not make an Asset Disposition
Offer. The Issuer shall then be obligated to apply the Net Cash Proceeds in
accordance with clause (A) or (B)(2) of Section 3.12(a)(iii).
(e) Whenever Net Cash Proceeds are received by the Issuer, and
prior to the allocation of such Net Cash Proceeds pursuant to this Section
3.12, such Net Cash Proceeds shall be set aside by the Issuer in a separate
account pending allocation.
SECTION 3.13 Limitations on Liens. The Issuer will not, and will
not permit any Subsidiary to, issue, assume or guarantee any Indebtedness
secured by a Lien (other than a Permitted Lien) of or upon any Property of the
Issuer or any Subsidiary or any shares of stock or debt of
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any Subsidiary which owns Property, whether such Property is owned at the date
of the Indenture or thereafter acquired, without making effective provision
whereby the Securities (together with, if the Issuer shall so determine, any
other debt of the Issuer ranking equally with the Securities and then existing
or thereafter created) shall be secured by such Lien equally and ratably with
such Indebtedness, so long as such Indebtedness shall be so secured; provided
that the foregoing prohibition shall not apply to (i) liens with respect to
accounts receivable or inventory securing Permitted Working Capital
Indebtedness or (ii) liens with respect to sale and leaseback transactions
regarding the facility known as the "Number 9 Tandem Mill" or the facility
known as the "Foster Wheeler Steam Generating Facility".
Notwithstanding the foregoing, and subject to the provisions of
Section 3.9, the Issuer or any Subsidiary may issue, assume or guarantee
Indebtedness secured by Liens without equally and ratably securing the
Securities, provided that, after giving effect thereto, without duplication,
the sum of (i) the aggregate amount of all outstanding Indebtedness secured by
Liens so issued, assumed or guaranteed (excluding Indebtedness secured by
Permitted Liens) plus (ii) the aggregate amount of Attributable Debt incurred
by the Issuer or any Subsidiary in respect of sale and leaseback transactions
plus (iii) the aggregate amount of Indebtedness (including Acquired
Indebtedness and Permitted Indebtedness) of all Subsidiaries of the Issuer
does not at such time exceed 10% of Consolidated Net Tangible Assets.
SECTION 3.14 Limitations on Sale and Leaseback Transactions. The
Issuer will not and will not permit any Subsidiary to enter into any sale and
leaseback transaction with respect to any Property (whether now owned or
hereafter acquired) unless the net proceeds of the sale or transfer of the
property to be leased are at least equal to the fair market value (as
determined by the Board of Directors of the Issuer) of such Property and
unless the Issuer or such Subsidiary would be entitled under Sections 3.9 and
3.13, without equally and ratably securing the Securities, to issue, assume or
guarantee debt secured by a mortgage on such Property in an amount at least
equal to the Attributable Debt in respect of such sale and leaseback
transaction; provided, however, that the foregoing prohibition does not apply
to leases between the Issuer and a Subsidiary or between Subsidiaries or to
sales and leasebacks with respect to the facility known as the "Number 9
Tandem Mill" or the facility known as the "Foster Wheeler Steam Generating
Facility"; provided, that the Company must be able to incur, in respect of
such sale and
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leaseback transactions, debt in an amount at least equal to the present value
(discounted at the rate of interest implicit in the terms of the lease) of the
obligation of the lessee for net rental payments during the remaining term of
the lease (including any period for which such lease has been extended or may,
at the option of the lessor, be extended) under Section 3.9 hereof.
SECTION 3.15 Limitations on Dividend and Other Payment Restrictions
Affecting Subsidiaries. The Issuer will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Issuer to (a)(i) pay dividends or make any
other distributions on its Capital Stock, or any other interest or
participation in or measured by its profits, owned by the Issuer or a
Subsidiary of the Issuer, or (ii) pay any Indebtedness owed to the Issuer or a
Subsidiary of the Issuer, (b) make loans or advances to the Issuer or a
Subsidiary of the Issuer or (c) transfer any of its properties or assets to
the Issuer or a Subsidiary of the Issuer, except for Permitted Liens and Liens
permitted under the second paragraph of Section 3.13 and such other
encumbrances or restrictions existing under or by reason of (i) any
restrictions, with respect to a Subsidiary that is not a Subsidiary on the
date of this Indenture, under any agreement in existence at the time such
Subsidiary becomes a Subsidiary (unless such agreement was entered into in
connection with, or in contemplation of, such entity becoming a Subsidiary on
or after the date of the Indenture), (ii) any restrictions under any agreement
evidencing any Acquired Indebtedness of a Subsidiary of the Issuer incurred
pursuant to the provisions of Section 3.9; provided that such restrictions
shall not restrict or encumber any assets of the Issuer or its Subsidiaries
other than such Subsidiary, (iii) terms relating to the nonassignability of
any operating lease, (iv) any encumbrance or restriction existing under any
agreement that refinances or replaces the agreements containing restrictions
described in clauses (i)-(iii), provided that the terms and conditions of any
such restrictions are no less favorable to the holders of the Securities than
those under the agreement so refinanced or replaced, or (v) any encumbrance or
restriction due to applicable law.
SECTION 3.16 Change of Control Option. In the event that there
shall occur a Change of Control, each Holder of Securities shall have the
right, at such Holder's option, to require the Issuer to purchase all or any
part of such Holder's Securities, on the date (the "Repurchase
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Date") that is 90 days after notice of the Change of Control, at 101% of the
principal amount thereof, plus accrued interest to the Repurchase Date.
On or before the thirtieth day after the Change of Control, the
Issuer is obligated to mail, or cause to be mailed, to all Holders of record
of such Securities a notice regarding the Change of Control and the repurchase
right. Substantially simultaneously with mailing of the notice, the Issuer
shall cause a copy of such notice to be published in the Wall Street Journal
or another newspaper of general circulation in the Borough of Manhattan, the
City of New York.
Each such notice of a repurchase right shall state: (i) the
Repurchase Date; (ii) the date by which the repurchase right must be
exercised; (iii) the price for such Securities; and (iv) the procedure which
the Holder of Securities must follow to exercise such right.
To exercise a repurchase right, the holder of such Securities must
deliver, at least two Business Days prior to the Repurchase Date, written
notice to the Issuer (or an agent designated by the Issuer for such purpose)
of the Holder's exercise of such right, together with the Securities with
respect to which the right is being exercised, duly endorsed for transfer.
Such written notice from the Holder shall be irrevocable unless the rescission
thereof is duly approved by the Continuing Directors.
In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Issuer shall pay or cause to be paid the price
payable with respect to the Security or Securities as to which the repurchase
price has been exercised in cash to the Holder of such Security or Securities,
on the Repurchase Date. In the event that a repurchase right is exercised
with respect to less than the entire principal amount of a surrendered
Security, the Issuer shall execute and deliver to the Trustee and the Trustee
shall authenticate for issuance in the name of the Holder a new Security or
Securities in the aggregate principal amount of that portion of such
surrendered Security not repurchased.
The Issuer will comply with all applicable tender offer rules and
regulations, including Section 14(e) of the Exchange Act and the rules
thereunder, if the Issuer is required to give a notice of right of repurchase
as a result of a Change of Control.
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As used herein, "Change of Control" means (i) any sale, lease or
other transfer (in one transaction or a series of transactions) of more than
75% of the assets of the Issuer to any Person (other than a Wholly Owned
Subsidiary of the Issuer); (ii) a "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act (other than the 1984 ESOP, the
1989 ESOP or any other employee benefit plan of the Issuer) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
Capital Stock of the Issuer representing more than 50% of the voting power of
such Capital Stock; (iii) Continuing Directors cease to constitute at least a
majority of the Board of Directors of the Issuer; or (iv) the stockholders of
the Issuer approve any plan or proposal for the liquidation or dissolution of
the Issuer.
As used herein, "Continuing Director" means a director who either
was a member of the Board of Directors of the Issuer on the date of the
Indenture or who became a director of the Issuer subsequent to such date and
whose election, or nomination for election by the Issuer's stockholders, was
duly approved by a majority of the Continuing Directors then on the Board of
Directors of the Issuer.
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT.
SECTION 4.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. In case one or more of the following Events of Default
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing,
that is to say:
(a) default in the payment of any instalment of interest upon any
of the Securities as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal on
any of the Securities as and when the same shall become due and payable
either at maturity, by declaration or otherwise; or
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(c) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements on the part of the Issuer
contained in the Securities or in this Indenture for a period of 60 days
after the date on which written notice specifying such failure, stating
that such notice is a "Notice of Default" hereunder and demanding that
the Issuer remedy the same, shall have been given by registered or
certified mail, return receipt requested, to the Issuer by the Trustee,
or to the Issuer and the Trustee by the holders of at least 25% in
aggregate principal amount of the Securities at the time outstanding; or
(d) an event of default, as defined in any indenture or instrument
evidencing or under which the Issuer has at the date of this Indenture or
shall hereafter have outstanding at least $25,000,000 aggregate principal
amount of indebtedness for borrowed money, shall happen and be continuing
and such indebtedness shall have been accelerated so that the same shall
be or become due and payable prior to the date on which the same would
otherwise have become due and payable, and such a acceleration shall not
be rescinded or annulled within ten days after notice thereof shall have
been given to the Issuer by the Trustee (if such event be known to it),
or to the Issuer and the Trustee by the holders of at least 25% in
aggregate principal amount of the Securities at the time outstanding;
provided that if such event of default under such indenture or instrument
shall be remedied or cured by the Issuer or waived by the holder of such
indebtedness, then the Event of Default hereunder by reason thereof shall
be deemed likewise to have been thereupon remedied, cured or waived
without further action upon the part of either the Trustee or any of the
Securityholders, and provided further that, subject to the provisions of
Sections 5.1 and 5.2, the Trustee shall not be charged with knowledge of
any such default unless written notice thereof shall have been given to
the Trustee by the Issuer, by the holder or an agent of the holder of any
such indebtedness, by the trustee then acting under any indenture or
other instrument under which such default shall have occurred, or by the
holders of not less than 25% in the aggregate principal amount of the
Securities at the time outstanding.
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or
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hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Issuer or for
any substantial part of its property or ordering the winding up or liquidation
of its affairs, and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(f) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of its
property, or make any general assignment for the benefit of creditors.
Then, and in each and every such case, unless the principal of all of the
Securities shall have already become due and payable, either the Trustee or
the holders of not less than 25% in aggregate principal amount of the
Securities then outstanding hereunder, by notice in writing to the Issuer (and
to the Trustee if given by Securityholders), may declare the entire principal
of all the Securities and the interest accrued thereon, to be due and payable
immediately, and upon any such declaration the same shall become immediately
due and payable. This provision, however, is subject to the condition that
if, at any time after the principal of the Securities shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided,
the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured instalments of interest upon all the Securities and the principal
of any and all Securities which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
instalments of interest, at the same rate as the rate of interest specified in
the Securities, to the date of such payment or deposit) and if any and all
Events of Default under the Indenture, other than the non-payment of the
principal of Securities which shall have become due by acceleration, shall
have been cured, waived or otherwise remedied as provided herein--then and in
every such case the holders of a majority in aggregate principal amount of the
Securities then outstanding, by written notice to the Issuer and to the
Trustee, may waive all defaults and rescind and annul such declaration and its
consequences, but no such
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waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
SECTION 4.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt. The Issuer covenants that (a) in case default shall
be made in the payment of any instalment of interest on any of the Securities
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities when
the same shall have become due and payable, whether upon maturity or upon any
redemption or by declaration or otherwise--then upon demand of the Trustee,
the Issuer will pay to the Trustee for the benefit of the holders of the
Securities the whole amount that then shall have become due and payable on all
such Securities for principal or interest, as the case may be (with interest
to the date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
instalments of interest at the same rate as the rate of interest specified in
the Securities); and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including reasonable
compensation to the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and any expenses and liabilities incurred, and
all advances made, by the Trustee and each predecessor Trustee except as a
result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities to the registered holders, whether
or not the Securities be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or other obligor
upon the Securities and collect in the manner provided by law out of the
property of the Issuer or other obligor upon the Securities, wherever situated
the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the
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Securities under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or other similar law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Issuer or its property or such other obligor, or in case of
any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section, shall be entitled
and empowered, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Securities, and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and
their respective agents, attorneys and counsel, and for reimbursement of
all expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Securityholders allowed in any judicial proceedings
relative to the Issuer or other obligor upon the Securities, or to the
creditors or property of the Issuer or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or
other similar official is hereby authorized by each of the
Securityholders to make payments to the Trustee, and, in the event that
the Trustee shall consent to the making of payments directly to the
Securityholders, to pay to the Trustee
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such amounts as shall be sufficient to cover reasonable compensation to
the Trustee, each predecessor Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee except
as a result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan or reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture,
or under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof on any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the holders of the Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Securities, and it shall not be necessary to make any holders
of the Securities parties to any such proceedings.
SECTION 4.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article shall be applied in the following order at
the date or dates fixed by the Trustee and, in case of the distribution of
such moneys on account of principal or interest, upon presentation of the
several Securities and stamping (or otherwise noting) thereon the payment, or
issuing Securities in reduced principal amounts in exchange for the presented
Securities if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses, including reasonable
compensation to the Trustee and
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each predecessor Trustee and their respective agents and attorneys and of
all expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or
bad faith;
SECOND: In case the principal of the Securities shall not have
become and be then due and payable, to the payment of interest in default
in the order of the maturity of the instalments of such interest, with
interest (to the extent that such interest has been collected by the
Trustee) upon the overdue instalments of interest at the same rate as the
rate of interest specified in the Securities, such payments to be made
ratably to the persons entitled thereto, without discrimination or
preference;
THIRD: In case the principal of the Securities shall have become
and shall be then due and payable, to the payment of the whole amount
then owing and unpaid upon all the Securities for principal and interest,
with interest upon the overdue principal, and (to the extent that such
interest has been collected by the Trustee) upon overdue instalments of
interest at the same rate as the rate of interest specified in the
Securities; and in case such moneys shall be insufficient to pay in full
the whole amount so due and unpaid upon the Securities, then to the
payment of such principal and interest, without preference or priority of
principal over interest, or of interest over principal, or of any
instalment of interest over any other instalment of interest, or of any
Security over any other Security, ratably to the aggregate of such
principal and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Issuer or
any other person lawfully entitled thereto.
SECTION 4.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by law.
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SECTION 4.5 Restoration of Rights on Abandonment of Proceedings.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the Trustee, then and
in every such case the Issuer and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceedings had been taken.
SECTION 4.6 Limitations on Suits by Securityholders. No holder of
any Security shall have any right by virtue of or by availing of any provision
of this Indenture to institute any action or proceeding at law or in equity or
in bankruptcy or otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, custodian or other
similar official or for any other remedy hereunder, unless such holder
previously shall have given to the Trustee written notice of default and of
the continuance thereof, as hereinbefore provided, and unless also the holders
of not less than 25% in aggregate principal amount of the Securities then
outstanding shall have made written request upon the Trustee to institute such
action or proceedings in its own name as trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby and the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such action or proceedings and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 4.8; it being understood and intended, and being
expressly covenanted by the taker and holder of every Security with every
other taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice
the rights of any other holder of Securities, or to obtain or seek to obtain
priority over or preference to any other such holder or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities. For the protection
and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 4.7 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 2.6, no right or remedy
herein conferred upon or
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reserved to the Trustee or to the Securityholders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
No delay or omission of the Trustee or of any holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 4.6, every power and remedy
given by this Indenture or by law to the Trustee or to the Securityholders may
be exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Securityholders.
SECTION 4.8 Control by Securityholders. The holders of a majority
in aggregate principal amount of the Securities at the time outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee by this Indenture; provided that such direction
shall not be otherwise than in accordance with law and the provisions of this
Indenture and provided further that (subject to the provisions of Section 5.1)
the Trustee shall have the right to decline to follow any such direction if
the Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good
faith by its board of directors, the executive committee, or a trust committee
of directors or responsible officers of the Trustee shall determine that the
action or proceedings so directed would involve the Trustee in personal
liability or if the Trustee in good faith shall so determine that the actions
or forbearances specified in or pursuant to such direction shall be unduly
prejudicial to the interests of holders of the Securities not joining in the
giving of said direction, it being understood that (subject to Section 5.1)
the Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such holders.
Nothing in this Indenture shall impair the right of the Trustee in
its discretion to take any action deemed proper by the Trustee and which is
not inconsistent with such direction by Securityholders.
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SECTION 4.9 Waiver of Past Defaults. Prior to the declaration of
the maturity of the Securities as provided in Section 4.1, the holders of a
majority in aggregate principal amount of the Securities at the time
outstanding may on behalf of the holders of all the Securities waive any past
default or Event of Default hereunder and its consequences, except a default
(a) in the payment of principal of or interest on any of the Securities or (b)
in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the holder of each Security affected. In the
case of any such waiver, the Issuer, the Trustee and the holders of the
Securities shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have occurred
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 4.10 Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to
Securityholders a notice of the Default within 90 days after it occurs.
Except in the case of a Default in payment on any Security, the Trustee may
withhold the notice if the Trustee in good faith by its board of directors,
the executive committee, or a trust committee of directors or Responsible
Officers determines that withholding the notice is in the interest of
Securityholders.
SECTION 4.11 Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security
to receive payment of principal and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
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ARTICLE FIVE
CONCERNING THE TRUSTEE.
SECTION 5.1 Duties and Responsibilities of the
Trustee; During Default; Prior to Default. The Trustee, prior to the
occurrence of an Event of Default and after the curing or waiving of all
Events of Default which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and no
covenants or obligations shall be implied in this Indenture or the Securities.
In case an Event of Default has occurred (which has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture
but need not verify the accuracy of the contents thereof;
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(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount
of the Securities at the time outstanding relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
(d) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(e) whether or not expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to (a), (b),
(c) and (d) of this Section 5.1.
This Section 5.1 is in furtherance of and subject to Sections 315
and 316 of the Trust Indenture Act of 1939.
SECTION 5.2 Certain Rights of the Trustee. In furtherance of and
subject to the Trust Indenture Act of 1939, and subject to Section 5.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of
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Directors may be evidenced to the Trustee by a copy thereof certified by
the secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall
not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or document unless requested in
writing so to do by the holders of not less than a majority in aggregate
principal amount of the Securities then outstanding; provided that, if
the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Issuer or, if
paid by the Trustee or any predecessor trustee, shall be repaid by the
Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either
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directly or by or through agents or attorneys not regularly in its employ and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed with due care by it hereunder.
SECTION 5.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds Thereof. The recitals
contained herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Issuer of any of the Securities or of the proceeds
thereof.
SECTION 5.4 Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and may otherwise deal with the Issuer and receive, collect, hold
and retain collections from the Issuer with the same rights it would have if
it were not the Trustee or such agent.
SECTION 5.5 Moneys Held by Trustee. Subject to the provisions of
Section 9.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Neither the Trustee nor any
agent of the Issuer or the Trustee shall be under any liability for interest
on any moneys received by it hereunder.
SECTION 5.6 Compensation and Indemnification of
Trustee and Its Prior Claim. The Issuer covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) and the Issuer covenants
and agrees to pay or reimburse the Trustee and each predecessor Trustee upon
its request for all reasonable expenses, disbursements and advances incurred
or made by or on behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in
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its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Issuer also covenants to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this Indenture or the trusts hereunder and its duties hereunder, including the
costs and expenses of defending itself against or investigating any claim of
liability in the premises. The obligations of the Issuer under this Section
to compensate and indemnify the Trustee and each predecessor Trustee and to
pay or reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be a senior claim to that of the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the holders of particular Securities, and the
Securities are hereby subordinated to such senior claim. When the Trustee
incurs expenses or renders services after an Event of Default specified in
Section 4.1(e) or (f) occurs, the expenses and the compensation for such
services are intended to constitute expenses of administration under any
bankruptcy law.
SECTION 5.7 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 5.1 and 5.2, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered
or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 5.8 Persons Eligible for Appointment as Trustee. The
Trustee hereunder shall at all times be a corporation having a combined
capital and surplus of at least $25,000,000, and which is eligible in
accordance with the provisions of Section 310(a) of the Trust Indenture Act of
1939. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of a Federal, State or District of
Columbia supervising or
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examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
SECTION 5.9 Resignation and Removal; Appointment
of Successor Trustee. (a) The Trustee may at any time resign by giving
written notice of resignation to the Issuer and by mailing notice thereof by
first-class mail to holders of Securities at their last addresses as they
shall appear on the Security register. Upon receiving such notice of
resignation, the Issuer shall promptly appoint a successor trustee by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 60 days after the mailing of
such notice of resignation, the resigning trustee, the Issuer, the resigning
Trustee or the Holders of at least ten percent in aggregate principal amount
of the Securities may petition any court of competent jurisdiction for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act of 1939, after written request therefor
by the Issuer or by any Securityholder who has been a bona fide holder of
a Security or Securities for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 5.8 and shall fail to resign after written request
therefor by the Issuer or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee and appoint a
successor trustee by written instrument, in
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duplicate, executed by order of the Board of Directors of the Issuer, one copy
of which instrument shall be delivered to the Trustee so removed and one copy
to the successor trustee, or, subject to Section 315(e) of the Trust Indenture
Act of 1939, any Securityholder who has been a bona fide holder of a Security
or Securities for at least six months may on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
appoint a successor trustee by delivering to the Trustee so removed, to the
successor trustee so appointed and to the Issuer the evidence provided for in
Section 6.1 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee and any appointment
of a successor trustee pursuant to any of the provisions of this Section 5.9
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 5.10.
SECTION 5.10 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 5.9 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor hereunder, with like effect
as if originally named as trustee herein; but, nevertheless, on the written
request of the Issuer or of the successor trustee, upon payment of its charges
then unpaid, the trustee ceasing to act shall, subject to Section 9.4, pay
over to the successor trustee all moneys at the time held by it hereunder and
shall execute and deliver an instrument transferring to such successor trustee
all such rights, powers, duties and obligations. Upon request of any such
successor trustee, the Issuer shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or
collected by such
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trustee to secure any amounts then due it pursuant to the provisions of
Section 5.6.
Upon acceptance of appointment by a successor trustee as provided in
this Section 5.10, the Issuer shall mail notice thereof by first-class mail to
the holders of Securities at their last addresses as they shall appear in the
Security register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 5.9.
If the Issuer fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Issuer.
SECTION 5.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation into which the Trustee may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be eligible under the
provisions of Section 5.8, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder
or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities
or in this Indenture provided that the certificate of the Trustee shall have;
provided, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
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ARTICLE SIX
CONCERNING THE SECURITYHOLDERS.
SECTION 6.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securityholders may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Sections 5.1 and 5.2) conclusive in favor of the
Trustee and the Issuer, if made in the manner provided in this Article.
SECTION 6.2 Proof of Execution of Instruments and
of Holding of Securities; Record Date. Subject to Sections 5.1 and 5.2, the
execution of any instrument by a Securityholder or his agent or proxy may be
proved in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Securities shall be proved by the Security register
or by a certificate of the registrar thereof. The Issuer may set a record
date for purposes of determining the identity of holders of Securities
entitled to vote or consent to any action referred to in Section 6.1, which
record date may be set at any time or from time to time by notice to the
Trustee, for any date or dates (in the case of any adjournment or
resolicitation) not more than 60 days nor less than five days prior to the
proposed date of such vote or consent, and thereafter, notwithstanding any
other provisions hereof, only holders of Securities of record on such record
date shall be entitled to so vote or give such consent or to withdraw such
vote or consent.
SECTION 6.3 Holders to Be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security
register as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the
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Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be
affected by any notice to the contrary. All such payments so made to any such
person, or upon his order, shall be valid, and, to the extent of the sum or
sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Security.
SECTION 6.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the holders of the requisite aggregate principal amount of
Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor on
the Securities or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer or
any other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver only Securities which the Trustee knows
are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer or any other obligor on the Securities. In case of a dispute as to
such right, the advice of counsel shall be full protection in respect of any
decision made by the Trustee in accordance with such advice. Upon request of
the Trustee, the Issuer shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the
Issuer to be owned or held by or for the account of any of the above-described
persons; and, subject to Sections 5.1 and 5.2, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts
therein set forth and of the fact that all Securities not listed therein are
outstanding for the purpose of any such determination.
SECTION 6.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 6.1,
of the taking of any action by the holders of the percentage in aggregate
principal amount of the Securities specified in this Indenture in connection
with such action, any holder of a Security the serial number of which is shown
by the evidence to be included among the serial numbers of the Securities the
holders of which have consented to such action may, by
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filing written notice at the Corporate Trust Office and upon proof of holding
as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the holder of any
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Security and of any Securities issued in exchange
or substitution therefor, irrespective of whether or not any notation in
regard thereto is made upon any such Security. Any action taken by the
holders of the percentage in aggregate principal amount of the Securities
specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Trustee and the holders of all the
Securities.
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES.
SECTION 7.1 Supplemental Indentures Without
Consent of Securityholders. The Issuer, when authorized by a resolution of
its Board of Directors, and the Trustee may from time to time and at any time,
without the consent of the holders of any of the Securities at the time
outstanding, enter into an indenture or indentures supplemental hereto for one
or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities any property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Eight;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as its Board of Directors and the
Trustee shall consider to be for the protection of the holders of
Securities, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement
of all or any of the several remedies provided in this Indenture as
herein set forth; provided, that in respect of any such additional
covenant, restriction, condition or provision such
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supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case
of other defaults) or may provide for an immediate enforcement upon such an
Event of Default or may limit the remedies available to the Trustee upon such
an Event of Default or may limit the right of the holders of a majority in
aggregate principal amount of the Securities to waive such an Event of
Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective
or inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any
supplemental indenture as the Board of Directors may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of the Securities; and
(e) to provide for the issuance under this Indenture of Securities
in coupon form (including Securities registrable as to principal only)
and to provide for exchangeability of such Securities with Securities
issued hereunder in fully registered form, and to make all appropriate
changes for such purpose.
The Trustee is hereby authorized to join in the execution of any
such supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 7.2 Supplemental Indentures With Consent
of Securityholders. With the consent (evidenced by a majority as provided in
Article Six) of the holders of not less than a majority in aggregate principal
amount of the Securities at the time outstanding, the Issuer, when authorized
by a resolution of its Board of Directors, and the Trustee may, from time to
time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the
Securities; provided, that no such supplemental indenture shall (a)
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reduce the rate or change the time or place for payment of interest or reduce
any amount payable on redemption thereof; (b) reduce the principal of or
change the fixed maturity or place of payment of any Security; (c)change the
currency of payment of principal of or interest on any Security; (d) reduce
the principal amount of outstanding Securities necessary to modify or amend
this Indenture; or (e) make any change in Section 4.9, 4.11 or the first
paragraph of this Section 7.2, without the consent of the holders of all
Securities then outstanding.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors certified by the Secretary or an
Assistant Secretary of the Issuer authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders and other documents, if any, required by
Section 6.1, the Trustee shall join with the Issuer in the execution of such
supplemental indenture unless such 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 supplemental indenture.
It shall not be necessary for the consent of the Securityholders
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof by first-class mail to the holders of Securities
at their addresses as they shall appear on the registry books of the Issuer,
setting forth in general terms the substance of such supplemental indenture.
Any failure of the Issuer to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 7.3 Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and the
holders of Securities shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all the
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terms and conditions of any such supplemental indenture shall be and be deemed
to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 7.4 Documents to Be Given to Trustee. The Trustee, subject
to the provisions of Sections 5.1 and 5.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any such
supplemental indenture complies with the applicable provisions of this
Indenture and is a legal, valid and binding obligation of the Issuer
enforceable against the Issuer in accordance with its terms, subject to the
customary exceptions. Such supplemental indenture will comply with the Trust
Indenture Act of 1939.
SECTION 7.5 Notation on Securities in Respect
of Supplemental Indentures. Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee as to any matter
provided for by such supplemental indenture or as to any action taken at any
such meeting. If the Issuer or the Trustee shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer, authenticated by the
Trustee and delivered in exchange for the Securities then outstanding.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
SECTION 8.1 Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions. The Issuer will not consolidate or
merge with or into, or sell, lease, convey or otherwise dispose of all or
substantially all of its assets (as an entirety or substantially an entirety
in one transaction or a series of related transactions) to, any Person (other
than a merger with or into a Wholly Owned Subsidiary; provided that such
Wholly Owned Subsidiary is not organized in a foreign jurisdiction) unless:
(a) the entity formed by or surviving any such consolidation or merger (if
other than the Issuer), or to which sale, lease, conveyance or other
disposition shall have been made (the "Surviving Entity"), is a corporation
organized and existing under the laws of the United States, any state thereof
or the District of Columbia; (b) the Surviving Entity assumes by supplemental
indenture all of the obligations of the Issuer on the
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Securities and this Indenture in form and substance satisfactory to the
Trustee; (c) immediately after the transaction, no Default or Event of Default
shall have occurred and be continuing; (d) immediately after giving effect to
such transaction, the Consolidated Net Worth of the Surviving Entity would be
at least equal to the Consolidated Net Worth of the Issuer immediately prior
to such transaction; and (e) immediately after giving effect to such
transaction on a pro forma basis, the Surviving Entity could incur at least
$1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to clause
(a) of Section 3.9.
SECTION 8.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Issuer, with the same effect as if it had been named
herein.
Such successor corporation may cause to be signed, and may issue
either in its own name or in the name of the Issuer prior to such succession
any or all of the Securities issuable hereunder which theretofore shall not
have been signed by the Issuer and delivered to the Trustee; and, upon the
order of such successor corporation, instead of the Issuer, and subject to all
the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which previously
shall have been signed and delivered by the officers of the Issuer to the
Trustee for authentication, and any Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee
for that purpose. All of the Securities so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance, such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease), the Issuer or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this
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Indenture and the Securities and may be liquidated and dissolved.
SECTION 8.3 Opinion of Counsel to Trustee. The Trustee, subject to
the provisions of Sections 5.1 and 5.2, may receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, lease or conveyance, and any such assumption, and any such
liquidation or dissolution, complies with the applicable provisions of this
Indenture, is in compliance with all conditions precedent contained in this
Indenture and that such supplemental indenture, if any, constitutes the legal,
valid and binding obligation of the surviving corporation, enforceable against
the surviving corporation in accordance with its terms, subject to the
customary exceptions.
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 9.1 Satisfaction and Discharge of Indenture. If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities outstanding hereunder, as and when the same
shall have become due and payable, or (b) the Issuer shall have delivered to
the Trustee for cancellation all Securities theretofore authenticated (other
than any Securities which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.6) or (c)(1) the
Issuer shall have irrevocably deposited or caused to be deposited with the
Trustee as trust funds the entire amount in cash (other than moneys repaid by
the Trustee or any paying agent to the Issuer in accordance with Section 9.4)
or direct obligations of the United States of America, backed by its full
faith and credit, maturing as to principal and interest in such amounts and at
such times as will insure the availability of cash sufficient to pay at
maturity or upon redemption all such Securities not theretofore delivered to
the Trustee for cancellation, including principal and interest due or to
become due to such date of maturity as the case may be, and (2) the Issuer
shall have delivered to the Trustee (i) either (A) a ruling directed to the
Trustee received from the Internal Revenue Service to the effect that the
Holders of the Securities will not recognize income, gain or loss for federal
income tax purposes as a result of the Issuer's exercise of its option under
this Section 9.1(c) and will be subject to Federal income tax on the same
amount and in the same manner
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and at the same times as would have been the case if such option had not been
exercised or (B) an Opinion of Counsel, reasonably satisfactory to the
Trustee, to the same effect as the ruling described in clause (A) accompanied
by a ruling to that effect published by the Internal Revenue Service and (ii)
an Opinion of Counsel, reasonably satisfactory to the Trustee, to the effect
that after the passage of 90 days 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 and if,
in any such case, the Issuer shall also pay or cause to be paid all other sums
payable hereunder by the Issuer, then this Indenture shall cease to be of
further effect (except as to (i) rights of registration of transfer and
exchange, and the Issuer's right of optional redemption, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen Securities, (iii)
rights of holders to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), (iv) the rights, obligations and immunities of the Trustee
hereunder and (v) the rights of the Securityholders as beneficiaries hereof
with respect to the property so deposited with the Trustee payable to all or
any of them), and the Trustee, on demand of the Issuer accompanied by an
Officers' Certificate and an Opinion of Counsel and at the cost and expense of
the Issuer, shall execute proper instruments acknowledging such satisfaction
of and discharging this Indenture.
The Issuer agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably incurred and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Securities.
SECTION 9.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 9.4, all moneys deposited with the Trustee
pursuant to Section 9.1 shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Issuer
acting as its own paying agent), to the holders of the particular Securities
for the payment or redemption of which such moneys have been deposited with
the Trustee, of all sums due and to become due thereon for principal and
interest; but such money need not be segregated from other funds except to the
extent required by law.
SECTION 9.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of
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this Indenture, all moneys then held by any paying agent under the provisions
of this Indenture shall, upon demand of the Issuer, be repaid to it or paid to
the Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
SECTION 9.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Three Years. Any moneys deposited with or paid to
the Trustee or any paying agent for the payment of the principal of or
interest on any Security and not applied but remaining unclaimed for three
years after the date upon which such principal or interest shall have become
due and payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property law, be repaid to the Issuer by the Trustee or such
paying agent, and the holder of such Security shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property laws, thereafter look only to the Issuer for any payment which such
holder may be entitled to collect, and all liability of the Trustee or any
paying agent with respect to such moneys shall thereupon cease.
ARTICLE TEN
MISCELLANEOUS PROVISIONS.
SECTION 10.1 Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the
holders thereof and as part of the consideration for the issue of the
Securities.
SECTION 10.2 Provisions of Indenture for the Sole
Benefit of Parties and Securityholders. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any
person, firm or corporation, other than the parties hereto and their
successors and the holders of the Securities, any legal or
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equitable right, remedy or claim under this Indenture or under any covenant or
provision herein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and their successors and of the holders of
the Securities.
SECTION 10.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 10.4 Notices and Demands on Issuer,
Trustee and Securityholders. Any notice or demand which by any provision of
this Indenture is required or permitted to be given or served by the Trustee
or by the holders of Securities to or on the Issuer shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Issuer addressed
(until another address of the Issuer is filed by the Issuer with the Trustee)
to Weirton Steel Corporation, 400 Three Springs Drive, Weirton, West Virginia
26062, Attention: Vice President - Law and Secretary or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
telephone number: (304) 797-2000
facsimile number: (304) 797-3420
Any notice, direction, request or demand by the Issuer or any
Securityholder to or upon the Trustee shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the Trustee
at its Corporate Trust Office, Four Albany Street, New York, New York 10006,
Attention: Corporate Trust Agency Group or transmitted by facsimile
transmission (confirmed by guaranteed overnight courier) to the following
facsimile numbers:
telephone number: (212) 250-6792
facsimile number: (212) 250-6392 or
(212) 250-6961
Where this Indenture provides for notice to holders, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each holder entitled
thereto, at his last address as it appears in the Security register. In any
case where notice to holders is given by mail, neither the failure to mail
such notice, nor any
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defect in any notice so mailed, to any particular holder shall affect the
sufficiency of such notice with respect to other holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 10.5 Officers' Certificates and Opinions
of Counsel; Statements to Be Contained Therein. Upon any application or
demand by the Issuer to the Trustee to take any action under any of the
provisions of this Indenture, the Issuer shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in
this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the
person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with and (d) a statement as to whether or not,
in the opinion of such person, such condition or covenant has been complied
with.
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Any certificate, statement or opinion of an officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters or information with respect to which
is in the possession of the Issuer, upon the certificate, statement or opinion
of or representations by an officer or officers of the Issuer, unless such
counsel knows that the certificate, statement or opinion or representations
with respect to the matters upon which his certificate, statement or opinion
may be based as aforesaid are erroneous, or in the exercise of reasonable care
should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 10.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of interest on or principal of the Securities or the date
fixed for redemption of any Security shall not be a Business Day, then payment
of interest or principal need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date of maturity or the date fixed for redemption, and no interest shall
accrue for the period after such date.
SECTION 10.7 Trust Indenture Act of 1939. Prior to the
effectiveness of the Exchange Offer Registration Statement or Shelf
Registration Statement, as applicable, this Indenture shall incorporate and be
governed by the provisions of the Trust Indenture Act of 1939 that are
required to be part of and to govern indentures qualified under the Trust
Indenture Act of 1939. After the
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effectiveness of the Exchange Offer Registration Statement or Shelf
Registration Statement, as applicable, this Indenture shall be subject to the
provisions of the Trust Indenture Act of 1939 that are required to be a part
of this Indenture and shall, to the extent applicable, be governed by such
provisions. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture by
operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of
1939 (an "incorporated provision"), such incorporated provision shall control.
SECTION 10.8 New York Law to Govern. This Indenture and each
Security shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
said State, except as may otherwise be required by mandatory provisions of
law.
SECTION 10.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 10.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES.
SECTION 11.1 Right of Optional Redemption; Prices. The Securities
may not be redeemed at the option of the Issuer prior to maturity, except as
set forth in this Section 11.1. The Securities may not be redeemed at the
option of the Issuer prior to June 1, 2000. At any time and from time to time
after June 1, 2000, the Issuer may redeem the Securities at a redemption price
from June 1, 2000 to May 31, 2001 of 105.3750% of the principal amount
thereof, from June 1, 2001 to May 31, 2002 at a redemption price of 102.6875%
of the principal amount thereof, and thereafter until maturity of 100% of the
principal amount thereof, in each case plus accrued interest to the redemption
date. Notwithstanding the foregoing, if the date fixed for redemption as set
forth in this paragraph is a June 1 or December 1, then the interest payable
on such date shall be paid to the holder of record on the preceding May 15 or
November 15. Notice of such redemption shall be mailed not
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less than 30 nor more than 60 days prior to the date fixed for redemption to
the holders of Securities to be redeemed, all as provided in the Indenture, in
the circumstances set forth in this paragraph.
SECTION 11.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the holders of Securities to be redeemed as a whole or in part
shall be given by mailing notice of such redemption by first class mail,
postage prepaid, at least 30 days and not more than 60 days prior to the date
fixed for redemption to such holders of Securities at their last addresses as
they shall appear upon the registry books. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the holder receives the notice. Failure to give notice by
mail, or any defect in the notice to the holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
The notice of redemption to each such holder shall specify the
principal amount of each Security held by such holder to be redeemed, the date
fixed for redemption, the redemption price, the place or places of payment,
that payment will be made upon presentation and surrender of such Securities,
that interest accrued to the date fixed for redemption will be paid as
specified in said notice and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. In case any
Security is to be redeemed in part only the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall state
that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities in principal amount equal to the
unredeemed portion thereof will be issued.
The notice of redemption of Securities to be redeemed at the option
of the Issuer shall be given by the Issuer or, at the Issuer's request, by the
Trustee in the name and at the expense of the Issuer. The Issuer shall notify
the Trustee of such redemption at least 15 days prior to the date the notice
of redemption is to be sent to the Holders (unless a shorter period of time
shall be satisfactory to the Trustee) and shall specify in such notice whether
the Trustee is to give such notice.
At least one business day prior to the redemption date specified in
the notice of redemption given as provided in this Section, the Issuer will
deposit with the Trustee or with one or more paying agents (or, if the Issuer
is acting
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as its own paying agent, set aside, segregate and hold in trust as provided in
Section 3.4) an amount of money sufficient to redeem on the redemption date
all the Securities so called for redemption at the appropriate redemption
price, together with accrued interest to the date fixed for redemption. If
less than all the outstanding Securities are to be redeemed, the Issuer will
deliver to the Trustee at least 70 days prior to the date fixed for redemption
an Officers' Certificate stating the aggregate principal amount of Securities
to be redeemed.
The Trustee shall select the Securities to be redeemed pro rata or
by a method that complies with applicable legal and stock exchange
requirements, if any, taking into account the provisions of the next
paragraph. The particular Securities to be redeemed shall be selected unless
otherwise provided herein, not less than 45 days or more than 60 days prior to
the redemption date by the Trustee from the outstanding Securities not
previously called for redemption.
The Trustee shall promptly notify the Issuer in writing of the
Securities selected for redemption and, in the case of any Security selected
for partial redemption, the principal amount thereof to be redeemed.
Securities and portions of them selected shall be in amounts of $1,000 or
whole multiples of $1,000. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption.
SECTION 11.3 Payment of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable
on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with interest
accrued to said date) interest on the Securities or portions of Securities so
called for redemption shall cease to accrue and, except as provided in
Sections 5.5 and 9.4, such Securities shall cease from and after the date
fixed for redemption to be entitled to any benefit or security under this
Indenture, and the holders thereof shall have no right in respect of such
Securities except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption. On presentation and surrender of
such Securities at a place of payment specified in said notice, said
Securities or the specified portions thereof shall be
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paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided that
any semiannual payment of interest becoming due on the date fixed for
redemption shall be payable to the holders of such Securities registered as
such on the relevant record date subject to the terms and provisions of
Section 2.4 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate
borne by the Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the
order of the holder thereof, at the expense of the Issuer, a new Security or
Securities, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 11.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. Securities shall be excluded from
eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by an
authorized officer of the Issuer and delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being
owned of record and beneficially by, and not pledged or hypothecated by either
(a) the Issuer or (b) an entity specifically identified in such written
statement directly or indirectly controlling or controlled by or under direct
or indirect common control with the Issuer.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of June 12, 1995.
WEIRTON STEEL CORPORATION
Attest:
By: /s/ Herbert Elish
Name: Herbert Elish
/s/ William R. Kiefer Title: Chairman and Chief
Name: William R. Kiefer Executive Officer
Title: Vice President Law
and Secretary
(SEAL)
BANKERS TRUST COMPANY,
as Trustee
Attest: By: /s/ Matthew Seedy
Name: Matthew Seedy
/s/ Terence Rawlins Title: Assistant Vice President
Name: Terence Rawlins
Title: Assistant Treasurer
(SEAL)
94
<PAGE>95
Exhibit A
[FORM OF RULE 144A GLOBAL SECURITY]
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
INVESTOR THAT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) or (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"),
(2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT, WITHIN THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY OR THE LAST DATE ON
WHICH THIS SECURITY WAS HELD BY AN AFFILIATE OF THE ISSUER, RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF ANY CERTIFICATED SECURITY OR PRIVATE EXCHANGE SECURITY WITHIN THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE SECURITY OR THE LAST DATE ON
WHICH THE SECURITY WAS HELD BY AN AFFILIATE OF THE ISSUER, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE OF SUCH SECURITY RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT SUCH SECURITY TO THE TRUSTEE. IF
ANY PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
<PAGE>96
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.8 OF THE INDENTURE.
No. $
WEIRTON STEEL CORPORATION
10 3/4% Senior Notes Due 2005
Weirton Steel Corporation, a Delaware Corporation (the "Issuer"),
for value received hereby promises to pay to or registered
assigns the principal sum of Dollars at the Issuer's office or
agency for said purpose in the Borough of Manhattan, the City of New York on
June 1, 2005 in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semiannually in arrears on June 1 and
December 1 of each year, on said principal sum in like coin or currency at the
rate per annum set forth above at said office or agency from the June 1 or the
December 1, as the case may be, next preceding the date of this Security to
<PAGE>97
which interest on the Securities has been paid or duly provided for, unless
the date hereof is a date to which interest on the Securities has been paid or
duly provided for, in which case from the date of this Security, or unless no
interest has been paid or duly provided for on the Securities, in which case
from June 12, 1995 until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after May
15 or November 15, as the case may be, and before the following June 1 or
December 1, this Security shall bear interest from such June 1 or December 1;
provided, that if the Issuer shall default in the payment of interest due on
such June 1 or December 1, then this Security shall bear interest from the
next preceding June 1 or December 1 to which interest on the Securities has
been paid or duly provided for, or, if no interest has been paid or duly
provided for on the Securities since the Original issue date of this Security,
from June 12, 1995. The interest so payable on any June 1 or December 1 will,
except as otherwise provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Security is registered at the
close of business on the May 15 or November 15 preceding such June 1 or
December 1, whether or not such day is a Business Day (as defined in the
Indenture); provided that interest may be paid, at the option of the Issuer,
by mailing a check therefor payable to the registered holder entitled thereto
at his last address as it appears on the Security register.
Reference is made to the further provisions set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect
as though fully set forth at this place.
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly manually signed by the Trustee
acting under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated:
WEIRTON STEEL CORPORATION
[Seal]
______________________________
<PAGE>98
[FORM OF REVERSE OF SECURITY]
WEIRTON STEEL CORPORATION
10 3/4% Senior Notes Due 2005
This Security is one of a duly authorized issue of debt securities
of the Issuer, limited to the aggregate principal amount of $125,000,000
(except as otherwise provided in the Indenture mentioned below), issued or to
be issued pursuant to an indenture dated as of June 12, 1995 (the
"Indenture"), duly executed and delivered by the Issuer to Bankers Trust
Company, Trustee (herein called the "Trustee"). Reference is hereby made to
the Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Securities.
The Issuer promises to pay interest on the principal amount of this
Security on each June 1 and December 1, until June 1, 2005 or the earlier
redemption of the Securities as set forth below, at the rate of 10 3/4% per
annum (subject to adjustment as provided below). Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
Unless otherwise agreed by the Issuer and the holder of any Security, payments
by the Issuer in respect of the Securities (including principal, premium, if
any, and interest) shall be paid to holders of the Securities in next-day
funds. If the date of maturity of interest on or principal of the Securities
or the date fixed for redemption of any Security shall not be a Business Day,
then payment of interest or principal will be made on the next succeeding
Business Day, with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for
the period after such date.
In the event that either (i) the Exchange Offer Registration
Statement (as defined in the Indenture) is not filed with the Securities and
Exchange Commission on or prior to the 45th calendar day following June 12,
1995 and a Shelf Notice (as defined in the Indenture) has not been delivered
with respect to all Securities eligible for exchange in the Exchange Offer on
or prior to such 45th calendar day, (ii) the Exchange Offer Registration
Statement is not declared effective on or prior to the 135th calendar day
following June 12, 1995 and a Shelf Notice has not been
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<PAGE>99
delivered with respect to all Securities eligible for exchange in the Exchange
Offer (as defined in the Indenture) on or prior to such 135th calendar day, or
(iii) (A) an Exchange Offer is not consummated on or prior to the 165th
calendar day following June 12, 1995 and a Shelf Notice has not been delivered
with respect to all Securities eligible for exchange in the Exchange Offer on
or prior to such 165th calendar day, or (B) the Shelf Registration Statement
(as defined in the Indenture) is not declared effective on or prior to the
165th calendar day following June 12, 1995 or (C) if applicable, the Shelf
Registration Statement ceases to be effective (except as specifically
permitted therein) without being succeeded immediately by an additional
registration statement filed and declared effective (each such event referred
to in clauses (i) through (iii) a "Registration Default"), the Issuer will pay
increased cash interest to each Holder of the Securities during the period
following the occurrence of such Registration Default in an amount equal to
0.50% per annum until the Exchange Offer Registration Statement is filed, the
Exchange Offer Registration Statement is declared effective, the Exchange
Offer is consummated or the Shelf Registration Statement is declared effective
or again becomes effective, as the case may be. All such additional accrued
cash interest shall be paid to record holders of the Securities by wire
transfer of immediately available funds or by federal funds check by the
Issuer on each interest payment date. Upon (x) the filing of the Exchange
Offer Registration Statement or the delivery of a Shelf Notice with respect to
all Securities eligible for exchange in the Exchange Offer in the case of
clause (i) above, (y) the effectiveness of the Exchange Offer Registration
Statement or the delivery of a Shelf Notice with respect to all Securities
eligible for exchange in the Exchange Offer in the case of clause (ii) above
or (z) the consummation of the Exchange Offer or the delivery of a Shelf
Notice with respect to all Securities eligible for exchange in the Exchange
Offer (in the case of clause (iii) (A) above) or the effectiveness of a Shelf
Registration Statement (in the case of clause (iii) (B) above) or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (except as specifically permitted therein) without being succeeded
immediately by an additional registration statement filed and declared
effective (in the case of clause (iii) (C) above), and provided that none of
the conditions set forth in clauses (i), (ii) and (iii) above continues to
exist, such additional interest shall cease to accrue on the Securities from
the date of such filing, effectiveness or consummation; and provided further,
that no such additional interest shall accrue on any Security (i) subsequent
to the time of the consummation of an Exchange Offer with respect to such
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<PAGE>100
Security, or (ii) at any time that a Shelf Registration Statement is available
with respect to such Security. Each of the conditions set forth in clauses
(i) - (iii) above shall be fulfilled in accordance with the terms of the
Registration Rights Agreement dated June 12, 1995 between the Issuer and
Lazard Fr res & Co. LLC (the "Registration Rights Agreement"). The Holder of
this Security is entitled to the benefits of such Registration Rights
Agreement.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be
declared due and payable, in the manner and with the effect, and subject to
the conditions, provided in the Indenture. The Indenture provides that in
certain events such declaration and its consequences may be waived by the
holders of a majority in aggregate principal amount of the Securities then
outstanding and that, prior to any such declaration, such holders may waive
any past default under the Indenture and its consequences except a default in
the payment of principal of or interest on any of the Securities. Any such
consent or waiver by the holder of this Security (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such holder and upon
all future holders and owners of this Security and any Security which may be
issued in exchange or substitution therefor, whether or not any notation
thereof is made upon this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent
of the holders of not less than a majority in aggregate principal amount of
the Securities at the time outstanding, evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities; provided that no such supplemental indenture shall
(a) reduce the rate or change the time or place for payment of interest on any
Security or reduce any amount payable on the redemption hereof; (b) reduce the
principal of or change the fixed maturity or place of payment of any Security;
(c) change the currency of payment of principal or interest on any Security;
(d) reduce the principal amount of outstanding Securities necessary to modify
or amend this Indenture; (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Security; or (f) modify
any of the foregoing provisions or reduce the principal amount of outstanding
Securities necessary to waive any covenant or past Default, without the
consent of the holders of all Securities then outstanding.
<PAGE>101
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Security at the place, times, and rate, and in the currency,
herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and any integral multiple of $1,000;
provided, that Certificated Securities (as defined in the Indenture) shall be
issued in minimum denominations of $250,000 and integral multiples of $1,000
above that amount.
At the office or agency of the Issuer referred to on the face hereof
and in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations.
Upon due presentment for registration of transfer of this Security
at the above-mentioned office or agency of the Issuer, a new Security or
Securities of authorized denominations, for a like aggregate principal amount,
will be issued to the transferee as provided in the Indenture. No service
charge shall be made for any such transfer, but the Issuer may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
The Securities may not be redeemed at the option of the Issuer prior
to maturity, except as set forth in this paragraph. The Securities may not be
redeemed at the option of the Issuer prior to June 1, 2000. At any time and
from time to time after June 1, 2000, the Issuer may redeem the Securities at
a redemption price from June 1, 2000 to May 31, 2001 of 105.3750% of the
principal amount thereof, from June 1, 2001 to May 31, 2002 at a redemption
price of 102.6875% of the principal amount thereof, and thereafter until
maturity at 100% of the principal amount thereof, in each case plus accrued
interest to the redemption date. Notwithstanding the foregoing, if the date
fixed for redemption as set forth in this paragraph is a June 1 or December 1,
then the interest payable on such date shall be paid to the holder of record
on the preceding May 15 or November 15. Notice of such redemption shall be
mailed not less than 30 nor more than 60 days prior to the date fixed for
redemption to the holders of Securities to be redeemed, all as provided in the
Indenture, in the circumstances set forth in this paragraph.
<PAGE>102
Subject to payment by the Issuer of a sum sufficient to pay the
amount due on redemption, interest on this Security (or portion hereof if this
Security is redeemed in part) shall cease to accrue upon the date duly fixed
for redemption of this Security (or portion hereof if this Security is
redeemed in part).
Subject to the terms of the Indenture, if the Issuer or any of its
Subsidiaries consummate any Asset Disposition (as defined in the Indenture),
the Issuer or any of its Subsidiaries shall be required to invest the Net Cash
Proceeds (as defined in the Indenture) of the Asset Disposition within 270
days, at the Issuer's election, in the business or businesses of the Issuer as
of the Issue Date or any related business, or, to the extent not so invested,
make an Asset Disposition Offer (as defined in the Indenture) to purchase the
Securities (on a pro rata basis if the amount available for such repurchase is
less than the outstanding principal amount of the Securities) or any other
Indebtedness which is pari passu with the Securities, at a purchase price of
100% of the principal amount thereof plus accrued interest to the date of
repayment. Notwithstanding the foregoing, the Issuer and its Subsidiaries
will not be required to apply any Net Cash Proceeds in accordance with this
provision except to the extent that the aggregate gross proceeds from all
Asset Dispositions which are not applied in accordance with this provision
exceed $25,000,000.
In the event that there shall occur a Change of Control (as defined
in the Indenture), each holder of the Securities shall have the right, at the
Holder's option, to require the Issuer to purchase all or any part of such
Holder's Securities on the date (the "Repurchase Date") that is 90 days after
notice of the Change of Control, at 101% of the principal amount thereof, plus
accrued interest to the Repurchase Date. To be repaid, the Security must be
received, with the completed form entitled Option of Holder to Elect Purchase
(set forth below), by the paying agent at its then specified office at least
two Business Days prior to the Repurchase Date. Exercise of the repayment
option by the Securityholder will be irrevocable unless the rescission thereof
is duly approved by the Continuing Directors.
The Issuer, the Trustee, and any authorized agent of the Issuer or
the Trustee, may deem and treat the registered holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Issuer or the Trustee or any authorized agent of the
Issuer or the Trustee), for the purpose of receiving payment of, or on account
of, the
<PAGE>103
principal hereof and, subject to the provisions on the face hereof, interest
hereon and for all other purposes, and neither the Issuer nor the Trustee nor
any authorized agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Security, for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
<PAGE>104
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Issuer pursuant
to Section 3.16 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Security purchased by the
Issuer pursuant to Section 3.16 of the Indenture, state the amount (in
aggregate principal amount):
$[ ].
Date: [ ] Your Signature: [ ]
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: [ ]
<PAGE>105
Schedule A
Exchange of portions of this Global
Security for other forms of Securities
Principal Amount of Remaining
Securities Issued Principal
in Exchange for Amount of
a Portion of This This Global Notation
Date Global Security Security Made By
<TABLE>
<CAPTION>
<S> <C> <C> <C>
</TABLE>
105
<PAGE>106
Exhibit B
[FORM OF CERTIFICATED SECURITY]
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
INVESTOR THAT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) or (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"),
(2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT, WITHIN THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY OR THE LAST DATE ON
WHICH THIS SECURITY WAS HELD BY AN AFFILIATE OF THE ISSUER, RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF ANY CERTIFICATED SECURITY OR PRIVATE EXCHANGE SECURITY WITHIN THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE SECURITY OR THE LAST DATE ON
WHICH THE SECURITY WAS HELD BY AN AFFILIATE OF THE ISSUER, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE OF SUCH SECURITY RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT SUCH SECURITY TO THE TRUSTEE. IF
ANY PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO
<PAGE>107
REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
No. $
WEIRTON STEEL CORPORATION
10 3/4% Senior Notes Due 2005
Weirton Steel Corporation, a Delaware Corporation (the "Issuer"),
for value received hereby promises to pay to or registered
assigns the principal sum of Dollars at the Issuer's office or
agency for said purpose in the Borough of Manhattan, the City of New York on
June 1, 2005 in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually in arrears on June 1 and
December 1 of each year, on said principal sum in like coin or currency at the
rate per annum set forth above at said office or agency from the June 1 or the
December 1, as the case may be, next preceding the date of this Security to
which interest on the Securities has been paid or duly provided for, unless
the date hereof is a date to which interest on the Securities has been paid or
duly provided for, in which case from the date of this Security, or unless no
interest has been paid or duly provided for on the Securities, in which case
from June 12, 1995 until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after May
15 or November 15, as the case may be, and before the following June 1 or
December 1, this Security shall bear interest from such June 1 or December 1;
provided, that if the Issuer shall default in the payment of interest due on
such June 1 or December 1, then this Security shall bear interest from the
next preceding June 1 or December 1 to which interest on the Securities has
been paid or duly provided for, or, if no interest has been paid or duly
provided for on the Securities since the Original issue date of this Security,
from June 12, 1995. The interest so payable on any June 1 or December 1 will,
except as otherwise provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Security is registered at the
close of business on the May 15 or November 15 preceding such June 1 or
December 1, whether or not such day is a Business Day (as defined in the
Indenture); provided that interest may be paid, at the
<PAGE>108
option of the Issuer, by mailing a check therefor payable to the registered
holder entitled thereto at his last address as it appears on the Security
register.
Reference is made to the further provisions set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect
as though fully set forth at this place.
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly manually signed by the Trustee
acting under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated:
WEIRTON STEEL CORPORATION
[Seal]
______________________________
<PAGE>109
[FORM OF REVERSE OF SECURITY]
WEIRTON STEEL CORPORATION
10 3/4% Senior Notes Due 2005
This Security is one of a duly authorized issue of debt securities
of the Issuer, limited to the aggregate principal amount of $125,000,000
(except as otherwise provided in the Indenture mentioned below), issued or to
be issued pursuant to an indenture dated as of June 12, 1995 (the
"Indenture"), duly executed and delivered by the Issuer to Bankers Trust
Company, Trustee (herein called the "Trustee"). Reference is hereby made to
the Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Securities.
The Issuer promises to pay interest on the principal amount of this
Security on each June 1 and December 1, until June 1, 2005 or the earlier
redemption of the Securities as set forth below, at the rate of 10 3/4% per
annum (subject to adjustment as provided below). Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
Unless otherwise agreed by the Issuer and the holder of any Security, payments
by the Issuer in respect of the Securities (including principal, premium, if
any, and interest) shall be paid to holders of the Securities in next-day
funds. If the date of maturity of interest on or principal of the Securities
or the date fixed for redemption of any Security shall not be a Business Day,
then payment of interest or principal will be made on the next succeeding
Business Day, with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for
the period after such date.
In the event that either (i) the Exchange Offer Registration
Statement (as defined in the Indenture) is not filed with the Securities and
Exchange Commission on or prior to the 45th calendar day following June 12,
1995 and a Shelf Notice (as defined in the Indenture) has not been delivered
with respect to all Securities eligible for exchange in the Exchange Offer on
or prior to such 45th calendar day, (ii) the Exchange Offer Registration
Statement is not declared effective on or prior to the 135th calendar day
following June 12, 1995 and a Shelf Notice has not been
<PAGE>110
delivered with respect to all Securities eligible for exchange in the Exchange
Offer (as defined in the Indenture) on or prior to such 135th calendar day, or
(iii) (A) an Exchange Offer is not consummated on or prior to the 165th
calendar day following June 12, 1995 and a Shelf Notice has not been delivered
with respect to all Securities eligible for exchange in the Exchange Offer on
or prior to such 165th calendar day, or (B) the Shelf Registration Statement
(as defined in the Indenture) is not declared effective on or prior to the
165th calendar day following June 12, 1995 or (C) if applicable, the Shelf
Registration Statement ceases to be effective (except as specifically
permitted therein) without being succeeded immediately by an additional
registration statement filed and declared effective (each such event referred
to in clauses (i) through (iii) a "Registration Default"), the Issuer will pay
increased cash interest to each Holder of the Securities during the period
following the occurrence of such Registration Default in an amount equal to
0.50% per annum until the Exchange Offer Registration Statement is filed, the
Exchange Offer Registration Statement is declared effective, the Exchange
Offer is consummated or the Shelf Registration Statement is declared effective
or again becomes effective, as the case may be. All such additional accrued
cash interest shall be paid to record holders of the Securities by wire
transfer of immediately available funds or by federal funds check by the
Issuer on each interest payment date. Upon (x) the filing of the Exchange
Offer Registration Statement or the delivery of a Shelf Notice with respect to
all Securities eligible for exchange in the Exchange Offer in the case of
clause (i) above, (y) the effectiveness of the Exchange Offer Registration
Statement or the delivery of a Shelf Notice with respect to all Securities
eligible for exchange in the Exchange Offer in the case of clause (ii) above
or (z) the consummation of the Exchange Offer or the delivery of a Shelf
Notice with respect to all Securities eligible for exchange in the Exchange
Offer (in the case of clause (iii) (A) above) or the effectiveness of a Shelf
Registration Statement (in the case of clause (iii) (B) above) or upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (except as specifically permitted therein) without being succeeded
immediately by an additional registration statement filed and declared
effective (in the case of clause (iii) (C) above), and provided that none of
the conditions set forth in clauses (i), (ii) and (iii) above continues to
exist, such additional interest shall cease to accrue on the Securities from
the date of such filing, effectiveness or consummation; and provided further,
that no such additional interest shall accrue on any Security (i) subsequent
to the time of the consummation of an Exchange Offer with respect to such
<PAGE>111
Security, or (ii) at any time that a Shelf Registration Statement is available
with respect to such Security. Each of the conditions set forth in clauses
(i) - (iii) above shall be fulfilled in accordance with the terms of the
Registration Rights Agreement dated June 12, 1995 between the Issuer and
Lazard Fr res & Co. LLC (the "Registration Rights Agreement"). The Holder of
this Security is entitled to the benefits of such Registration Rights
Agreement.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be
declared due and payable, in the manner and with the effect, and subject to
the conditions, provided in the Indenture. The Indenture provides that in
certain events such declaration and its consequences may be waived by the
holders of a majority in aggregate principal amount of the Securities then
outstanding and that, prior to any such declaration, such holders may waive
any past default under the Indenture and its consequences except a default in
the payment of principal of or interest on any of the Securities. Any such
consent or waiver by the holder of this Security (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such holder and upon
all future holders and owners of this Security and any Security which may be
issued in exchange or substitution therefor, whether or not any notation
thereof is made upon this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent
of the holders of not less than a majority in aggregate principal amount of
the Securities at the time outstanding, evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities; provided that no such supplemental indenture shall
(a) reduce the rate or change the time or place for payment of interest on any
Security or reduce any amount payable on the redemption hereof; (b) reduce the
principal of or change the fixed maturity or place of payment of any Security;
(c) change the currency of payment of principal or interest on any Security;
(d) reduce the principal amount of outstanding Securities necessary to modify
or amend this Indenture; (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Security; or (f) modify
any of the foregoing provisions or reduce the principal amount of outstanding
Securities necessary to waive any covenant or past Default, without the
consent of the holders of all Securities then outstanding.
<PAGE>112
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Security at the place, times, and rate, and in the currency,
herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and any integral multiple of $1,000;
provided, that Certificated Securities (as defined in the Indenture) shall be
issued in minimum denominations of $250,000 and integral multiples of $1,000
above that amount.
At the office or agency of the Issuer referred to on the face hereof
and in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations.
Upon due presentment for registration of transfer of this Security
at the above-mentioned office or agency of the Issuer, a new Security or
Securities of authorized denominations, for a like aggregate principal amount,
will be issued to the transferee as provided in the Indenture. No service
charge shall be made for any such transfer, but the Issuer may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
The Securities may not be redeemed at the option of the Issuer prior
to maturity, except as set forth in this paragraph. The Securities may not be
redeemed at the option of the Issuer prior to June 1, 2000. At any time and
from time to time after June 1, 2000, the Issuer may redeem the Securities at
a redemption price from June 1, 2000 to May 31, 2001 of 105.3750% of the
principal amount thereof, from June 1, 2001 to May 31, 2002 at a redemption
price of 102.6875% of the principal amount thereof, and thereafter until
maturity at 100% of the principal amount thereof, in each case plus accrued
interest to the redemption date. Notwithstanding the foregoing, if the date
fixed for redemption as set forth in this paragraph is a June 1 or December 1,
then the interest payable on such date shall be paid to the holder of record
on the preceding May 15 or November 15. Notice of such redemption shall be
mailed not less than 30 nor more than 60 days prior to the date fixed for
redemption to the holders of Securities to be redeemed, all as provided in the
Indenture, in the circumstances set forth in this paragraph.
<PAGE>113
Subject to payment by the Issuer of a sum sufficient to pay the
amount due on redemption, interest on this Security (or portion hereof if this
Security is redeemed in part) shall cease to accrue upon the date duly fixed
for redemption of this Security (or portion hereof if this Security is
redeemed in part).
Subject to the terms of the Indenture, if the Issuer or any of its
Subsidiaries consummate any Asset Disposition (as defined in the Indenture),
the Issuer or any of its Subsidiaries shall be required to invest the Net Cash
Proceeds (as defined in the Indenture) of the Asset Disposition within 270
days, at the Issuer's election, in the business or businesses of the Issuer as
of the Issue Date or any related business, or, to the extent not so invested,
make an Asset Disposition Offer (as defined in the Indenture) to purchase the
Securities (on a pro rata basis if the amount available for such repurchase is
less than the outstanding principal amount of the Securities) or any other
Indebtedness which is pari passu with the Securities, at a purchase price of
100% of the principal amount thereof plus accrued interest to the date of
repayment. Notwithstanding the foregoing, the Issuer and its Subsidiaries
will not be required to apply any Net Cash Proceeds in accordance with this
provision except to the extent that the aggregate gross proceeds from all
Asset Dispositions which are not applied in accordance with this provision
exceed $25,000,000.
In the event that there shall occur a Change of Control (as defined
in the Indenture), each holder of the Securities shall have the right, at the
Holder's option, to require the Issuer to purchase all or any part of such
Holder's Securities on the date (the "Repurchase Date") that is 90 days after
notice of the Change of Control, at 101% of the principal amount thereof, plus
accrued interest to the Repurchase Date. To be repaid, the Security must be
received, with the completed form entitled Option of Holder to Elect Purchase
(set forth below), by the paying agent at its then specified office at least
two Business Days prior to the Repurchase Date. Exercise of the repayment
option by the Securityholder will be irrevocable unless the rescission thereof
is duly approved by the Continuing Directors.
The Issuer, the Trustee, and any authorized agent of the Issuer or
the Trustee, may deem and treat the registered holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Issuer or the Trustee or any authorized agent of the
Issuer or the Trustee), for the purpose of receiving payment of, or on account
of, the
<PAGE>114
principal hereof and, subject to the provisions on the face hereof, interest
hereon and for all other purposes, and neither the Issuer nor the Trustee nor
any authorized agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Security, for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
<PAGE>115
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Issuer pursuant
to Section 3.16 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Security purchased by the
Issuer pursuant to Section 3.16 of the Indenture, state the amount (in
aggregate principal amount):
$[ ].
Date: [ ] Your Signature: [ ]
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: [ ]
<PAGE>116
TRANSFER CERTIFICATION
In connection with any transfer of this Security occurring prior to
the date which is the earlier of three years after the later of the original
issuance of this Security or the last date on which this Security was held by
an Affiliate of the Issuer, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Security in the name of any Person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.8 of the Indenture
shall have been satisfied.
Date:
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
<PAGE>117
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Issuer as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an executive
officer
<PAGE>118
Exhibit C
[FORM OF EXCHANGE SECURITY]
[FORM OF FACE OF SECURITY]
No. $
WEIRTON STEEL CORPORATION
10 3/4% Senior Notes Due 2005
Weirton Steel Corporation, a Delaware Corporation (the "Issuer"),
for value received hereby promises to pay to or registered
assigns the principal sum of Dollars at the Issuer's office or
agency for said purpose in the Borough of Manhattan, the City of New York on
June 1, 2005 in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually in arrears on June 1 and
December 1 of each year, on said principal sum in like coin or currency at the
rate per annum set forth above at said office or agency from the June 1 or the
December 1, as the case may be, next preceding the date of this Security to
which interest on the Securities has been paid or duly provided for, unless
the date hereof is a date to which interest on the Securities has been paid or
duly provided for, in which case from the date of this Security, or unless no
interest has been paid or duly provided for on the Securities, in which case
from June 12, 1995 until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after May
15 or November 15, as the case may be, and before the following June 1 or
December 1, this Security shall bear interest from such June 1 or December 1;
provided, that if the Issuer shall default in the payment of interest due on
such June 1 or December 1, then this Security shall bear interest from the
next preceding June 1 or December 1 to which interest on the Securities has
been paid or duly provided for, or, if no interest has been paid or duly
provided for on the Securities since the Original issue date of this Security,
from June 12, 1995. The interest so payable on any June 1 or December 1 will,
except as otherwise provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Security is registered at the
close of business on the May
<PAGE>119
15 or November 15 preceding such June 1 or December 1, whether or not such day
is a Business Day (as defined in the Indenture); provided that interest may be
paid, at the option of the Issuer, by mailing a check therefor payable to the
registered holder entitled thereto at his last address as it appears on the
Security register.
Reference is made to the further provisions set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect
as though fully set forth at this place.
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly manually signed by the Trustee
acting under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated:
WEIRTON STEEL CORPORATION
[Seal]
______________________________
<PAGE>120
[FORM OF REVERSE OF SECURITY]
WEIRTON STEEL CORPORATION
10 3/4% Senior Notes Due 2005
This Security is one of a duly authorized issue of debt securities
of the Issuer, limited to the aggregate principal amount of $125,000,000
(except as otherwise provided in the Indenture mentioned below), issued or to
be issued pursuant to an indenture dated as of June 12, 1995 (the
"Indenture"), duly executed and delivered by the Issuer to Bankers Trust
Company, Trustee (herein called the "Trustee"). Reference is hereby made to
the Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Securities.
The Issuer promises to pay interest on the principal amount of this
Security on each June 1 and December 1, until June 1, 2005 or the earlier
redemption of the Securities as set forth below, at the rate of 10 3/4% per
annum. Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months. Unless otherwise agreed by the Issuer and the
holder of any Security, payments by the Issuer in respect of the Securities
(including principal, premium, if any, and interest) shall be paid to holders
of the Securities in next-day funds. If the date of maturity of interest on
or principal of the Securities or the date fixed for redemption of any
Security shall not be a Business Day, then payment of interest or principal
will be made on the next succeeding Business Day, with the same force and
effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be
declared due and payable, in the manner and with the effect, and subject to
the conditions, provided in the Indenture. The Indenture provides that in
certain events such declaration and its consequences may be waived by the
holders of a majority in aggregate principal amount of the Securities then
outstanding and that, prior to any such declaration, such holders may waive
any past default under the Indenture and its consequences except a default in
the payment of
<PAGE>121
principal of or interest on any of the Securities. Any such consent or waiver
by the holder of this Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders
and owners of this Security and any Security which may be issued in exchange
or substitution therefor, whether or not any notation thereof is made upon
this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent
of the holders of not less than a majority in aggregate principal amount of
the Securities at the time outstanding, evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities; provided that no such supplemental indenture shall
(a) reduce the rate or change the time or place for payment of interest on any
Security or reduce any amount payable on the redemption hereof; (b) reduce the
principal of or change the fixed maturity or place of payment of any Security;
(c) change the currency of payment of principal or interest on any Security;
(d) reduce the principal amount of outstanding Securities necessary to modify
or amend this Indenture; (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Security; or (f) modify
any of the foregoing provisions or reduce the principal amount of outstanding
Securities necessary to waive any covenant or past Default, without the
consent of the holders of all Securities then outstanding.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Security at the place, times, and rate, and in the currency,
herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and any integral multiple of $1,000;
provided, that Certificated Securities (as defined in the Indenture) shall be
issued in minimum denominations of $250,000 and integral multiples of $1,000
above that amount.
At the office or agency of the Issuer referred to on the face hereof
and in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations.
<PAGE>122
Upon due presentment for registration of transfer of this Security
at the above-mentioned office or agency of the Issuer, a new Security or
Securities of authorized denominations, for a like aggregate principal amount,
will be issued to the transferee as provided in the Indenture. No service
charge shall be made for any such transfer, but the Issuer may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
The Securities may not be redeemed at the option of the Issuer prior
to maturity, except as set forth in this paragraph. The Securities may not be
redeemed at the option of the Issuer prior to June 1, 2000. At any time and
from time to time after June 1, 2000, the Issuer may redeem the Securities at
a redemption price from June 1, 2000 to May 31, 2001 of 105.3750% of the
principal amount thereof, from June 1, 2001 to May 31, 2002 at a redemption
price of 102.6875% of the principal amount thereof, and thereafter until
maturity at 100% of the principal amount thereof, in each case plus accrued
interest to the redemption date. Notwithstanding the foregoing, if the date
fixed for redemption as set forth in this paragraph is a June 1 or December 1,
then the interest payable on such date shall be paid to the holder of record
on the preceding May 15 or November 15. Notice of such redemption shall be
mailed not less than 30 nor more than 60 days prior to the date fixed for
redemption to the holders of Securities to be redeemed, all as provided in the
Indenture, in the circumstances set forth in this paragraph.
Subject to payment by the Issuer of a sum sufficient to pay the
amount due on redemption, interest on this Security (or portion hereof if this
Security is redeemed in part) shall cease to accrue upon the date duly fixed
for redemption of this Security (or portion hereof if this Security is
redeemed in part).
Subject to the terms of the Indenture, if the Issuer or any of its
Subsidiaries consummate any Asset Disposition (as defined in the Indenture),
the Issuer or any of its Subsidiaries shall be required to invest the Net Cash
Proceeds (as defined in the Indenture) of the Asset Disposition within 270
days, at the Issuer's election, in the business or businesses of the Issuer as
of the Issue Date or any related business, or, to the extent not so invested,
make an Asset Disposition Offer (as defined in the Indenture) to purchase the
Securities (on a pro rata basis if the amount available for such repurchase is
less than the outstanding principal amount of the Securities) or any other
Indebtedness which is pari passu with the Securities, at a
<PAGE>123
purchase price of 100% of the principal amount thereof plus accrued interest
to the date of repayment. Notwithstanding the foregoing, the Issuer and its
Subsidiaries will not be required to apply any Net Cash Proceeds in accordance
with this provision except to the extent that the aggregate gross proceeds
from all Asset Dispositions which are not applied in accordance with this
provision exceed $25,000,000.
In the event that there shall occur a Change of Control (as defined
in the Indenture), each holder of the Securities shall have the right, at the
Holder's option, to require the Issuer to purchase all or any part of such
Holder's Securities on the date (the "Repurchase Date") that is 90 days after
notice of the Change of Control, at 101% of the principal amount thereof, plus
accrued interest to the Repurchase Date. To be repaid, the Security must be
received, with the completed form entitled Option of Holder to Elect Purchase
(set forth below), by the paying agent at its then specified office at least
two Business Days prior to the Repurchase Date. Exercise of the repayment
option by the Securityholder will be irrevocable unless the rescission thereof
is duly approved by the Continuing Directors.
The Issuer, the Trustee, and any authorized agent of the Issuer or
the Trustee, may deem and treat the registered holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Issuer or the Trustee or any authorized agent of the
Issuer or the Trustee), for the purpose of receiving payment of, or on account
of, the principal hereof and, subject to the provisions on the face hereof,
interest hereon and for all other purposes, and neither the Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Security, for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
<PAGE>124
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Issuer pursuant
to Section 3.16 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Security purchased by the
Issuer pursuant to Section 3.16 of the Indenture, state the amount (in
aggregate principal amount):
$[ ].
Date: [ ] Your Signature: [ ]
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: [ ]
<PAGE>125
Exhibit D
[FORM OF PRIVATE EXCHANGE SECURITY]
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
INVESTOR THAT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) or (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"),
(2) AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOT, WITHIN THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY OR THE LAST DATE ON
WHICH THIS SECURITY WAS HELD BY AN AFFILIATE OF THE ISSUER, RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF ANY PRIVATE EXCHANGE SECURITY WITHIN THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THE SECURITY OR THE LAST DATE ON WHICH THE SECURITY WAS
HELD BY AN AFFILIATE OF THE ISSUER, THE HOLDER MUST CHECK THE APPROPRIATE BOX
SET FORTH ON THE REVERSE OF SUCH SECURITY RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT SUCH SECURITY TO THE TRUSTEE. IF ANY PROPOSED TRANSFEREE
IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
<PAGE>126
No. $
WEIRTON STEEL CORPORATION
10 3/4% Senior Notes Due 2005
Weirton Steel Corporation, a Delaware Corporation (the "Issuer"),
for value received hereby promises to pay to or registered
assigns the principal sum of Dollars at the Issuer's office or
agency for said purpose in the Borough of Manhattan, the City of New York on
June 1, 2005 in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually in arrears on June 1 and
December 1 of each year, on said principal sum in like coin or currency at the
rate per annum set forth above at said office or agency from the June 1 or the
December 1, as the case may be, next preceding the date of this Security to
which interest on the Securities has been paid or duly provided for, unless
the date hereof is a date to which interest on the Securities has been paid or
duly provided for, in which case from the date of this Security, or unless no
interest has been paid or duly provided for on the Securities, in which case
from June 12, 1995 until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after May
15 or November 15, as the case may be, and before the following June 1 or
December 1, this Security shall bear interest from such June 1 or December 1;
provided, that if the Issuer shall default in the payment of interest due on
such June 1 or December 1, then this Security shall bear interest from the
next preceding June 1 or December 1 to which interest on the Securities has
been paid or duly provided for, or, if no interest has been paid or duly
provided for on the Securities since the Original issue date of this Security,
from June 12, 1995. The interest so payable on any June 1 or December 1 will,
except as otherwise provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Security is registered at the
close of business on the May 15 or November 15 preceding such June 1 or
December 1, whether or not such day is a Business Day (as defined in the
Indenture); provided that interest may be paid, at the option of the Issuer,
by mailing a check therefor payable to the registered holder entitled thereto
at his last address as it appears on the Security register.
<PAGE>127
Reference is made to the further provisions set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect
as though fully set forth at this place.
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly manually signed by the Trustee
acting under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated:
WEIRTON STEEL CORPORATION
[Seal]
______________________________
<PAGE>128
[FORM OF REVERSE OF SECURITY]
WEIRTON STEEL CORPORATION
10 3/4% Senior Notes Due 2005
This Security is one of a duly authorized issue of debt securities
of the Issuer, limited to the aggregate principal amount of $125,000,000
(except as otherwise provided in the Indenture mentioned below), issued or to
be issued pursuant to an indenture dated as of June 12, 1995 (the
"Indenture"), duly executed and delivered by the Issuer to Bankers Trust
Company, Trustee (herein called the "Trustee"). Reference is hereby made to
the Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Securities.
The Issuer promises to pay interest on the principal amount of this
Security on each June 1 and December 1, until June 1, 2005 or the earlier
redemption of the Securities as set forth below, at the rate of 10 3/4% per
annum. Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months. Unless otherwise agreed by the Issuer and the
holder of any Security, payments by the Issuer in respect of the Securities
(including principal, premium, if any, and interest) shall be paid to holders
of the Securities in next-day funds. If the date of maturity of interest on
or principal of the Securities or the date fixed for redemption of any
Security shall not be a Business Day, then payment of interest or principal
will be made on the next succeeding Business Day, with the same force and
effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be
declared due and payable, in the manner and with the effect, and subject to
the conditions, provided in the Indenture. The Indenture provides that in
certain events such declaration and its consequences may be waived by the
holders of a majority in aggregate principal amount of the Securities then
outstanding and that, prior to any such declaration, such holders may waive
any past default under the Indenture and its consequences except a default in
the payment of
<PAGE>129
principal of or interest on any of the Securities. Any such consent or waiver
by the holder of this Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders
and owners of this Security and any Security which may be issued in exchange
or substitution therefor, whether or not any notation thereof is made upon
this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent
of the holders of not less than a majority in aggregate principal amount of
the Securities at the time outstanding, evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities; provided that no such supplemental indenture shall
(a) reduce the rate or change the time or place for payment of interest on any
Security or reduce any amount payable on the redemption hereof; (b) reduce the
principal of or change the fixed maturity or place of payment of any Security;
(c) change the currency of payment of principal or interest on any Security;
(d) reduce the principal amount of outstanding Securities necessary to modify
or amend this Indenture; (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Security; or (f) modify
any of the foregoing provisions or reduce the principal amount of outstanding
Securities necessary to waive any covenant or past Default, without the
consent of the holders of all Securities then outstanding.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Security at the place, times, and rate, and in the currency,
herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and any integral multiple of $1,000;
provided, that Certificated Securities (as defined in the Indenture) shall be
issued in minimum denominations of $250,000 and integral multiples of $1,000
above that amount.
At the office or agency of the Issuer referred to on the face hereof
and in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations.
<PAGE>130
Upon due presentment for registration of transfer of this Security
at the above-mentioned office or agency of the Issuer, a new Security or
Securities of authorized denominations, for a like aggregate principal amount,
will be issued to the transferee as provided in the Indenture. No service
charge shall be made for any such transfer, but the Issuer may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
The Securities may not be redeemed at the option of the Issuer prior
to maturity, except as set forth in this paragraph. The Securities may not be
redeemed at the option of the Issuer prior to June 1, 2000. At any time and
from time to time after June 1, 2000, the Issuer may redeem the Securities at
a redemption price from June 1, 2000 to May 31, 2001 of 105.3750% of the
principal amount thereof, from June 1, 2001 to May 31, 2002 at a redemption
price of 102.6875% of the principal amount thereof, and thereafter until
maturity at 100% of the principal amount thereof, in each case plus accrued
interest to the redemption date. Notwithstanding the foregoing, if the date
fixed for redemption as set forth in this paragraph is a June 1 or December 1,
then the interest payable on such date shall be paid to the holder of record
on the preceding May 15 or November 15. Notice of such redemption shall be
mailed not less than 30 nor more than 60 days prior to the date fixed for
redemption to the holders of Securities to be redeemed, all as provided in the
Indenture, in the circumstances set forth in this paragraph.
Subject to payment by the Issuer of a sum sufficient to pay the
amount due on redemption, interest on this Security (or portion hereof if this
Security is redeemed in part) shall cease to accrue upon the date duly fixed
for redemption of this Security (or portion hereof if this Security is
redeemed in part).
Subject to the terms of the Indenture, if the Issuer or any of its
Subsidiaries consummate any Asset Disposition (as defined in the Indenture),
the Issuer or any of its Subsidiaries shall be required to invest the Net Cash
Proceeds (as defined in the Indenture) of the Asset Disposition within 270
days, at the Issuer's election, in the business or businesses of the Issuer as
of the Issue Date or any related business, or, to the extent not so invested,
make an Asset Disposition Offer (as defined in the Indenture) to purchase the
Securities (on a pro rata basis if the amount available for such repurchase is
less than the outstanding principal amount of the Securities) or any other
Indebtedness which is pari passu with the Securities, at a
<PAGE>131
purchase price of 100% of the principal amount thereof plus accrued interest
to the date of repayment. Notwithstanding the foregoing, the Issuer and its
Subsidiaries will not be required to apply any Net Cash Proceeds in accordance
with this provision except to the extent that the aggregate gross proceeds
from all Asset Dispositions which are not applied in accordance with this
provision exceed $25,000,000.
In the event that there shall occur a Change of Control (as defined
in the Indenture), each holder of the Securities shall have the right, at the
Holder's option, to require the Issuer to purchase all or any part of such
Holder's Securities on the date (the "Repurchase Date") that is 90 days after
notice of the Change of Control, at 101% of the principal amount thereof, plus
accrued interest to the Repurchase Date. To be repaid, the Security must be
received, with the completed form entitled Option of Holder to Elect Purchase
(set forth below), by the paying agent at its then specified office at least
two Business Days prior to the Repurchase Date. Exercise of the repayment
option by the Securityholder will be irrevocable unless the rescission thereof
is duly approved by the Continuing Directors.
The Issuer, the Trustee, and any authorized agent of the Issuer or
the Trustee, may deem and treat the registered holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Issuer or the Trustee or any authorized agent of the
Issuer or the Trustee), for the purpose of receiving payment of, or on account
of, the principal hereof and, subject to the provisions on the face hereof,
interest hereon and for all other purposes, and neither the Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Security, for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
<PAGE>132
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Issuer pursuant
to Section 3.16 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Security purchased by the
Issuer pursuant to Section 3.16 of the Indenture, state the amount (in
aggregate principal amount):
$[ ].
Date: [ ] Your Signature: [ ]
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: [ ]
<PAGE>133
TRANSFER CERTIFICATION
In connection with any transfer of this Security occurring prior to
the date which is the earlier of three years after the later of the original
issuance of this Security or the last date on which this Security was held by
an Affiliate of the Issuer, the undersigned confirms that without utilizing
any general solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred to an institutional "accredited
investor", as such term is defined in Rule 501 (a) (1), (2), (3) or
(7) under the Securities Act of 1933, as amended. An executed
Institutional Accredited Investor Transfer Certificate is submitted
herewith.
or
[ ] (c) this Security is being transferred other than in accordance with (a)
or (b) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Security in the name of any Person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.8 of the Indenture
shall have been satisfied.
Date:
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
<PAGE>134
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Issuer as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:__________________ ________________________________
NOTICE: To be
executed by an executive officer
<PAGE>135
Exhibit E
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
BANKERS TRUST COMPANY, as Trustee
Dated:
________________________________
Authorized Signatory
<PAGE>136
Exhibit F
[FORM OF INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE]
_______________, ____
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group
Re: Weirton Steel Corporation (the "Company")
10 3/4% Senior Notes Due 2005
(the "Securities")
Dear Sirs:
In connection with our proposed purchase of $_______________
aggregate principal amount of the Securities, we confirm that:
1. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
dated as of June 12, 1995 relating to the Securities (the "Indenture")
and the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended
(the "Securities Act").
2. We understand that the offer and sale of the Securities have
not been registered under the Securities Act, and that the Securities may
not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Securities, we
will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you
and to the Company a signed letter substantially in the form of this
letter,
<PAGE>137
(D) pursuant to the exemption from registration provided by Rule 144 under the
Securities Act, or (E) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person purchasing
any of the Securities from us a notice advising such purchaser that resales of
the Securities are restricted as stated herein.
3. We understand that, on any proposed resale of any Securities,
we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the
Securities purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
and have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of our investment in
the Securities, and we and any accounts for which we are acting are each
able to bear the economic risk or our or its investment.
5. We are acquiring the Securities purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are 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 or official
inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:___________________________
Authorized Signature
<PAGE>138
Exhibit G
[FORM OF PRIVATE EXCHANGE SECURITY TRANSFER CERTIFICATE]
In connection with a sale, for value, of 10 3/4% Senior Notes Due
2005 (the "Securities") of Weirton Steel Corporation (the "Company") the
undersigned Holder confirms the following with respect to the undersigned's
sale of a Private Exchange Security (Certificate No. _________):
(a) The undersigned is listed as a "Selling Securityholder" in the
Shelf Registration Statement with respect to the Securities (the
"Registration Statement").
(b) The sale is being made pursuant to the plan of distribution
described in the Prospectus which is part of the Registration
Statement (as supplemented by all supplements and post-effective
amendments thereto, the "Prospectus").
(c) The Security described above is submitted for registration of
transfer in connection with a change of beneficial ownership
resulting from a sale or other transfer for value.
(d) The undersigned Holder has delivered to the transferee a
Prospectus in connection with the sale of the above-described
Security under the above-mentioned Registration Statement, or has
delivered to the Registrar an opinion of counsel, acceptable to the
Registrar, to the effect that delivery of a Prospectus is not
required under the Securities Act of 1933, as amended.
Defined terms used but not defined herein have the meaning assigned
in the Indenture dated as of June 12, 1995 relating to the Securities.
Name of
Selling Holder _________________________________
Signed
________________________________________________
Date:__________________________
<PAGE>139
Exhibit H
SCHEDULE OF CERTAIN PROPERTIES OF THE ISSUER
<PAGE>1
==============================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of June 12, 1995
Between
WEIRTON STEEL CORPORATION
as Issuer
and
LAZARD FRERES & CO. LLC
as Initial Purchaser
==============================================================================
<PAGE>2
TABLE OF CONTENTS
Page
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Shelf Registration . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Additional Interest . . . . . . . . . . . . . . . . . . . . . . . . 11
5. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . 13
6. Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . 24
7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8. Rules 144 and 144A . . . . . . . . . . . . . . . . . . . . . . . . . 29
9. Underwritten Registrations . . . . . . . . . . . . . . . . . . . . . 30
10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(a) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . 30
(b) Adjustments Affecting Registrable Notes . . . . . . . . . . . . 30
(c) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 30
(d) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(e) Successors and Assigns . . . . . . . . . . . . . . . . . . . . 32
(f) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 32
(g) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(h) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 33
(i) Severability . . . . . . . . . . . . . . . . . . . . . . . . . 33
(j) Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . 33
(k) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 33
(l) Underwriting Agreement . . . . . . . . . . . . . . . . . . . . 33
(m) Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 34
<PAGE>3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of
June 12, 1995 between Weirton Steel Corporation, a Delaware corporation (the
"Company"), and Lazard Freres & Co. LLC (the "Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated June 5, 1995, between the Company and the Initial Purchaser
(the "Purchase Agreement") which provides for the sale by the Company to the
Initial Purchaser of $125,000,000 aggregate principal amount of the Company's
10 % Senior Notes Due 2005 (the "Notes"). In order to induce the Initial
Purchaser to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement for the benefit of
the Initial Purchaser and its direct and indirect transferees and assigns.
The execution and delivery of this Agreement is a condition to the Initial
Purchaser's obligation to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a) hereof.
Advice: See the last paragraph of Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 2(b) hereof.
Company: See the introductory paragraphs hereto.
Effectiveness Date: The 135th day after the Issue Date.
Effectiveness Period: See Section 3(a) hereof.
Event Date: See Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a) hereof.
<PAGE>4
Exchange Offer: See Section 2(a) hereof.
Exchange Offer Registration Statement: See Section 2(a) hereof.
Filing Date: The 45th day after the Issue Date.
Holder: Any holder of a Registrable Note or Registrable Notes.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of June 12, 1995 between the
Company and Bankers Trust Company, as Trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with
the terms thereof.
Initial Purchaser: See the introductory paragraphs hereto.
Inspectors: See Section 5(o) hereof.
Issue Date: The date on which the Notes were originally issued
under the Indenture.
NASD: See Section 5(t) hereof.
Notes: See the introductory paragraphs hereto.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2(b) hereof.
Person: An individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated association, union, business association,
firm or other legal entity.
Private Exchange: See Section 2(b) hereof.
Private Exchange Notes: See Section 2(b) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule
<PAGE>5
430A promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereto.
Records: See Section 5(o) hereof.
Registrable Notes: Each Note upon original issuance of the Notes
and at all times subsequent thereto, each Exchange Note as to which Section
2(c)(iv) hereof is applicable upon original issuance and at all times
subsequent thereto and each Private Exchange Note upon original issuance
thereof and at all times subsequent thereto, until in the case of any such
Note, Exchange Note or Private Exchange Note, as the case may be, the earliest
to occur of (i) a Registration Statement (other than, with respect to any
Exchange Note as to which Section 2(c)(iv) hereof is applicable, the Exchange
Offer Registration Statement) covering such Note, Exchange Note or such
Private Exchange Note having been declared effective by the SEC and such Note
or such Private Exchange Note, as the case may be, having been disposed of in
accordance with such effective Registration Statement, (ii) such Note,
Exchange Note or Private Exchange Note, as the case may be, being eligible for
sale to the public pursuant to Rule 144, (iii) such Note having been exchanged
for an Exchange Note pursuant to an Exchange Offer which may be resold without
restriction under state and federal securities laws, or (iv) such Note,
Exchange Note or Private Exchange Note, as the case may be, ceasing to be
outstanding for purposes of the Indenture.
Registration Default: See Section 4(a) hereof.
Registration Statement: Any registration statement of the Company,
including, but not limited to, the Exchange Offer Registration Statement,
filed with the SEC pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and
sales of securities made in compliance therewith resulting in offers and sales
by subsequent holders that are not affiliates of an issuer of such
<PAGE>6
securities being free of the registration and prospectus delivery requirements
of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration Statement: See Section 3(a) hereof.
Subsequent Shelf Registration Statement: See Section 3(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if existent, the
trustee under any subsequent indenture governing the Exchange Notes and
Private Exchange Notes (if any).
Underwritten registration or underwritten offering: A registration
in which securities of the Company are sold to an underwriter for reoffering
to the public.
2. Exchange Offer
(a) The Company shall file with the SEC no later than
the Filing Date, a registration statement under the Securities Act with
respect to a registered offer to exchange (the "Exchange Offer") any and all
of the Registrable Notes (other than Private Exchange Notes, if any) for a
like aggregate principal amount of debt securities of the Company which are
identical in all material respects to the Notes (the "Exchange Notes"), except
that the Exchange Notes shall have been registered pursuant to an effective
Registration Statement under the Securities Act and shall contain no
restrictive legend thereon, and which are entitled to the benefits of the
Indenture or a trust indenture which is identical in all material respects to
the Indenture (other than such changes to the Indenture or any such identical
<PAGE>7
trust indenture as are necessary to comply with any requirements of the SEC to
effect or maintain the qualification thereof under the TIA) and which, in
either case, has been qualified under the TIA. The Exchange Offer shall be
registered under the Securities Act on an appropriate form (the "Exchange
Offer Registration Statement") and shall comply with all applicable tender
offer rules and regulations under the Exchange Act. The Company shall use
reasonable best efforts to cause the Exchange Offer Registration Statement to
be declared effective under the Securities Act on or before the Effectiveness
Date. Upon the Exchange Offer Registration Statement being declared
effective, the Company will offer the Exchange Notes in exchange for surrender
of the Notes. The Company will keep the Exchange Offer open for at least 20
business days (or longer if required by applicable law) after the date that
notice of the Exchange Offer is mailed to Holders. For purposes of this
Section 2(a) only, if after such Exchange Offer Registration Statement is
initially declared effective by the SEC, the Exchange Offer or the issuance of
the Exchange Notes thereunder is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court, such Exchange Offer Registration Statement shall be deemed not to have
become effective for purposes of this Agreement. Each Holder who participates
in the Exchange Offer will be required to represent that any Exchange Notes
received by it will be acquired in the ordinary course of its business, that
at the time of the consummation of the Exchange Offer such Holder will have no
arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes in violation of the provisions of the
Securities Act, and that such Holder is not an affiliate of the Company within
the meaning of the Securities Act. Upon consummation of the Exchange Offer in
accordance with this Section 2, the provisions of this Agreement shall
continue to apply, mutatis mutandis, solely with respect to Registrable Notes
that are Private Exchange Notes and Exchange Notes held by Participating
Broker-Dealers, and the Company shall have no further obligation to register
Registrable Notes pursuant to Section 3 hereof (other than Private Exchange
Notes and other than in respect of any Exchange Notes as to which clause
2(c)(iv) hereof applies). No securities other than the Exchange Notes shall
be included in the Exchange Offer Registration Statement.
(b) The Company shall include within the Prospectus contained in
the Exchange Offer Registration Statement certain information necessary to
allow a broker-dealer who holds Notes that were acquired for its own account
as a result of market-making activities or other ordinary course trading
activities (other than Notes acquired directly from the Company or one of the
Company's affiliates) to exchange such Notes pursuant to the Exchange Offer
and to satisfy the prospectus delivery
<PAGE>8
requirements in connection with resales of Exchange Notes received by such
broker-dealer in the Exchange Offer, including a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchaser, which shall
contain a summary statement of the positions taken or policies made by the
Staff of the Division of Corporation Finance of the SEC (the "Staff") with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Notes received by such broker-dealer in the Exchange Offer (a "Participating
Broker-Dealer"), whether such positions or policies have been publicly
disseminated by the Staff or such positions or policies, in the judgment of
the Initial Purchaser, represent the prevailing views of the Staff. Such
"Plan of Distribution" section shall also expressly permit the use of the
Prospectus by all Persons subject to the prospectus delivery requirements of
the Securities Act, including all Participating Broker-Dealers, and include a
statement describing the means by which Participating Broker-Dealers may
resell the Exchange Notes. Each broker-dealer that receives Exchange Notes
for its own account in exchange for Notes where such Notes were acquired by
such broker-dealer as a result of market-making activities must acknowledge
that it will comply with any prospectus delivery requirements under the
Securities Act in connection with any resale of Exchange Notes.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein, in order to permit such Prospectus to be lawfully delivered
by all Persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as is necessary to comply with
applicable law in connection with any resale of the Exchange Notes; provided,
however, that such period shall not exceed 120 days after the Exchange Offer
Registration Statement is declared effective (or such longer period if
extended pursuant to the last paragraph of Section 5 hereof) (the "Applicable
Period").
If, prior to consummation of the Exchange Offer, the Initial
Purchaser holds any Notes acquired by it and having, or which are reasonably
likely to be determined to have, the status of an unsold allotment in the
initial distribution, or any other Holder is not entitled to participate in
the Exchange Offer, the Company upon the request of the Initial Purchaser or
any such Holder shall simultaneously with the delivery of the Exchange Notes
in the Exchange Offer, issue and deliver to the Initial Purchaser and any such
Holder, in exchange (the "Private Exchange") for such Notes held by the
Initial Purchaser and any such Holder, a like principal amount of debt
securities of the Company that are identical in all material respects to the
Exchange Notes except for any such restrictions on transfer that,
<PAGE>9
in the opinion of counsel for the Company, are required under the Securities
Act (the "Private Exchange Notes") (and which are issued pursuant to the same
indenture as the Exchange Notes); provided, however, the Company shall not be
required to effect such exchange if, in the written opinion of counsel for the
Company (a copy of which shall be delivered to the Initial Purchaser and any
Holder affected thereby), such exchange cannot be effected without
registration under the Securities Act. The Private Exchange Notes shall bear
the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from (A) the later of (i) the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or (ii) if the
Notes are surrendered for exchange on a date in a period which includes the
record date for an interest payment date to occur on or after the date of such
exchange and as to which interest will be paid, the date of such interest
payment date or (B) if no interest has been paid on the Notes, from the Issue
Date.
In connection with the Exchange Offer, the Company shall:
(1) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer
with an address in the Borough of Manhattan, the City of New York;
(3) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York time, on the last business day on which
the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Company shall:
(1) accept for exchange all Notes tendered and not validly
withdrawn pursuant to the Exchange Offer or the Private Exchange;
<PAGE>10
(2) deliver to the Trustee for cancellation all Notes so accepted
for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as the case
may be, equal in principal amount to the Notes of such Holder so accepted
for exchange.
The Exchange Offer and the Private Exchange shall not be subject to
any conditions, other than that (i) the Exchange Offer or the Private
Exchange, as the case may be, does not violate applicable law or any
applicable interpretation of the Staff, (ii) no action or proceeding is
instituted or threatened in any court or by any governmental agency which
might materially impair the ability of the Company to proceed with the
Exchange Offer or the Private Exchange and no material adverse development has
occurred in any existing action or proceeding with respect to the Company and
(iii) all governmental approvals have been obtained, which approvals the
Company deems necessary for the consummation of the Exchange Offer or Private
Exchange.
The Exchange Notes and the Private Exchange Notes may be issued
under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture, which in either event shall provide that the
Exchange Notes shall not be subject to the transfer restrictions set forth in
the Indenture. The Indenture or such indenture shall provide that the
Exchange Notes, the Private Exchange Notes and the Notes shall vote and
consent together on all matters as one class and that neither the Exchange
Notes, the Private Exchange Notes or the Notes will have the right to vote or
consent as a separate class on any matter.
(c) If (i) the Company determines in reasonably good faith that (x)
because of any change in law or in the applicable interpretations of the
Staff, the SEC is not likely to permit the Company to effect an Exchange Offer
prior to the Effectiveness Date, or (y) that the Exchange Notes would not be
tradeable upon receipt by the Holders that participate in the Exchange Offer
without restriction under applicable state and federal securities laws (other
than due solely to the status of a Holder as an affiliate of the Company
within the meaning of the Securities Act), (ii) the Exchange Offer is not
consummated within 165 days of the Issue Date, (iii) any holder of Private
Exchange Notes so requests within 135 days after the consummation of the
Private Exchange, or (iv) in the case of any Holder that participates in the
Exchange Offer, such Holder does not receive Exchange Notes on the date of the
exchange that may be sold without restriction under state and federal
securities laws (other than due solely to the status of such Holder as an
affiliate of the Company within the meaning of the Securities Act) and so
notifies the Company
<PAGE>11
within 60 days after such Holder first becomes aware of any such restriction
and provides the Company with a reasonable basis for its conclusion, in the
case of each of clauses (i), (ii), (iii) and (iv) of this sentence, then the
Company shall promptly deliver to the Holders of Registrable Notes and the
Trustee written notice thereof (the "Shelf Notice") and shall file a Shelf
Registration pursuant to Section 3 hereof.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c)
hereof, then:
(a) Shelf Registration. The Company shall file with the SEC a
Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Registrable Notes (the "Shelf
Registration Statement"). If the Company shall not have filed an Exchange
Offer Registration Statement, the Company shall use its diligent best efforts
to file with the SEC the Shelf Registration Statement as promptly as
practicable, but no later than 30 days from the delivery of the Shelf Notice.
The Shelf Registration Statement shall be on Form S-1 or another appropriate
form permitting registration of such Registrable Notes for resale by Holders
in the manner or manners designated by them (including, without limitation,
one or more underwritten offerings). The Company shall not permit any
securities other than the Registrable Notes to be included in the Shelf
Registration Statement or any Subsequent Shelf Registration Statement.
The Company shall use all reasonable efforts to cause the initial
Shelf Registration Statement to be declared effective under the Securities Act
by the 165th day after the Issue Date and to keep the Shelf Registration
Statement continuously effective under the Securities Act until the date which
is 36 months from its effective date, subject to extension pursuant to the
last paragraph of Section 5 hereof (the "Effectiveness Period"), or such
shorter period ending when (i) all Registrable Notes covered by the Shelf
Registration Statement have been sold in the manner set forth and as
contemplated in the initial Shelf Registration Statement or (ii) a Subsequent
Shelf Registration Statement covering all of the Registrable Notes has been
declared effective under the Securities Act.
(b) Subsequent Shelf Registrations. If the initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement ceases
to be effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the securities registered
thereunder), the Company shall use all reasonable efforts to obtain the prompt
withdrawal
<PAGE>12
of any order suspending the effectiveness thereof, and in any event shall
within 30 days of such cessation of effectiveness amend the Shelf Registration
Statement in a manner to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Notes (a "Subsequent
Shelf Registration Statement"). If a Subsequent Shelf Registration Statement
is filed, the Company shall use its best efforts to cause the Subsequent Shelf
Registration to be declared effective under the Securities Act as soon as
practicable after such filing and to keep such Registration Statement
continuously effective for a period equal to the number of days in the
Effectiveness Period less the aggregate number of days during which the Shelf
Registration Statement or any Subsequent Shelf Registration was previously
continuously effective. As used herein the term "Shelf Registration
Statement" means the Shelf Registration Statement and any Subsequent Shelf
Registration Statement.
(c) Supplements and Amendments. The Company shall promptly
supplement and amend the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used
for such Shelf Registration Statement, if required by the Securities Act, or
if reasonably requested by the Holders of a majority in aggregate principal
amount of the Registrable Notes covered by such Registration Statement or by
any underwriter of such Registrable Notes.
(d) Hold-Back Agreements
(1) Restrictions on Public Sale by Holders of Registrable Notes.
Each Holder of Registrable Notes whose Registrable Notes are covered by a
Shelf Registration Statement filed pursuant to this Section 3 (which
Registrable Notes are not being sold in the underwritten offering
described below) agrees, if requested (pursuant to a timely written
notice) by the Company or the managing underwriter or underwriters in an
underwritten offering, not to effect any public sale or distribution of
any of the Registrable Notes or a similar security of the Company,
including a sale pursuant to Rule 144 or Rule 144A (except as part of
such underwritten offering), during the period beginning 20 days prior
to, and ending 90 days after, the closing date of each underwritten
offering made pursuant to such Shelf Registration Statement, to the
extent timely notified in writing by the Company or by the managing
underwriter or underwriters; provided, however, that each holder of
Registrable Notes shall be subject to the hold-back restrictions of this
Section 3(d)(1) only once during the term of this Agreement.
<PAGE>13
The foregoing provisions shall not apply to any Holder if such
Holder is prevented by applicable statute or regulation from entering
into any such agreement; provided, however, that any such Holder shall
undertake, in its request to participate in any such underwritten
offering, not to effect any public sale or distribution of the class of
securities covered by such Shelf Registration Statement (except as part
of such underwritten offering) during such period unless it has provided
30 days' prior written notice of such sale or distribution to the Company
or the managing underwriter or underwriters, as the case may be.
(2) Restrictions on the Company and Others. The Company agrees (A)
not to effect any public or private sale or distribution (including,
without limitation, a sale pursuant to Regulation D under the Securities
Act) of any securities the same as or similar to those covered by a Shelf
Registration Statement filed pursuant to this Section 3, or any
securities convertible into or exchangeable or exercisable for such
securities, during the 10 days prior to, and during the 90-day period
beginning on, the commencement of an underwritten public distribution of
Registrable Notes, where the managing underwriter or underwriters so
requests; (B) to include in any agreements entered into by the Company on
or after the date of this Agreement (other than any underwriting
agreement relating to a public offering registered under the Securities
Act) pursuant to which the Company issues or agrees to issue securities
the same as or similar to the Notes a provision that each holder of such
securities that are the same as or similar to Notes issued at any time on
or after the date of this Agreement agrees not to effect any public or
private sale or distribution, or request or demand the registration, of
any such securities (or any securities convertible into or exchangeable
or exercisable for such securities) during the period referred to in
clause (A) of this Section 3(d)(2), including any sale pursuant to Rule
144 or Rule 144A; and (C) not to grant or agree to grant any "piggy-back
registration" or other similar rights to any holder of the Company's or
any of their respective subsidiaries' securities issued on or after the
date of this Agreement with respect to any Registration Statement.
4. Additional Interest
(a) The Company and the Initial Purchaser agree that the Holders of
Notes will suffer damages if the Company fails to fulfill its obligations
under Section 2 or Section 3 hereof and that it would not be feasible to
ascertain the extent of such damages with precision. Accordingly, the Company
agrees to pay,
<PAGE>14
as liquidated damages, additional interest on the Notes ("Additional
Interest") under the circumstances and to the extent set forth below (each
such event referred to in clauses (i) through (iii) below, a "Registration
Default" and each of which shall be given independent effect):
(i) if the Exchange Offer Registration Statement has not been filed
on or prior to the 45th calendar day following the Issue Date and a Shelf
Notice has not been delivered with respect to all Notes eligible for
exchange in the Exchange Offer on or prior to such 45th calendar day,
then commencing on the 46th day after the Issue Date, Additional Interest
shall accrue on the Notes over and above the accrued interest at a rate
of 0.50% per annum;
(ii) if the Exchange Offer Registration Statement is not declared
effective by the SEC on or prior to the 135th calendar day following the
Issue Date and a Shelf Notice has not been delivered with respect to all
Notes eligible for exchange in the Exchange Offer on or prior to such
135th calendar day, then commencing on the 136st day after the Issue
Date, Additional Interest shall accrue on the Notes included or which
should have been included in such Exchange Offer Registration Statement
over and above the accrued interest at a rate of 0.50% per annum; and
(iii) if (A) the Exchange Offer is not consummated on or prior to
the 165th calendar day following the Issue Date and a Shelf Notice has
not been delivered with respect to all Notes eligible for exchange in the
Exchange Offer on or prior to such 165th calendar day, (B) the Shelf
Registration Statement is not declared effective on or prior to the 165th
calendar day following the Issue Date or (C) if applicable, the Shelf
Registration Statement has been declared effective and ceases to be
effective (except as specifically permitted therein) without being
succeeded immediately by an additional registration statement filed and
declared effective, then commencing on the day immediately following the
date of such Registration Default, Additional Interest shall accrue on
the Notes over and above the accrued interest at a rate of 0.50% per
annum;
provided, however, that (1) upon the filing of the Exchange Offer Registration
Statement or the delivery of a Shelf Notice with respect to all Notes eligible
for exchange in the Exchange Offer (in the case of clause (i) of this Section
4(a)), (2) upon the effectiveness of the Exchange Offer Registration Statement
or the delivery of a Shelf Notice with respect to all Notes eligible for
exchange in the Exchange Offer (in the case of clause (ii) of this Section
4(a)), or (3) upon the consummation of the Exchange
<PAGE>15
Offer or the delivery of a Shelf Notice with respect to all Notes eligible for
exchange in the Exchange Offer (in the case of clause (iii)(A) of this Section
4(a)), or upon the effectiveness of the Shelf Registration Statement (in the
case of clause (iii)(B) of this Section 4(a)), or upon the effectiveness of
the Shelf Registration Statement which had ceased to remain effective (except
as specifically permitted therein) without being succeeded immediately by an
additional registration statement filed and declared effective (in the case of
clause (iii)(C) of this Section 4(a)), Additional Interest on the Notes as a
result of such clause (or the relevant subclause thereof), as the case may be,
shall cease to accrue; and provided further, that no Additional Interest shall
accrue on any Note (i) subsequent to the time of the consummation of the
Exchange Offer with respect to such Note, or (ii) at any time that a Shelf
Registration Statement is available with respect to such Note.
Notwithstanding the foregoing, the Company shall not be required to pay
Additional Interest with respect to the Notes of a Holder if the applicable
Registration Default arises from the Company's failure to file, or cause to
become effective, a Shelf Registration Statement within the time periods
specified in this Section 4 by reason of the failure of such Holder to provide
such information as (i) the Company may reasonable request, with reasonable
prior written notice, for use in the Shelf Registration Statement or any
Prospectus included therein to the extent the Company reasonably determines
that such information is required to be included therein by applicable law,
(ii) the NASD or the SEC may request in connection with such Shelf
Registration Statement or (iii) is required to comply with the agreements of
such Holder as contained in the penultimate paragraph of Section 5 to the
extent compliance thereof is necessary for the Shelf Registration Statement to
be declared effective.
(b) The Company shall notify the Trustee within one business day
after each Registration Default (an "Event Date"). Any amounts of Additional
Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be
payable in cash semi-annually on each June 1 and December 1 (to the holders of
record on the May 15 and November 15 immediately preceding such dates),
commencing with the first such date occurring after any such Additional
Interest commences to accrue. The amount of Additional Interest will be
determined by multiplying the applicable Additional Interest rate by the
principal amount of the Registrable Notes, multiplied by a fraction, the
numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed), and the denominator of which is 360.
<PAGE>16
5. Registration Procedures
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Company shall effect such registrations to
permit the sale of the securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Company hereunder the
Company shall:
(a) Prepare and file with the SEC on or prior to the Filing Date, a
Registration Statement or Registration Statements as prescribed by Sections 2
or 3 hereof, and use its diligent best efforts to cause each such Registration
Statement to become effective and remain effective as provided herein;
provided, however, that, if (1) such filing is pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, before filing any Registration Statement
or Prospectus or any amendments or supplements thereto, the Company shall
furnish to and afford the Holders of the Registrable Notes covered by such
Registration Statement or each such Participating Broker-Dealer, as the case
may be, one counsel selected by the Holders of a majority in aggregate
principal amount of the Registrable Notes (the "Holders' Counsel"), counsel
for such Participating Broker-Dealer and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents (including
copies of any documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed (in each case at least five business
days prior to such filing, or such later date as is reasonable under the
circumstances). The Company shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto if the Holders of a
majority in aggregate principal amount of the Registrable Notes covered by
such Registration Statement and the Holders' Counsel, or any such
Participating Broker-Dealer and its counsel, as the case may be, or the
managing underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-
effective amendments to each Shelf Registration Statement or Exchange Offer
Registration Statement, as the case may be, as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness Period or
the Applicable Period, as the case may be; cause the related Prospectus to be
supplemented by any Prospectus supplement required by applicable law, and as
so supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) promulgated under the
<PAGE>17
Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent resale of any
securities being sold by a Participating Broker-Dealer covered by any such
Prospectus. The Company shall be deemed not to have used its diligent best
efforts to keep a Registration Statement effective during the Applicable
Period if it voluntarily takes any action that would result in selling Holders
of the Registrable Notes covered thereby or Participating Broker-Dealers
seeking to sell Exchange Notes not being able to sell such Registrable Notes
or such Exchange Notes during that period unless (i) such action is required
by applicable law or (ii) such action is taken by the Company in good faith
and for valid business reasons (not including avoidance of the Company's
obligations hereunder), including the acquisition or divestiture of assets.
(c) If (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, notify the selling
Holders of Registrable Notes and Holders' Counsel, or each such Participating
Broker-Dealer and their counsel, as the case may be, and the managing
underwriters, if any, promptly (but in any event within two business days),
(i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any post-
effective amendment, when the same has become effective under the Securities
Act (including in such notice a written statement that any Holder may, upon
request, obtain, at the sole expense of the Company, one conformed copy of
such Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be incorporated
by reference and exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) if at any time when a
prospectus is required by the Securities Act to be delivered in connection
with sales of the Registrable Notes or resales of Exchange Notes by
Participating Broker-Dealers the representations and warranties of the Company
contained in any agreement (including any underwriting agreement),
contemplated by Section 5(n) hereof, to the knowledge of the Company, cease to
be true and correct in all material respects, (iv) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or
<PAGE>18
any of the Registrable Notes or the Exchange Notes to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event, or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in or
amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
(vi) of the Company's determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, use its reasonable
best efforts to prevent the issuance of any order suspending the effectiveness
of a Registration Statement or of any order preventing or suspending the use
of a Prospectus or suspending the qualification (or exemption from
qualification) of any of the Registrable Notes or the Exchange Notes to be
sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if
any such order is issued, to use its best efforts to obtain the withdrawal of
any such order at the earliest possible moment.
(e) If a Shelf Registration Statement is filed pursuant to Section
3 and if requested by the managing underwriter or underwriters (if any), the
Holders of a majority in aggregate principal amount of the Registrable Notes
being sold in connection with an underwritten offering or any Participating
Broker-Dealer, (i) promptly incorporate in a prospectus supplement or post-
effective amendment such information as the managing underwriter or
underwriters (if any), their counsel, such Holders, Holders' Counsel, any
Participating Broker-Dealer or their counsel determine is reasonably necessary
to be included therein, (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the
<PAGE>19
matters to be incorporated in such prospectus supplement or post-effective
amendment, and (iii) supplement or make amendments to such Registration
Statement.
(f) If (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, furnish to each
selling Holder of Registrable Notes, Holders' Counsel and to each such
Participating Broker-Dealer who so requests and its counsel and each managing
underwriter, if any, at the sole expense of the Company, one conformed copy of
the Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) If (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, deliver to each
selling Holder of Registrable Notes and Holders' Counsel, or each such
Participating Broker-Dealer and its counsel, as the case may be, and the
underwriters, if any, at the sole expense of the Company, as many copies of
the Prospectus or Prospectuses (including each form of preliminary prospectus)
and each amendment or supplement thereto and any documents incorporated by
reference therein as such Persons may reasonably request; and, subject to the
last paragraph of this Section 5, the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of the
selling Holders of Registrable Notes or each such Participating Broker-Dealer,
as the case may be, and the underwriters or agents, if any, and dealers (if
any), in connection with the offering and sale of the Registrable Notes
covered by, or the sale by Participating Broker-Dealers of the Exchange Notes
pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Offer Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes
during the Applicable Period, use its best efforts to cooperate with the
selling Holders of Registrable Notes and Holders' Counsel or each such
Participating Broker-Dealer and its counsel, as the case may be, the managing
underwriter or underwriters, if any, and their counsel in
<PAGE>20
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Notes for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the managing
underwriter or underwriters reasonably request; provided, however, that where
Exchange Notes held by Participating Broker-Dealers or Registrable Notes are
offered other than through an underwritten offering, the Company agrees to
cause the Company's counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this Section
5(h); keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept
effective and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Exchange
Notes held by Participating Broker-Dealers or the Registrable Notes covered by
the applicable Registration Statement; provided, however, that the Company
shall not be required (A) to qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) to take any action that
would subject it to general service of process in any such jurisdiction where
it is not then so subject or (C) to subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not then so
subject.
(i) If a Shelf Registration statement is filed pursuant to Section
3 hereof, cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes to be
sold, which certificates shall not bear any restrictive legends and shall be
in a form eligible for deposit with The Depository Trust Company; and enable
such Registrable Notes to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, or Holders may
request.
(j) Use its best efforts to cause the Registrable Notes covered by
the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary to enable
the seller or sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Notes, except as may be
required solely as a consequence of the nature of such selling Holder's
business, in which case the Company will cooperate in all reasonable respects
with the filing of such registration statement and the granting of such
approvals; provided, however, that the Company shall not be required (A) to
qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) to take any action that would subject it to
<PAGE>21
general service of process in any such jurisdiction where it is not then so
subject or (C) to subject itself to taxation in excess of a nominal dollar
amount in any such jurisdiction where it is not then so subject.
(k) If (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, upon the occurrence
of any event contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly
as practicable prepare and (subject to Section 5(a) hereof) file with the SEC,
at the sole expense of the Company, a supplement or post-effective amendment
to the Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes being sold thereunder or to the purchasers
of the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(l) Use its best efforts to cause the Registrable Notes covered by
a Registration Statement or the Exchange Notes, as the case may be, to be
rated with the appropriate rating agencies, if so requested by the Holders of
a majority in aggregate principal amount of Registrable Notes covered by such
Registration Statement or the Exchange Notes, as the case may be, or the
managing underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with certificates
for the Registrable Notes in a form eligible for deposit with The Depository
Trust Company and (ii) provide a CUSIP number for the Registrable Notes.
(n) In connection with any underwritten offering of Registrable
Notes pursuant to a Shelf Registration Statement, enter into an underwriting
agreement as is customary in underwritten offerings of debt securities similar
to the Notes and take all such other actions as are reasonably requested by
the managing underwriter or underwriters in order to expedite or facilitate
the registration or the disposition of such Registrable Notes and, in such
connection, (i) make such representations and warranties to, and covenants
with, the
<PAGE>22
underwriters with respect to the business of the Company and its subsidiaries
(including any acquired business, properties or entity, if applicable) and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings of debt
securities similar to the Notes, and confirm the same in writing if and when
requested; (ii) use reasonable best efforts to obtain the written opinions of
counsel to the Company and written updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriter or underwriters,
addressed to the underwriters covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as may be
reasonably requested by the managing underwriter or underwriters; (iii) use
reasonable best efforts to obtain "cold comfort" letters and updates thereof
in form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent certified public accountants
of the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are, or are
required to be, included or incorporated by reference in the Registration
Statement), addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings and such other
matters as reasonably requested by the managing underwriter or underwriters as
permitted by the Statement on Auditing Standards No. 72; and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section 7
hereof (or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Registrable Notes covered by such
Registration Statement and the managing underwriter or underwriters or agents)
with respect to all parties to be indemnified pursuant to said Section. The
above shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder.
(o) If (1) a Shelf Registration Statement is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period, make available for
inspection by any selling Holder of such Registrable Notes being sold, or each
such Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Notes, if any, and any
attorney, accountant or other agent
<PAGE>23
retained by any such selling Holder or each such Participating Broker-Dealer,
as the case may be, or underwriter (collectively, the "Inspectors"), at the
offices where normally kept, during reasonable business hours, all financial
and other records, pertinent corporate documents and instruments of the
Company and its subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of the
Company and its subsidiaries to supply all information reasonably requested by
any such Inspector in connection with such Registration Statement; provided,
however, that all information shall be kept confidential by each such
Inspector, except to the extent that (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a subpoena
or other order from a court of competent jurisdiction, (iii) disclosure of
such information is, in the opinion of counsel for any Inspector, necessary or
advisable in connection with any action, claim, suit or proceeding, directly
or indirectly, involving or potentially involving such Inspector and arising
out of, based upon, relating to, or involving this Agreement, or any
transactions contemplated hereby or arising hereunder; provided, however, that
prior notice be provided as soon as practicable to the Company of the
potential disclosure of any information by such Inspector pursuant to clause
(ii) or this clause (iii) to permit the Company to obtain a protective order
(or waive the provisions of this paragraph (o)) and that such Inspector shall
take such actions as are reasonably necessary to protect the confidentiality
of such information to the extent such action is otherwise not inconsistent
with, an impairment of or in derogation of the rights and interests of the
Holders or any Inspector, or (iv) the information in such Records has been
made generally available to the public by the Company. Each selling Holder of
such Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential, shall be used only for due diligence
purposes pursuant to this Section 5(p) and shall not be used by it as the
basis for any market transactions in the securities of the Issuer unless and
until such information is generally available to the public. Each selling
Holder of such Registrable Notes and each such Participating Broker-Dealer
will be required to further agree that it will, upon learning that disclosure
of such Records is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company to undertake appropriate action to prevent
disclosure of the Records deemed confidential at the Company's sole expense.
<PAGE>24
(p) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange
Offer or the first Registration Statement relating to the Registrable Notes;
and in connection therewith, cooperate with the trustee under any such
indenture and the Holders of the Registrable Notes, to effect such changes to
such indenture as may be required for such indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its reasonable best
efforts to cause such trustee to execute, all documents as may be required to
effect such changes, and all other forms and documents required to be filed
with the SEC to enable such indenture to be so qualified in a timely manner.
(q) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45
days after the end of any 12-month period (or 90 days after the end of any 12-
month period if such period is a fiscal year) (i) commencing at the end of any
fiscal quarter in which Registrable Notes are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(r) Upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company, in a form customary for
underwritten transactions, addressed to the Trustee for the benefit of all
Holders of Registrable Notes participating in the Exchange Offer or the
Private Exchange, as the case may be, that the Exchange Notes or Private
Exchange Notes, as the case may be, and the related indenture constitute
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject to customary
exceptions and qualifications.
(s) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the Company
(or to such other Person as directed by the Company) in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be, the Company
shall mark, or cause to be marked, on such Registrable Notes that such
Registrable Notes are being cancelled in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be;
<PAGE>25
in no event shall such Registrable Notes be marked as paid or otherwise
satisfied.
(t) Cooperate with each seller of Registrable Notes covered by any
Registration Statement, Holders' Counsel and each underwriter, if any,
participating in the disposition of such Registrable Notes and its counsel in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc. (the "NASD") .
(u) Use its diligent best efforts to take all other steps necessary
or advisable to effect the registration of the Exchange Notes and/or
Registrable Notes covered by a Registration Statement contemplated hereby.
The Company may require each seller of Registrable Notes as to which
any registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Registrable Notes as the
Company may, from time to time, reasonably request. The Company may exclude
from such registration the Registrable Notes of any seller who fails to
furnish such information within a reasonable time after receiving such
request. Each seller as to which any registration pursuant to a Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such seller not materially
misleading.
Each Holder of Registrable Notes and each Participating Broker-
Dealer agrees by acquisition of such Registrable Notes or Exchange Notes to be
sold by such Participating Broker-Dealer, as the case may be, that, upon
actual receipt of any notice from the Company of the happening of any event of
the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof,
such Holder will forthwith discontinue disposition of such Registrable Notes
covered by such Registration Statement or Prospectus or Exchange Notes to be
sold by such Holder or Participating Broker-Dealer, as the case may be, until
such Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or
until it is advised in writing (the "Advice") by the Company that the use of
the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto and, if so directed by the Company, such
Holder or Participating Broker-Dealer, as the case may be, will deliver to the
Company all copies, other than permanent file copies, then in such Holder's or
Participating Broker-Dealer's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice. In the
event the Company shall give any
<PAGE>26
such notice, each of the Effectiveness Period and the Applicable Period shall
be extended by the number of days during such periods from and including the
date of the giving of such notice to and including the date when each seller
of Registrable Notes covered by such Registration Statement or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, shall have
received (x) the copies of the supplemented or amended Prospectus contemplated
by Section 5(k) hereof or (y) the Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Exchange Offer or a Shelf Registration Statement is filed
or becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of counsel
in connection with Blue Sky qualifications of the Registrable Notes or
Exchange Notes and determination of the eligibility of the Registrable Notes
or Exchange Notes for investment under the laws of such jurisdictions (x)
where the holders of Registrable Notes are located, in the case of the
Exchange Notes, or (y) as provided in Section 5(h) hereof, in the case of
Registrable Notes or Exchange Notes to be sold by a Participating Broker-
Dealer during the Applicable Period)), (ii) printing expenses, including,
without limitation, expenses of printing certificates for Registrable Notes or
Exchange Notes in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses if the printing of prospectuses is
requested by the managing underwriter or underwriters, if any, by the Holders
of a majority in aggregate principal amount of the Registrable Notes included
in any Registration Statement or in respect of Registrable Notes or Exchange
Notes to be sold by any Participating Broker-Dealer during the Applicable
Period, as the case may be, (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company and reasonable fees and
disbursements of Holders' Counsel (subject to the provisions of Section 6(b)
hereof), (v) fees and disbursements of all independent certified public
accountants referred to in Section 5(n)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) rating agency fees,
(vii) Securities Act liability insurance, if the Company desires such
insurance, (viii) fees and expenses of all other Persons retained by the
Company, (ix) internal expenses of the Company (including, without limitation,
all salaries and expenses of
<PAGE>27
officers and employees of the Company performing legal or accounting duties),
(x) the expense of any annual audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any
securities exchange, if applicable, and (xii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any other
documents necessary in order to comply with this Agreement.
(b) The Company shall reimburse the Holders of the Registrable
Notes being registered in a Shelf Registration Statement for the reasonable
fees and disbursements, not to exceed $25,000, of Holders' Counsel (in
addition to appropriate local counsel) and other out-of-pocket expenses of
such Holders of Registrable Notes incurred in connection with the registration
and sale of the Registrable Notes.
7. Indemnification
(a) In the event of a Shelf Registration Statement or in connection
with any delivery by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, the Company agrees to
indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer selling Exchange Notes during the Applicable
Period, the officers and directors of each such Person, and each Person, if
any, who controls any such Person within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act (each, a "Participant"),
from and against any and all losses, claims, damages and liabilities
(including, without limitation, and subject to Section 7(c) below, the
reasonable legal fees and other expenses actually incurred in connection with
any suit, action or proceeding or any claim asserted) caused by, arising out
of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment
thereto) or Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary
Prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the case of the Prospectus, in
the light of the circumstances under which they were made, not misleading,
except insofar as such losses, claims, damages or liabilities are caused by
any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with information relating to any
Participant furnished to the Company in writing by such Participant expressly
for use therein; provided, however, that the Company shall not be required to
indemnify any such Person if
<PAGE>28
such untrue statement or omission or alleged untrue statement or omission was
contained or made in any preliminary prospectus and corrected in the
Prospectus or any amendment or supplement thereto and the Prospectus does not
contain any other untrue statement or omission or alleged untrue statement or
omission of a material fact that was the subject matter of the related
proceeding and any such loss, liability, claim, damage or expense suffered or
incurred by the Participants resulted from any action, claim or suit by any
Person who purchased Registrable Notes or Exchange Notes which are the subject
thereof from such Participant and it is established in the related proceeding
that such Participant failed to deliver or provide a copy of the Prospectus
(as amended or supplemented) to such Person with or prior to the confirmation
of the sale of such Registrable Notes or Exchange Notes sold to such Person if
required by applicable law, unless such failure to deliver or provide a copy
of the Prospectus (as amended or supplemented) was a result of noncompliance
by the Company with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each Person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company to each
Participant, but only with reference to information relating to such
Participant furnished to the Company in writing by such Participant expressly
for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus. The liability of any
Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Notes or Exchange Notes
giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "Indemnified Person")
shall promptly notify the Person against whom such indemnity may be sought
(the "Indemnifying Person") in writing, and the Indemnifying Person, upon
request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Person may reasonably designate in such proceeding
and shall pay the reasonable fees and expenses actually incurred by such
counsel related to such proceeding; provided, however, that the failure to so
notify the Indemnifying Person shall not relieve it of any obligation or
liability which it may have hereunder or otherwise (unless and only to the
extent that such failure directly results
<PAGE>29
in the loss or compromise of any material rights or defenses by the Company
and the Company was not otherwise aware of such action or claim). In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person or any affiliate and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood
that, unless there exists a conflict among Indemnified Persons, the
Indemnifying Person shall not, in connection with any one such proceeding or
separate but substantially similar related proceeding in the same jurisdiction
arising out of the same general allegations, be liable for the fees and
expenses of more than one separate firm (in addition to any appropriate local
counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed promptly after receipt of the invoice therefor as they are
incurred. Any such separate firm for the Participants and such control
Persons of Participants shall be designated in writing by Participants who
sold a majority in interest of Registrable Notes and Exchange Notes sold by
all such Participants and any such separate firm for the Company, its
directors, its officers and such control Persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its prior written
consent (which consent shall not be unreasonably withheld), but if settled
with such consent or if there be a final judgment for the plaintiff for which
the Indemnified Person is entitled to indemnification pursuant to this
Agreement, the Indemnifying Person agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for reasonable fees and expenses actually
incurred by counsel as contemplated by the second sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of
any proceeding effected without its prior written consent if (i) such
settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement; provided, however, that the
Indemnifying Person shall not be liable for any
<PAGE>30
settlement effected without its consent pursuant to this sentence if the
Indemnifying Person is contesting, in good faith, the request for
reimbursement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Persons (which consent shall not be unreasonably
withheld), effect any settlement or compromise of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party, or indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement or compromise (A) includes an unconditional
written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement
as to an admission of fault, culpability or failure to act by or on behalf of
any Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to (other than by
reason of exceptions provided therein), or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to
provide for just and equitable contribution, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect (i) the
relative benefits received by the Indemnifying Person or Persons on the one
hand and the Indemnified Person or Persons on the other from the offering of
the Notes or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements
or omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Participants on the other shall be deemed
to be in the same proportion as the total proceeds from the offering (net of
discounts and commissions but before deducting expenses) of the Notes received
by the Company bears to the total proceeds received by such Participant from
the sale of Registrable Notes or Exchange Notes, as the case may be. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Participant or
such other Indemnified Person, as the case may be, on the other, the
<PAGE>31
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that
such Participant has otherwise been required to pay or has paid by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the indemnified Persons referred to above.
8. Rules 144 and 144A
The Company covenants to file with the Trustee, within 15 days after the
Company is required to file the same with the SEC, copies of the annual
reports and of the information, documents and other reports which the Company
may be required to file with the SEC pursuant to Section 13 or Section 15(d)
of the Exchange Act. If, during any period in which Registrable Notes with an
aggregate principal amount equal to or greater than ten percent of the
aggregate principal amount of Registrable Notes originally issued under the
Indenture are outstanding, the Company is not obligated to file annual
reports, documents or other reports with the SEC pursuant to Section 13 or
15(d) of the Exchange Act, the Company will furnish to the Trustee the same
such annual reports documents or other reports as if the Company were so
subject. The Company further covenants, for so long as any Registrable
<PAGE>32
Notes remain outstanding, to make available to any Holder or beneficial owner
of Registrable Notes in connection with any sale thereof and any prospective
purchaser of such Registrable Notes from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Registrable Notes pursuant to Rule 144A, unless the
Company is then subject to Section 13 or 15(d) of the Exchange Act and reports
filed thereunder satisfy the information requirements of Rule 144A(d)(4) as
then in effect.
9. Underwritten Registrations
If any of the Registrable Notes covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the investment banker or
investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate principal amount of such
Registrable Notes included in such offering and reasonably acceptable to the
Company.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. The Company has not, as of the
date hereof, and the Company shall not after the date of this Agreement, enter
into any agreement with respect to any of its securities that is inconsistent
with the rights granted to the Holders of Registrable Notes in this Agreement
or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's other issued and
outstanding securities under any such agreements. The Company has not entered
and will not enter into any agreement with respect to any of its securities
which will grant to any Person piggy-back registration rights with respect to
a Registration Statement.
(b) Adjustments Affecting Registrable Notes. The Company shall
not, directly or indirectly, take any action with respect to the Registrable
Notes as a class that would adversely affect the ability of the Holders of
Registrable Notes to include
<PAGE>33
such Registrable Notes in a registration undertaken pursuant to this
Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, otherwise than with
the prior written consent of (A) the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes and (B)
in circumstances that would adversely affect the Participating Broker-Dealers,
the Participating Broker-Dealers holding not less than a majority in aggregate
principal amount of the Exchange Notes held by all Participating Broker-
Dealers; provided, however, that Section 7 and this Section 10(c) may not be
amended, modified or supplemented without the prior written consent of each
Holder and each Participating Broker-Dealer (including any person who was a
Holder or Participating BrokerDealer of Registrable Notes or Exchange Notes,
as the case may be, disposed of pursuant to any Registration Statement).
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of Registrable
Notes may be given by Holders of at least a majority in aggregate principal
amount of the Registrable Notes being sold by such Holders pursuant to such
Registration Statement.
(d) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustee)
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, next-day air courier or facsimile:
(1) if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or
Participating Broker-Dealer, as the case may be, set forth on the records
of the registrar under the Indenture, with a copy in like manner to the
Initial Purchaser as follows:
Lazard Freres & Co. LLC
One Rockefeller Plaza
New York, New York 10020
Facsimile No: (212) 632-6060
Attention: General Counsel's Office
<PAGE>34
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Facsimile No: (212) 450-4800
Attention: Winthrop B. Conrad, Jr., Esq.
(2) if to the Initial Purchaser, at the address specified in
Section 10(d)(1);
(3) if to the Company, at the addresses as follows:
Weirton Steel Corporation
400 Three Springs Drive
Weirton, West Virginia 26062
Facsimile No: (304) 797-3420
Attention: William R. Kiefer,
Vice President-Law
and Secretary
with a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Facsimile No: (212) 821-8111
Attention: Harvey L. Sperry, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties hereto, the Holders and the Participating Broker-Dealers; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless such successor or assign holds
Registrable Notes.
<PAGE>35
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
(j) Third Party Beneficiaries. Holders of Registrable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(k) Entire Agreement. This Agreement, together with the Purchase
Agreement and the Indenture, is intended by the parties as a final and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein and any and all
prior oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda between the
Initial Purchaser on the one hand and the Company on the other, or between or
among any agents, representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect to the subject
matter hereof and thereof are merged herein and replaced hereby.
<PAGE>36
(l) Underwriting Agreement. Notwithstanding the provisions of
Sections 3(d), 5, 6 and 7, in the event of a Shelf Registration pursuant to
Section 3 hereof, to the extent that the Holders of Registrable Notes shall
enter into an underwriting or similar agreement, which agreement contains
provisions covering one or more issues addressed in such Sections with
substantially similar effect, the provisions contained in such Sections
addressing such issue or issues shall be of no force or effect with respect to
the registration of securities being effected in connection with such
underwriting or similar agreement.
(m) Termination. This Agreement shall terminate and be of no
further force or effect when there shall not be any Registrable Notes, except
that the provisions of Section 4, 6, 7 and Sections 10(h) and (j) shall
survive any such termination.
<PAGE>37
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
WEIRTON STEEL CORPORATION
By: /s/ Herbert Elish
Name: Herbert Elish
Title: Chairman and Chief
Executive Officer
LAZARD FRERES & CO. LLC
By: /s/ Thomas R. Haack
Name: Thomas R. Haack
Title: Managing Director
<PAGE>1
EXHIBIT 12
WEIRTON STEEL CORPORATION
STATEMENT REGARDING COMPUTATION OF
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
<TABLE>
<CAPTION>
Six Months Ended,
(In Thousands of Dollars) June 30, Year Ended December 31,
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
(Unaudited)
Amortization of debt discount $ 898 $ 1,255 $ 2,509 $ 1,965 $ 113 $ 101 $ 95
Portion of rentals representing
interest 1,117 1,117 2,235 2,449 2,118 2,140 1,711
Interest expense 21,538 26,047 49,999 52,802 46,951 45,579 39,090
Combined fixed charges $ 23,553 $ 28,419 $ 54,743 $ 57,216 $ 49,182 $47,820 $ 40,896
====== ====== ====== ====== ====== ====== ======
Earnings - pretax income with
applicable adjustments $ 78,815 $ 54,958 $ 101,209 $ 1,054 $ 212 $(41,428) $ 28,689
Ratio 3.35 1.93 1.85 - - - -
Earnings deficiency - - - $56,162 $48,970 $ 89,248 $ 12,207
</TABLE>
<PAGE>1
EXHIBIT 21
Subsidiary of Weirton Steel Corporation:
Weirton Receivables, Inc.
<PAGE>1
EXHIBIT 23.1
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated January 24,
1995, included (or incorporated by reference) in Weirton Steel Corporation's
Form 10-K for the year ended December 31, 1994, and to all references to our
firm included in this registration statement.
/s/ Arthur Andersen LLP
Pittsburgh, Pennsylvania
July 27, 1995
