<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment Number 2
(X) Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 25, 1994 or
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
___________________________
Commission file number 1-14378 (formerly 0-14727)
ACME METALS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 36-3802419
(State of incorporation) (I.R.S. Employer Identification No.)
13500 South Perry Avenue, Riverdale, Illinois 60627-1182
(Address of principal executive offices) (Zip Code)
(708) 849-2500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of each Class
______________________________
Common stock, par value $1.00 per share
(The class of common stock was listed on the New York Stock Exchange on May 21,
1996)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. X
---
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The aggregate market value as of February 10, 1995 of common stock, $1 par
value, held by non-affiliates of the Registrant was: $185,807,862
Number of shares of Common Stock outstanding as of February 10, 1995:
11,434,330
The following documents are partially incorporated into this report by
reference:
(1) Proxy Statement filed in connection with the Annual Meeting of
Shareholders scheduled for April 27, 1995 is partially incorporated by
reference into Part III, Items 10, 11, 12 and 13.
<PAGE> 2
The Form 10-K for the fiscal year ended December 25, 1994 is hereby
amended by substituting in its entirety Item 14 (a)(3) as follows:
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (3) Exhibits
<TABLE>
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EXHIBIT DESCRIPTION
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3. Articles of Incorporation and By-Laws
3 (i) Restated Certificate of Incorporation of the Registrant. Filed as Exhibit 3.1 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended December
27, 1992 (the "1992 10-K") and incorporated by reference herein.
3 (ii) Amended and Restated By-Laws of Registrant as adopted May 25, 1992. Filed as
Exhibit 3.2 to the 1992 10-K and incorporated by reference herein.
4. Instruments Defining the Rights of Security Holders, Including Indentures
4.1 Rights Agreement dated as of July 15, 1994 between the Registrant and First
Chicago Trust Company of New York, Rights Agent. Filed on Form 8-A August 8,
1994 and Form 8A/A August 12, 1994 and incorporated by reference herein.
* 4.2 Indenture dated as of August 11, 1994 among the Registrant and Guarantors and
Shawmut Bank Connecticut, National Association as trustee, relating to the 12
1/2% Senior Secured Notes due 2002.
* 4.3 Form of 12 1/2% Senior Secured Note due 2002 (included as Exhibit A to Exhibit
4.2).
* 4.4 Indenture dated as of August 11, 1994 among the Registrant and Guarantors and
Shawmut Bank, Connecticut, National Association as trustee, relating to the 13
1/2% Senior Secured Discount Notes due 2004.
* 4.5 Form of 13 1/2% Senior Secured Discount Note due 2004 (included as Exhibit A to
Exhibit 4.4)
* 4.6 Collateral Agency Agreement dated as of August 11, 1994 among the Registrant,
Acme Steel Company, Acme Packaging Corporation, the Trustees, the Term Loan
Agent and the Collateral Agent.
* Filed herewith with this 10-K/A
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* 4.7 Company Stock Pledge Agreement dated as of August 11, 1994 between the Registrant
and the Collateral Agent.
* 4.8 Subsidiary Stock Pledge Agreement dated as of August 11, 1994 among Acme Steel
Company, Acme Packaging Corporation and the Collateral Agent.
* 4.9 Security Agreement dated as of August 11, 1994 between Acme Steel Company and
the Collateral Agent.
* 4.10 Mortgage dated as of August 11, 1994 from Acme Steel Company to the Collateral
Agent.
* 4.11 Intercreditor Agreement dated as of August 11, 1994 among the Registrant, Acme
Steel Company, Harris Trust and Savings Bank and the Collateral Agent.
* 4.12 Disbursement Agreement dated as of August 11, 1994 between the Registrant and
the Collateral Agent.
** 4.13 Form of Registration Rights Agreement dated March 28, 1994 among the Registrant
and The Substituted Purchasers.
10. Material contracts
10.1 Tax Indemnification Agreement between Acme Steel Company and The Interlake
Corporation dated May 30, 1986. Filed as Exhibit 10.1 to the 1992 10-K and
incorporated by reference herein.
10.2 Cross-Indemnification Agreement between Acme Steel Company and The Interlake
Corporation dated May 29, 1986. Filed as Exhibit 10.2 to the 1992 10-K and
incorporated by reference herein.
** 10.3 $80,000,000 Credit Agreement by and among Acme Group and Harris Trust and
Savings Bank individually and as Agent and the Lenders which are or become
parties hereto dated as of August 11, 1994 (the "Credit Agreement").
** 10.4 Assignment and Acceptance dated August 24, 1994 relating to the Credit Agreement
(National City Bank, Assignee).
** 10.5 Assignment and Acceptance dated August 24, 1994 relating to the Credit Agreement
(NBD Bank, N.A., Assignee).
** 10.6 Assignment and Acceptance dated August 24, 1994 relating to the Credit Agreement
(Mercantile Bank of St. Louis National Association, Assignee).
</TABLE>
* Filed herewith with this 10-K/A
** Filed with Form 10-K for the fiscal year ended December 25, 1994
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** 10.7 Assignment and Acceptance dated September 1, 1994 relating to the Credit
Agreement (General Electric Capital Corporation, Assignee).
* 10.8 Term Loan Agreement dated August 4, 1994 among the Registrant, the Lenders and
Lehman Commercial Paper Inc. (the "Term Loan").
** 10.9 Amendment to the Term Loan dated as of December 15, 1994.
10.10 Form of Engineering, Procurement and Construction Contract dated July 28, 1994
between Acme Steel Company and Raytheon Engineers & Constructors, Inc. Filed as
Exhibit 10.41 to Amendment No. 3 to Form S-1 Registration Statement, No.
33-54101 and incorporated by reference herein.
** 10.11 Amendment 1 to Engineering, Procurement and Construction Contract between Acme
Steel Company and Raytheon Engineers & Constructors, Inc. dated as of July 28,
1994.
** 10.12 Amendment 2 to Engineering, Procurement and Construction Contract between Acme
Steel Company and Raytheon Engineers & Constructors, Inc. dated as of March 21,
1995.
** 10.13 Joint Development Program Agreement dated July 28, 1994 between Acme Steel
Company and SMS Schloemann-Siemag, AG.
10.14 Agreement between the Registrant and Reynold C. MacDonald dated June 1, 1992(1).
Filed as Exhibit 10.3 to the 1992 10-K and incorporated by reference herein.
10.15 Non-Employee Directors Retirement Plan dated February 22, 1990 as adopted May
25, 1992(1). Filed as Exhibit 10.4 to the 1992 10-K and incorporated by
reference herein.
** 10.16 Non-Employee's Directors' Stock Compensation Plan adopted January 27, 1995(1).
10.17 Assignment and Assumption Agreement dated May 24, 1992 relating to
Indemnification Agreements including Form of Indemnification Agreement. Filed as
Exhibit 10.12 to the 1992 10-K and incorporated by reference herein.
10.18 Indemnification Agreement between the Registrant and William R. Wilson dated
July 23, 1992. Filed as Exhibit 10.13 to the 1992 10-K and incorporated by
reference herein.
** 10.19 Indemnification Agreement between the Registrant and Carol O'Cleireacain dated
April 28, 1994.
</TABLE>
* Filed herewith with this 10-K/A
** Filed with Form 10-K for the fiscal year ended December 25, 1994
(1) Filed pursuant to Item 14 of Form 10-K
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** 10.20 Indemnification Agreement between the Registrant and L. Frederick Sutherland
dated January 26, 1995.
** 10.21 1994 Executive Incentive Compensation Plan of Acme Metals Incorporated as
adopted April 28, 1994(1).
10.22 Deferred Compensation Agreement dated May 24, 1986 between the Registrant and
Brian W. H. Marsden as adopted May 25, 1992(1). Filed as Exhibit 10.15 to the
1992 10-K and incorporated by reference herein.
** 10.23 Acme Metals Incorporated Deferred Compensation Plan as Amended and Restated
effective January 1, 1994 and adopted November 21, 1994(1).
10.24 Key Executive Severance Pay Plan dated January 22, 1987, as adopted May 25,
1992, with Exhibit 1 amended through May 25, 1992(1). Filed as Exhibit 10.17 to
the 1992 10-K and incorporated by reference herein.
** 10.25 Acme Metals Incorporated 1994 Stock Incentive Program as adopted April 28,
1994(1).
10.26 Form of Grant of Stock Option including Form of First Amendment dated October
30, 1986 - 10 executive officers, 30 other employees(1)(2). Filed as Exhibit
10.19 to the 1992 10-K and incorporated by reference herein.
10.27 Form of Grant of Stock Option dated July 22, 1987 including Form of First
Amendment dated October 30, 1986 - 10 executive officers, 41 other
employees(1)(2). Filed as Exhibit 10.20 to the 1992 10-K and incorporated by
reference herein.
10.28 Form of Grant of Stock Option dated May 26, 1988 - 10 executive officers, 49
other employees(1)(2). Filed as Exhibit 10.21 to the 1992 10-K and incorporated
by reference herein.
10.29 Form of Grant of Stock Option dated June 1, 1989 - 10 executive officers, 48
other employees(1)(2). Filed as Exhibit 10.22 to the 1992 10-K and incorporated
by reference herein.
10.30 Grant of Stock Option Agreement dated June 1, 1990 - S. D. Bennett(1)(2). Filed
as Exhibit 10.23 to the 1992 10-K and incorporated by reference herein.
10.31 Form of Grant of Stock Option dated June 7, 1990 - 9 executive officers, 50
other employees(1)(2). Filed as Exhibit 10.24 to the 1992 10-K and incorporated
by reference herein.
</TABLE>
** Filed with Form 10-K for the fiscal year ended December 1994
(1) Filed pursuant to Item 14 of Form 10-K
(2) Also see Amendment and Assignment Agreement filed with Exhibit
10.13 to the 1992 10-K
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10.32 Form of Grant of Stock Option dated May 20, 1991 - 10 executive officers, 54
other employees(1)(2). Filed as Exhibit 10.25 to the 1992 10-K and incorporated
by reference herein.
10.33 Form of Grant of Stock Option dated June 12, 1992 - 5 executive officers, 10
other employees(1)(2). Filed as Exhibit 10.26 to the 1992 10-K and incorporated
by reference herein.
10.34 Form of Grant of Stock Option dated May 27, 1993 - 5 executives officers, 26
other employees(1). Filed as Exhibit 10.27 to the 1992 10-K and incorporated by
reference herein.
** 10.35 Form of Grant of Stock Option dated May 26, 1994 - 6 executive officers, 24
other employees.
10.36 Form of Grant of Stock Award dated January 25, 1991 including Form of First
Amendment dated January 25, 1991 - 11 executive officers, 14 other
employees(1)(2). Filed as Exhibit 10.29 to the 1992 10-K and incorporated by
reference herein.
10.37 Form of Grant of Stock Award dated January 22, 1992 - 5 executive officers, 10
other employees(1)(2). Filed as Exhibit 10.30 to the 1992 10-K and incorporated
by reference herein.
10.38 Stock Award Agreement dated June 12, 1992 - S. D. Bennett(1)(2). Filed as
Exhibit 10.31 to the 1992 10-K and incorporated by reference herein.
10.39 Form of Grant of Stock Award dated January 26, 1993 - 5 executive officers, 16
other employees(1)(2). Filed as Exhibit 10.32 to the 1992 10-K and incorporated
by reference herein.
10.40 Form of Grant of Stock Award dated January 26, 1994, 5 executive officers, 14
other employees. Filed as Exhibit 10.33 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 26, 1993 (the "1993 10-K") and
incorporated by reference herein.
** 10.41 Form of Grant of Stock Award dated January 27, 1995, 5 executive officers, 6
other employees(1).
** 10.42 Acme Metals Incorporated Employee Stock Ownership Plan Restated effective
November 1, 1994(1).
</TABLE>
** Filed with Form 10-K for the fiscal year ended December 25, 1994
(1) Filed pursuant to Item 14 of Form 10-K
(2) Also see Amendment and Assignment Agreement filed with exhibit
10.13 to the 1992 10-K
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** 10.43 Acme Metals Incorporated Salaried Employees' Retirement Savings Plan Restated
effective November 1, 1994(1).
** 10.44 Consolidated Pension Plan for Acme Salaried and Hourly Employees As Amended and
Restated effective November 1, 1994 with Appendix A to the Consolidated Pension
Plan for Acme Salaried and Hourly Employees As Amended and Restated Effective
July 31, 1994(1).
** 10.45 Acme Metals Incorporated Supplemental Benefits Plan effective January 1, 1994(1).
10.46 Acme Metals Incorporated Salaried Employees' Past Service Pension Plan ("Past
Service Pension Plan") dated June 1, 1992(1). Filed as Exhibit 10.37 to the
1992 10-K and incorporated by reference herein.
10.47 Amendment No. 1 to the Past Service Pension Plan(1). Filed as Exhibit 10.38 to
the 1993 10-K and incorporated by reference herein.
** 10.48 Amendment No. 2 to the Past Service Pension Plan(1).
** 13. Registrant's Annual Report to Security Holders for the fiscal year ended
December 25, 1994.
** 21. Subsidiaries of the registrant
** 23. Consent of experts and counsel
** 23.1 Consent of Price Waterhouse LLP
** 27. Financial Data Schedule
</TABLE>
** Filed with Form 10-K for the fiscal year ended December 25, 1994
(1) Filed pursuant to Item 14 of Form 10-K.
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACME METALS INCORPORATED
Date: August 28, 1996 By: /s/ Edward P. Weber, Jr.
-------------------------
Edward P. Weber, Jr.
Vice President and Secretary
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EXHIBIT 4.2
================================================================================
ACME METALS INCORPORATED
AND GUARANTORS
$125,000,000
12 1/2% Senior Secured Notes due 2002
_________________
INDENTURE
Dated as of August 11, 1994
_________________
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
Trustee
<PAGE> 2
CROSS-REFERENCE TABLE
Indenture
Trust Indenture Act Section Section
- --------------------------- ----------
Section 310 (a) (1).......................... 7.10
(a) (2).......................... 7.10
(a) (3).......................... N.A.
(a) (4).......................... N.A.
(a) (5).......................... N.A.
(b).............................. 7.08; 7.10; 12.02
(c).............................. N.A.
Section 311 (a).............................. 7.11
(b).............................. 7.11
(c).............................. N.A.
Section 312 (a).............................. 2.05
(b).............................. 12.03
(c).............................. 12.03
Section 313 (a).............................. 7.06
(b) (1).......................... N.A.
(b) (2).......................... 7.06
(c).............................. 7.06; 12.02
(d).............................. 7.06
Section 314 (a).............................. 4.13; 12.02
(b).............................. 10.02
(c) (1).......................... 12.02
(c) (2).......................... 12.04
(c) (3).......................... N.A.
(d).............................. 10.02
(e).............................. 12.05
(f).............................. N.A.
Section 315 (a).............................. 7.01 (b)
(b).............................. 7.05; 12.02
(c).............................. 7.01 (a)
(d).............................. 7.01 (c)
(e).............................. 6.11
Section 316 (a) (last sentence).............. 2.09
(a) (1) (A)...................... 6.05
(a) (1) (B)...................... 6.04
(a) (2).......................... N.A.
(b).............................. 6.07
(c).............................. N.A.
Section 317 (a) (1) ......................... 6.08
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(a) (2)............................ 6.09
(b)................................ 2.04
Section 318 (a)................................ 12.01
____________________
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
<PAGE> 4
TABLE OF CONTENTS
-----------------
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Page
----
SECTION 1.01. Definitions ...................................... 1
SECTION 1.02. Other Definitions ............................... 28
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act .................................. 28
SECTION 1.04. Rules of Construction .......................... 29
ARTICLE II.
THE SECURITIES
SECTION 2.01. Form and Dating ................................. 30
SECTION 2.02. Execution and Authentication .................... 30
SECTION 2.03. Registrar and Paying Agent ...................... 31
SECTION 2.04. Paying Agent To Hold Money in Trust ............. 32
SECTION 2.05. Securityholder Lists ............................ 32
SECTION 2.06 Transfer and Exchange ........................... 33
SECTION 2.07. Replacement Securities .......................... 34
SECTION 2.08. Outstanding Securities .......................... 35
SECTION 2.09. Treasury Securities ............................. 35
SECTION 2.10. Temporary Securities ............................ 36
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Page
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SECTION 2.11. Cancellation .................................... 36
SECTION 2.12. Defaulted Interest .............................. 37
ARTICLE III.
REDEMPTION
SECTION 3.01. Notices to Trustee .............................. 37
SECTION 3.02. Selection of Securities To Be Redeemed .......... 38
SECTION 3.03. Notice of Redemption ............................ 38
SECTION 3.04. Effect of Notice of Redemption .................. 39
SECTION 3.05. Deposit of Redemption Price ..................... 40
SECTION 3.06. Securities Redeemed in Part ..................... 40
ARTICLE IV.
COVENANTS
SECTION 4.01. Payment of Securities ........................... 41
SECTION 4.02. Maintenance of Office or Agency ................. 41
SECTION 4.03. Limitation on Transactions with Affiliates ...... 42
SECTION 4.04. Limitation on Indebtedness ...................... 43
SECTION 4.05. Limitation on Liens ............................. 44
SECTION 4.06. Limitation on Disposition of Assets ............. 44
SECTION 4.07. Limitation on Restricted Payments ............... 51
SECTION 4.08. Corporate Existence ............................. 52
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Page
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SECTION 4.09. Payment of Taxes and Other Claims .............. 53
SECTION 4.10. Notice of Defaults ............................. 53
SECTION 4.11. Maintenance of Properties, Insurance ........... 54
SECTION 4.12. Compliance Certificate ......................... 55
SECTION 4.13. Reports ........................................ 55
SECTION 4.14. Waiver of Stay, Extension or Usury Laws ........ 56
SECTION 4.15. Repurchase of Securities upon Change of Control 56
SECTION 4.16. Limitation on Sale and Leaseback Transactions 58
SECTION 4.17. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries ............ 59
SECTION 4.18. Limitation on Actions Affecting Security ....... 60
SECTION 4.19. Inspection and Confidentiality ................. 60
SECTION 4.20. Limitations on Investments, Loans and Advances . 61
SECTION 4.21. Additional Guarantors .......................... 61
ARTICLE V.
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Restriction on Mergers and ...................... 62
SECTION 5.02. Successor Corporation Substituted ............... 63
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Page
----
ARTICLE VI.
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default ..................................... 63
SECTION 6.02. Acceleration .......................................... 66
SECTION 6.03. Other Remedies ........................................ 67
SECTION 6.04. Waiver of Past Default ................................ 67
SECTION 6.05. Control by Majority ................................... 68
SECTION 6.06. Limitation on Suits ................................... 68
SECTION 6.07. Rights of Holders To Receive Payment .................. 69
SECTION 6.08. Collection Suit by Trustee ............................ 69
SECTION 6.09. Trustee May File Proofs of Claim ...................... 70
SECTION 6.10. Priorities ............................................ 70
SECTION 6.11. Undertaking for Costs ................................. 71
SECTION 6.12. Trustee Election Not To Foreclose ..................... 71
ARTICLE VII.
TRUSTEE
SECTION 7.01. Duties of Trustee ..................................... 72
SECTION 7.02. Rights of Trustee ..................................... 74
SECTION 7.03. Individual Rights of Trustee .......................... 75
SECTION 7.04. Trustee's Disclaimer .................................. 75
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Page
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SECTION 7.05. Notice of Defaults .................................... 76
SECTION 7.06. Reports by Trustee to Holders ......................... 76
SECTION 7.07. Compensation and Indemnity ............................ 76
SECTION 7.08. Replacement of Trustee ................................ 78
SECTION 7.09. Successor Trustee by Merger, etc....................... 80
SECTION 7.10. Eligibility; Disqualification.......................... 80
SECTION 7.11. Preferential Collection of Claims
Against Company........................................ 81
SECTION 7.12. Appointment of Co-Trustee ............................. 81
ARTICLE VIII.
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Satisfaction and Discharge ............................ 81
SECTION 8.02. Defeasance and Covenant Defeasance .................... 83
SECTION 8.03. Application of Trust Money ............................ 86
SECTION 8.04. Repayment to Company .................................. 86
SECTION 8.05. Reinstatement ......................................... 87
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders ............................ 87
SECTION 9.02. With Consent of Holders ............................... 88
SECTION 9.03. Compliance with Trust Indenture Act .................. 89
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Page
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SECTION 9.04. Revocation and Effect of Consents .................... 89
SECTION 9.05. Notation on or Exchange of Securities ................ 90
SECTION 9.06. Trustee To Sign Amendments, etc. ..................... 91
ARTICLE X.
COLLATERAL AND SECURITY
SECTION 10.01. Collateral and Security Documents .................... 91
SECTION 10.02. Opinions of Counsel; TIA Requirements ................ 92
SECTION 10.03. Disposition of Collateral Without Release ............ 94
SECTION 10.04. Authorization of Actions To Be
Taken by the Collateral .............................. 94
SECTION 10.05. Collateral Agency Agreement........................... 95
ARTICLE XI.
SENIOR GUARANTEE OF SECURITIES
SECTION 11.01. Unconditional Guarantee .............................. 96
SECTION 11.02. Severability ......................................... 97
SECTION 11.03. Release of a Guarantor ............................... 97
SECTION 11.04. Limitation of Guarantor's Liability .................. 98
SECTION 11.05. Guarantors May Consolidate,
etc., on Certain Terms. .............................. 99
SECTION 11.06. Contribution ......................................... 100
SECTION 11.07. Waiver of Subrogation ................................ 100
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Page
----
SECTION 11.08. Execution of Guarantee .................................. 101
ARTICLE XII.
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls ............................ 101
SECTION 12.02. Notices ................................................. 102
SECTION 12.03. Communications by Holders with Other Holders ............ 104
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent ............................................... 104
SECTION 12.05. Statements Required in Certificate or Opinion ........... 104
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar ............... 105
SECTION 12.07. Governing Law ........................................... 105
SECTION 12.08. No Recourse Against Others .............................. 105
SECTION 12.09. Successors .............................................. 106
SECTION 12.10. Counterpart Originals ................................... 106
SECTION 12.11. Severability ............................................ 106
SECTION 12.12. No Adverse Interpretation of Other Agreements ........... 107
SECTION 12.13. Legal Holidays .......................................... 107
SIGNATURES ............................................................. 108
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Page
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EXHIBIT A - Form of Security ....................... A-1
EXHIBIT B - Form of Security Agreement ............. B-1
EXHIBIT C - Form of Mortgage ....................... C-1
EXHIBIT D - Form of Stock Pledge Agreement ......... D-1
EXHIBIT E - Form of Disbursement Agreement ......... E-1
EXHIBIT F - Form of Collateral Agency Agreement .... F-1
EXHIBIT G - Form of Intercreditor Agreement ........ G-1
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____________________________
NOTE: This Table of Contents shall not, for any purpose, be
deemed to be a part of the Identure.
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<PAGE> 13
INDENTURE dated as of August 11, 1994 among ACME METALS
INCORPORATED, a Delaware corporation (the "Company"), each of the Guarantors
named on the signature page hereto and Shawmut Bank Connecticut, National
Association, a national banking association, as Trustee (the "Trustee").
Intending to be legally bound hereby, all parties agree as
follows for the benefit of the others and for the equal and ratable benefit of
the Holders of the Company's 12 1/2% Senior Secured Notes due 2002 (the
"Securities").
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accreted Value" means, as of any date of determination prior
to August 1, 1997, the sum of (a) the initial offering price of each Senior
Secured Discount Note and (b) the portion of the excess of the principal amount
of each Senior Secured Discount Note over such initial offering price which
shall have been amortized through such date, such amount to be so amortized on
a daily basis and compounded semi-annually on each February 1 and August 1 at
the rate of 13 1/2% per annum from the date of issuance of the Senior Secured
Discount Notes through the date of determination computed on the basis of a
360-day year of twelve 30-day months.
"Acme Packaging" means Acme Packaging Corporation, a Delaware
corporation, and a Wholly Owned Subsidiary of the Company.
"Acme Steel" means Acme Steel Company, a Delaware corporation,
and a Wholly Owned Subsidiary of the Company.
"Acquired Indebtedness" means (i) with respect to any Person
that becomes a Subsidiary of the Company (or is merged into the Company or any
of its Subsidiaries) after the Issue Date, Indebtedness of, or Preferred Stock
issued by, such Person or any of its Subsidiaries existing at the time such
Person becomes a
<PAGE> 14
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Subsidiary of the Company (or is merged into the Company or any of its
Subsidiaries), whether or not such Indebtedness was incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary of the Company
(or being merged into the Company or any of its Subsidiaries), and (ii) with
respect to the Company or any of its Subsidiaries, any Indebtedness assumed by
the Company or any of its Subsidiaries in connection with the acquisition of
any assets from another Person (other than the Company or any of its
Subsidiaries), whether or not such Indebtedness was incurred by such other
Person in connection with, or in contemplation of, such acquisition.
"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; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. Notwithstanding the foregoing, the term
"Affiliate" shall not include, (i) with respect to the Company, any Subsidiary
of the Company, (ii) with respect to any Subsidiary of the Company, the Company
or any other Subsidiary of the Company, (iii) with respect to the Company or
any Subsidiary of the Company, any benefit plan in existence on the Issue Date,
or any comparable plans established subsequent thereto or (iv) Wabush.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Applicable Portion" with respect to any Available Proceeds
Amount shall mean such Available Proceeds Amount times a fraction the numerator
of which shall be the aggregate principal amount of Securities then outstanding
plus all accrued and unpaid interest thereon to the Unapplied Proceeds Offer
Payment Date and the denominator of which shall be the sum of (a) such amount
and (b) either (y) if the Unapplied Proceeds Offer Payment Date is prior to
August 1, 1997, the Accreted Value of the then outstanding
<PAGE> 15
-3-
Senior Secured Discount Notes through such payment date or (z) if the Unapplied
Offer Payment Date is on and after August 1, 1997 the aggregate principal
amount of the then outstanding Senior Secured Discount Notes plus all accrued
and unpaid interest thereon to the Unapplied Proceeds Offer Payment Date and
(c) the aggregate principal amount of Loans (as such term is defined in the
Term Loan Agreement) then outstanding plus all accrued and unpaid interest
thereon to the Unapplied Proceeds Offer Payment Date.
"Asset Sale" means 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) of any Property (each, a "transaction") by the Company or any of
its Subsidiaries to any Person; provided that (i) transactions involving
Property other than Collateral between the Company and a Subsidiary of the
Company or transactions involving Property other than Collateral between
Subsidiaries of the Company; and (ii) transactions (including sales or other
transfers or dispositions of receivables relating to the incurrence of
Indebtedness permitted pursuant to Section 4.04 hereof) in the ordinary course
of business (including such a transaction with or between Subsidiaries) shall
not constitute Asset Sales. For purposes of this definition, the term "Asset
Sale" shall not include any sale, transfer, conveyance, lease or other
disposition of assets and properties of the Company that is governed by Section
4.07 or Section 5.01 (except to the extent indicated therein).
"Available Proceeds Amount" means the amount of funds (whether
held in the Collateral Account or by the Company or any of its Subsidiaries)
constituting: (i) the portion of any Net Award or Net Proceeds that, pursuant
to the Security Documents, the Company is not required to, or that the Company
has elected not to, apply to a Restoration of the affected Collateral or (ii)
the portion, if any, of the Net Cash Proceeds of an Asset Sale (net, in the
case of an Asset Sale of property that does not constitute Collateral, of any
Indebtedness repaid with the proceeds of such Asset Sale to the extent so
applied within 180 days of such Asset Sale to the repayment of such
Indebtedness; provided that Indebted-
<PAGE> 16
-4-
ness subordinated to (a) the Securities or (b) any other Indebtedness of the
Company or any of its Subsidiaries may not be so repaid; provided, further,
that with respect to any Indebtedness so repaid outstanding under a revolving
credit facility there shall be an equivalent permanent reduction in the
committed amount thereof) that has not been applied by the Company, within 180
days after the date of the Asset Sale giving rise to such Net Cash Proceeds, to
either (x) the acquisition or construction of property constituting a Related
Business Investment, in the case of Net Cash Proceeds of property not
constituting Collateral, or (y) the acquisition or construction of property
constituting a Related Business Investment, which property has been made
subject to the Liens of the Security Documents as contemplated by Section 4.06
hereof and the applicable provisions of the Collateral Agency Agreement within
such 180-day period, in the case of Net Cash Proceeds of property constituting
Collateral; provided, however, that Net Cash Proceeds shall be deemed to have
been so applied, and the Liens contemplated above shall be deemed to have been
granted, within such 180-day period if (A) within such 180-day period, the
Board of Directors of the Company shall have adopted a capital expenditure plan
contemplating the application of such Net Cash Proceeds to a Related Business
Investment and the Company shall have taken significant steps to implement such
plan, (B) such plan shall have been fully implemented within 180 days after the
date of adoption of such plan and (c) to the extent such plan involves the
acquisition or construction of property required to be made subject to the
Liens of the Security Documents, as contemplated above, such Liens shall have
been granted in accordance with the provisions hereof and the applicable
provisions of the Collateral Agency Agreement within 180 days after the date of
adoption of such plan.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of that Board.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions
<PAGE> 17
-5-
in the City of New York or in the city of the Corporate Trust Office of the
Trustee are authorized or obligated by law, resolution or executive order to
close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, or other equivalents (however designated) of
or in such Person's capital stock, and options, rights or warrants to purchase
such capital stock, whether outstanding on or issued after the Issue Date,
including, without limitation, all Common Stock and Preferred Stock.
"Capitalized Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of such obligation shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Equivalents" means (i) United States Government
Obligations, (ii) commercial paper rated the highest grade by Moody's Investors
Service, Inc. ("Moody's") and Standard & Poor's Corporation ("S&P") and
maturing not more than one year from the date of creation thereof, (iii) time
deposits with, and certificates of deposit and banker's acceptances issued by,
any bank having capital surplus and undivided profits aggregating at least
$500,000,000 and maturing not more than one year 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 or S&P.
"Change of Control" means (i) any sale, lease or other
transfer (in one transaction or a series of related transactions) by the
Company or any of its Subsidiaries of all or substantially all of the
consolidated assets of the Company to any Person (other than a Wholly Owned
Subsidiary of the Company); (ii) a "person" or
<PAGE> 18
-6-
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act
(other than the Company)) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of Capital Stock of the Company representing 40%
or more 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.
"Collateral" means, collectively, all of the property and
assets that are from time to time subject to the Lien of any of the Security
Documents.
"Collateral Account" means the collateral account established
pursuant to the Collateral Agency Agreement.
"Collateral Agency Agreement" means the Collateral Agency
Agreement dated as of the date hereof between the Company, Acme Steel, Acme
Packaging, the Trustee, the Term Loan Agent, the Discount Note Trustee and the
Collateral Agent in substantially the form attached hereto as Exhibit F as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with its terms.
"Collateral Agent" means Shawmut Bank Connecticut, National
Association, as collateral agent under the Collateral Agency Agreement and the
other Security Documents until a successor replaces it in accordance with the
provisions of the Collateral Agency Agreement, this Indenture and the other
Security Documents and thereafter means such successor.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.
"Company Order" means a written order or request signed in the
name of the Company by its President or Vice President, and
<PAGE> 19
-7-
by its Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, and
delivered to the Trustee.
"Commodity Agreement" of any Person means any option or
futures contract or similar agreement or arrangement designed to protect such
Person or any of its Subsidiaries against fluctuations in commodity prices.
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such Person's common stock,
whether outstanding on the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"Consolidated Cash Flow Available for Fixed Charges" means,
for any period, on a consolidated basis for the Company and its Subsidiaries,
the sum for such period of (i) Consolidated Net Income, (ii) income taxes with
respect to such period determined in accordance with GAAP, (iii) interest
expense for such period determined in accordance with GAAP and (iv)
depreciation and amortization expenses (including, without duplication,
amortization of debt discount and debt issue costs and amortization of
previously capitalized interest to cost of sales) and other non-cash charges to
earnings which reduced Consolidated Net Income (excluding any non-cash charge
to the extent that such non-cash charge requires an accrual of or a reserve for
cash charges for any future period), determined in accordance with GAAP.
"Consolidated Fixed Charges" of the Company for any period
means the sum of: (i) the aggregate amount of interest which, in conformity
with GAAP, would be set forth opposite the caption "interest expense" or any
like caption on a consolidated income statement for the Company and its
Subsidiaries (including, but not limited to, imputed interest included on
Capitalized Lease Obligations, all commissions, discounts and other fees and
charges owed with respect to letters of credit and banker's acceptance
financing, the net costs associated with Commodity Agreements, Currency
Agreements and Interest Protection Agreements, amortiza-
<PAGE> 20
-8-
tion of other financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount, premium, if any, and all other
non-cash interest expense other than previously capitalized interest amortized
to cost of sales), plus (ii) interest incurred during the period and
capitalized by the Company and its Subsidiaries, on a consolidated basis in
accordance with GAAP, plus (iii) the amount of Preferred Stock Dividends
declared by the Company and any of its Subsidiaries on Disqualified Stock
(other than such Preferred Stock Dividends payable to the Company or any Wholly
Owned Subsidiary), whether or not paid during such period, provided that, in
making such computation, the Consolidated Fixed Charges attributable to
interest on any Indebtedness computed on a pro forma basis and bearing a
floating interest rate shall be computed as if the rate in effect (after giving
effect to any Interest Protection Agreement) on the date of computation will be
the applicable rate for the entire period.
"Consolidated Net Income" of the Company for any period means
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 the computation of net income (loss) (to the extent
otherwise included therein) without duplication: (i) the net income (or loss)
of any Person (other than a Subsidiary of the Company) in which any Person
other than the Company or any of its Subsidiaries has an ownership interest,
except to the extent that any such income has actually been received by the
Company or any of its Subsidiaries in the form of cash dividends or similar
cash distributions during such period; (ii) the net income (or loss) of any
Person that accrued prior to the date that (a) such Person becomes a Subsidiary
of the Company or is merged into or consolidated with the Company or any of its
Subsidiaries or (b) the assets of such Person are acquired by the Company or
any of its Subsidiaries, except for purposes of a pro forma calculation
pursuant to clause (c) of the second sentence of the first paragraph of Section
4.04, the net income (or loss) of such Person shall be taken into account for
the full four-quarter period for which the calculation is being made; (iii) the
net income of any Subsidiary of the Company to the extent that (but only as
long as) the declaration or payment of dividends or similar
<PAGE> 21
-9-
distributions by such Subsidiary of that income is not permitted by operation
of the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to the Subsidiary
during such period; (iv) any gain or loss, together with any related provisions
for taxes on any such gain or loss, realized during such period by the Company
or any of its Subsidiaries upon (a) the acquisition of any securities, or the
extinguishment of any Indebtedness, of the Company or any of its Subsidiaries
or (b) any Asset Sale by the Company or any of its Subsidiaries; (v) any
extraordinary gain or loss, together with any related provision for taxes on
any such extraordinary gain or loss, realized by the Company or any of its
Subsidiaries during such period; and (vi) in the case of a successor to the
Company by consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets.
"Consolidated Tangible Net Worth" means, with respect to any
Person, the consolidated stockholder's equity (including any Preferred Stock
that is classified as equity under GAAP, other than Disqualified Stock) of such
Person and its Subsidiaries, as determined in accordance with GAAP, less the
book value of all Intangible Assets reflected on the consolidated balance sheet
of the Company and its Subsidiaries as of such date.
"Construction Contract" means the engineering, procurement and
construction contract dated as of July 28, 1994 between Acme Steel and Raytheon
Engineers & Constructors, Inc., pursuant to which the Modernization Project
shall be constructed.
"Continuing Director" means a director who either was a member
of the Board of Directors of the Company on the Issue Date 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, either by a specific vote or by approval of the proxy statement issued
by the Company on behalf of the entire Board of Directors of the Company in
which such individual is named as nominee for director.
<PAGE> 22
-10-
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.02 or such other address as the
Trustee may give notice to the Company.
"Currency Agreement" of any Person means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries 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.
"Disbursement Agreement" means the Disbursement Agreement
dated as of the date hereof between the Company and the Collateral Agent,
substantially in the form attached hereto as Exhibit E, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms.
"Discount Note Indenture" means the indenture under which the
Senior Secured Discount Notes are issued as it may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"Discount Note Trustee" means the party named as trustee in
the Discount Note Indenture until a successor replaces it in accordance with
the provisions of the Discount Note Indenture and thereafter means such
successor.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, (i) 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) is convertible
into or exchangeable for (whether at the option of the issuer or the holder
thereof) (a) debt securities or (b) any Capital Stock referred to in clause (i)
above, in each case, at any time prior to the Maturity Date.
<PAGE> 23
-11-
"Environmental Laws" has the meaning assigned to such form in
the Mortgage.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"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.
"Guarantee" means the guarantee of each Guarantor set forth in
Article Eleven and any additional guarantee of the Securities executed by any
Subsidiary of the Company.
"Guarantor" means each of (i) Acme Steel, Alabama
Metallurgical Corporation, a Washington corporation, Acme Packaging, Alpha Tube
Corporation, a Delaware corporation, Universal Tool & Stamping Company, Inc.,
an Indiana corporation, Alta Slitting Corporation, a Delaware corporation, and
Acme Steel Company International, Inc. a Barbados corporation, and (ii) each of
the Company's Subsidiaries that becomes a guarantor of the Securities pursuant
to the provisions of Section 4.21 hereof.
"Hazardous Materials" has the meaning assigned to such term in
the Mortgages.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the books of the Registrar or any co-Registrar.
"Indebtedness" of any Person means, without duplication, (i)
any liability of such Person (a) for borrowed money, or under any reimbursement
obligation relating to a letter of credit,
<PAGE> 24
-12-
(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 Indebtedness of others that such person 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) Disqualified Stock of such Person and (v)
all Indebtedness of others secured by a Lien on any asset of such Person, and
which is not otherwise assumed by such Person, provided that Indebtedness shall
not include accounts payable (including, without limitation, accounts payable
to such Person by any of its Subsidiaries or to any such Subsidiary by such
Person or any of its other Subsidiaries, in each case, in accordance with
customary industry practice) or liabilities to trade creditors of such Person
arising in the ordinary course of business. The amount of Indebtedness of any
Person at any date shall be (a) the outstanding balance at such date of all
unconditional obligations as described above, (b) the maximum liability of such
Person for any contingent obligations under clause (ii) above at such date and
(c) in the case of clause (v) above, the lesser of (1) the fair market value of
any asset subject to a Lien securing the Indebtedness of others on the date
that the Lien attaches and (2) the amount of the Indebtedness secured.
"Indenture" means this Indenture as amended, amended and
restated, supplemented or otherwise modified from time to time.
"Intangible Assets" of any Person means all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, write-ups of assets over
their prior carrying values (other than write-ups which occurred prior to the
Issue Date and other than, in connection with the acquisition of an asset, the
write-up of the value of such asset (within one year of its acquisition) to its
fair market value in accordance with GAAP) and all other items which would be
treated as intangibles on the consolidated balance
<PAGE> 25
-13-
sheet of the Company and its Subsidiaries prepared in accordance with GAAP.
"Intercreditor Agreement" means the Intercreditor Agreement
dated as of the date hereof among the Collateral Agent (on behalf of the
Holders of Securities, the holders of the Senior Secured Discount Notes, the
Lenders and the holders of Permitted Replacement Financing, if any, incurred in
accordance with the provisions hereof), the agent under the Working Capital
Facility (and any successor or successors thereto or assignee or assignees
therefrom), the Company and Acme Steel, in substantially the form attached
hereto as Exhibit G, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"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.
"Investment" 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 the date on which the Securities are
originally issued under this Indenture.
<PAGE> 26
-14-
"Loans" has the meaning assigned to such term in the Term Loan
Agreement.
"Lien" means, with respect to any Property, any mortgage, deed
of trust, lien, pledge, lease, easement, restriction, covenant, right-of-way,
charge, security interest or encumbrance of any kind or nature 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.
"Maturity Date" means the date, which is set forth on the face
of the Securities, on which the Securities will mature.
"Modernization Project" means the continuous thin slab
castor/hot strip mill complex to be constructed at Acme Steel's Riverdale,
Illinois plant pursuant to the Construction Contract and all architectural,
engineering and construction plans, utility and other installations and permits
together with all land, improvements, additions, furniture, fixtures and
equipment associated with such project.
"Mortgage" means the mortgage (or deed of trust) dated as of
the date hereof between Acme Steel and the Collateral Agent, in substantially
the form of Exhibit C hereto, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Net Award" has the meaning assigned to such term in the
Security Documents.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents received by the Company or by any of its Subsidiaries from such
Asset Sale (except to the extent that such obligations are sold with recourse
to the
<PAGE> 27
-15-
Company or to any Subsidiary of the Company) net of (a) reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including, without
limitation, brokerage, legal, accounting and investment banking fees and sales
commissions) to the extent actually paid, (b) taxes paid or payable ((1)
including, without limitation, income taxes reasonably estimated to be actually
payable as a result of any disposition of property within two years of the date
of disposition and (2) after taking into account any reduction in tax liability
due to available tax credits or deductions and any tax sharing arrangements),
(c) in the case of any Asset Sale that does not involve any portion of the
Collateral, repayment of Indebtedness that is required by the terms thereof to
be repaid in connection with such Asset Sale to the extent so repaid in cash
and (d) appropriate amounts to be provided by the Company or by any Subsidiary
of the Company, as the case may be, as a reserve, in accordance with GAAP
consistently applied, against any liabilities associated with such Asset Sale
and retained by the Company or by any Subsidiary of the Company, as the case
may be, after such Asset Sale, including without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale.
"Net Proceeds" has the meaning assigned to such term in the
Security Documents.
"Obligations" means any principal, premiums, interest,
penalties, fees and other liabilities payable under the documentation governing
any Indebtedness.
"Officer" means the Chairman, the President, any Vice
President, the Chief Financial Officer, the Treasurer, or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company complying with Sections 12.04 and 12.05.
<PAGE> 28
-16-
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee, and who may be an employee
of or counsel to the Company or the Trustee.
"Permitted Additional Lender" means a lender to the Company or
a Guarantor under any Permitted Replacement Financing.
"Permitted Indebtedness" means (i) Indebtedness of the Company
and its Subsidiaries outstanding immediately following the Issue Date; (ii)
Indebtedness under the Working Capital Facility which does not exceed $80
million principal amount outstanding at any one time; (iii) the Securities, the
Senior Secured Discount Notes and all Obligations outstanding under the Term
Loan Agreement; (iv) the Guarantees, the guarantees of the Senior Secured
Discount Notes and the guarantees of the Company's Obligations under the Term
Loan Agreement; (v) Indebtedness in respect of obligations of the Company to
the Trustee under this Indenture, to the trustee under the Discount Note
Indenture, to the Agent under the Term Loan Agreement and to the Collateral
Agent under the Security Documents; (vi) 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 maturity, by acceleration or otherwise) to the payment and
performance of the Company's obligations under this Indenture and the
Securities; provided, further, that any Indebtedness of the Company or any of
its Subsidiaries owed to any other Subsidiary of the Company that ceases to be
such a Subsidiary shall be deemed to be incurred and shall be treated as an
incurrence for purposes of the first paragraph of Section 4.04 at the time the
Subsidiary in question ceases to be a Subsidiary of the Company; and (vii)
Indebtedness of the Company or its Subsidiaries under any Currency Agreements,
Commodity Agreements or Interest Protection Agreements.
<PAGE> 29
-17-
"Permitted Investments" means (i) obligations of or guaranteed
by the U.S. government, its agencies or government-sponsored enterprises; (ii)
short-term commercial bank and corporate obligations that have received the
highest short-term rating from two of the following rating organizations:
Standard & Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Duff & Phelps Credit Rating Co., Fitch Investor Service, Inc.,
IBCA Ltd. and Thomson Bankwatch Inc.; (iii) money market preferred stocks
which, at the date of acquisition and at all times thereafter, are accorded
ratings of at least AA- or Aa3 by S&P or Moody's, respectively; (iv) tax-exempt
obligations that are accorded the highest short-term rating by S&P or Moody's
or a long-term rating of at least A- or A3 by S&P or Moody's, respectively, at
the time of purchase; (v) master repurchase agreements with foreign or domestic
banks having a capital and surplus of not less than $250,000,000 or primary
dealers so long as such agreements are collateralized with obligations of the
U.S. government or its agencies at a ratio of 102%, or with other collateral
rated at least AA or Aa2 by S&P or Moody's, respectively, at a ratio of 103%
and, in either case, marked-to-market weekly and so long as such securities
shall be held by a third-party agent; (vi) guaranteed investment contracts
and/or agreements of a bank, insurance company or other institution whose
unsecured, uninsured and unguaranteed obligations (or claims-paying ability)
have at the time of purchase ratings of AAA or Aaa by S&P or Moody's,
respectively; (vii) time deposits with, and certificates of deposit and
banker's acceptances issued by, any bank having capital surplus and undivided
profits aggregating at least $500,000,000 and maturing not more than one year
from the date of creation thereof; and (viii) money market funds the portfolio
of which is limited to investments described in clauses (i) through (vii)
above. In no event shall any of the Permitted Investments described in clauses
(i) through (vi) above have a final maturity more than two years from the date
of purchase; provided, however, that in the event of a Qualified Defeasance
Transaction, Permitted Investments used to defease the defeased Indebtedness
may have a final maturity up to the date of the final maturity of the
Indebtedness so defeased.
<PAGE> 30
-18-
"Permitted Liens" means (i)(x) with respect to Property other
than Collateral, Liens existing on the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date and (y) with respect to
Collateral, Liens existing on the Issue Date to the extent specifically
permitted in the appropriate Security Document, (ii) Liens on accounts
receivable and inventory of the Company and its Subsidiaries securing
Indebtedness incurred under the Working Capital Facility and/or any other
working capital facility; provided, however, that the Indebtedness under such
other working capital facility is permitted to be incurred under Section 4.04
hereof (other than as Permitted Indebtedness) and the amount outstanding at any
time under such facility is not in excess of the amount permitted to be
incurred thereunder pursuant to the borrowing base formula set forth therein,
(iii) Liens securing Indebtedness collateralized by Property of, or any shares
of stock of or debt of, any corporation existing at the time such corporation
becomes a Subsidiary of the Company or at the time such corporation is merged
into the Company or any of its Subsidiaries; provided that such Liens are not
incurred in connection with, or in contemplation of, such corporation becoming
a Subsidiary of the Company or merging into the Company or any of its
Subsidiaries and the Acquired Indebtedness could have been incurred pursuant to
the first paragraph of Section 4.04 hereof (other than as Permitted
Indebtedness), (iv) Liens securing Refinancing Indebtedness used to refund,
refinance or extend Indebtedness referred to in the preceding clause (iii);
provided that any such Lien does not extend to or cover any Property, shares or
debt other than the Property, shares or debt securing the Indebtedness so
refunded, refinanced or extended, (v) Liens other than on Collateral in favor
of the Company or any of its Subsidiaries, (vi) Liens on Property (other than
Collateral) of the Company or any of its Subsidiaries acquired after the Issue
Date in favor of governmental bodies to secure progress or advance payments
relating to such Property, (vii) Liens on Property (other than the Collateral)
of the Company or any of its Subsidiaries acquired after the Issue Date
securing industrial revenue or pollution control or other tax exempt bonds
issued in connection with the acquisition or refinancing of such Property to
the extent the incurrence of such Indebtedness is permitted pursuant to the
provisions of Section 4.04 hereof, (viii) Liens to
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secure certain Indebtedness that is otherwise permitted under this Indenture
and that is used to finance the cost of Property of the Company or any of its
Subsidiaries acquired after the Issue Date; provided that (a) any such Lien is
created solely for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, the cost (including sales and excise
taxes, installation and delivery charges and other direct costs of, and other
direct expenses paid or charged in connection with, such purchase or
construction) of such Property, (b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost, (c) the Indebtedness
secured by such Lien is incurred by the Company or its Subsidiary within 90
days of the acquisition of such Property by the Company or its Subsidiary, as
the case may be, (d) such Lien does not extend to or cover any Property other
than such item of Property and any improvements on such item, (e) no Net Cash
Proceeds derived from Collateral are used to fund all or any portion of the
cost of acquisition of such Property, and (f) prior to completion of the
Modernization Project, Acme Steel shall not incur or permit any Lien otherwise
permitted under this clause (viii) and no Liens at any time may encumber assets
which comprise the Modernization Project, (ix) Liens on Property (other than
Collateral) to secure Indebtedness that is otherwise permitted under this
Indenture the aggregate principal amount of which does not exceed $35 million
outstanding at any one time, (x) statutory liens or landlords', 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 and, with
respect to any such Liens arising in respect of any of the Collateral, only to
the extent specifically permitted under the provisions of the appropriate
Security Document, (xi) Liens on the Collateral for the benefit of (a) holders
of the Senior Secured Discount Notes or (b) holders of Indebtedness arising at
any time after retirement of the Senior Secured Discount Notes; provided that
the principal amount of such Indebtedness does not exceed the original
principal amount of such Senior Secured Discount Notes and the holders of such
replacement
<PAGE> 32
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Indebtedness (acting through a designated representative) enter into a
supplement to the Collateral Agency Agreement in substantially the form annexed
thereto and the Company and such holders otherwise comply with the applicable
provisions thereof, (xii) Liens on the Collateral for the benefit of the
holders of the Securities and (xiii) easements, restrictions, reservations or
rights of others for right-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes and other similar charges or
encumbrances not interfering in any material respect with the conduct of the
business of the Company or any of its Subsidiaries or, in the case of such
charges or encumbrances which affect the Collateral, to the extent permitted by
the provisions of the Mortgage.
"Permitted Replacement Financing" means Indebtedness of the
Company or a Guarantor incurred in compliance with this Indenture which may, in
accordance with the provisions of clause (xi) of the definition of Permitted
Liens take a security interest in certain of the Collateral upon the execution
and delivery by each Permitted Additional Lender (or a representative thereof)
of a supplement to the Collateral Agency Agreement as contemplated therein and
upon satisfaction of the other conditions set forth in Section 8.11 of the
Collateral Agency Agreement relating thereto.
"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.
"Preferred Stock Dividend" of any Person means, for any
dividend payable with regard to Preferred Stock issued by such Person, the
amount of such dividend multiplied by a fraction, the numerator of which is one
and the denominator of which is one minus the maximum statutory combined
federal, state and local income tax
<PAGE> 33
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rate (expressed as a decimal number between 1 and 0) then applicable to such
Person.
"Principal" of a debt security means the principal of the
security plus, when appropriate, the premium, if any, on the security.
"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.
"Qualified Defeasance Transaction" means any transaction by
the Company or any of its Subsidiaries in which Indebtedness is defeased;
provided, however, that in the case of Indebtedness which is subordinate to
any other Indebtedness of such Person, such Indebtedness is being defeased in
compliance with Section 4.07 hereof; and provided, further, that in order for
such defeasance to be a Qualified Defeasance Transaction the net present value
of the cost of such defeasance, including but not limited to the actual costs
of any Permitted Investments, the costs of any trustee or agent overseeing such
defeasance and any costs associated with the closing of such transaction, must
be less than the net present value of all present and future payments on the
Indebtedness to be defeased including but not limited to principal, interest
and premium, if any.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed as Exhibit A.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Company or its Subsidiaries
outstanding on the Issue Date or other Indebted-
<PAGE> 34
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ness permitted to be incurred by the Company or its Subsidiaries pursuant to
the terms of this Indenture, but only to the extent that (i) the Refinancing
Indebtedness is subordinated to the Securities to the same extent as the
Indebtedness being refunded, refinanced or extended, if at all, (ii) the
Refinancing Indebtedness is scheduled to mature either (a) no earlier than the
Indebtedness being refunded, refinanced or extended, or (b) after the Maturity
Date, (iii) the portion, if any, of the Refinancing Indebtedness that is
scheduled to mature on or prior to the Maturity Date has a weighted average
life to maturity at the time such Refinancing Indebtedness is incurred that is
equal to or greater than the weighted average life to maturity of the portion
of the Indebtedness being refunded, refinanced or extended that is scheduled to
mature on or prior to the Maturity Date, and (iv) such Refinancing Indebtedness
is in an aggregate principal amount that is equal to or less than the sum of
(a) the aggregate principal amount then outstanding under the Indebtedness
being refunded, refinanced or extended, (b) the amount of accrued and unpaid
interest, if any, on such Indebtedness being refunded, refinanced or extended
and (c) the amount of customary fees, expenses and costs related to the
incurrence of such Refinancing Indebtedness; provided that Indebtedness which
is in an aggregate principal amount greater than the sum of (a), (b) and (c) of
this clause (iv) shall constitute Refinancing Indebtedness to the extent of the
sum of (a), (b) and (c) if the amount of Indebtedness in excess of the sum of
(a), (b) and (c) could otherwise be incurred pursuant to Section 4.04.
"Related Business Investment" means any Investment, capital
expenditure or other expenditure by the Company or any Subsidiary of the
Company in Property or assets (other than the Property or assets subject to any
Lien except for (1) with respect to any Available Proceeds Amount resulting
from an Asset Sale involving Collateral, the Lien of the Security Documents and
(2) with respect to any Available Proceeds Amount resulting from an Asset Sale
not involving Collateral, the Lien of any instruments or documents that secured
Indebtedness that was secured by the assets subject to such Asset Sale) which
is related to the business of the
<PAGE> 35
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Company and its Subsidiaries as it is conducted on the date of the Asset Sale
giving rise to the Asset Sale Proceeds to be reinvested.
"Released Interests" has the meaning assigned to such term in
the Collateral Agency Agreement.
"Restoration" has the meaning assigned to such term in each of
the Mortgages.
"Restricted Investment" means, with respect to any Person, any
Investment by such Person in any (i) of its Affiliates or in any Person that
becomes an Affiliate as a result of such Investment, (ii) executive officer or
director of such Person and (iii) executive officer or director of any
Affiliate of such Person; provided that loans or advances made in the ordinary
course of business for travel, relocation or similar purposes shall not
constitute Restricted Investments.
"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 (a) dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock)
and (b) 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 of the Company
or any of its Subsidiaries which is subordinated in right of payment to the
Securities (including any Guarantees thereof); and (iv) the making of any
Restricted Investment or guarantee of any Restricted Investment in any Person.
<PAGE> 36
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"SEC" means the Securities and Exchange Commission.
"Secured Parties" has the meaning assigned to such term in the
Collateral Agency Agreement.
"Securities" means the 12 1/2% Senior Secured Notes due 2002,
as amended or supplemented from time to time pursuant to the terms of this
Indenture, that are issued under this Indenture.
"Security Agreement" means the Security Agreement dated as of
the date hereof between Acme Steel and the Collateral Agent, in substantially
the form attached hereto as Exhibit B, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with its terms.
"Security Documents" means, collectively, the Security
Agreement, the Mortgage, the Stock Pledge Agreements, the Disbursement
Agreement, the Collateral Agency Agreement and the Intercreditor Agreement and
all security agreements, mortgages, deeds of trust, collateral assignments, or
other instruments evidencing or creating any security interest in favor of the
Collateral Agent in all or any portion of the Collateral in each case, as
amended, amended and restated, supplemented or otherwise modified from time to
time.
"Senior Secured Discount Notes" means the 13 1/2% Senior
Secured Discount Notes due 2004, as amended or supplemented from time to time
pursuant to the terms of the Discount Note Indenture, that are issued under the
Discount Note Indenture.
"Significant Subsidiary" means any Subsidiary of the Company
which would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act of 1933, as amended, and the Exchange
Act.
"Special Stock Purchase Warrants" means the 5,600,000 special
common stock purchase warrants issued and sold by the Company in March 1994 and
the Common Stock for which they can be exercised.
<PAGE> 37
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"Stated Maturity," when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment
of interest is due and payable.
"Stock Pledge Agreements" means, collectively, the Stock
Pledge Agreement dated the date hereof between (i) the Company or (ii) Acme
Steel and Acme Packaging, and, in each case, the Collateral Agent, in
substantially the form attached hereto as Exhibit D, as each may be amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
"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 or controlled by such Person.
"Term Loan Agent" means the party named as agent in the Term
Loan Agreement until a successor replaces it in accordance with the provisions
of the Term Loan Agreement and thereafter means such successor.
"Term Loan Agreement" means the Term Loan Agreement dated
August 4, 1994 among the Company, the Agent and the Lenders as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture, except as
provided in Section 9.03.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
<PAGE> 38
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"Trust Officer" means any officer within the corporate trust
administration department (or any successor group of the Trustee), including
any vice president, assistant vice president, assistant secretary or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at that time shall be such
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Unapplied Proceeds Offer Payment Date" means, with respect to
any Available Proceeds Amount from an Asset Sale, the earlier of (x) the 180th
day following receipt of such Available Proceeds Amount or (y) such earlier
date on which an Unapplied Proceeds Offer shall expire; provided, however, that
to the extent that the Board of Directors of the Company shall have adopted a
capital expenditure plan contemplating the application of Net Cash Proceeds
from an Asset Sale to a Related Business Investment and the Company shall have
taken significant steps to implement such plan within 180 days of an Asset
Sale, the Unapplied Proceeds Offer Payment Date with respect thereto shall be
the 180th day after the adoption of such plan.
"United States Government Obligations" means securities which
are direct obligations of (i) the United States or (ii) an agency or
instrumentality of the United States, the payment of which is unconditionally
guaranteed by the United States, which, in either case, are full faith and
credit obligations of the United States and are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such United
States Government Obligations or a specific payment of interest on or principal
of any such United States Government Obligations held by such custodian for the
account of the holder of a depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount received by the custodian in respect of the United States Government
Obligations for the specific payment of interest or
<PAGE> 39
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principal of the United States Government Obligations evidenced by such
depository receipt.
"Valuation Date" has the meaning assigned to such term in the
Collateral Agency Agreement.
"Wabush" means the entity called Wabush Mines, a Canadian
joint venture, including Wabush Iron Co. Ltd., an Ohio corporation and one of
the joint venturers of Wabush Mines, which is engaged in the mining,
beneficiation and pelletizing of iron ore or any successor to either such
entity, any entity of approximately equivalent value substituted therefor or
any investment of approximately equivalent value and purpose.
"Wholly Owned Subsidiary" of any Person means, at any time, a
Subsidiary all of the Capital Stock of which (except director's qualifying
shares, if any) are at the time owned directly or indirectly by such Person.
"Working Capital Facility" means the revolving credit
facility, as the same may be amended or supplemented from time to time, and any
refinancing or replacement of such credit facility or any successor credit
facility so long as the aggregate amount permitted to be borrowed under any
such amended, supplemented, refinanced, replaced or successor credit facility
does not exceed the lesser of (i) $80 million outstanding at any time or (ii)
an amount equal to the sum of 85% of the face value of all "eligible
receivables" of the Company and its Subsidiaries party to such credit facility
plus 50% of the lower of the fair market value or cost of their "eligible
inventory" (as such terms are defined for purposes of such credit facility).
<PAGE> 40
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SECTION 1.02. Other Definitions.
Term Defined in Section
---- ------------------
"Affiliate Transaction" 4.03
"Bankruptcy Law" 6.01
"Collateral Account" 11.01
"covenant defeasance" 8.02
"Custodian" 6.01
"defeasance" 8.02
"Event of Default" 6.01
"incurrence" 4.04
"Paying Agent" 2.03
"Registrar" 2.03
"Released Trust Moneys" 11.04
"Repurchase Date" 4.15
"Repurchase Right" 4.15
"Required Filing Dates" 4.13
"Surviving Entity" 5.01
"Trust Moneys" 11.01
"Unapplied Proceeds Offer" 4.06
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
<PAGE> 41
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"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles in effect on the Issue Date, and any other
reference in this Indenture to "generally accepted accounting
principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
<PAGE> 42
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ARTICLE II.
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities, the notation thereon relating to the
Guarantees and the Trustee's certificates of authentication shall be
substantially in the form of Exhibit A. The Securities may have notations,
legends or endorsements required by law, securities exchange rule or usage.
Any notations, legends or endorsements not contained in the form of Security
contained in Exhibit A shall be delivered in writing to the Trustee. The
Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the form of the
Securities, annexed hereto as Exhibit A, shall constitute, and are hereby
expressly made, a part of this Indenture.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature. The Company's seal shall appear on the
Securities and may be reproduced manually or by facsimile.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue
in the aggregate principal amount of up to $125,000,000, upon a written order
of the Company signed by two Officers or by an
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Officer and an Assistant Treasurer or Assistant Secretary of the Company. The
order shall specify the amount of Securities to be authenticated and the date
on which the original issue of Securities is to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not exceed
$125,000,000 except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to
the Company and eligible to qualify as a Trustee hereunder pursuant to Section
7.10 to authenticate Securities other than upon original issuance. Any such
appointment shall be evidenced by an instrument in writing signed by a Trust
Officer of the Trustee, and a copy of such instrument shall be promptly
furnished to the Company. The Company shall pay all fees payable to the
authenticating agent. Any authenticating agent appointed hereunder shall be
entitled to the benefits of Section 7.07. Unless limited by the terms of such
appointment, any authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate as provided in
Section 7.03. The provisions of Sections 7.08, 7.09 and 7.10 shall apply to
any authenticating agent appointed hereunder with the same effect as if such
authenticating agent were the Trustee hereunder.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Securities may be presented for
payment ("Paying Agent"). The Company may have one or more co-Registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
<PAGE> 44
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The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement
the provisions of this Indenture that relate to such Agent and shall, if
required, incorporate the provisions of the TIA. The Company shall notify the
Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall
be entitled to appropriate compensation in accordance with the provisions of
Section 7.07.
The Company initially appoints the Trustee as Registrar and
Paying Agent. The Company shall give written notice to the Trustee in the
event that the Company decides to act as Registrar or Paying Agent.
SECTION 2.04. Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent to agree in
writing to hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities (whether such money has been paid to it by the Company or any
other obligor on the Securities), and the Company and the Paying Agent shall
each notify the Trustee of any default by the Company (or any other obligor on
the Securities) in making any such payment. If the Company or a Subsidiary of
the Company acts as Paying Agent, it shall segregate the money and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and account for any funds disbursed and the
Trustee may at any time during the continuance of any payment default, upon
written request to a Paying Agent, require such Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed. Upon making
such payment the Paying Agent shall have no further liability for the money
delivered to the Trustee.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the
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names and addresses of Securityholders. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least five Business Days before
each Interest Payment Date and at such other times as the Trustee may request
in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
Every Holder of a Security, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any information as to the names and addresses of the Holders
required by Section 312 of the TIA, and that the Trustee shall not be held
accountable by reason of mailing any material required to be disclosed pursuant
to a request made under Section 312(b) of the TIA.
SECTION 2.06 Transfer and Exchange.
When Securities are surrendered to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for an
equal principal amount of Securities of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met. Every Security surrendered for
registration of transfer or exchange shall (if so required by the Company or
the Registrar) be duly endorsed by or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar duly executed by
the Holder thereof or such Holder's attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's request. The date
of any Security issued pursuant to this Section 2.06 shall be the date of such
transfer or exchange. No service charge shall be made to the Securityholder
for any registration of transfer or exchange, but the Company may require from
the Securityholder payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer tax or similar governmental charge payable upon exchanges not
involving any transfer pursuant to Section 2.10, 3.06 or 9.05,
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in which event the Company shall be responsible for the payment of such taxes).
The Company shall not be required (i) to register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of the selection for redemption of Securities under
Section 3.02 and ending at the close of business on the day of the mailing of
the relevant notice of redemption, (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, or (iii) to register
the transfer of or exchange any Security which has been surrendered for
payment or repayment at the option of the Holder pursuant to Section 4.06 or
Section 4.15, except the portion, if any, of such Security not to be so paid or
repaid.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, then, in the absence of notice to the Company or the Trustee
that such lost, destroyed or wrongfully taken Security has been acquired by a
bona fide purchaser, the Company shall issue and the Trustee shall authenticate
a replacement Security if the requirements of the Company and the Trustee are
met. The Company and the Trustee may require (i) evidence to their
satisfaction of the loss, destruction or wrongful taking of a Security and (ii)
such security or indemnity in an amount sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee and any Agent from
any loss which any of them may suffer if such Security is replaced. The
Company and the Trustee each may charge such Holder for its expenses in
replacing such Security.
Every replacement Security is an additional obligation of the
Company.
<PAGE> 47
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SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities that
have been authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation and those described in this Section or Section
2.09 as not outstanding. Subject to Section 2.09, a Security does not cease to
be outstanding because the Company or one of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
Securities with respect to which the Company has effected
defeasance and/or covenant defeasance as provided in Article Eight shall cease
to be outstanding on and after the date of such defeasance and/or covenant
defeasance, except to the extent provided in Section 8.02.
If the Paying Agent (other than the Company, a Subsidiary of
the Company or an Affiliate of the Company) holds on a redemption date, a
Purchase Date, a Repurchase Date or Maturity Date (or in the event that the
Company, a Subsidiary of the Company or an Affiliate is acting as Paying Agent,
if the Company, such Subsidiary or Affiliate sets aside and segregates in trust
on a redemption date, a Purchase Date, a Repurchase Date or Maturity Date)
money sufficient to pay the principal of and interest on Securities payable on
that date, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, request, waiver or
consent, Securities owned by the Company, any Subsidiary of the Company or an
Affiliate of the Company shall be disregarded and not treated as outstanding,
except that for the
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purposes of determining whether the Trustee shall be protected in relying on
any such direction, request, waiver or consent, only Securities which the
Trustee actually knows are so owned shall be so disregarded and treated.
The Trustee may require an Officers' Certificate listing
Securities owned by the Company, a Subsidiary of the Company or an Affiliate of
the Company.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Securities in exchange for
temporary Securities upon surrender of such temporary securities. Until such
exchange, temporary Securities shall be entitled to the same rights, benefits
and privileges as definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee for cancellation any Securities surrendered to them for transfer,
exchange, repayment, redemption or payment. The Trustee and no one else shall
promptly cancel all Securities so delivered to the Trustee or surrendered for
transfer, exchange, repayment, redemption, payment or cancellation. The
Company may not issue and the Trustee shall not authenticate new Securities to
replace or reissue or resell Securities which the Company has redeemed, paid,
purchased, repurchased, purchased on the open market or otherwise, or otherwise
acquired or have been delivered to the Trustee for cancellation. The Trustee
(subject to the record-retention requirements of the Exchange Act) shall
destroy all cancelled Securities and promptly deliver a certificate of
destruction to the Company.
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SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest, plus any interest payable on
the defaulted interest pursuant to Section 4.01 hereof, to the persons who are
Securityholders on a subsequent special record date, and such term, as used in
this Section 2.12 with respect to the payment of any defaulted interest, shall
mean the fifteenth day next preceding the date fixed by the Company for the
payment of defaulted interest, whether or not such day is a Business Day. At
least 15 days before such special record date, the Company shall mail to each
Securityholder and to the Trustee, or the Trustee in the name and at the
expense of the Company shall mail to each Securityholder, a notice that states
such special record date, the payment date and the amount of defaulted interest
to be paid.
Alternatively, in lieu of paying such defaulted interest
pursuant to the preceding paragraph, the Company may make payment of such
defaulted interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such securities exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this paragraph, such manner of payment shall be deemed practicable by the
Trustee.
ARTICLE III.
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to
paragraph 5 of the Securities at the applicable redemption price set forth
thereon, it shall notify the Trustee in writing of the redemption date and the
principal amount of Securities to be redeemed.
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The Company shall give the notice provided for in this Section
at least 45 days before the redemption date (unless a shorter notice shall be
agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant
to paragraph 5 thereof, the Trustee shall select the Securities to be redeemed
by any method that complies with the requirements of the principal national
securities exchange, if any, on which the Securities being redeemed are listed,
at the discretion of the Trustee, or, if the Securities are not so listed, by
lot, pro rata or in such other manner as the Trustee shall deem fair and
reasonable; provided that no Security with a principal amount of $1,000 or less
shall be redeemed in part. The Trustee shall make the selection from the
Securities then outstanding, subject to redemption and not previously called
for redemption. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. The Trustee shall promptly notify the
Company in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail a notice of redemption by first class mail,
postage prepaid, to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
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(1) the redemption date;
(2) the redemption price;
(3) the CUSIP number of the Securities;
(4) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption
ceases to accrue on and after the redemption date and the only
remaining right of the Holders is to receive payment of the redemption
price upon surrender to the Paying Agent; and
(7) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and
that, after the redemption date, upon surrender of such Security, a
new Security or Securities in principal amount equal to the unredeemed
portion thereof will be issued.
At the Company's request made at least 45 days before the
redemption date (unless a shorter time period shall be agreed to by the Trustee
in writing), the Trustee shall give the notice of redemption on behalf of the
Company, in the Company's name and at the Company's expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date and at the redemption
price and from and after the redemption date (unless the Company defaults in
making the redemption payment) such Securities shall cease to accrue interest.
Upon surrender to the
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Paying Agent, such Securities shall be paid at the redemption price, plus
accrued interest thereon to the redemption date, but interest installments
whose maturity is on or prior to such redemption date shall be payable to the
Holders of record at the close of business on the relevant record dates
referred to in the Securities. The Trustee shall not be required to (i) issue,
authenticate, register the transfer of or exchange any Security during a period
beginning 15 days before the date a notice of redemption is mailed and ending
at the close of business on the date the redemption notice is mailed, or (ii)
register the transfer or exchange of any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the redemption date, the
Company shall deposit with the Paying Agent (or if the Company is its own
Paying Agent, shall, on or before the redemption date, segregate and hold in
trust) money sufficient to pay the redemption price of and accrued interest on
all Securities to be redeemed on that date other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part (with,
if so required by the Company or the Trustee, due endorsement by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), the Trustee shall authenticate for the
Holder a new Security in principal amount equal to and in exchange for the
unredeemed portion of the Security surrendered.
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ARTICLE IV.
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of
principal or interest shall be considered paid on the date due if the Trustee
or Paying Agent (other than the Company, a Subsidiary of the Company or an
Affiliate of the Company) holds on that date money in immediately available
funds designated for and sufficient to pay the installment in full.
The Company shall pay interest on overdue principal at the
same rate per annum borne by the Securities. The Company shall pay interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 12.02. The Company hereby
initially designates the office of Shawmut Trust Company located at 14 Wall
Street, 8th Floor, New York, N.Y. 10005, as its office or agency in the Borough
of Manhattan, The City of New York, to receive all such presentations,
surrenders, notices or demands until changed as permitted in this Indenture.
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The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
SECTION 4.03. Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its
Subsidiaries to, make any loan, advance, guarantee or capital contribution to,
or for the benefit of, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, any Affiliate of the Company or any
Affiliate of any of the Company's Subsidiaries or any holder of 10% or more of
any class of Capital Stock of the Company (including any Affiliates of such
holders) (each, an "Affiliate Transaction") except for any Affiliate
Transaction 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 an Affiliate of the Company
or any of the Company's Subsidiaries.
In addition, the Company will not, and will not permit any
Subsidiary of the Company to, enter into an Affiliate Transaction, or any
series of related Affiliate Transactions, unless with respect to such
transaction or transactions involving or having a value of more than
$1,000,000, the Company has (x) obtained the approval of a majority of the
Board of Directors in the exercise of their fiduciary duties and (y) either
obtained the approval of a majority of the members of the full Board of
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Directors not having any interest in such transaction or transactions or
obtained an opinion of a qualified independent financial advisor to the effect
that such transaction or transactions are fair to the Company or such
Subsidiary, as the case may be, from a financial point of view.
SECTION 4.04. Limitation on Indebtedness.
The Company will not, and will not permit any of its
Subsidiaries, directly or indirectly, to, create, incur, assume, become liable
for or guarantee the payment of (collectively, an "incurrence") any
Indebtedness (including Acquired Indebtedness); provided the Company and its
Subsidiaries may incur Indebtedness, including Acquired Indebtedness, if (i) at
the time of such event and after giving effect thereto, on a pro forma basis,
the ratio of Consolidated Cash Flow Available for Fixed Charges to
Consolidated Fixed Charges for the four full fiscal quarters immediately
preceding such event, taken as one period and calculated using the assumptions
and adjustments set forth in the following sentence, would have been greater
than 2.0 to 1.0, and (ii) no Default or Event of Default shall have occurred
and be continuing at the time of or occur as a consequence of the incurrence of
such Indebtedness. The following assumptions and adjustments shall be used in
calculating the ratio of Consolidated Cash Flow Available for Fixed Charges to
Consolidated Fixed Charges for the four-quarter period preceding the incurrence
of Indebtedness giving rise to such determination: (a) the Indebtedness being
incurred will be assumed to have been incurred on the first day of such
four-quarter period; (b) any other Indebtedness incurred during, and remaining
outstanding at the end of, such four-quarter period or incurred subsequent to
such four-quarter period will be assumed to have been incurred on the first day
of such four-quarter period; (c) with respect to the incurrence of Acquired
Indebtedness, the related acquisition (whether by means of purchase, merger or
otherwise) and any related repayment of any Indebtedness will be assumed to
have occurred on the first day of such four-quarter period with the appropriate
adjustments with respect to such acquisition and repayment being included in
such pro forma calculations; (d) with respect to Indebtedness repaid (other
than a repayment of revolving credit
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obligations) during such four-quarter period (or subsequent thereto) out of the
proceeds of sales of Capital Stock or operating cash flows in such four-quarter
period, such Indebtedness will be assumed to have been repaid on the first day
of such four-quarter period; and (e) any permanent reduction in the committed
amount of a revolving credit facility during such four-quarter period (or
subsequent thereto) will be deemed to have occurred on the first day of such
four-quarter period and interest paid on any amounts drawn on such revolving
credit facility during such four-quarter period in excess of such reduced
committed amount shall, for the period during which such drawn amounts were
actually outstanding, be excluded from such calculation.
The foregoing limitations shall not apply to the incurrence of
(i) Permitted Indebtedness, (ii) Refinancing Indebtedness and (iii) additional
Indebtedness of the Company or any of its Subsidiaries the aggregate principal
amount of which does not exceed $35 million outstanding at any one time.
SECTION 4.05. Limitation on Liens.
The Company will not, and will not permit any Subsidiary of
the Company to, issue, assume, guarantee or suffer to exist any Indebtedness
secured by a Lien (other than a Permitted Lien) of or upon any Property of the
Company or any Subsidiary of the Company or any shares of stock or debt of any
Subsidiary of the Company, whether such Property is owned at the Issue Date or
thereafter acquired.
SECTION 4.06. Limitation on Disposition of Assets.
(a) The Company will not, and will not cause or permit
any of its Subsidiaries to, consummate any Asset Sale unless (i) the
consideration in respect of such Asset Sale is at least equal to the fair
market value of the assets subject to such Asset Sale, (ii) at least 75% of the
value of the consideration therefrom received by the Company or such Subsidiary
is in the form of cash or Cash Equivalents, and (iii) to the extent such Asset
Sale involves Collateral, (x) such Asset Sale is not between the Company
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and any of its Subsidiaries or between Subsidiaries of the Company and (y) the
Company shall cause the cash consideration received in respect thereof to be
deposited in the Collateral Account as and when received by the Company or by
any Subsidiary of the Company and shall otherwise comply with the provisions
hereof and of the Collateral Agency Agreement applicable to such Collateral and
Asset Sale. The Company may, for so long as no Default or Event of Default
exists hereunder or would be caused thereby, apply Net Cash Proceeds held by it
(or in compliance with the provisions hereof and the Collateral Agency
Agreement, direct the Collateral Agent to release Net Cash Proceeds held in the
Collateral Account for application) to the acquisition or construction of
Property constituting a Related Business Investment; provided, however, that if
such application is not made in the manner and within the times contemplated by
the definition of Available Proceeds Amount, the Company shall be required to
make an Unapplied Proceeds Offer (as defined below) pursuant to paragraph (b)
below.
(b) In the event there shall be any Available Proceeds
Amount, the Company shall make an offer to purchase (the "Unapplied Proceeds
Offer") to all Holders of the Securities on the Unapplied Proceeds Offer
Payment Date a principal amount (expressed as an integral multiple of $1,000)
of the Securities equal to the Applicable Portion of such Available Proceeds
Amount (as such amount may be increased in accordance with clause (vii) of
paragraph (f) hereof). In each case of an Unapplied Proceeds Offer, the
purchase price for the Securities shall be equal to 100% of the principal
amount thereof plus accrued and unpaid interest to the Unapplied Proceeds Offer
Payment Date. Notwithstanding the foregoing (A) the Company may defer the
Unapplied Proceeds Offer until there is an aggregate unutilized Available
Proceeds Amount equal to or in excess of $5,000,000 (at which time, the entire
unutilized Available Proceeds Amount whether or not withdrawn by the Company
pursuant to Section 3.4 of the Collateral Agency Agreement, and not just the
amount in excess of $5,000,000, shall be applied as required pursuant hereto),
(B) in connection with any Asset Sale, the Company and its Subsidiaries will
not be required to comply with the requirements of clause (ii) of paragraph (a)
to the extent that the aggregate non-cash consideration received in
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connection with such Asset Sale, together with the sum of all non-cash
consideration received in connection with all prior Asset Sales that has not
yet been converted into cash, does not exceed $5 million; provided that when
any non-cash consideration is converted into cash, such cash shall constitute
Net Cash Proceeds and be subject to clause (ii) of paragraph (a), and (C) in
connection with any Asset Sale relating to the Company's interest in Wabush,
the Company need not comply with the provisions of clauses (i) and (ii) of
paragraph (a). To the extent the Unapplied Proceeds Offer is not fully
subscribed to by Holders of Securities, the Company may, subject to the terms
hereof and of the Collateral Agency Agreement, obtain a release of the
unutilized portion of the Available Proceeds Amount relating to such Unapplied
Proceeds Offer from the Lien of the Security Documents.
(c) If at any time any non-cash consideration is received
by the Company or by any Subsidiary of the Company, as the case may be, in
connection with any Asset Sale involving Collateral, such non-cash
consideration shall be made subject to the Lien of the Security Documents in
the manner contemplated hereby and the Collateral Agency Agreement. If and
when any non-cash consideration received from any Asset Sale (whether or not
relating to Collateral) is converted into or sold or otherwise disposed of for
cash, then such conversion or disposition shall be deemed to constitute an
Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in
accordance with this Section.
(d) All Net Proceeds and all Net Awards required to be
delivered to the Collateral Agent pursuant to any Security Document shall
constitute Trust Moneys and shall be delivered by the Company to the Collateral
Agent contemporaneously with receipt by the Company and be deposited in the
Collateral Account. Net Proceeds and Net Awards so deposited that are required
to be applied or may be applied by the Company to effect a Restoration of the
affected Collateral under the applicable Security Document may be withdrawn
from the Collateral Account, only in accordance with the provisions of this
Indenture and the Collateral Agency Agreement. Net Proceeds and Net Awards so
deposited that are not required to be applied to effect a Restoration of the
affected
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Collateral under the applicable Security Document may be withdrawn only in
accordance with the provisions of this Indenture and the Collateral Agency
Agreement.
(e) The Company shall provide the Trustee and the
Collateral Agent with prompt notice of the occurrence of an Unapplied Proceeds
Offer. Such notice shall be accompanied by an Officers' Certificate setting
forth (i) a statement to the effect that (x) the Company or a Subsidiary of the
Company has made an Asset Sale and/or (y) there has occurred a destruction or
condemnation in respect of Collateral resulting in Net Proceeds or Net Awards
which are not required to be applied to effect a Restoration of such affected
Collateral under the applicable Security Document and (ii) the aggregate
principal amount of Securities offered to be purchased and the basis of
calculation in determining such aggregate principal amount. The Company is
obligated with respect to the Securities and the Senior Secured Discount Notes
(i) to give notice of an Unapplied Proceeds Offer and the equivalent offer
pursuant to the Discount Note Indenture at the same time and in the same manner
to each holder of the Securities and the Senior Secured Discount Notes, (ii) to
set the same expiration date for the Unapplied Proceeds Offer and the
equivalent offer pursuant to the Discount Note Indenture arising out of each
event giving rise to an Available Proceeds Amount and (iii) to establish
identical dates as the Unapplied Proceeds Offer Payment Date and the equivalent
date pursuant to the Discount Note Indenture for each such offer referred to in
clauses (i) and (ii).
In the event of the transfer of substantially all (but not
all) of the Property of the Company and its Subsidiaries as an entirety to a
Person in a transaction permitted under Section 5.01 hereof, the successor
corporation shall be deemed to have sold the Properties of the Company and its
Subsidiaries not so transferred for purposes of this Section, and shall comply
with the provisions of this Section with respect to such deemed sale as if it
were an Asset Sale. In addition, the fair market value of such properties and
assets of the Company or its Subsidiaries deemed to be sold shall be deemed to
be Net Cash Proceeds for purposes of this Section.
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(f) The Company shall provide the Trustee and the
Collateral Agent with written notice of the Unapplied Proceeds Offer at least
45 days before any notice of any Unapplied Proceeds Offer is mailed to Holders
of the Securities (unless shorter notice is acceptable to the Trustee). Notice
of an Unapplied Proceeds Offer shall be mailed by the Company, or by the
Trustee in the name of and at the expense of the Company, to all Holders of
Securities not less than 30 days nor more than 60 days before the Unapplied
Proceeds Offer Payment Date at their last registered address with a copy to the
Trustee and the Paying Agent. The Unapplied Proceeds Offer shall remain open
from the time of mailing for at least 20 Business Days and until at least 4:00
p.m., New York City time, on the Business Day next preceding the Unapplied
Proceeds Offer Payment Date. The notice, which shall govern the terms of the
Unapplied Proceeds Offer, shall include such disclosures as are required by law
and shall state:
(i) that the Unapplied Proceeds Offer is being made
pursuant to this Section 4.06;
(ii) the purchase price (including the amount of accrued
interest, if any) for each Security and the Unapplied Proceeds Offer
Payment Date;
(iii) that any Security not tendered or accepted for
payment will continue to accrue interest in accordance with the terms
thereof;
(iv) that, unless the Company defaults in making the
payment, any Security accepted for payment pursuant to the Unapplied
Proceeds Offer shall cease to accrue interest after the Unapplied
Process Offer Payment Date;
(v) that Holders electing to have Securities purchased
pursuant to an Unapplied Proceeds Offer will be required to surrender
their Securities to the Paying Agent at the address specified in the
notice prior to 4:00 p.m., New York City time, on the business day
next preceding the Unapplied Proceeds Offer Payment Date and must
complete any form letter
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of transmittal proposed by the Company and acceptable to the Trustee
and the Paying Agent;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than 4:00 p.m., New
York City time, on the business day next preceding the Unapplied
Proceeds Offer Payment Date, a tested telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase, the Security certificate
number (if any) and a statement that such Holder is withdrawing his or
her election to have such Securities purchased;
(vii) that if Securities in a principal amount in excess of
the Applicable Portion plus the excess, if any, of (x) the Applicable
Portion (as defined in the Discount Note Indenture) over (y) Senior
Secured Discount Notes validly tendered pursuant to Section 4.06 of
the Discount Note Indenture in each case arising as a result of the
Asset Sale giving rise to the Unapplied Proceeds Offer are tendered
pursuant to the Unapplied Proceeds Offer, the Company shall purchase
Securities on a pro rata basis among the Securities tendered (with
such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000 or integral multiples of
$1,000 shall be acquired);
(viii) that Holders whose Securities are purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(ix) the instructions that Holders must follow in order to
tender their Securities.
On the business day prior to the Unapplied Proceeds Payment
Date, the Company shall (i) deposit, or cause to be deposited, the Applicable
Portion plus any additional amounts determined pursuant to clause (vii) of this
paragraph (f) (which amount may consist of Trust Moneys already held by the
Collateral Agent) in immediately available funds with the Paying Agent, (ii)
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accept for payment, on a pro rata basis among the Securities tendered in the
event that Securities in a principal amount in excess of the amount set forth
in clause (vii) of this paragraph (f) are tendered pursuant to the Unapplied
Proceeds Offer (and in any event with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000
or integral multiples of $1,000 shall be purchased), Securities or portions
thereof tendered for purchase pursuant to the Unapplied Proceeds Offer and
(iii) deliver to the Paying Agent the Securities so accepted together with an
Officers' Certificate setting forth the Securities or portions thereof tendered
for purchase and accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security equal in principal amount to
any unpurchased portion of the Security surrendered. Any Securities not so
accepted shall be promptly mailed or delivered by the Company to the Holders
thereof. The Paying Agent shall promptly deliver to the Company the balance of
such Available Proceeds Amount held by the Paying Agent after payment to the
Holders of Securities as aforesaid. For purposes of this Section 4.06, so long
as the Collateral Agent is also the Trustee, the Collateral Agent shall act as
Paying Agent and, otherwise, the Trustee shall act as Paying Agent.
The Company will and will cause its Subsidiaries to comply, to
the extent applicable, with the requirements of Section 14(e) of the Exchange
Act and any other securities laws or regulations in connection with the
repurchase of Securities pursuant to the Unapplied Proceeds Offer. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this Section 4.06, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.06 by virtue thereof.
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SECTION 4.07. Limitation on Restricted Payments.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment unless:
(x) no Default or Event of Default shall have occurred
and be continuing at the time of or after giving effect to such
Restricted Payment;
(xi) immediately after giving effect to such Restricted
Payment, the Company could incur at least $1.00 of Indebtedness (other
than Permitted Indebtedness) pursuant to the first paragraph of
Section 4.04; and
(xii) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments (the fair
market value of any such Restricted Payment if other than cash as
determined in good faith by the Board of Directors and evidenced by a
Board Resolution) declared or made after the Issue Date does not
exceed 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 the first full fiscal quarter of
the Company commencing after the Issue Date 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 Board of
Directors and evidenced by a Board Resolution) received by the Company
from (1) the issue or sale after the Issue Date of Capital Stock of
the Company (other than the issue or sale of (A) Disqualified Stock,
(B) Capital Stock of the Company to any Subsidiary of the Company or
(C) the exercise of the Special Stock Purchase Warrants); and (2) the
issue or sale after the Issue Date of any Indebtedness or other
securities of the Company convertible into or exercisable for Capital
Stock (other than Disqualified Stock) of the
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Company which has been so converted or exercised, as the case may be.
The foregoing clauses (ii) and (iii) will not prohibit: (A)
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 Indenture; (B) the repurchase, redemption or retirement of
any shares of Capital Stock of the Company or any of its Subsidiaries in
exchange for, or out of the net proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of, other shares of Capital Stock
(other than Disqualified Stock) of the Company; (C) the repurchase, redemption
or retirement of subordinated Indebtedness of the Company or any of its
Subsidiaries in exchange for, by conversion into, or out of the net proceeds
of, a substantially concurrent (x) issue or sale of Capital Stock (other than
Disqualified Stock) of the Company or (y) incurrence of Refinancing
Indebtedness with respect to such subordinated Indebtedness; (D) the purchase
of options or Capital Stock issued to members of management of the Company
pursuant to the terms of their employment agreements upon termination of
employment, death or disability of any such Person in an amount not to exceed
$1,000,000 per annum; and (E) payments to taxing authorities by the Company or
a Subsidiary of the Company on behalf of a holder of Capital Stock of the
Company (or an option to purchase such Capital Stock) pursuant to Section 4 of
the Company's [Grant of Stock Award] dated January 29, 1994; provided that each
Restricted Payment described in clauses (A) through (D) (other than subclause
(y) of clause (C)) of this sentence shall be taken into account for purposes of
computing the aggregate amount of all Restricted Payments pursuant to clause
(iii) of the immediately preceding paragraph.
SECTION 4.08. Corporate Existence.
Subject to Article Five, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
of its Subsidiaries in accordance with the respective organizational documents
of each Subsidiary and the
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rights (charter and statutory) and material franchises of the Company and each
of its Subsidiaries; provided that the Company shall not be required to
preserve any such right or franchise, or the corporate existence of any
Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and each of its Subsidiaries, taken as a whole, and that the loss thereof is
not, and will not be, adverse in any material respect to the Holders.
SECTION 4.09. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges (including any penalties, interest and
additions to taxes) levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any of
its Subsidiaries and (2) all lawful claims for labor, materials and supplies
which, in each case, if unpaid, might by law become a material liability, or
Lien upon the Property, of the Company or any of its Subsidiaries; provided
that, subject to the applicable provisions of the Security Documents, the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and an adequate
reserve has been established therefor to the extent required by GAAP.
SECTION 4.10. Notice of Defaults.
(1) In the event that any Indebtedness of the Company or
any of its Subsidiaries is declared due and payable before its maturity because
of the occurrence of any default (or any event which, with notice or lapse of
time, or both, would constitute such a default) under such Indebtedness, the
Company shall promptly give written notice to the Trustee of such declaration,
the status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
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(2) Upon becoming aware of any Default or Event of
Default, the Company shall promptly deliver an Officers' Certificate to the
Trustee specifying the Default or Event of Default.
SECTION 4.11. Maintenance of Properties, Insurance.
(a) Subject to the applicable provisions of the Security
Documents, the Company shall cause all material Properties owned by or leased
to it or any of its Subsidiaries and used or useful in the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept
in normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this Section shall prevent the Company or any of its
Subsidiaries from discontinuing the use, operation or maintenance of any of
such properties (other than Properties constituting items of Collateral except
to the extent permitted by Section 10.03), or disposing of any of them (other
than Properties constituting items of collateral except to the extent permitted
by Section 10.03) if such discontinuance or disposal is, in the reasonable good
faith judgment of the Board of Directors or of the board of directors of any
Subsidiary of the Company concerned, or of an officer (or other agent employed
by the Company or of any of its Subsidiaries) of the Company or any of its
Subsidiaries having managerial responsibility for any such Property, desirable
in the conduct of the business of the Company or any Subsidiary of the
Company, and if such discontinuance or disposal is not adverse in any material
respect to the Holders.
(b) Subject to the applicable provisions of the Security
Documents, the Company shall maintain, and shall cause its Subsidiaries to
maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers' compensation and
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interruption of business insurance. The Company shall provide, and shall cause
its Subsidiaries to provide, an Officers' Certificate as to compliance with the
foregoing requirements to the Trustee prior to the anniversary or renewal date
of each such policy, together with satisfactory evidence of such insurance,
which certificate shall expressly state such expiration date for each policy
listed.
SECTION 4.12. Compliance Certificate.
The Company shall deliver to the Trustee within 100 days after
the close of each fiscal year an Officers' Certificate stating that a review of
the activities of the Company has been made under the supervision of the
signing officers with a view to determining whether a Default or Event of
Default has occurred and whether or not the signers know of any Default or
Event of Default by the Company that occurred during such fiscal quarter or
fiscal year, as the case may be. If they do know of such a Default or Event of
Default, the certificate shall describe all such Defaults or Events of Default,
their status and the action the Company is taking or proposes to take with
respect thereto. The first certificate to be delivered by the Company pursuant
to this Section 4.12 shall be for the fiscal year ending December 1994.
SECTION 4.13. Reports.
So long as at least 10% of the initial aggregate principal
amount of the Securities are outstanding, whether or not the Company is subject
to Section 13(a) or 15(d) of the Exchange Act, the Company shall file with the
SEC the annual reports, quarterly reports and other documents which the Company
would have been required to file with the SEC pursuant to such Sections 13(a)
and 15(d) if the Company were so subject, such documents to be filed with the
SEC on or prior to the respective dates (the "Required Filing Dates") by which
the Company would have been required so to file such documents if the Company
were so subject. The Company shall also in any event (x) within 15 days after
each Required Filing Date file with the Trustee copies of the annual reports,
quarterly reports and other documents which the Company
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would have been required to file with the SEC pursuant to Sections 13(a) and
15(d) of the Exchange Act if the Company were subject to such Sections and (y)
if filing such documents by the Company with the SEC is not permitted under the
Exchange Act, promptly upon written request supply copies of such documents to
any prospective Holder. The Company shall also comply with the other
provisions of TIA Section 314(a).
SECTION 4.14. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law, which would prohibit or forgive the Company from
paying all or any portion of the principal of and/or interest on the Securities
as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law, and covenants that it shall
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.15. Repurchase of Securities upon Change of Control.
(c) Upon the occurrence of a Change of Control, each
Holder of the Securities shall have the right (the "Repurchase Right"), at such
Holder's option, to require the Company to repurchase all or any part of such
Holder's Securities on a date specified in the notice referred to below (the
"Repurchase Date") that is the same date as the equivalent repurchase date
under the Discount Note Indenture and is no later than 60 days after notice of
the Change of Control, at 101% of the principal amount thereof, plus accrued
interest to the Repurchase Date.
(d) On or before the thirtieth day after the Change of
Control, the Company shall deliver, or cause to be delivered, by
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first-class mail, to all holders of record of such Securities and the
Trustee (or the Trustee, in the name and at the expense of the Company, shall
deliver) a notice regarding the Change of Control and the Repurchase Right.
Each such notice shall state
(i) the Repurchase Date;
(ii) the date by which the Repurchase Right must be exercised;
(iii) the price (including the amount of accrued interest, if any)
for such Securities; and
(iv) the procedure which the Holder of Securities must follow to
exercise the Repurchase Right.
Substantially simultaneously with mailing of the notice, the
Company shall cause a copy of such notice to be published in a newspaper of
general circulation in the Borough of Manhattan, The City of New York.
(e) To exercise the Repurchase Right, the Holder of a
Security must deliver at least ten days prior to the Repurchase Date written
notice to the Company (or any agent designated by the Company for such purpose)
of such Holder's exercise of the Repurchase Right, together with the Security
with respect to which such Repurchase Right is being exercised, duly endorsed
for transfer; provided that, if mandated by applicable tender offer rules and
regulations, a Holder may be permitted to deliver such written notice nearer to
the Repurchase Date, as may be specified by the Company.
(f) In the event a Repurchase Right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid the
price payable with respect to the Securities as to which the Repurchase Right
has been exercised in cash to the Holder of such 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 Company shall
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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.
(g) The Company shall 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 the
Repurchase Right as a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this Section 4.15, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 4.15 by virtue thereof.
(h) No repurchase of Securities under this Section 4.15
shall occur until the Trustee shall have received, prior to the Repurchase
Date, an Officers' Certificate and an Opinion of Counsel as to (i) the
Company's compliance with this Section 4.15 and (ii) the fulfillment of all
conditions precedent to such repurchase.
SECTION 4.16. Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any Subsidiary of
the Company to, enter into any sale and leaseback transaction with respect to
any Property (whether now owned or hereafter acquired) unless (i) (a) the
Property that is subject of such sale and leaseback transaction does not
constitute Collateral and (b) the sale or transfer of the Property to be leased
complies with the requirements of Section 4.06 and (ii) the Company or such
Subsidiary would be entitled under Section 4.04 to incur any Capitalized Lease
Obligations in respect of such sale and leaseback transaction.
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SECTION 4.17. Limitation 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 (i) (a) pay dividends or make any
other distributions on its Capital Stock, or any other interest or
participation in or measured by its profits, owned by the Company or any other
Subsidiary of the Company, or (b) pay any Indebtedness owed to the Company or
any other Subsidiary of the Company, (ii) make loans or advances to the Company
or a Subsidiary of the Company or (iii) transfer any of its properties or
assets to the Company or any other Subsidiary of the Company, except for
Permitted Liens and such other encumbrances or restrictions existing under or
by reason of (a) any restrictions, with respect to a Subsidiary that is not a
Subsidiary of the Company on the Issue Date, under any agreement in existence
at the time such Subsidiary becomes a Subsidiary of the Company (unless such
agreement was entered into in connection with, or in contemplation of, such
entity becoming a Subsidiary of the Company on or after the Issue Date), (b)
any restrictions under any agreement evidencing any Acquired Indebtedness of a
Subsidiary of the Company incurred pursuant to the provisions of Section 4.04;
provided that such restrictions shall not restrict or encumber any assets of
the Company or its Subsidiaries other than such Subsidiary, (c) terms relating
to the nonassignability of any operating lease, (d) any restrictions under the
Working Capital Facility, (e) any encumbrance or restriction existing under any
agreement that refinances or replaces the agreements containing restrictions
described in clauses (a) through (d); provided that the terms and conditions of
any such restrictions are not materially less favorable to the Holders of the
Securities than those under the agreement so refinanced or replaced, or (f) any
encumbrance or restriction due to applicable law.
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SECTION 4.18. Limitation on Actions Affecting Security.
The Company shall not, and shall not permit any Subsidiary of
the Company to, take or omit to take any action, which action or omission would
have the result of materially adversely affecting or impairing the Liens and
security interests in the Collateral in favor of the Collateral Agent on behalf
of the Holders of the Securities and the other secured parties thereunder, nor
shall the Company or any such Subsidiary grant any interest whatsoever in the
Collateral except as expressly permitted by this Indenture and the Security
Documents.
SECTION 4.19. Inspection and Confidentiality.
(a) The Company shall, and shall cause each of its
Subsidiaries to, permit authorized representatives of the Trustee and the
Collateral Agent to visit and inspect the properties of the Company and its
Subsidiaries, and any or all books, records and documents in the possession of
the Company relating to the Collateral, and to make copies and take extracts
therefrom and to visit and inspect the Collateral, all upon reasonable prior
notice and at such reasonable times during normal business hours and as often
as may be reasonably requested.
(b) The Trustee and the Collateral Agent and their
respective authorized representatives referred to in Section 4.19(a) agree not
to use any information obtained pursuant to this Section 4.19 for any unlawful
purpose and, prior to the occurrence of an Event of Default, to keep
confidential any proprietary information identified to the Trustee, the
Collateral Agent or such representative (as applicable) as proprietary
information and not to disclose any such proprietary information to any Person
except that (i) the recipient of the information may disclose any information
that becomes publicly available other than as a result of disclosure by such
recipient, (ii) the recipient of the information may disclose any information
that its counsel reasonably concludes is necessary to be disclosed by law,
pursuant to any court or administrative order or ruling or in any pending legal
or administrative proceeding or investigation after prior written
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notice, reasonable under the circumstances, to the Company, and (iii) the
recipient of the information may disclose any information necessary to be
disclosed pursuant to any provision of the TIA.
SECTION 4.20. Limitations on Investments, Loans and Advances.
The Company will not make and will not permit any of its
Subsidiaries to make any Investments in any Person, except (i) Investments by
the Company in or to any Subsidiary (or an entity which, following and as a
result of such Investment, becomes a Subsidiary of the Company) and Investments
in or to the Company or a Subsidiary (or an entity which, following and as a
result of such Investment, becomes a Subsidiary of the Company) by any
Subsidiary, (ii) Investments represented by accounts receivable created or
acquired in the ordinary course of business, (iii) advances to employees,
officers and directors in the ordinary course of business, (iv) Investments
under or pursuant to Interest Protection Agreements, (v) Permitted Investments,
(vi) Restricted Investments made pursuant to Section 4.07 hereof, (vii)
Investments in Wabush and (viii) other Investments in Persons other than
Subsidiaries or Affiliates of the Company or any of the Company's Subsidiaries
not to exceed $10,000,000 at any one time outstanding. For purposes of
calculating the amount of any outstanding Investment pursuant to clause (viii),
any return of capital or repayment of a loan or advance constituting all or a
portion of the original amount of the Investment shall be deducted.
SECTION 4.21. Additional Guarantors.
If the Company or any of its Subsidiaries transfers or causes
to be transferred, in one or a series of related transactions, any Property
having a book value in excess of $500,000 to any Subsidiary that is not a
Guarantor, or if the Company or any of its Subsidiaries shall organize, acquire
or otherwise invest in another Subsidiary having total assets with a book value
in excess of $500,000, then such transferee or acquired or other Subsidiary
shall (i) execute and deliver to the Trustee a supplemental indenture in form
reasonably satisfactory to the Trustee pursuant to which such Subsidiary shall
unconditionally guarantee all of the
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Company's obligations under the Securities and the Indenture on the terms set
forth in the Indenture and (ii) deliver to the Trustee an Opinion of Counsel
that such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary and constitutes the legal, valid, binding and
enforceable obligation of such Subsidiary. Thereafter, such Subsidiary shall
be a Guarantor for all purposes hereof.
ARTICLE V.
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Restriction on Mergers and
Consolidations and Sales of Assets.
The Company shall not consolidate or merge with or into any
Person, and the Company will not, and will not permit any of its Subsidiaries
to, sell, lease, convey or otherwise dispose of all or substantially all of the
Company's consolidated assets (as an entirety or substantially an entirety in
one transaction or a series of related transactions, including by way of
liquidation or dissolution) to, any Person unless, in each such case:
(i) the entity formed by or surviving any such consol-
idation 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;
(ii) the Surviving Entity assumes by supplemental
indenture all of the obligations of the Company on the Securities
and under this Indenture and the Security Documents;
(iii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be
continuing;
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(iv) immediately after giving effect to such transaction and
the use of any net proceeds therefrom on a pro forma basis, the
Consolidated Tangible Net Worth of the Company or the Surviving
Entity, as the case may be, would be at least equal to the
Consolidated Tangible Net Worth of the Company immediately prior to
such transaction; and
(v) immediately after giving effect to such transaction and
the use of any net proceeds therefrom on a pro forma basis, the
Company or the Surviving Entity, as the case may be, could incur at
least $1.00 of Indebtedness (other than Permitted Indebtedness)
pursuant to the first paragraph of Section 4.04.
SECTION 5.02. Successor Corporation Substituted.
Upon any conveyance, lease or transfer in accordance with
Section 5.01, the surviving Person to which such conveyance, lease or transfer
is made will succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
surviving Person had been named as the Company herein and thereafter the
predecessor corporation will be relieved of all further obligations and
covenants under this Indenture, the Securities and the Security Documents to
which it was a party or bound.
ARTICLE VI.
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(i) the Company fails to pay interest on any Securities when
the same becomes due and payable and such failure continues for a
period of 30 days;
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(ii) the Company fails to pay the principal of or premium on
any Securities when the same becomes due and payable whether at
maturity, upon acceleration, redemption or otherwise;
(iii) any Guarantee ceases to be in full force and effect or is
declared to be null and void and unenforceable or is found to be
invalid or any Guarantor denies its liability under its Guarantee
(other than by reason of release of a Guarantor in accordance with
the terms hereof);
(iv) the Company or any Guarantor fails to observe or perform
any other covenant in this Indenture or in any of the Security
Documents for 60 days after notice from the Trustee, the Collateral
Agent or the holders of 25% in principal amount of the Securities
outstanding (except in the case of a default with respect to Section
4.15 and Section 5.01, which will constitute Events of Default with
such notice but without passage of time);
(v) the Company or any of its Subsidiaries fails to make any
payment when due (after giving effect to any applicable grace
period) under the Senior Secured Discount Notes or any other
Indebtedness in excess of $5 million which is not subordinated to
the Securities (including, without limitation, Indebtedness under
the Working Capital Facility);
(vi) the Company or any of its Subsidiaries fails to perform
any term, covenant, condition or provision of the Senior Secured
Discount Notes or any other Indebtedness in excess of $5 million
individually or $10 million in the aggregate, which failure results
in the acceleration of the maturity of such Indebtedness;
(vii) a final judgment or judgments for the payment of money
not fully covered by insurance, which judgments exceed $5 million
individually or $10 million in the aggregate, is entered against the
Company or any of its Subsidiaries and is
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not satisfied, stayed, annulled or rescinded within 60 days of
being entered;
(viii) any Person, after the occurrence of an event of default
under any instrument evidencing Indebtedness secured by Collateral,
shall commence judicial proceedings to foreclose any material
portion of the Collateral or shall exercise any legal or contractual
right to the ownership of any material portion of the Collateral in
lieu of foreclosure;
(ix) the Company or any Guarantor pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors; or
(x) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Guarantor in an involuntary case or proceeding,
(B) appoints a Custodian of the Company or any
Guarantor or for all or substantially all of its property, or
(C) orders the liquidation of the Company or any
Guarantor,
and in each case the order or decree remains unstayed and in effect for 30
days; provided that if the entry of such order
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or decree is appealed and dismissed on appeal then the Event of
Default hereunder by reason of the entry of such order or decree shall
be deemed to have been cured.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
The Trustee shall, within 90 days after the occurrence of any Default
known to it, give to the holders of Securities 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 Securities, 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 Securities.
SECTION 6.02. Acceleration.
In case an Event of Default (other than an Event of Default described
in clause (ix) or (x) of Section 6.01 above with respect to the Company and any
Significant Subsidiaries) shall occur and be continuing, the Trustee or the
holders of at least 25% in aggregate principal amount of the Securities then
outstanding, by notice in writing to the Company (and to the Trustee if given
by the holders of Securities), may declare all unpaid principal and accrued
interest on the Securities then outstanding to be due and payable immediately.
Any such declaration with respect to the Securities may be annulled by the
Holders of not less than a majority in principal amount of the outstanding
Securities in accordance with Section 6.04.
If an Event of Default specified in clause (ix) or (x) of Section 6.01
occurs with respect to the Company or any Significant Subsidiary and is
continuing, then all unpaid principal of, premium, if any, and accrued interest
on the outstanding Securities shall ipso facto become immediately due and
payable without any
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declaration or other act on the part of the Trustee or any Holder thereof.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities, this Indenture or the Security Documents.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy maturing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Each Securityholder, by accepting a Security, acknowledges that the
exercise of remedies by the Trustee with respect to the Collateral is subject
to the terms and conditions of the Security Documents and the proceeds received
upon realization of the Collateral shall be applied by the Trustee in
accordance with Section 6.10 hereof.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except, unless theretofore cured, a Default in the payment of
principal of or interest on any Security as specified in clauses (i) and (ii)
of Section 6.01. The Company shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching
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copies of such consents. When a Default or Event of Default is so waived, it
is cured.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of not less than a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction. In the event the Trustee takes any
action or follows any direction pursuant to this Indenture, the Trustee shall
be entitled to indemnification satisfactory to it in its sole discretion
against any loss or expense caused by taking such action or following such
direction.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in principal amount of
the outstanding Securities make a written request to the Trustee to
pursue a remedy;
(3) such Holder or Holders offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
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(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(5) during such 60-day period the Holders of a majority
in principal amount of the outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on 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 except to the
extent that the institution or prosecution of such suit or entry of judgment
therein would, under applicable law, result in the surrender, impairment or
waiver of the Lien of this Indenture and the Security Documents upon the
Collateral.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 6.01(i) or (ii) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor on the Securities for the whole amount of principal and
accrued interest remaining unpaid, together with interest overdue on principal
and to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs
and expenses of
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collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
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Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 shall not apply to a suit by the Trustee, a suit by Holders
of more than 10% in aggregate principal amount of the outstanding Securities,
or to any suit instituted by any Holder for the enforcement or the payment of
the principal or interest on any Securities on or after the respective due
dates expressed in the Security.
SECTION 6.12. Trustee Election Not To Foreclose.
Notwithstanding anything to the contrary contained in this Indenture,
or any of the Security Documents, in the event the Trustee is entitled or
required to commence an action to foreclose the Mortgage or otherwise exercise
its remedies to acquire control or possession of the Mortgaged Property (as
defined therein), the Trustee shall not be required to commence any such action
or exercise any such remedy if the Trustee has determined in good faith that
the Trustee may incur liability under the Environmental
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Laws as the result of the presence at, or release on or from, the Facility of
any Hazardous Materials unless the Trustee has received security or indemnity,
from a Holder or Holders, in an amount and in a form all satisfactory to the
Trustee in its sole discretion, protecting the Trustee from all such liability.
ARTICLE VII.
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default actually known to the Trustee
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs. Subject to such
provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under this Indenture at the request of any of the holders of
Securities, unless they shall have offered to the Trustee security and
indemnity satisfactory to it.
(b) Except during the continuance of an Event of Default
actually known to the Trustee:
(1) The Trustee need perform only those duties as are
specifically set forth herein and no others and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions and such other documents delivered to it pursuant to Section
12.04 hereof furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and
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opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section 7.01.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or to take or omit
to take any action under this Indenture or take any action at the request or
direction of Holders if it shall have reasonable grounds for believing that
repayment of such funds is not assured to it or it does not receive an
indemnity satisfactory to it in its sole discretion against such risk,
liability, loss, fee or expense (including, without limitation, liability
relating in any way to Environmental Laws and/or Hazardous Materials) which
might be incurred by it in compliance with such request or direction.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this
Section 7.01.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing
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with the Company. Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) The Trustee shall not be responsible in any way for
monitoring or managing the Company's policies, practices or compliance with
Environmental Laws or Hazardous Materials relating to the Mortgaged Property.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(h) The Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the
document.
(i) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate and an Opinion of Counsel, which
shall conform to the provisions of Section 12.05. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(j) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any
agent (other than an agent who is an employee of the Trustee) appointed
with due care.
(k) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(l) The Trustee may consult with counsel and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
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(m) Subject to Section 9.02 hereof, the Trustee may (but
shall not be obligated to), without the consent of the Holders, give any
consent, waiver or approval required under the Security Documents or by
the terms hereof with respect to the Collateral, but shall not without
the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities at the time outstanding (i) give any
consent, waiver or approval or (ii) agree to any amendment or
modification of the Security Documents, in each case, that shall have a
material adverse effect on the interests of any Holder. The Trustee
shall be entitled to request and conclusively rely on an Opinion of
Counsel with respect to whether any consent, waiver, approval, amendment
or modification shall have a material adverse effect on the interests of
any Holder.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the value or condition of the Collateral or any part thereof, or as to the
title of the Company thereto, or as to the security afforded thereby or hereby,
or as to the validity or genuineness of any Collateral pledged and deposited
with the Trustee, or as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication. The Trustee makes no representations with
respect to the effectiveness or adequacy of this Indenture or the Security
Documents, or the validity or perfection, if any, of Liens granted
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under this Indenture or the Security Documents. The Trustee shall not be
responsible for independently ascertaining or maintaining such validity or
perfection, if any, and shall be fully protected in relying upon certificates
and opinions delivered to it in accordance with the terms of this Indenture or
the Security Documents.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and the
Trustee receives actual notice of such event, the Trustee shall mail to each
Securityholder notice of the Default or Event of Default within 90 days after
receipt of such notice. Except in the case of a Default or an Event of Default
in payment of principal of or interest on any Security, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of Securityholders.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a) within 60 days after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Securityholder a report dated as of such May 15 that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b), (c) and (d).
A copy of each such report at the time of its mailing to Securityholders
shall be filed with the SEC and each securities exchange, if any, on which the
Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services rendered hereunder and
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under the Security Documents. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including fees and expenses of counsel) incurred or made by it in
addition to the compensation for its services, except any such disbursements,
expenses and advances as may be attributable to the Trustee's negligence or bad
faith. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents, accountants, experts and counsel and any
taxes or other expenses incurred by a trust created pursuant to Section 8.01
hereof.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability incurred by the Trustee without
negligence or bad faith on its part in connection with the administration of
this trust and its duties under this Indenture and the Security Documents,
including the reasonable expenses and attorneys' fees of defending itself
against any claim of liability arising hereunder. Without limiting the
foregoing sentence in any way, the Company shall also indemnify the Trustee
for, and hold it harmless against, any loss or liability incurred by the
Trustee (including reasonable attorneys' and consultants' fees and court costs)
arising from or relating to any Environmental Laws or Hazardous Materials
concerning the Mortgaged Property (as defined in the Mortgage) or any breach or
alleged breach by the Company of any representation, warranty or covenant in
the Mortgage, provided such is not due to the Trustee's willful violation of
any Environmental Laws. The Trustee shall notify the Company promptly of any
claim asserted against the Trustee for which it may seek indemnity. However,
the failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and
the Trustee shall cooperate in the defense (and may employ its own counsel) at
the Company's expense. The Company need not pay for any settlement made
without its written consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee as a result of the
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violation of this Indenture by the Trustee if such violation arose from the
Trustee's negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a senior claim prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (viii) or (ix) of Section 6.01 occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Company's obligations under
this Section 7.07 and any claim arising hereunder shall survive the resignation
or removal of any Trustee, the discharge of the Company's obligations pursuant
to Article Eight and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
(a) The Trustee may resign at any time by so notifying the Company
in writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee in writing and may
appoint a successor Trustee with the Company's consent. The Company may remove
the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the senior claim provided in Section 7.07, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have the rights, powers and duties of the Trustee under
this Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(b) If the Trustee, at the time of any resignation, removal or
disqualification:
(i) is also then acting as the Discount Note Trustee and is
simultaneously resigning or otherwise ceasing to act as Discount Note
Trustee under the Discount Note Indenture; and
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(ii) is also then acting as Collateral Agent and is
simultaneously resigning or otherwise ceasing to act as Collateral Agent
then, any appointment of a successor Trustee pursuant to the terms
hereof who is simultaneously appointed successor Discount Note Trustee pursuant
to the terms of the Discount Note Indenture shall automatically and without
further action on the part of the holders of the Securities be appointed as
Collateral Agent under each of the Security Documents.
(c) Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another corporation
or banking corporation, the resulting, surviving or transferee corporation or
banking corporation without any further act shall be the successor Trustee (and
successor Collateral Agent, if then so acting, under the Security Documents).
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The Trustee shall
have a combined capital and surplus of at least $100,000,000 as set forth in its
most recent published annual report of condition. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of TIA Section 310(b),
the Trustee and the Company shall comply with the provisions of TIA Section
310(b). If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect hereinafter specified in this Article Seven.
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SECTION 7.11. Preferential Collection of Claims
Against Company.
The Trustee, in its capacity as Trustee hereunder and in its capacity as
Collateral Agent under the Security Documents, shall comply with TIA Section
311(a), excluding any creditor relationship listed in TIA Section 311(b). A
Trustee who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated therein.
SECTION 7.12. Appointment of Co-Trustee.
If the Trustee deems it necessary or desirable in connection with the
Collateral and/or the enforcement of the Security Documents, the Trustee may
appoint a co-Trustee with such powers of the Trustee as may be designated by the
Trustee at the time of such appointment, and the Company shall, on request,
execute and deliver to such co-Trustee any deeds, conveyances or other
instruments required by such co-Trustee so appointed by the Trustee to more
fully and certainly vest in and confirm to such co-Trustee its rights, powers,
trusts, duties and obligations hereunder.
ARTICLE VIII.
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Satisfaction and Discharge.
This Indenture shall cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of the Securities, as
expressly provided for in Section 2.06, and except as to Section 7.07) as to all
outstanding Securities when (i) either (a) all such Securities theretofore
authenticated and delivered (except (1) lost, destroyed or wrongfully taken
Securities which have been replaced or paid as provided in Section 2.07 and (2)
Securities for whose payment money has theretofore been deposited with the
Trustee or any Paying Agent and thereafter repaid to the Company as provided in
Section 8.04)
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have been delivered to the Trustee for cancellation or (b) all such Securities
not theretofore delivered to the Trustee for cancellation either have become
due and payable, will become due and payable at their Stated Maturity within
one year or are redeemable at the option of the Company and are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name and at the
expense of the Company, and, in any event, the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire indebtedness for principal of,
premium, if any and interest to the date of such deposit (in the case of
Securities that have become due and payable) or to the Maturity Date or
redemption date, as the case may be, on the Securities not theretofore
delivered to the Trustee for cancellation; (ii) the Company has paid or caused
to be paid all other sums payable under this Indenture by the Company; and
(iii) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that (A) all conditions precedent under this
Indenture relating to the satisfaction and discharge of this Indenture have
been complied with and (B) such satisfaction and discharge will not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
After such delivery or irrevocable deposit and delivery of an Officers'
Certificate and Opinion of Counsel, the Trustee upon request shall acknowledge
in writing the discharge of the Company's obligations under the Securities and
this Indenture except for those surviving obligations specified above.
Notwithstanding the satisfaction and discharge of this Indenture, if
money shall have been deposited with the Trustee pursuant to subclause (b) of
clause (i) of the first paragraph of this Section 8.01, the obligations of the
Trustee under Sections 8.03 and 8.04 shall survive.
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SECTION 8.02. Defeasance and Covenant Defeasance.
(a) The Company may, at its option and at any time, elect
to have the obligations of the Company discharged with respect to the
outstanding Securities (a "defeasance") by fulfilling the applicable conditions
of Section 8.02(b). Such defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Securities, and to have satisfied all its other obligations under such
Securities, this Indenture and the Security Documents (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive unless otherwise terminated
or discharged hereunder: (i) the rights of Holders of outstanding Securities
to receive, solely from the trust fund described in Sections 8.02(b) and 8.03,
payments in respect of the principal of, premium, if any, and interest on such
Securities when such payments are due, (ii) the Company's obligations with
respect to the Securities concerning issuing temporary Securities (Section
2.10), registration of transfer or exchange of Securities (Section 2.06),
mutilated, destroyed, lost or stolen Securities (Section 2.07) and the
maintenance of an office or agency for payment (Section 4.02) and money for
security payments held in trust (Section 2.04), (iii) the rights, powers,
trusts, duties and immunities of the Trustee set forth in Article Seven and
(iv) the defeasance provisions this Article Eight. In addition, the Company
may, at its option and at any time, elect to have the obligations of the
Company released with respect to any covenants contained in Sections 4.03,
4.04, 4.05, 4.06, 4.07, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and 5.01
(a "covenant defeasance") by fulfilling the applicable provisions of Section
8.02(b) and such Securities shall thereafter be deemed not to be outstanding
for the purposes of any direction, waiver, consent, declaration or any other
act or action of the Holders (and the consequences of any thereof) taken or to
be taken in connection with any of such covenants, but shall continue to be
deemed outstanding for all other purposes hereunder. For this purpose such
covenant defeasance means with respect to such outstanding Securities that the
Company may omit to comply with and shall have no liability in respect of any
term, condition or
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limitation set forth in any such Section or by reason of reference in any such
Section to any other provision herein or in any other document, and such
omission to comply with any such term, condition or limitation shall not
constitute a Default or an Event of Default with respect to the Securities. In
the event covenant defeasance occurs, the events described in clauses (iii) (as
it applies to the covenants listed in the foregoing sentence), (v), (vi) and
(vii) of Section 6.01 shall no longer constitute Events of Default with respect
to the Securities. Except as specified above, the remainder of this Indenture
and such Securities shall be unaffected by such covenant defeasance.
(b) The following shall be the conditions to application of this
Section 8.02:
(i) the Company shall have deposited or caused to be
deposited irrevocably with the Trustee as trust funds, in trust for the
benefit of the Holders of the Securities, cash in U.S. dollars, United
States Government Obligations, or a combination thereof, in an amount
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay the principal of and interest
on the outstanding Securities on the Stated Maturity of such principal
or installment of principal or interest;
(ii) in the case of defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the
date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance
had not occurred;
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(iii) in the case of covenant defeasance, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
to the effect that the Holders of the outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or, insofar as clauses (viii)
and (ix) of Section 6.01 are concerned, at any time during the period
ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);
(v) such defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the
Company is a party or by which it is bound;
(vi) in the case of defeasance or covenant defeasance, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Securities over the
other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
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that all conditions precedent provided for relating to either the
defeasance or the covenant defeasance, as the case may be, have been
complied with.
(c) Notwithstanding defeasance or covenant defeasance in
accordance with this Section 8.02, the obligations of the Trustee under Sections
8.03 and 8.04 shall survive.
SECTION 8.03. Application of Trust Money.
Subject to Section 8.04, the Trustee shall hold in trust all money or
United States Government Obligations deposited with it pursuant to Sections 8.01
or 8.02, and shall apply the deposited money and the money from United States
Government Obligations in accordance with this Indenture to the payment of
principal of and interest on the Securities.
SECTION 8.04. Repayment to Company.
Subject to Sections 7.07, 8.01 and 8.02, the Trustee shall promptly pay
to the Company upon written request any excess money and/or United States
Government Obligations held by it at any time. The Trustee shall pay to the
Company upon written request any money held by it for the payment of principal,
premium or interest that remains unclaimed for two years; provided that the
Trustee before being required to make any payment may at the expense of the
Company cause to be published once in a newspaper of general circulation in the
City of New York or mail to each Holder entitled to such money notice that such
money remains unclaimed and that, after a date specified therein which shall be
at least 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining shall be repaid to the Company. After
payment to the Company, Securityholders entitled to money must look to the
Company for payment as general creditors unless an applicable abandoned property
law designates another person and all liability of the Trustee or Paying Agent
with respect to such money shall thereupon cease.
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SECTION 8.05. Reinstatement.
If the Trustee is unable to apply any money or United States Government
Obligations in accordance with Sections 8.01 or 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Sections 8.01 or
8.02 until such time as the Trustee is permitted to apply all such money or
United States Government Obligations in accordance with Sections 8.01 or 8.02;
provided that if the Company has made any payment of interest on or principal of
any Securities because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money or United States Government Obligations held by the
Trustee.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee or
the Collateral Agent, as applicable, may amend or supplement this Indenture, the
Security Documents or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to give effect to the release of any Released
Interests or any other item of Collateral or of any Lien, in each case
pursuant to this Indenture and the Collateral Agency Agreement;
(3) to evidence the succession of another Person to the
Company or any Subsidiary of the Company and the assumption by
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any such successor of the covenants of the Company or such Subsidiary,
as the case may be;
(4) to evidence the release and discharge of the
obligations of any Subsidiary of the Company the Capital Stock of which
has been sold or otherwise disposed of in accordance with the applicable
provisions of this Indenture; or
(5) to make any change that does not have a material
adverse effect on the rights of any Securityholder.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee or the Collateral Agent, as applicable, may amend or
supplement this Indenture, the Security Documents or the Securities with the
written consent of the Holders of at least a majority in principal amount of
the outstanding Securities. Subject to Section 6.07, the Holders of not less
than a majority in principal amount of the outstanding Securities may waive
compliance by the Company with any provision of this Indenture, the Security
Documents or the Securities. However, without the consent of each
Securityholder affected thereby, an amendment, supplement or waiver, including a
waiver pursuant to Section 6.04, may not:
(i) reduce the rate, or change the time or place for
payment, of interest on any Security, or reduce any amount payable on
the redemption thereof or upon a Change of Control;
(ii) reduce the principal, or change the fixed maturity or
place of payment, of any Security;
(iii) change the currency of payment of principal of or
interest on any Security;
(iv) impair the right to institute suit for the enforcement
of any payment on or with respect to any Security;
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(v) reduce the principal amount of outstanding Securities
necessary to modify or amend this Indenture or any Security Document;
(vi) modify any of the provisions of Section 4.15;
(vii) subject to clauses (2), (4) and (5) of Section 9.01,
affect adversely the ranking or security of the Securities; or
(viii) modify any of the foregoing provisions or reduce the
principal amount of outstanding Securities necessary to waive any
covenant or past Default.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of that Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, except as provided in the succeeding paragraph, any such
Holder or subsequent Holder may revoke the
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consent as to his Security or portion of a Security. Such revocation shall be
effective only if the Trustee receives written notice of such revocation before
the date the amendment, supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke by written notice received by the Trustee any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date, unless the relevant amendment, supplement or waiver to which
such consent relates has become effective, in which event such Persons who were
Holders at such record date shall no longer be entitled to revoke any consent
previously given and such consent shall continue to be valid and effective.
After an amendment, supplement or waiver becomes effective, it shall
form a part of this Indenture for all purposes and bind every Securityholder,
unless it makes a change described in any of clauses (i) through (viii) of
Section 9.02. In that case, the amendment, supplement or waiver shall form a
part of this Indenture for all purposes and bind each Holder of a Security who
has consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company
or the Trustee so
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determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver, constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
satisfactory to it in its sole discretion.
ARTICLE X.
COLLATERAL AND SECURITY
SECTION 10.01. Collateral and Security Documents.
In order to secure the due and punctual payment of the principal of and
interest on the Securities, the Senior Secured Discount Notes and, under certain
circumstances, Permitted Replacement Financing when and as the same shall be due
and payable, whether on an Interest Payment Date, at maturity, by acceleration,
purchase, repurchase, redemption or otherwise, and interest on the overdue
principal of and interest (to the extent permitted by law), if any, on the
Securities, the Senior Secured Discount Notes and, under certain circumstances,
Permitted Replacement Financing and the performance of all other obligations of
the Company and the Guarantors to the Holders or the Trustee
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under this Indenture and the Securities, the holders of the Senior Secured
Discount Notes or the Discount Note Trustee under the Discount Note Indenture
and the Senior Secured Discount Notes or, under certain circumstances, the
Permitted Additional Lenders under the documents governing the Permitted
Replacement Financing, the Company, Acme Steel, Acme Packaging, the Collateral
Agent, the Trustee and the Discount Note Trustee have simultaneously with the
execution of this Indenture entered into the Collateral Agency Agreement and
the Collateral Agent, the Company, Acme Steel and/or Acme Packaging have
entered into the other Security Documents to which they are a party pursuant to
which the Company, Acme Steel and Acme Packaging have granted to the Collateral
Agent for the benefit of the Secured Parties a first priority Lien on and
security interest in the Collateral. The Trustee and the Company hereby agree
that the Collateral Agent holds the Collateral in trust for the benefit of the
Secured Parties pursuant to the terms of the Security Documents.
(a) The Trustee is authorized and directed to enter into the
Collateral Agency Agreement and the Collateral Agent is authorized and directed
to enter into the Security Documents. In the event that pursuant to clause
(xi)(b) of the definition of "Permitted Liens" the Company shall elect to grant
additional Liens on assets that comprise Collateral to secure Permitted
Replacement Financing, the Trustee and the Collateral Agent are authorized and
directed to execute and deliver a supplement to the Collateral Agency Agreement
as contemplated therein. In addition, in the event of any Permitted Bank
Refinancing (as defined in the Intercreditor Agreement) the Collateral Agent is
authorized to execute and deliver a supplement to the Intercreditor Agreement as
contemplated therein. Each Securityholder, by accepting a Security, agrees to
all of the terms and provisions of the Security Documents, as the same may be
amended from time to time pursuant to the provisions of the Security Documents
and this Indenture.
SECTION 10.02. Opinions of Counsel; TIA Requirements.
(b) Promptly after the execution and delivery of this Indenture,
the Company shall deliver the opinion(s) required by
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Section 3.14(b) of the TIA and Section 5.8(b) of the Collateral Agency
Agreement to the Trustee and the Collateral Agent. In addition, the Company
shall furnish to the Collateral Agent and the Trustee on April 1 in each year,
beginning with April 1, 1995, an Opinion of Counsel, dated as of such date,
either (i)(A) stating that, in the opinion of such counsel, action has been
taken with respect to the recording, filing, re-recording and refiling of all
supplemental indentures, financing statements, continuation statements and
other documents as is necessary to maintain the Lien of the Security Documents
and reciting with respect to such Liens on the Collateral the details of such
action or referring to prior Opinions of Counsel in which such details are
given, and (B) stating that, based on relevant laws as in effect on the date of
such Opinion of Counsel, all financing statements, continuation statements and
other documents have been executed and filed that are necessary as of such date
and during the succeeding 24 months fully to maintain the security interest of
the Collateral Agent, the Securityholders and the Trustee hereunder and under
the Security Documents with respect to the Collateral, or (ii) stating that, in
the opinion of such counsel, no such action is necessary to maintain such Lien.
(c) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to the Security Documents. To the extent applicable, the
Company shall cause TIA Section 314(d) relating to the release of property from
the Lien of the Security Documents and relating to the substitution therefor of
any property to be subjected to the Lien of the Security Documents to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company, except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee in the exercise of reasonable care.
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SECTION 10.03. Disposition of Collateral Without Release.
So long as no Default or Event of Default shall have occurred and be
continuing and subject to the requirements of Section 314 of the TIA, the
Company or any subsidiary may, without any release or consent by the Collateral
Agent or the Trustee, sell or otherwise dispose of any machinery, equipment,
furniture, apparatus, tools or implements or other similar property which is
subject to the Lien of the Security Documents, which (i) in any single
transaction has a fair market value of $25,000 or less or (ii) shall have become
worn out, obsolete or otherwise in need of replacement or repair; provided that,
in the case of this clause (ii) such sale or other disposition is in conjunction
with a substantially concurrent transaction whereby additional personal property
is made subject to the Lien of the Security Documents and the Property so sold
pursuant to (i) and (ii) above shall be conclusively deemed to be free and clear
of the Lien of the Security Documents without further action by the Collateral
Agent.
SECTION 10.04. Authorization of Actions To Be
Taken by the Collateral Agent
Under the Security Documents.
Subject to the provisions of the Security Documents, (a) the Collateral
Agent may, in its sole discretion and without the consent of the
Securityholders, take all actions it deems necessary or appropriate in order to
(i) enforce any of the terms of the Security Documents and (ii) collect and
receive any and all amounts payable in respect of the obligations of the Company
thereunder and hereunder and (b) the Collateral Agent shall have power to
institute and to maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Collateral by any act that may be unlawful or in
violation of the Security Documents or this Indenture, and such suits and
proceedings as the Collateral Agent may deem expedient to preserve or protect
its interests and the interests of the Securityholders in the Collateral
(including the power to institute and maintain suits or proceedings to restrain
the enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may
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be unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interest
thereunder or be prejudicial to the interests of the Securityholders or of the
Collateral Agent.)
SECTION 10.05. Collateral Agency Agreement.
Simultaneously with the issuance of the Securities, the Trustee, the
Discount Note Trustee, the Collateral Agent, the Company, Acme Steel and Acme
Packaging will enter into the Collateral Agency Agreement. The Collateral
Agency Agreement will provide the terms under which the Collateral Agent will
hold the Collateral as security for, among other things, the Company's and the
Guarantors' obligations on the Securities and under this Indenture. It will
provide generally that decisions in respect of administering the Collateral and
releasing portions of the Collateral in circumstances permitted by the
Indenture, the Discount Note Indenture and the Security Documents may be made by
the Collateral Agent without the further consent of the Holders. It will also
provide that decisions in respect of releasing portions of the Collateral in
circumstances not permitted in the Indenture, Discount Note Indenture or the
Security Documents and foreclosing on or otherwise pursuing remedies with
respect to such Collateral generally may be made by the holders of not less than
a majority in aggregate principal amount of the Securities and the Senior
Secured Discount Notes voting separately. If an Event of Default occurs under
this Indenture the Trustee will notify the Discount Note Trustee simultaneously
with any notifications to the Company or the holders of the Senior Secured
Discount Notes. In the event a declaration of acceleration of the Securities
occurs as a result thereof, the Trustee on behalf of the Holders, in addition to
any rights or remedies available to it under this Indenture may, subject to the
provisions of the Collateral Agency Agreement, cause the Collateral Agent to
take such action as the Trustee deems advisable to protect its rights in the
Collateral. The proceeds received by the Collateral Agent from any foreclosure
will be applied by the Collateral Agent first to pay the expenses of such
foreclosure and fees and other amounts then payable to the Collateral Agent and
the Trustees under the Indenture, the Discount
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Note Indenture and the Collateral Agency Agreement, and thereafter to pay, pro
rata, the principal of, premium, if any, and interest on the Securities and the
Senior Secured Discount Notes or any Permitted Replacement Financing pursuant
to the terms of the Collateral Agency Agreement.
ARTICLE XI.
SENIOR GUARANTEE OF SECURITIES
SECTION 11.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally, guarantees
(such guarantee to be referred to herein as the "Guarantee") to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and the
Collateral Agent and their successors and assigns that: (i) the principal of
and interest on the Securities will be promptly paid in full when due, subject
to any applicable grace period, whether at maturity, by acceleration or
otherwise, and interest on the overdue principal, if any, and interest on any
interest, to the extent lawful, of the Securities and all other obligations of
the Company to the Holders, the Trustee or the Collateral Agent hereunder, under
the Indenture or the Security Documents will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (ii) in case
of any extension of time of payment or renewal of any Securities or of any such
other obligations, the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, subject to any
applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 11.04. Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities, this Indenture or any Security
Documents, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might
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otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice
and all demands whatsoever and covenants that this Guarantee will not be
discharged except by complete performance of the obligations contained in the
Securities, this Indenture, this Guarantee and any Security Documents. If any
Securityholder or the Trustee is required by any court or otherwise to return
to the Company, any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or any Guarantor, any
amount paid by the Company or any Guarantor to the Trustee or such
Securityholder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purpose of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Guarantee.
SECTION 11.02. Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Release of a Guarantor.
Upon the sale or disposition (by merger, sale of stock of such Guarantor
or the parent of such Guarantor or otherwise) of a Guarantor (or all or
substantially all its assets) to an entity which is not either the Company or
another Guarantor and which sale
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or disposition is otherwise in compliance with the terms of this Indenture
(including, but not limited to, Section 4.06 hereof), such Guarantor shall be
deemed released from all obligations under this Article Eleven without any
further action required on the part of the Trustee or any Holder. In the event
such Guarantor is Acme Packaging, it shall be released from its obligations
under the Stock Purchase Agreement to which it is a party following execution
of an amendment to such Stock Purchase Agreement in accordance with its terms.
In addition, if the stock of such Guarantor has been pledged pursuant to a
Stock Pledge Agreement, such stock shall be released by the Collateral Agent
from the Lien of such Stock Pledge Agreement pursuant to the terms thereof.
The Trustee and the Collateral Agent shall, at the sole cost and expense of the
Company, deliver an appropriate instrument evidencing such release upon receipt
of a request by the Company accompanied by an Officers' Certificate certifying
as to the compliance with this Section 11.03. Any Guarantor not so released
remains liable for the full amount of principal of and interest on the
Securities as provided in this Article Eleven.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law.
To effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 11.06, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
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SECTION 11.05. Guarantors May Consolidate,
etc., on Certain Terms.
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Guarantor with or into
the Company or another Guarantor or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor, which consolidation, merger, sale or conveyance is
otherwise in accordance with the terms of this Indenture and the Security
Documents. Upon any such consolidation, merger, sale or conveyance, the
Guarantee given by such Guarantor shall no longer have any force or effect.
(b) Other than as set forth in Sections 11.03 and 11.05(a) above,
each Guarantor will not, and the Company will not cause or permit any Guarantor
to, consolidate with or merge with or into any Person unless: (i) the entity
formed by or surviving any such consolidation or merger (if other than the
Guarantor), or to which sale, lease, conveyance or other disposition shall have
been made, is a corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) such entity assumes
by supplemental indenture all of the obligations of the Guarantor on the
Guarantee and under this Indenture and the Security Documents; (iii) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; (iv) immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro forma basis, the
Consolidated Tangible Net Worth of the Company and its Subsidiaries would be at
least equal to the Consolidated Tangible Net Worth of the Company and its
Subsidiaries immediately prior to such transaction; and (v) immediately after
giving effect to such transaction and the use of any net proceeds therefrom on a
pro forma basis, the Company could incur at least $1.00 of Indebtedness (other
than Permitted Indebtedness) pursuant to the first paragraph of Section 4.04
hereof.
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SECTION 11.06. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each Guarantor
(including the Funding Guarantor), determined in accordance with GAAP, subject
to Section 11.04, for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations with respect to the Guarantee.
SECTION 11.07. Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or other rights which
it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under the Guarantee, this Indenture and the Security Documents, including,
without limitation, any right of subrogation, reimbursement, exoneration or
indemnification, and any right to participate in any claim or remedy of any
Holder of Securities against the Company, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Guarantor in violation of the preceding sentence and the
Securities shall not have been paid in full, such amount shall be deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders of the Securities, and shall forthwith be paid to the
Trustee for the benefit of such Holders to be credited and applied upon the
Securities, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set
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forth in this Section 11.07 is knowingly made in contemplation of such
benefits.
SECTION 11.08. Execution of Guarantee.
To evidence their guarantee to the Securityholder specified in Section
11.01, the Guarantors hereby agree to execute the Guarantee in substantially the
form of Exhibit A recited to be endorsed on each Security ordered to be
authenticated and delivered by the Trustee. Each Guarantor hereby agrees that
its Guarantee set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Guarantee. Each such Guarantee shall be signed on behalf of each Guarantor by
an Officer prior to the authentication of the Security on which it is endorsed,
and the delivery of such Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of such Guarantee on behalf of
such Guarantor. Such signature upon the Guarantee may be by manual or facsimile
signature of such Officer and may be imprinted or otherwise reproduced on the
Guarantee, and in case such Officer who shall have signed the Guarantee shall
cease to be such Officer before the Security on which such Guarantee is endorsed
shall have been authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed the Guarantee had not ceased to be
such Officer of the Guarantor.
ARTICLE XII.
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the
TIA, the required provision shall control.
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SECTION 12.02. Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person, by facsimile and confirmed by overnight courier, or
mailed by first-class mail addressed as follows:
if to the Company or any of the Guarantors:
Acme Metals Incorporated
13500 South Perry Avenue
Riverdale, Illinois 60627
Attention: Corporate Secretary with a
copy to the Treasurer
Facsimile: 708-841-6010
Telephone: 708-849-2500
with copies to:
Coffield Ungaretti & Harris
3500 Three First National Plaza
Chicago, Illinois 60602
Attention: Alton B. Harris
Facsimile: 312-977-4405
Telephone: 312-977-4400
if to the Trustee:
Shawmut Bank Connecticut, National
Association
777 Main Street
Hartford, CT 06115
Attention: Corporate Trust Administration
Facsimile: 203-986-7920
Telephone: 203-986-4424
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The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first class, postage prepaid, to a
Securityholder, including any notice delivered in connection with TIA Section
310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall
be mailed to him or her at his or her address as set forth on the registration
books of the Registrar and shall be sufficiently given to him or her if so
mailed within the time prescribed.
Any notice or other communication to the Company or to the Trustee shall
be deemed given only when such notice or other communication is actually
received by the Company or the Trustee, as the case may be. Any notice or other
communication mailed to a Holder in the manner prescribed above shall be
conclusively deemed to have been received by such Holder, whether or not such
Holder actually receives such notice or other communication. Failure to mail a
notice or communication to a Securityholder or any defect in it shall not affect
its sufficiency with respect to other Securityholders.
In the event that, by reason of the suspension of or irregularities in
regular mail service or by reason of any other cause, it shall be impractical to
mail notice of any event to Holders 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 sufficient giving
of such notice for every purpose hereunder.
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 latest date for the giving of such notice, and such waiver
shall be deemed to constitute 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.
<PAGE> 116
-104-
SECTION 12.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA Section 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture
relating to the proposed action or inaction have been complied with; and
(2) an Opinion of Counsel in form and substance
safisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent, if any, provided for in this
Indenture relating to the proposed action or inaction have been
complied with.
SECTION 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than pursuant to Section 4.12)
shall include:
(3) a statement that the person making such certificate or
opinion has read such covenant or condition;
<PAGE> 117
-105-
(4) 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;
(5) a statement that, in the opinion of such person, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(6) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with; provided
that with respect to matters of fact an Opinion of Counsel may rely on
an Officers' Certificate or certificates of public officials.
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 12.07. Governing Law.
The laws of the State of New York shall govern this Indenture and the
Securities without regard to principles of conflicts of law.
SECTION 12.08. No Recourse Against Others.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer,
director or employee, as such, past, present or future, of the Company, either
directly or through the Company, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that this Indenture and the Securities are solely
corporate obligations of the Company, and
<PAGE> 118
-106-
that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers, directors or employees,
as such, of the Company, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in the Securities or
implied therefrom; and each Securityholder by its acceptance of a Security, as
consideration for and as a condition of the execution of this Indenture and the
issue of the Securities, hereby expressly waives and releases any and all such
personal liability (either at common law or in equity or by constitution or
statute) of, and any and all such rights and claims against, every such
incorporator, stockholder, officer, director or employee, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in the
Securities or implied therefrom.
SECTION 12.09. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 12.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.11. Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
<PAGE> 119
-107-
SECTION 12.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.13. Legal Holidays.
In any case where any Interest Payment Date, redemption date, Maturity
Date, Stated Maturity, Unapplied Proceeds Offer Payment Date or Repurchase Date
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or the Securities) payment of principal of and premium, if any, and
interest on the Securities 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
Interest Payment Date, redemption date, Maturity Date, Stated Maturity,
Unapplied Proceeds Offer Payment Date or Repurchase Date; provided that if such
payment is so made, no interest shall accrue for the period from and after such
Interest Payment Date, redemption date, Maturity Date, Stated Maturity,
Unapplied Proceeds Offer Payment Date or Repurchase Date, as the case may be.
<PAGE> 120
-108-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
ACME METALS INCORPORATED
By: /s/ Jerry F. Williams
------------------------------
Name: Jerry F. Williams
Title: Vice President
GUARANTORS:
ACME PACKAGING CORPORATION
ACME STEEL COMPANY
ACME STEEL COMPANY INTERNATIONAL,
INC.
ALABAMA METALLURGICAL CORPORATION
ALPHA TUBE CORPORATION
ALTA SLITTING CORPORATION
UNIVERSAL TOOL AND STAMPING
COMPANY, INC.
By: /s/ Jerry F. Williams
------------------------------
Name: Jerry F. Williams
Vice President
(for each of the above-listed
Guarantors)
<PAGE> 121
-109-
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
By: /s/ Susan T. Keller
------------------------------
Name: Susan T. Keller
Title: Vice President
<PAGE> 122
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
ACME STEEL COMPANY
By: /s/ S. D. Bennett
------------------------------
Name: Stephen D. Bennett
Title: President
<PAGE> 123
EXHIBIT A
ACME METALS INCORPORATED
No. $
12 1/2% SENIOR SECURED NOTE DUE 2002
Acme Metals Incorporated promises to pay to
or registered assigns the principal sum of
Dollars on the Maturity Date of August 1, 2002.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
IN WITNESS WHEREOF, ACME METALS INCORPORATED has caused this instrument
to be executed in its corporate name by a facsimile signature of its President
and its Secretary and has caused the facsimile of its corporate seal to be
affixed hereunto or imprinted hereon.
Dated: ACME METALS INCORPORATED
By
------------------------------
Title:
By
------------------------------
Title:
Certificate of Authentication:
This is one of the 12 1/2% Senior Secured Notes due 2002 referred to in
the within-mentioned Indenture.
<PAGE> 124
A-2
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
By Date:
--------------------
Authorized Signature
<PAGE> 125
A-3
(REVERSE OF SECURITY)
ACME METALS INCORPORATED
12 1/2% Senior Secured Note due 2002
1. Interest.
Acme Metals Incorporated, a Delaware corporation (the
"Company"), promises to pay interest at the rate of 12 1/2% per annum on the
principal amount of this Security semiannually commencing on February 1, 1995,
until the principal hereof is paid or made available for payment. Interest on
the Securities will accrue from and including the most recent date to which
interest has been paid or, if no interest has been paid, from and including
August 1, 1994, through but excluding the date on which interest is paid. If
an Interest Payment Date falls on a day that is not a Business Day, the
interest payment to be made on such Interest Payment Date will be made on the
next succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
2. Method of Payment.
The interest payable on the Securities, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Security is registered at
the close of business on the regular record date, which shall be the January 15
or July 15 (whether or not a Business Day) next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for, and any
interest payable on such defaulted interest (to the extent lawful), will
forthwith cease to be payable to the Holder on such regular record date and
shall be paid to the person in whose name this Security is registered at the
close of business on a special record date for the payment of such defaulted
interest to be fixed by the Company, notice of which shall be given to Holders
not less than 15 days prior to such special record date. Payment of the
principal of and interest on this Security will be made at the agency of the
<PAGE> 126
A-4
Company maintained for that purpose in New York, New York and at any other
office or agency maintained by the Company for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided that at the option of
the Company payment of interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the Security
register.
3. Paying Agent and Registrar.
Initially, Shawmut Bank Connecticut, National Association (the
"Trustee"), will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders of
Securities. The Company or any of its Subsidiaries may act as Registrar,
co-Registrar or, except in certain circumstances specified in the Indenture,
Paying Agent.
4. Indenture.
This Security is one of a duly authorized issue of Securities
of the Company, designated as its 12 1/2% Senior Secured Notes due 2002 (the
"Securities"), limited in aggregate principal amount to $125,000,000 (except
for Securities issued in substitution for destroyed, lost or stolen Securities)
issuable under an indenture dated as of August 11, 1994 (the "Indenture"),
between the Company and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by the Trust
Indenture Act of 1939 (the "Act") (15 U.S. Code Sections 77aaa-77bbbb) as in
effect on the date of the Indenture and the date the Indenture is qualified
under the Act. The Securities are subject to all such terms, and Holders of
Securities are referred to the Indenture and the Act for a statement of them.
Payment on each Security is guaranteed on a senior basis, jointly and
severally, by the Guarantors pursuant to Article Thirteen of the Indenture.
Capitalized terms contained in this Security to the extent not
defined herein shall have the meanings assigned to them in the Indenture.
<PAGE> 127
A-5
5. Optional Redemption.
The Securities may not be redeemed prior to August 1, 1998.
On or after August 1, 1998, the Company may, at its option, redeem the
Securities in whole or in part, from time to time, at the following redemption
prices (expressed in percentages of the principal amount thereof), in each case
together with accrued interest, if any, to the date of redemption.
If redeemed during the twelve-month period beginning August 1,
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
1998 . . . . . . . . . . . . . . . . . . . . . . . . 106.250%
1999 . . . . . . . . . . . . . . . . . . . . . . . . 104.167%
2000 . . . . . . . . . . . . . . . . . . . . . . . . 102.083%
2001 . . . . . . . . . . . . . . . . . . . . . . . . 100.000%
</TABLE>
6. Repurchase upon Change of Control.
By the date specified for repurchase, which shall be within 60
days after giving notice of a Change of Control, each Holder shall have the
right, at its option, to require the Company to purchase all or any part of
such Holder's Securities at 101% of the principal amount thereof plus accrued
interest to the purchase date.
7. Notice of Redemption.
Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his or her registered address.
Securities in denominations larger than $1,000 may be redeemed in part. On and
after the redemption date, interest ceases to accrue on those Securities or
portion of them called for redemption.
8. Security Documents.
<PAGE> 128
A - 6
In order to secure the due and punctual payment of the principal of and
interest on the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same will be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Company has granted security interests in and
Liens on the Collateral owned by it to the Collateral Agent for the benefit of
the Holders of Securities pursuant to the Indenture and the Security Documents.
The Securities will be secured by Liens on and security interests in the
Collateral that are subject only to certain permitted encumbrances. The
Collateral will also secure the Company's obligations under the Senior Secured
Discount Notes and the Discount Note Indenture and, in certain circumstances,
amounts under Permitted Replacement Financing. Proceeds from the Collateral
will be shared among the parties secured thereby pursuant to the terms of the
Collateral Agency Agreement.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
the Security Documents and the terms and provisions of the Indenture will not be
deemed for any purpose to be an impairment of the security under the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption.
10 . Persons Deemed Owners.
The registered Holder of a Security may be treated as the
owner of it for all purposes.
11. Unclaimed Funds.
<PAGE> 129
A - 7
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee or Paying Agent will repay the funds to
the Company at its request. After such repayment Holders of Securities
entitled to such funds must look to the Company for payment unless an abandoned
property law designates another person.
12. Discharge Prior to Redemption or Maturity.
The Indenture will be discharged and cancelled except for
certain Sections thereof, subject to the terms of the Indenture, upon the
payment of all the Securities or upon the irrevocable deposit with the Trustee
of funds or United States Government Obligations sufficient for such payment or
redemption.
13. Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture, the Securities and the Security Documents, except for certain
provisions thereof ("defeasance"), and may be discharged from its obligations
to comply with certain covenants contained in the Indenture, the Securities and
the Security Documents ("covenant defeasance"), in each case upon satisfaction
of certain conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Security
Documents or the Securities may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the outstanding
Securities, and any past default or compliance with any provision may be waived
with the consent of the Holders of at least a majority in principal amount of
the outstanding Securities. Without the consent of any Holder, the Company and
the Trustee may amend or supplement the Indenture, the Security Documents or
the Securities to cure any ambiguity, defect or inconsistency, to give effect
to specified transactions or permitted releases, or to make any change that
does not materially and adversely affect the rights of any Holder of
Securities.
15. Restrictive Covenants.
<PAGE> 130
A-8
The Securities are secured obligations of the Company limited
to the aggregate principal amount of $125,000,000. The Indenture restricts the
ability of the Company or any of its Subsidiaries to permit any Liens to be
imposed on their assets other than certain Permitted Liens, restricts the
ability of the Company or any of its Subsidiaries to make certain payments,
limits the Indebtedness which the Company and its Subsidiaries may incur and
limits the terms on which the Company may engage in Asset Sales. The Company
is also obligated under certain circumstances to make an offer to purchase
Securities with the net cash proceeds of certain Asset Sales. The Company must
report annually to the Trustee on compliance with certain covenants in the
Indenture.
16. Successor Corporation.
Pursuant to the Indenture, the ability of the Company to
consolidate with, merge with or into or transfer its assets to another person
is conditioned upon certain requirements, including certain financial
requirements applicable to the surviving Person.
17. Defaults and Remedies.
An Event of Default consists of: a default for 30 days in
payment of interest on the Securities or a default in payment of principal of
or premium on the Securities when due, whether at maturity, upon acceleration,
redemption or otherwise; a cessation of any Guarantee to be in full force and
effect or a declaration of any Guarantee to be null and void and unenforceable
or a finding of any Guarantee to be invalid or a denial by any Guarantor of its
liability under its Guarantee; a failure by the Company to comply with any
other covenant in the Indenture or in any of the Security Documents for 60 days
after notice from the Trustee or the holders of 25% in principal amount of the
outstanding Securities (except in the case of a default with respect to
provisions relating to the repurchase of Securities upon a Change of Control or
the merger, consolidation or sale of all or substantially all of the assets of
the Company, which will constitute Events of Default with notice but without
passage of time); failure of the Company or any of its Subsidiaries to make any
payment when due (after giving effect to any applicable grace period) under the
Senior Secured Discount Notes or any other senior Indebtedness in excess of $5
million;
<PAGE> 131
A - 9
failure of the Company or any of its Subsidiaries to perform any term,
covenant, condition or provision of the Senior Secured Discount Notes or any
other Indebtedness in excess of $5 million individually or $10 million in the
aggregate, which failure results in the acceleration of the maturity of such
Indebtedness; a final judgment or judgments for the payment of money not fully
covered by insurance, which judgments exceed $5 million individually or $10
million in the aggregate, is entered against the Company or any of its
Subsidiaries and is not satisfied, stayed, annulled or rescinded within 60 days
of being entered; a party, after an event of default under any Indebtedness
secured by Collateral, commences foreclosure proceedings, or exercises rights
to ownership in lieu thereof, on any portion of the Collateral and certain
events of bankruptcy, insolvency or reorganization of the Company or any of its
Significant Subsidiaries. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities may declare all the outstanding Securities to be due and payable
immediately. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to
it before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of a continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interests. The Company is required to file periodic reports
with the Trustee as to the absence of Default and to notify the Trustee
promptly after it becomes aware of any Default.
18. Trustee Dealings with Company.
The Trustee in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
<PAGE> 132
A-10
19. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or the Security Documents or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
21. Indenture and Security Documents.
Each Securityholder, by accepting a Security, agrees to be
bound to all of the terms and provisions of the Indenture and the Security
Documents, as the same may be amended from time to time.
22. Abbreviations.
Customary abbreviations may be used in the name of
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities
<PAGE> 133
A - 11
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Company will furnish to any Holder of record of Securities
upon written request and without charge a copy of the Indenture.
<PAGE> 134
A-12
[FORM OF NOTATION OF NOTE RELATING TO GUARANTEE]
SENIOR GUARANTEE
The Guarantors (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) have unconditionally guaranteed
on a senior basis (such guarantee by each Guarantor being referred to herein as
the "Guarantee") (i) the due and punctual payment of the principal of and
interest on the Securities, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Securities, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee, all in accordance with the terms set forth in Article Eleven of the
Indenture and (ii) in the case of any extension of time of payment or renewal
of any Securities or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
GUARANTORS:
ACME PACKAGING CORPORATION
ACME STEEL COMPANY
ACME STEEL COMPANY INTERNATIONAL,
INC.
ALABAMA METALLURGICAL CORPORATION
ALPHA TUBE CORPORATION
ALTA SLITTING CORPORATION
UNIVERSAL TOOL AND STAMPING
COMPANY, INC.
<PAGE> 135
A-13
By:
-----------------------------
Name:
(for each of the above-listed
Guarantors)
<PAGE> 136
A-14
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ______________________________________, agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: __________________ Signed: ______________________
(Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee: ___________________________________________
The holder's signature must be guaranteed by an eligible
guarantor institution which is a member of one of the following recognized
Signature Guarantee Programs:
1. The Securities Transfer Agents Medallion Program (STAMP)
2. The New York Stock Exchange Medallion Signature Program (MSP)
3. The Stock Exchanges Medallion Program (SEMP)
<PAGE> 137
A - 15
<PAGE> 138
A-16
OPTION OF HOLDER TO ELECT PURCHASE
If you the Holder want to elect to have this Security purchased by the Company,
check the box: / /
If you want to elect to have only part of this Security purchased by the
Company, state the amount: $___________
Date: ____________ Your signature: _____________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee: _________________________________________
The holder's signature must be guaranteed by an eligible
guarantor institution which is a member of one of the following recognized
Signature Guarantee Programs:
1. The Securities Transfer Agents Medallion Program (STAMP)
2. The New York Stock Exchange Medallion Signature Program (MSP)
3. The Stock Exchanges Medallion Program (SEMP)
<PAGE> 1
EXHIBIT 4.4
ACME METALS INCORPORATED
AND GUARANTORS
$117,958,000
13 1/2% Senior Secured Discount Notes due 2004
_________________
INDENTURE
Dated as of August 11, 1994
_________________
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
Trustee
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Indenture
Trust Indenture Act Section Section
- --------------------------- ---------
<S> <C> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10; 12.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 12.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.13; 12.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 12.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
Section 316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
</TABLE>
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<TABLE>
<S> <C> <C>
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
- --------------------
</TABLE>
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 1.03 Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 1.04 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE II
THE SECURITIES
SECTION 2.01 Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.02 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.03 Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.04 Paying Agent To Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.05 Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.07 Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.08 Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.09 Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.10 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
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SECTION 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE III
REDEMPTION
SECTION 3.01 Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.02 Selection of Securities To Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.03 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.04 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.05 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.06 Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IV
COVENANTS
SECTION 4.01 Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.02 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.03 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.04 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.05 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.06 Limitation on Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.07 Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 4.08 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4.09 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
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<S> <C> <C>
SECTION 4.10 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.11 Maintenance of Properties, Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.12 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.13 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 4.14 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 4.15 Repurchase of Securities upon Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 4.16 Limitation on Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 4.18 Limitation on Actions Affecting Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 4.19 Inspection and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 4.20 Limitations on Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.21 Additional Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION V
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01 Restriction on Mergers and Consolidations and Sales of Assets . . . . . . . . . . . . . . . . . . . 62
SECTION 5.02 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
</TABLE>
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<S> <C> <C>
SECTION 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 6.04 Waiver of Past Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 6.05 Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 6.06 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 6.07 Rights of Holders To Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6.08 Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6.09 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.12 Trustee Election Not to Foreclose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE VII
TRUSTEE
SECTION 7.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 7.02 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 7.03 Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 7.05 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 7.06 Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 7.07 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 7.08 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
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SECTION 7.09 Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 7.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 7.11 Preferential Collection of Claims
Against Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 7.12 Appointment of Co-Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Satisfaction and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 8.02 Defeasance and Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 8.03 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 8.04 Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 8.05 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01 Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 9.02 With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 9.03 Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.04 Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 9.05 Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 9.06 Trustee To Sign Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
</TABLE>
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ARTICLE X
COLLATERAL AND SECURITY
<S> <C>
SECTION 10.01 Collateral and Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 10.02 Opinions of Counsel; TIA Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 10.03 Disposition of Collateral Without Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 10.04 Authorization of Actions To Be
Taken by the Collateral Agent
Under the Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 10.05 Collateral Agency Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE XI
SENIOR GUARANTEE OF SECURITIES
SECTION 11.01 Unconditional Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 11.02 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 11.03 Release of a Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 11.04 Limitation of Guarantor's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 11.05 Guarantors May Consolidate,
etc., on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 11.06 Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 11.07 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 11.08 Execution of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
</TABLE>
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ARTICLE XII
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 12.03 Communications by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 12.04 Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 12.05 Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 12.06 Rules by Trustee, Paying Agent, Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 12.07 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 12.08 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 12.09 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 12.10 Counterpart Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 12.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 12.12 No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 12.13 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
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<TABLE>
<S> <C> <C>
EXHIBIT A - Form of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B - Form of Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C - Form of Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D - Form of Stock Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E - Form of Disbursement Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
EXHIBIT F - Form of Collateral Agency Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
EXHIBIT G - Form of Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
</TABLE>
____________________
NOTE: This Table of Contents shall not, for any purpose, be deemed to be a
part of the Indenture.
-viii-
<PAGE> 12
INDENTURE dated as of August 11, 1994 among ACME METALS
INCORPORATED, a Delaware corporation (the "Company"), each of the Guarantors
named on the signature page hereto and Shawmut Bank Connecticut, National
Association, a national banking association, as Trustee (the "Trustee").
Intending to be legally bound hereby, all parties agree as
follows for the benefit of the others and for the equal and ratable benefit of
the Holders of the Company's 13 1/2% Senior Secured Discount Notes due 2004
(the "Securities").
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Accreted Value" means, as of any date of determination prior
to August 1, 1997, the sum of (a) the initial offering price of each Security
and (b) the portion of the excess of the principal amount of each Security over
such initial offering price which shall have been amortized through such date,
such amount to be so amortized on a daily basis and compounded semi-annually on
each February 1 and August 1 at the rate of 13 1/2% per annum from the date of
issuance of the Securities through the date of determination computed on the
basis of a 360-day year of twelve 30-day months.
"Acme Packaging" means Acme Packaging corporation, a Delaware
corporation, and a Wholly Owned Subsidiary of the Company.
"Acme Steel" means Acme Steel Company, a Delaware corporation,
and a Wholly Owned Subsidiary of the Company.
"Acquired Indebtedness" means (i) with respect to any Person
that becomes a Subsidiary of the Company (or is merged into the Company or any
of its Subsidiaries) after the Issue Date, Indebtedness of, or Preferred Stock
issued by, such Person or any of its Subsidiaries existing at the time such
Person becomes a
<PAGE> 13
-2-
Subsidiary of the Company (or is merged into the Company or any of its
Subsidiaries), whether or not such Indebtedness was incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary of the Company
(or being merged into the Company or any of its Subsidiaries), and (ii) with
respect to the Company or any of its Subsidiaries, any Indebtedness assumed by
the Company or any of its Subsidiaries in connection with the acquisition of
any assets from another Person (other than the Company or any of its
Subsidiaries), whether or not such Indebtedness was incurred by such other
Person in connection with, or in contemplation of, such acquisition.
"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; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. Notwithstanding the foregoing, the term
"Affiliate" shall not include, (i) with respect to the Company, any Subsidiary
of the Company, (ii) with respect to any Subsidiary of the Company, the Company
or any other Subsidiary of the Company, (iii) with respect to the Company or
any Subsidiary of the Company, any benefit plan in existence on the Issue Date
of the Indentures, or any comparable plans established subsequent thereto or
(iv) Wabush.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Applicable Portion" with respect to any Available Proceeds
Amount shall mean such Available Proceeds Amount times a fraction the numerator
of which shall be (a) if the Unapplied Proceeds Offer Payment Date is prior to
August 1, 1997, the Accreted Value of the then outstanding securities through
such payment date or (b) if the Unapplied Proceeds Offer Payment Date is on and
after August 1, 1997 the aggregate principal amount of
<PAGE> 14
-3-
Securities then outstanding plus all accrued and unpaid interest thereon to the
Unapplied Proceeds Offer Payment Date and the denominator of which shall be the
sum of (x) such amount in either (a) or (b) as applicable and (y) the aggregate
principal amount of the then outstanding Senior Secured Notes plus all accrued
and unpaid interest thereon to the Unapplied Proceeds Offer Payment Date and
(c) the aggregate principal amount of Loans (as such term is defined in the
Term Loan Agreement) then outstanding plus all accrued and unpaid interest
thereon to the Unapplied Proceeds Offer Payment Date.
"Asset Sale" means 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) of any Property (each, a "transaction") by the Company or any of
its Subsidiaries to any Person; provided that (i) transactions involving
Property other than Collateral between the Company and a Subsidiary of the
Company or transactions involving Property other than Collateral between
Subsidiaries of the Company; and (ii) transactions (including sales or other
transfers or dispositions of receivables relating to the incurrence of
Indebtedness permitted pursuant to Section 4.04 hereof) in the ordinary course
of business (including such a transaction with or between Subsidiaries) shall
not constitute Asset Sales. For purposes of this definition, the term "Asset
Sale" shall not include any sale, transfer, conveyance, lease or other
disposition of assets and properties of the Company that is governed by Section
4.07 or Section 5.01 (except to the extent indicated therein).
"Available Proceeds Amount" means the amount of funds (whether
held in the Collateral Account or by the Company or any of its Subsidiaries)
constituting: (i) the portion of any Net Award or Net Proceeds that, pursuant
to the Security Documents, the Company is not required to, or that the Company
has elected not to, apply to a Restoration of the affected Collateral or (ii)
the portion, if any, of the Net Cash Proceeds of an Asset Sale (net, in the
case of an Asset Sale of property that does not constitute Collateral, of any
Indebtedness repaid with the proceeds of such
<PAGE> 15
-4-
Asset Sale to the extent so applied within 180 days of such Asset Sale to the
repayment of such Indebtedness; provided that Indebtedness subordinated to (a)
the Securities or (b) any other Indebtedness of the Company or any of its
Subsidiaries may not be so repaid; provided, further, that with respect to any
Indebtedness so repaid outstanding under a revolving credit facility there
shall be an equivalent permanent reduction in the committed amount thereof)
that has not been applied by the Company, within 180 days after the date of the
Asset Sale giving rise to such Net Cash Proceeds, to either (x) the acquisition
or construction of property constituting a Related Business Investment, in the
case of Net Cash Proceeds of property not constituting Collateral, or (y) the
acquisition or construction of property constituting a Related Business
Investment, which property has been made subject to the Liens of the Security
Documents as contemplated by Section 4.06 hereof and the applicable provisions
of the Collateral Agency Agreement within such 180-day period, in the case of
Net Cash Proceeds of property constituting Collateral; provided, however, that
Net Cash Proceeds shall be deemed to have been so applied, and the Liens
contemplated above shall be deemed to have been granted, within such 180-day
period if (A) within such 180-day period, the Board of Directors of the Company
shall have adopted a capital expenditure plan contemplating the application of
such Net Cash Proceeds to a Related Business Investment and the Company shall
have taken significant steps to implement such plan, (B) such plan shall have
been fully implemented within 180 days after the date of adoption of such plan
and (C) to the extent such plan involves the acquisition or construction of
property required to be made subject to the Liens of the Security Documents, as
contemplated above, such Liens shall have been granted in accordance with the
provisions hereof and the applicable provisions of the Collateral Agency
Agreement within 180 days after the date of adoption of such plan.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of that Board.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
<PAGE> 16
-5-
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in the City of New
York or in the city of the Corporate Trust Office of the Trustee are authorized
or obligated by law, resolution or executive order to close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, or other equivalents (however designated) of
or in such Person's capital stock, and options, rights or warrants to purchase
such capital stock, whether outstanding on or issued after the Issue Date,
including, without limitation, all Common Stock and Preferred Stock.
"Capitalized Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of such obligation shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Equivalents" means (i) United States Government
Obligations, (ii) commercial paper rated the highest grade by Moody's Investors
Service, Inc. ("Moody's") and Standard & Poor's Corporation ("S&P") and
maturing not more than one year from the date of creation thereof, (iii) time
deposits with, and certificates of deposit and banker's acceptances issued by,
any bank having capital surplus and undivided profits aggregating at least
$500,000,000 and maturing not more than one year 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 or S&P.
"Change of Control" means (i) any sale, lease or other
transfer (in one transaction or a series of related transactions) by the
Company or any of its Subsidiaries of all or substantially
<PAGE> 17
-6-
all of the consolidated 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
Company)) becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of Capital Stock of the Company representing 40% or more 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.
"Collateral" means, collectively, all of the property and
assets that are from time to time subject to the Lien of any of the Security
Documents.
"Collateral Account" means the collateral account established
pursuant to the Collateral Agency Agreement.
"Collateral Agency Agreement" means the Collateral Agency
Agreement dated as of the date hereof between the Company, Acme Steel, Acme
Packaging, the Trustee, the Term Loan Agent, the Note Trustee and the
Collateral Agent in substantially the form attached hereto as Exhibit F as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with its terms.
"Collateral Agent" means Shawmut Bank Connecticut, National
Association, as collateral agent under the Collateral Agency Agreement and the
other Security Documents until a successor replaces it in accordance with the
provisions of the Collateral Agency Agreement, this Indenture and the other
Security Documents and thereafter means such successor.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.
<PAGE> 18
-7-
"Company Order" means a written order or request signed in the
name of the Company by its President or Vice President, and by its Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary, and delivered to the
Trustee.
"Commodity Agreement" of any Person means any option or
futures contract or similar agreement or arrangement designed to protect such
Person or any of its Subsidiaries against fluctuations in commodity prices.
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such Person's common stock,
whether outstanding on the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"Consolidated Cash Flow Available for Fixed Charges" means,
for any period, on a consolidated basis for the Company and its Subsidiaries,
the sum for such period of (i) Consolidated Net Income, (ii) income taxes with
respect to such period determined in accordance with GAAP, (iii) interest
expense for such period determined in accordance with GAAP and (iv)
depreciation and amortization expenses (including, without duplication,
amortization of debt discount and debt issue costs and amortization of
previously capitalized interest to cost of sales) and other non-cash charges to
earnings which reduced Consolidated Net Income (excluding any non-cash charge
to the extent that such non-cash charge requires an accrual of or a reserve for
cash charges for any future period), determined in accordance with GAAP.
"Consolidated Fixed Charges" of the Company for any period
means the sum of: (i) the aggregate amount of interest which, in conformity
with GAAP, would be set forth opposite the caption "interest expense" or any
like caption on a consolidated income statement for the Company and its
Subsidiaries (including, but not limited to, imputed interest included on
Capitalized Lease Obligations, all commissions, discounts and other fees and
charges owed with respect to letters of credit and banker's acceptance
<PAGE> 19
-8-
financing, the net costs associated with Commodity Agreements, Currency
Agreements and Interest Protection Agreements, amortization of other financing
fees and expenses, the interest portion of any deferred payment obligation,
amortization of discount, premium, if any, and all other non-cash interest
expense other than previously capitalized interest amortized to cost of sales),
plus (ii) interest incurred during the period and capitalized by the Company
and its Subsidiaries, on a consolidated basis in accordance with GAAP, plus
(iii) the amount of Preferred Stock Dividends declared by the Company and any
of its Subsidiaries on Disqualified Stock (other than such Preferred Stock
Dividends payable to the Company or any Wholly Owned Subsidiary), whether or
not paid during such period; provided that, in making such computation, the
Consolidated Fixed Charges attributable to interest on any Indebtedness
computed on a pro forma basis and bearing a floating interest rate shall be
computed as if the rate in effect (after giving effect to any Interest
Protection Agreement) on the date of computation will be the applicable rate
for the entire period.
"Consolidated Net Income" of the Company for any period means
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 the computation of net income (loss) (to the extent
otherwise included therein) without duplication: (i) the net income (or loss)
of any Person (other than a Subsidiary of the Company) in which any Person
other than the Company or any of its Subsidiaries has an ownership interest,
except to the extent that any such income has actually been received by the
Company or any of its Subsidiaries in the form of cash dividends or similar
cash distributions during such period; (ii) the net income (or loss) of any
Person that accrued prior to the date that (a) such Person becomes a Subsidiary
of the Company or is merged into or consolidated with the Company or any of its
Subsidiaries or (b) the assets of such Person are acquired by the Company or
any of its Subsidiaries, except for purposes of a pro forma calculation
pursuant to clause (c) of the second sentence of the first paragraph of Section
4.04, the net income (or loss) of such Person shall be taken into account for
the full four-quarter
<PAGE> 20
-9-
period for which the calculation is being made; (iii) the net income of any
Subsidiary of the Company to the extent that (but only as long as) the
declaration or payment of dividends or similar distributions by such Subsidiary
of that income is not permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to the Subsidiary during such period; (iv) any gain or
loss, together with any related provisions for taxes on any such gain or loss,
realized during such period by the Company or any of its Subsidiaries upon (a)
the acquisition of any securities, or the extinguishment of any Indebtedness,
of the Company or any of its Subsidiaries or (b) any Asset Sale by the Company
or any of its Subsidiaries; (v) any extraordinary gain or loss, together with
any related provision for taxes on any such extraordinary gain or loss,
realized by the Company or any of its Subsidiaries during such period; and (vi)
in the case of a successor to the Company by consolidation, merger or transfer
of its assets, any earnings of the successor prior to such merger,
consolidation or transfer of assets.
"Consolidated Tangible Net Worth" means, with respect to any
Person, the consolidated stockholder's equity (including any Preferred Stock
that is classified as equity under GAAP, other than Disqualified Stock) of such
Person and its Subsidiaries, as determined in accordance with GAAP, less the
book value of all Intangible Assets reflected on the consolidated balance sheet
of the Company and its Subsidiaries as of such date.
"Construction Contract" means the engineering procurement and
construction contract dated as of July 28, 1994 between Acme Steel and Raytheon
Engineers & Constructors, Inc., pursuant to which the Modernization Project
shall be constructed.
"Continuing Director" means a director who either was a member
of the Board of Directors of the Company on the Issue Date 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, either by
<PAGE> 21
-10-
a specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Directors of the Company in which such individual
is named as nominee for director.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.02 or such other address as the
Trustee may give notice to the Company.
"Currency Agreement" of any Person means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries 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.
"Disbursement Agreement" means the Disbursement Agreement
dated as of the date hereof between the Company and the Collateral Agent,
substantially in the form attached hereto as Exhibit E, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, (i) 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) is convertible
into or exchangeable for (whether at the option of the issuer or the holder
thereof) (a) debt securities or (b) any Capital Stock referred to in clause (i)
above, in each case, at any time prior to the Maturity Date.
"Environmental Laws" has the meaning assigned to such term in
the Mortgage.
<PAGE> 22
-11-
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"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.
"Guarantee" means the guarantee of each Guarantor set forth in
Article Eleven and any additional guarantee of the Securities executed by any
Subsidiary of the Company.
"Guarantor" means each of (i) Acme Steel, Alabama
Metallurgical Corporation, a Washington corporation, Acme Packaging, Alpha Tube
Corporation, a Delaware corporation, Universal Tool & Stamping Company, Inc.,
an Indiana corporation, Alta Slitting Corporation, a Delaware corporation, and
Acme Steel Company International, Inc. a Barbados corporation, and (ii) each of
the Company's Subsidiaries that becomes a guarantor of the Securities pursuant
to the provisions of Section 4.21 hereof.
"Hazardous Materials" has the meaning assigned to such term
in the Mortgage.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the books of the Registrar or any co-Registrar.
"Indebtedness" of any Person means, without duplication, (i)
any liability of such Person (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
<PAGE> 23
-12-
or with services incurred in connection with capital expenditures, or (c) in
respect of Capitalized Lease Obligations, (ii) any Indebtedness of others that
such person 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) Disqualified Stock
of such Person and (v) all Indebtedness of others secured by a Lien on any
asset of such Person, and which is not otherwise assumed by such Person;
provided that Indebtedness shall not include accounts payable (including,
without limitation, accounts payable to such Person by any of its Subsidiaries
or to any such Subsidiary by such Person or any of its other Subsidiaries, in
each case, in accordance with customary industry practice) or liabilities to
trade creditors of such Person arising in the ordinary course of business. The
amount of Indebtedness of any Person at any date shall be (a) the outstanding
balance at such date of all unconditional obligations as described above, (b)
the maximum liability of such Person for any contingent obligations under
clause (ii) above at such date and (c) in the case of clause (v) above, the
lesser of (1) the fair market value of any asset subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (2) the amount of
the Indebtedness secured.
"Indenture" means this Indenture as amended, amended and
restated, supplemented or otherwise modified from time to time.
"Intangible Assets" of any Person means all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, write-ups of assets over
their prior carrying values (other than write-ups which occurred prior to the
Issue Date and other than, in connection with the acquisition of an asset, the
write-up of the value of such asset (within one year of its acquisition) to its
fair market value in accordance with GAAP) and all other items which would be
treated as intangibles on the consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with GAAP.
<PAGE> 24
-13-
"Intercreditor Agreement" means the Intercreditor Agreement
dated as of the date hereof among the Collateral Agent (on behalf of the
Holders of Securities, the holders of the Senior Secured Notes, the Lenders and
the holders of Permitted Replacement Financing, if any, incurred in accordance
with the provisions hereof), the agent under the Working Capital Facility (and
any successor or successors thereto or assignee or assignees therefrom), the
Company and Acme Steel, in substantially the form attached hereto as Exhibit G,
as the same may be amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"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.
"Investment" 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 the date on which the Securities are
originally issued under this Indenture.
"Lien" means, with respect to any Property, any mortgage, deed
of trust, lien, pledge, lease, easement, restriction, covenant, right-of-way,
charge, security interest or encumbrance of any kind or nature in respect of
such Property. For purposes of
<PAGE> 25
-14-
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.
"Loans" has the meaning assigned to such term in the Term Loan
Agreement.
"Maturity Date" means the date, which is set forth on the face
of the Securities, on which the Securities will mature.
"Modernization Project" means the continuous thin slab
castor/hot strip mill complex to be constructed at Acme Steel's Riverdale,
Illinois plant pursuant to the Construction Contract and all architectural,
engineering and construction plans, utility and other installations and permits
together with all land, improvements, additions, furniture, fixtures and
equipment associated with such project.
"Mortgage" means the mortgage (or deed of trust) dated as of
the date hereof between Acme Steel and the Collateral Agent, in substantially
the form of Exhibit C hereto, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Net Award" has the meaning assigned to such term in the
Security Documents.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents received by the Company or by any of its Subsidiaries from such
Asset Sale (except to the extent that such obligations are sold with recourse
to the Company or to any Subsidiary of the Company) net of (a) reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including, without
limitation, brokerage, legal, accounting and investment banking fees and sales
commissions) to the extent
<PAGE> 26
-15-
actually paid, (b) taxes paid or payable ((1) including, without limitation,
income taxes reasonably estimated to be actually payable as a result of any
disposition of property within two years of the date of disposition and (2)
after taking into account any reduction in tax liability due to available tax
credits or deductions and any tax sharing arrangements), (c) in the case of any
Asset Sale that does not involve any portion of the Collateral, repayment of
Indebtedness that is required by the terms thereof to be repaid in connection
with such Asset Sale to the extent so repaid in cash and (d) appropriate
amounts to be provided by the Company or by any Subsidiary of the Company, as
the case may be, as a reserve, in accordance with GAAP consistently applied,
against any liabilities associated with such Asset Sale and retained by the
Company or by any Subsidiary of the Company, as the case may be, after such
Asset Sale, including without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale.
"Net Proceeds" has the meaning assigned to such term in the
Security Documents.
"Note Indenture" means the indenture under which the Senior
Secured Notes are issued as it may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"Note Trustee" means the party named as trustee in the Note
Indenture until a successor replaces it in accordance with the provisions of
the Note Indenture and thereafter means such successor.
"Obligations" means any principal, premiums, interest,
penalties, fees and other liabilities payable under the documentation governing
any Indebtedness.
"Officer" means the Chairman, the President, any Vice
President, the Chief Financial Officer, the Treasurer, or the Secretary of the
Company.
<PAGE> 27
-16-
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company complying with Sections 12.04 and 12.05.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee, and who may be an employee
of or counsel to the Company or the Trustee.
"Permitted Additional Lender" means a lender to the Company or
a Guarantor under any Permitted Replacement Financing.
"Permitted Indebtedness" means (i) Indebtedness of the Company
and its Subsidiaries outstanding immediately following the Issue Date; (ii)
Indebtedness under the Working Capital Facility which does not exceed $80
million principal amount outstanding at any one time; (iii) the Securities, the
Senior Secured Notes and all Obligations outstanding under the Term Loan
Agreement; (iv) the Guarantees, the guarantees of the Senior Secured Notes and
the guarantees of the Company's Obligations under the Term Loan Agreement; (v)
Indebtedness in respect of obligations of the Company to the Trustee under this
Indenture, to the trustee under the Note Indenture, to the Agent under the Term
Loan Agreement and to the Collateral Agent under the Security Documents; (vi)
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 maturity, by acceleration or otherwise) to the
payment and performance of the Company's obligations under this Indenture and
the Securities; provided, further, that any Indebtedness of the Company or any
of its Subsidiaries owed to any other Subsidiary of the Company that ceases to
be such a Subsidiary shall be deemed to be incurred and shall be treated as an
incurrence for purposes of the first paragraph of Section 4.04 at the time the
Subsidiary in question ceases to be a Subsidiary of the Company; and (vii)
Indebtedness
<PAGE> 28
-17-
of the Company or its Subsidiaries under any Currency Agreements, Commodity
Agreements or Interest Protection Agreements.
"Permitted Investments" means (i) obligations of or guaranteed
by the U.S. government, its agencies or government-sponsored enterprises; (ii)
short-term commercial bank and corporate obligations that have received the
highest short-term rating from two of the following rating organizations:
Standard & Poor's Corporation ("S&P"), Moody's Investor Services, Inc.
("Moody's"), Duff & Phelps Credit Rating Co., Fitch Investor Service, Inc.,
IBCA Ltd., and Thomson Bankwatch Inc.; (iii) money market preferred stocks
which, at the date of acquisition and at all times thereafter, are accorded
ratings of at least AA- or Aa3 by S&P or Moody's, respectively; (iv) tax-exempt
obligations that are accorded the highest short-term rating by S&P or Moody's
or a long-term rating of at least A- or A3 by S&P or Moody's, respectively at
the time of purchase; (v) master repurchase agreements with foreign or domestic
banks having a capital and surplus of not less than $250,000,000 or primary
dealers so long as such agreements are collateralized with obligations of the
U.S. government or its agencies at a ratio of 102%, or with other collateral
rated at least AA or Aa2 by S&P or Moody's, respectively, at a ratio of 103%
and, in either case, marked-to-market weekly and so long as such securities
shall be held by a third-party agent; (vi) guaranteed investment contracts
and/or agreements of a bank, insurance company or other institution whose
unsecured, uninsured and unguaranteed obligations (or claims-paying ability)
have at the time of purchase ratings of AAA or Aaa by S&P or Moody's,
respectively; (vii) time deposits with, and certificates of deposit and
banker's acceptances issued by, any bank having capital surplus and undivided
profits aggregating at least $500,000,000 and maturing not more than one year
from the date of creation thereof; and (viii) money market funds the portfolio
of which is limited to investments described in clauses (i) through (vii)
above. In no event shall any of the Permitted Investments described in clauses
(i) through (vi) above have a final maturity more than two years from the date
of purchase; provided, however, that in the event of a Qualified Defeasance
Transaction, Permitted Investments used to defease the defeased
<PAGE> 29
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Indebtedness may have a final maturity up to the date of the final maturity of
the Indebtedness so defeased.
"Permitted Liens" means (i)(x) with respect to Property other
than Collateral, Liens existing on the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date and (y) with respect to
Collateral, Liens existing on the Issue Date to the extent specifically
permitted in the appropriate Security Document, (ii) Liens on accounts
receivable and inventory of the Company and its Subsidiaries securing
Indebtedness incurred under the Working Capital Facility, and/or any other
working capital facility; provided, however, that the Indebtedness under such
other working capital facility is permitted to be incurred under Section 4.04
hereof (other than as Permitted Indebtedness) and the amount outstanding at any
time under such facility is not in excess of the amount permitted to be
incurred thereunder pursuant to the borrowing base formula set forth therein,
(iii) Liens securing Indebtedness collateralized by Property of, or any shares
of stock of or debt of, any corporation existing at the time such corporation
becomes a Subsidiary of the Company or at the time such corporation is merged
into the Company or any of its Subsidiaries; provided that such Liens are not
incurred in connection with, or in contemplation of, such corporation becoming
a Subsidiary of the Company or merging into the Company or any of its
Subsidiaries and the Acquired Indebtedness could have been incurred pursuant to
the first paragraph of Section 4.04 hereof (other than as Permitted
Indebtedness), (iv) Liens securing Refinancing Indebtedness used to refund,
refinance or extend Indebtedness referred to in the preceding clause (iii);
provided that any such Lien does not extend to or cover any Property, shares or
debt other than the Property, shares or debt securing the Indebtedness so
refunded, refinanced or extended, (v) Liens other than on Collateral in favor
of the Company or any of its Subsidiaries, (vi) Liens on Property (other than
Collateral) of the Company or any of its Subsidiaries acquired after the Issue
Date in favor of governmental bodies to secure progress or advance payments
relating to such Property, (vii) Liens on Property (other than the Collateral)
of the Company or any of its Subsidiaries acquired after the Issue Date
securing industrial revenue or pollution
<PAGE> 30
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control or other tax exempt bonds issued in connection with the acquisition or
refinancing of such Property to the extent the incurrence of such Indebtedness
is permitted pursuant to the provisions of Section 4.04 hereof, (viii) Liens to
secure certain Indebtedness that is otherwise permitted under this Indenture
and that is used to finance the cost of Property of the Company or any of its
Subsidiaries acquired after the Issue Date; provided that (a) any such Lien is
created solely for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, the cost (including sales and excise
taxes, installation and delivery charges and other direct costs of, and other
direct expenses paid or charged in connection with, such purchase or
construction) of such Property, (b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost, (c) the Indebtedness
secured by such Lien is incurred by the Company or its Subsidiary within 90
days of the acquisition of such Property by the Company or its Subsidiary, as
the case may be, (d) such Lien does not extend to or cover any Property other
than such item of Property and any improvements on such item, (e) no Net Cash
Proceeds derived from Collateral are used to fund all or any portion of the
cost of acquisition of such Property, and (f) prior to completion of the
Modernization Project, Acme Steel shall not incur or permit any Lien otherwise
permitted under this clause (viii) and no Liens at any time may encumber assets
which comprise the Modernization Project, (ix) Liens on Property (other than
Collateral) to secure Indebtedness that is otherwise permitted under this
Indenture the aggregate principal amount of which does not exceed $35 million
outstanding at any one time, (x) statutory liens or landlords', 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 and, with
respect to any such Liens arising in respect of any of the Collateral, only to
the extent specifically permitted under the provisions of the appropriate
Security Document, (xi) Liens on the Collateral for the benefit of (a) holders
of the Senior Secured Notes or (b) holders of Indebtedness arising at any
<PAGE> 31
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time after retirement of the Senior Secured Notes; provided that the principal
amount of such Indebtedness does not exceed the original principal amount of
such Senior Secured Notes and the holders of such replacement Indebtedness
(acting through a designated representative) enter into a supplement to the
Collateral Agency Agreement in substantially the form annexed thereto and the
Company and such holders otherwise comply with the applicable provisions
thereof, (xii) Liens on the Collateral for the benefit of the holders of the
Securities and (xiii) easements, restrictions, reservations or rights of others
for right-of-way, sewers, electric lines, telegraph and telephone lines and
other similar purposes and other similar charges or encumbrances not
interfering in any material respect with the conduct of the business of the
Company or any of its Subsidiaries or, in the case of such charges or
encumbrances which affect the Collateral, to the extent permitted by the
provisions of the Mortgage.
"Permitted Replacement Financing" means Indebtedness of the
Company or a Guarantor incurred in compliance with this Indenture which may, in
accordance with the provisions of clause (xi) of the definition of Permitted
Liens take a security interest in certain of the Collateral upon the execution
and delivery by each Permitted Additional Lender (or a representative thereof)
of a supplement to the Collateral Agency Agreement as contemplated therein and
upon satisfaction of the other conditions set forth in Section 8.11 of the
Collateral Agency Agreement relating thereto.
"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.
"Preferred Stock Dividend" of any Person means, for any
dividend payable with regard to Preferred Stock issued by such Person, the
amount of such dividend multiplied by a fraction, the
<PAGE> 32
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numerator of which is one and the denominator of which is one minus the
maximum statutory combined federal, state and local income tax rate (expressed
as a decimal number between 1 and 0) then applicable to such Person.
"Principal" of a debt security means the principal of the
security plus, when appropriate, the premium, if any, on the security.
"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.
"Qualified Defeasance Transaction" means any transaction by
the Company or any of its Subsidiaries in which Indebtedness is defeased;
provided, however, that in the case of Indebtedness which is subordinate to any
other Indebtedness of such Person, such Indebtedness is being defeased in
compliance with Section 4.07 hereof; and provided, further, that in order for
such defeasance to be a Qualified Defeasance Transaction the net present value
of the cost of such defeasance, including but not limited to the actual costs
of any Permitted Investments, the cost of any trustee or agent overseeing such
defeasance and any costs associated with the closing of such transaction, must
be less than the net present value of all present and future payments on the
Indebtedness to be defeased including but not limited to principal, interest
and premium, if any.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed as Exhibit A.
<PAGE> 33
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"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Company or its Subsidiaries
outstanding on the Issue Date or other Indebtedness permitted to be incurred by
the Company or its Subsidiaries pursuant to the terms of this Indenture, but
only to the extent that (i) the Refinancing Indebtedness is subordinated to the
Securities to the same extent as the Indebtedness being refunded, refinanced or
extended, if at all, (ii) the Refinancing Indebtedness is scheduled to mature
either (a) no earlier than the Indebtedness being refunded, refinanced or
extended, or (b) after the Maturity Date, (iii) the portion, if any, of the
Refinancing Indebtedness that is scheduled to mature on or prior to the
Maturity Date has a weighted average life to maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the
weighted average life to maturity of the portion of the Indebtedness being
refunded, refinanced or extended that is scheduled to mature on or prior to the
Maturity Date, and (iv) such Refinancing Indebtedness is in an aggregate
principal amount that is equal to or less than the sum of (a) the aggregate
principal amount then outstanding under the Indebtedness being refunded,
refinanced or extended, (b) the amount of accrued and unpaid interest, if any,
on such Indebtedness being refunded, refinanced or extended and (c) the amount
of customary fees, expenses and costs related to the incurrence of such
Refinancing Indebtedness; provided that Indebtedness which is in an aggregate
principal amount greater than the sum of (a), (b) and (c) of this clause (iv)
shall constitute Refinancing Indebtedness to the extent of the sum of (a), (b)
and (c) if the amount of Indebtedness in excess of the sum of (a), (b) and (c)
could otherwise be incurred pursuant to Section 4.04.
"Related Business Investment" means any Investment, capital
expenditure or other expenditure by the Company or any Subsidiary of the
Company in Property or assets (other than the Property or assets subject to any
Lien except for (1) with respect to any Available Proceeds Amount resulting
from an Asset Sale involving Collateral, the Lien of the Security Documents and
(2) with respect to any Available Proceeds Amount resulting from an Asset Sale
not involving Collateral, the Lien of any instruments or
<PAGE> 34
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documents that secured Indebtedness that was secured by the assets subject to
such Asset Sale) which is related to the business of the Company and its
Subsidiaries as it is conducted on the date of the Asset Sale giving rise to
the Asset Sale Proceeds to be reinvested.
"Released Interests" has the meaning assigned to such term in
the Collateral Agency Agreement.
"Restoration" has the meaning assigned to such term in each
of the Mortgages.
"Restricted Investment" means, with respect to any Person, any
Investment by such Person in any (i) of its Affiliates or in any Person that
becomes an Affiliate as a result of such Investment, (ii) executive officer or
director of such Person and (iii) executive officer or director of any
Affiliate of such Person; provided that loans or advances made in the ordinary
course of business for travel, relocation or similar purposes shall not
constitute Restricted Investments.
"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 (a) dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock)
and (b) 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 (including a Qualified Defeasance
Transaction), repurchase, redemption or other acquisition or retirement for
value, prior to any scheduled maturity, scheduled repayment or scheduled
sinking fund payment, of any Indebtedness of the Company or any of its
Subsidiaries which is subordinated in right of payment to the Securities
(including any
<PAGE> 35
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Guarantees thereof); and (iv) the making of any Restricted Investment or
guarantee of any Restricted Investment in any Person.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" has the meaning assigned to such term in the
Collateral Agency Agreement.
"Securities" means the 13 1/2% Senior Secured Discount Notes
due 2004, as amended or supplemented from time to time pursuant to the terms of
this Indenture, that are issued under this Indenture.
"Security Agreement" means the Security Agreement dated as of
the date hereof between Acme Steel and the Collateral Agent, in substantially
the form attached hereto as Exhibit B, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with its terms.
"Security Documents" means, collectively, the Security
Agreement, the Mortgage, the Stock Pledge Agreements, the Disbursement
Agreement, the Collateral Agency Agreement and the Intercreditor Agreement and
all security agreements, mortgages, deeds of trust, collateral assignments, or
other instruments evidencing or creating any security interest in favor of the
Collateral Agent in all or any portion of the Collateral in each case, as
amended, amended and restated, supplemented or otherwise modified from time to
time.
"Senior Secured Notes" means the 12 1/2% Senior Secured Notes
due 2002, as amended or supplemented from time to time pursuant to the terms of
the Note Indenture, that are issued under the Note Indenture.
"Significant Subsidiary" means any Subsidiary of the Company
which would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act of 1933, as amended, and the Exchange
Act.
<PAGE> 36
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"Special Stock Purchase Warrants" means the 5,600,000 special
common stock purchase warrants issued and sold by the Company in March 1994 and
the Common Stock for which they can be exercised.
"Stated Maturity," when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment
of interest is due and payable.
"Stock Pledge Agreements" means, collectively, the Stock
Pledge Agreement dated the date hereof between (i) the Company or (ii) Acme
Steel and Acme Packaging, and, in each case, the Collateral Agent, in
substantially the form attached hereto as Exhibit D, as each may be amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
"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 or controlled by such Person.
"Term Loan Agent" means the party named as agent in the Term
Loan Agreement until a successor replaces it in accordance with the provisions
of the Term Loan Agreement and thereafter means such successor.
"Term Loan Agreement" means the Term Loan Agreement dated
August 4, 1994 among the Company, the Agent and the Lenders as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture, except as
provided in Section 9.03.
<PAGE> 37
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"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
administration department (or any successor group of the Trustee), including
any vice president, assistant vice president, assistant secretary or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at that time shall be such
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Unapplied Proceeds Offer Payment Date" means, with respect to
any Available Proceeds Amount from an Asset Sale, the earlier of (x) the 180th
day following receipt of such Available Proceeds Amount or (y) such earlier
date on which an Unapplied Proceeds Offer shall expire; provided, however, that
to the extent that the Board of Directors of the Company shall have adopted a
capital expenditure plan contemplating the application of Net Cash Proceeds
from an Asset Sale to a Related Business Investment and the Company shall have
taken significant steps to implement such plan within 180 days of an Asset
Sale, the Unapplied Proceeds Offer Payment Date with respect thereto shall be
the 180th day after the adoption of such plan.
"United States Government Obligations" means securities which
are direct obligations of (i) the United States or (ii) an agency or
instrumentality of the United States, the payment of which is unconditionally
guaranteed by the United States, which, in either case, are full faith and
credit obligations of the United States and are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such United
States Government Obligations or a specific payment of interest on or principal
of any such United States Government Obligations held by such custodian for the
account of the holder of
<PAGE> 38
-27-
a depository receipt; provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount received by the
custodian in respect of the United States Government Obligations for the
specific payment of interest or principal of the United States Government
Obligations evidenced by such depository receipt.
"Valuation Date" has the meaning assigned to such term in the
Collateral Agency Agreement.
"Wabush" means the entity called Wabush Mines, a Canadian
joint venture, including Wabush Iron Co. Ltd., an Ohio corporation and one of
the joint venturers of Wabush Mines, which is engaged in the mining,
beneficiation and pelletizing of iron ore or any successor to either such
entity, any entity of approximately equivalent value substituted therefor or
any investment of approximately equivalent value and purpose.
"Wholly Owned Subsidiary" of any Person means, at any time, a
Subsidiary all of the Capital Stock of which (except director's qualifying
shares, if any) are at the time owned directly or indirectly by such Person.
"Working Capital Facility" means the revolving credit
facility, as the same may be amended or supplemented from time to time, and any
refinancing or replacement of such credit facility or any successor credit
facility so long as the aggregate amount permitted to be borrowed under any
such amended, supplemented, refinanced, replaced or successor credit facility
does not exceed the lesser of (i) $80 million outstanding at any time or (ii)
an amount equal to the sum of 85% of the face value of all "eligible
receivables" of the Company and its Subsidiaries party to such credit facility
plus 50% of the lower of the fair market value or cost of their "eligible
inventory" (as such terms are defined for purposes of such credit facility).
<PAGE> 39
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SECTION 1.02 Other Definitions.
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Affiliate Transaction" 4.03
"Bankruptcy Law" 6.01
"Collateral Account" 11.01
"covenant defeasance" 8.02
"Custodian" 6.01
"defeasance" 8.02
"Event of Default" 6.01
"incurrence" 4.04
"Paying Agent" 2.03
"Registrar" 2.03
"Released Trust Monkeys" 11.04
"Repurchase Right" 4.15
"Required Filing Dates" 4.15
"Surviving Entity" 5.01
"Trust Monkeys" 11.01
"Unapplied Proceeds Offer" 4.06
</TABLE>
SECTION 1.03 Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
<PAGE> 40
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"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles in effect on the Issue Date, and any other
reference in this Indenture to "generally accepted accounting
principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
ARTICLE II.
THE SECURITIES
<PAGE> 41
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SECTION 2.01 Form and Dating.
The Securities, the notation thereon relating to the
Guarantees and the Trustee's certificates of authentication shall be
substantially in the form of Exhibit A. The Securities may have notations,
legends or endorsements required by law, securities exchange rule or usage.
Any notations, legends or endorsements not contained in the form of Security
contained in Exhibit A shall be delivered in writing to the Trustee. The
Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the form of the
Securities, annexed hereto as Exhibit A, shall constitute, and are hereby
expressly made, a part of this Indenture.
SECTION 2.02 Execution and Authentication.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature. The Company's seal shall appear on the
Securities and may be reproduced manually or by facsimile.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue
in the aggregate principal amount of up to $117,958,000, upon a written order
of the Company signed by two Officers or by an Officer and an Assistant
Treasurer or Assistant Secretary of the Company. The order shall specify the
amount of Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated. The aggregate principal amount
<PAGE> 42
-31-
of Securities outstanding at any time may not exceed $117,958,000 except as
provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to
the Company and eligible to qualify as a Trustee hereunder pursuant to Section
7.10 to authenticate Securities other than upon original issuance. Any such
appointment shall be evidenced by an instrument in writing signed by a Trust
Officer of the Trustee, and a copy of such instrument shall be promptly
furnished to the Company. The Company shall pay all fees payable to the
authenticating agent. Any authenticating agent appointed hereunder shall be
entitled to the benefits of Section 7.07. Unless limited by the terms of such
appointment, any authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate as provided in
Section 7.03. The provisions of Sections 7.08, 7.09 and 7.10 shall apply to
any authenticating agent appointed hereunder with the same effect as if such
authenticating agent were the Trustee hereunder.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
IV.SECTION 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Securities may be presented for
payment ("Paying Agent"). The Company may have one or more co-Registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement
the provisions of this Indenture that relate to such Agent and shall, if
required, incorporate the
<PAGE> 43
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provisions of the TIA. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation in accordance with the provisions of Section 7.07.
The Company initially appoints the Trustee as Registrar and
Paying Agent. The Company shall give written notice to the Trustee in the
event that the Company decides to act as Registrar or Paying Agent.
SECTION 2.04 Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent to agree in
writing to hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities (whether such money has been paid to it by the Company or any
other obligor on the Securities), and the Company and the Paying Agent shall
each notify the Trustee of any default by the Company (or any other obligor on
the Securities) in making any such payment. If the Company or a Subsidiary of
the Company acts as Paying Agent, it shall segregate the money and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and account for any funds disbursed and the
Trustee may at any time during the continuance of any payment default, upon
written request to a Paying Agent, require such Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed. Upon making
such payment the Paying Agent shall have no further liability for the money
delivered to the Trustee.
SECTION 2.05 Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least five Business Days before each Interest
Payment Date and at such other times as the Trustee may request in writing a
list in such form and
<PAGE> 44
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as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
Every Holder of a Security, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any information as to the names and addresses of the Holders
required by Section 312 of the TIA, and that the Trustee shall not be held
accountable by reason of mailing any material required to be disclosed pursuant
to a request made under Section 312(b) of the TIA.
SECTION 2.06 Transfer and Exchange.
When Securities are surrendered to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for an
equal principal amount of Securities of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met. Every Security surrendered for
registration of transfer or exchange shall (if so required by the Company or
the Registrar) be duly endorsed by or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar duly executed by
the Holder thereof or such Holder's attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's request. The date
of any Security issued pursuant to this Section 2.06 shall be the date of such
transfer or exchange. No service charge shall be made to the Securityholder
for any registration of transfer or exchange, but the Company may require from
the Securityholder payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer tax or similar governmental charge payable upon exchanges not
involving any transfer pursuant to Section 2.10, 3.06 or 9.05, in which event
the Company shall be responsible for the payment of such taxes).
<PAGE> 45
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The Company shall not be required (i) to register the transfer
of or exchange Securities during a period beginning at the opening of business
15 days before the day of the selection for redemption of Securities under
Section 3.02 and ending at the close of business on the day of the mailing of
the relevant notice of redemption, (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, or (iii) to register
the transfer of or exchange any Security which has been surrendered for payment
or repayment at the option of the Holder pursuant to Section 4.06 or Section
4.15, except the portion, if any, of such Security not to be so paid or repaid.
SECTION 2.07 Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, then, in the absence of notice to the Company or the Trustee
that such lost, destroyed or wrongfully taken Security has been acquired by a
bona fide purchaser, the Company shall issue and the Trustee shall authenticate
a replacement Security if the requirements of the Company and the Trustee are
met. The Company and the Trustee may require (i) evidence to their
satisfaction of the loss, destruction or wrongful taking of a Security and (ii)
such security or indemnity in an amount sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee and any Agent from
any loss which any of them may suffer if such Security is replaced. The
Company and the Trustee each may charge such Holder for its expenses in
replacing such Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08 Outstanding Securities.
Securities outstanding at any time are all Securities that
have been authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation and those
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described in this Section or Section 2.09 as not outstanding. Subject to
Section 2.09, a Security does not cease to be outstanding because the Company
or one of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
Securities with respect to which the Company has effected
defeasance and/or covenant defeasance as provided in Article Eight shall cease
to be outstanding on and after the date of such defeasance and/or covenant
defeasance, except to the extent provided in Section 8.02.
If the Paying Agent (other than the Company, a Subsidiary of
the Company or an Affiliate of the Company) holds on a redemption date, a
Purchase Date, a Repurchase Date or Maturity Date (or in the event that the
Company, a Subsidiary of the Company or an Affiliate is acting as Paying Agent,
if the Company, such Subsidiary or Affiliate sets aside and segregates in trust
on a redemption date, a Purchase Date, a Repurchase Date or Maturity Date)
money sufficient to pay the principal of and interest on Securities payable on
that date, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.09 Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, request, waiver or
consent, Securities owned by the Company, any Subsidiary of the Company or an
Affiliate of the Company shall be disregarded and not treated as outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, request, waiver or consent, only
Securities which the Trustee actually knows are so owned shall be so
disregarded and treated.
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The Trustee may require an Officers' Certificate listing
Securities owned by the Company, a Subsidiary of the Company or an Affiliate of
the Company.
SECTION 2.10 Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Securities in exchange for
temporary Securities upon surrender of such temporary securities. Until such
exchange, temporary Securities shall be entitled to the same rights, benefits
and privileges as definitive Securities.
SECTION 2.11 Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee for cancellation any Securities surrendered to them for transfer,
exchange, repayment, redemption or payment. The Trustee and no one else shall
promptly cancel all Securities so delivered to the Trustee or surrendered for
transfer, exchange, repayment, redemption, payment or cancellation. The
Company may not issue and the Trustee shall not authenticate new Securities to
replace or reissue or resell Securities which the Company has redeemed, paid,
purchased, repurchased, purchased on the open market or otherwise, or otherwise
acquired or have been delivered to the Trustee for cancellation. The Trustee
(subject to the record-retention requirements of the Exchange Act) shall
destroy all cancelled Securities and promptly deliver a certificate of
destruction to the Company.
SECTION 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest, plus any interest
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payable on the defaulted interest, pursuant to Section 4.01 hereof, to the
persons who are Securityholders on a subsequent special record date, and such
term, as used in this Section 2.12 with respect to the payment of any defaulted
interest, shall mean the fifteenth day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before such special record date, the Company
shall mail to each Securityholder and to the Trustee, or the Trustee in the
name and at the expense of the Company shall mail to each Securityholder, a
notice that states such special record date, the payment date and the amount of
defaulted interest to be paid.
Alternatively, in lieu of paying such defaulted interest
pursuant to the preceding paragraph, the Company may make payment of such
defaulted interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such securities exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this paragraph, such manner of payment shall be deemed practicable by the
Trustee.
ARTICLE III.
REDEMPTION
SECTION 3.01 Notices to Trustee.
If the Company wants to redeem Securities pursuant to
paragraph 5 of the Securities at the applicable redemption price set forth
thereon, it shall notify the Trustee in writing of the redemption date and the
principal amount of Securities to be redeemed.
The Company shall give the notice provided for in this Section
at least 45 days before the redemption date (unless a shorter notice shall be
agreed to by the Trustee in writing),
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together with an Officers' Certificate stating that such redemption will comply
with the conditions contained herein.
SECTION 3.02 Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant
to paragraph 5 thereof, the Trustee shall select the Securities to be redeemed
by any method that complies with the requirements of the principal national
securities exchange, if any, on which the Securities being redeemed are listed,
at the discretion of the Trustee, or, if the Securities are not so listed, by
lot, pro rata or in such other manner as the Trustee shall deem fair and
reasonable; provided that no Security with a principal amount of $1,000 or less
shall be redeemed in part. The Trustee shall make the selection from the
Securities then outstanding, subject to redemption and not previously called
for redemption. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. The Trustee shall promptly notify the
Company in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption.
SECTION 3.03 Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail a notice of redemption by first class mail,
postage prepaid, to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
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(3) the CUSIP number of the Securities;
(4) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption
ceases to accrue on and after the redemption date and the only
remaining right of the Holders is to receive payment of the redemption
price upon surrender to the Paying Agent; and
(7) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and
that, after the redemption date, upon surrender of such Security, a
new Security or Securities in principal amount equal to the unredeemed
portion thereof will be issued.
At the Company's request made at least 45 days before the
redemption date (unless a shorter time period shall be agreed to by the Trustee
in writing), the Trustee shall give the notice of redemption on behalf of the
Company, in the Company's name and at the Company's expense.
SECTION 3.04 Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date and at the redemption
price and from and after the redemption date (unless the Company defaults in
making the redemption payment) such Securities shall cease to accrue interest.
Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon to the redemption date, but
interest installments whose maturity is on or prior to such redemption date
shall be payable to the Holders of record at the
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close of business on the relevant record dates referred to in the Securities.
The Trustee shall not be required to (i) issue, authenticate, register the
transfer of or exchange any Security during a period beginning 15 days before
the date a notice of redemption is mailed and ending at the close of business
on the date the redemption notice is mailed, or (ii) register the transfer or
exchange of any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
SECTION 3.05 Deposit of Redemption Price.
At least one Business Day before the redemption date, the
Company shall deposit with the Paying Agent (or if the Company is its own
Paying Agent, shall, on or before the redemption date, segregate and hold in
trust) money sufficient to pay the redemption price of and accrued interest on
all Securities to be redeemed on that date other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.06 Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part (with,
if so required by the Company or the Trustee, due endorsement by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), the Trustee shall authenticate for the
Holder a new Security in principal amount equal to and in exchange for the
unredeemed portion of the Security surrendered.
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ARTICLE IV.
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of
principal or interest shall be considered paid on the date due if the Trustee
or Paying Agent (other than the Company, a Subsidiary of the Company or an
Affiliate of the Company) holds on that date money in immediately available
funds designated for and sufficient to pay the installment in full.
The Company shall pay interest on overdue principal at the
same rate per annum borne by the Securities. The Company shall pay interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful.
SECTION 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 12.02. The Company hereby
initially designates the office of Shawmut Trust Company located at 14 Wall
Street, 8th Floor, New York, New York 10005 as its office or agency in the
Borough of Manhattan, The City of New York, to receive all such presentations,
surrenders, notices or demands until changed as permitted in this Indenture.
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The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
SECTION 4.03 Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its
Subsidiaries to, make any loan, advance, guarantee or capital contribution to,
or for the benefit of, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, any Affiliate of the Company or any
Affiliate of any of the Company's Subsidiaries or any holder of 10% or more of
any class of Capital Stock of the Company (including any Affiliates of such
holders) (each, an "Affiliate Transaction") except for any Affiliate
Transaction 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 an Affiliate of the Company
or any of the Company's Subsidiaries.
In addition, the Company will not, and will not permit any
Subsidiary of the Company to, enter into an Affiliate Transaction, or any
series of related Affiliate Transactions, unless with respect to such
transaction or transactions involving or having a value of more than
$1,000,000, the Company has (x) obtained the approval of a majority of the
Board of Directors in the exercise of their fiduciary duties and (y) either
obtained the approval of a majority of the members of the full Board of
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Directors not having any interest in such transaction or transactions or
obtained an opinion of a qualified independent financial advisor to the effect
that such transaction or transactions are fair to the Company or such
Subsidiary, as the case may be, from a financial point of view.
SECTION 4.04 Limitation on Indebtedness.
The Company will not, and will not permit any of its
Subsidiaries, directly or indirectly, to, create, incur, assume, become liable
for or guarantee the payment of (collectively, an "incurrence") any
Indebtedness (including Acquired Indebtedness); provided the Company and its
Subsidiaries may incur Indebtedness, including Acquired Indebtedness, if (i) at
the time of such event and after giving effect thereto, on a pro forma basis,
the ratio of Consolidated Cash Flow Available for Fixed Charges to
Consolidated Fixed Charges for the four full fiscal quarters immediately
preceding such event, taken as one period and calculated using the assumptions
and adjustments set forth in the following sentence, would have been greater
than 2.0 to 1.0, and (ii) no Default or Event of Default shall have occurred
and be continuing at the time of or occur as a consequence of the incurrence of
such Indebtedness. The following assumptions and adjustments shall be used in
calculating the ratio of Consolidated Cash Flow Available for Fixed Charges to
Consolidated Fixed Charges for the four-quarter period preceding the incurrence
of Indebtedness giving rise to such determination: (a) the Indebtedness being
incurred will be assumed to have been incurred on the first day of such
four-quarter period; (b) any other Indebtedness incurred during, and remaining
outstanding at the end of, such four-quarter period or incurred subsequent to
such four-quarter period will be assumed to have been incurred on the first day
of such four-quarter period; (c) with respect to the incurrence of Acquired
Indebtedness, the related acquisition (whether by means of purchase, merger or
otherwise) and any related repayment of any Indebtedness will be assumed to
have occurred on the first day of such four-quarter period with the appropriate
adjustments with respect to such acquisition and repayment being included in
such pro forma calculations; (d) with respect to Indebtedness repaid (other
than
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a repayment of revolving credit obligations) during such four-quarter period
(or subsequent thereto) out of the proceeds of sales of Capital Stock or
operating cash flows in such four-quarter period, such Indebtedness will be
assumed to have been repaid on the first day of such four-quarter period; and
(e) any permanent reduction in the committed amount of a revolving credit
facility during such four-quarter period (or subsequent thereto) will be deemed
to have occurred on the first day of such four-quarter period and interest paid
on any amounts drawn on such revolving credit facility during such four-quarter
period in excess of such reduced committed amount shall, for the period during
which such drawn amounts were actually outstanding, be excluded from such
calculation.
The foregoing limitations shall not apply to the incurrence of
(i) Permitted Indebtedness, (ii) Refinancing Indebtedness and (iii) additional
Indebtedness of the Company or any of its Subsidiaries the aggregate principal
amount of which does not exceed $35 million outstanding at any one time.
SECTION 4.05 Limitation on Liens.
The Company will not, and will not permit any Subsidiary of
the Company to, issue, assume, guarantee or suffer to exist any Indebtedness
secured by a Lien (other than a Permitted Lien) of or upon any Property of the
Company or any Subsidiary of the Company or any shares of stock or debt of any
Subsidiary of the Company, whether such Property is owned at the Issue Date or
thereafter acquired.
SECTION 4.06 Limitation on Disposition of Assets.
(a) The Company will not, and will not cause or permit
any of its Subsidiaries to, consummate any Asset Sale unless (i) the
consideration in respect of such Asset Sale is at least equal to the fair
market value of the assets subject to such Asset Sale, (ii) at least 75% of the
value of the consideration therefrom received by the Company or such Subsidiary
is in the form of cash or Cash Equivalents, and (iii) to the extent such Asset
Sale
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involves Collateral, (x) such Asset Sale is not between the Company and any of
its Subsidiaries or between Subsidiaries of the Company and (y) the Company
shall cause the cash consideration received in respect thereof to be deposited
in the Collateral Account as and when received by the Company or by any
Subsidiary of the Company and shall otherwise comply with the provisions hereof
and of the Collateral Agency Agreement applicable to such Collateral and Asset
Sale. The Company may, for so long as no Default or Event of Default exists
hereunder or would be caused thereby, apply Net Cash Proceeds held by it (or in
compliance with the provisions hereof and the Collateral Agency Agreement,
direct the Collateral Agent to release Net Cash Proceeds held in the Collateral
Account for application) to the acquisition or construction of Property
constituting a Related Business Investment; provided, however, that if such
application is not made in the manner and within the times contemplated by the
definition of Available Proceeds Amount, the Company shall be required to make
an Unapplied Proceeds Offer (as defined below) pursuant to paragraph (b) below.
(b) In the event there shall be any Available Proceeds
Amount, the Company shall make an offer to purchase (the "Unapplied Proceeds
Offer") to all Holders of the Securities on the Unapplied Proceeds Offer
Payment Date an amount of the Securities equal to the Applicable Portion of
such Available Proceeds Amount (as such amount may be increased in accordance
with clause (vii) of paragraph (f) hereof) expressed, prior to August 1, 1997,
in multiples of the Accreted Amount and therefor in multiples of $1,000. In
each case of an Unapplied Proceeds Offer, the purchase price for the Securities
shall be equal to 100% of the Accreted Value thereof at the repurchase date, if
repurchased prior to August 1, 1997, and of the principal amount thereof plus
accrued and unpaid interest to the Unapplied Proceeds Offer Payment Date if
repurchased thereafter. Notwithstanding the foregoing (A) the Company may
defer the Unapplied Proceeds Offer until there is an aggregate unutilized
Available Proceeds Amount equal to or in excess of $5,000,000 (at which time,
the entire unutilized Available Proceeds Amount whether or not withdrawn by the
Company pursuant to Section 3.4 of the Collateral Agency Agreement, and not
just the amount in excess of $5,000,000, shall be applied as
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required pursuant hereto), (B) in connection with any Asset Sale, the Company
and its Subsidiaries will not be required to comply with the requirements of
clause (ii) of paragraph (a) to the extent that the aggregate non-cash
consideration received in connection with such Asset Sale, together with the
sum of all non-cash consideration received in connection with all prior Asset
Sales that has not yet been converted into cash, does not exceed $5 million;
provided that when any non-cash consideration is converted into cash, such cash
shall constitute Net Cash Proceeds and be subject to clause (ii) of paragraph
(a), and (C) in connection with any Asset Sale relating to the Company's
interest in Wabush, the Company need not comply with the provisions of clauses
(i) and (ii) of paragraph (a). To the extent the Unapplied Proceeds Offer is
not fully subscribed to by Holders of Securities, the Company may, subject to
the terms hereof and of the Collateral Agency Agreement, obtain a release of
the unutilized portion of the Available Proceeds Amount relating to such
Unapplied Proceeds Offer from the Lien of the Security Documents.
(c) If at any time any non-cash consideration is received
by the Company or by any Subsidiary of the Company, as the case may be, in
connection with any Asset Sale involving Collateral, such non-cash
consideration shall be made subject to the Lien of the Security Documents in
the manner contemplated hereby and the Collateral Agency Agreement. If and
when any non-cash consideration received from any Asset Sale (whether or not
relating to Collateral) is converted into or sold or otherwise disposed of for
cash, then such conversion or disposition shall be deemed to constitute an
Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in
accordance with this Section.
(d) All Net Proceeds and all Net Awards required to be
delivered to the Collateral Agent pursuant to any Security Document shall
constitute Trust Moneys and shall be delivered by the Company to the Collateral
Agent contemporaneously with receipt by the Company and be deposited in the
Collateral Account. Net Proceeds and Net Awards so deposited that are required
to be applied or may be applied by the Company to effect a Restoration of the
affected Collateral under the applicable Security Document may be withdrawn
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from the Collateral Account, only in accordance with the provisions of this
Indenture and the Collateral Agency Agreement. Net Proceeds and Net Awards so
deposited that are not required to be applied to effect a Restoration of the
affected Collateral under the applicable Security Document may be withdrawn
only in accordance with the provisions of this Indenture and the Collateral
Agency Agreement.
(e) The Company shall provide the Trustee and the
Collateral Agent with prompt notice of the occurrence of an Unapplied Proceeds
Offer. Such notice shall be accompanied by an Officers' Certificate setting
forth (i) a statement to the effect that (x) the Company or a Subsidiary of the
Company has made an Asset Sale and/or (y) there has occurred a destruction or
condemnation in respect of Collateral resulting in Net Proceeds or Net Awards
which are not required to be applied to effect a Restoration of such affected
Collateral under the applicable Security Document and (ii) the aggregate
Accreted Value of principal amount, as the case may be, of Securities offered
to be purchased and the basis of calculation in determining such aggregate
principal amount. The Company is obligated with respect to the Securities and
the Senior Secured Notes (i) to give notice of an Unapplied Proceeds Offer and
the equivalent offer pursuant to the Note Indenture at the same time and in the
same manner to each holder of the Securities and the Senior Secured Notes, (ii)
to set the same expiration date for the Unapplied Proceeds Offer and the
equivalent offer pursuant to the Note Indenture arising out of each event
giving rise to an Available Proceeds Amount and (iii) to establish identical
dates as the Unapplied Proceeds Offer Payment Date and the equivalent date
pursuant to the Note Indenture for each such offer referred to in clauses (i)
and (ii).
In the event of the transfer of substantially all (but not
all) of the Property of the Company and its Subsidiaries as an entirety to a
Person in a transaction permitted under Section 5.01 hereof, the successor
corporation shall be deemed to have sold the Properties of the Company and its
Subsidiaries not so transferred for purposes of this Section, and shall comply
with the provisions of this Section with respect to such deemed sale as if it
were an
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Asset Sale. In addition, the fair market value of such properties and assets
of the Company or its Subsidiaries deemed to be sold shall be deemed to be Net
Cash Proceeds for purposes of this Section.
(f) The Company shall provide the Trustee and the
Collateral Agent with written notice of the Unapplied Proceeds Offer at least
45 days before any notice of any Unapplied Proceeds Offer is mailed to Holders
of the Securities (unless shorter notice is acceptable to the Trustee). Notice
of an Unapplied Proceeds Offer shall be mailed by the Company, or by the
Trustee in the name of and at the expense of the Company, to all Holders of
Securities not less than 30 days nor more than 60 days before the Unapplied
Proceeds Offer Payment Date at their last registered address with a copy to the
Trustee and the Paying Agent. The Unapplied Proceeds Offer shall remain open
from the time of mailing for at least 20 Business Days and until at least 4:00
p.m., New York City time, on the Business Day next preceding the Unapplied
Proceeds Offer Payment Date. The notice, which shall govern the terms of the
Unapplied Proceeds Offer, shall include such disclosures as are required by law
and shall state:
(i) that the Unapplied Proceeds Offer is being made
pursuant to this Section 4.06;
(ii) the purchase price (including the amount of accrued
interest, if any) for each Security and the Unapplied Proceeds Offer
Payment Date;
(iii) that any Security not tendered or accepted for
payment will continue to accrete or accrue interest, as the case may
be, in accordance with the terms thereof;
(iv) that, unless the Company defaults in making the
payment, any Security accepted for payment pursuant to the Unapplied
Proceeds Offer shall cease to accrete or accrue interest, as the case
may be, after the Unapplied Procees Offer Payment Date;
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(v) that Holders electing to have Securities purchased
pursuant to an Unapplied Proceeds Offer will be required to surrender
their Securities to the Paying Agent at the address specified in the
notice prior to 4:00 p.m., New York City time, on the business day
next preceding the Unapplied Proceeds Offer Payment Date and must
complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than 4:00 p.m., New
York City time, on the business day next preceding the Unapplied
Proceeds Offer Payment Date, a tested telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase, the Security certificate
number (if any) and a statement that such Holder is withdrawing his or
her election to have such Securities purchased;
(vii) that if Securities in an Accreted Value or principal
amount, as the case may be, in excess of the Applicable Portion plus
the excess, if any, of (x) the Applicable Portion (as defined in the
Note Indenture) over (y) Senior Secured Notes validly tendered
pursuant to Section 4.06 of the Note Indenture in each case arising
as a result of the Asset Sale giving rise to the Unapplied Proceeds
Offer are tendered pursuant to the Unapplied Proceeds Offer, the
Company shall purchase Securities on a pro rata basis among the
Securities tendered (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of
$1,000 or integral multiples of $1,000 shall be acquired);
(viii) that Holders whose Securities are purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(ix) the instructions that Holders must follow in order to
tender their Securities.
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On the business day prior to the Unapplied Proceeds Payment
Date, the Company shall (i) deposit, or cause to be deposited, the Applicable
Portion plus any additional amounts determined pursuant to clause (vii) of this
paragraph (f) (which amount may consist of Trust Moneys already held by the
Collateral Agent) in immediately available funds with the Paying Agent, (ii)
accept for payment, on a pro rata basis among the Securities tendered in the
event that Securities in an Accreted Value or a principal amount, as the case
may be, in excess of the amount set forth in clause (vii) of this paragraph
(f) are tendered pursuant to the Unapplied Proceeds Offer (and in any event
with such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000 or integral multiples of $1,000 shall be
purchased), Securities or portions thereof tendered for purchase pursuant to
the Unapplied Proceeds Offer and (iii) deliver to the Paying Agent the
Securities so accepted together with an Officers' Certificate setting forth the
Securities or portions thereof tendered for purchase and accepted for payment
by the Company. The Paying Agent shall promptly mail or deliver to Holders of
Securities so accepted payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail or deliver to such Holders a
new Security equal in principal amount to any unpurchased portion of the
Security surrendered. Any Securities not so accepted shall be promptly mailed
or delivered by the Company to the Holders thereof. The Paying Agent shall
promptly deliver to the Company the balance of such Available Proceeds Amount
held by the Paying Agent after payment to the Holders of Securities as
aforesaid. For purposes of this Section 4.06, so long as the Collateral Agent
is also the Trustee, the Collateral Agent shall act as Paying Agent and,
otherwise, the Trustee shall act as Paying Agent.
The Company will and will cause its Subsidiaries to comply, to
the extent applicable, with the requirements of Section 14(e) of the Exchange
Act and any other securities laws or regulations in connection with the
repurchase of Securities pursuant to the Unapplied Proceeds Offer. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this Section 4.06, the Company shall comply with the
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applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.06 by virtue thereof.
SECTION 4.07 Limitation on Restricted Payments.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment unless:
(x) no Default or Event of Default shall have occurred
and be continuing at the time of or after giving effect to such
Restricted Payment;
(xi) immediately after giving effect to such Restricted
Payment, the Company could incur at least $1.00 of Indebtedness (other
than Permitted Indebtedness) pursuant to the first paragraph of Section
4.04; and
(xii) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments (the fair
market value of any such Restricted Payment if other than cash as
determined in good faith by the Board of Directors and evidenced by a
Board Resolution) declared or made after the Issue Date does not exceed
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 the first full fiscal quarter of the Company
commencing after the Issue Date 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 Board of Directors and
evidenced by a Board Resolution) received by the Company from (1) the
issue or sale after the Issue Date of Capital Stock of the Company
(other than the issue or sale of (A) Disqualified Stock, (B) Capital
Stock of the Company to any Subsidiary of the Company or (C)
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the exercise of the Special Stock Purchase Warrants); and (2) the issue
or sale after the Issue Date of 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.
The foregoing clauses (ii) and (iii) will not prohibit: (A)
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 Indenture; (B) the repurchase, redemption or retirement of
any shares of Capital Stock of the Company or any of its Subsidiaries in
exchange for, or out of the net proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of, other shares of Capital Stock
(other than Disqualified Stock) of the Company; (C) the repurchase, redemption
or retirement of subordinated Indebtedness of the Company or any of its
Subsidiaries in exchange for, by conversion into, or out of the net proceeds
of, a substantially concurrent (x) issue or sale of Capital Stock (other than
Disqualified Stock) of the Company or (y) incurrence of Refinancing
Indebtedness with respect to such subordinated Indebtedness; (D) the purchase
of options or Capital Stock issued to members of management of the Company
pursuant to the terms of their employment agreements upon termination of
employment, death or disability of any such Person in an amount not to exceed
$1,000,000 per annum; and (E) payments to taxing authorities by the Company or
a Subsidiary of the Company on behalf of a holder of Capital Stock of the
Company (or an option to purchase such Capital Stock pursuant to Section 4 of
the Company's [Grant of Stock Award] dated January 29, 1994; provided that each
Restricted Payment described in clauses (A) through (D) (other than subclause
(y) of clause (C)) of this sentence shall be taken into account for purposes of
computing the aggregate amount of all Restricted Payments pursuant to clause
(iii) of the immediately preceding paragraph.
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SECTION 4.08 Corporate Existence.
Subject to Article Five, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
of its Subsidiaries in accordance with the respective organizational documents
of each Subsidiary and the rights (charter and statutory) and material
franchises of the Company and each of its Subsidiaries; provided that the
Company shall not be required to preserve any such right or franchise, or the
corporate existence of any Subsidiary, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and each of its Subsidiaries, taken as a whole,
and that the loss thereof is not, and will not be, adverse in any material
respect to the Holders.
SECTION 4.09 Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges (including any penalties, interest and
additions to taxes) levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any of
its Subsidiaries and (2) all lawful claims for labor, materials and supplies
which, in each case, if unpaid, might by law become a material liability, or
Lien upon the Property, of the Company or any of its Subsidiaries; provided
that, subject to the applicable provisions of the Security Documents, the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and an adequate
reserve has been established therefor to the extent required by GAAP.
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SECTION 4.10 Notice of Defaults.
(1) In the event that any Indebtedness of the Company or
any of its Subsidiaries is declared due and payable before its maturity because
of the occurrence of any default (or any event which, with notice or lapse of
time, or both, would constitute such a default) under such Indebtedness, the
Company shall promptly give written notice to the Trustee of such declaration,
the status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(2) Upon becoming aware of any Default or Event of
Default, the Company shall promptly deliver an Officers' Certificate to the
Trustee specifying the Default or Event of Default.
SECTION 4.11 Maintenance of Properties, Insurance.
(a) Subject to the applicable provisions of the Security
Documents, the Company shall cause all material Properties owned by or leased
to it or any of its Subsidiaries and used or useful in the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept
in normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this Section shall prevent the Company or any of its
Subsidiaries from discontinuing the use, operation or maintenance of any of
such properties (other than Properties constituting items of Collateral except
to the extent permitted by Section 10.03), or disposing of any of them (other
than Properties constituting items of collateral except to the extent permitted
by Section 10.03) if such discontinuance or disposal is, in the reasonable good
faith judgment of the Board of Directors or of the board of directors of any
Subsidiary of the Company concerned, or of an officer (or other agent employed
by the Company or of any of its Subsidiaries) of the
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Company or any of its Subsidiaries having managerial responsibility for any
such Property, desirable in the conduct of the business of the Company or any
Subsidiary of the Company, and if such discontinuance or disposal is not
adverse in any material respect to the Holders.
(b) Subject to the applicable provisions of the Security
Documents, the Company shall maintain, and shall cause its Subsidiaries to
maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers' compensation and
interruption of business insurance. The Company shall provide, and shall cause
its Subsidiaries to provide, an Officers' Certificate as to compliance with the
foregoing requirements to the Trustee prior to the anniversary or renewal date
of each such policy, together with satisfactory evidence of such insurance,
which certificate shall expressly state such expiration date for each policy
listed.
SECTION 4.12 Compliance Certificate.
The Company shall deliver to the Trustee within 100 days after
the close of each fiscal year an Officers' Certificate stating that a review of
the activities of the Company has been made under the supervision of the
signing officers with a view to determining whether a Default or Event of
Default has occurred and whether or not the signers know of any Default or
Event of Default by the Company that occurred during such fiscal quarter or
fiscal year, as the case may be. If they do know of such a Default or Event of
Default, the certificate shall describe all such Defaults or Events of Default,
their status and the action the Company is taking or proposes to take with
respect thereto. The first certificate to be delivered by the Company pursuant
to this Section 4.12 shall be for the fiscal year ending December 1994.
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SECTION 4.13 Reports.
So long as at least 10% of the initial aggregate principal
amount of the Securities are outstanding, whether or not the Company is subject
to Section 13(a) or 15(d) of the Exchange Act, the Company shall file with the
SEC the annual reports, quarterly reports and other documents which the
Company would have been required to file with the SEC pursuant to such Sections
13(a) and 15(d) if the Company were so subject, such documents to be filed with
the SEC on or prior to the respective dates (the "Required Filing Dates") by
which the Company would have been required so to file such documents if the
Company were so subject. The Company shall also in any event (x) within 15
days after each Required Filing Date file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company would have
been required to file with the SEC pursuant to Sections 13(a) and 15(d) of the
Exchange Act if the Company were subject to such Sections and (y) if filing
such documents by the Company with the SEC is not permitted under the Exchange
Act, promptly upon written request supply copies of such documents to any
prospective Holder. The Company shall also comply with the other provisions of
TIA Section 314(a).
SECTION 4.14 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law, which would prohibit or forgive the Company from
paying all or any portion of the principal of and/or interest on the Securities
as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law, and covenants that it shall
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
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SECTION 4.15 Repurchase of Securities upon Change of Control.
(c) Upon the occurrence of a Change of Control, each
Holder of the Securities shall have the right (the "Repurchase Right"), at such
Holder's option, to require the Company to repurchase all or any part of such
Holder's Securities on a date specified in the notice referred to below (the
"Repurchase Date") that is the same date as the equivalent repurchase date
under the Note Indenture and is no later than 60 days after notice of the
Change of Control, at 101% of the Accreted Value thereof at the Repurchase
Date, if repurchased prior to August 1, 1997, and of the principal amount
thereof, plus accrued interest to the Repurchase Date if repurchased
thereafter.
(d) On or before the thirtieth day after the Change of
Control, the Company shall deliver, or cause to be delivered, by first-class
mail, to all holders of record of such Securities and the Trustee (or the
Trustee, in the name and at the expense of the Company, shall deliver) a notice
regarding the Change of Control and the Repurchase Right. Each such notice
shall state
(i) the Repurchase Date;
(ii) the date by which the Repurchase Right must be
exercised;
(iii) the price (including the amount of accrued interest,
if any) for such Securities; and
(iv) the procedure which the Holder of Securities must
follow to exercise the Repurchase Right.
Substantially simultaneously with mailing of the notice, the
Company shall cause a copy of such notice to be published in a newspaper of
general circulation in the Borough of Manhattan, The City of New York.
(e) To exercise the Repurchase Right, the Holder of a
Security must deliver at least ten days prior to the Repurchase
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Date written notice to the Company (or any agent designated by the Company for
such purpose) of such Holder's exercise of the Repurchase Right, together with
the Security with respect to which such Repurchase Right is being exercised,
duly endorsed for transfer; provided that, if mandated by applicable tender
offer rules and regulations, a Holder may be permitted to deliver such written
notice nearer to the Repurchase Date, as may be specified by the Company.
(f) In the event a Repurchase Right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid the
price payable with respect to the Securities as to which the Repurchase Right
has been exercised in cash to the Holder of such 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 Company 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.
(g) The Company shall 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 the
Repurchase Right as a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this Section 4.15, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 4.15 by virtue thereof.
(h) No repurchase of Securities under this Section 4.15
shall occur until the Trustee shall have received, prior to the Repurchase
Date, an Officers' Certificate and an Opinion of Counsel as to (i) the
Company's compliance with this Section 4.15 and (ii) the fulfillment of all
conditions precedent to such repurchase.
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SECTION 4.16 Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any Subsidiary of
the Company to, enter into any sale and leaseback transaction with respect to
any Property (whether now owned or hereafter acquired) unless (i) (a) the
Property that is subject of such sale and leaseback transaction does not
constitute Collateral and (b) the sale or transfer of the Property to be leased
complies with the requirements of Section 4.06 and (ii) the Company or such
Subsidiary would be entitled under Section 4.04 to incur any Capitalized Lease
Obligations in respect of such sale and leaseback transaction.
SECTION 4.17 Limitation 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 (i) (a) pay dividends or make any
other distributions on its Capital Stock, or any other interest or
participation in or measured by its profits, owned by the Company or any other
Subsidiary of the Company, or (b) pay any Indebtedness owed to the Company or
any other Subsidiary of the Company, (ii) make loans or advances to the Company
or a Subsidiary of the Company or (iii) transfer any of its properties or
assets to the Company or any other Subsidiary of the Company, except for
Permitted Liens and such other encumbrances or restrictions existing under or
by reason of (a) any restrictions, with respect to a Subsidiary that is not a
Subsidiary of the Company on the Issue Date, under any agreement in existence
at the time such Subsidiary becomes a Subsidiary of the Company (unless such
agreement was entered into in connection with, or in contemplation of, such
entity becoming a Subsidiary of the Company on or after the Issue Date), (b)
any restrictions under any agreement evidencing any Acquired Indebtedness of a
Subsidiary of the Company incurred pursuant to the provisions of Section 4.04;
provided that such restrictions shall not restrict or encumber any assets of
the Company or its Subsidiaries other than such
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Subsidiary, (c) terms relating to the nonassignability of any operating lease,
(d) any restrictions under the Working Capital Facility, (e) any encumbrance or
restriction existing under any agreement that refinances or replaces the
agreements containing restrictions described in clauses (a) through (d);
provided that the terms and conditions of any such restrictions are not
materially less favorable to the Holders of the Securities than those under the
agreement so refinanced or replaced, or (f) any encumbrance or restriction due
to applicable law.
SECTION 4.18 Limitation on Actions Affecting Security.
The Company shall not, and shall not permit any Subsidiary of
the Company to, take or omit to take any action, which action or omission would
have the result of materially adversely affecting or impairing the Liens and
security interests in the Collateral in favor of the Collateral Agent on behalf
of the Holders of the Securities and the other secured parties thereunder, nor
shall the Company or any such Subsidiary grant any interest whatsoever in the
Collateral except as expressly permitted by this Indenture and the Security
Documents.
SECTION 4.19 Inspection and Confidentiality.
(a) The Company shall, and shall cause each of its
Subsidiaries to, permit authorized representatives of the Trustee and the
Collateral Agent to visit and inspect the properties of the Company and its
Subsidiaries, and any or all books, records and documents in the possession of
the Company relating to the Collateral, and to make copies and take extracts
therefrom and to visit and inspect the Collateral, all upon reasonable prior
notice and at such reasonable times during normal business hours and as often
as may be reasonably requested.
(b) The Trustee and the Collateral Agent and their
respective authorized representatives referred to in Section 4.19(a) agree not
to use any information obtained pursuant to this Section 4.19 for any unlawful
purpose and, prior to the occurrence of an Event of Default, to keep
confidential any
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proprietary information identified to the Trustee, the Collateral Agent or such
representative (as applicable) as proprietary information and not to disclose
any such proprietary information to any Person except that (i) the recipient of
the information may disclose any information that becomes publicly available
other than as a result of disclosure by such recipient, (ii) the recipient of
the information may disclose any information that its counsel reasonably
concludes is necessary to be disclosed by law, pursuant to any court or
administrative order or ruling or in any pending legal or administrative
proceeding or investigation after prior written notice, reasonable under the
circumstances, to the Company, and (iii) the recipient of the information may
disclose any information necessary to be disclosed pursuant to any provision of
the TIA.
SECTION 4.20 Limitations on Investments, Loans and Advances.
The Company will not make and will not permit any of its
Subsidiaries to make any Investments in any Person, except (i) Investments by
the Company in or to any Subsidiary (or an entity which, following and as a
result of such Investment, becomes a Subsidiary of the Company) and Investments
in or to the Company or a Subsidiary (or an entity which, following and as a
result of such Investment, becomes a Subsidiary of the Company) by any
Subsidiary, (ii) Investments represented by accounts receivable created or
acquired in the ordinary course of business, (iii) advances to employees,
officers and directors in the ordinary course of business, (iv) Investments
under or pursuant to Interest Protection Agreements, (v) Permitted Investments,
(vi) Restricted Investments made pursuant to Section 4.07 hereof, (vii)
Investments in Wabush and (viii) other Investments in Persons other than
Subsidiaries or Affiliates of the Company or any of the Company's Subsidiaries
not to exceed $10,000,000 at any one time outstanding. For purposes of
calculating the amount of any outstanding Investment pursuant to clause
(viii), any return of capital or repayment of a loan or advance constituting
all or a portion of the original amount of the Investment shall be deducted.
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SECTION 4.21 Additional Guarantors.
If the Company or any of its Subsidiaries transfers or causes
to be transferred, in one or a series of related transactions, any Property
having a book value in excess of $500,000 to any Subsidiary that is not a
Guarantor, or if the Company or any of its Subsidiaries shall organize, acquire
or otherwise invest in another Subsidiary having total assets with a book value
in excess of $500,000, then such transferee or acquired or other Subsidiary
shall (i) execute and deliver to the Trustee a supplemental indenture in form
reasonably satisfactory to the Trustee pursuant to which such Subsidiary shall
unconditionally guarantee all of the Company's obligations under the Securities
and the Indenture on the terms set forth in the Indenture and (ii) deliver to
the Trustee an Opinion of Counsel that such supplemental indenture has been
duly authorized, executed and delivered by such Subsidiary and constitutes the
legal, valid, binding and enforceable obligation of such Subsidiary.
Thereafter, such Subsidiary shall be a Guarantor for all purposes hereof.
ARTICLE V.
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01 Restriction on Mergers and Consolidations and Sales of Assets.
The Company shall not consolidate or merge with or into any
Person, and the Company will not, and will not permit any of its Subsidiaries
to, sell, lease, convey or otherwise dispose of all or substantially all of the
Company's consolidated assets (as an entirety or substantially an entirety in
one transaction or a series of related transactions, including by way of
liquidation or dissolution) to, any Person unless, in each such case:
(i) 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
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organized and existing under the laws of the United States, any state
thereof or the District of Columbia;
(ii) the Surviving Entity assumes by supplemental
indenture all of the obligations of the Company on the Securities and
under this Indenture and the Security Documents;
(iii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
(iv) immediately after giving effect to such transaction
and the use of any net proceeds therefrom on a pro forma basis, the
Consolidated Tangible Net Worth of the Company or the Surviving
Entity, as the case may be, would be at least equal to the
Consolidated Tangible Net Worth of the Company immediately prior to
such transaction; and
(v) immediately after giving effect to such transaction
and the use of any net proceeds therefrom on a pro forma basis, the
Company or the Surviving Entity, as the case may be, could incur at
least $1.00 of Indebtedness (other than Permitted Indebtedness)
pursuant to the first paragraph of Section 4.04.
SECTION 5.02 Successor Corporation Substituted.
Upon any conveyance, lease or transfer in accordance with
Section 5.01, the surviving Person to which such conveyance, lease or transfer
is made will succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
surviving Person had been named as the Company herein and thereafter the
predecessor corporation will be relieved of all further obligations and
covenants under this Indenture, the Securities and the Security Documents to
which it was a party or bound.
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ARTICLE VI.
DEFAULT AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs if:
(i) the Company fails to pay interest on any Securities
when the same becomes due and payable and such failure continues for a
period of 30 days;
(ii) the Company fails to pay the principal of or premium
on any Securities when the same becomes due and payable whether at
maturity, upon acceleration, redemption or otherwise;
(iii) any Guarantee ceases to be in full force and effect
or is declared to be null and void and unenforceable or is found to be
invalid or any Guarantor denies its liability under its Guarantee
(other than by reason of release of a Guarantor in accordance with the
terms hereof);
(iv) the Company or any Guarantor fails to observe or
perform any other covenant in this Indenture or in any of the Security
Documents for 60 days after notice from the Trustee, the Collateral
Agent or the holders of 25% in principal amount of the Securities
outstanding (except in the case of a default with respect to Section
4.15 and Section 5.01, which will constitute Events of Default with
such notice but without passage of time);
(v) the Company or any of its Subsidiaries fails to make
any payment when due (after giving effect to any applicable grace
period) under the Senior Secured Notes or any other Indebtedness in
excess of $5 million which is not subordinated to the Securities
(including, without limitation, Indebtedness under the Working Capital
Facility);
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(vi) the Company or any of its Subsidiaries fails to
perform any term, covenant, condition or provision of the Senior
Secured Notes or any other Indebtedness in excess of $5 million
individually or $10 million in the aggregate, which failure results in
the acceleration of the maturity of such Indebtedness;
(vii) a final judgment or judgments for the payment of
money not fully covered by insurance, which judgments exceed
$5 million individually or $10 million in the aggregate, is entered
against the Company or any of its Subsidiaries and is not satisfied,
stayed, annulled or rescinded within 60 days of being entered;
(viii) any Person, after the occurrence of an event of
default under any instrument evidencing Indebtedness secured by
Collateral, shall commence judicial proceedings to foreclose any
material portion of the Collateral or shall exercise any legal or
contractual right to the ownership of any material portion of the
Collateral in lieu of foreclosure;
(ix) the Company or any Guarantor pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors; or
(x) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
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(A) is for relief against the Company or any
Guarantor in an involuntary case or proceeding,
(B) appoints a Custodian of the Company or any
Guarantor or for all or substantially all of its property, or
(C) orders the liquidation of the Company or any
Guarantor,
and in each case the order or decree remains unstayed and in effect
for 30 days; provided that if the entry of such order or decree is
appealed and dismissed on appeal then the Event of Default hereunder
by reason of the entry of such order or decree shall be deemed to have
been cured.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
The Trustee shall, within 90 days after the occurrence of any
Default known to it, give to the holders of Securities 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 Securities, 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 Securities.
SECTION 6.02 Acceleration.
In case an Event of Default (other than an Event of Default
described in clause (ix) or (x) of Section 6.01 above with respect to the
Company and any Significant Subsidiaries) shall occur and be continuing, the
Trustee or the holders of at least 25% in aggregate principal amount of the
Securities then outstanding, by notice in writing to the Company (and to the
Trustee if given by the holders of Securities), may declare, prior to August 1,
1997
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the Accreted Value and thereafter all unpaid principal and accrued interest on
the Securities then outstanding to be due and payable immediately. Any such
declaration with respect to the Securities may be annulled by the Holders of
not less than a majority in principal amount of the outstanding Securities in
accordance with Section 6.04.
If an Event of Default specified in clause (ix) or (x) of
Section 6.01 occurs with respect to the Company or any Significant Subsidiary
and is continuing, then, prior to August 1, 1997 the Accreted Value and
thereafter all unpaid principal of, premium, if any, and accrued interest on
the outstanding Securities shall ipso facto become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder
thereof.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities, this Indenture or the Security
Documents.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy maturing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
Each Securityholder, by accepting a Security, acknowledges
that the exercise of remedies by the Trustee with respect to the Collateral is
subject to the terms and conditions of the Security Documents and the proceeds
received upon realization of the Collateral shall be applied by the Trustee in
accordance with Section 6.10 hereof.
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SECTION 6.04 Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of not
less than a majority in aggregate principal amount of the outstanding
Securities by written notice to the Trustee may waive an existing Default or
Event of Default and its consequences, except, unless theretofore cured, a
Default in the payment of principal of or interest on any Security as specified
in clauses (i) and (ii) of Section 6.01. The Company shall deliver to the
Trustee an Officers' Certificate stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of such consents.
When a Default or Event of Default is so waived, it is cured.
SECTION 6.05 Control by Majority.
Subject to Section 2.09, the Holders of not less than a
majority in principal amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction. In the event the Trustee takes any
action or follows any direction pursuant to this Indenture, the Trustee shall
be entitled to indemnification satisfactory to it in its sole discretion
against any loss or expense caused by taking such action or following such
direction.
SECTION 6.06 Limitation on Suits.
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
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(2) the Holders of at least 25% in principal amount of
the outstanding Securities make a written request to the Trustee to
pursue a remedy;
(3) such Holder or Holders offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(5) during such 60-day period the Holders of a majority
in principal amount of the outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
such other Securityholder.
SECTION 6.07 Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of and interest on 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
except to the extent that the institution or prosecution of such suit or entry
of judgment therein would, under applicable law, result in the surrender,
impairment or waiver of the Lien of this Indenture and the Security Documents
upon the Collateral.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default in payment of interest or principal
specified in Section 6.01(i) or (ii) occurs and is continuing, the Trustee may
recover judgment in its own name and as
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trustee of an express trust against the Company or any other obligor on the
Securities for the whole amount of principal and accrued interest remaining
unpaid, together with interest overdue on principal and to the extent that
payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the Securities and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Securities), its creditors or its property and shall
be entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
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SECTION 6.10 Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 shall not apply to a suit by the Trustee, a suit
by Holders of more than 10% in aggregate principal amount of the outstanding
Securities, or to any suit instituted by any Holder for the enforcement or the
payment of the principal or interest on any Securities on or after the
respective due dates expressed in the Security.
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SECTION 6.12 Trustee Election Not to Foreclose.
Notwithstanding anything to the contrary contained in this
Indenture, or any of the Security Documents, in the event the Trustee is
entitled or required to commence an action to foreclose the Mortgage or
otherwise exercise its remedies to acquire control or possession of the
Mortgaged Property (as defined therein), the Trustee shall not be required to
commence any such action or exercise any such remedy if the Trustee has
determined in good faith that the Trustee may incur liability under the
Environmental Laws as the result of the presence at, or release on or from, the
Facility of any Hazardous Materials unless the Trustee has received security or
indemnity, from a Holder or Holders, in an amount and in a form all
satisfactory to the Trustee in its sole discretion, protecting the Trustee from
all such liability.
ARTICLE VII.
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default actually known to the Trustee
has occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs. Subject to such
provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under this Indenture at the request of any of the holders of
Securities, unless they shall have offered to the Trustee security and
indemnity satisfactory to it.
(b) Except during the continuance of an Event of Default
actually known to the Trustee:
(1) The Trustee need perform only those duties as are
specifically set forth herein and no others and no implied
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covenants or obligations shall be read into this Indenture against the
Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions and such other documents delivered to it pursuant to Section
12.04 hereof furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine
the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section 7.01.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or to take or omit
to take any action under this Indenture or take any action at the request or
direction of Holders if it shall have reasonable grounds for believing that
repayment of such funds is not assured to it or it does not receive an
indemnity satisfactory to it in its sole discretion against such risk,
liability, loss, fee or expense (including, without limitation, liability
relating in any way to Environmental Laws and/or
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Hazardous Materials) which might be incurred by it in compliance with such
request or direction.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this
Section 7.01.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) The Trustee shall not be responsible in any way for
monitoring or managing the Company's policies, practices, or compliance with
Environmental Laws or Hazardous Materials relating to the Mortgaged Property.
SECTION 7.02 Rights of Trustee.
Subject to Section 7.01:
(h) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in
the document.
(i) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate and an Opinion of Counsel, which
shall conform to the provisions of Section 12.05. The Trustee shall
not be liable for any action it takes or omits to take in good faith
in reliance on such certificate or opinion.
(j) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any
agent (other than an agent who is an employee of the Trustee)
appointed with due care.
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(k) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it reasonably believes to
be authorized or within its rights or powers.
(l) The Trustee may consult with counsel and the advice
or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(m) Subject to Section 9.02 hereof, the Trustee may (but
shall not be obligated to), without the consent of the Holders, give
any consent, waiver or approval required under the Security Documents
or by the terms hereof with respect to the Collateral, but shall not
without the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding
(i) give any consent, waiver or approval or (ii) agree to any
amendment or modification of the Security Documents, in each case,
that shall have a material adverse effect on the interests of any
Holder. The Trustee shall be entitled to request and conclusively
rely on an Opinion of Counsel with respect to whether any consent,
waiver, approval, amendment or modification shall have a material
adverse effect on the interests of any Holder.
SECTION 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the value or condition of the Collateral or
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any part thereof, or as to the title of the Company thereto, or as to the
security afforded thereby or hereby, or as to the validity or genuineness of
any Collateral pledged and deposited with the Trustee, or as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Indenture or any document
issued in connection with the sale of Securities or any statement in the
Securities other than the Trustee's certificate of authentication. The Trustee
makes no representations with respect to the effectiveness or adequacy of this
Indenture or the Security Documents, or the validity or perfection, if any, of
Liens granted under this Indenture or the Security Documents. The Trustee
shall not be responsible for independently ascertaining or maintaining such
validity or perfection, if any, and shall be fully protected in relying upon
certificates and opinions delivered to it in accordance with the terms of this
Indenture or the Security Documents.
SECTION 7.05 Notice of Defaults.
If a Default or an Event of Default occurs and is continuing
and the Trustee receives actual notice of such event, the Trustee shall mail to
each Securityholder notice of the Default or Event of Default within 90 days
after receipt of such notice. Except in the case of a Default or an Event of
Default in payment of principal of or interest on any Security, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interest of
Securityholders.
SECTION 7.06 Reports by Trustee to Holders.
If required by TIA Section 313(a) within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b), (c) and (d).
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A copy of each such report at the time of its mailing to
Securityholders shall be filed with the SEC and each securities exchange, if
any, on which the Securities are listed.
The Company shall promptly notify the Trustee in writing if
the Securities become listed on any securities exchange or of any delisting
thereof.
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services rendered hereunder and under the
Security Documents. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable disbursements, expenses and
advances (including fees and expenses of counsel) incurred or made by it in
addition to the compensation for its services, except any such disbursements,
expenses and advances as may be attributable to the Trustee's negligence or bad
faith. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents, accountants, experts and counsel and any
taxes or other expenses incurred by a trust created pursuant to Section 8.01
hereof.
The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability incurred by the Trustee without
negligence or bad faith on its part in connection with the administration of
this trust and its duties under this Indenture and the Security Documents,
including the reasonable expenses and attorneys' fees of defending itself
against any claim of liability arising hereunder. Without limiting the
foregoing sentence in any way, the Company shall also indemnify the Trustee
for, and hold it harmless against, any loss or liability incurred by the
Trustee (including reasonable attorneys' and consultants' fees and court costs)
arising from or relating to any Environmental Laws or Hazardous Materials
concerning the Mortgaged Property (as defined in the Mortgage) or any breach or
alleged breach by the Company of any representation, warranty or covenant in
the Mortgage, provided
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such is not due to the Trustee's willful violation of any Environmental Laws.
The Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. However, the failure by the Trustee
to so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall cooperate
in the defense (and may employ its own counsel) at the Company's expense. The
Company need not pay for any settlement made without its written consent, which
consent shall not be unreasonably withheld. The Company need not reimburse any
expense or indemnify against any loss or liability incurred by the Trustee as a
result of the violation of this Indenture by the Trustee if such violation
arose from the Trustee's negligence or bad faith.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a senior claim prior to the Securities against all
money or property held or collected by the Trustee, in its capacity as Trustee,
except money or property held in trust to pay principal of or interest on
particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in clause (viii) or (ix) of Section 6.01 occurs, the
expenses (including the reasonable fees and expenses of its agents and counsel)
and the compensation for the services shall be preferred over the status of the
Holders in a proceeding under any Bankruptcy Law and are intended to constitute
expenses of administration under any Bankruptcy Law. The Company's obligations
under this Section 7.07 and any claim arising hereunder shall survive the
resignation or removal of any Trustee, the discharge of the Company's
obligations pursuant to Article Eight and any rejection or termination under
any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
(n) The Trustee may resign at any time by so notifying
the Company in writing. The Holders of a majority in principal amount of the
outstanding Securities may remove the Trustee by so notifying the Trustee in
writing and may appoint a successor
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Trustee with the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall transfer, after payment of all sums then owing
to the Trustee pursuant to Section 7.07, all property held by it as Trustee to
the successor Trustee, subject to the senior claim provided in Section 7.07,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession
to each Securityholder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
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If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
(o) If the Trustee, at the time of any resignation,
removal or disqualification:
(i) is also then acting as the Note Trustee and is
simultaneously resigning or otherwise ceasing to act as Note Trustee
under the Note Indenture; and
(ii) is also then acting as Collateral Agent and is
simultaneously resigning or otherwise ceasing to act as Collateral
Agent
then, any appointment of a successor Trustee pursuant to the
terms hereof who is simultaneously appointed successor Note Trustee
pursuant to the terms of the Note Indenture shall automatically and
without further action on the part of the holders of the Securities be
appointed as Collateral Agent under each of the Security Documents.
(c) Notwithstanding replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee (and successor Collateral Agent, if then so acting, under the
Security Documents).
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SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The Trustee shall
have a combined capital and surplus of at least $100,000,000 as set forth in
its most recent published annual report of condition. If the Trustee has or
shall acquire any "conflicting interest" within the meaning of TIA Section
310(b), the Trustee and the Company shall comply with the provisions of TIA
Section 310(b). If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article Seven.
SECTION 7.11 Preferential Collection of Claims
Against Company.
The Trustee, in its capacity as Trustee hereunder and in its
capacity as Collateral Agent under the Security Documents, shall comply with
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
SECTION 7.12 Appointment of Co-Trustee.
If the Trustee deems it necessary or desirable in connection
with the Collateral and/or the enforcement of the Security Documents, the
Trustee may appoint a co-Trustee with such powers of the Trustee as may be
designated by the Trustee at the time of such appointment, and the Company
shall, on request, execute and deliver to such co-Trustee any deeds,
conveyances or other instruments required by such co-Trustee so appointed by
the Trustee to more fully and certainly vest in and confirm to such co-Trustee
its rights, powers, trusts, duties and obligations hereunder.
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ARTICLE VIII.
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01 Satisfaction and Discharge.
This Indenture shall cease to be of further effect (except as
to surviving rights of registration of transfer or exchange of the Securities,
as expressly provided for in Section 2.06, and except as to Section 7.07) as to
all outstanding Securities when (i) either (a) all such Securities theretofore
authenticated and delivered (except (1) lost, destroyed or wrongfully taken
Securities which have been replaced or paid as provided in Section 2.07 and (2)
Securities for whose payment money has theretofore been deposited with the
Trustee or any Paying Agent and thereafter repaid to the Company as provided in
Section 8.04) have been delivered to the Trustee for cancellation or (b) all
such Securities not theretofore delivered to the Trustee for cancellation
either have become due and payable, will become due and payable at their Stated
Maturity within one year or are redeemable at the option of the Company and are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name
and at the expense of the Company, and, in any event, the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire indebtedness for principal
of, premium, if any and interest to the date of such deposit (in the case of
Securities that have become due and payable) or to the Maturity Date or
redemption date, as the case may be, on the Securities not theretofore
delivered to the Trustee for cancellation; (ii) the Company has paid or caused
to be paid all other sums payable under this Indenture by the Company; and
(iii) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating that (A) all conditions precedent under this
Indenture relating to the satisfaction and discharge of this Indenture have
been complied with and (B) such satisfaction and discharge will not result in a
breach or violation of, or constitute a default under, this
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Indenture or any other material agreement or instrument to which the Company is
a party or by which it is bound.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
Notwithstanding the satisfaction and discharge of this
Indenture, if money shall have been deposited with the Trustee pursuant to
subclause (b) of clause (i) of the first paragraph of this Section 8.01, the
obligations of the Trustee under Sections 8.03 and 8.04 shall survive.
SECTION 8.02 Defeasance and Covenant Defeasance.
(a) The Company may, at its option and at any time, elect
to have the obligations of the Company discharged with respect to the
outstanding Securities (a "defeasance") by fulfilling the applicable conditions
of Section 8.02(b). Such defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Securities, and to have satisfied all its other obligations under such
Securities, this Indenture and the Security Documents (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive unless otherwise terminated
or discharged hereunder: (i) the rights of Holders of outstanding Securities
to receive, solely from the trust fund described in Sections 8.02(b) and 8.03,
payments in respect of the principal of, premium, if any, and interest on such
Securities when such payments are due, (ii) the Company's obligations with
respect to the Securities concerning issuing temporary Securities (Section
2.10), registration of transfer or exchange of Securities (Section 2.06),
mutilated, destroyed, lost or stolen Securities (Section 2.07) and the
maintenance of an office or agency for payment (Section 4.02) and money for
security payments held in trust (Section 2.04), (iii) the rights, powers,
trusts, duties and immunities of the Trustee set
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forth in Article Seven and (iv) the defeasance provisions this Article Eight.
In addition, the Company may, at its option and at any time, elect to have the
obligations of the Company released with respect to any covenants contained in
Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19,
4.20, 4.21 and 5.01 (a "covenant defeasance") by fulfilling the applicable
provisions of Section 8.02(b) and such Securities shall thereafter be deemed
not to be outstanding for the purposes of any direction, waiver, consent,
declaration or any other act or action of the Holders (and the consequences of
any thereof) taken or to be taken in connection with any of such covenants, but
shall continue to be deemed outstanding for all other purposes hereunder. For
this purpose such covenant defeasance means with respect to such outstanding
Securities that the Company may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such Section
or by reason of reference in any such Section to any other provision herein or
in any other document, and such omission to comply with any such term,
condition or limitation shall not constitute a Default or an Event of Default
with respect to the Securities. In the event covenant defeasance occurs, the
events described in clauses (iii) (as it applies to the covenants listed in the
foregoing sentence), (v), (vi) and (vii) of Section 6.01 shall no longer
constitute Events of Default with respect to the Securities. Except as
specified above, the remainder of this Indenture and such Securities shall be
unaffected by such covenant defeasance.
(b) The following shall be the conditions to application
of this Section 8.02:
(i) the Company shall have deposited or caused to be
deposited irrevocably with the Trustee as trust funds, in trust for
the benefit of the Holders of the Securities, cash in U.S. dollars,
United States Government Obligations, or a combination thereof, in an
amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay the principal of and interest
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on the outstanding Securities on the Stated Maturity of such principal
or installment of principal or interest;
(ii) in the case of defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the
date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance
had not occurred;
(iii) in the case of covenant defeasance, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United
States to the effect that the Holders of the outstanding Securities
will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance
had not occurred;
(iv) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or, insofar as clauses
(viii) and (ix) of Section 6.01 are concerned, at any time during the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);
(v) such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under,
this Indenture or any other material agreement or instrument to which
the Company is a party or by which it is bound;
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(vi) in the case of defeasance or covenant defeasance, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Securities over
the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others;
and
(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance or
the covenant defeasance, as the case may be, have been complied with.
(c) Notwithstanding defeasance or covenant defeasance in
accordance with this Section 8.02, the obligations of the Trustee under
Sections 8.03 and 8.04 shall survive.
SECTION 8.03 Application of Trust Money.
Subject to Section 8.04, the Trustee shall hold in trust all
money or United States Government Obligations deposited with it pursuant to
Sections 8.01 or 8.02, and shall apply the deposited money and the money from
United States Government Obligations in accordance with this Indenture to the
payment of principal of and interest on the Securities.
SECTION 8.04 Repayment to Company.
Subject to Sections 7.07, 8.01 and 8.02, the Trustee
shall promptly pay to the Company upon written request any excess
money and/or United States Government Obligations held by it at any
time. The Trustee shall pay to the Company upon written request
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any money held by it for the payment of principal, premium or interest
that remains unclaimed for two years; provided that the Trustee before being
required to make any payment may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each Holder entitled to such money notice that such money remains
unclaimed and that, after a date specified therein which shall be at least 30
days from the date of such publication or mailing, any unclaimed balance of
such money then remaining shall be repaid to the Company. After payment to the
Company, Securityholders entitled to money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person and all liability of the Trustee or Paying Agent with respect to
such money shall thereupon cease.
SECTION 8.05 Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Sections 8.01 or 8.02 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Sections 8.01 or 8.02 until such time as the Trustee is permitted to apply all
such money or United States Government Obligations in accordance with Sections
8.01 or 8.02; provided that if the Company has made any payment of interest on
or principal of any Securities because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or United States Government Obligations
held by the Trustee.
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ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01 Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the
Trustee or the Collateral Agent, as applicable, may amend or supplement this
Indenture, the Security Documents or the Securities without notice to or
consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to give effect to the release of any Released
Interests or any other item of Collateral or of any Lien, in each case
pursuant to this Indenture and the Collateral Agency Agreement;
(3) to evidence the succession of another Person to the
Company or any Subsidiary of the Company and the assumption by any
such successor of the covenants of the Company or such Subsidiary, as
the case may be;
(4) to evidence the release and discharge of the
obligations of any Subsidiary of the Company the Capital Stock of
which has been sold or otherwise disposed of in accordance with the
applicable provisions of this Indenture; or
(5) to make any change that does not have a material
adverse effect on the rights of any Securityholder.
SECTION 9.02 With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a
Board Resolution, and the Trustee or the Collateral Agent, as applicable, may
amend or supplement this Indenture, the Security Documents or the Securities
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities. Subject to Section 6.07, the Holders of
not less than
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a majority in principal amount of the outstanding Securities may waive
compliance by the Company with any provision of this Indenture, the Security
Documents or the Securities. However, without the consent of each
Securityholder affected thereby, an amendment, supplement or waiver, including
a waiver pursuant to Section 6.04, may not:
(i) reduce the rate, or change the time or place for
payment, of interest on any Security, or reduce any amount payable on
the redemption thereof or upon a Change of Control;
(ii) reduce the principal, or change the fixed maturity or
place of payment, of any Security;
(iii) change the currency of payment of principal of or
interest on any Security;
(iv) impair the right to institute suit for the enforcement
of any payment on or with respect to any Security;
(v) reduce the principal amount of outstanding Securities
necessary to modify or amend this Indenture or any Security Document;
(vi) modify any of the provisions of Section 4.15;
(vii) subject to clauses (2), (4) and (5) of Section 9.01,
affect adversely the ranking or security of the Securities; or
(viii) modify any of the foregoing provisions or reduce the
principal amount of outstanding Securities necessary to waive any
covenant or past Default.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of that Security or portion of that Security that evidences
the same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security. However, except as provided in the
succeeding paragraph, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security. Such revocation shall be
effective only if the Trustee receives written notice of such revocation before
the date the amendment, supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last two sentences of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke by written notice received by the
Trustee any consent previously given, whether or not such Persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date, unless the relevant amendment,
supplement or waiver to which such consent relates has become effective, in
which event such Persons
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who were Holders at such record date shall no longer be entitled to revoke any
consent previously given and such consent shall continue to be valid and
effective.
After an amendment, supplement or waiver becomes effective, it
shall form a part of this Indenture for all purposes and bind every
Securityholder, unless it makes a change described in any of clauses (i)
through (viii) of Section 9.02. In that case, the amendment, supplement or
waiver shall form a part of this Indenture for all purposes and bind each
Holder of a Security who has consented to it and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the
consenting Holder's Security.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment, supplement
or waiver.
SECTION 9.06 Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver, constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions).
The Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or
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otherwise. In signing any amendment, supplement or waiver, the Trustee shall
be entitled to receive an indemnity satisfactory to it in its sole discretion.
ARTICLE X.
COLLATERAL AND SECURITY
SECTION 10.01 Collateral and Security Documents.
(a) In order to secure the due and punctual payment of
the principal of and interest on the Securities, the Senior Secured Notes and,
under certain circumstances, Permitted Replacement Financing when and as the
same shall be due and payable, whether on an Interest Payment Date, at
maturity, by acceleration, purchase, repurchase, redemption or otherwise, and
interest on the overdue principal of and interest (to the extent permitted by
law), if any, on the Securities, the Senior Secured Notes and, under certain
circumstances, Permitted Replacement Financing and the performance of all other
obligations of the Company and the Guarantors to the Holders or the Trustee
under this Indenture and the Securities, the holders of the Senior Secured
Notes or the Note Trustee under the Note Indenture and the Senior Secured Notes
or, under certain circumstances, the Permitted Additional Lenders under the
documents governing the Permitted Replacement Financing, the Company, Acme
Steel, Acme Packaging, the Collateral Agent, the Trustee and the Note Trustee
have simultaneously with the execution of this Indenture entered into the
Collateral Agency Agreement and the Collateral Agent, the Company, Acme Steel
and/or Acme Packaging have entered into the other Security Documents to which
they are a party pursuant to which the Company, Acme Steel and Acme Packaging
have granted to the Collateral Agent for the benefit of the Secured Parties a
first priority Lien on and security interest in the Collateral. The Trustee
and the Company hereby agree that the Collateral Agent holds the Collateral in
trust for the benefit of the Secured Parties pursuant to the terms of the
Security Documents.
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(b) The Trustee is authorized and directed to enter into
the Collateral Agency Agreement and the Collateral Agent is authorized and
directed to enter into the Security Documents. In the event that pursuant to
clause (xi)(b) of the definition of "Permitted Liens" the Company shall elect
to grant additional Liens on assets that comprise Collateral to secure
Permitted Replacement Financing, the Trustee and the Collateral Agent are
authorized and directed to execute and deliver a supplement to the Collateral
Agency Agreement as contemplated therein. In addition, in the event of any
Permitted Bank Refinancing (as defined in the Intercreditor Agreement) the
Collateral Agent is authorized to execute and deliver a supplement to the
Intercreditor Agreement as contemplated therein. Each Securityholder, by
accepting a Security, agrees to all of the terms and provisions of the Security
Documents, as the same may be amended from time to time pursuant to the
provisions of the Security Documents and this Indenture.
SECTION 10.02 Opinions of Counsel; TIA Requirements.
(c) Promptly after the execution and delivery of this
Indenture, the Company shall deliver the opinion(s) required by Section 3.14(b)
of the TIA and Section 5.8(b) of the Collateral Agency Agreement to the Trustee
and the Collateral Agent. In addition, the Company shall furnish to the
Collateral Agent and the Trustee on April 1 in each year, beginning with April
1, 1995, an Opinion of Counsel, dated as of such date, either (i)(A) stating
that, in the opinion of such counsel, action has been taken with respect to the
recording, filing, re-recording and refiling of all supplemental indentures,
financing statements, continuation statements and other documents as is
necessary to maintain the Lien of the Security Documents and reciting with
respect to such Liens on the Collateral the details of such action or referring
to prior Opinions of Counsel in which such details are given, and (B) stating
that, based on relevant laws as in effect on the date of such Opinion of
Counsel, all financing statements, continuation statements and other documents
have been executed and filed that are necessary as of such date and during the
succeeding 24 months fully to maintain the security interest of the Collateral
Agent, the Securityholders and the Trustee hereunder and under the
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Security Documents with respect to the Collateral, or (ii) stating that, in the
opinion of such counsel, no such action is necessary to maintain such Lien.
(d) The release of any Collateral from the terms of the
Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the Security Documents. To the extent
applicable, the Company shall cause TIA Section 314(d) relating to the release
of property from the Lien of the Security Documents and relating to the
substitution therefor of any property to be subjected to the Lien of the
Security Documents to be complied with. Any certificate or opinion required by
TIA Section 314(d) may be made by an Officer of the Company, except in cases
where TIA Section 314(d) requires that such certificate or opinion be made by
an independent Person, which Person shall be an independent engineer, appraiser
or other expert selected or approved by the Trustee in the exercise of
reasonable care.
SECTION 10.03 Disposition of Collateral Without Release.
So long as no Default or Event of Default shall have occurred
and be continuing and subject to the requirements of Section 314 of the TIA,
the Company or any subsidiary may, without any release or consent by the
Collateral Agent or the Trustee, sell or otherwise dispose of any machinery,
equipment, furniture, apparatus, tools or implements or other similar property
which is subject to the Lien of the Security Documents, which (i) in any single
transaction has a fair market value of $25,000 or less or (ii) shall have
become worn out, obsolete or otherwise in need of replacement or repair;
provided that, in the case of this clause (ii) such sale or other disposition
is in conjunction with a substantially concurrent transaction whereby
additional personal property is made subject to the Lien of the Security
Documents and the Property so sold pursuant to (i) and (ii) above shall be
conclusively free and clear of the Lien of the Security Documents without
further action by the Collateral Agent.
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SECTION 10.04 Authorization of Actions To Be
Taken by the Collateral Agent
Under the Security Documents.
Subject to the provisions of the Security Documents, (a) the
Collateral Agent may, in its sole discretion and without the consent of the
Securityholders, take all actions it deems necessary or appropriate in order to
(i) enforce any of the terms of the Security Documents and (ii) collect and
receive any and all amounts payable in respect of the obligations of the
Company thereunder and hereunder and (b) the Collateral Agent shall have power
to institute and to maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any act that may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Collateral Agent may deem expedient to preserve or
protect its interests and the interests of the Securityholders in the
Collateral (including the power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or
order would impair the security interest thereunder or be prejudicial to the
interests of the Securityholders or of the Collateral Agent.)
SECTION 10.05 Collateral Agency Agreement.
Simultaneously with the issuance of the Securities, the
Trustee, the Note Trustee, the Collateral Agent, the Company, Acme Steel and
Acme Packaging will enter into the Collateral Agency Agreement. The Collateral
Agency Agreement will provide the terms under which the Collateral Agent will
hold the Collateral as security for, among other things, the Company's and the
Guarantors' obligations on the Securities and under this Indenture. It will
provide generally that decisions in respect of administering the Collateral and
releasing portions of the Collateral in circumstances permitted by the
Indenture, the Note Indenture and the Security Documents may be made by the
Collateral Agent without
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the further consent of the Holders. It will also provide that decisions in
respect of releasing portions of the Collateral in circumstances not permitted
in the Indenture, Note Indenture or the Security Documents and foreclosing on
or otherwise pursuing remedies with respect to such Collateral generally may be
made by the holders of not less than a majority in aggregate principal amount
of the Securities and the Senior Secured Notes voting separately. If an Event
of Default occurs under this Indenture the Trustee will notify the Note Trustee
simultaneously with any notifications to the Company or the holders of the
Senior Secured Notes. In the event a declaration of acceleration of the
Securities occurs as a result thereof, the Trustee on behalf of the Holders, in
addition to any rights or remedies available to it under this Indenture may,
subject to the provisions of the Collateral Agency Agreement, cause the
Collateral Agent to take such action as the Trustee deems advisable to protect
its rights in the Collateral. The proceeds received by the Collateral Agent
from any foreclosure will be applied by the Collateral Agent first to pay the
expenses of such foreclosure and fees and other amounts then payable to the
Collateral Agent and the Trustees under the Indenture, the Note Indenture and
the Collateral Agency Agreement, and thereafter to pay, pro rata, the principal
of, premium, if any, and interest on the Securities and the Senior Secured
Notes or any Permitted Replacement Financing pursuant to the terms of the
Collateral Agency Agreement.
ARTICLE XI.
SENIOR GUARANTEE OF SECURITIES
SECTION 11.01 Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "Guarantee") to each
Holder of a Security authenticated and delivered by the Trustee and to the
Trustee and the Collateral Agent and their successors and assigns that: (i)
the principal of and interest on the Securities will be promptly paid in full
when due, subject to any applicable grace period, whether at maturity,
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by acceleration or otherwise, and interest on the overdue principal, if any,
and interest on any interest, to the extent lawful, of the Securities and all
other obligations of the Company to the Holders, the Trustee or the Collateral
Agent hereunder, under the Indenture or the Security Documents will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any extension of time of payment or renewal of any
Securities or of any such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, subject to any applicable grace period, whether at stated maturity, by
acceleration or otherwise, subject, however, in the case of clauses (i) and
(ii) above, to the limitations set forth in Section 11.04. Each Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities,
this Indenture or any Security Documents, the absence of any action to enforce
the same, any waiver or consent by any Holder of the Securities with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice
and all demands whatsoever and covenants that this Guarantee will not be
discharged except by complete performance of the obligations contained in the
Securities, this Indenture, and this Guarantee and any Security Documents. If
any Securityholder or the Trustee is required by any court or otherwise to
return to the Company, any Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Company or any Guarantor, any
amount paid by the Company or any Guarantor to the Trustee or such
Securityholder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purpose of
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this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any acceleration of such obligations as provided in
Article Six, such obligations (whether or not due and payable) shall forthwith
become due and payable by each Guarantor for the purpose of this Guarantee.
SECTION 11.02 Severability.
In case any provision of this Guarantee shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.03 Release of a Guarantor.
Upon the sale or disposition (by merger, sale of stock of such
Guarantor or the parent of such Guarantor or otherwise) of a Guarantor (or all
or substantially all its assets) to an entity which is not either the Company
or another Guarantor and which sale or disposition is otherwise in compliance
with the terms of this Indenture (including, but not limited to, Section 4.06
hereof), such Guarantor shall be deemed released from all obligations under
this Article Eleven without any further action required on the part of the
Trustee or any Holder. In the event such Guarantor is Acme Packaging, it shall
be released from its obligations under the Stock Purchase Agreement to which it
is a party following execution of an amendment to such Stock Purchase Agreement
in accordance with its terms. In addition, if the stock of such Guarantor has
been pledged pursuant to a Stock Pledge Agreement, such stock shall be released
by the Collateral Agent from the Lien of such Stock Pledge Agreement pursuant
to the terms thereof. The Trustee and the Collateral Agent shall, at the sole
cost and expense of the Company, deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 11.03.
Any Guarantor not so released remains liable for
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the full amount of principal of and interest on the Securities as provided in
this Article Eleven.
SECTION 11.04 Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder,
hereby confirms that it is the intention of all such parties that the guarantee
by such Guarantor pursuant to its Guarantee not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal or state law. To effectuate the foregoing intention, the Holders and
such Guarantor hereby irrevocably agree that the obligations of such Guarantor
under the Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to Section 11.06, result in the
obligations of such Guarantor under the Guarantee not constituting such
fraudulent transfer or conveyance.
SECTION 11.05 Guarantors May Consolidate,
etc., on Certain Terms.
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Guarantor with or
into the Company or another Guarantor or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety
to the Company or another Guarantor, which consolidation, merger, sale or
conveyance is otherwise in accordance with the terms of this Indenture and the
Security Documents. Upon any such consolidation, merger, sale or conveyance,
the Guarantee given by such Guarantor shall no longer have any force or effect.
Other than as set forth in Sections 11.03 and
11.05(a) above, each Guarantor will not, and the Company will not cause or
permit any Guarantor to, consolidate with or merge with
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or into any Person unless: (i) the entity formed by or surviving any such
consolidation or merger (if other than the Guarantor), or to which sale, lease,
conveyance or other disposition shall have been made, is a corporation
organized and existing under the laws of the United States, any state thereof
or the District of Columbia; (ii) such entity assumes by supplemental indenture
all of the obligations of the Guarantor on the Guarantee and under this
Indenture and the Security Documents; (iii) immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom on a pro forma basis, the Consolidated
Tangible Net Worth of the Company and its Subsidiaries would be at least equal
to the Consolidated Tangible Net Worth of the Company and its Subsidiaries
immediately prior to such transaction; and (v) immediately after giving effect
to such transaction and the use of any net proceeds therefrom on a pro forma
basis, the Company could incur at least $1.00 of Indebtedness (other than
Permitted Indebtedness) pursuant to the first paragraph of Section 4.04 hereof.
SECTION 11.06 Contribution.
In order to provide for just and equitable contribution among
the Guarantors, the Guarantors agree, inter se, that in the event any payment
or distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each
Guarantor (including the Funding Guarantor), determined in accordance with
GAAP, subject to Section 11.04, for all payments, damages and expenses incurred
by that Funding Guarantor in discharging the Company's obligations with respect
to the Securities or any other Guarantor's obligations with respect to the
Guarantee.
SECTION 11.07 Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise
from the existence, payment, performance or
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enforcement of such Guarantor's obligations under the Guarantee, this Indenture
and the Security Documents, including, without limitation, any right of
subrogation, reimbursement, exoneration or indemnification, and any right to
participate in any claim or remedy of any Holder of Securities against the
Company, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account
of such claim or other rights. If any amount shall be paid to any Guarantor in
violation of the preceding sentence and the Securities shall not have been paid
in full, such amount shall be deemed to have been paid to such Guarantor for
the benefit of, and held in trust for the benefit of, the Holders of the
Securities, and shall forthwith be paid to the Trustee for the benefit of such
Holders to be credited and applied upon the Securities, whether matured or
unmatured, in accordance with the terms of this Indenture. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 11.07 is knowingly made in contemplation of such
benefits.
SECTION 11.08 Execution of Guarantee.
To evidence their guarantee to the Securityholder specified in
Section 11.01, the Guarantors hereby agree to execute the Guarantee in
substantially the form of Exhibit A recited to be endorsed on each Security
ordered to be authenticated and delivered by the Trustee. Each Guarantor
hereby agrees that its Guarantee set forth in Section 11.01 shall remain in
full force and effect notwithstanding any failure to endorse on each Security a
notation of such Guarantee. Each such Guarantee shall be signed on behalf of
each Guarantor by an Officer prior to the authentication of the Security on
which it is endorsed, and the delivery of such Security by the Trustee, after
the authentication thereof hereunder, shall constitute due delivery of such
Guarantee on behalf of such Guarantor. Such signature upon the Guarantee may
be by manual or facsimile signature of such Officer and may be imprinted or
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otherwise reproduced on the Guarantee, and in case such Officer who shall have
signed the Guarantee shall cease to be such Officer before the Security on
which such Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and delivered or disposed of as though the person who signed the
Guarantee had not ceased to be such Officer of the Guarantor.
ARTICLE XII.
MISCELLANEOUS
SECTION 12.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
SECTION 12.02 Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to the Company or any of the Guarantors:
Acme Metals Incorporated
13500 South Perry Avenue
Riverdale, Illinois 60627
Attention: Corporate Secretary with
a copy to the Treasurer
Facsimile: 708-841-6010
Telephone: 708-849-2500
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with copies to:
Coffield Ungaretti & Harris
3500 Three First National Plaza
Chicago, Illinois 60602
Attention: Alton B. Harris
Facsimile: 312-977-4405
Telephone: 312-977-4400
if to the Trustee:
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, CT 06115
Attention: Corporate Trust Administration
Facsimile: 203-986-7920
Telephone: 203-986-4424
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed, first class, postage
prepaid, to a Securityholder, including any notice delivered in connection with
TIA Section 310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section
315(b), shall be mailed to him or her at his or her address as set forth on
the registration books of the Registrar and shall be sufficiently given to him
or her if so mailed within the time prescribed.
Any notice or other communication to the Company or to the
Trustee shall be deemed given only when such notice or other communication is
actually received by the Company or the Trustee, as the case may be. Any
notice or other communication mailed to a Holder in the manner prescribed above
shall be conclusively deemed to have been received by such Holder, whether or
not such Holder actually receives such notice or other communication. Failure
to
<PAGE> 115
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mail a notice or communication to a Securityholder or any defect in it shall
not affect its sufficiency with respect to other Securityholders.
In the event that, by reason of the suspension of or
irregularities in regular mail service or by reason of any other cause, it
shall be impractical to mail notice of any event to Holders 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 sufficient giving of such notice for every purpose hereunder.
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 latest date for the giving of such notice, and such
waiver shall be deemed to constitute 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.
SECTION 12.03 Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section
312(b) with other Securityholders with respect to their rights under this
Indenture or the Securities. The Company, the Trustee, the Registrar and any
other person shall have the protection of TIA Section 312(c).
SECTION 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take or refrain from taking any action under this Indenture, the Company
shall furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance
satisfactory to the Trustee stating that, in the opinion of
<PAGE> 116
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the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action or inaction have been
complied with; and
(2) an Opinion of Counsel in form and substance
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent, if any, provided for in this
Indenture relating to the proposed action or inaction have been
complied with.
SECTION 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 4.12) shall include:
(3) a statement that the person making such certificate
or opinion has read such covenant or condition;
(4) 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;
(5) a statement that, in the opinion of such person, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(6) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with;
provided that with respect to matters of fact an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials.
<PAGE> 117
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SECTION 12.06 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.
SECTION 12.07 Governing Law.
The laws of the State of New York shall govern this Indenture
and the Securities without regard to principles of conflicts of law.
SECTION 12.08 No Recourse Against Others.
No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer, director or employee, as such, past, present or future,
of the Company, either directly or through the Company, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the Securities are solely corporate obligations of the Company,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers, directors or employees,
as such, of the Company, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in the Securities or
implied therefrom; and each Securityholder by its acceptance of a Security, as
consideration for and as a condition of the execution of this Indenture and the
issue of the Securities, hereby expressly waives and releases any and all such
personal liability (either at common law or in equity or by constitution or
statute) of, and any and all such rights and claims against, every such
incorporator, stockholder, officer, director or employee, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in the
Securities or implied therefrom.
<PAGE> 118
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SECTION 12.09 Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 12.10 Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 12.11 Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
SECTION 12.12 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.13 Legal Holidays.
In any case where any Interest Payment Date, redemption date,
Maturity Date, Stated Maturity, Unapplied Proceeds Offer Payment Date or
Repurchase Date shall not be a Business Day, then (notwithstanding any other
provision of this Indenture or the Securities) payment of principal of and
premium, if any, and interest on the Securities 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 Interest Payment Date, redemption date, Maturity Date,
Stated Maturity, Unapplied Proceeds Offer Payment Date or Repurchase Date;
provided that if such payment is so made,
<PAGE> 119
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no interest shall accrue for the period from and after such Interest Payment
Date, redemption date, Maturity Date, Stated Maturity, Unapplied Proceeds Offer
Payment Date or Repurchase Date, as the case may be.
<PAGE> 120
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the date first written above.
ACME METALS INCORPORATED
By: /s/ Jerry F. Williams
-----------------------------
Name: Jerry F. Williams
Title: Vice President
GUARANTORS:
ACME PACKAGING CORPORATION
ACME STEEL COMPANY
ACME STEEL COMPANY INTERNATIONAL,
INC.
ALABAMA METALLURGICAL CORPORATION
ALPHA TUBE CORPORATION
ALTA SLITTING CORPORATION
UNIVERSAL TOOL AND STAMPING
COMPANY, INC.
/s/ Jerry F. Williams
By: ---------------------------
Name: Jerry F. Williams
(for each of the above-listed
Guarantors)
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
<PAGE> 121
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By: /s/ Susan T. Keller
-----------------------
Name: Susan T. Keller
Title: Vice President
<PAGE> 122
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the date first written above.
ACME STEEL COMPANY
By: /s/ S. D. Bennett
--------------------------
Name: Stephen D. Bennett
Title: President
<PAGE> 123
A-1
EXHIBIT A
ACME METALS INCORPORATED
No. $
13 1/2% SENIOR SECURED DISCOUNT NOTE DUE 2004
Acme Metals Incorporated promises to pay to
or registered assigns the principal sum of
Dollars on the Maturity Date of August 1, 2004.
Interest Payment Dates: February 1 and August 1, commencing February 1, 1998
Record Dates: January 15 and July 15
IN WITNESS WHEREOF, ACME METALS INCORPORATED has caused this
instrument to be executed in its corporate name by a facsimile signature of its
President and its Secretary and has caused the facsimile of its corporate seal
to be affixed hereunto or imprinted hereon.
Dated: ACME METALS INCORPORATED
By______________________________
Title:
By______________________________
Title:
<PAGE> 124
A-2
Certificate of Authentication:
This is one of the 13 1/2% Senior Secured Discount Notes due
2004 referred to in the within-mentioned Indenture.
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
By____________________ Date:
Authorized Signature
<PAGE> 125
A-3
(REVERSE OF SECURITY)
ACME METALS INCORPORATED
13 1/2% Senior Secured Discount Note due 2004
1. Interest.
Acme Metals Incorporated, a Delaware corporation (the
"Company"), promises to pay interest at the rate of 13 1/2% per annum on the
principal amount of this Security semiannually commencing on February 1, 1998,
until the principal hereof is paid or made available for payment. Interest on
the Securities will accrue from and including the most recent date to which
interest has been paid or, if no interest has been paid, from and including
August 1, 1997, through but excluding the date on which interest is paid. If
an Interest Payment Date falls on a day that is not a Business Day, the
interest payment to be made on such Interest Payment Date will be made on the
next succeeding Business Day with the same force and effect as if made on such
Interest Payment Date, and no additional interest will accrue as a result of
such delayed payment. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
2. Method of Payment.
The interest payable on the Securities, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Security is registered at
the close of business on the regular record date, which shall be the January 15
or July 15 (whether or not a Business Day) next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for, and any
interest payable on such defaulted interest (to the extent lawful), will
forthwith cease to be payable to the Holder on such regular record date and
shall be paid to the person in whose name this Security is registered at the
close of business on a special record date for the payment of such defaulted
interest to be fixed by the Company, notice of which shall be given to Holders
not less than 15
<PAGE> 126
A-4
days prior to such special record date. Payment of the principal of and
interest on this Security will be made at the agency of the Company maintained
for that purpose in New York, New York and at any other office or agency
maintained by the Company for such purpose, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided that at the option of the Company payment
of interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Security register.
3. Paying Agent and Registrar.
Initially, Shawmut Bank Connecticut, National Association (the
"Trustee"), will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders of
Securities. The Company or any of its Subsidiaries may act as Registrar,
co-Registrar or, except in certain circumstances specified in the Indenture,
Paying Agent.
4. Indenture.
This Security is one of a duly authorized issue of Securities
of the Company, designated as its 13 1/2% Senior Secured Discount Notes due
2004 (the "Securities"), limited in aggregate principal amount to $117,958,000
(except for Securities issued in substitution for destroyed, lost or stolen
Securities) issuable under an indenture dated as of August 11, 1994 (the
"Indenture"), between the Company and the Trustee. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
the Trust Indenture Act of 1939 (the "Act") (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the Indenture and the date the
Indenture is qualified under the Act. The Securities are subject to all such
terms, and Holders of Securities are referred to the Indenture and the Act for
a statement of them. Payment on each Security is guaranteed on a senior basis,
jointly and severally, by the Guarantors pursuant to Article Thirteen of the
Indenture.
<PAGE> 127
A-5
Capitalized terms contained in this Security to the extent not
defined herein shall have the meanings assigned to them in the Indenture.
5. Optional Redemption.
The Securities may not be redeemed prior to August 1, 1999.
On or after August 1, 1999, the Company may, at its option, redeem the
Securities in whole or in part, from time to time, at the following redemption
prices (expressed in percentages of the principal amount thereof), in each case
together with accrued interest, if any, to the date of redemption.
If redeemed during the twelve-month period beginning August 1,
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.750%
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.500%
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.250%
2002 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . 100.000%
</TABLE>
6. Repurchase upon Change of Control.
By the date specified for repurchase, which shall be within 60
days after giving notice of a Change of Control, each Holder shall have the
right, at its option, to require the Company to purchase all or any part of
such Holder's Securities at 101% of the Accreted Value thereof at the purchase
date as purchased prior to August 1, 1997 and of the principal amount thereof
plus accrued interest to the purchase date if purchased thereafter.
7. Notice of Redemption.
Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his or her registered address.
Securities in denominations larger than
<PAGE> 128
A-6
$1,000 may be redeemed in part. On and after the redemption date, interest
ceases to accrue on those Securities or portion of them called for redemption.
8. Security Documents.
In order to secure the due and punctual payment of the
principal of and interest on the Securities and all other amounts payable by
the Company under the Indenture and the Securities when and as the same will be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Company has granted
security interests in and Liens on the Collateral owned by it to the Collateral
Agent for the benefit of the Holders of Securities pursuant to the Indenture
and the Security Documents. The Securities will be secured by Liens on and
security interests in the Collateral that are subject only to certain permitted
encumbrances. The Collateral will also secure the Company's obligations under
the Senior Secured Notes and the Note Indenture and, in certain circumstances,
amounts under Permitted Replacement Financing. Proceeds from the Collateral
will be shared among the parties secured thereby pursuant to the terms of the
Collateral Agency Agreement.
The Trustee and each Holder acknowledge that a release of any
of the Collateral or any Lien strictly in accordance with the terms and
provisions of the Security Documents and the terms and provisions of the
Indenture will not be deemed for any purpose to be an impairment of the
security under the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption.
<PAGE> 129
A-7
10. Persons Deemed Owners.
The registered Holder of a Security may be treated as the
owner of it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee or Paying Agent will repay the funds to
the Company at its request. After such repayment Holders of Securities
entitled to such funds must look to the Company for payment unless an abandoned
property law designates another person.
12. Discharge Prior to Redemption or Maturity.
The Indenture will be discharged and cancelled except for
certain Sections thereof, subject to the terms of the Indenture, upon the
payment of all the Securities or upon the irrevocable deposit with the Trustee
of funds or United States Government Obligations sufficient for such payment
or redemption.
13. Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture, the Securities and the Security Documents, except for certain
provisions thereof ("defeasance"), and may be discharged from its obligations
to comply with certain covenants contained in the Indenture, the Securities and
the Security Documents ("covenant defeasance"), in each case upon satisfaction
of certain conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Security
Documents or the Securities may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the outstanding
Securities, and any past default or compliance with any provision may be waived
with the consent of the Holders of at least a majority in principal amount of
the outstanding Securities. Without the consent of any Holder, the
<PAGE> 130
A-8
Company and the Trustee may amend or supplement the Indenture, the Security
Documents or the Securities to cure any ambiguity, defect or inconsistency, to
give effect to specified transactions or permitted releases, or to make any
change that does not materially and adversely affect the rights of any Holder
of Securities.
15. Restrictive Covenants.
The Securities are secured obligations of the Company limited
to the aggregate principal amount of $117,958,000. The Indenture restricts the
ability of the Company or any of its Subsidiaries to permit any Liens to be
imposed on their assets other than certain Permitted Liens, restricts the
ability of the Company or any of its Subsidiaries to make certain payments,
limits the Indebtedness which the Company and its Subsidiaries may incur and
limits the terms on which the Company may engage in Asset Sales. The Company
is also obligated under certain circumstances to make an offer to purchase
Securities with the net cash proceeds of certain Asset Sales. The Company must
report annually to the Trustee on compliance with certain covenants in the
Indenture.
16. Successor Corporation.
Pursuant to the Indenture, the ability of the Company to
consolidate with, merge with or into or transfer its assets to another person
is conditioned upon certain requirements, including certain financial
requirements applicable to the surviving Person.
17. Defaults and Remedies.
An Event of Default consists of: a default for 30 days in
payment of interest on the Securities or a default in payment of principal of
or premium on the Securities when due, whether at maturity, upon acceleration,
redemption or otherwise; a cessation of any Guarantee to be in full force and
effect or a declaration of any Guarantee to be null and void and unenforceable
or a finding of any Guarantee to be invalid or a denial by any Guarantor of its
liability under its Guarantee; a failure by the Company to comply with any
other covenant in the Indenture or in any of the Security
<PAGE> 131
A-9
Documents for 60 days after notice from the Trustee or the holders of 25% in
principal amount of the outstanding Securities (except in the case of a default
with respect to provisions relating to the repurchase of Securities upon a
Change of Control or the merger, consolidation or sale of all or substantially
all of the assets of the Company, which will constitute Events of Default with
notice but without passage of time); failure of the Company or any of its
Subsidiaries to make any payment when due (after giving effect to any
applicable grace period) under the Senior Secured Notes or any other senior
Indebtedness in excess of $5 million; failure of the Company or any of its
Subsidiaries to perform any term, covenant, condition or provision of the
Senior Secured Notes or any other Indebtedness in excess of $5 million
individually or $10 million in the aggregate, which failure results in the
acceleration of the maturity of such Indebtedness; a final judgment or
judgments for the payment of money not fully covered by insurance, which
judgments exceed $5 million individually or $10 million in the aggregate, is
entered against the Company or any of its Subsidiaries and is not satisfied,
stayed, annulled or rescinded within 60 days of being entered; a party, after
an event of default under any Indebtedness secured by Collateral, commences
foreclosure proceedings, or exercises rights to ownership in lieu thereof, on
any portion of the Collateral and certain events of bankruptcy, insolvency or
reorganization of the Company or any of its Significant Subsidiaries. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the outstanding Securities may declare all the
outstanding Securities to be due and payable immediately. Holders may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in principal amount of the outstanding Securities may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of a continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company is required to file periodic reports with the Trustee
as to the absence of Default and to notify the Trustee promptly after it
becomes aware of any Default.
<PAGE> 132
A-10
18. Trustee Dealings with Company.
The Trustee in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
19. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or the Security Documents or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Holder of a Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
21. Indenture and Security Documents.
Each Securityholder, by accepting a Security, agrees to be
bound to all of the terms and provisions of the Indenture and the Security
Documents, as the same may be amended from time to time.
22. Abbreviations.
Customary abbreviations may be used in the name of
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
<PAGE> 133
A-11
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder of record of Securities
upon written request and without charge a copy of the Indenture.
<PAGE> 134
A-12
[FORM OF NOTATION OF NOTE RELATING TO GUARANTEE]
SENIOR GUARANTEE
The Guarantors (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) have unconditionally guaranteed
on a senior basis (such guarantee by each Guarantor being referred to herein as
the "Guarantee") (i) the due and punctual payment of the principal of and
interest on the Securities, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Securities, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee, all in accordance with the terms set forth in Article Eleven of the
Indenture and (ii) in the case of any extension of time of payment or renewal
of any Securities or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
GUARANTORS:
ACME PACKAGING CORPORATION
ACME STEEL COMPANY
ACME STEEL COMPANY INTERNATIONAL,
INC.
ALABAMA METALLURGICAL CORPORATION
ALPHA TUBE CORPORATION
ALTA SLITTING CORPORATION
UNIVERSAL TOOL AND STAMPING
COMPANY, INC.
<PAGE> 135
A-13
By:
______________________________
Name:
(for each of the above-listed
Guarantors)
<PAGE> 136
A-14
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Security to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ______________________________________, agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: __________________ Signed: ______________________
(Sign exactly as
name appears on the
other side of this
Security)
Signature Guarantee: _________________________________________________________
The holder's signature must be guaranteed by an eligible guarantor institution
which is a member of one of the following recognized Signature Guarantee
Programs:
1. The Securities Transfer Agents Medallion Program (STAMP)
2. The New York Stock Exchange Medallion Signature Program
(MSP)
3. The Stock Exchanges Medallion Program (SEMP)
<PAGE> 1
EXHIBIT 4.6
COLLATERAL AGENCY AGREEMENT
COLLATERAL AGENCY AGREEMENT ("Agreement"), dated as of August
11, 1994, by and among ACME METALS INCORPORATED, a Delaware corporation, having
its principal place of business at 13500 South Perry Avenue, Riverdale,
Illinois 60627 (together with its successors and assigns, the "Company"), ACME
STEEL COMPANY, a Delaware corporation, having its principal place of business
at 13500 South Perry Avenue, Riverdale, Illinois 60627 (together with its
successors and assigns, "Acme Steel"), ACME PACKAGING CORPORATION, a Delaware
corporation, having its principal place of business at 13500 South Perry
Avenue, Riverdale, Illinois 60627 (together with its successors and assigns,
"Acme Packaging," together with the Company and Acme Steel, the "Obligors"),
Shawmut Bank Connecticut, National Association, a national banking association,
having an address at 777 Main Street, Hartford, Connecticut, 06115, as
collateral agent (in such capacity and together with its successors and assigns
in such capacity, the "Collateral Agent") and the Secured Parties (as
hereinafter defined).
R E C I T A L S :
A. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Note Indenture"), dated as of August 11, 1994, by and among the Company, the
subsidiaries of the Company, as guarantors (the "Guarantors") and Shawmut Bank
Connecticut, National Association, as trustee (in such capacity and together
with its successors and assigns in such capacity, the "Note Trustee") for the
holders of the Senior Secured Notes (as hereinafter defined), the Company is
issuing its 12 1/2% senior secured notes due 2002 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Senior
Secured Notes") in the aggregate principal amount of $125,000,000.
<PAGE> 2
-2-
B. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Discount Note Indenture"; together with the Note Indenture, the "Indentures"),
dated as of August 11, 1994, by and among the Company, the Guarantors and
Shawmut Bank Connecticut, National Association, as trustee (in such capacity
and together with its successors and assigns in such capacity, the "Discount
Note Trustee"; together with the Note Trustee, the "Trustees") for the holders
of the Senior Secured Discount Notes (as hereinafter defined), the Company is
issuing its 13 1/2% senior secured discount notes due 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Senior Secured Discount Notes"; together with the Senior Secured Notes,
the "Notes") in the aggregate principal amount of $117,958,000.
C. Pursuant to that certain term loan agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Term Loan Agreement"), dated as of August 4, 1994 by and among the
Company, Lehman Commercial Paper Inc., as agent (in such capacity and together
with its successors and assigns in such capacity, the "Agent"), and the lenders
party thereto (together with all subsequent lenders party to the Term Loan
Agreement, the "Lenders") the Company borrowing $50,000,000.
D. To secure the payment and performance by the Company
of its obligations under the Debt Instruments (as hereinafter defined), it has
executed and delivered to the Collateral Agent, for the benefit of the Secured
Parties, (a) a certain company stock pledge agreement (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Company
Stock Pledge"), dated as of the date hereof, pursuant to which the Company
granted to the Collateral Agent, for the benefit of the Secured Parties, a
first priority lien on and security interest in the Pledged Collateral (as
defined in the Company Stock Pledge) and (b) a certain disbursement agreement
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Disbursement Agreement"), dated as of the date hereof, pursuant
to which the Company granted to the Collateral Agent, for the benefit of the
Secured Parties (other than the Permitted Additional Lenders
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(as hereinafter defined), if any), a first priority lien on and security
interest in the Collateral (as defined in the Disbursement Agreement).
E. To secure the payment and performance by Acme Steel
of its obligations under the Debt Instruments it has executed and delivered to
the Collateral Agent, for the benefit of the Secured Parties, (a) a certain
mortgage (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Mortgage"), dated as of the date hereof, pursuant to
which Acme Steel granted to the Collateral Agent, for the benefit of the
Secured Parties, a first priority mortgage lien on and security interest in the
Mortgaged Property (as defined in the Mortgage), (b) a certain security
agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Security Agreement"), dated as of the date hereof,
pursuant to which Acme Steel granted to the Collateral Agent, for the benefit
of the Secured Parties, a first priority lien on and security interest in the
Pledged Collateral (as defined in the Security Agreement) and (c) a certain
subsidiary stock pledge agreement (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Subsidiary Stock
Pledge"), dated as of the date hereof, pursuant to which Acme Steel granted to
the Collateral Agent, for the benefit of the Secured Parties, a first priority
lien on and security interest in the Pledged Collateral (as defined in the
Subsidiary Stock Pledge) purported to be owned or held by it under the
Subsidiary Stock Pledge.
F. To secure the payment and performance by Acme
Packaging of its obligations under the Debt Instruments it has executed and
delivered to the Collateral Agent, for the benefit of the Secured Parties, the
Subsidiary Stock Pledge pursuant to which Acme Packaging granted to the
Collateral Agent, for the benefit of the Secured Parties, a first priority lien
on and security interest in the Pledged Collateral (as defined in the
Subsidiary Stock Pledge) purported to be owned or held by it under the
Subsidiary Stock Pledge.
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G. Certain other parties which may from time to time
become additional lenders to the Obligors (each such lender, a "Permitted
Additional Lender" and collectively, the "Permitted Additional Lenders") may,
in accordance with the provisions of clause (xi) of the definition of
"Permitted Liens" in each Indenture as in effect on the date hereof, take a
lien on and security interest in the Shared Collateral (as hereinafter defined)
to secure the Indebtedness (as defined in each Indenture as in effect on the
date hereof) and other obligations due such Permitted Additional Lenders (such
Indebtedness, the "Permitted Replacement Financing") upon the execution and
delivery by the Permitted Additional Lenders of a supplement to this Agreement
in the form of Exhibit A hereto and upon satisfaction of the other conditions
relating thereto contemplated herein.
H. The parties hereto are executing and delivering this
instrument to evidence their agreement in respect of the Collateral (as
hereinafter defined).
A G R E E M E N T :
The parties agree as follows:
ARTICLE 1
DEFINITIONS
Definitions. (a) Capitalized terms that are not otherwise
defined herein are used herein with the meanings given thereto in the
Indentures, as in effect on the date of execution of this Agreement.
(b) The following terms shall have the respective
meanings set forth below:
"Accreted Amount" means, with respect to the Senior Secured
Discount Notes, the Accreted Value and, with respect to any
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Permitted Replacement Financing issued at a discount, the then accreted amount,
based upon the original issue price, determined in accordance with GAAP.
"Acme Steel" has the meaning set forth in the introductory paragraph hereto.
"Acme Packaging" has the meaning set forth in the introductory paragraph
hereto.
"Additional Security Documents" means any and all instruments
or documents delivered by the Obligors evidencing or creating a Lien in favor
of the Collateral Agent on all or any portion of the assets acquired by any of
the Obligors after the date hereof which shall be of the type pledged,
mortgaged, granted or collaterally assigned to the Collateral Agent by the
Obligors on the date hereof pursuant to the Security Documents and on all or
any portion of the assets acquired by any of the Obligors in connection with
any Related Business Investment.
"Additional Undertaking" has the meaning set forth in Section 3.8.
"Agreement" has the meaning set forth in the introductory paragraph hereto.
"Architect's Certificate" has the meaning set forth in Section 3.8.
"CAA Supplement" has the meaning set forth in Section 8.11.
"Collateral" means the Shared Collateral and the Disbursement
Collateral, collectively.
"Collateral Account" has the meaning set forth in Section 3.1(a).
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"Collateral Agent" has the meaning set forth in the
introductory paragraph hereto.
"Collateral Agent's Fees" means all fees, costs and expenses
of the Collateral Agent of the type described in Sections 5.3, 5.4, 5.5 and
5.6.
"Collateral Proceeds Accounts" has the meaning set forth in
Section 3.2.
"Company" has the meaning set forth in the introductory
paragraph hereto.
"Company Stock Pledge" has the meaning set forth in recital D.
"Debt Instrument" means each of (i) the Note Indenture and the
Senior Secured Notes and any related instruments or agreements, (ii) the
Discount Note Indenture and the Senior Secured Discount Notes and any related
instruments or agreements, (iii) the Term Loan Agreement and any related
instruments or agreements and (iv) the notes, agreements and/or instruments
which, at any time, collectively evidence or comprise any Permitted Replacement
Financing.
"Denied Holder" has the meaning set forth in the definition
of "Pro Rata Share."
"Directing Holders" means, at any time, the holders of Notes
which constitute at least (i) 50%, or such greater amount as may be required
under the applicable circumstances by the Note Indenture, in principal amount
of Senior Secured Notes, (ii) 50%, or such greater amount as may be required
under the applicable circumstances by the Discount Note Indenture, in principal
amount of Senior Secured Discount Notes and (iii) the Requisite Lenders;
provided, however, that for purposes of calculating the percentages set forth
in this definition there shall not be counted the principal amount of any
Notes (A) for which (and to the extent that) there are at such time on deposit
with the Collateral Agent
<PAGE> 7
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amounts to be applied to the payment of principal of or interest or premium on
or with respect thereto, (B) which are owned or held by or on behalf of the
Company or any of its Affiliates, or (C) which have been defeased or in respect
of which the Company's and each of its subsidiaries' (if applicable)
obligations have been terminated in each case pursuant to the provisions of
Article Eight of each Indenture. The Trustees acknowledge, on their own behalf
and on behalf of the Noteholders, that as a result of this definition, the
Collateral Agent may refuse to act unless Noteholders of both the Senior
Secured Notes and the Senior Secured Discount Notes and the Requisite Lenders
vote consistently.
"Disbursement Agreement" has the meaning set forth in
recital D.
"Disbursement Collateral" means the "Collateral" as defined in
the Disbursement Agreement.
"Discount Note Indenture" has the meaning set forth in recital
B hereto.
"Discount Note Trustee" has the meaning set forth in recital
B hereto.
"Distribution Date" means the date on which any funds are
distributed by the Collateral Agent in accordance with the provisions of
Section 4.1.
"Enforcement Notice" has the meaning set forth in Section 2.2.
"Estimate" has the meaning set forth in Section 3.8.
"Event of Default" means an Event of Default under the Note
Indenture, the Discount Note Indenture or the Term Loan Agreement or any event,
act or circumstance which would permit or result in the acceleration of any
Permitted Replacement Financing or the institution in respect thereof of any
remedy by the Secured Party thereunder.
<PAGE> 8
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"Guarantors" has the meaning set forth in recital A hereto.
"Indentures" has the meaning set forth in recital B hereto.
"Loan" or "Loans" shall have the meaning given such terms in
the Term Loan Agreement as in effect on the date hereof.
"Majority Holders of an Applicable Class" means, at any time,
the holders of the Senior Secured Notes, the Senior Secured Discount Notes or
the Lenders or interests in any other Debt Instrument constituting Permitted
Replacement Financing which in principal amount constitute more than 50% of the
Total Amount of Secured Obligations of an Applicable Class; provided, however,
that for purposes of calculating the percentage set forth in this definition
there shall not be counted the principal amount of any Notes and/or interests
in any Debt Instrument constituting Permitted Replacement Financing (A) for
which (and to the extent that) there are at such time on deposit with the
Collateral Agent amounts to be applied to the payment of principal of or
interest or premium on or with respect thereto, (B) which are owned or held by
or on behalf of the Company or any of its Affiliates, (C) which are owned or
held by or on behalf of any Denied Holder or (D) which have been defeased or in
respect of which the Company's and each of its subsidiaries' (if applicable)
obligations have been terminated in each case pursuant to the provisions of
Article Eight of each Indenture or of any comparable provisions set forth in
any Debt Instrument constituting Permitted Replacement Financing.
"Mortgaged Property" has the meaning set forth in recital E
hereto and any other "Mortgaged Property" as defined in any other Mortgage.
"Mortgage" has the meaning set forth in recital D hereto and
any other mortgage, deed of trust or other instrument substantially in the form
of the Mortgage described in recital E hereto executed and delivered pursuant
to the provisions of this Agreement.
<PAGE> 9
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"Note Indenture" has the meaning set forth in recital A
hereto.
"Note Trustee" has the meaning set forth in recital A hereto.
"Noteholders" means the Senior Secured Noteholders and the
Senior Secured Discount Noteholders, collectively.
"Notes" has the meaning set forth in recital B hereto.
"Obligors" has the meaning set forth in the introductory
paragraph hereto.
"Permitted Additional Lender" has the meaning set forth in
recital G hereto.
"Permitted Replacement Financing" has the meaning set forth in
recital G hereto.
"Pro Rata Share" with respect to any Secured Party means, at
any date of determination thereof, the percentage derived by dividing (i) the
total, without duplication, of all amounts owed to such Secured Party (whether
by virtue of acceleration or otherwise) under or in respect of the Debt
Instrument held or administered by such Secured Party (it being expressly
understood that in the case of any Debt Instrument issued at a discount, the
principal amount thereof at any time shall be limited to the Accreted Amount
thereof), less the amount on deposit in the relevant Collateral Proceeds
Account with respect thereto, by (ii) the Total Amount of Secured Obligations;
provided, however, that (A) with respect to any Secured Party representing an
issue of Permitted Replacement Financing, if any holder of such issue of
Permitted Replacement Financing pursuant to Section 8.11 shall not be entitled
to the benefits of this Agreement (a "Denied Holder"), then the amount
calculated under clause (i) of this definition with respect to such Secured
Party shall exclude the total amount of Secured Obligations owing to each and
every such Denied Holder at the relevant time of calculation hereunder and (B)
for purposes of clause (i) of this
<PAGE> 10
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definition, there shall not be counted any Notes and/or interests in any Debt
Instrument constituting Permitted Replacement Financing which (I) have been
defeased or in respect of which the Company's and each of its subsidiaries' (if
applicable) obligations have been terminated pursuant to the provisions of
Article Eight of each Indenture or of any comparable provisions set forth in
any Debt Instrument constituting Permitted Replacement Financing and (II) are
owned or held by or on behalf of the Company or any of the Company's
Affiliates; and provided, further, that for purposes of clause SECOND of
Section 4.1, the Total Amount of Secured Obligations in clause (ii) above shall
include only amounts then outstanding under or in respect of (x) the Note
Indenture and the Senior Secured Notes and any related instruments and
agreements, (y) the Discount Note Indenture and the Senior Secured Discount
Notes and any related instruments and agreements and (z) the Term Loan
Agreement and any related instruments and agreements.
"Requisite Lenders" has the meaning given such term in the
Term Loan Agreement as in effect on the date hereof.
"Secured Obligations" means, at any time, the obligations of
the Company and/or its subsidiaries from time to time under or in respect of
the Debt Instruments (calculated, in the case of any Debt Instrument issued at
a discount, as the Accreted Amount thereof).
"Secured Party" means (i) the Note Trustee, in respect of the
applicable Debt Instruments including the Senior Secured Notes and the Note
Indenture, (ii) the Discount Note Trustee, in respect of the applicable Debt
Instruments including the Senior Secured Discount Notes and the Discount Note
Indenture, (iii) the Agent, in respect of the applicable Debt Instruments
including the Term Loan Agreement, (iv) the Collateral Agent, in respect of the
Security Documents and (v) with respect to Secured Obligations under or in
respect of any Debt Instrument constituting Permitted Replacement Financing,
the trustee, agent or fiduciary in respect thereof and, if no such trustee,
agent or fiduciary exists in respect thereof, the holders thereof collectively
whose identities and addresses are actually known to the Collateral Agent;
provided, however, that
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with respect to clause (v), such entities or their legal representative on
their behalf, shall have executed and delivered a CAA Supplement and the other
conditions set forth in Section 8.11 hereof shall have been satisfied.
"Security Agreement" has the meaning set forth in recital E
hereto.
"Security Documents" means the Intercreditor Agreement, the
Company Stock Pledge, the Mortgage, the Security Agreement, the Subsidiary
Stock Pledge, the Disbursement Agreement, the Indentures (to the extent the
Indentures constitute security agreements under the UCC), the Term Loan
Agreement (to the extent the Term Loan Agreement constitutes security
agreements under the UCC) and all other instruments or documents delivered by
the Obligors evidencing or creating any Lien in favor of the Collateral Agent
in all or any portion of the Collateral (including, without limitation, any
Additional Security Documents), in each case, as amended, amended and restated,
supplemented or otherwise modified from time to time.
"Senior Secured Discount Noteholders" means holders of the
Senior Secured Discount Notes.
"Senior Secured Discount Notes" has the meaning set forth in
recital B hereto.
"Senior Secured Noteholders" means holders of the Senior
Secured Notes.
"Senior Secured Notes" has the meaning set forth in recital A
hereto.
"Shared Collateral" means the Pledged Collateral (as defined
in each of the Company Stock Pledge, the Subsidiary Stock Pledge and the
Security Agreement), the Mortgaged Property (as defined in the Mortgage) and
the Collateral Account hereunder and any other property which may from time to
time be subject to one or more of the Liens evidenced or created by any of the
Security Documents (other than the Disbursement Agreement).
<PAGE> 12
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"Subsidiary Stock Pledge" has the meaning set forth in recital
E.
"Survey" means a survey of any parcel of real property (and
all improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the state in which such property is located, (ii) dated (or
redated) not earlier than six months prior to the date of delivery thereof
(unless there shall have occurred within six months prior to such date of
delivery any exterior construction on the site of such property, in which event
such survey shall be dated (or redated) to a date after the completion of such
construction, (iii) certified by the surveyor (in a manner reasonably
acceptable to the title company providing title insurance in respect of the
Liens of the Security Documents) and (iv) complying in all respects with the
minimum detail requirements of the American Land Title Association, or local
equivalent, as such requirements are in effect on the date of preparation of
such survey.
"Title Policies" means any mortgagee policies of title
insurance delivered to the Collateral Agent in connection with the issuance of
the Notes and any other mortgagee policies of title insurance delivered to the
Collateral Agent under the applicable Debt Instrument in connection with any
Permitted Replacement Financing.
"Total Amount of Secured Obligations" means, at any time, the
total, without duplication, of all amounts then outstanding under or in respect
of each of the Debt Instruments (calculated, in the case of Debt Instruments
issued at a discount, as the Accreted Amount thereof), less, in each case, (A)
the amount of cash collateral on deposit in the Collateral Proceeds Accounts
with respect thereto and (B) the principal amount of any Notes and/or interests
in any Debt Instrument constituting Permitted Replacement Financing (I) which
are owned or held by the Company or any of its Affiliates, (II) which are owned
or held by or on behalf of any Denied Holder and (III) which have been defeased
or in respect of which the Company's and each of its subsidiaries' (if
applicable) obligations have been terminated in each case pursuant to the
<PAGE> 13
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provisions of Article Eight of each Indenture or of any comparable provisions
set forth in any Debt Instrument constituting Permitted Replacement Financing.
"Total Amount of Secured Obligations of an Applicable Class"
means, at any time, the total, without duplication, of all amounts then
outstanding under or in respect of the Senior Secured Notes, the Senior Secured
Discount Notes, the Term Loan Agreement or any issue of Permitted Replacement
Financing, less, in each case (A) the amount of cash collateral on deposit in
the Collateral Proceeds Account with respect thereto and (B) the principal
amount of any Notes and/or interests in any Debt Instrument constituting
Permitted Replacement Financing (I) which are owned or held by or on behalf of
the Company or any of its Affiliates, (II) which are owned or held by or on
behalf of any Denied Holder and (III) which have been defeased or in respect of
which the Company's and each of its subsidiaries' (if applicable) obligations
have been terminated in each case pursuant to the provisions of Article Eight
of each Indenture or of any comparable provisions set forth in any Debt
Instrument constituting Permitted Replacement Financing.
"Trust Estate" means (i) the right, title and interest of the
Collateral Agent in, to and under each of the Security Documents, (ii) the
right, title and interest of the Collateral Agent in, to and under each of the
Title Policies and (iii) the amounts from time to time held in the Collateral
Proceeds Accounts.
"Trustees" has the meaning set forth in recital B hereto.
"Trust Moneys" has the meaning set forth in Section 3.3
hereof.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section references are to this Agreement unless otherwise specified.
<PAGE> 14
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ARTICLE 2
DECLARATION OF TRUST; REMEDIES
2.1 Declaration and Acceptance of Trust. The Collateral
Agent hereby declares, and the Obligors agree, that the Collateral Agent holds
the Trust Estate as trustee in trust under this Agreement for the equal and
ratable benefit of the Secured Parties (and the Persons for whom the Secured
Parties act as trustee, agent or fiduciary, as applicable) as provided herein.
By acceptance of the benefits of this Agreement and the Security Documents each
Secured Party and each Person for whom such Secured Party acts as trustee,
agent or fiduciary, as applicable, (i) consents to the appointment of the
Collateral Agent as agent hereunder and grants the Collateral Agent all rights
and powers necessary for the Collateral Agent to perform its obligations
hereunder, (ii) confirms that the Collateral Agent shall have the authority to
act as the exclusive agent of such Secured Party (or Person, as applicable) to
make claims under and otherwise act in all respects as the beneficiary of the
Title Policies and for enforcement of any remedies under or with respect to any
Security Document (including, without limitation, the Intercreditor Agreement)
and the giving or withholding of any consent or approval relating to any
Collateral or the Security Documents (including, without limitation, the
Intercreditor Agreement) or any obligations with respect thereto or otherwise
take any action on behalf of the Secured Parties contemplated in the Security
Documents (including, without limitation, to receive opinions, maintain
collateral accounts and exercise remedies), (iii) agrees that, except as
provided in this Agreement, such Secured Party (or Person, as applicable) shall
not take any action to enforce any of such remedies or give any such consents
or approvals relating to any Collateral or the Security Documents or itself
make any claim under the Title Policies, and (iv) agrees that such Secured
Party (or Person, as applicable) shall not bring any suit, action or proceeding
to enforce such Secured Party's Debt Instrument or any interest therein
(including any individual bond, note or similar instrument comprising a portion
of a Debt Instrument) if doing so could, under the laws of any applicable
jurisdiction, cause to be applicable any "one action
<PAGE> 15
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rule" or other law or defense which could adversely affect any Secured Party's
rights and remedies in respect of any Collateral.
2.2 Remedies. Upon the occurrence and during the continuance
of an Event of Default in respect of any Debt Instrument, the Majority Holders
of an Applicable Class in respect of such Debt Instrument (or, if the Secured
Party in respect of such Debt Instrument is a trustee, agent or fiduciary, such
Secured Party) shall in one or more writings addressed to the Collateral Agent
specify that an Event of Default has occurred and is continuing and shall state
the nature thereof (each such writing, an "Enforcement Notice"). Such
Enforcement Notice may also indicate what rights or remedies available to the
Collateral Agent or the Secured Parties with respect to the Collateral the
Secured Party requests be exercised by the Collateral Agent on behalf of all
Secured Parties. Each Enforcement Notice shall generally describe the nature
of and relevant facts relating to such Event of Default and that such notice is
being delivered by the Majority Holders of an Applicable Class of a Debt
Instrument or by the Secured Party in respect of a Debt Instrument who is a
trustee, agent or fiduciary and is authorized by and entitled to bind such
holders. Upon the receipt of an Enforcement Notice by the Collateral Agent,
the Collateral Agent shall, within three Business Days thereafter, notify each
Secured Party and the Company in writing that the Collateral Agent has received
such Enforcement Notice, enclosing a copy of such Enforcement Notice. An
Enforcement Notice shall be deemed to be in effect hereunder only if such
notice shall have been given and not rescinded, annulled or withdrawn in
writing by the applicable Secured Party. In the event an Enforcement Notice is
inconsistent with any previously delivered Enforcement Notice, the Collateral
Agent shall, as soon as practicable, but in any event within three Business
Days of obtaining knowledge of such inconsistency, give notice thereof to all
Secured Parties. Thereafter, subject to the provisions hereof relating to
indemnification of the Collateral Agent, the Collateral Agent shall exercise
the right or remedy directed by the Directing Holders as reported to the
Collateral Agent in writing by the Directing Holders as contemplated in
Section 2.6 of this Agreement and any other actions not inconsistent with such
direction.
<PAGE> 16
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2.3 Determinations Relating to Collateral. Prior to the
occurrence and continuance of an Event of Default and receipt of an Enforcement
Notice from the Majority Holders of an Applicable Class or a Secured Party, in
the event (i) the Collateral Agent shall receive any written request from any
Obligor under any Security Document (other than the Indentures or the Term Loan
Agreement) for consent or approval with respect to any matter or thing relating
to any Collateral or such Obligor's obligations with respect thereto
(including, without limitation, consent to amendment of the documents relating
to the Modernization Project as required by Section 6(i) of the Security
Agreement) and which matter or thing is, under the terms of any applicable
Security Document, of a nature such that the Collateral Agent shall not be
entitled to respond thereto or determines not to respond thereto or (ii) there
shall be due to or from the Collateral Agent under the provisions of any
Security Document (other than the Indentures or the Term Loan Loan Agreement)
any material performance or the delivery of any material instrument or (iii)
the Collateral Agent shall become aware of any nonperformance by any Obligor of
any covenant or any breach of any representation or warranty of such Obligor
set forth in any Security Document (other than the Indentures or the Term Loan
Loan Agreement), then, in each such event, the Collateral Agent shall, within
three Business Days, advise all Secured Parties in writing of the matter or
thing as to which consent has been requested or the performance or instrument
required to be delivered or the nonperformance or breach of which the
Collateral Agent has become aware. The Directing Holders shall have the
exclusive authority to direct the Collateral Agent's response to any of the
circumstances contemplated in clauses (i), (ii) and (iii) above. In the event
the Collateral Agent shall be required to respond to any of the circumstances
contemplated in this Section 2.3, the Collateral Agent shall be entitled, at
the sole cost and expense of the Company, to hire experts, consultants, agents
and attorneys to advise the Collateral Agent on the manner in which the
Collateral Agent shall respond thereto. The Collateral Agent shall be fully
protected in the taking of any action recommended or approved by any such
expert, consultant, agent or attorney or agreed to by the Directing Holders.
<PAGE> 17
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2.4 Right to Make Advances. If an advance of funds shall at
any time be required for the preservation or maintenance of any Collateral,
subject to Section 6.4(c), the Collateral Agent, any Secured Party or any
Person for whom a Secured Party acts as trustee, agent or fiduciary shall be
entitled to make, but not be obligated to make, such advance. Each such
advance shall be reimbursed, with interest accrued from the date such advance
was made at the rate borne by the Senior Secured Discount Notes, by the
Obligors upon demand by the Collateral Agent or such Secured Party or Person,
as the case may be, and if the Obligors fail to comply with any such demand,
out of the proceeds of any sale of or other realization upon any Collateral
distributed pursuant to clause FIRST of Section 4.1. In the event any Secured
Party shall receive any funds which, under this Section 2.4, belong to the
Collateral Agent or any other Secured Party (or Person for whom a Secured Party
acts as trustee, agent or fiduciary), such Secured Party shall remit such funds
promptly to the Collateral Agent for distribution to the Collateral Agent or
such other Secured Party (or Person), as the case may be, and prior to such
remittance shall hold such funds in trust for the Collateral Agent or such
other Secured Party (or Person), as the case may be.
2.5 Nature of Secured Parties' Rights. All of the Secured
Parties (and each Person for whom a Secured Party acts as trustee, agent or
fiduciary) shall be bound by any instruction or direction given by the
Directing Holders pursuant to this Agreement to the extent any such instruction
or direction is within the powers or rights granted to such group under this
Agreement.
2.6 Voting. In each case where any vote or consent of the
Directing Holders is required or desired to be made or determined hereunder or
under the Intercreditor Agreement, each Secured Party shall, in accordance with
the provisions of its Debt Instrument, advise in reasonable detail in writing
the Persons for whom it acts as trustee, agent or fiduciary of the matters or
things to which such vote or consent pertain and afford such Persons an
opportunity to indicate (which may be accomplished by affirmative act or
failure to act within a reasonably prescribed time period) a response to the
matters or things set forth in such
<PAGE> 18
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writing. The results of such voting or consent solicitation shall be promptly
reported in writing to the Collateral Agent and shall be certified as correct
to the best knowledge of such Secured Party. Any determination as to whether a
vote or consent of the Directing Holders has been obtained shall be made by
the Collateral Agent on the basis of such written information, which
information may be conclusively relied upon by the Collateral Agent. The
Collateral Agent shall not be liable for errors in such determinations unless
the Collateral Agent shall have been grossly negligent or shall have acted in
bad faith in connection therewith.
ARTICLE 3
COLLATERAL ACCOUNT; COLLATERAL PROCEEDS ACCOUNTS;
WITHDRAWALS FROM COLLATERAL ACCOUNT
3.1 Collateral Account. (a) On the date hereof there shall
be established and, at all times hereafter until this Agreement shall have
terminated, there shall be maintained with the Collateral Agent, a single
collateral account which shall be entitled the "Collateral Account" (the
"Collateral Account"). The Collateral Account shall be established and
maintained by the Collateral Agent at its corporate trust offices. All Trust
Moneys which are received by the Collateral Agent shall be deposited in the
Collateral Account and thereafter shall be held, applied and/or disbursed by
the Collateral Agent as part of the Trust Estate in accordance with the
provisions of this Agreement.
(b) Each of the Note Trustee, the Discount Note Trustee
and the Agent hereby appoints and constitutes the Collateral Agent as its agent
for the administration of the Collateral Account. In the event there shall be
any Permitted Replacement Financing in effect, the Secured Party in respect
thereof hereby appoints and constitutes the Collateral Agent as its agent for
the administration of the Collateral Account in respect thereof.
(c) The Collateral Agent shall take such actions with
respect to the Collateral Account as shall be directed in writing by the
Directing Holders and shall hold, apply and release funds
<PAGE> 19
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held in the Collateral Account in accordance with the provisions hereof as
directed by the Directing Holders to the extent not inconsistent with this
Agreement and the Debt Instruments; provided, however, that notwithstanding the
foregoing, so long as no Event of Default is continuing and no Enforcement
Notice is in effect, application of Trust Moneys held in the Collateral Account
by the Collateral Agent pursuant to the direction of the Company shall not
require the consent of any Secured Party, holder of Notes or holder of
Permitted Replacement Financing if and to the extent such direction is made by
the Company in compliance with all of the terms and provisions hereof and each
Debt Instrument and if all of the conditions precedent herein and therein for
the effectiveness of such direction have been satisfied in full all of which
shall be certified to the Collateral Agent as required herein and therein.
3.2 Collateral Proceeds Accounts. The Collateral Agent shall
establish and maintain, at the office of its corporate trust division, a
separate collateral trust account (each, a "Collateral Proceeds Account"),
which may be sub accounts or notional accounts of one account, for each of the
Secured Parties in respect of its Debt Instrument until the earlier of (i) the
termination of this Agreement or (ii) the indefeasible payment in full, in
cash, to all Secured Parties of all Obligations owing to such Secured Parties.
All funds on deposit in the Collateral Proceeds Accounts shall be held, applied
and disbursed by the Collateral Agent as part of the Trust Estate in accordance
with the terms of this Agreement.
3.3 "Trust Moneys" Defined. All cash or Cash Equivalents
received by the Collateral Agent:
(i) upon the release of Property from the Lien of the
Security Documents; or
(ii) as proceeds of insurance upon any, all or part of the
Collateral (other than any liability insurance proceeds payable to the
Collateral Agent for any loss, liability or expense incurred by it)
including, without limitation, proceeds of any insurance received
pursuant to Section 1.13 of any Mortgage; or
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(iii) as proceeds of any other sale or other disposition of
all or any part of the Collateral by or on behalf of the Collateral
Agent (including any proceeds received pursuant to Section 1.13 of any
Mortgage in respect of the sale or other disposition of all or any
part of the Collateral taken by eminent domain or purchased by, or
sold pursuant to any order of a governmental authority) or any
collection, recovery, receipt, appropriation or other realization of
or from all or any part of the Collateral pursuant to the Security
Documents or otherwise; or
(iv) for application hereunder, in the Indentures, in the
Term Loan Agreement, in the Debt Instruments constituting Permitted
Replacement Financing or in the Security Documents, or whose
disposition is not elsewhere otherwise specifically provided for
herein or therein;
(all such moneys being herein sometimes called "Trust Moneys"); shall be held
by the Collateral Agent for the benefit of the Secured Parties as a part of the
Trust Estate and, upon any entry upon or sale or other disposition of the
Collateral or any part thereof pursuant to enforcement of the Security
Documents, said Trust Moneys shall be applied in accordance with Section 4.1
hereof; but, prior to any such entry, sale or other disposition, all or any
part of the Trust Moneys may be withdrawn, and shall be released, paid or
applied by the Collateral Agent, from time to time as provided herein.
3.4 Withdrawal of Certain Net Cash Proceeds Aggregating Less
Than $5 Million. In accordance with Section 4.06(b)(A) of each of the
Indentures, Section 5.6(b)(A) of the Term Loan Agreement and any analogous
provisions of any Debt Instrument evidencing Permitted Replacement Financing,
to the extent that any Trust Moneys consist of Available Proceeds Amounts and
the aggregate amount of all Available Proceeds Amounts (whether derived from
one or more Asset Sales, insurance or eminent domain or similar proceedings)
received by the Company or the Collateral Agent to date is less than $5
million, such Trust Moneys may be withdrawn by the Company and shall be paid by
the Collateral Agent
<PAGE> 21
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upon a request by a Company Order and upon receipt by the Secured
Parties of (i) an Officers' Certificate certifying that such Trust Moneys
constitute Available Proceeds Amounts described above and that all such amounts
received to date are less than $5 million and (ii) all opinions, certificates
and other documentation required by the TIA, if any as certified to the
Collateral Agent by the Company.
Upon compliance with the foregoing provisions of this Section
3.4, the Collateral Agent shall apply the Trust Moneys as directed and
specified in such Company Order.
3.5 Withdrawal of Trust Moneys Following an Unapplied
Proceeds Offer. To the extent that any Trust Moneys consist of Net Cash
Proceeds received by the Collateral Agent as a result of an Asset Sale and an
Unapplied Proceeds Offer has been made in accordance with Section 4.06 of each
of the Indentures, Section 5.6 of the Term Loan Agreement and the analogous
provisions of any Debt Instrument evidencing Permitted Replacement Financing,
such Trust Moneys may be withdrawn by the Company and shall be paid by the
Collateral Agent to the Company (or as otherwise directed by the Company) upon
a Company Order to the Collateral Agent and upon receipt by the Secured Parties
of the following:
(a) An Officers' Certificate, dated not more than five
days prior to the Purchase Date certifying:
(i) that no Default or Event of Default exists
and that the release of the Trust Moneys will not result in a
Default or Event of Default;
(ii) (A) that such Trust Moneys constitute Net
Cash Proceeds, (B) that pursuant to and in accordance with
Section 4.06 of each of the Indentures, Section 5.6 of the
Term Loan Agreement and the analogous provisions of any Debt
Instrument evidencing Permitted Replacement Financing, the
Company has made an Unapplied Proceeds Offer, (C) the amount
of Trust Moneys to be applied to the repurchase of the Notes
and any Debt Instruments
<PAGE> 22
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evidencing Permitted Replacement Financing pursuant to
the Unapplied Proceeds Offer, (D) the amount of Trust Moneys
to be released to the Company, and (E) the Unapplied Proceeds
Offer Payment Date; and
(iii) that all conditions precedent and covenants
provided for in the Debt Instruments and this Agreement
relating to such application of Trust Moneys have been
complied with; and
(b) All opinions, certificates and other documentation
required under the TIA, if any as certified to the Collateral Agent by
the Company.
Upon compliance with the foregoing provisions of this Section
3.5, the Collateral Agent shall apply the Trust Moneys as directed and
specified by such Company Order.
3.6 Withdrawal of Trust Moneys for Reinvestment. To the
extent that any Trust Moneys consist of Net Cash Proceeds received by the
Collateral Agent as the result of an Asset Sale and the Company intends to
invest such Net Cash Proceeds in a Related Business Investment (the "Released
Trust Moneys"), such Trust Moneys may be withdrawn by the Company and shall be
paid by the Collateral Agent to the Company (or as otherwise directed by the
Company) upon a Company Order to the Collateral Agent and upon receipt by the
Secured Parties of the following:
(a) An Officers' Certificate certifying that (i) the
release of the Released Trust Moneys complies with the terms and
conditions of Section 4.06 of each of the Indentures, Section 5.6 of
the Term Loan Agreement and the analogous provisions of any Debt
Instrument evidencing Permitted Replacement Financing, (ii) there is
no Default or Event of Default in effect or continuing on the date
thereof, (iii) the release of the Released Trust Moneys will not
result in a Default or Event of Default hereunder, (iv) the parties
executing any and all documents required under the provisions of this
Section were duly authorized to do so, and (v) all
<PAGE> 23
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conditions precedent and covenants provided for in the Debt
Instruments and this Agreement relating to such release have been
complied with;
(b) If the Related Business Investment to be made is an
investment in real property:
(i) a Mortgage or other instrument or instruments in
recordable form sufficient to grant to the Collateral
Agent for the benefit of the Secured Parties (A)
substantially the same rights and remedies in respect
of such real property as granted thereto under the
Mortgage executed and delivered on the Issue Date and
(B) a valid first priority mortgage Lien on such real
property subject to no Liens other than Prior Liens
of the types permitted under the Mortgage delivered
on the Issue Date and, if the real property is a
leasehold or easement interest, such Mortgage or
other instrument or instruments shall include normal
and customary provisions with respect thereto, in
each case together with evidence of the filing of all
such financing statements and other instruments as
may be necessary to perfect such Lien;
(ii) a Title Policy (or a commitment to issue title
insurance) insuring that the Lien of the instruments
delivered pursuant to clause (i) above constitutes a
valid and perfected first priority mortgage Lien on
such real property in an aggregate amount equal to
the fair market value of the real property, together
with an Officers' Certificate stating that any
specific exceptions to such title insurance are
Permitted Liens, together with such endorsements and
other opinions of the type included in the Title
Policy or otherwise delivered to the Collateral Agent
on the Issue Date with respect to the Mortgaged
Property;
<PAGE> 24
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(iii) in the event such real property has a fair
value in excess of $250,000, a Survey with
respect thereto;
(iv) evidence of payment or a closing statement indicating
payments to be made by the Company of all title
premiums, recording charges, transfer taxes and other
costs and expenses, including reasonable legal fees
and disbursements of counsel for the Collateral Agent
(and any local counsel), that may be incurred to
validly and effectively subject the real property to
the Lien of any applicable Security Document and to
perfect such Lien;
(v) an Officers' Certificate stating that the Company has
caused there to be conducted by a reputable expert a
review and analysis of the environmental conditions
relating to such real property and that, in the
reasonable and good faith judgment of the issuer
thereof such real property does not contain any
conditions which would cause a prudent institutional
lender to decline to fund loans secured by such real
property, together with a copy of the written report
of such expert; and
(vi) such further documents, opinions, certificates or
instruments (including, without limitation (A)
policies or certificates of insurance, (B) UCC,
judgment and tax lien searches, (C) consents,
approvals, estoppels and tenant subordination
agreements and (D) Officers' Certificates in respect
of compliance with local codes or ordinances relating
to building or fire safety or structural soundness
and the adequacy of utility services) as are
customarily provided to institutional mortgage
lenders;
(c) If the Related Business Investment is not an
investment in real property:
<PAGE> 25
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(i) an instrument sufficient to grant to the Collateral
Agent, for the benefit of the Secured Parties (A)
substantially the same rights and remedies in respect
of such personal property interest as granted thereto
under the Security Agreement, the Company Stock
Pledge or the Subsidiary Stock Pledge, as the case
may be, executed and delivered on the Issue Date and
(B) a valid first priority Lien on such personal
property interest subject to no Liens other than
Liens permitted under such instrument, together with
evidence of the filing of such financing statements
and other instruments as may be necessary to perfect
such Liens; and
(ii) evidence of payment or a closing statement indicating
payments to be made by the Company of all filing
fees, recording charges, transfer taxes and other
costs and expenses, including reasonable legal fees
and disbursements of counsel for the Collateral Agent
(and any local counsel), that may be incurred to
validly and effectively subject the Related Business
Investment to the Lien of any Security Document; and
(d) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are therewith
delivered to the Collateral Agent conform to the
requirements of this Agreement and the Security
Documents, and that, upon the basis of such request
of the Company and the accompanying documents
specified in this Section 3.6, all conditions
precedent herein provided for relating to such
withdrawal and payment have been complied with, and
the Trust Moneys whose withdrawal is then requested
may be lawfully paid over under this Section 3.6;
<PAGE> 26
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(ii) that the Collateral Agent has a valid and
perfected Lien on such Related Business
Investments, that the same and every part thereof
are subject to no Liens prior to the Lien of the
Security Documents, except Liens permitted under the
Security Documents; and
(iii) that all of such Obligor's right, title and interest
in and to said Related Business Investments, are then
subject to the Lien of the Security Documents;
(e) All certificates, opinions and other documentation
required under the TIA, if any as certified to the Collateral Agent by
the Company.
Upon compliance with the foregoing provisions of this Section
3.6, the Collateral Agent shall apply the Released Trust Moneys as directed and
specified by such Company Order.
3.7 Withdrawal of Trust Moneys on Basis of Retirement of
Securities. Trust Moneys may be withdrawn by the Company to be applied to the
redemption and retirement of the Notes or the repayment of any Loans and shall
be paid by the Collateral Agent to the Company (or as otherwise directed by the
Company) upon a Company Order to the Collateral Agent and upon receipt by the
Secured Parties of the following:
(a) A Board Resolution requesting the withdrawal and
payment of a specified amount of Trust Moneys; and
(b) An Officers' Certificate, dated not more than 30 days
prior to the date of the application for the withdrawal and payment of
such Trust Moneys, certifying that (i) there is no Default or Event of
Default in effect or continuing on the date thereof and (ii) all
conditions precedent and covenants provided for in the Debt
Instruments and this Agreement relating to such withdrawal and
application have been complied with.
<PAGE> 27
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Upon compliance with the foregoing provisions of this Section
3.7, the Collateral Agent shall apply the Trust Moneys as directed and
specified by such Company Order.
3.8 Withdrawal of Net Proceeds and Net Awards For
Restoration. To the extent that any Trust Moneys consist of either Net
Proceeds or Net Awards received by the Collateral Agent pursuant to Section
1.13 of any Mortgage and such Net Proceeds or Net Awards are required to be
applied or may be applied by the Obligor thereunder to effect a Restoration of
the affected Collateral, such Trust Moneys may be withdrawn by the Company and
shall be paid by the Collateral Agent upon a request by a Company Order to
reimburse such Obligor for expenditures made, or to pay costs incurred, by such
Obligor to repair, rebuild or replace the property destroyed, damaged or taken,
upon receipt by the Secured Parties of the following:
(a) An Officers' Certificate of the Company, dated not
more than 30 days prior to the date of the application for the
withdrawal and payment of such Trust Moneys stating:
(i) that expenditures have been made, or costs
incurred, by such Obligor in a specified amount for the
purpose of making certain repairs, rebuildings and
replacements of the Collateral, which shall be briefly
described, and stating the fair market value thereof at the
date of the expenditure or incurrence thereof by such Obligor;
(ii) that no part of such expenditures or costs
has been or is being made the basis for the withdrawal of any
Trust Moneys in any previous or then pending application
pursuant to this Section 3.8;
(iii) that there is no outstanding Indebtedness,
other than costs for which payment is being requested, for the
purchase price or construction of such repairs, rebuildings or
replacements, or for labor, wages, materials or supplies in
connection with the making
<PAGE> 28
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thereof, which, if unpaid, might become the basis of a
vendor's, mechanic's, laborer's, materialman's, statutory or
other similar Lien upon any Collateral;
(iv) that the property to be repaired, rebuilt or
replaced is necessary or desirable in the conduct of such
Obligor's business;
(v) whether any part of such repairs, rebuildings
or replacements within six months before the date of
acquisition thereof by such Obligor has been used or operated
by any Person other than such Obligor in a business similar to
that in which such property has been or is to be used or
operated by such Obligor, and whether the fair value to such
Obligor, at the date of such acquisition, of such part of such
repairs, rebuildings or replacement is at least $25,000, or at
least 1% of the aggregate principal amount of the outstanding
Notes and Loans, collectively;
(vi) that no Default or Event of Default under any
Debt Instrument shall have occurred and be continuing; and
(vii) that all conditions precedent herein and in
the Debt Instruments relating to such withdrawal and payment
have been complied with;
(b) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are
therewith delivered to the Collateral Agent conform in all
material respects to the requirements of this Agreement and
the Security Documents, and that, upon the basis of such
request of the Company and the accompanying documents
specified in this Section 3.8 (and without any investigation
as to any factual matter discussed within those instruments),
all conditions precedent herein provided for relating to such
withdrawal and payment have
<PAGE> 29
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been complied with, and the Trust Moneys whose
withdrawal is then requested may be lawfully paid over under
this Section 3.8; and
(ii) upon the payment therefor during the
performance and at completion of the Restoration work and the
construction or installation thereof upon the Mortgaged
Property, the buildings, fixtures, and personalty (other than
non-UCC Property) comprising the Restoration work shall become
subject to the lien of the Mortgage and other Security
Documents pertinent thereto. The foregoing opinion does not
address the priority of the lien of the Mortgage or other
Security Documents with respect to competing Liens (if any) on
the Restoration work.
(c) A certificate of an independent, reputable architect,
engineer or appraiser acceptable to Collateral Agent and licensed in
the state where the Premises are located, stating:
(i) that, based upon the Architect's observations
at the site of the Restoration work and its review of the
contractor's application for payment, the Restoration work to
which the payment request relates has progressed to the point
indicated therein and, to the best of the Architect's
knowledge, information and belief, is in accordance with the
Plans and Specifications and the other documents forming the
contract for construction of the Restoration work
(collectively, the "Contract Documents") subject (with respect
to certifications relating to all payments other than the
final payment upon completion of the Restoration work) to an
evaluation of the Restoration work for conformance with the
Contract Documents on substantial completion, results of
subsequent tests and inspections and minor deviations from the
Contract Documents correctable prior to completion;
<PAGE> 30
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(ii) the sums requested are required to reimburse
such Obligor for payments by such Obligor to, or are
due to, the contractors, subcontractors, materialmen,
laborers, engineers, architects or other persons rendering
services or materials for the Restoration pursuant to the
Contract Documents, and that, when added to the sums, if any,
previously paid out by Collateral Agent, such sums do not
exceed the amount due under the Contract Documents to the date
of such Architect's Certificate;
(iii) whether or not the Estimate (as defined in
the applicable Mortgage) continues to be accurate, and if not,
what the entire cost of such Restoration under the Contract
Documents is then estimated to be; and
(iv) that the amount of the Net Proceeds or Net
Awards, as the case may be, plus any amount received by
Collateral Agent under an Additional Undertaking (as defined
in the applicable Mortgage) remaining after giving effect to
such payment, based upon the Contract Documents in effect as
of the date of the certification and the contractors most
recent sworn statement setting forth the amounts yet to become
due the contractor and its subcontractors, a copy of which is
attached will be sufficient on completion of the Restoration
to pay for the same in full (including, in detail, an
estimate by trade of the remaining costs of completion);
(d) an endorsement (or the title insurers commitment to
issue an endorsement upon receipt of advice that the funds requested
have been disbursed) to the mortgage title policy for the property
affected by the Restoration work (i) extending the effective date of
the insurance thereunder to the date of the disbursement of funds
requested, (ii) insuring that no mechanics liens arising from the
Restoration work have been filed of record to such date, (iii)
insuring against mechanics liens arising with respect to that portion
of the Restoration work for which the request for
<PAGE> 31
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disbursement is made thereunder, and (iv) reflecting no other liens or
additional Schedule B exceptions to such title policy. Said
commitment and endorsement shall be in form substantially the same as
that attached to the Disbursement Agreement as Attachment 1.
(e) If such request is the final request for any payment,
in addition to the documentation required by (a), (b),
(c) and (d) above, such request shall be accompanied by:
an Officers' Certificate stating that all occupancy
certificates, operating and other permits, licenses, waivers,
other documents, or any combination of the foregoing required
by law in connection with or as a result of such Restoration
have been obtained; and
(f) All other documentation required under TIA Section
314(d), if any.
Upon compliance with the foregoing provisions of this Section
3.8, the Collateral Agent shall pay on the written request of the Company an
amount of Trust Moneys of the character aforesaid equal to the amount of the
expenditures or costs stated in the Officers' Certificate required by clause
(i) of subsection (a) of this Section 3.8, or the fair value to such Obligor of
such repairs, rebuildings and replacements, as stated in such Officers'
Certificate, whichever is less.
3.9 Investment of Trust Moneys. (a) All or any part of any
Trust Moneys held by the Collateral Agent shall from time to time be invested
or reinvested by or on behalf of the Collateral Agent in any Cash Equivalents
pursuant to the written direction of the Company, which shall specify the Cash
Equivalents in which such Trust Moneys shall be invested. Unless an Event of
Default occurs and is continuing, any interest on such Cash Equivalents (in
excess of any accrued interest paid at the time of purchase) that may be
received by the Collateral Agent shall be forthwith paid to the Company. Such
Cash Equivalents shall be held by the Collateral
<PAGE> 32
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Agent as a part of the Trust Estate, subject to the same provisions
hereof as the cash used by it to purchase such Cash Equivalents.
(b) The Collateral Agent shall not be liable or
responsible for any loss resulting from such investments or sales except only
for its own negligent action, its own negligent failure to act or its own
willful misconduct in complying with this Section 3.9.
ARTICLE 4
APPLICATION OF CERTAIN AMOUNTS
4.1 Application of Proceeds. In the event that there shall
have occurred an Event of Default, and by virtue of the exercise of remedies in
respect thereof or in connection therewith, the Collateral Agent receives any
amount or proceeds from the sale or disposition of or realization upon any
Collateral (including, without limitation, proceeds of any claim under the
Title Policies), the Collateral Agent shall apply such amount or proceeds as
soon as practicable after receipt as follows:
FIRST: To the Collateral Agent in an amount equal to the
Collateral Agent's fees and expenses, including reasonable attorney's fees and
expenses which are unpaid as of the applicable Distribution Date and to any
Secured Party or other Person which has theretofore advanced or paid any such
Collateral Agent's Fees in an amount equal to the amount thereof so advanced or
paid by such Secured Party or Person and to reimburse to the Collateral Agent
and any Secured Party or other Person the amount of any advance made pursuant
to Section 2.4 (with interest thereon at a rate per annum equal to two percent
(2%) in excess of the highest rate payable under the Notes);
SECOND: (a) With respect to the Shared Collateral to each
Secured Party in an amount equal to the product of (i) the total amount
available for distribution on such Distribution Date under this clause SECOND
attributable to such Shared Collateral and
<PAGE> 33
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(ii) such Secured Party's Pro Rata Share and (b) with respect to the
Disbursement Collateral, to the Note Trustee, the Discount Note Trustee and the
Agent in an amount equal to the product of (i) the total amount available for
distribution on such Disbursement Date under this clause SECOND attributable to
such Disbursement Collateral and (ii) such Secured Party's Pro Rata Share; and
THIRD: After payment in full of all Secured Obligations in
accordance with the provisions of clause SECOND above, to the Company or the
successors or assigns of the Company as their interests may appear, or to such
Person who may be lawfully entitled to receive the same.
4.2 Release of Amounts in Collateral Proceeds
Accounts. Amounts on deposit in a Collateral Proceeds Account with respect to
Secured Obligations shall be paid to the applicable Secured Party as
contemplated in Section 4.1 hereof upon receipt by the Collateral Agent of a
certificate from such Secured Party setting forth the name of the Person to
whom payment should be made and the amount owing to such Secured Party and
stating that such amount will be applied to the payment of Secured Obligations.
4.3 Payment Provisions. For the purposes of Section 4.1, all
interest to be paid on any of the Secured Obligations pursuant to the terms of
any Debt Instrument shall, as among the Secured Parties and irrespective of
whether recognized or allowed by any bankruptcy proceeding, be treated as due
and owing on the Secured Obligations; provided, however, that no default rate
of interest in excess of 2% per annum in excess of the rate borne by such
Secured Obligations in the event there would have been no default shall be
taken into account for purposes of Section 4.1.
ARTICLE 5
AGREEMENTS WITH COLLATERAL AGENT
5.1 Delivery of Debt Instruments. On the date hereof, the
Company shall deliver to the Collateral Agent a true and
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complete copy of each of the Debt Instruments to which it and/or any other
Obligor is a party as in effect on the date hereof. Promptly upon the
execution thereof, the Company shall deliver to the Collateral Agent a true and
complete copy of any and all amendments, modifications or supplements of or to
any Debt Instrument to which it and/or any other Obligor is a party and copies
of any Debt Instrument it and/or any other Obligor hereafter delivers.
5.2 Information as to Holders. The Company shall deliver to
the Collateral Agent by January 15 in each year, and from time to time upon
request of the Collateral Agent, a list setting forth, by each Debt Instrument,
(i) the aggregate principal amount outstanding thereunder, (ii) the interest
rate or rates then in effect thereunder, and (iii) to the extent known to the
Company and/or the other Obligors, the names of the Secured Parties and the
unpaid principal amount thereof owing to each Secured Party (or the Persons for
whom such Secured Party acts as trustee, agent or fiduciary). The Company
shall furnish to the Collateral Agent within thirty days after the date hereof
a list setting forth the name and address of each party to whom notices must be
sent under the Debt Instruments to which it and/or any other Obligor is a party
and the Company shall furnish promptly to the Collateral Agent any changes or
additions to such list.
5.3 Compensation and Expenses. The Obligors shall pay to the
Collateral Agent, from time to time upon demand, (i) compensation (which shall
be reasonable and not in excess of the Collateral Agent's customary
compensation for similar services and shall not be limited by any provision of
law in regard to compensation of a trustee of an express trust) for its
services hereunder and for administering the Trust Estate and (ii) all of the
fees, costs and expenses of the Collateral Agent (including, without
limitation, the fees and disbursements of its counsel and such financial or
investment advisor and special counsel as the Collateral Agent elects to
retain) (a) arising in connection with the preparation, execution, delivery,
modification and termination of this Agreement, and the enforcement of any
provisions hereof, or (b) incurred or required to be advanced in connection
with the
<PAGE> 35
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administration of the Trust Estate, the investment of the Trust Monies, and the
preservation, protection or defense of the Collateral Agent's rights under this
Agreement and in and to the Collateral and the Trust Estate. The obligations
of the Obligors under this Section 5.3 shall survive the termination of the
other provisions of this Agreement.
5.4 Stamp and Other Similar Taxes. The Obligors shall
indemnify and hold harmless the Collateral Agent and each Secured Party (and
each Person for whom any Secured Party acts as trustee, agent or fiduciary)
from any present or future claim for liability for any mortgage, stamp,
recording, intangibles or other similar tax and any penalties or interest with
respect thereto, which may be assessed, levied or collected by any jurisdiction
in connection with this Agreement, any Security Document or any Secured
Obligation. The obligations of the Obligors under this Section 5.4 shall
survive the termination of the other provisions of this Agreement.
5.5 Filing Fees, Excise Taxes, etc. The Obligors shall pay
or reimburse the Collateral Agent for any and all amounts in respect of all
search, filing, intangible, transfer, recording and registration fees, taxes,
excise taxes and other similar imposts which may be payable or determined to be
payable in respect of the execution, delivery, performance and enforcement of
this Agreement, any Security Document or any Secured Obligation to the extent
the same may be paid or reimbursed by the Obligors without subjecting the
Collateral Agent or any Secured Party to any civil or criminal liability. The
obligations of the Obligors under this Section 5.5 shall survive the
termination of the other provisions of this Agreement.
5.6 Indemnification. (a) Each Obligor agrees to, jointly
and severally, pay, indemnify, and hold the Collateral Agent harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and the Security Documents
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unless arising from the gross negligence or willful misconduct of the
Collateral Agent. Without limiting the foregoing sentence in any way, the
Obligors shall also indemnify the Collateral Agent for, and hold it harmless
against, any loss or liability incurred by the Collateral Agent (including
reasonable attorneys' and consultants' fees and court costs) arising from or
relating to any Environmental Laws or Hazardous Materials (as such terms are
defined in the Mortgage) concerning the Mortgaged Property (as such term is
defined in the Mortgage) or any breach or alleged breach by the Obligors of any
representation, warranty or covenant in the Mortgage, provided such is not due
to the Collateral Agent's willful violation of any Environmental Laws.
(b) In any suit, proceeding or action brought by the
Collateral Agent with respect to the Collateral or for any sum owing in respect
of Secured Obligations, or to enforce the provisions of any Security Document,
the Obligors shall, jointly and severally, save, indemnify and keep the
Collateral Agent and each of the Secured Parties (and each Person for whom any
Secured Party acts as trustee, agent or fiduciary) harmless from and against
all expense, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction of liability whatsoever incurred or
suffered by the Collateral Agent or such Secured Party (or Person), as the case
may be, arising out of a breach by the Obligors of any obligation set forth in
this Agreement, and all such obligations of the Obligors shall be and remain
enforceable against and only against the Obligors. The provisions of this
Section 5.6 shall survive the termination of the other provisions of this
Agreement.
5.7 Recording and Opinions; Further Assurance. (a) Each
Obligor shall take or cause to be taken all action required to perfect,
maintain, preserve and protect the Lien on and security interest in the
Collateral granted by the Security Documents, including, without limitation,
the filing of financing statements, continuation statements and any instruments
of further assurance, in such manner and in such places as may be required by
law fully to preserve and protect the rights of the Secured Parties and the
Collateral Agent under this Agreement and the other
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Security Documents to all property comprising the Collateral. The Obligors
shall from time to time promptly pay all financing and continuation statement
recording and/or filing fees, charges and taxes relating to this Agreement and
the other Security Documents, any amendments thereto and any other instruments
of further assurance required pursuant to the Security Documents.
(b) The Company shall furnish to the Collateral Agent and
the Trustees, at the time of execution and delivery hereof, Opinion(s) of
Counsel either (a) substantially to the effect that, in the opinion of such
counsel, this Agreement and the grant of a security interest in the Collateral
intended to be made by the Security Documents and all other instruments of
further assurance, including, without limitation, financing statements, have
been properly recorded and filed to the extent necessary to perfect the
security interests in the Collateral created by the Security Documents and
reciting the details of such action, and stating that as to the security
interests created pursuant to the Security Documents, such recordings and
filings are the only recordings and filings necessary to give notice thereof
and that no re-recordings or refilings are necessary to maintain such notice
(other than as stated in such opinion), or (b) to the effect that, in the
opinion of such counsel, no such action is necessary to perfect such security
interests. Promptly after execution and delivery of this Agreement, the
Company shall deliver the opinion(s) required by Section 314(b) of the TIA.
The Company shall furnish to the Secured Parties, at the time of execution and
delivery of any Additional Security Document(s), Opinion(s) of Counsel either
substantially to the effect set forth in clause (a) of the immediately
preceding sentence (but relating only to such Additional Security Documents and
the Collateral secured thereby) or to the effect set forth in clause (b)
thereof.
(c) The Company shall furnish to the Collateral Agent
yearly, simultaneous with its delivery to the Trustees, the Opinion of Counsel
called for in Section 10.02 of the Indentures.
(d) At any time and from time to time, upon the written
request of the Collateral Agent, and at the expense of the
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Obligors, the Obligors shall promptly execute and deliver any and all such
further instruments and documents and take such further action as the
Collateral Agent reasonably deems necessary or desirable in obtaining the full
benefits intended to be provided by this Agreement.
ARTICLE 6
COLLATERAL AGENT
6.1 Acceptance of Trust. The Collateral Agent, for itself
and its successors, hereby accepts the trust created by this Agreement upon the
terms and conditions hereof, including those contained in Article 5 and in this
Article 6. The Collateral Agent's duties in respect of the Trust Estate shall
include, without limitation, the review of applications of the Obligors or
others for consents, waivers, releases or other matters relating to the Trust
Estate or the Collateral and the prosecution following any Event of Default of
any action or proceeding or the taking of any nonjudicial remedial action as
shall be determined to be required pursuant to the provisions of Sections 2.2
and 2.3.
6.2 Exculpatory Provisions. (a) The Collateral Agent shall
not be responsible in any manner whatsoever for the correctness of any
recitals, statements, representations or warranties herein contained, all of
which are made solely by the Obligors. The Collateral Agent makes no
representations as to the value or condition of the Trust Estate or any part
thereof, or as to the title of the Obligors thereto or as to the security
afforded by the Security Documents or this Agreement or as to the validity,
execution (except its own execution thereof), enforceability, legality or
sufficiency of the Security Documents or this Agreement or of the Secured
Obligations, and the Collateral Agent shall incur no liability or
responsibility in respect of any such matters. The Collateral Agent shall not
be responsible for insuring the Trust Estate or for the payment of taxes,
charges, assessments or Liens upon the Trust Estate, except that, subject to
the provisions of Section 6.4(c), in the event the Collateral Agent enters into
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possession of a part or all of the Collateral, the Collateral Agent shall use
reasonable efforts to preserve the part in its possession.
(b) The Collateral Agent shall not be required to
ascertain or inquire as to the performance by the Obligors of any of the
covenants or agreements contained herein, in any Security Document or in any
Debt Instrument. Whenever it is necessary, or in the opinion of the Collateral
Agent advisable, for the Collateral Agent to ascertain the amount of Secured
Obligations then held by a Secured Party (or any Person for whom a Secured
Party acts as trustee, agent or fiduciary), the Collateral Agent may rely on a
certificate as to such amount from any trustee, agent or fiduciary constituting
or representing such Secured Party and if any such Secured Party shall not
provide such information to the Collateral Agent, such Secured Party shall not
be entitled to receive payments hereunder (in which case the amounts otherwise
payable to such Secured Party shall be held in trust for such Secured Party in
the applicable Collateral Proceeds Account) until such Secured Party has
provided such information to the Collateral Agent.
(c) The Collateral Agent shall not be personally liable
for any action taken or omitted to be taken by it in accordance with this
Agreement or any Security Document or any Debt Instrument except for its own
gross negligence or willful misconduct.
(d) Notwithstanding anything to the contrary contained in
this Agreement, the Indentures, the Term Loan Agreement or any of the Security
Documents, in the event the Collateral Agent is entitled or required to
commence an action to foreclose the Mortgage or otherwise exercise its remedies
to acquire control or possession of the Mortgaged Property, the Collateral
Agent shall not be required to commence any such action or exercise any such
remedy if the Collateral Agent has determined in good faith that the Collateral
Agent may incur liability under the Environmental Laws as the result of the
presence at, or release on or from, the Facility of any Hazardous Materials
unless the Collateral Agent has received security or indemnity, from a Secured
Party or holders of
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Indebtedness benefiting from this Agreement, in an amount and in a form all
satisfactory to the Collateral Agent in its sole discretion, protecting the
Collateral Agent from all such liability.
6.3 Delegation of Duties. The Collateral Agent may execute
any of the trusts or powers hereof and perform any duty hereunder either
directly or by or through agents or attorneys-in-fact. The Collateral Agent
shall be entitled to advice of counsel concerning all matters pertaining to
such trusts, powers and duties. The Collateral Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it without gross negligence or willful misconduct in the employment of such
agents or attorneys-in-fact.
6.4 Reliance by the Collateral Agent. (a) The Collateral
Agent may consult with counsel, and any opinion of such counsel (who shall not
be employees of the Obligors) shall be full and complete authorization and
protection in respect of any action taken or suffered by it hereunder in
accordance therewith. The Collateral Agent shall have the right at any time to
seek instructions concerning the administration of the Trust Estate from any
court of competent jurisdiction.
(b) The Collateral Agent may rely, and shall be fully
protected in acting, upon any Enforcement Notice, resolution, statement,
certificate, instrument, opinion, direction, instruction, report, notice,
request, consent, order, bond or other paper or document as to which it has no
reason to believe to be other than genuine and to have been signed or presented
by the proper party or parties or, in the case of cables, telecopies and
telexes, to have been sent by the proper party or parties. In the absence of
its gross negligence or willful misconduct, the Collateral Agent may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Collateral Agent and conforming to the requirements of this Agreement or
any Security Document.
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(c) The Collateral Agent shall not be under any
obligation to exercise any of the rights or powers vested in the Collateral
Agent by this Agreement unless the Collateral Agent shall have been provided
adequate security and indemnity against the costs, expenses and liabilities
that may be incurred by it in compliance with such request or direction,
including, without limitation, such reasonable advances as may be requested by
the Collateral Agent, and liability relating in any way to Environmental Law
and/or Hazardous Materials.
(d) The Collateral Agent shall not be responsible in any
way for, nor shall it have a duty or obligation to, monitor, manage or perform
the Company's policies, practices or compliance with Environmental Laws or
Hazardous Materials relating to Mortgaged Property.
6.5 Resignation or Removal of the Collateral Agent. (a) The
Collateral Agent may at any time, (i) by giving written notice to the Secured
Parties, resign and be discharged of the responsibilities hereby created, such
resignation to become effective upon the appointment of a successor collateral
agent or collateral agents pursuant to the terms of paragraph (b) hereof or
(ii) be removed from its capacity as the Collateral Agent by the Directing
Holders. If no successor collateral agent or collateral agents shall be
appointed and approved within sixty days from the date of the giving of the
aforesaid notice of resignation or within sixty days from the date of such
removal, the Collateral Agent (notwithstanding the termination of all of its
other duties and obligations hereunder by reason of such resignation or such
removal) shall, or any Secured Party may, apply to any court of competent
jurisdiction to appoint a successor collateral agent or collateral agents
(which may be an individual or individuals) to act hereunder. Any successor
collateral agent or collateral agents so appointed by such court shall
immediately and without further act be superseded by any successor collateral
agent or collateral agents appointed pursuant to the terms of paragraph (b)
hereof.
(b) If at any time the Collateral Agent shall resign or
otherwise become incapable of acting, or if at any time a vacancy
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shall occur in the office of the Collateral Agent by virtue of the removal of
the Collateral Agent or for any other cause, a successor collateral agent or
collateral agents may be appointed (i) automatically under the circumstances
provided by Section 7.08(b) of each of the Indentures or (ii) in all other
cases, by the Directing Holders, and in each of the cases described in clauses
(i) and (ii) of this paragraph (b), the powers, duties, authority and title of
the predecessor collateral agent or collateral agents shall be terminated and
cancelled without procuring the resignation of such predecessor collateral
agent or collateral agents, and without any other formality (except as may be
required by applicable law).
(c) The appointment and designation referred to in
subsection 6.5(b) shall, after any required filing, be full evidence of the
right and authority to make the same and of all the facts therein recited, and
this Agreement shall vest in such successor collateral agent or collateral
agents, without any further act, deed or conveyance, all of the estate and
title of its predecessor or their predecessors, and upon such filing for record
the successor collateral agent or collateral agents shall become fully vested
with all the estates, properties, rights, powers, trusts, duties, authority and
title of its predecessor or their predecessors; but such predecessor or
predecessors shall, nevertheless, on the written request of the Directing
Holders, the Obligors or its or their successor collateral agent or collateral
agents, execute and deliver an instrument transferring to such successor or
successors all the estates, properties, rights, powers, trusts, duties,
authority and title of such predecessor or predecessors hereunder. Each such
predecessor or predecessors shall deliver all securities and moneys held by it
or them to such successor collateral agent or collateral agents.
(d) Any required filing for record of the instrument
appointing a successor collateral agent or collateral agents as hereinabove
provided shall be at the expense of the Obligors. The resignation of any
collateral agent or collateral agents and the instrument or instruments
removing any collateral agent or collateral agents, together with all other
instruments, deeds and
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conveyances provided for in this Article 6 shall, if required by law, be
forthwith recorded, registered and filed by and at the expense of the Obligors,
wherever this Agreement is recorded, registered and filed.
6.6 Status of Successors to the Collateral Agent. Except as
permitted by Section 6.5, every successor to the Collateral Agent appointed
pursuant to Section 6.5 shall be a bank or trust company in good standing and
having power so to act, incorporated under the laws of the United States or any
State thereof or the District of Columbia, and having its principal corporate
trust office within the forty-eight contiguous States, and shall also have
capital, surplus and undivided profits of not less than $100,000,000, if there
be such an institution with such capital, surplus and undivided profits
willing, qualified and able to accept the trust upon reasonable or customary
terms.
6.7 Merger of the Collateral Agent. Any corporation into
which the Collateral Agent may be merged, or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Collateral Agent shall be a party, shall be the Collateral Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of the parties hereto.
6.8 Appointment of Additional and Separate Collateral Agent.
Whenever (i) the Collateral Agent shall deem it necessary or prudent (in
accordance with the advice or opinion of its counsel) in order to conform to
any law of any jurisdiction in which all or any part of the Collateral shall be
situated or to make any claim or bring any suit with respect to or in
connection with the Collateral, or (ii) the Collateral Agent shall be advised
by counsel satisfactory to it that it is so necessary or prudent in the
interest of the Secured Parties, then in any such case, the Collateral Agent
shall execute and deliver from time to time all instruments and agreements
necessary or proper to constitute another bank or trust company or one or more
persons approved by the Collateral Agent either to act as additional trustee or
trustees of all or any part of the Trust Estate, jointly with the
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Collateral Agent, or to act as separate trustee or trustees of all or any part
of the Trust Estate, in any such case with such powers as may be provided in
such instruments or agreements, and to vest in such bank, trust company or
person as such additional trustee or separate trustee, as the case may be, any
property, title, right or power of the Collateral Agent deemed necessary or
advisable by the Collateral Agent. The Obligors and the Secured Parties hereby
consent to all actions taken by the Collateral Agent under the foregoing
provisions of this Section 6.8.
ARTICLE 7
TERMINATION; RELEASES OF COLLATERAL;
EXPIRATION OF CERTAIN RIGHTS
7.1 Termination. This Agreement shall terminate when all
amounts owing in respect of the Secured Obligations under or in respect of (i)
the Note Indenture and the Senior Secured Notes and any related instruments and
agreements, (ii) the Discount Note Indenture and the Senior Secured Discount
Notes and any related instruments and agreements and (iii) the Term Loan
Agreement and any related instruments and agreements shall have been
indefeasibly paid in full in cash or at such time as such Secured Obligations
otherwise have been defeased in accordance with the applicable Debt Instrument
and the Obligors and its subsidiaries are discharged of their obligations under
each such Debt Instrument in accordance with its terms; provided, however, that
if such Debt Instrument is subject to reinstatement as provided in Section 8.05
of the Indentures, this Agreement shall likewise be reinstated.
7.2 Releases of Collateral. (a) Following the repayment in
full of all Indebtedness outstanding under the Term Loan Agreement and the
termination of such Term Loan Agreement, the Company shall be entitled to
obtain a full release of all of the Collateral from the Liens of the Security
Documents upon compliance with the conditions precedent set forth in Section
8.01 of each of the Indentures for satisfaction and discharge of the Indentures
or for defeasance pursuant to Section 8.02(b) of each of the
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Indentures and of the analogous provisions of the Debt Instruments evidencing
any Permitted Replacement Financing. Upon delivery by the Company to the
Secured Parties of an Officers' Certificate and an Opinion of Counsel, each to
the effect that such conditions precedent have been complied with (and which
may be the same Officers' Certificate and Opinion of Counsel required by
Article Eight of each of the Indentures), the Collateral Agent shall forthwith
take all necessary action (at the request of and the expense of the Obligors)
to release and reconvey to the appropriate Obligors all of the Collateral, and
shall deliver such Collateral in its possession to the appropriate Obligors
including, without limitation, the execution and delivery of releases and
satisfactions wherever required.
(b) The Company shall be entitled to obtain a release of,
and the Collateral Agent shall release, items of Collateral (other than Trust
Moneys) (the "Released Interests") subject to an Asset Sale upon compliance
with the condition precedent that the Company shall have delivered to the
Secured Parties the following:
(i) A Company Order requesting release of Released
Interests, such Company Order (A) specifically describing the proposed
Released Interests, (B) specifying the value of such Released
Interests on a date within 60 days of the Company Order (the
"Valuation Date"), (C) stating that the purchase price to be received
is at least equal to the fair market value of the Released Interests,
(D) stating that the release of such Released Interests will not
interfere with or impede the Collateral Agent's ability to realize the
value of the remaining Collateral and will not impair the maintenance
and operation of the remaining Collateral, (E) confirming the sale of,
or an agreement to sell, such Released Interests is a bona fide sale
to a Person that is not an Affiliate of the Company or, in the event
that such sale is to a Person that is such an Affiliate, confirming
that such sale is being made in accordance with Section 4.03 of each
of the Indentures, Section 5.3 of the Term Loan Agreement and the
analogous provisions of the Debt Instruments evidencing any Permitted
Replacement Financing, (F) certifying that such Asset Sale
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complies with the terms and conditions of Section 4.06 of each of the
Indentures, Section 5.6 of the Term Loan Agreement and the analogous
provisions of the Debt Instruments evidencing any Permitted
Replacement Financing, (G) in the event that there is to be a
substitution of Property for the Collateral subject to the Asset Sale,
specifying the Property intended to be substituted for the Collateral
to be disposed of and (H) shall be accompanied by a counterpart of the
instruments proposed to give effect to the release fully executed and
acknowledged (if applicable) by all parties thereto other than the
Collateral Agent;
(ii) An Officers' Certificate certifying that (A) such
Asset Sale covers only the Released Interests and complies with the
terms and conditions of an Asset Sale pursuant to Section 4.06 of each
of the Indentures, Section 5.6 of the Term Loan Agreement and the
analogous provisions of the Debt Instruments evidencing any Permitted
Replacement Financing, (B) all Net Cash Proceeds from the sale of any
of the Released Interests will be applied pursuant to Section 4.06 of
each of the Indentures, Section 5.6 of the Term Loan Agreement and the
analogous provisions of the Debt Instruments evidencing any Permitted
Replacement Financing, (C) there is no Default or Event of Default in
effect or continuing on the date thereof, the Valuation Date or the
date of such Asset Sale, (D) the release of the Released Interest will
not result in a Default or Event of Default hereunder and (E) all
conditions precedent to such release have been complied with;
(iii) The Net Cash Proceeds and other non-cash
consideration received from the Asset Sale required to be delivered to
the Collateral Agent pursuant to Section 4.06 of each of the
Indentures, Section 5.6 of the Term Loan Agreement and the analogous
provisions of the Debt Instruments evidencing any Permitted
Replacement Financing and, if any property other than cash or cash
equivalents is included in such consideration, such instruments of
conveyance, assignment and transfer, if any, as may be necessary, in
the opinion of counsel reasonably satisfactory to the Collateral Agent
(which
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may include counsel to the Company), to subject to the Lien of the
Security Documents all the right, title and interest of the Company or
its Subsidiary, as the case may be, in and to such property;
(iv) If any Released Interest is only a portion of a
discrete parcel of real property, evidence that a title company shall
have committed to issue an endorsement to the Title Policy relating to
the affected Mortgaged Property confirming that after such release,
the Lien of the applicable Mortgage continues unimpaired as a first
priority perfected Lien upon the remaining Mortgaged Property subject
only to Prior Liens (as defined in the applicable Mortgage); and
(v) All certificates, opinions and other documentation
required by the TIA, if any as certified to the Collateral Agent by
the Company.
Upon compliance with the foregoing provisions of this Section
7.2(b), the Collateral Agent shall cause to be released and reconveyed to the
appropriate Obligor, the Released Interests.
(c) The Company shall be entitled to obtain a release of,
and the Collateral Agent shall release, items of Collateral taken by eminent
domain or sold pursuant to the exercise by the United States of America or any
State, municipality or other governmental authority of any right which it may
then have to purchase, or to designate a purchaser or to order a sale of, all
of any part of the Collateral, upon compliance with the condition precedent
that the Company shall have delivered to the Secured Parties the following:
(i) An Officers' Certificate certifying that (A) such
Property has been taken by eminent domain and the amount of the award
therefor, or that such Property has been sold pursuant to a right
vested in the United States of America, or a State, municipality or
other governmental authority to purchase, or to designate a purchaser,
or order a sale of such Property and the amount of the proceeds of
such sale, and
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(B) all conditions precedent to such release have been complied with;
(ii) Subject to the requirements of any Prior Lien (as
defined in the applicable Mortgage) on the Collateral so taken, cash
equal to the amount of the award for such property or the proceeds of
such sale, to be held as Trust Moneys subject to the disposition
thereof pursuant to Article Three hereof; and
(iii) All opinions, certificates and other documentation
required by the TIA, if any as certified to the Collateral Agent by
the Company.
Upon compliance with the foregoing provisions of this Section
7.2(c), the Collateral Agent shall cause to be released and reconveyed to the
appropriate Obligor, the aforementioned items of Collateral.
(d) Subject to paragraphs (a), (b) and (c) above, so long
as no Event of Default is continuing and no Enforcement Notice is in effect, in
each case where any Security Document or Debt Instrument specifically permits
the Company to obtain a release of Collateral upon compliance with the
provisions set forth therein (it being expressly understood that if there shall
not exist any Event of Default and no Enforcement Notice is in effect, then no
consent from any party to this Agreement is necessary for such compliance), the
Collateral Agent shall, upon receipt of evidence from the Company of such
compliance, and subject to the next sentence, release from the Lien of such
Security Document such Collateral (it being expressly understood that this
sentence of this Section 7.2 shall not be construed as in any way limiting,
amending, supplementing or waiving any of the procedures to be followed under
such Security Document or Debt Instrument or any of the conditions precedent
(including, without limitation, delivery of instruments, Officers' Certificates
and Opinions of Counsel) to be satisfied thereunder). In each case where any
Debt Instrument specifically permits the Company to obtain a release of
Collateral upon compliance with the provisions set forth therein, the
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Collateral Agent shall, upon receipt of a written direction from all
Secured Parties confirming that such proposed release complies with the
provisions of the Debt Instruments, release such Collateral from the Lien of
the Security Documents. In the event that neither the Debt Instruments nor any
Security Document specifically contemplates the Company's right to obtain a
particular release of Collateral which shall be requested by the Company, the
Lien of any instrument comprising a portion of the Trust Estate shall be
released in whole or in part by the Collateral Agent acting solely at the
direction and with the consent of the Directing Holders.
7.3 Form and Sufficiency of Release. In the event that the
Company has or has caused to be sold, exchanged, or otherwise disposed of or
proposes to sell, exchange or otherwise dispose of any portion of the
Collateral that under the provisions of Section 7.2 may be sold, exchanged or
otherwise disposed of by the Company, and the Company requests the Collateral
Agent to furnish a written disclaimer, release or quit-claim of any interest in
such property under this Agreement and the Security Documents, the Collateral
Agent shall execute, acknowledge and deliver to the Company (in proper and
recordable form) such an instrument promptly after satisfaction of the
conditions set forth herein for delivery of any such release. Notwithstanding
the preceding sentence, all purchasers and grantees of any property or rights
purporting to be released herefrom shall be entitled to rely upon any release
executed by the Collateral Agent hereunder as sufficient for the purpose of
this Agreement and as constituting a good and valid release of the property
therein described from the Lien of the Security Documents.
7.4 Purchaser Protected. In no event shall any purchaser in
good faith of any property purported to be released hereunder be bound to
ascertain the authority of the Collateral Agent to execute the release or to
inquire as to the satisfaction of any conditions required by the provisions
hereof for the exercise of such authority or to see to the application of any
consideration given by such purchaser or other transferee; nor shall any
purchaser or other transferee of any property or rights
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permitted to be sold in accordance herewith be under any obligation to
ascertain or inquire into the authority of the Company to make or cause to be
made any such sale or other transfer.
7.5 Amendment of Collateral Documents. The Directing Holders
shall have the exclusive authority to direct the Collateral Agent to amend,
supplement or waive any provision of any Title Policy or any Security Document
(other than the Indentures, the Term Loan Agreement or any of the provisions of
any Debt Instrument constituting Permitted Replacement Financing), in each case
without any consent or approval, or prior notice, to any other Secured Party;
provided, however, that (A) to the extent any amendment, supplement or waiver
releases the Collateral, the same shall be governed by the provisions of
Section 7.2 and not this Section 7.5 and (B) no such amendment, supplement or
waiver shall affect the right of any Secured Party (or any Person for whom a
Secured Party acts as trustee, agent or fiduciary) not consenting thereto in
writing to equal and ratable security to the extent and for the periods
contemplated by this Agreement; and provided, further, that the consent of no
Secured Party signatory hereto or of any holder of Notes or of Permitted
Replacement Financing shall in any event be required to amend, supplement or
modify any Security Document (other than the Indentures and the Term Loan
Agreement) to make any customary, technical and/or conforming changes thereto
to the extent necessary to secure, and provide for the rights, remedies and
Obligations of, any issue of Permitted Replacement Financing thereunder in the
manner contemplated herein and therein.
ARTICLE 8
MISCELLANEOUS
8.1 Amendments, Supplements and Waivers. The Directing
Holders, the Collateral Agent and the Obligors may, from time to time, amend,
supplement or waive any provision hereof; provided, however, that no such
amendment, supplement or waiver shall adversely affect the rights of any
Secured Party to equal and ratable security to the extent and for the periods
contemplated by
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this Agreement unless consented to by all holders of the Senior Secured Notes,
Senior Secured Discount Notes, the Lenders or interests in any other Debt
Instrument constituting Permitted Replacement Financing affected thereby. Any
amendment, supplement or waiver made in compliance with the provisions of the
preceding sentence of this Section shall be binding upon the Secured Parties
and their respective successors and assigns. Notwithstanding the foregoing,
the Obligors, the Collateral Agent and any Secured Party in respect of any
Permitted Replacement Financing may, without the consent of any Secured Party
signatory hereto, make any customary, technical and/or conforming amendments to
this Agreement to the extent necessary to make such Secured Party a party
hereto and to give effect to the ratable proceeds distribution provisions
contemplated herein.
8.2 Notices, Distributions and Payments. (a)In each case
herein or in any Security Document where any payment or distribution is to be
made or notice is to be given to Secured Parties, (i) such payments,
distributions and notices in respect of the Senior Secured Notes shall be made
to the Note Trustee for the benefit of the Senior Secured Noteholders, (ii)
such payments, distributions and notices in respect of the Senior Secured
Discount Notes shall be made to the Discount Note Trustee for the benefit of
the Senior Secured Discount Noteholders, (iii) such payments, distributions and
notices shall be made to the Agent for the benefit of the Lenders and (iv) such
payments, distributions and notices in respect of the holders of any Permitted
Replacement Financing shall be made to the Secured Party in respect thereof.
(b) All notices, requests, demands and other
communications provided for or permitted hereunder shall be in writing
(including telex and telecopy communications) and shall be sent by mail, telex,
telecopier or hand delivery:
<PAGE> 52
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(i) If to the Obligors, to them at the Company's
address at:
13500 South Perry Avenue
Riverdale, Illinois, 60627
Attention: Corporate Secretary with
a copy to the Treasurer
Telephone No.: (708) 849-2500
Telecopier No.: (708) 841-6010
(ii) If to the Collateral Agent, to it at its address at:
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
Telephone No.: (203) 986-4424
Telecopier No.: (203) 986-7920
(iii) If to the Note Trustee, to it at its address at:
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
Telephone No.: (203) 986-4424
Telecopier No.: (203) 986-7920
(iv) If to the Discount Note Trustee, to it, at its
address at:
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
Telephone No.: (203) 986-4424
Telecopier No.: (203) 986-7920
<PAGE> 53
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(v) If to the Agent, to it at its address at:
3 World Financial Center
New York, New York 10285
Attention: Neil Ullman
Telephone No.: (212) 256-6383
Telecopier No.: (212) 619-9716
(vi) If to holders of Permitted Replacement Financing, to
it or them, at the address(es) set forth in Exhibit A hereto.
All such notices, requests, demands and communications shall be deemed to have
been duly given or made, when delivered by hand or five business days after
being deposited in the mail, postage prepaid, when telexed, answer back
received and when telecopied, receipt acknowledged.
8.3 Headings. Headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
8.4 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
8.5 Dealings with the Company. Upon any application or
demand by the Company to the Collateral Agent to take or permit any action
under any of the provisions of this Agreement or under any Security Document,
the Company shall furnish to the Collateral Agent an Officers' Certificate and
Opinion of Counsel stating that all conditions precedent, if any, provided for
in this Agreement or such Security Document, as the case may be, relating to
the proposed action 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
<PAGE> 54
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Agreement or any Security Document relating to such particular
application or demand, no additional certificate or opinion need be furnished.
8.6 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and shall inure to the
benefit of the Secured Parties and their respective successors and assigns and
nothing herein or in any Security Document is intended or shall be construed to
give any other person any right, remedy or claim under, to or in respect of
this Agreement, the Collateral or the Trust Estate.
8.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
8.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST THE OBLIGORS WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE BOROUGH OF MANHATTAN, STATE OF NEW YORK AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT THE OBLIGORS ACCEPT FOR THEMSELVES AND IN
CONNECTION WITH THEIR PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. THE
OBLIGORS DESIGNATE AND APPOINT CT CORPORATION SYSTEM, WITH AN ADDRESS AT 1633
BROADWAY, NEW YORK, NEW YORK 10019 AND SUCH OTHER PERSONS AS MAY HEREAFTER BE
SELECTED BY THE COMPANY IRREVOCABLY AGREEING IN WRITING TO SO SERVE, AS THEIR
AGENT TO RECEIVE ON THEIR BEHALF, SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE
OBLIGORS TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH
PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO THE OBLIGORS C/O THE
COMPANY AT ITS ADDRESS PROVIDED FOR IN PARAGRAPH (D) ABOVE EXCEPT THAT UNLESS
OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY THE
OBLIGORS REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, THE OBLIGORS HEREBY AGREE
THAT SERVICE UPON THEM BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
<PAGE> 55
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NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT TO BRING
PROCEEDINGS AGAINST THE OBLIGORS IN THE COURTS OF ANY OTHER JURISDICTION.
8.9 Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument.
8.10 Certain References. Wherever in this Agreement the
Collateral Agent is permitted or required to take any action or make any
election only upon the direction and with the consent of the Directing Holders,
the Collateral Agent shall not be required to account to the Obligors to prove
the direction and consent of the Directing Holders to take such action or make
such election, and the taking of such action or the making of such election by
the Collateral Agent shall be deemed conclusive proof, as between the Obligors,
on the one hand, and the Collateral Agent and Secured Parties, on the other
hand, that such action or election was authorized. The Obligors shall not
raise as a defense to any action, claim, counterclaim or proceeding involving
this Agreement or any Security Document, any claim that any action taken or
election made by the Collateral Agent was not authorized by the Directing
Holders if such action or election was taken or made after the giving of a
notice referred to in Section 2.2(a), if applicable, and after any such
direction to the Collateral Agent.
8.11 Permitted Additional Lenders. (a) Permitted Additional
Lenders shall not be deemed Secured Parties hereunder until such time as the
following conditions shall have been satisfied: (A) the Permitted Additional
Lenders, or the agent, trustee or other representative acting on its or their
behalf, shall, contemporaneously with the incurrence of such Permitted
Replacement Financing, execute and deliver a supplement or amendment to this
Agreement (the "CAA Supplement") substantially in the form of Exhibit A annexed
hereto, and shall have delivered such opinions, title insurance and other
instruments and documents as the Collateral Agent shall reasonably require in
accordance with an
<PAGE> 56
-56-
Opinion of Counsel (upon which the Collateral Agent may conclusively rely) to
comply with (B) hereof; (B) there is delivered to the Collateral Agent an
Opinion of Counsel confirming that (1) such Permitted Replacement Financing
ranks pari passu in right of payment with the Notes, Indebtedness outstanding
under the Term Loan Agreement and each issue of Permitted Replacement Financing
and is being incurred pursuant to an instrument (the "Permitted Replacement
Financing Indenture") that includes provisions which are substantially
identical to Sections 4.06 and 4.15 and Article Ten of each of the Indentures,
Sections 5.6 and 5.15 of the Term Loan Agreement and to the defined terms
relating to or used in each of such Sections 4.06 and 4.15 and Article Ten of
each of the Indentures and Sections 5.6 and 5.15 of the Term Loan Agreement;
(2) based on the results of searches of Uniform Commercial Code filings and the
real estate records in the applicable jurisdictions, as of the effective date
of the CAA Supplement pursuant to which the Permitted Additional Lenders
expressly become parties to this Agreement (the "New Party Date"), there are no
intervening Liens since the Issue Date of the type which require filing to
perfect a Lien under the Uniform Commercial Code or real property law in the
applicable jurisdictions (an "Intervening Lien") or, in lieu of such opinion,
the applicable CAA Supplement shall expressly provide that such Permitted
Additional Lenders shall indemnify any other Person who was a party to this
Agreement prior to the New Party Date in question and who shall remain a party
thereto after the New Party Date in question (any such party an "Existing
Party") against any diminution in the value to be received by each Existing
Party upon the disposition of any Collateral that would arise due to the pro
rata allocation of rights provisions of this Agreement and the existence of
such Intervening Lien and of any other Intervening Lien arising since the Issue
Date and on or prior to the New Party Date in question, with the form and
substance of such indemnity to be reasonably acceptable to the Trustee and/or
the Agent of the Indebtedness secured by the Collateral immediately prior to
the relevant New Party Date; (3) each of the Security Documents continues to be
effective and enforceable in accordance with its terms (subject to customary
bankruptcy and limitations of creditors' rights exceptions) and the incurrence
of the Indebtedness evidenced by the
<PAGE> 57
-57-
Permitted Replacement Financing in question will not affect the validity or
perfection of the security interest of the Collateral Agent for the benefit of
the Secured Parties and will not affect the priority of the security interest
of the Collateral Agent for the benefit of the Existing Parties who were
Existing Parties on the Issue Date or with respect to any Existing Party who
became an Existing Party prior to any Intervening Lien arising after the date
such party became an Existing Party; (4) the Collateral Agent has title
insurance in customary form for all amounts outstanding under the Debt
Instruments; and (5) the execution and delivery of such CAA Supplement, and the
performance by the Obligors of their obligations thereunder, will not cause any
default or event of default under any of the Security Documents or under any
other material agreement of the Obligors; (C) such Person proposing to become a
Permitted Additional Lender shall expressly agree pursuant to an express
provision of the CAA Supplement to indemnify each Existing Party against any
diminution in value to be received by each Existing Party upon the disposition
of any Collateral that would arise due to the pro rata allocation of rights
provisions of this Agreement and the existence of any Lien arising since the
Issue Date and prior to the New Party Date in question and not the subject of
the Opinion of Counsel referred to in clause (B)(2) above, with the form and
substance of such indemnity to be reasonably acceptable to the Trustee and/or
the Agent of the Indebtedness secured by the Collateral immediately prior to
the relevant New Party Date; and (D) the Company shall have delivered to the
Collateral Agent contemporaneously with the execution and delivery of such CAA
Supplement, an Officers' Certificate stating that no default or event of
default has occurred or is continuing under any of the Security Documents or
under any of the Debt Instruments.
(b) In the event that any holder of Permitted Replacement
Financing shall deny, contest or otherwise refuse or fail to, or shall for any
reason be unable to, perform in a full and timely manner each and every of its
obligations hereunder (including, without limitation, its obligations to
indemnify any Existing Party against any diminution in the value to be
received thereby upon the disposition of any Collateral by virtue of the
<PAGE> 58
-58-
existence of any Intervening Lien as contemplated in paragraph (a) of this
Section 8.11 or shall attempt in any manner to seize or foreclose on the
Collateral or in any other way attempt to enforce a security interest in the
Collateral other than through the mechanism provided herein, such holder of
Permitted Replacement Financing shall not be entitled to have any of the
benefits or exercise any of the rights which would otherwise be available to it
hereunder.
8.12 Powers Exercisable by Receiver or Trustee. In case the
Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Agreement upon the Company with respect
to the release, sale or other disposition of such property may be exercised by
such receiver or trustee, and an instrument signed by such receiver or trustee
shall be deemed the equivalent of any similar instrument of the Company or of
any officer or officers thereof required by the provisions of this Agreement.
8.13 Possession and Use of Collateral. Subject to and in
accordance with the provisions of the Debt Instruments and the Security
Documents, so long as no Default or Event of Default shall have occurred and be
continuing, each Obligor shall have the right to remain in possession and
retain exclusive control of the Collateral owned or held by it (other than
Trust Moneys, securities and other personal property held by, or required to be
deposited or pledged with, the Collateral Agent under the Security Documents),
to operate, manage, develop, use and enjoy such Collateral (other than Trust
Moneys) to alter or repair any such Collateral consisting of machinery or
equipment so long as such alterations and repairs do not diminish the value
thereof or impair the Lien of the Security Documents thereon and to collect,
receive, use, invest and dispose of the reversions, remainders, rates,
interest, rents, issues, profits, revenues, proceeds and other income thereof
(other than Trust Moneys).
8.14 No Waiver; Discontinuance of Proceeding. (a) No
failure on the part of Collateral Agent to exercise, no course of dealing with
respect to, and no delay in exercising, any right,
<PAGE> 59
-59-
power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by the Collateral Agent of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein provided are to the
fullest extent permitted by the law cumulative and are not exclusive of any
remedies provided by law.
(b) In the event the Collateral Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the Obligors,
the Collateral Agent and each Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the
Collateral, and all rights, remedies and powers of the Collateral Agent and the
Secured Parties shall continue as if no such proceeding had been instituted.
8.15 Obligations Absolute. All obligations of the Obligors
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any
Obligor;
(ii) any lack of validity or enforceability of any Note,
any Debt Instrument governing Permitted Replacement Financing or any
other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
any Debt Instrument governing Secured Obligations, or any other
agreement or instrument relating thereto;
<PAGE> 60
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(iv) any exchange, release or non-perfection of any
other collateral, or any release or amendment or waiver of or consent
to any departure from any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect of this Agreement, any
Debt Instrument governing Secured Obligations except as specifically set forth
in a waiver granted pursuant to the provisions of Section 8.1; or
(vi) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, any Obligor.
<PAGE> 61
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be duly executed by their respective
officers thereunto duly authorized as of the day and year first above written.
ACME METALS INCORPORATED
By: /s/ Jerry F. Williams
-----------------------------
Name: Jerry F. Williams
Title: Vice President
ACME STEEL COMPANY
By: /s/ S. D. Bennett
-----------------------------
Name: Stephen D. Bennett
Title: President
ACME PACKAGING CORPORATION
By: /s/ Jerry F. Williams
-----------------------------
Name: Jerry F. Williams
Title: Vice President
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, as
Collateral Agent
By: /s/ Susan T. Keller
-----------------------------
Name: Susan T. Keller
Title: Vice President
<PAGE> 62
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, as Note
Trustee
By: /s/ Susan T. Keller
-------------------------------
Name: Susan T. Keller
Title: Vice President
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, as Discount
Notes Trustee
By: /s/ Susan T. Keller
-------------------------------
Name: Susan T. Keller
Title: Vice President
LEHMAN COMMERCIAL PAPER INC.,
as Agent
By: /s/ Christopher Ryan
-------------------------------
Name: Christopher Ryan
Title:
<PAGE> 63
EXHIBIT A
[date]
[address of Collateral Agent]
Dear Sirs:
We will become lenders to one or more of the Obligors (this,
and all other capitalized terms used herein without definition, as so defined
in that certain Collateral Agency Agreement, dated as of August 11, 1994 to
which this letter is an exhibit) today and wish to become Permitted Additional
Lenders with the benefits granted to such Permitted Additional Lenders pursuant
to the Security Documents. [We are acting as duly appointed representatives
for all such Permitted Additional Lenders under the terms of an agreement,
dated the date hereof, attached hereto as Exhibit I.] Until indicated in
writing to the contrary to the Collateral Agent, the Trustees, the Agent and
the Obligors, our address for purposes of Section 8.2(b) of the Collateral
Agency Agreement is [give address for notices.]
We hereby acknowledge that we have been provided with copies
of all the Security Documents and have been given sufficient time to review
them. By signing this letter we hereby agree, in exchange for the security
interest in the Shared Collateral described in such Collateral Agency Agreement
and the other Security Documents, to abide by all of the terms and conditions
of such Security Documents and expressly acknowledge that (i) all decisions
with respect to the Collateral will be made by holders of a majority in
principal amount of the then outstanding Notes and the Loans, (ii) that we will
have no rights under such Security Documents other than to receive our Pro Rata
Share of the Shared Collateral under the circumstances set forth in such
Security Documents and (iii) that should we seek to challenge such provisions
or seek in any way to foreclose or otherwise enforce the
<PAGE> 64
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Lien in the Security Documents or in any other way seek to enforce a
security interest in the Collateral or seek an interest in the Disbursement
Collateral whether through judicial, quasi-judicial or independent action that
we will lose all rights hereunder and under the Security Documents to the
benefit of the Collateral. We understand that before we become Permitted
Additional Lenders the Company must certify that it will not be in default as a
result of the incurrence of the Indebtedness to be incurred by one or more of
the Obligors under the Debt Instrument which is intended to be Permitted
Replacement Financing and we are not aware of any facts that lead us to
conclude that the Company can not so certify.
_______________________________
as Permitted Additional Lenders
By:____________________________
Name:
Title:
We hereby certify as follows:
That the Company is not, and will not be as the result of the
incurrence of the Indebtedness contemplated by this letter, in default under
the Indentures or the Term Loan Agreement.
ACME METALS INCORPORATED
By:_____________________________________
Name:
Title:
ACME STEEL COMPANY
<PAGE> 65
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By:____________________________________________
Name:
Title:
ACME PACKAGING CORPORATION
By:____________________________________________
Name:
Title:
Accepted and Acknowledged:
____________________________
as Collateral Agent
By:_________________________
Name:
Title:
____________________________
as Note Trustee
By:_________________________
Name:
Title:
____________________________
as Discount Note Trustee
<PAGE> 66
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By:_________________________
Name:
Title:
____________________________
as Agent
By:_________________________
Name:
Title:
<PAGE> 1
EXHIBIT 4.7
COMPANY STOCK PLEDGE AGREEMENT
COMPANY STOCK PLEDGE AGREEMENT (the "Agreement"), dated as of
August 11, 1994, made by ACME METALS INCORPORATED, a Delaware corporation
(together with its successors and assigns, "Pledgor"), in favor of SHAWMUT BANK
CONNECTICUT, NATIONAL ASSOCIATION, a national banking association, as
collateral agent (in such capacity and together with its successors and assigns
in such capacity, "Collateral Agent") pursuant to the Collateral Agency
Agreement (as hereinafter defined).
R E C I T A L S :
1. Pledgor is the legal and beneficial owner of the
Pledged Shares (as hereinafter defined) set forth on Schedule A attached
hereto.
2. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Note Indenture"), dated as of August 11, 1994, by and among Pledgor, the
subsidiaries of Pledgor and Shawmut Bank Connecticut, National Association, as
trustee (in such capacity and together with its successors and assigns in such
capacity, the "Note Trustee") for the holders of the Senior Secured Notes (as
hereinafter defined), Pledgor is issuing its 12 1/2% senior secured notes due
2002 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "Senior Secured Notes") in the aggregate principal amount of
$125,000,000.
3. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Discount Note Indenture"; together with the Note Indenture, the "Indentures"),
dated as of August 11, 1994, by and among Pledgor, the subsidiaries of Pledgor
and Shawmut Bank Connecticut, National Association, as trustee (in such
capacity and together with its successors and assigns in such capacity, the
"Discount Note Trustee"; together with the Note Trustee, the "Trustees") for
the holders of the Senior Secured Discount Notes
<PAGE> 2
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(as hereinafter defined), Pledgor is issuing its 13 1/2% senior secured
discount notes due 2004 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Senior Secured Discount Notes";
together with the Senior Secured Notes, the "Notes") in the aggregate principal
amount of $117,958,000.
4. Pursuant to that certain term loan agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Term Loan Agreement"), dated as of August 4, 1994 by and among Acme
Metals, Lehman Commercial Paper Inc., as agent (in such capacity and together
with its successors and assigns in such capacity, the "Agent"), and the lenders
party thereto (together with all subsequent lenders party to the Term Loan
Agreement, the "Lenders") Acme Metals is borrowing $50,000,000.
5. Collateral Agent is the collateral agent under that
certain collateral agency agreement (the "Collateral Agency Agreement"), dated
as of August 11, 1994, for the Trustees (for the benefit of the holders of the
Notes), for the Agent (for the benefit of the Lenders) and such other parties
which may from time to time become additional lenders to Pledgor and/or its
subsidiaries (each such lender, a "Permitted Additional Lender" and
collectively, the "Permitted Additional Lenders"; together with the Trustees,
the Agent and Collateral Agent, the "Secured Parties") which may, in accordance
with the provisions of clause (xi) of the definition of "Permitted Liens" in
each Indenture as in effect on the date hereof, take a security interest in the
Collateral (as defined in the Collateral Agency Agreement) to secure the
financing provided by the Permitted Additional Lenders (such financing, the
"Permitted Replacement Financing") upon the execution and delivery by the
Permitted Additional Lenders of a supplement to the Collateral Agency Agreement
as contemplated therein.
6. This Agreement is given by Pledgor in favor of
Collateral Agent for its benefit and the benefit of the other Secured Parties
to secure the payment and performance of the Secured Obligations (as
hereinafter defined).
<PAGE> 3
-3-
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Pledgor and Collateral Agent hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used herein but
not otherwise defined herein shall have the meanings assigned to such terms in
the Indentures as in effect on the date hereof. The following terms shall have
the following meanings. Such definitions shall be equally applicable to the
singular and plural forms of the terms defined.
"Additional Shares" shall mean all additional shares of stock
of any of the issuers set forth on Schedule A attached hereto from time to time
acquired by Pledgor in any manner (which to the extent permitted by law are,
and shall remain at all times until this Agreement terminates, certificated
securities) and, if incorporated in a jurisdiction that permits certificates,
the certificates representing such additional shares and in all cases any
interest of Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time hereafter, and any successor statute.
"Distributions" shall mean all dividends, cash, options,
warrants, rights, instruments, distributions, returns of capital, income,
profits and other property interests or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the shares of stock held by Pledgor.
"Future Shares" shall mean all shares of stock owned or held
by Pledgor of any Person which, after the date of this Agreement, is or
becomes, as a result of any occurrence, a Subsidiary of Pledgor (which to the
extent permitted by law are, and shall remain at all times until this Agreement
terminates,
<PAGE> 4
-4-
certificated securities) and, if incorporated in a jurisdiction that permits
certificates, the certificates representing such additional shares and in all
cases any interest of Pledgor in the entries on the books of any financial
intermediary pertaining to such additional shares.
"Pledged Shares" shall mean the shares of capital stock of
each Person listed in Schedule A annexed hereto issued by the Persons
identified therein (which to the extent permitted by law are, and shall remain
at all times until this Agreement terminates, certificated securities) and, if
incorporated in a jurisdiction which permits certificates, the certificates
representing the pledged shares and in all cases any interest of Pledgor in the
entries on the books of any financial intermediary pertaining to such pledged
shares.
"Proceeds" shall have the meaning assigned to the term
"proceeds" under the UCC and, in any event, shall include, without limitation,
any and all (i) proceeds of any insurance, indemnity, warranty or guarantee
payable to Collateral Agent or to Pledgor from time to time with respect to any
of the Pledged Collateral, (ii) payments (in any form whatsoever) made or due
and payable to Pledgor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Pledged Collateral by any governmental authority (or any person acting under
color of a governmental authority), (iii) products of the Pledged Collateral
and (iv) other amounts from time to time paid or payable under or in connection
with any of the Pledged Collateral.
"UCC" shall mean the Uniform Commercial Code as in effect in
any relevant jurisdiction.
SECTION 2. Pledge. As collateral security for the payment
and performance when due of all the Secured Obligations, Pledgor hereby pledges
to Collateral Agent and grants to Collateral Agent for the benefit of the
Secured Parties a continuing first priority security interest in and pledge of
all of Pledgor's right, title and interest in, to and under the following
property, whether
<PAGE> 5
-5-
now existing or hereafter acquired (collectively, the "Pledged
Collateral"):
(i) all Pledged Shares;
(ii) all Additional Shares;
(iii) all Future Shares;
(iv) all Distributions; and
(v) all Proceeds of any of the property specified in
clauses (i) through (iv) of this Section 2.
SECTION 3. Delivery of Pledged Collateral. All certificates
or instruments representing or evidencing the Pledged Collateral shall, to the
extent not previously delivered to Collateral Agent, be delivered to and held
by or on behalf of Collateral Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Collateral Agent. Collateral Agent shall have the right, at
any time and without notice to Pledgor, to transfer to or to register in the
name of Collateral Agent or any of its nominees any or all of the Pledged
Collateral. If any issuer of Pledged Collateral is incorporated in a
jurisdiction which does not permit the use of certificates to evidence equity
ownership, then Pledgor shall, to the extent permitted by applicable law,
record such pledge on the stock register of the issuer, execute any customary
stock pledge forms or other documents necessary or appropriate to complete the
pledge and give Collateral Agent the right to transfer such Pledged Collateral
under the terms hereof and provide to Collateral Agent an Opinion of Counsel,
in form and substance satisfactory to it, confirming such pledge. In addition,
Collateral Agent shall have the right at any time to exchange certificates
representing or evidencing Pledged Collateral for certificates of smaller or
larger denominations.
<PAGE> 6
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SECTION 4. Secured Obligations. This Agreement secures, and
the Pledged Collateral is collateral security for, the payment and performance
in full when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the filing of a petition in bankruptcy or
the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)), of (i) all of the obligations, liabilities
and indebtedness of Pledgor now or hereafter existing under or in respect of
each Indenture, the Notes, the Term Loan Agreement and the notes related
thereto and the notes, agreements and/or other instruments which collectively
evidence any Permitted Replacement Financing (such notes, agreements and/or
other instruments, together with the Indentures and the Notes, the Term Loan
Agreement and the notes related thereto, the "Debt Instruments") (including,
without limitation, the obligations of Pledgor to pay principal of, premium, if
any, and interest on any Debt Instruments when due and payable) and all other
charges, fees, expenses, commissions, reimbursements, premiums, indemnities and
all other amounts due or to become due under or in connection with each Debt
Instrument and (ii) without duplication of the amounts described in clause (i)
of this Section 4, all obligations, indebtedness and liabilities of Pledgor now
existing or hereafter arising under or in respect of this Agreement, including,
without limitation, with respect to all charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in this Agreement (the obligations
described in clauses (i) and (ii) of this Section 4, collectively, the "Secured
Obligations").
SECTION 5. No Release. Nothing set forth in this Agreement
shall relieve Pledgor from the performance of any term, covenant, condition or
agreement on Pledgor's part to be performed or observed under or in respect of
any Pledged Collateral or from any liability to any Person under or in respect
of any Pledged Collateral or shall impose any obligation on Collateral Agent or
any other Secured Party to perform or observe any such term, covenant,
condition or agreement on Pledgor's part to be so performed or observed or
impose any liability on Collateral Agent
<PAGE> 7
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or any other Secured Party for any act or omission on the part of Pledgor
relating thereto or for any breach of any representation or warranty on the
part of Pledgor contained in this Agreement, or in respect of the Pledged
Collateral or made in connection herewith or therewith. The obligations of
Pledgor contained in this Section 5 shall survive the termination of this
Agreement and the discharge of Pledgor's other obligations hereunder.
SECTION 6. Representations, Warranties and Covenants.
Pledgor represents, warrants and covenants as follows:
(a) Ownership. With respect to the Pledged Collateral
existing on the date hereof, Pledgor is, and, as to the Pledged
Collateral acquired by it from time to time after the date hereof,
Pledgor will be, the legal and beneficial owner thereof free from any
Lien or other right, title or interest of any Person other than the
Lien and security interest granted by Pledgor to Collateral Agent in
the Pledged Collateral pursuant to this Agreement. The Lien and
security interest created by this Agreement shall not at any time be
subject to any Lien other than the Lien and security interest granted
by Pledgor to Collateral Agent hereunder. Except as otherwise
permitted by the appropriate provisions of the Debt Instruments,
Pledgor at all times will be the sole beneficial owner of the Pledged
Collateral. Pledgor has not performed any acts which might prevent
Collateral Agent from enforcing any of the terms of this Agreement or
that would limit Collateral Agent in any such enforcement and Pledgor
shall defend the Pledged Collateral against all claims and demands of
all Persons at any time claiming any interest therein adverse to
Collateral Agent or any other Secured Party.
(b) Shares Validly Issued. All of the Pledged Shares
have been, and to the extent hereafter issued the Additional Shares
and Future Shares will be upon such issuance, duly authorized and
validly issued and fully paid and non-assessable.
<PAGE> 8
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(c) Necessary Filings; Delivery of Shares. No
filings, registrations or recordings are necessary or
appropriate to create, preserve, protect and perfect the
security interest granted by Pledgor to Collateral Agent
pursuant to this Agreement. Upon the delivery of the Pledged
Collateral to Collateral Agent in accordance with Section 3
hereof, Collateral Agent will have a valid and perfected first
priority Lien on and security interest in the Pledged
Collateral subject to no prior Liens.
(d) Government Regulations. The pledge of the
Pledged Collateral pursuant to this Agreement does not
violate Regulations G, T, U or X of the Federal Reserve Board.
(e) Authorization; Enforceability. Pledgor has
full power, authority and legal right to pledge and
grant a security interest in all the Pledged Collateral
pursuant to this Agreement. This Agreement constitutes the
legal, valid and binding obligation of Pledgor, enforceable
against Pledgor in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and similar laws affecting creditors'
rights generally and to general equitable principles.
(f) No Consents. No consent of any other party
(including, without limitation, stockholders or
creditors of Pledgor) and no consent, authorization, approval,
or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either
(i) for the execution, delivery or performance of this
Agreement by Pledgor or (ii) for the exercise by Collateral
Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Agreement.
(g) No Conflicts. The execution, delivery and
performance by Pledgor of this Agreement do not (or
with notice or lapse of time or both, will not) violate,
conflict with or constitute a default under, or result in the
<PAGE> 9
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termination of, or accelerate the performance required by, or result
in there being declared void, voidable or without further binding
effect any provision of any other agreement, instrument or document to
which Pledgor is a party.
(h) Accuracy of Information. All information set forth
herein (including, without limitation, the information set forth in
the Schedules annexed hereto) relating to the Pledged Collateral is
accurate and complete in all respects.
(i) Additional Equity Interests. Pledgor shall (i) cause
each issuer of the Pledged Shares not to issue any securities in
addition to or in substitution for the Pledged Shares issued by such
issuer, except to Pledgor and (ii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all
Additional Shares and Future Shares.
(j) Chief Executive Office; Records. The chief executive
office of Pledgor is located at 13500 South Perry Avenue, Riverdale,
Illinois 60627. Pledgor shall not move such office, except to such
new location as Pledgor may establish in accordance with the last
sentence of this subsection 6(j). Pledgor shall not establish a new
location for such office nor shall it change its name until (i) it
shall have given Collateral Agent not less than thirty (30) days'
prior written notice of its intention so to do, clearly describing
such new location or name and providing such other information in
connection therewith as Collateral Agent may request and (ii) with
respect to such new location or name, Pledgor shall have taken all
action satisfactory to Collateral Agent to maintain the perfection and
proof of the security interest of Collateral Agent for the benefit of
the Secured Parties in the Pledged Collateral intended to be granted
hereby.
SECTION 7. Supplements, Further Assurances. Pledgor agrees
that at any time and from time to time, at the expense of Pledgor, Pledgor will
promptly execute and deliver all further
<PAGE> 10
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instruments and documents, and take all further action, that may be
necessary or that Collateral Agent may request, in order to perfect and protect
the Lien granted or purported to be granted hereby or to enable Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Pledged Collateral.
SECTION 8. Voting Rights; Distributions; Etc.
(a) For so long as no Event of Default shall have
occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with
the terms or purpose of this Agreement.
(ii) Pledgor shall be entitled to receive and retain any
and all Distributions, but only if and to the extent made in
accordance with the provisions of the Indentures as in effect on the
date hereof; provided, however, that any and all such Distributions
other than in the form of cash, and any and all such Distributions in
the form of cash paid or payable in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus shall be, and shall be
forthwith delivered to Collateral Agent to hold as, Pledged Collateral
and shall, if received by Pledgor, be received in trust for the
benefit of Collateral Agent, be segregated from the other property or
funds of Pledgor, and be forthwith delivered to Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement).
(iii) Collateral Agent hereby authorizes Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to subsection 8(a)(i) hereof and to receive the Distributions
which it is authorized to receive and retain pursuant to subsection
8(a)(ii) hereof.
<PAGE> 11
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(b) Upon the occurrence and during the
continuance of an Event of Default, all rights of Pledgor to exercise
the voting and other consensual rights it would otherwise be entitled
to exercise pursuant to subsection 8(a)(i) and to receive the
Distributions which it would otherwise be authorized to receive and
retain pursuant to subsection 8(a)(ii) without any action or the
giving of any notice shall cease, and all such rights shall thereupon
become vested in Collateral Agent, and Collateral Agent shall
thereupon have the sole right, but not the duty or obligation, to
exercise such voting and other consensual rights and the sole right to
receive and hold as Pledged Collateral such Distributions.
(c) Pledgor shall, at Pledgor's sole cost and expense,
from time to time execute and deliver to Collateral Agent
appropriate instruments as Collateral Agent may request in order to
permit Collateral Agent to exercise the voting and other rights which
it may be entitled to exercise pursuant to subsection 8(b) hereof and
to receive all Distributions which it may be entitled to receive under
subsection 8(b) hereof.
(d) All Distributions which are received by Pledgor
contrary to the provisions of subsection 8(a)(ii) hereof shall
be received in trust for the benefit of Collateral Agent, shall be
segregated from other funds of Pledgor and shall immediately be paid
over to Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement).
SECTION 9. Transfers and Other Liens. Pledgor shall not (i)
except as permitted by the appropriate provisions of the Debt
Instruments, sell, convey, assign or otherwise dispose of, or grant
any option or warrant with respect to, any of the Pledged Collateral
or (ii) create or permit to exist any Lien upon or with respect to any
of the Pledged Collateral except for the Lien and security interest
granted by Pledgor to Collateral Agent pursuant to this Agreement.
SECTION 10. Reasonable Care. Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if such
<PAGE> 12
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Pledged Collateral is accorded treatment substantially equivalent to that which
Collateral Agent, in its individual capacity, accords its own property
consisting of negotiable securities, it being understood that Collateral Agent
shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Collateral, whether or not Collateral Agent or any
other Secured Party has or is deemed to have knowledge of such matters or (ii)
taking any necessary steps to preserve rights against any Person with respect
to any Pledged Collateral.
SECTION 11. Events of Default; Remedies.
(a) Event of Default. It shall be an Event of Default
hereunder if there shall occur an "Event of Default" as defined
in the Collateral Agency Agreement.
(b) Dispositions of Pledged Collateral. If an Event of
Default shall have occurred and be continuing, Collateral Agent
may exercise in respect of the Pledged Collateral, in addition to
other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under
the UCC, and the Collateral Agent may also in its sole discretion,
without notice except as specified below, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private sale
or at any exchange or broker's board for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as
Collateral Agent may deem commercially reasonable, irrespective of the
impact of any such sales on the market price of the Pledged
Collateral. Collateral Agent or any other Secured Party may be the
purchaser of any or all of the Pledged Collateral at any such sale and
shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Pledged
Collateral sold at such sale, to use and apply any of the Secured
Obligations owed to such Secured Party as a credit on account of the
purchase price of any Pledged Collateral payable by such Secured Party
at such sale. Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of Pledgor,
and
<PAGE> 13
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Pledgor hereby waives (to the extent permitted by law) all
rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now
existing or hereafter enacted. Collateral Agent shall give Pledgor not
less than five days' prior written notice of the time and place of any
sale or other intended disposition of any of the Pledged Collateral,
except any Pledged Collateral which is of a type customarily sold on a
recognized market. The notice of such sale shall (i) in the case of a
public sale, state the time and place fixed for such sale and (ii) in
the case of a private sale, state the day after which such sale may be
consummated. Pledgor agrees that such notice constitutes reasonable
notice. Collateral Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given.
Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned. Pledgor hereby waives any claims against
Collateral Agent arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale,
even if Collateral Agent accepts the first offer received and does not
offer such Pledged Collateral to more than one offeree.
(c) Securities Laws Limitations. Pledgor recognizes
that, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws, Collateral Agent may be compelled,
with respect to any sale of all or any part of the Pledged Collateral,
to limit purchasers to those who will agree, among other things, to
acquire the Pledged Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. Pledgor
acknowledges that any such private sales may be at prices and on terms
less favorable to Collateral Agent than those obtainable through a
public sale without such restrictions (including, without limitation,
a public offering made pursuant to a registration statement under the
Securities Act), and, notwithstanding such circumstances, agrees that
any such private
<PAGE> 14
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sale shall be deemed to have been made in a commercially
reasonable manner and that Collateral Agent shall have no obligation
to engage in public sales and no obligation to delay the sale of any
Pledged Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state
securities laws, even if Pledgor would agree to do so.
(d) Additional Information. If Collateral Agent
determines to exercise its right to sell any or all of the
Pledged Collateral, upon written request, Pledgor shall, and shall
cause each issuer of any Pledged Collateral to be sold hereunder from
time to time to, furnish to Collateral Agent all such information as
Collateral Agent may request in order to determine the number of
shares and other instruments included in the Pledged Collateral which
may be sold by Collateral Agent as exempt transactions under the
Securities Act and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
(e) Waivers. Pledgor hereby waives, to the extent
permitted by applicable law, notice or judicial hearing in
connection with Collateral Agent's taking possession or Collateral
Agent's disposition of any Pledged Collateral, including, without
limitation, any and all prior notice and hearing for any prejudgment
remedy or remedies and any such right which Pledgor would otherwise
have under law, and Pledgor hereby further waives: (i) all damages
occasioned by such taking of possession; (ii) all other requirements
as to the time, place and terms of sale or other requirements with
respect to the enforcement of Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisal, valuation, stay, extension
or moratorium now or hereafter in force under any applicable law. Any
sale of, or the grant of options to purchase, or any other realization
upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of
Pledgor therein and thereto, and shall be a perpetual bar both at law
and in equity against Pledgor and against any and all Persons claiming
or attempting to claim the Pledged Collateral so sold, optioned or
realized upon, or any part thereof, from, through and under Pledgor.
<PAGE> 15
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(f) Deficiency. Notwithstanding any other provision of
this Agreement to the contrary, if, after giving effect to any
sale, transfer or other disposition of any or all of the Pledged
Collateral pursuant hereto and after the application of the proceeds
hereunder and any Pledged Collateral sold, transferred or otherwise
disposed of pursuant to any other Security Document to the Secured
Obligations, any Secured Obligations remain unpaid or unsatisfied,
Pledgor shall remain liable for the unpaid and unsatisfied amount of
such Secured Obligations.
SECTION 12. Application of Proceeds. The proceeds
received by Collateral Agent in respect of any sale of, collection from or
other realization upon all or any part of the Pledged Collateral pursuant to
the exercise by Collateral Agent of its remedies as a secured creditor as
provided in Section 11 hereof, together with any other sums then held by
Collateral Agent pursuant to this Agreement, shall be applied promptly by
Collateral Agent in the manner set forth in the Collateral Agency Agreement.
SECTION 13. Expenses. Pledgor will upon demand pay to
Collateral Agent the amount of any and all expenses, including the reasonable
fees and expenses of its counsel and the allocated fees and expenses of staff
counsel and the fees and expenses of any experts and agents which Collateral
Agent may incur in connection with (i) the collection of the Secured
Obligations, (ii) the enforcement and administration of this Agreement, (iii)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iv) the exercise or
enforcement of any of the rights of Collateral Agent hereunder or (v) the
failure by Pledgor to perform or observe any of the provisions hereof. All
amounts payable by Pledgor under this Section 13 shall be due upon demand and
shall be part of the Secured Obligations. Pledgor's obligations under this
Section shall survive the termination of this Agreement and the discharge of
Pledgor's other obligations hereunder.
SECTION 14. No Waiver; Discontinuance of Proceeding.
<PAGE> 16
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(a) No Waiver. No failure on the part of Collateral
Agent to exercise, no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise
by Collateral Agent of any right, power or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein provided are to the
fullest extent permitted by the law cumulative and are not exclusive
of any remedies provided by law.
(b) Discontinuance of Proceeding. In the event
Collateral Agent shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have
been discontinued or abandoned for any reason or shall have been
determined adversely to Collateral Agent, then and in every such case
Pledgor, Collateral Agent and each Secured Party shall be restored to
their respective former positions and rights hereunder with respect to
the Pledged Collateral, and all rights, remedies and powers of
Collateral Agent and the Secured Parties shall continue as if no such
proceeding had been instituted.
SECTION 15. Collateral Agent. (a) Collateral Agent has been
appointed as collateral agent pursuant to the Collateral Agency Agreement and
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of Pledged
Collateral) in accordance with the provisions of the Collateral Agency
Agreement. The actions of Collateral Agent hereunder are subject to the
provisions of the Collateral Agency Agreement. Collateral Agent may resign and
a successor Collateral Agent may be appointed in the manner provided in the
Indentures, the Term Loan Agreement and the Collateral Agency Agreement. Upon
the acceptance of any appointment as Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring Collateral Agent shall
thereupon be discharged from
<PAGE> 17
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its duties and obligations under this Agreement in accordance
with the Collateral Agency Agreement. After any retiring Collateral
Agent's resignation, the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it under
this Agreement while it was Collateral Agent.
(b) Notwithstanding anything to the contrary contained in
this Agreement, the Indenture, the Mortgage or any of the other
Security Documents, in the event the Collateral Agent is entitled or
required to commence an action to exercise voting rights hereunder or
otherwise exercise its remedies to acquire control or possession of
the Mortgaged Property, the Collateral Agent shall not be required to
commence any such action or exercise any such remedy if the Collateral
Agent has determined in good faith that the Collateral Agent may incur
liability under the Environmental Laws (as defined in the Mortgage) as
the result of the presence at, or release on or from, the Facility of
any Hazardous Materials (as defined in the Mortgage) unless the
Collateral Agent has received security or indemnity, from a Secured
Party or holders of Indebtedness benefiting from the pledge of this
Agreement, in an amount and in a form all satisfactory to the
Collateral Agent in its sole discretion, protecting the Collateral
Agent from all such liability.
SECTION 16. Collateral Agent May Perform; Collateral Agent
Appointed Attorney-in-Fact. If Pledgor shall fail to do any act or thing that
it has covenanted to do hereunder or if any warranty on the part of Pledgor
contained herein shall be breached, Collateral Agent or any Secured Party may
(but shall have no duty or obligation to) do the same or cause it to be done or
remedy any such breach, and may reasonably expend funds for such purpose. Any
and all amounts so expended by Collateral Agent or such Secured Party shall be
paid by Pledgor promptly upon demand therefor, with interest at the Default
Rate during the period from and including the date on which such funds were so
expended to the date of repayment. Pledgor's obligations under this Section 16
shall survive the termination of this Agreement and the discharge of Pledgor's
other obligations under this Agreement. Pledgor hereby appoints Collateral
Agent its attorney-in-fact with an interest,
<PAGE> 18
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with full authority in the place and stead of Pledgor and in the name of
Pledgor, or otherwise, from time to time in Collateral Agent's discretion, to
take any action and to execute any instrument consistent with the terms of this
Agreement, any Debt Instrument, the Collateral Agency Agreement and the
Intercreditor Agreement which Collateral Agent may deem necessary or advisable
to accomplish the purposes of this Agreement. The foregoing grant of authority
is a power of attorney coupled with an interest and such appointment shall be
irrevocable for the term of this Agreement. Pledgor hereby ratifies all that
such attorney shall lawfully do or cause to be done by virtue and in accordance
with the terms hereof.
SECTION 17. Indemnity.
(a) Indemnity. Pledgor agrees to indemnify, pay and hold
harmless Collateral Agent and the officers, directors,
employees, agents and affiliates of Collateral Agent (collectively,
the "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs (including, without limitation, settlement costs and
claims for strict liability in tort and environmental or hazardous
waste claims of any sort), expenses or disbursements of any kind or
nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated a party
thereto), which may be imposed on, incurred by, or asserted against
such Indemnitee, in any manner relating to or arising out of this
Agreement, the Intercreditor Agreement, the Collateral Agency
Agreement or the Debt Instruments (including, without limitation, any
misrepresentation by Pledgor in this Agreement) (the "Indemnified
Liabilities"); provided, however, that Pledgor shall have no
obligation to an Indemnitee hereunder with respect to Indemnified
Liabilities if it has been determined by a final decision (after all
appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such Indemnified Liability arose from the negligence
or willful misconduct of such Indemnitee or, in the case of
environmental laws, the willful violation of such laws. To the extent
that the undertaking to
<PAGE> 19
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indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Pledgor
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.
(b) Survival. The obligations of Pledgor contained in
this Section 17 shall survive the termination of this Agreement
and the discharge of Pledgor's other obligations under this Agreement.
(c) Reimbursement. Any amounts paid by any Indemnitee as
to which such Indemnitee has the right to reimbursement shall
constitute Secured Obligations secured by the Pledged Collateral.
SECTION 18. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision of this
Agreement, nor consent to any departure by Pledgor therefrom, shall be
effective unless the same shall be done in accordance with the terms of the
Collateral Agency Agreement and unless in writing and signed by Collateral
Agent and Pledgor. Any amendment, modification or supplement of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by Pledgor from the terms of any provision of this
Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement or any Debt Instrument, no notice to or demand on
Pledgor in any case shall entitle Pledgor to any other or further notice or
demand in similar or other circumstances.
SECTION 19. Termination; Release.
(a) Except as otherwise provided herein, this Agreement
shall terminate upon compliance by Pledgor with the applicable
provisions of the Collateral Agency Agreement. Upon termination of
this Agreement or any release of Pledged Collateral in accordance with
the provisions of the Collateral Agency Agreement, Collateral Agent
shall, upon the request and at the sole cost and expense of
<PAGE> 20
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Pledgor, forthwith assign, transfer and deliver to Pledgor,
against receipt and without recourse to or warranty by Collateral
Agent, such of the Pledged Collateral as may be in possession of
Collateral Agent and as shall not have been sold or otherwise applied
pursuant to the terms hereof on the order of and at the sole cost and
expense of Pledgor, and proper instruments (including UCC termination
statements on Form UCC-3) acknowledging the termination of this
Agreement or the release of such Pledged Collateral, as the case may
be.
(b) In the event that any Asset Sale made by Pledgor in
accordance with applicable provisions of the Debt Instruments
involves the sale of an asset which constitutes Pledged Collateral,
Pledgor shall deliver all Net Cash Proceeds received in respect of
such item of Pledged Collateral to Collateral Agent to be held by
Collateral Agent as Trust Moneys and applied in accordance with the
provisions of the Collateral Agency Agreement.
SECTION 20. Notices. Unless otherwise provided herein, any
notice or other communication herein shall be given in the manner set forth in
the Collateral Agency Agreement and at the addresses set forth in the
Collateral Agency Agreement, or at such other address as shall be designated by
any party in a written notice to the other party.
SECTION 21. Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgor, its successors and assigns, and (ii)
inure, together with the rights and remedies of Collateral Agent hereunder, to
the benefit of Collateral Agent and the other Secured Parties and each of their
respective successors, transferees and assigns; no other Persons (including,
without limitation, any other creditor of the Pledgor) shall have any interest
herein or any right or benefit with respect hereto. Without limiting the
generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any Debt Instrument held by it secured by this Agreement to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to such Secured Party,
<PAGE> 21
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herein or otherwise, subject however, to the applicable provisions of the Debt
Instruments.
SECTION 22. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 23. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
BOROUGH OF MANHATTAN, STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. PLEDGOR DESIGNATES AND APPOINTS CT
CORPORATION SYSTEM, WITH AN ADDRESS AT 1633 BROADWAY, NEW YORK, NEW YORK 10019
AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY PLEDGOR IRREVOCABLY
AGREEING IN WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF, SERVICE
OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY PLEDGOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL
TO PLEDGOR AT ITS ADDRESS PROVIDED FOR IN SECTION 20 HEREOF EXCEPT THAT UNLESS
OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY PLEDGOR
REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, PLEDGOR HEREBY AGREES THAT SERVICE
UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF COLLATERAL AGENT TO BRING PROCEEDINGS AGAINST PLEDGOR IN THE
COURTS OF ANY OTHER JURISDICTION.
<PAGE> 22
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SECTION 24. Severability of Provisions. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 25. Execution in Counterparts. This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all such counterparts together shall constitute one and the
same Agreement.
SECTION 26. Headings. The Section and subsection headings
used in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
SECTION 27. Obligations Absolute. All obligations of Pledgor
hereunder shall be absolute and unconditional irrespective of:
(a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of
Pledgor;
(b) any lack of validity or enforceability of any Debt
Instrument, or any other agreement or instrument relating thereto;
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
any Debt Instrument, or any other agreement or instrument relating
thereto;
(d) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or
<PAGE> 23
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consent to any departure from any guarantee, for all or any of the
Secured Obligations;
(e) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect of this
Agreement or any Debt Instrument except as specifically set forth in a
waiver granted pursuant to the provisions of Section 18; or
(f) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, Pledgor.
<PAGE> 24
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be duly executed and delivered by its duly authorized officer as
of the date first above written.
ACME METALS INCORPORATED,
as Pledgor
By: /s/ Jerry F. Williams
-----------------------------
Name: Jerry F. Williams
Title: Vice President/Finance
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ Susan T. Keller
-----------------------------
Name: Susan T. Keller
Title: Vice President
<PAGE> 25
SCHEDULE A
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage of
All Capital or
Other Equity
Class of Par Certificate Number Interests of
Issuer Stock Value Numbers of Shares Issuer
- ------ -------- ----- ----------- --------- --------------
<S> <C> <C> <C> <C> <C>
Acme Steel Capital $1.00 1 100 100%
Company
Acme Pack- Capital $1.00 2 1,000 100%
aging Cor-
poration
</TABLE>
<PAGE> 1
EXHIBIT 4.8
SUBSIDIARY STOCK PLEDGE AGREEMENT
SUBSIDIARY STOCK PLEDGE AGREEMENT (the "Agreement"), dated as
of August 11, 1994, among ACME STEEL COMPANY, a Delaware corporation (together
with its successors and assigns, "Acme Steel") and ACME PACKAGING CORPORATION,
a Delaware corporation (together with its successors and assigns, "Acme
Packaging"; Acme and Acme Packaging, collectively the "Pledgors" and each
individually a "Pledgor") in favor of SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, having an office at 777 Main
Street, Hartford, Connecticut 06115, as collateral agent (in such capacity and
together with its successors and assigns in such capacity, "Collateral Agent")
pursuant to the Collateral Agency Agreement (as hereinafter defined).
R E C I T A L S :
1. Pledgors are the legal and beneficial owner of the
Pledged Shares (as hereinafter defined) set forth on Schedule A attached
hereto.
2. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Note Indenture"), dated as of August 11, 1994, by and among Acme Metals
Incorporated ("Acme Metals"), the subsidiaries of Acme Metals and Shawmut Bank
Connecticut, National Association, as trustee (in such capacity and together
with its successors and assigns in such capacity, the "Note Trustee") for the
holders of the Senior Secured Notes (as hereinafter defined), Acme Metals is
issuing its 12 1/2% senior secured notes due 2002 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Senior
Secured Notes") in the aggregate principal amount of $125,000,000.
3. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Discount Note Indenture"; together with the Note Indenture, the "Indentures"),
dated as of August 11, 1994, by and
<PAGE> 2
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among Acme Metals, the subsidiaries of Acme Metals and Shawmut Bank
Connecticut, National Association, as trustee (in such capacity and together
with its successors and assigns in such capacity, the "Discount Note Trustee";
together with the Note Trustee, the "Trustees") for the holders of the Senior
Secured Discount Notes (as hereinafter defined), Acme Metals is issuing its 13
1/2% senior secured discount notes due 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Senior Secured
Discount Notes"; together with the Senior Secured Notes, the "Notes") in the
aggregate principal amount of $117,958,000.
4. Pursuant to that certain term loan agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Term Loan Agreement"), dated as of August 4, 1994 by and among Acme
Metals, Lehman Commercial Paper Inc., as agent (in such capacity and together
with its successors and assigns in such capacity, the "Agent"), and the lenders
party thereto (together with all subsequent lenders party to the Term Loan
Agreement, the "Lenders"), Acme Metals is borrowing $50,000,000.
5. Collateral Agent is the collateral agent under that
certain collateral agency agreement (the "Collateral Agency Agreement"), dated
as of August 11, 1994, for the Trustees (for the benefit of the holders of the
Notes), for the Agent (for the benefit of the Lenders) and such other parties
which may from time to time become additional lenders to Pledgors and/or their
subsidiaries (each such lender, a "Permitted Additional Lender" and
collectively, the "Permitted Additional Lenders"; together with the Trustees,
the Agent and Collateral Agent, the "Secured Parties") which may, in accordance
with the provisions of clause (xi) of the definition of "Permitted Liens" in
each Indenture as in effect on the date hereof, take a security interest in the
Collateral (as defined in the Collateral Agency Agreement) to secure the
financing provided by the Permitted Additional Lenders (such financing, the
"Permitted Replacement Financing") upon the execution and delivery by the
Permitted Additional Lenders of a supplement to the Collateral Agency Agreement
as contemplated therein.
<PAGE> 3
-3-
6. This Agreement is given by Pledgors in favor of
Collateral Agent for its benefit and the benefit of the other Secured Parties
to secure the payment and performance of the Secured Obligations (as
hereinafter defined).
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Pledgors and Collateral Agent hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used herein but
not otherwise defined herein shall have the meanings assigned to such terms in
the Indentures as in effect on the date hereof. The following terms shall have
the following meanings. Such definitions shall be equally applicable to the
singular and plural forms of the terms defined.
"Additional Shares" shall mean all additional shares of stock
of any of the issuers set forth on Schedule A attached hereto from time to time
acquired by each Pledgor in any manner (which to the extent permitted by law
are, and shall remain at all times until this Agreement terminates,
certificated securities) and, if incorporated in a jurisdiction that permits
certificates, the certificates representing such additional shares and in all
cases any interest of Pledgors in the entries on the books of any financial
intermediary pertaining to such additional shares.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time hereafter, and any successor statute.
"Distributions" shall mean all dividends, cash, options,
warrants, rights, instruments, distributions, returns of capital, income,
profits and other property interests or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the shares of stock held by each Pledgor.
<PAGE> 4
-4-
"Future Shares" shall mean all shares of stock owned or held
by any Pledgor of any Person which, after the date of this Agreement, is or
becomes, as a result of any occurrence, a Subsidiary of either Pledgor (which
to the extent permitted by law are, and shall remain at all times until this
Agreement terminates, certificated securities) and, if incorporated in a
jurisdiction that permits certificates, the certificates representing such
additional shares and in all cases any interest of Pledgors in the entries on
the books of any financial intermediary pertaining to such additional shares.
"Pledged Shares" shall mean the shares of capital stock of
each Person listed in Schedule A annexed hereto issued by the Persons
identified therein (which to the extent permitted by law are, and shall remain
at all times until this Agreement terminates, certificated securities) and, if
incorporated in a jurisdiction which permits certificates, the certificates
representing the pledged shares and in all cases any interest of Pledgors in
the entries on the books of any financial intermediary pertaining to such
pledged shares.
"Proceeds" shall have the meaning assigned to the term
"proceeds" under the UCC and, in any event, shall include, without limitation,
any and all (i) proceeds of any insurance, indemnity, warranty or guarantee
payable to Collateral Agent or to any Pledgor from time to time with respect to
any of the Pledged Collateral, (ii) payments (in any form whatsoever) made or
due and payable to any Pledgor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Pledged Collateral by any governmental authority (or any person
acting under color of a governmental authority), (iii) products of the Pledged
Collateral and (iv) other amounts from time to time paid or payable under or in
connection with any of the Pledged Collateral.
"UCC" shall mean the Uniform Commercial Code as in effect in
any relevant jurisdiction.
<PAGE> 5
-5-
SECTION 2. Pledge. As collateral security for the payment
and performance when due of all the Secured Obligations, each Pledgor hereby
pledges to Collateral Agent and grants to Collateral Agent for the benefit of
the Secured Parties a continuing first priority security interest in and pledge
of all such Pledgor's right, title and interest in, to and under the following
property, whether now existing or hereafter acquired (collectively, the
"Pledged Collateral"):
(i) all Pledged Shares;
(ii) all Additional Shares;
(iii) all Future Shares;
(iv) all Distributions; and
(v) all Proceeds of any of the property specified in
clauses (i) through (iv) of this Section 2.
SECTION 3. Delivery of Pledged Collateral. All certificates
or instruments representing or evidencing the Pledged Collateral shall, to the
extent not previously delivered to Collateral Agent, be delivered to and held
by or on behalf of Collateral Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Collateral Agent. Collateral Agent shall have the right, at
any time and without notice to Pledgors, to transfer to or to register in the
name of Collateral Agent or any of its nominees any or all of the Pledged
Collateral. If any issuer of Pledged Collateral is incorporated in a
jurisdiction which does not permit the use of certificates to evidence equity
ownership, then such Pledgor shall, to the extent permitted by applicable law,
record such pledge on the stock register of the issuer, execute any customary
stock pledge forms or other documents necessary or appropriate to complete the
pledge and give Collateral Agent the right to transfer such Pledged Collateral
under the terms hereof and provide to Collateral Agent an Opinion of Counsel,
in
<PAGE> 6
-6-
form and substance satisfactory to it, confirming such pledge. In
addition, Collateral Agent shall have the right at any time to exchange
certificates representing or evidencing Pledged Collateral for certificates of
smaller or larger denominations.
SECTION 4. Secured Obligations. This Agreement secures, and
the Pledged Collateral is collateral security for, the payment and performance
in full when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the filing of a petition in bankruptcy or
the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)), of (i) all of the obligations, liabilities
and indebtedness of each Pledgor now or hereafter existing under or in respect
of each Indenture, the Notes, the Term Loan Agreement and the notes related
thereto and the notes, agreements and/or other instruments which collectively
evidence any Permitted Replacement Financing (such notes, agreements and/or
other instruments, together with the Indentures and the Notes, the Term Loan
Agreement and the notes related thereto, the "Debt Instruments") (including,
without limitation, the obligations of each Pledgor to pay principal of,
premium, if any, and interest on any Debt Instruments when due and payable) and
all other charges, fees, expenses, commissions, reimbursements, premiums,
indemnities and all other amounts due or to become due under or in connection
with each Debt Instrument and (ii) without duplication of the amounts described
in clause (i) of this Section 4, all obligations, indebtedness and liabilities
of each Pledgor now existing or hereafter arising under or in respect of this
Agreement, including, without limitation, with respect to all charges, fees,
expenses, commissions, reimbursements, premiums, indemnities and other
payments related to or in respect of the obligations contained in this
Agreement (the obligations described in clauses (i) and (ii) of this Section 4,
collectively, the "Secured Obligations").
SECTION 5. No Release. Nothing set forth in this Agreement
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on any Pledgor's part to be performed or observed under or in
respect of any Pledged Collateral
<PAGE> 7
-7-
or from any liability to any Person under or in respect of any Pledged
Collateral or shall impose any obligation on Collateral Agent or any other
Secured Party to perform or observe any such term, covenant, condition or
agreement on any Pledgor's part to be so performed or observed or impose any
liability on Collateral Agent or any other Secured Party for any act or
omission on the part of each Pledgor relating thereto or for any breach of any
representation or warranty on the part of any Pledgor contained in this
Agreement, or in respect of the Pledged Collateral or made in connection
herewith or therewith. The obligations of each Pledgor contained in this
Section 5 shall survive the termination of this Agreement and the discharge of
each Pledgor's other obligations hereunder.
SECTION 6. Representations, Warranties and Covenants. Each
Pledgor represents, warrants and covenants as follows:
(a) Ownership. With respect to the Pledged
Collateral existing on the date hereof, each Pledgor is, and, as to
the Pledged Collateral acquired by it from time to time after the date
hereof, each Pledgor will be, the legal and beneficial owner thereof
free from any Lien or other right, title or interest of any Person
other than the Lien and security interest granted by each Pledgor to
Collateral Agent in the Pledged Collateral pursuant to this Agreement.
The Lien and security interest created by this Agreement shall not at
any time be subject to any Lien other than the Lien and security
interest granted by each Pledgor to Collateral Agent hereunder.
Except as otherwise permitted by the appropriate provisions of the
Debt Instruments, each Pledgor will at all times be the sole
beneficial owner of the Pledged Collateral. Pledgors have not
performed any acts which might prevent Collateral Agent from enforcing
any of the terms of this Agreement or that would limit Collateral
Agent in any such enforcement and each Pledgor shall defend the
Pledged Collateral against all claims and demands of all Persons at
any time claiming any interest therein adverse to Collateral Agent or
any other Secured Party.
<PAGE> 8
-8-
(b) Shares Validly Issued. All of the Pledged
Shares have been, and to the extent hereafter issued the Additional
Shares and Future Shares will be upon such issuance, duly authorized
and validly issued and fully paid and non-assessable.
(c) Necessary Filings; Delivery of Shares. No
filings, registrations or recordings are necessary or appropriate to
create, preserve, protect and perfect the security interest granted by
each Pledgor to Collateral Agent pursuant to this Agreement. Upon the
delivery of the Pledged Collateral to Collateral Agent in accordance
with Section 3 hereof, Collateral Agent will have a valid and
perfected first priority Lien on and security interest in the Pledged
Collateral subject to no prior Liens.
(d) Government Regulations. The pledge of the
Pledged Collateral pursuant to this Agreement does not violate
Regulations G, T, U or X of the Federal Reserve Board.
(e) Authorization; Enforceability. Each Pledgor
has full power, authority and legal right to pledge and grant a
security interest in all the Pledged Collateral pursuant to this
Agreement. This Agreement constitutes the legal, valid and binding
obligation of each Pledgor, enforceable against each Pledgor in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and
similar laws affecting creditors' rights generally and to general
equitable principles.
(f) No Consents. No consent of any other party
(including, without limitation, stockholders or creditors of each
Pledgor) and no consent, authorization, approval, or other action by,
and no notice to or filing with, any governmental authority or
regulatory body is required either (i) for the execution, delivery or
performance of this Agreement by each Pledgor or (ii) for the exercise
by Collateral Agent of the voting or other rights provided for in
<PAGE> 9
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this Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Agreement.
(g) No Conflicts. The execution, delivery and
performance by each Pledgor of this Agreement do not (or with notice
or lapse of time or both, will not) violate, conflict with or
constitute a default under, or result in the termination of, or
accelerate the performance required by, or result in there being
declared void, voidable or without further binding effect any
provision of any other agreement, instrument or document to which each
Pledgor is a party.
(h) Accuracy of Information. All information set
forth herein (including, without limitation, the information set forth
in the Schedules annexed hereto) relating to the Pledged Collateral is
accurate and complete in all respects.
(i) Additional Equity Interests. Each Pledgor
shall (i) cause each issuer of the Pledged Shares not to issue any
securities in addition to or in substitution for the Pledged Shares
issued by such issuer, except to such Pledgor and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all Additional Shares and Future Shares.
(j) Chief Executive Office; Records. The
Pledgor's chief executive office is located at 13500 Perry Avenue,
Riverdale, Illinois 60627. No Pledgor will move such office, except
to such new location as such Pledgor may establish in accordance with
the last sentence of this subsection 6(j). No Pledgor will establish
a new location for such office nor shall it change its name until (i)
it shall have given Collateral Agent not less than thirty (30) days'
prior written notice of its intention so to do, clearly describing
such new location or name and providing such other information in
connection therewith as Collateral Agent may request and (ii) with
respect to such new location or name, such Pledgor shall have taken
all action satisfactory to Collateral Agent to maintain the perfection
and proof of the security interest of
<PAGE> 10
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Collateral Agent for the benefit of the Secured Parties in the Pledged
Collateral intended to be granted hereby.
SECTION 7. Supplements, Further Assurances. Each Pledgor
agrees that at any time and from time to time, at the expense of such Pledgor,
to promptly execute and deliver all further instruments and documents, and take
all further action, that may be necessary or that Collateral Agent may request,
in order to perfect and protect the Lien granted or purported to be granted
hereby or to enable Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Pledged Collateral.
SECTION 8. Voting Rights; Distributions; Etc.
(a) For so long as no Event of Default shall have
occurred and be continuing:
(i) Each Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with
the terms or purpose of this Agreement.
(ii) Each Pledgor shall be entitled to receive and retain
any and all Distributions, but only if and to the extent made in
accordance with the provisions of the Indentures as in effect on the
date hereof; provided, however, that any and all such Distributions
other than in the form of cash, and any and all such Distributions in
the form of cash paid or payable in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus shall be, and shall be
forthwith delivered to Collateral Agent to hold as, Pledged Collateral
and shall, if received by each Pledgor, be received in trust for the
benefit of Collateral Agent, be segregated from the other property or
funds of each Pledgor, and be forthwith delivered to Collateral Agent
as Pledged Collateral in the same form as so received (with any
necessary endorsement).
<PAGE> 11
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(iii) Collateral Agent hereby authorizes Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to subsection 8(a)(i) hereof and to receive the Distributions
which it is authorized to receive and retain pursuant to subsection
8(a)(ii) hereof.
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of any Pledgor to exercise the voting
and othr consensual rights it would otherwise be entitled to exercise
pursuant to subsection 8(a)(i) and to receive the Distributions which
it would otherwise be authorized to receive and retain pursuant to
subsection 8(a)(ii) without any action or the giving of any notice
shall cease, and all such rights shall thereupon become vested in
Collateral Agent, and Collateral Agent shall thereupon have the sole
right, but not the duty or obligation, to exercise such voting and
other consensual rights and the sole right to receive and hold as
Pledged Collateral such Distributions.
(c) Each Pledgor shall, at Pledgor's sole cost and
expense, from time to time execute and deliver to Collateral Agent
appropriate instruments as Collateral Agent may request in order to
permit Collateral Agent to exercise the voting and other rights which
it may be entitled to exercise pursuant to subsection 8(b) hereof and
to receive all Distributions which it may be entitled to receive
under subsection 8(b) hereof.
(d) All Distributions which are received by any Pledgor
contrary to the provisions of subsection 8(a)(ii) hereof shall be
received in trust for the benefit of Collateral Agent, shall be
segregated from other funds of such Pledgor and shall immediately be
paid over to Collateral Agent as Pledged Collateral in the same form
as so received (with any necessary endorsement).
SECTION 9. Transfers and Other Liens. Each Pledgor shall not
(i) except as permitted by the appropriate provisions of the Debt Instruments,
sell, convey, assign or otherwise dispose of, or grant any option or warrant
with respect to, any of the Pledged Collateral or (ii) create or permit to
exist any Lien upon or with
<PAGE> 12
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respect to any of the Pledged Collateral except for the Lien and security
interest granted by each Pledgor to Collateral Agent pursuant to this Agreement.
SECTION 10. Reasonable Care. Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equivalent to that which Collateral Agent, in its
individual capacity, accords its own property consisting of negotiable
securities, it being understood that Collateral Agent shall not have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not Collateral Agent or any other Secured Party
has or is deemed to have knowledge of such matters or (ii) taking any necessary
steps to preserve rights against any Person with respect to any Pledged
Collateral.
SECTION 11. Events of Default; Remedies.
(a) Event of Default. It shall be an Event of
Default hereunder if there shall occur an "Event of Default" as
defined in the Collateral Agency Agreement.
(b) Dispositions of Pledged Collateral. If an
Event of Default shall have occurred and be continuing, Collateral
Agent may exercise in respect of the Pledged Collateral, in addition
to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on
default under the UCC, and the Collateral Agent may also in its sole
discretion, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or
private sale or at any exchange or broker's board for cash, on credit
or for future delivery, and at such price or prices and upon such
other terms as Collateral Agent may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of
the Pledged Collateral. Collateral Agent or any other Secured Party
may be the
<PAGE> 13
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purchaser of any or all of the Pledged Collateral at any such sale and
shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Pledged
Collateral sold at such sale, to use and apply any of the Secured
Obligations owed to such Secured Party as a credit on account of the
purchase price of any Pledged Collateral payable by such Secured Party
at such sale. Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives (to the extent permitted by
law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. Collateral Agent shall give each
Pledgor not less than five days' prior written notice of the time and
place of any sale or other intended disposition of any of the Pledged
Collateral, except any Pledged Collateral which is of a type
customarily sold on a recognized market. The notice of such sale
shall (i) in the case of a public sale, state the time and place fixed
for such sale and (ii) in the case of a private sale, state the day
after which such sale may be consummated. Each Pledgor agrees that
such notice constitutes reasonable notice. Collateral Agent shall not
be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. Collateral Agent may adjourn any
public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each
Pledgor hereby waives any claims against Collateral Agent arising by
reason of the fact that the price at which any Pledged Collateral may
have been sold at such a private sale was less than the price which
might have been obtained at a public sale, even if Collateral Agent
accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree.
(c) Securities Laws Limitations. Each Pledgor
recognizes that, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Securities
<PAGE> 14
-14-
Act"), and applicable state securities laws, Collateral Agent may be
compelled, with respect to any sale of all or any part of the Pledged
Collateral, to limit purchasers to those who will agree, among other
things, to acquire the Pledged Collateral for their own account, for
investment and not with a view to the distribution or resale thereof.
Each Pledgor acknowledges that any such private sales may be at prices
and on terms less favorable to Collateral Agent than those obtainable
through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration
statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Collateral
Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period
of time necessary to permit the issuer thereof to register it for a
form of public sale requiring registration under the Securities Act or
under applicable state securities laws, even if each Pledgor would
agree to do so.
(d) Additional Information. If Collateral Agent
determines to exercise its right to sell any or all of the Pledged
Collateral, upon written request, each Pledgor shall, and shall cause
each issuer of any Pledged Collateral to be sold hereunder from time
to time to, furnish to Collateral Agent all such information as
Collateral Agent may request in order to determine the number of
shares and other instruments included in the Pledged Collateral which
may be sold by Collateral Agent as exempt transactions under the
Securities Act and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
(e) Waivers. Each Pledgor hereby waives, to the
extent permitted by applicable law, notice or judicial hearing in
connection with Collateral Agent's taking possession or Collateral
Agent's disposition of any Pledged Collateral, including, without
limitation, any and all prior notice and hearing for any prejudgment
remedy or remedies and any such
<PAGE> 15
-15-
right which each Pledgor would otherwise have under law, and each
Pledgor hereby further waives: (i) all damages occasioned by such
taking of possession; (ii) all other requirements as to the time,
place and terms of sale or other requirements with respect to the
enforcement of Collateral Agent's rights hereunder; and (iii) all
rights of redemption, appraisal, valuation, stay, extension or
moratorium now or hereafter in force under any applicable law. Any
sale of, or the grant of options to purchase, or any other realization
upon, any Pledged Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of each
Pledgor therein and thereto, and shall be a perpetual bar both at law
and in equity against each Pledgor and against any and all Persons
claiming or attempting to claim the Pledged Collateral so sold,
optioned or realized upon, or any part thereof, from, through and
under each Pledgor.
(f) Deficiency. Notwithstanding any other
provision of this Agreement to the contrary, if, after giving effect
to any sale, transfer or other disposition of any or all of the
Pledged Collateral pursuant hereto and after the application of the
proceeds hereunder and any Pledged Collateral sold, transferred or
otherwise disposed of pursuant to any other Security Document to the
Secured Obligations, any Secured Obligations remain unpaid or
unsatisfied, each Pledgor shall remain liable for the unpaid and
unsatisfied amount of such Secured Obligations.
SECTION 12. Application of Proceeds. The proceeds received
by Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Pledged Collateral pursuant to the
exercise by Collateral Agent of its remedies as a secured creditor as provided
in Section 11 hereof, together with any other sums then held by Collateral
Agent pursuant to this Agreement, shall be applied promptly by Collateral Agent
in the manner set forth in the Collateral Agency Agreement.
<PAGE> 16
-16-
SECTION 13. Expenses. Each Pledgor will upon demand
pay to Collateral Agent the amount of any and all expenses, including the
reasonable fees and expenses of its counsel and the allocated fees and expenses
of staff counsel and the fees and expenses of any experts and agents which
Collateral Agent may incur in connection with (i) the collection of the Secured
Obligations, (ii) the enforcement and administration of this Agreement, (iii)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iv) the exercise or
enforcement of any of the rights of Collateral Agent hereunder or (v) the
failure by any Pledgor to perform or observe any of the provisions hereof. All
amounts payable by any Pledgor under this Section 13 shall be due upon demand
and shall be part of the Secured Obligations. Each Pledgor's obligations under
this Section shall survive the termination of this Agreement and the discharge
of each Pledgor's other obligations hereunder.
SECTION 14. No Waiver; Discontinuance of Proceeding.
(a) No Waiver. No failure on the part of Collateral
Agent to exercise, no course of dealing with respect to, and no delay
in exercising, any right, power or remedy hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise by
Collateral Agent of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right,
power or remedy. The remedies herein provided are to the fullest
extent permitted by the law cumulative and are not exclusive of any
remedies provided by law.
(b) Discontinuance of Proceeding. In the event
Collateral Agent shall have instituted any proceeding to enforce any
right, power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued
or abandoned for any reason or shall have been determined adversely
to Collateral Agent, then and in every such case each Pledgor,
Collateral Agent and each Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the
Pledged Collateral, and all rights, remedies
<PAGE> 17
-17-
and powers of Collateral Agent and the Secured Parties shall continue
as if no such proceeding had been instituted.
SECTION 15. Collateral Agent.
(a) Collateral Agent has been appointed as collateral
agent pursuant to the Collateral Agency Agreement and shall have the
right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking
action (including, without limitation, the release or substitution of
Pledged Collateral) in accordance with the provisions of the
Collateral Agency Agreement. The actions of Collateral Agent
hereunder are subject to the provisions of the Collateral Agency
Agreement. Collateral Agent may resign and a successor Collateral
Agent may be appointed in the manner provided in the Indentures, the
Term Loan Agreement and the Collateral Agency Agreement. Upon the
acceptance of any appointment as Collateral Agent by a successor
Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent under this Agreement, and
the retiring Collateral Agent shall thereupon be discharged from its
duties and obligations under this Agreement in accordance with the
Collateral Agency Agreement. After any retiring Collateral Agent's
resignation, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under
this Agreement while it was Collateral Agent.
(b) Notwithstanding anything to the contrary contained in
this Agreement, the Indenture, the Mortgage or any of the other
Security Documents, in the event the Collateral Agent is entitled or
required to commence an action to exercise voting rights hereunder or
otherwise exercise its remedies to acquire control or possession of
the Mortgaged Property, the Collateral Agent shall not be required to
commence any such action or exercise any such remedy if the Collateral
Agent has determined in good faith that the Collateral Agent may
incur liability under the Environmental Laws (as defined in the
Mortgage) as the result of the presence at, or release on or from, the
Facility of any Hazardous Materials (as
<PAGE> 18
-18-
defined in the Mortgage) unless the Collateral Agent has received
security or indemnity, from a Secured Party or holders of Indebtedness
benefiting from the the pledge of this Agreement, in an amount and in
a form all satisfactory to the Collateral Agent in its sole discretion,
protecting the Collateral Agent from all such liability.
SECTION 16. Collateral Agent May Perform; Collateral Agent
Appointed Attorney-in-Fact. If Pledgors shall fail to do any act or thing
that it has covenanted to do hereunder or if any warranty on the part of any
Pledgor contained herein shall be breached, Collateral Agent or any Secured
Party may (but shall have no duty or obligation to) do the same or cause it to
be done or remedy any such breach, and may reasonably expend funds for such
purpose. Any and all amounts so expended by Collateral Agent or such Secured
Party shall be paid by Pledgors promptly upon demand therefor, with interest at
the Default Rate during the period from and including the date on which such
funds were so expended to the date of repayment. Each Pledgor's obligations
under this Section 16 shall survive the termination of this Agreement and the
discharge of each Pledgor's other obligations under this Agreement. Each
Pledgor hereby appoints Collateral Agent its attorney-in-fact with an interest,
with full authority in the place and stead of each Pledgor and in the name of
each Pledgor, or otherwise, from time to time in Collateral Agent's discretion,
to take any action and to execute any instrument consistent with the terms of
this Agreement, any Debt Instrument, the Collateral Agency Agreement and the
Intercreditor Agreement which Collateral Agent may deem necessary or advisable
to accomplish the purposes of this Agreement. The foregoing grant of authority
is a power of attorney coupled with an interest and such appointment shall be
irrevocable for the term of this Agreement. Each Pledgor hereby ratifies all
that such attorney shall lawfully do or cause to be done by virtue and in
accordance with the terms hereof.
SECTION 17. Indemnity.
(a) Indemnity. Each Pledgor agrees to indemnify, pay and
hold harmless Collateral Agent and the officers, directors,
<PAGE> 19
-19-
employees, agents and affiliates of Collateral Agent (collectively, the
"Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs
(including, without limitation, settlement costs and claims for strict
liability in tort and environmental or hazardous waste claims of any
sort), expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of counsel
for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated a party thereto), which may
be imposed on, incurred by, or asserted against such Indemnitee, in
any manner relating to or arising out of this Agreement, the
Intercreditor Agreement, the Collateral Agency Agreement or the Debt
Instruments (including, without limitation, any misrepresentation by
each Pledgor in this Agreement) (the "Indemnified Liabilities");
provided, however, that no Pledgor shall have any obligation to an
Indemnitee hereunder with respect to Indemnified Liabilities if it has
been determined by a final decision (after all appeals and the
expiration of time to appeal) by a court of competent jurisdiction that
such Indemnified Liability arose from the negligence or willful
misconduct of such Indemnitee or, in the case of environmental laws,
the willful violation of such laws. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or
public policy, the Pledgor shall contribute the maximum portion which
it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
(b) Survival. The obligations of each Pledgor contained
in this Section 17 shall survive the termination of this Agreement and
the discharge of each Pledgor's other obligations under this Agreement.
(c) Reimbursement. Any amounts paid by any Indemnitee as
to which such Indemnitee has the right to reimbursement shall constitute
Secured Obligations secured by the Pledged Collateral.
<PAGE> 20
-20-
SECTION 18. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision of this
Agreement, nor consent to any departure by any Pledgor therefrom, shall be
effective unless the same shall be done in accordance with the terms of the
Collateral Agency Agreement and unless in writing and signed by Collateral
Agent and each Pledgor. Any amendment, modification or supplement of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any Pledgor from the terms of any provision of
this Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement or any Debt Instrument, no notice to or demand on
any Pledgor in any case shall entitle any Pledgor to any other or further
notice or demand in similar or other circumstances.
SECTION 19. Termination; Release.
(a) Except as otherwise provided herein, this Agreement
shall terminate upon compliance by each Pledgor with the applicable
provisions of the Collateral Agency Agreement. Upon termination of
this Agreement or any release of Pledged Collateral in accordance with
the provisions of the Collateral Agency Agreement, Collateral Agent
shall, upon the request and at the sole cost and expense of each
Pledgor, forthwith assign, transfer and deliver to each Pledgor,
against receipt and without recourse to or warranty by Collateral
Agent, such of the Pledged Collateral as may be in possession of
Collateral Agent and as shall not have been sold or otherwise applied
pursuant to the terms hereof on the order of and at the sole cost and
expense of each Pledgor, and proper instruments (including UCC
termination statements on Form UCC-3) acknowledging the termination of
this Agreement or the release of such Pledged Collateral, as the case
may be.
(b) In the event that any Asset Sale made by any Pledgor
in accordance with applicable provisions of the Debt Instruments
involves the sale of an asset which constitutes Pledged Collateral,
such Pledgor shall deliver all Net Cash Proceeds received in respect
of such item of Pledged Collateral to Collateral Agent to
<PAGE> 21
-21-
be held by Collateral Agent as Trust Moneys and applied in accordance
with the provisions of the Collateral Agency Agreement.
SECTION 20. Notices. Unless otherwise provided herein, any
notice or other communication herein shall be given in the manner set forth in
the Collateral Agency Agreement and at the addresses set forth in the
Collateral Agency Agreement, or at such other address as shall be designated by
any party in a written notice to the other party.
SECTION 21. Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon each Pledgor, its successors and assigns, and
(ii) inure, together with the rights and remedies of Collateral Agent
hereunder, to the benefit of Collateral Agent and the other Secured Parties and
each of their respective successors, transferees and assigns; no other Persons
(including, without limitation, any other creditor of the Pledgors) shall have
any interest herein or any right or benefit with respect hereto. Without
limiting the generality of the foregoing clause (ii), any Secured Party may
assign or otherwise transfer any Debt Instrument held by it secured by this
Agreement to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party,
herein or otherwise, subject however, to the applicable provisions of the Debt
Instruments.
SECTION 22. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 23. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL
<PAGE> 22
-22-
COURT OF COMPETENT JURISDICTION IN THE BOROUGH OF MANHATTAN, STATE OF NEW YORK
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
PLEDGOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, WITH AN ADDRESS AT 1633
BROADWAY, NEW YORK, NEW YORK 10019 AND SUCH OTHER PERSONS AS MAY HEREAFTER BE
SELECTED BY PLEDGOR IRREVOCABLY AGREEING IN WRITING TO SO SERVE, AS ITS AGENT
TO RECEIVE ON ITS BEHALF, SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY
SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY PLEDGOR TO BE EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL
BE MAILED BY REGISTERED MAIL TO PLEDGOR AT ITS ADDRESS PROVIDED FOR IN SECTION
20 HEREOF EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE
TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY
AGENT APPOINTED BY PLEDGOR REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, PLEDGOR
HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF COLLATERAL AGENT TO BRING
PROCEEDINGS AGAINST PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 24. Severability of Provisions. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 25. Execution in Counterparts. This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all such counterparts together shall constitute one and the
same Agreement.
<PAGE> 23
-23-
SECTION 26. Headings. The Section and subsection headings
used in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
SECTION 27. Obligations Absolute. All obligations of each
Pledgor hereunder shall be absolute and unconditional irrespective of:
(a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any
Pledgor;
(b) any lack of validity or enforceability of any Debt
Instrument, or any other agreement or instrument relating thereto;
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
any Debt Instrument, or any other agreement or instrument relating
thereto;
(d) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured
Obligations;
(e) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect of this
Agreement or any Debt Instrument except as specifically set forth in a
waiver granted pursuant to the provisions of Section 18; or
(f) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, any Pledgor.
<PAGE> 24
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be duly executed and delivered by its duly authorized officer as
of the date first above written.
ACME STEEL COMPANY,
as Pledgor
By: /s/ S. D. Bennett
---------------------------
Name: Stephen D. Bennett
Title: President
ACME PACKAGING CORPORATION,
as Pledgor
By: /s/ Jerry F. Williams
---------------------------
Name: Jerry F. Williams
Title: Treasurer
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ Susan T. Keller
---------------------------
Name: Susan T. Keller
Title: Vice President
<PAGE> 25
SCHEDULE A
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage of
All Capital or
Other Equity
Class of Par Certificate Number Interests of
Pledgor: Acme Steel Stock Value Numbers of Shares Issuer
-------- ----- ----------- --------- --------------
<S> <C> <C> <C> <C> <C>
Issuer
- ------
Alabama Metallurgical Capital $10.00 3 45,000 100%
Corporation
Pledgor: Acme Packaging
Issuer
- ------
Universal Tool and
Stamping Company, Inc. Capital $5.00 214 10,970 100%
Alpha Tube Corporation Capital None 2 500 100%
Alta Slitting Corporation Capital $1.00 2 500 100%
Acme Steel Company
International, Inc. Common None 2 1,000 100%
</TABLE>
<PAGE> 1
EXHIBIT 4.9
SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement"), dated as of August 11,
1994, made by ACME STEEL COMPANY, a Delaware corporation having an office at
13500 South Perry Avenue, Riverdale, Illinois 60627 (together with its
successors and assigns, "Pledgor"), in favor of SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association, having an office at 777
Main Street, Hartford, Connecticut 06115, as collateral agent (in such capacity
and together with its successors and assigns in such capacity, "Collateral
Agent") (for its benefit and for the benefit of the other Secured Parties (as
hereinafter defined)).
R E C I T A L S :
1. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Note Indenture"), dated as of August 11, 1994, by and among Acme Metals
Incorporated (the "Company"), Pledgor, as subsidiary guarantor of the Company's
obligations, each of the other subsidiaries of the Company, as guarantors
(collectively, the "Guarantors") of the Company's obligations, and Shawmut Bank
Connecticut, National Association, as trustee (in such capacity and together
with its successors and assigns in such capacity, the "Note Trustee") for the
holders of the Senior Secured Notes (as hereinafter defined), the Company is
issuing its 12 1/2% senior secured notes due 2002 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Senior
Secured Notes") in the aggregate principal amount of $125,000,000.
2. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Discount Note Indenture"; together with the Note Indenture, the "Indentures"),
dated as of August 11, 1994, by and among the Company, the Guarantors and
Shawmut Bank Connecticut, National Association, as trustee (in such capacity
and together with its successors and assigns in such capacity, the "Discount
<PAGE> 2
-2-
Note Trustee"; together with the Note Trustee, the "Trustees") for the holders
of the Senior Secured Discount Notes (as hereinafter defined), the Company is
issuing its 13 1/2% senior secured discount notes due 2004 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Senior
Secured Discount Notes"; together with the Senior Secured Notes, the "Notes")
in the aggregate principal amount of $117,958,000.
3. Pursuant to that certain term loan agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Term Loan Agreement"), dated as of August 4, 1994 by and among the
Company, Lehman Commercial Paper Inc., as agent (in such capacity and together
with its successors and assigns in such capacity, the "Agent"), and the lenders
party thereto (together with all subsequent lenders party to the Term Loan
Agreement, the "Lenders"), Acme Metals is borrowing $50,000,000.
4. Collateral Agent is the collateral agent under that
certain collateral agency agreement (the "Collateral Agency Agreement"), dated
as of August 11, 1994, for the Trustees (for the benefit of the holders of the
Notes), for the Agent for the benefit of the Lenders and such other parties
which may from time to time become additional lenders to the Company and/or the
Guarantors (each such lender, a "Permitted Additional Lender" and collectively,
the "Permitted Additional Lenders"; together with the Trustees, the Agent and
Collateral Agent, the "Secured Parties") which may, in accordance with the
provisions of clause (xi) of the definition of "Permitted Liens" in each
Indenture as in effect on the date hereof, take a security interest in the
Collateral (as defined in the Collateral Agency Agreement) to secure the
financing provided by the Permitted Additional Lenders (such financing, the
"Permitted Replacement Financing") upon the execution and delivery by the
Permitted Additional Lenders of a supplement to the Collateral Agency Agreement
as contemplated therein.
5. Pledgor is the owner of the Pledged Collateral (as
hereinafter defined).
<PAGE> 3
-3-
6. This Agreement is given by Pledgor in favor of
Collateral Agent for its benefit and the benefit of the other Secured Parties
to secure the payment and performance of the Secured Obligations (as
hereinafter defined).
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Pledgor and Collateral Agent hereby agree as follows:
SECTION 1. Definitions. Unless otherwise defined herein,
capitalized terms used herein but not otherwise defined shall have the meanings
assigned to such terms in the Indentures as in effect on the date hereof. The
following terms shall have the following meanings. Such definitions shall be
applicable equally to the singular and plural forms of the terms defined.
"Collateral Account" shall mean the collateral account
established and maintained under Section 3.1 of the Collateral Agency
Agreement.
"Collateral Account Funds" shall mean all funds from time to
time on deposit in the Collateral Account; all investments (including, without
limitation, Cash Equivalents) and all certificates and instruments from time to
time representing or evidencing such investments; all notes, certificates of
deposit, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by Collateral Agent for or on behalf of Pledgor in
substitution for, or in addition to, any or all of the Pledged Collateral; and
all interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the items constituting Pledged Collateral.
"Contested Liens" shall have the meaning assigned to such term
in subsection 7(e) of this Agreement.
<PAGE> 4
-4-
"Copyrights" shall mean all copyrights of the United States or
any other country, and all registrations and recordings thereof, including,
without limitation, applications, registrations and recordings in the United
States Copyright Office or in any similar office or agency of the United
States, or in any similar office or agency of any other country or any
political subdivision thereof including, without limitation, those described in
Schedule A annexed hereto and all copyrights in derivative works, extensions or
renewals thereof.
"Indemnification Documents" shall mean, collectively, (i) that
certain cross-indemnification agreement dated as of May 29, 1986, by and
between The Interlake Corporation ("Interlake") and Pledgor and (ii) that
certain tax indemnification agreement made and entered into as of May 30, 1986,
by and between Interlake and Pledgor.
"Intangibles" shall mean all contract rights relating to
Pledged Collateral (including, without limitation, Pledgor's rights under the
Modernization Project Documents and the Indemnification Documents), and all
goodwill, descriptions, name plates, choses-in-action, causes of action,
catalogs, confidential information, consulting agreements, engineering
contracts, and such other assets which relate to the goodwill of the business
of Pledgor and rights to refund or indemnification to the extent the foregoing
relate to Pledged Collateral, deposit accounts, letters of credit, documents,
instruments, chattel paper and income tax refunds to the extent relating to
Pledged Collateral, claims for tax or other refunds against any city, county,
state, or federal government, or any agency or authority or other subdivision
thereof relating to Pledged Collateral, lease agreements relating to Pledged
Collateral, corporate or other business records relating to Pledged Collateral,
and all other general intangibles of every kind and description relating to
Pledged Collateral.
"Intellectual Property" shall mean, collectively, all
Copyrights, Patents and Trademarks and all licenses therefor and all licenses
under the patents, trademarks, copyrights and trade secrets of third parties to
Pledgor.
<PAGE> 5
-5-
"Modernization Project" means the continuous thin slab
cluster/hot strip mill complex to be constructed at Acme Steel's Riverdale,
Illinois plant pursuant to the Construction Contract and all architectural,
engineering and construction plans, utility and other installations and permits
together with all land, improvements, additions, furniture, fixtures and
equipment associated with such project.
"Modernization Project Documents" shall mean, collectively,
the following agreements, each as amended, amended and restated, supplemented
or otherwise modified from time to time: the Construction Contract and all
exhibits, attachments, supplements or other documents or instruments attached
or related thereto and any and all other agreements of a similar nature
relating to feasibility, engineering, procurement, performance guarantees
and/or incentive arrangements relating to performance in respect of the
conception, design, construction and timely completion of the Modernization
Project.
"Patents" shall mean all letters patent of the United States
or any other country, and all patent applications therefor, including, without
limitation, patents and patent applications in the United States Patent and
Trademark Office (the "PTO") or in any similar office or agency of the United
States, or in any similar office or agency of any other country or any
political subdivision thereof including, without limitation, those described in
Schedule B annexed hereto and all reissues, re-examinations, continuations,
divisionals, continuations-in-part or extensions thereof and all associated
priority rights.
"Permitted Liens" shall have the meaning assigned to such term
pursuant to subsection 6(b) of this Agreement.
"Prior Liens" shall have the meaning assigned to such term
pursuant to subsection 6(a) of this Agreement.
"Proceeds" shall have the meaning assigned to the term
"proceeds" under the UCC and, in any event, shall include, without limitation,
any and all (i) proceeds of any insurance, indemnity,
<PAGE> 6
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warranty or guarantee payable to Collateral Agent or to Pledgor from time to
time with respect to any of the Pledged Collateral, (ii) payments (in any form
whatsoever) made or due and payable to Pledgor from time to time in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Pledged Collateral by any governmental authority (or any
person acting under color of a governmental authority), (iii) products of the
Pledged Collateral and (iv) other amounts from time to time paid or payable
under or in connection with any of the Pledged Collateral; provided, however,
that Proceeds shall not include property constituting Bank Primary Collateral
(as defined in the Intercreditor Agreement).
"Trademarks" shall mean all trademarks, trade names, trade
styles, service marks, designs and general intangibles of like nature, and all
registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the PTO or in any similar office
or agency of the United States or any State thereof, or in any similar office
or agency of any other country or any political subdivision thereof, together
with the goodwill associated therewith including, without limitation, those
described in Schedule C annexed hereto and all reissues, amendments, extensions
or renewals thereof.
"UCC" shall mean the Uniform Commercial Code as in effect in
any relevant jurisdiction.
SECTION 2. Pledge and Grant of Security Interest. As
collateral security for the payment and performance when due of all the Secured
Obligations, Pledgor hereby pledges, assigns, transfers and grants to
Collateral Agent for the benefit of the Secured Parties a continuing first
priority security interest in and pledge of, the right, title and interest of
Pledgor in, to and under the following property, whether now owned or hereafter
acquired (collectively, the "Pledged Collateral"):
(i) the Collateral Account and all Collateral Account
Funds;
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(ii) all Intangibles;
(iii) all Intellectual Property; and
(iv) all Proceeds of any of the property specified in
clauses (i) through (iii) of this Section 2.
SECTION 3. Secured Obligations. This Agreement secures, and
the Pledged Collateral is collateral security for, the payment and performance
in full when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the filing of a petition in bankruptcy or
the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)), of (i) all of the obligations, liabilities
and indebtedness of Pledgor now or hereafter existing under or in respect of
each Indenture, the Notes, the Term Loan Agreement and the notes relating
thereto and the notes, agreements and/or other instruments which collectively
evidence any Permitted Replacement Financing (such notes, agreements and/or
other instruments, together with the Indentures and the Notes, the Term Loan
Agreement and the notes relating thereto, the "Debt Instruments") (including,
without limitation, the obligations of Pledgor to pay principal of, premium, if
any, and interest on any Debt Instruments when due and payable) and all other
charges, fees, expenses, commissions, reimbursements, premiums, indemnities and
all other amounts due or to become due under or in connection with each Debt
Instrument and (ii) without duplication of the amounts described in clause (i)
of this Section 3, all obligations, indebtedness and liabilities of Pledgor now
existing or hereafter arising under or in respect of this Agreement, including,
without limitation, with respect to all charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in this Agreement (the obligations
described in clauses (i) and (ii) of this Section 3, collectively, the "Secured
Obligations").
SECTION 4. No Release. Nothing set forth in this Agreement
shall relieve Pledgor from the performance of any term, covenant, condition or
agreement on Pledgor's part to be performed
<PAGE> 8
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or observed under or in respect of any of the Pledged Collateral constituting
general intangibles, accounts or contract rights or from any liability to any
Person under or in respect of any of such Pledged Collateral or shall impose
any obligation on Collateral Agent or any other Secured Party to perform or
observe any such term, covenant, condition or agreement on Pledgor's part to be
so performed or observed or shall impose any liability on Collateral Agent or
any other Secured Party for any act or omission on the part of Pledgor relating
thereto or for any breach of any representation or warranty on the part of
Pledgor contained in this Agreement, or under or in respect of the Pledged
Collateral or made in connection herewith or therewith. The obligations of
Pledgor contained in this Section 4 shall survive the termination of this
Agreement and the discharge of Pledgor's other obligations under this
Agreement.
SECTION 5. Supplements; Further Assurances. Pledgor agrees
that, at any time and from time to time, it will execute and file and refile
such financing statements, continuation statements, amendments thereto and
other documents (including, without limitation, this Agreement) in such offices
(including, without limitation, the PTO and the United States Copyright Office)
required or permitted by law in order to perfect, protect and preserve the
rights and interests granted to Collateral Agent hereunder. Without limiting
Pledgor's obligation to make such filings, and without imposing any obligation
on the Collateral Agent to make such filings, Pledgor hereby authorizes
Collateral Agent and appoints Collateral Agent as its attorney-in-fact to file
such financing statements, continuation statements, amendments thereto and
other documents without the signature of Pledgor to the fullest extent
permitted by applicable law, and Pledgor agrees to do such further acts and
things, and to execute and deliver to Collateral Agent such additional
assignments, agreements, powers and instruments, as Collateral Agent may, but
shall not be under obligation to, request to carry into effect the purposes of
this Agreement or to assure and confirm unto Collateral Agent its rights,
powers and remedies hereunder. All of the foregoing shall be at the sole cost
and expense of Pledgor.
<PAGE> 9
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SECTION 6. Representations, Warranties and Covenants.
Pledgor represents, warrants and covenants as follows:
(a) Necessary Filings. The filings, registrations and
recordings described in Schedule D hereto constitute the only filings,
registrations and recordings necessary and appropriate to create,
preserve, protect and perfect the security interest granted by Pledgor
to Collateral Agent pursuant to this Agreement in respect of the
Pledged Collateral. All such filings, registrations and recordings
shall, to the extent not previously made, be made immediately after
the execution hereof. Upon such filings, registrations and
recordings, the Lien granted to Collateral Agent for the benefit of
the Secured Parties pursuant to this Agreement constitutes and
hereafter will constitute as to the Pledged Collateral, a perfected
Lien superior and prior to the rights of all other Persons therein
other than the holders of the (i) Liens described in Schedule E
annexed hereto (collectively, the "Prior Liens") and (ii) Contested
Liens solely to the extent contemplated by the last sentence of
subsection 7(e) of this Agreement.
(b) No Liens. With respect to the Pledged Collateral
existing on the date hereof, Pledgor is, and, as to the Pledged
Collateral acquired by it from time to time after the date hereof,
Pledgor will be the owner thereof, free from any Lien or other right,
title or interest of any Person other than (i) Prior Liens, (ii) the
Lien and security interest granted by Pledgor to Collateral Agent in
the Pledged Collateral pursuant to this Agreement and (iii) Contested
Liens (the Liens described in clauses (i) through (iii) of this
sentence, collectively, the "Permitted Liens"). Pledgor shall defend
the Pledged Collateral against all claims and demands of all Persons
at any time claiming any interest therein adverse to Collateral Agent
or any other Secured Party.
(c) Other Financing Statements. There is no financing
statement (or similar statement or instrument of registration
<PAGE> 10
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under the law of any jurisdiction) covering or purporting to cover
any interest of any kind in the Pledged Collateral (other than such
statements or instruments in respect of Permitted Liens) and for so
long as any of the Secured Obligations remain unpaid, Pledgor shall
not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating
to the Pledged Collateral, other than financing statements or similar
statements or instruments filed or to be filed in respect of and
covering the security interest granted by Pledgor to Collateral Agent
pursuant to this Agreement.
(d) Chief Executive Office; Records. The chief executive
office of Pledgor is located at 13500 South Perry Avenue, Riverdale,
Illinois 60627. Pledgor shall not move such office, except to such
new location as Pledgor may establish in accordance with the last
sentence of this subsection 6(d). Pledgor shall not establish a new
location for such office nor shall it change its name until (i) it
shall have given Collateral Agent not less than thirty (30) days'
prior written notice of its intention so to do, clearly describing
such new location or name and providing such other information in
connection therewith as Collateral Agent may request and (ii) with
respect to such new location or name, Pledgor shall have taken all
action necessary to maintain the perfection and proof of the security
interest of Collateral Agent for the benefit of the Secured Parties in
the Pledged Collateral intended to be granted hereby, including,
without limitation, obtaining waivers of landlord's or warehouseman's
liens with respect to such new location.
(e) Authorization; Enforceability. Pledgor has full
corporate power, authority and legal right to pledge and grant a
security interest in all the Pledged Collateral pursuant to this
Agreement, and this Agreement constitutes the legal, valid and binding
obligation of Pledgor, enforceable against Pledgor in accordance with
its terms.
<PAGE> 11
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(f) No Consents. No consent of any party (including,
without limitation, stockholders or creditors of Pledgor) and no
consent, authorization, approval, or other action by, and no notice to
or filing with, any governmental authority or regulatory body or other
Person is required either (i) for the pledge by Pledgor of the Pledged
Collateral pursuant to this Agreement or for the execution, delivery
or performance of this Agreement by Pledgor, (ii) except as may be
provided in the Intercreditor Agreement and/or the Collateral Agency
Agreement, for the exercise by Collateral Agent of the voting or other
rights provided for in this Agreement or (iii) except as may be
provided in the Intercreditor Agreement and/or the Collateral Agency
Agreement, for the exercise by Collateral Agent of the remedies in
respect of the Pledged Collateral pursuant to this Agreement.
(g) Pledged Collateral. All information set forth herein
(including, without limitation, the information set forth in the
Schedules annexed hereto) relating to the Pledged Collateral is
accurate and complete in all respects.
(h) Intellectual Property. All of the registered, issued
or material Intellectual Property and all applications and licenses
therefor which are in existence on the date hereof are described on
Schedules A, B and C annexed hereto. Pledgor has the right to use all
such Intellectual Property and all computer programs and other similar
rights free from burdensome restrictions. There is not pending or, to
the best of Pledgor's knowledge, threatened any claim or litigation
against or affecting Pledgor contesting the validity of any of the
Intellectual Property or such computer programs or other rights.
(i) Modernization Project Documents. Pledgor shall
perform and comply with the terms and conditions of all Modernization
Project Documents. Pledgor shall not without the consent of
Collateral Agent (i) cancel or terminate any of the Modernization
Project Documents or consent to or accept any cancellation or
termination thereof, (ii) amend,
<PAGE> 12
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supplement or otherwise modify any of the Modernization Project
Documents (in each case as in effect on the date hereof) which could
have a material adverse effect on the Modernization Project, the other
Mortgaged Property (as defined in the Mortgage) or impair the Lien
granted to Collateral Agent under this Agreement, (iii) waive any
default under or breach of any of the Modernization Project Documents
or waive, fail to enforce, forgive or release any right, interest, or
entitlement of any kind, howsoever arising, under or in respect of
such Modernization Project Documents or, vary or agree to the
variation of any of the provisions of any of such Modernization
Project Documents or of the performance of any other Person under any
of such Modernization Project Documents, or (iv) petition, request or
take any other legal or administrative action which seeks, or may be
expected, to rescind, terminate or suspend, any of the Modernization
Project Documents or amend or modify any thereof. Pledgor shall
notify Collateral Agent in the event it receives any notice or
communication with respect to the Modernization Project Documents
including, without limitation, notices of default, and shall forward
promptly copies of any such notices or communications to Collateral
Agent. In the event of Pledgor's default under any of the
Modernization Project Documents, the parties thereto may permit
Collateral Agent to cure such default and thereafter perform any of
Pledgor's obligations thereunder and such performance by Collateral
Agent will not constitute a default under any such Modernization
Project Document.
SECTION 7. Provisions Concerning Pledged Collateral.
(a) Insurance. Pledgor shall at all times keep the
Pledged Collateral insured in favor of Collateral Agent, at Pledgor's
own expense, against all risks to which the Pledged Collateral may be
subject, in such amounts and with such deductibles as from time to
time would be maintained by a prudent operator of a business similar
to the business of Pledgor. Each policy or certificates with respect
to such insurance shall be endorsed to Collateral Agent for the
<PAGE> 13
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benefit of Collateral Agent (including, without limitation, by naming
Collateral Agent as an additional named insured or loss payee as its
interest may appear) and such policy or certificate shall be delivered
to Collateral Agent. Each such policy shall state that it cannot be
cancelled without thirty (30) days' prior written notice to Collateral
Agent. At least thirty (30) days prior to the expiration of any such
policy of insurance, a policy or policies renewing or extending such
expiring policy or renewal or extension certificates or other evidence
of renewal or extension shall be delivered to Collateral Agent. If
Pledgor shall fail to insure such Pledged Collateral with insurers
which would be utilized by a prudent operator of a business similar to
the business of Pledgor and in such amounts and with such deductibles
as contemplated herein or if Pledgor shall fail to so endorse and
deposit, or to extend or renew, all such insurance policies or
certificates with respect thereto, Collateral Agent shall have the
right (but shall be under no obligation), to advance funds to procure
or renew or extend such insurance and Pledgor agrees to reimburse
Collateral Agent for any and all costs and expenses thereof, with
interest on all such funds from the date advanced at the rate per
annum (the "Default Rate") equal to two percent (2%) in excess of the
highest rate payable under the Notes. Any proceeds of insurance in
respect of the Pledged Collateral are hereby assigned to Collateral
Agent. Subject to the provisions of the Intercreditor Agreement and
the Collateral Agency Agreement, in case of any loss or damage to any
of the Pledged Collateral, all proceeds of insurance maintained by
Pledgor shall be paid to Collateral Agent as Trust Moneys and shall be
subject to retention and disbursement by Collateral Agent in
accordance with the terms of the Collateral Agency Agreement.
(b) Further Actions. Pledgor shall, at its sole cost and
expense, make, execute, endorse, acknowledge, file and/or deliver to
Collateral Agent from time to time such lists, descriptions and
designations of the Pledged Collateral, copies of warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading,
documents of title,
<PAGE> 14
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vouchers, invoices and schedules relating to the Pledged Collateral.
(c) Notation on Books and Records. Pledgor shall place
on its books and records with respect to the Pledged Collateral a
notation stating that Collateral Agent has a security interest
therein.
(d) Protection of Collateral Agent's Security. Pledgor
shall properly maintain and protect the Pledged Collateral and shall
not take any action that impairs the rights of Collateral Agent or any
other Secured Party in the Pledged Collateral.
(e) Payment of Taxes; Claims. Pledgor shall pay promptly
when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for
labor, materials, supplies and warehousing) against, the Pledged
Collateral. Notwithstanding the foregoing, Pledgor may at its own
expense contest the amount or applicability of any such taxes,
assessments, governmental charges or levies or claims by appropriate
legal proceedings; provided, however, that (i) any such contest shall
be conducted in good faith by appropriate proceedings promptly
instituted and diligently conducted and (ii) in connection with such
contest, Pledgor shall have (x) made provision for the payment of such
contested amount on Pledgor's books if and to the extent required by
generally accepted accounting principles then used by Pledgor in the
preparation of its financial statements or (y) deposited with
Collateral Agent a sum sufficient to pay and discharge such obligation
and Collateral Agent's estimate of all interest and penalties related
thereto. Notwithstanding the foregoing provisions of this subsection
7(e), (x) no contest of any such obligation may be pursued by Pledgor
if such contest would expose Collateral Agent or any other Secured
Party to (A) any possible criminal liability or, (B) unless Pledgor
shall have furnished a bond or other security therefor satisfactory to
Collateral Agent or any other Secured Party, any additional
<PAGE> 15
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civil liability for failure to comply with such obligation and (y) if
at any time payment of any obligation imposed upon Pledgor by this
subsection 7(e) shall become necessary to prevent the imposition of
remedies because of non-payment, Pledgor shall pay the same in
sufficient time to prevent the imposition of remedies in respect of
such default or prospective default. Any Liens incurred in respect of
the taxes, assessments, governmental charges or levies or claims
contemplated by this subsection 7(e) (such Liens, to the extent the
amounts owing in respect thereof are not yet due or are being
contested and otherwise comply with the provisions of this subsection
7(e), the "Contested Liens") shall in all respects be subject and
subordinate in priority to the Lien and security interest created and
evidenced by this Agreement, except if and to the extent that the law
or regulation creating or authorizing such Lien provides that such
Lien must be superior to the Lien and security interest created and
evidenced hereby.
(f) As to Copyrights, Patents and Trademarks. Pledgor
shall:
(i) Advise Collateral Agent of all material
Copyrights, Patents and Trademarks and applications or
licenses for or registration of the same, created or obtained
by Pledgor on or after the date of this Agreement.
(ii) Take all steps necessary to maintain and
enforce the Copyrights, Patents and Trademarks (and licenses
therefor) including, without limitation, (x) payment of all
fees, (y) prosecuting infringers and (z) diligently pursuing
any application or registration related thereto.
SECTION 8. Transfers and Other Liens. Except as permitted by
the appropriate provisions of the Debt Instruments, Pledgor shall not sell,
convey, assign or otherwise dispose of, or grant any option with respect to,
any of the Pledged Collateral.
<PAGE> 16
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Pledgor shall not create or permit to exist any Lien upon or with respect to
any of the Pledged Collateral other than Permitted Liens.
SECTION 9. Reasonable Care. Collateral Agent shall be deemed
to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equivalent to that which Collateral Agent, in its
individual capacity, accords its own property, it being understood that
Collateral Agent shall not have responsibility for taking any necessary steps
to preserve rights against any Person with respect to any Pledged Collateral.
SECTION 10. Remedies Upon Event of Default.
(a) Obtaining Possession of Pledged Collateral. If an
Event of Default (as defined in the Collateral Agency Agreement) shall have
occurred and be continuing, then and in every such case, Collateral Agent may:
(i) personally, or by agents or attorneys, immediately
take possession of the Pledged Collateral or any part thereof, from
Pledgor or any other Person who then has possession of any part
thereof with or without notice or process of law, and for that purpose
may enter upon Pledgor's premises where any of the Pledged Collateral
is located and remove such Pledged Collateral and use in connection
with such removal any and all services, supplies, aids and other
facilities of Pledgor;
(ii) sell, assign, grant a license to use or otherwise
liquidate, or direct Pledgor to sell, assign, grant a license to use
or otherwise liquidate, any or all investments made in whole or in
part with the Pledged Collateral or any part thereof, and take
possession of the proceeds of any such sale, assignment, license or
liquidation;
(iii) take possession of the Pledged Collateral or any part
thereof, by directing Pledgor in writing to deliver the same to
Collateral Agent at any place or places designated by
<PAGE> 17
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Collateral Agent, in which event Pledgor shall at its own expense:
(x) forthwith cause the same to be moved to the place or places so
designated by Collateral Agent and there delivered to Collateral
Agent; (y) store and keep any Pledged Collateral so delivered to
Collateral Agent at such place or places pending further action by
Collateral Agent and (z) while the Pledged Collateral shall be so
stored and kept, provide such guards and maintenance services as shall
be necessary to protect the same and to preserve and maintain them in
good condition. Pledgor's obligation to deliver the Pledged
Collateral is of the essence of this Agreement. Upon application to a
court of equity having jurisdiction, Collateral Agent shall be
entitled to a decree requiring specific performance by Pledgor of such
obligation;
(iv) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Modernization Project Documents and/or the Indemnification Agreements)
constituting the Pledged Collateral to make any payment required by
the terms of such agreement, instrument or other obligation directly
to Collateral Agent; provided, however, that in the event any such
payments are made directly to Pledgor prior to receipt by any such
obligor of such instruction, Pledgor shall segregate all amounts
received pursuant thereto in a separate account and pay same promptly
to Collateral Agent; and
(v) substitute itself for Pledgor as a party to the
Modernization Project Documents and/or the Indemnification Agreements
and exercise all rights and remedies of Pledgor thereunder in
accordance with the terms thereof.
(b) Disposition of Pledged Collateral. Upon the
occurrence and during the continuance of an Event of Default, Collateral Agent
may exercise in respect of the Pledged Collateral, in addition to the other
rights and remedies provided for herein or otherwise available to it, without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's
<PAGE> 18
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board or at any of Collateral Agent's offices or elsewhere, for cash, on credit
or for future delivery, and at such price or prices and upon such other terms
as Collateral Agent may deem commercially reasonable. Collateral Agent or any
Secured Party may bid for and be the purchaser of any or all of the Pledged
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion
of the Pledged Collateral sold at such sale, to deliver any outstanding Note or
claims for interest thereon in lieu of cash, which Note or claims for interest
thereon shall be applied to the payment of such purchase price. In the event
that the amount payable in respect of the purchase price of the Pledged
Collateral purchased at any such sale shall be less than the amount due on such
Note, such Note shall be returned to the Secured Party after being
appropriately stamped to show partial payment. Each purchaser at any such sale
shall acquire the property sold absolutely free from any claim or right on the
part of Pledgor, and Pledgor hereby waives, to the fullest extent permitted by
law, all rights of redemption, stay or appraisal hereafter enacted. Collateral
Agent shall not be obligated to make any sale of Pledged Collateral regardless
of notice of sale having been given. Collateral Agent may adjourn any public
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Pledgor hereby waives, to the fullest
extent permitted by law, any claims against Collateral Agent arising by reason
of the fact that the price at which any Pledged Collateral may have been sold
at such a private sale was less than the price which might have been obtained
at a public sale, even if Collateral Agent accepts the first offer received and
does not offer such Pledged Collateral to more than one offeree. Pledgor
agrees that, to the extent notice of sale shall be required by law, five (5)
days' notice from Collateral Agent of the time and place of any public sale or
of the time after which a private sale or other intended disposition is to take
place shall be commercially reasonable notification of such matters. No
notification need be given to Pledgor if it has signed, after the occurrence of
an Event of Default, a statement renouncing or
<PAGE> 19
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modifying any right to notification of sale or other intended disposition.
(c) Remedies Under UCC. In addition to the rights and
remedies provided in this Agreement or otherwise available to it, Collateral
Agent shall have all the rights and remedies of a secured party under the UCC
and any other similar law in any applicable jurisdiction.
(d) Waiver of Claims. Except as otherwise provided
herein, Pledgor hereby waives, to the fullest extent permitted by applicable
law, notice or judicial hearing in connection with Collateral Agent's taking
possession or Collateral Agent's disposition of any of the Pledged Collateral,
including, without limitation, any and all prior notice and hearing for any
prejudgment remedy or remedies and any such right which Pledgor would otherwise
have under law, and Pledgor hereby further waives, to the fullest extent
permitted by applicable law: (i) all damages occasioned by such taking of
possession; (ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of Collateral Agent's
rights hereunder and (iii) all rights of redemption, appraisal, valuation,
stay, extension or moratorium now or hereafter in force under any applicable
law. Any sale of, or the grant of options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of Pledgor
therein and thereto, and shall be a perpetual bar both at law and in equity
against Pledgor and against any and all Persons claiming or attempting to claim
the Pledged Collateral so sold, optioned or realized upon, or any part thereof,
from, through or under Pledgor.
(e) Certain Sales of Pledged Collateral. Pledgor
recognizes that, by reason of certain prohibitions contained in law, rules,
regulations or orders of any foreign governmental authority, Collateral Agent
may be compelled, with respect to any sale of all or any part of the Pledged
Collateral, to limit purchasers to those who meet the requirements of such
foreign governmental authority. Pledgor acknowledges that any such sales
<PAGE> 20
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may be at prices and on terms less favorable to Collateral Agent than those
obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such restricted sale shall
be deemed to have been made in a commercially reasonable manner.
SECTION 11. Application of Proceeds. The proceeds received
by Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Pledged Collateral pursuant to the
exercise by Collateral Agent of its remedies as a secured creditor as provided
in Section 10 hereof shall be applied, together with any other sums then held
by Collateral Agent pursuant to this Agreement, promptly by Collateral Agent in
the manner set forth in the Collateral Agency Agreement.
SECTION 12. Expenses. Pledgor will upon demand pay to
Collateral Agent the amount of any and all expenses, including the fees and
expenses of Collateral Agent's counsel and the allocated costs of Collateral
Agent's internal counsel and the fees and expenses of any experts and agents
which Collateral Agent may incur in connection with (i) the collection of the
Secured Obligations, (ii) the enforcement and administration of this Agreement,
(iii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iv) the exercise or
enforcement of any of the rights of Collateral Agent or any other Secured Party
hereunder or (v) the failure by Pledgor to perform or observe any of the
provisions hereof. All amounts payable by Pledgor under this Section 12 shall
be due upon demand and shall be part of the Secured Obligations. Pledgor's
obligations under this Section 12 shall survive the termination of this
Agreement and the discharge of Pledgor's other obligations hereunder.
SECTION 13. No Waiver; Cumulative Remedies.
(a) No failure on the part of Collateral Agent to
exercise, no course of dealing with respect to, and no delay on the part of
Collateral Agent in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single
<PAGE> 21
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or partial exercise of any such right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein provided are cumulative and are not exclusive of
any remedies provided by law.
(b) In the event Collateral Agent shall have instituted
any proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to Collateral Agent, then and in every such case, Pledgor, Collateral
Agent and each holder of any of the Secured Obligations shall be restored to
their respective former positions and rights hereunder with respect to the
Pledged Collateral, and all rights, remedies and powers of Collateral Agent and
the Secured Parties shall continue as if no such proceeding had been
instituted.
SECTION 14. Actions by Collateral Agent; Successor Collateral
Agent.
(a) The actions of Collateral Agent hereunder are subject
to the provisions of the Collateral Agency Agreement. Collateral Agent shall
have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of Pledged
Collateral), in accordance with the provisions of the Collateral Agency
Agreement. Collateral Agent may resign and a successor Collateral Agent may be
appointed in the manner provided in the Collateral Agency Agreement. Upon the
acceptance of any appointment as Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations under this Agreement.
After any retiring Collateral Agent's resignation, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Collateral Agent.
<PAGE> 22
-22-
(b) Notwithstanding anything to the contrary contained in
this Agreement, the Indentures, the Term Loan Agreement or any of the Security
Documents, in the event the Collateral Agent is entitled or required to
commence an action to exercise voting rights hereunder or otherwise exercise
its remedies to acquire control or possession of the Mortgaged Property (as
defined in the Mortgage), the Collateral Agent shall not be required to
commence any such action or exercise any such remedy if the Collateral Agent
has determined in good faith that the Collateral Agent may incur liability
under the Environmental Laws as the result of the presence at, or release on or
from, the Facility of any Hazardous Materials unless the Collateral Agent has
received security or indemnity, from a Secured Party or holders of Indebtedness
benefiting from the pledge of this Agreement, in an amount and in a form all
satisfactory to the Collateral Agent in its sole discretion, protecting the
Collateral Agent from all such liability.
SECTION 15. Collateral Agent May Perform; Collateral Agent
Appointed Attorney-in-Fact. If Pledgor shall fail to do any act or thing that
it has covenanted to do hereunder or if any warranty on the part of Pledgor
contained herein shall be breached, Collateral Agent or any Secured Party may
(but shall have no duty or obligation to) do the same or cause it to be done or
remedy any such breach, and may expend funds for such purpose. Any and all
amounts so expended by Collateral Agent or such Secured Party shall be paid by
Pledgor promptly upon demand therefor, with interest at the Default Rate during
the period from and including the date on which such funds were so expended to
the date of repayment. Pledgor's obligations under this Section 15 shall
survive the termination of this Agreement and the discharge of Pledgor's other
obligations under this Agreement. Pledgor hereby appoints Collateral Agent its
attorney-in-fact with an interest, with full authority in the place and stead
of Pledgor and in the name of Pledgor, or otherwise, from time to time in
Collateral Agent's discretion, to take any action and to execute any instrument
consistent with the terms of this Agreement, any Debt Instrument, the
Collateral Agency Agreement and the Intercreditor Agreement which Collateral
Agent may deem necessary or advisable to
<PAGE> 23
-23-
accomplish the purposes of this Agreement. The foregoing grant of authority is
a power of attorney coupled with an interest and such appointment shall be
irrevocable for the term of this Agreement. Pledgor hereby ratifies all that
such attorney shall lawfully do or cause to be done by virtue and in accordance
with the terms hereof.
SECTION 16. Indemnity.
(a) Indemnity. Pledgor agrees to indemnify, pay and hold
harmless Collateral Agent and the officers, directors, employees, agents and
affiliates of Collateral Agent (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs (including, without limitation,
settlement costs and claims for strict liability in tort and environmental or
hazardous waste claims of any sort), expenses or disbursements of any kind or
nature whatsoever (including, without limitation, the fees and disbursements of
counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Indemnitee shall be designated a party thereto), which may be imposed on,
incurred by, or asserted against such Indemnitee, in any manner relating to or
arising out of this Agreement or the Intercreditor Agreement (including,
without limitation, any misrepresentation by Pledgor in this Agreement) (the
"Indemnified Liabilities"); provided, however, that Pledgor shall have no
obligation to an Indemnitee hereunder with respect to Indemnified Liabilities
if it has been determined by a final decision (after all appeals and the
expiration of time to appeal) by a court of competent jurisdiction that such
Indemnified Liability arose from the gross negligence or willful misconduct of
such Indemnitee or, in the case of environmental laws, the willful violation of
such laws. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Pledgor shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
<PAGE> 24
-24-
(b) Survival. The obligations of Pledgor contained in
this Section 16 shall survive the termination of this Agreement and the
discharge of Pledgor's other obligations under this Agreement.
(c) Reimbursement. Any amounts paid by any Indemnitee as
to which such Indemnitee has the right to reimbursement shall constitute
Secured Obligations secured by the Pledged Collateral.
SECTION 17. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision of this
Agreement, nor consent to any departure by Pledgor therefrom, shall be
effective unless the same shall be in writing and signed by Collateral Agent
and Pledgor. Any amendment, modification or supplement of or to any provision
of this Agreement, any waiver of any provision of this Agreement, and any
consent to any departure by Pledgor from the terms of any provision of this
Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement or any Debt Instrument, no notice to or demand on
Pledgor in any case shall entitle Pledgor to any other or further notice or
demand in similar or other circumstances.
SECTION 18. Termination; Release.
(a) Except as otherwise provided herein, this Agreement
shall terminate at such time as all of the Secured Obligations shall have been
indefeasibly paid in full and have been terminated. Upon termination of this
Agreement or any release of Pledged Collateral in accordance with the
provisions of the Collateral Agency Agreement, Collateral Agent shall, upon the
request and at the sole cost and expense of Pledgor, forthwith assign, transfer
and deliver to Pledgor, against receipt and without recourse to or warranty by
Collateral Agent, such of the Pledged Collateral as may be in possession of
Collateral Agent and as shall not have been sold or otherwise applied pursuant
to the terms hereof or the terms of the Intercreditor Agreement, on the order
of and at the sole cost and expense of Pledgor, and proper instruments
(including UCC termination statements on Form UCC-3) acknowledging the
termination
<PAGE> 25
-25-
of this Agreement or the release of such Pledged Collateral, as the case may
be.
(b) In the event that any Asset Sale made by Pledgor in
accordance with applicable provisions of the Debt Instruments involves the sale
of an asset which constitutes Pledged Collateral, Pledgor shall deliver all Net
Cash Proceeds received in respect of such item of Pledged Collateral to
Collateral Agent to be held by Collateral Agent as Trust Moneys and applied in
accordance with the provisions of the Collateral Agency Agreement.
SECTION 19. Notices. Unless otherwise provided herein, any
notice or other communication herein shall be given in the manner set forth in
the Collateral Agency Agreement and at the addresses set forth in the
Collateral Agency Agreement, or at such other address as shall be designated by
any party in a written notice to the other party.
SECTION 20. Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon Pledgor, its successors and assigns, and (ii)
inure, together with the rights and remedies of Collateral Agent hereunder, to
the benefit of Collateral Agent and the other Secured Parties and each of their
respective successors, transferees and assigns; no other Persons (including,
without limitation, any other creditor of Pledgor) shall have any interest
herein or any right or benefit with respect hereto. Without limiting the
generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any Debt Instrument held by it secured by this Agreement to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to such Secured Party, herein or
otherwise, subject however, to the applicable provisions of the Debt
Instruments.
SECTION 21. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS,
EXCEPT TO THE EXTENT THAT THE
<PAGE> 26
-26-
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
BOROUGH OF MANHATTAN, STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. PLEDGOR DESIGNATES AND APPOINTS CT CORPORATION
SYSTEM, WITH AN ADDRESS AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY PLEDGOR IRREVOCABLY AGREEING IN
WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF, SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY PLEDGOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO PLEDGOR
AT ITS ADDRESS PROVIDED FOR IN THE COLLATERAL AGENCY AGREEMENT EXCEPT THAT
UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY
SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY
PLEDGOR REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, PLEDGOR HEREBY AGREES THAT
SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN
SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF COLLATERAL AGENT TO BRING PROCEEDINGS AGAINST PLEDGOR
IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 23. Severability of Provisions. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
<PAGE> 27
-27-
SECTION 24. Execution in Counterparts. This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all such counterparts together shall constitute one and
the same Agreement.
SECTION 25. Headings. The Section and subsection headings
used in this Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
SECTION 26. Obligations Absolute. All obligations of Pledgor
hereunder shall be absolute and unconditional irrespective of:
(a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of
Pledgor;
(b) any lack of validity or enforceability of any Debt
Instrument, or any other agreement or instrument relating thereto;
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
any Debt Instrument, or any other agreement or instrument relating
thereto;
(d) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured
Obligations;
(e) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect of this
Agreement or any Debt Instrument except as specifically set forth in a
waiver granted pursuant to the provisions of Section 17; or
<PAGE> 28
(f) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, Pledgor.
<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
ACME STEEL COMPANY,
as Pledgor
By: /s/ S. D. Bennett
----------------------------
Name: Stephen D. Bennett
Title: President
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
as Collateral Agent,
By: /s/ Susan T. Keller
----------------------------
Name: Susan Keller
Title: Vice President
<PAGE> 30
SCHEDULE A
Acme Steel Company Copyrights
None
<PAGE> 31
SCHEDULE B
Acme Steel Company Patents
<TABLE>
<CAPTION>
=======================================================================================================
ISSUE DATE EXPIRATION
PATENT NO. AND USSN TITLE DATE
=======================================================================================================
<S> <C> <C> <C>
4,176,013 11/27/1979 Coke Oven Door Seal Assembly 11/27/1996
- -------------------------------------------------------------------------------------------------------
4,248,407 02/03/1981 Cast House Emissions Recycle System 02/03/1998
- -------------------------------------------------------------------------------------------------------
4,288,295 09/08/1981 Coke Oven with Apparatus for 09/08/1998
Partially Drying and Preheating
Coal
- -------------------------------------------------------------------------------------------------------
11/05/1993 Hyper-Reset Pressure
USSN Controller
147,539 Assignment from Buckner to
ASC 11/02/93
=======================================================================================================
</TABLE>
<PAGE> 32
SCHEDULE C
Acme Steel Company Trademarks
<TABLE>
<CAPTION>
======================================================================================
T. M. REG. NUMBER ISSUE/REG. DATE TITLE/TRADEMARK
======================================================================================
<S> <C> <C>
Reg. No. 1,362,911 10/01/1985 Supramet
- ---------------------------------------------------------------------------------------
USSN 74/393,957 Filed May 24, 1993 Acme Steel and Design
======================================================================================
</TABLE>
<PAGE> 33
SCHEDULE D
TO
SECURITY AGREEMENT
REQUIRED FILINGS
1. UCC-1 Financing Statement to be filed with the Secretary of State of
Illinois with respect to all collateral described in the Security
Agreement other than the Copyrights, Patents, Trademarks and the
Collateral Account and the Collateral Account Funds.
2. Patent Collateral Assignments for the Patents listed on Schedule B to
the Security Agreement filed with the U.S. Patent and Trademark
Office.
3. Trademark Collateral Assignments for the Trademarks listed on Schedule
C to the Security Agreement filed with the U.S. Patent and Trademark
Office.
4. With respect to the Collateral Account and the Collateral Account
Funds, no filing is required or sufficient to perfect the security
interest created by the Security Agreement; a lien on such collateral
is perfected only by possession by the secured party.
<PAGE> 34
SCHEDULE E
TO
SECURITY AGREEMENT
PRIOR LIENS
Debtor: Acme Packaging Corporation
<TABLE>
<CAPTION>
Filing Filing
Jurisdiction Secured Party Date No. Collateral Description
- ------------ ------------- ------ ------- ----------------------
<S> <C> <C> <C> <C>
CONNECTICUT, Vanguard 07/20/93 1021326 Equipment Lease
Secretary of Financial
State Service Corp.
</TABLE>
<PAGE> 1
EXHIBIT 4.10
================================================================================
MORTGAGE, ASSIGNMENT OF LEASES,
SECURITY AGREEMENT AND FIXTURE FILING
BY
ACME STEEL COMPANY,
Mortgagor,
TO
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
Mortgagee;
Securing Principal Indebtedness of: $292,958,000;
Relating to Premises in:
Illinois
Dated as of: August 11, 1994
================================================================================
After recording,
please return to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Daniel J. Zubkoff, Esq.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GRANTING CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE I WARRANTIES, REPRESENTATIONS AND
COVENANTS OF MORTGAGOR . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.1 Payment and Performance . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.2 Authority and Validity . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.3 Good Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.4 Recording Documentation To Assure
Security Interest; Fees and
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.5 Payment of Taxes, Insurance
Premiums, Assessments; Compliance
with Law and Insurance
Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.6 Certain Tax Law Changes . . . . . . . . . . . . . . . . . . . . . . . 14
Section 1.7 Required Insurance Policies . . . . . . . . . . . . . . . . . . . . . 14
Section 1.8 Failure To Make Certain Payments . . . . . . . . . . . . . . . . . . 18
Section 1.9 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.10 Mortgagor To Maintain Improvements . . . . . . . . . . . . . . . . . 19
Section 1.11 Mortgagor's Obligations with
Respect to Leases . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 1.12 Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 1.13 Destruction; Condemnation . . . . . . . . . . . . . . . . . . . . . . 23
Section 1.14 Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 1.15 Hazardous Material . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 1.16 Asbestos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 1.17 Books and Records; Reports . . . . . . . . . . . . . . . . . . . . . 31
Section 1.18 No Claims Against Mortgagee . . . . . . . . . . . . . . . . . . . . . 32
Section 1.19 Utility Services . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE II ASSIGNMENT OF RENTS; SECURITY
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.1 Assignment of Leases, Rents, Issues
and Profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.2 Security Interest in Personal
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE III EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . 36
Section 3.1 Remedies in Case of an Event of
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.2 Sale of Mortgaged Property If Event
of Default Occurs; Proceeds of
Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 3.3 Additional Remedies in Case of an
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 3.4 Legal Proceedings After an Event of
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 3.5 Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE IV CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE V MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.1 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.3 Covenants To Run with the Land . . . . . . . . . . . . . . . . . . . 46
Section 5.4 Captions; Gender and Number . . . . . . . . . . . . . . . . . . . . . 46
Section 5.5 Limitation on Interest Payable . . . . . . . . . . . . . . . . . . . 46
Section 5.6 Indemnification; Reimbursement . . . . . . . . . . . . . . . . . . . 47
Section 5.7 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.8 Changes in Writing . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.9 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.10 Concerning Mortgagee . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.11 Waiver of Stay . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.12 No Credit for Payment of Taxes or
Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.13 Stamp and Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.14 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . 50
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 5.15 Additional Security . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.16 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.17 Expenses of Collection . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.18 Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SIGNATURE PAGE
SCHEDULE A LEGAL DESCRIPTION
SCHEDULE B PRIOR LIENS
</TABLE>
iii
<PAGE> 5
MORTGAGE, ASSIGNMENT OF LEASES,
SECURITY AGREEMENT AND FIXTURE FILING
MORTGAGE, ASSIGNMENT OF LEASES, SECURITY AGREEMENT AND FIXTURE
FILING ("Mortgage"), dated as of August 11, 1994, made by ACME STEEL COMPANY, a
Delaware corporation, having an office at 13500 South Perry Avenue, Riverdale,
Illinois 60627, as mortgagor, assignor and debtor (together with its successors
and assigns, "Mortgagor"), in favor of SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association having an office at 777 Main
Street, Hartford, Connecticut 06115, as collateral agent pursuant to the
Collateral Agency Agreement (as hereinafter defined), as mortgagee, assignee
and secured party (in such capacity and together with its successors and
assigns in such capacity, "Mortgagee").
R E C I T A L S :
1. Mortgagor is the owner of the land described in
Schedule A annexed hereto and all the improvements situated thereon.
2. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Note Indenture"), dated as of August 11, 1994, by and among Acme Metals
Incorporated (the "Company"), Mortgagor, as subsidiary guarantor of the
Company's obligations, each of the other subsidiaries of the Company, as
guarantors (collectively, the "Guarantors") of the Company's obligations, and
Shawmut Bank Connecticut, National Association, as trustee (in such capacity
and together with its successors and assigns in such capacity, the "Note
Trustee") for the holders of the Senior Secured Notes (as hereinafter defined),
the Company is issuing its 12 1/2% senior secured notes due 2002 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Senior Secured Notes") in the aggregate principal amount of $125,000,000.
<PAGE> 6
- 2 -
3. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Discount Note Indenture"; together with the Note Indenture, the "Indentures"),
dated as of August 11, 1994, by and among the Company, Mortgagor, the
Guarantors and Shawmut Bank Connecticut, National Association, as trustee (in
such capacity and together with its successors and assigns in such capacity,
the "Discount Note Trustee"; together with the Note Trustee, the "Trustees")
for the holders of the Senior Secured Discount Notes (as hereinafter defined),
the Company is issuing its 13 1/2% senior secured discount notes due 2004 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Senior Secured Discount Notes"; together with the Senior Secured
Notes, the "Notes") in the aggregate principal amount of $117,958,000.
4. Pursuant to that certain term loan agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Term Loan Agreement"), dated as of August 4, 1994 by and among the
Company, Lehman Commercial Paper Inc., as agent (in such capacity and together
with its successors and assigns in such capacity, the "Agent"), and the lenders
party thereto (together with all subsequent lenders party to the Term Loan
Agreement, the "Lenders") the Company is borrowing $50,000,000.
5. Mortgagee is the collateral agent under that certain
collateral agency agreement (the "Collateral Agency Agreement"), dated as of
August 11, 1994, for the Trustees (for the benefit of the holders of the
Notes), the Agent (for the benefit of the Lenders) and such other parties which
may from time to time, become additional lenders to the Company, Mortgagor
and/or the Guarantors (each such lender, a "Permitted Additional Lender" and
collectively, the "Permitted Additional Lenders"; together with the Trustees,
the Agent and Mortgagee, the "Secured Parties") which may, in accordance with
the provisions of clause (xi) of the definition of "Permitted Liens" in each
Indenture as in effect on the date hereof, take a security interest in and/or
Lien on the Collateral (as defined in the Collateral Agency Agreement) to
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secure the financing provided by the Permitted Additional Lenders (such
financing, the "Permitted Replacement Financing") upon the execution and
delivery by the Permitted Additional Lenders of a supplement to the Collateral
Agency Agreement as contemplated therein.
6. This Mortgage is given by Mortgagor in favor of
Mortgagee to secure the payment and performance in full when due, whether at
stated maturity, by redemption, repurchase, acceleration or otherwise
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the filing of a petition in bankruptcy or
the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)), of (i) all of the obligations, liabilities
and indebtedness of Mortgagor now or hereafter existing under or in respect of
each Indenture, the Notes, the Term Loan Agreement and the notes relating
thereto and the notes, agreements and/or other instruments which collectively
evidence any Permitted Replacement Financing (such notes, agreements and/or
other instruments, together with the Indentures, the Notes, the Term Loan
Agreement and the notes relating thereto, the "Debt Instruments") (including,
without limitation, the obligations of Mortgagor to pay principal of, premium,
if any, and interest on any Debt Instruments when due and payable) and all
other charges, fees, premiums, indemnities and other amounts due or to become
due under or in connection with each Debt Instrument and (ii) without
duplication of the amounts described in clause (i), all obligations,
indebtedness and liabilities of Mortgagor pursuant to the terms of this
Mortgage, in each case whether now existing or hereafter arising, and whether
in the regular course of business or otherwise (collectively, the "Secured
Obligations").
G R A N T I N G C L A U S E S :
For and in consideration of the sum of Ten Dollars ($10.00)
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Mortgagor hereby grants, mortgages, bargains, sells,
assigns and conveys to Mortgagee and hereby grants to Mortgagee a security
interest in and first Lien (as defined in each Indenture and the Term Loan
<PAGE> 8
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Agreement as all are in effect on the date hereof) upon, all Mortgagor's right,
title and interest in and to the following property whether now owned or held
or hereafter acquired (collectively, the "Mortgaged Property"):
A. Any and all present estates or interests of
Mortgagor in the land described in Schedule A, together with all Mortgagor's
reversionary rights in and to any and all easements, rights-of-way, sidewalks,
strips and gores of land, drives, roads, curbs, streets, ways, alleys,
passages, passageways, sewer rights, waters, water courses, water rights,
mineral, gas and oil rights, power, air, light and other rights, estates,
titles, interests, privileges, liberties, servitudes, licenses, tenements,
hereditaments and appurtenances whatsoever, in any way belonging, relating or
appertaining thereto, or any part thereof, or which hereafter shall in any way
belong, relate or be appurtenant thereto (collectively, the "Land");
B. Any and all estates or interests of Mortgagor in
the buildings, structures and other improvements and any and all Alterations
(as hereinafter defined) now or hereafter located or erected on the Land,
including, without limitation, attachments, walks and ways (collectively, the
"Improvements"; together with the Land, the "Premises");
C. Any and all permits, licenses, franchises,
certificates, consents, approvals and authorizations, however characterized,
issued or in any way furnished, whether necessary or not for the operation and
use of the Premises, including, without limitation, building permits,
certificates of occupancy, environmental certificates, industrial permits, or
licenses and certificates of operation;
D. Any and all interest of Mortgagor in all
machinery, apparatus, equipment, fittings, fixtures, improvements and articles
of personal property of every kind and nature whatsoever (other than
Mortgagor's inventory) attached or affixed to, or located on, the Premises or
used in connection with the use and enjoyment of the Premises or the
maintenance or preservation thereof, including, without limitation, all
equipment comprising
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the Modernization Project (as defined in each Indenture as in effect on the
date hereof), all manufacturing, storage, handling and other equipment utilized
in connection with the production and marketing of steel, semi-finished steel,
steel ingots, slabs, steel strips and coils, tools, utility systems, fire
sprinkler and alarm systems, HVAC equipment, boiler, electronic data
processing, telecommunications or computer equipment, refrigeration, electronic
monitoring, water or lighting systems, power, sanitation, waste removal,
pollution abatement or control, elevators, window cleaning, maintenance or
other systems or equipment, all indoor or outdoor furniture, appliances or
supplies, and all other articles used or useful in connection with the use,
operation, maintenance or repair of any part of the Premises, together with any
and all parts, improvements, additions, replacements, accessions and
substitutions thereto or therefor (collectively, the "Equipment");
E. All Mortgagor's right, title and interest, as
landlord, franchisor, licensor or grantor, in all leases and subleases
of space, oil, gas and mineral leases, franchise agreements, licenses,
occupancy or concession agreements now existing or hereafter entered into
relating in any manner to the Premises or the Equipment and any and all
amendments, modifications, supplements and renewals of any thereof (each such
lease, license or agreement, together with any such amendment, modification,
supplement or renewal, a "Lease"), whether now in effect or hereafter coming
into effect including, without limitation, all rents, additional rents,
management fees payable by tenants, cash, guarantees, letters of credit, bonds,
sureties or securities deposited thereunder to secure performance of the
lessee's, franchisee's, licensee's or obligee's obligations thereunder,
revenues, earnings, profits and income, advance rental payments, payments
incident to assignment, sublease or surrender of a Lease, claims for forfeited
deposits and claims for damages, now due or hereafter to become due, with
respect to any Lease (collectively, the "Rents");
F. All general intangibles and contract rights
relating to the Premises or the Equipment and all reserves, deferred payments,
deposits, refunds and claims of every kind or character relating thereto
(collectively, the "Contract Rights");
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G. All surveys, title insurance policies, drawings,
plans, specifications, construction contracts, file materials, operating and
maintenance records, catalogues, tenant lists, correspondence, advertising
materials, operating manuals, warranties, guaranties, appraisals, studies and
data relating to the Premises or the Equipment or the construction of any
Alteration or the maintenance of any Permit (as hereinafter defined); and
H. All proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or liquidated claims, including,
without limitation, proceeds of insurance and condemnation or other awards or
payments with respect thereto (including, without limitation, any Net Proceeds
or Net Award (each as hereinafter defined)) and interest thereon (collectively,
the "Proceeds");
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee and
Mortgagee's successors and assigns forever (subject to the Prior Liens but not
to extensions or replacements of Prior Liens), for the purpose of securing the
payment and performance of the Secured Obligations.
Notwithstanding the foregoing, the Mortgaged Property shall
not include property or assets hereafter acquired by Mortgagor and financed by
Mortgagor with Indebtedness permitted to be incurred under each of the
Indentures and the Term Loan Agreement as all are in effect on the date
hereof, which Indebtedness is secured only by such property or assets as
permitted pursuant to clause (viii) of the definition of "Permitted Liens"
contained in each Indenture and the Term Loan Agreement as all are in effect on
the date hereof; provided, however, that at such time as such property or
assets shall no longer be subject to such Permitted Lien, such property or
assets shall, without any act or delivery by any Person (as defined in each
Indenture and the Term Loan Agreement as all are in effect on the date hereof),
constitute Mortgaged Property hereunder.
C O V E N A N T S :
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Mortgagor warrants, represents and covenants to and for the
benefit of Mortgagee as follows:
ARTICLE I
WARRANTIES, REPRESENTATIONS AND
COVENANTS OF MORTGAGOR
SECTION 1.1 Payment and Performance. Mortgagor shall pay and
perform in full as and when the same shall become due all of the Secured
Obligations.
SECTION 1.2 Authority and Validity. Mortgagor represents,
warrants and covenants that (i) Mortgagor is duly authorized to execute and
deliver this Mortgage, the Debt Instruments (other than Debt Instruments
evidencing Permitted Replacement Financing), the Collateral Agency Agreement
and the other documents evidencing or securing the Secured Obligations (this
Mortgage, the Debt Instruments, the Collateral Agency Agreement and such other
documents, collectively, the "Indenture Documents"), and all corporate and
governmental actions, consents, authorizations and approvals necessary or
required therefor have been duly and effectively taken or obtained, (ii) this
Mortgage and the other Indenture Documents (other than Debt Instruments
evidencing Permitted Replacement Financing) are legal, valid, binding and
enforceable obligations of Mortgagor and (iii) Mortgagor has full power and
lawful authority to execute and deliver this Mortgage and the other Indenture
Documents (other than Debt Instruments evidencing Permitted Replacement
Financing) and to mortgage and grant a security interest in the Mortgaged
Property as contemplated herein. With respect to Debt Instruments evidencing
Permitted Replacement Financing, Mortgagor represents, warrants and covenants
that (x) Mortgagor will, at such time as such Debt Instruments shall be
executed, be duly authorized to execute and deliver such Debt Instruments, and
all corporate and governmental actions, consents, authorizations and approvals
necessary or required therefor shall have been duly and effectively taken or
obtained, (y) such Debt Instruments will, at such time as such Debt Instruments
shall be executed, be legal, valid, binding and
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enforceable obligations of Mortgagor and (z) Mortgagor will, at such time as
such Debt Instruments shall be executed, have full power and lawful authority
to execute and deliver such Debt Instruments and to mortgage and grant a
security interest in the property as contemplated therein.
SECTION 1.3 Good Title.
1.3.1 Mortgagor represents, warrants and covenants
that (i) Mortgagor has good and marketable title to the Premises and the
landlord's interest and estate under or in respect of the Leases and good title
to the interest it purports to own or lease in and to each of the Permits, the
Equipment and the Contract Rights, in each case subject to no Liens, except for
those Liens identified on Schedule B annexed hereto (collectively, "Prior
Liens"), (ii) Mortgagor will keep in effect all rights and appurtenances to or
that constitute a part of the Mortgaged Property, (iii) Mortgagor will protect,
preserve and defend its interest in the Mortgaged Property and title thereto,
(iv) Mortgagor will comply with each of the terms, conditions and provisions of
any obligation of Mortgagor (x) which constitutes a part of the Mortgaged
Property, (y) which is secured by the Mortgaged Property or (z) the
noncompliance with which could be expected to result in the imposition of a
Lien on the Mortgaged Property, (v) Mortgagor will appear and defend the Lien
and security interests created and evidenced hereby and the validity and
priority of this Mortgage in any action or proceeding affecting or purporting
to affect the Mortgaged Property or any of the rights of Mortgagee hereunder,
(vi) this Mortgage creates and constitutes a valid and enforceable first Lien
on the Mortgaged Property, and, to the extent any of the Mortgaged Property
shall consist of personalty, a first security interest in the Mortgaged
Property, which first Lien and first security interest are and will be subject
only to (a) Prior Liens (but not to extensions or replacements of Prior Liens)
and (b) Liens hereafter created which, pursuant to the provisions of Section
1.12, are permitted to be superior to the Lien and security interests created
and evidenced hereby, and Mortgagor does now and shall warrant and defend to
Mortgagee and all its successors and assigns such title and the validity and
priority of the Lien and security interests created
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and evidenced hereby against the claims of all Persons, (vii) there has
been issued and there remain in effect each and every certificate of occupancy
or use or other Permit currently required for the existing use and occupancy by
Mortgagor and its tenants of the Premises and (viii) the Premises comply with
all local zoning, land use, setback or other development and use requirements
of Governmental Authorities (as hereinafter defined).
1.3.2 Mortgagor, immediately upon obtaining
knowledge of the pendency of any proceedings for the eviction of Mortgagor from
the Mortgaged Property or any part thereof by paramount title or otherwise
questioning Mortgagor's title to the Mortgaged Property as warranted in this
Mortgage, or of any condition that might be expected to give rise to any such
proceeding, shall notify Mortgagee in writing thereof. Mortgagee may
participate in such proceedings, and Mortgagor shall deliver or cause to be
delivered to Mortgagee all instruments requested by Mortgagee to permit such
participation. In any such proceedings Mortgagee may be represented by counsel
satisfactory to Mortgagee at the expense of Mortgagor. If, upon the resolution
of such proceedings, Mortgagor shall suffer a loss of the Mortgaged Property or
any part thereof or interest therein and title insurance proceeds shall be
payable to Mortgagor in connection therewith, such proceeds are hereby assigned
to and shall be paid to Mortgagee and applied as contemplated by Section 1.13
of this Mortgage.
SECTION 1.4 Recording Documentation To Assure Security
Interest; Fees and Expenses.
1.4.1 Mortgagor shall, forthwith after the execution
and delivery of this Mortgage and thereafter, from time to time, cause this
Mortgage and any financing statement, continuation statement or similar
instrument relating to any thereof or to any property intended to be subject to
the Lien of this Mortgage to be filed, registered and recorded in such manner
and in such places as may be required by any present or future law in order to
publish notice of and fully to protect the validity and priority thereof or the
Lien hereof purported to be created upon the Mortgaged Property and the
interest and rights of Mortgagee
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therein. Mortgagor shall pay or cause to be paid all taxes and fees incident
to such filing, registration and recording, and all expenses incident to the
preparation, execution and acknowledgment thereof, and of any instrument of
further assurance, and all Federal or state stamp taxes or other taxes, duties
and charges arising out of or in connection with the execution and delivery of
such instruments.
1.4.2 Mortgagor shall, at the sole cost and expense
of Mortgagor, do, execute, acknowledge and deliver all and every such further
acts, deeds, conveyances, mortgages, assignments, notices of assignment,
transfers, financing statements, continuation statements and assurances as
Mortgagee shall from time to time reasonably request or which may be necessary
to assure, perfect, convey, assign, mortgage, transfer and confirm unto
Mortgagee the property and rights hereby conveyed or assigned, or which
Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee
or which may facilitate the performance of the terms of this Mortgage or the
filing, registering or recording of this Mortgage. In the event Mortgagor
shall fail to execute any instrument required to be executed by Mortgagor under
this subsection 1.4.2, Mortgagee may execute the same as the attorney-in-fact
for Mortgagor, such power of attorney being coupled with an interest and
irrevocable.
SECTION 1.5 Payment of Taxes, Insurance Premiums,
Assessments; Compliance with Law and Insurance Requirements.
1.5.1 Unless contested in accordance with the provisions
of subsection 1.5.5 hereof, Mortgagor shall pay and discharge or cause to be
paid and discharged, from time to time when the same shall become due, all real
estate and other taxes, special assessments, levies, permits, inspection and
license fees, all premiums for insurance, all water and sewer rents and
charges, and all other public charges imposed upon or assessed against the
Mortgaged Property or any part thereof or upon the revenues, rents, issues,
income and profits of the Mortgaged Property, including, without limitation,
those arising in respect of the occupancy, use or possession thereof.
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1.5.2 Upon the occurrence and during the continuance of an
Event of Default, Mortgagor shall deposit with Mortgagee, on the first day
of each month, an amount estimated by Mortgagor to be equal to one-twelfth
(1/12th) of the annual taxes, assessments and other items required to be
discharged by Mortgagor under subsection 1.5.1 and amounts reasonably estimated
by Mortgagor to be necessary to maintain the insurance coverages contemplated
in Section 1.7, which estimates shall not be less than one-twelfth (1/12th) of
the annual taxes, assessments, insurance premiums and other items required to
be discharged by Mortgagor during the year immediately preceding the year
during which such Event of Default occurred. Such amounts shall be held by
Mortgagee without interest to Mortgagor and applied to the payment of each
obligation in respect of which such amounts were deposited, in such order or
priority as Mortgagee shall determine, on or before the date on which such
obligation would become delinquent. If at any time the amounts so deposited by
Mortgagor shall, in Mortgagee's judgment, be insufficient (when added to the
installments anticipated to be paid thereafter) to discharge any of such
obligations when due, Mortgagor shall immediately upon demand, deposit with
Mortgagee such additional amounts as may be requested by Mortgagee. Nothing
contained in this Section 1.5 shall affect any right or remedy of Mortgagee
under any provision of this Mortgage or of any statute or rule of law to pay
any such amount from its own funds and to add the amount so paid, together with
interest at a rate ("Default Rate") per annum equal to two percent (2%) in
excess of the highest rate payable under the Notes to the other amounts
outstanding in respect of the Secured Obligations or relieve Mortgagor of its
obligations to make or provide for the payment of the annual taxes, assessments
and other charges required to be discharged by Mortgagor under subsection
1.5.1. Mortgagor hereby grants to Mortgagee a security interest in all sums
held pursuant to this subsection 1.5.2 to secure payment and performance of the
Secured Obligations. During the continuance of any Event of Default, Mortgagee
may apply all or any part of the sums held pursuant to this subsection 1.5.2 to
payment and performance of the Secured Obligations in accordance with the
appropriate provisions of the Indenture Documents. Mortgagor shall redeposit
with Mortgagee an amount equal to all amounts so applied as a condition to the
cure,
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1.5.3 if any, of such Event of Default in addition to
fulfillment of any other required conditions.
1.5.3 Unless contested in accordance with the provisions
of subsection 1.5.4, Mortgagor shall timely pay (or obtain a bond in the amount
of), or cause to be paid, all lawful claims and demands of mechanics,
materialmen, laborers, employees, suppliers, government agencies administering
worker's compensation insurance, old age pensions and social security benefits
and all other claims, judgments, demands or amounts of any nature which, if
unpaid, or not bonded, could result in or permit the creation of a Lien on the
Mortgaged Property or any part thereof or the Rents arising therefrom, or
which might result in forfeiture of all or any part of the Mortgaged Property.
1.5.5 Mortgagor shall maintain, or cause to be
maintained, in full force and effect, all permits, certificates,
authorizations, consents, approvals, licenses, franchises or other instruments
now or hereafter required by any federal, state, municipal or local government
or quasi-governmental agency or authority (each of the foregoing, a
"Governmental Authority") to operate or use and occupy the Premises and the
Equipment for its intended uses (collectively, the "Permits;" each, a
"Permit"). Mortgagor represents that none of the Permits will be subject to
cancellation, forfeiture or any limitation on the scope thereof solely by
virtue of the execution of this Mortgage or the foreclosure of the Lien hereof.
Unless contested in accordance with the provisions of subsection 1.5.5,
Mortgagor shall comply promptly with, or cause prompt compliance with, all
requirements set forth in the Permits and all requirements of any law,
ordinance, rule, regulation or similar statute or case law (collectively,
"Legal Requirements") or any Governmental Authority applicable to all or any
part of the Mortgaged Property or the condition, use or occupancy of all or any
part thereof or any recorded deed of restriction, declaration, covenant running
with the land or otherwise, now or hereafter in force. Mortgagor shall not
initiate or consent to any change in the zoning, subdivision or any other use
classification of the Land, if such action could have an adverse effect on the
Lien of this Mortgage or diminish the
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value of the Mortgaged Property or impair the Mortgagee's rights or benefits
hereunder, without the prior written consent of Mortgagee.
1.5.5 Mortgagor may at its own expense contest the amount
or applicability of any of the obligations described in subsections 1.5.1,
1.5.3, 1.5.4 and 1.19 by appropriate legal proceedings, prosecution of which
operates to prevent the collection or enforcement thereof and the sale or
forfeiture of the Mortgaged Property or any part thereof to satisfy such
obligations; provided, however, that (i) any such contest shall be conducted in
good faith by appropriate legal proceedings promptly instituted and diligently
conducted and (ii) in connection with such contest, Mortgagor shall have made
provision for the payment or performance of such contested obligation on
Mortgagor's books if and to the extent required by generally accepted
accounting principles, or shall have deposited with Mortgagee a sum sufficient
to pay and discharge such obligation and Mortgagee's estimate of all interest
and penalties related thereto. Notwithstanding the foregoing provisions of
this subsection 1.5.5, (i) no contest of any such obligations may be pursued by
Mortgagor if such contest would expose Mortgagee or any other Secured Party to
any possible criminal liability or, unless Mortgagor shall have furnished an
Additional Undertaking (as hereinafter defined) therefor satisfactory to
Mortgagee or such other Secured Party, as the case may be, any additional civil
liability for failure to comply with such obligations and (ii) if at any time
payment or performance of any obligation contested by Mortgagor pursuant to
this subsection 1.5.5 shall become necessary to prevent the delivery of a tax
or similar deed conveying the Mortgaged Property or any portion thereof because
of nonpayment or nonperformance, Mortgagor shall pay or perform the same in
sufficient time to prevent the delivery of such tax or similar deed.
1.5.6 Mortgagor shall not in its use and occupancy of the
Premises or the Equipment (including, without limitation, in the making of any
Alteration) take any action that could be the basis for termination, revocation
or denial of any insurance coverage required to be maintained under this
Mortgage or that could be the basis for a defense to any claim under any
insurance policy maintained in respect of the Premises or the Equipment and
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Mortgagor shall otherwise comply in all respects with the requirements of any
insurer that issues a policy of insurance in respect of the Premises or the
Equipment.
1.5.7 Mortgagor shall, promptly upon receipt of any
written notice regarding any failure by Mortgagor to pay or discharge any of
the obligations described in subsection 1.5.1, 1.5.3, 1.5.4 or 1.5.6, furnish a
copy of such notice to Mortgagee.
SECTION 1.6 Certain Tax Law Changes. In the event of the
passage after the date of this Mortgage of any law deducting from the value of
real property, for the purpose of taxation, amounts in respect of any Lien
thereon or changing in any way the laws for the taxation of mortgages or debts
secured by mortgages for state or local purposes or the manner of the
collection of any such taxes, and imposing a new tax, either directly or
indirectly, on this Mortgage, any other Indenture Document or the interest of
Mortgagee in any of the Mortgaged Property, Mortgagor shall promptly pay to
Mortgagee such amount or amounts as may be necessary from time to time to pay
such tax.
SECTION 1.7 Required Insurance Policies.
1.7.1 Mortgagor shall maintain or cause to be maintained
in full force and effect the following insurance coverages in respect of the
Premises and the Equipment:
(i) Physical hazard insurance on an "all risk" basis
covering, without limitation, hazards commonly covered by fire and
extended coverage, lightning, windstorm, civil commotion, hail, riot,
strike, water damage, sprinkler leakage, collapse and malicious
mischief, in an amount equal to the full replacement cost of the
Improvements and all Equipment, with such deductibles and per
occurrence limitations as Mortgagee may from time to time require,
and, if Mortgagee shall not have imposed any such requirements, with
such deductibles and per occurrence limitations as would be maintained
by a prudent operator of property similar in use and configuration to
the Premises and located in the locality where the Premises are
located. "Full replacement cost" means the Cost of
<PAGE> 19
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Construction (as hereinafter defined) to replace the Improvements and the
Equipment, exclusive of depreciation, excavation, foundation and footings, as
determined from time to time (but not less frequently than once every twelve
(12) months) by a proper officer of Mortgagor in consultation with its
insurance company or insurance agent, as appropriate;
(ii) Commercial general liability insurance against claims
for bodily injury, death or property damage occurring on, in or about
the Premises and any adjoining streets, sidewalks and passageways and covering
any and all claims, including, without limitation, all legal liability, subject
to customary exclusions, to the extent insurable, imposed upon Mortgagee and
all court costs and attorneys' fees, arising out of or connected with the
possession, use, leasing, operation or condition of the Premises, with policy
limits and deductibles in such amounts as Mortgagee may from time to time
reasonably require, and, if Mortgagee shall not have imposed any such
requirements, in such amounts as would be maintained by a prudent operator of
property similar in use and configuration to the Premises and located in the
locality where the Premises are located;
(iii) Workers' compensation insurance as required by the
laws of the state in which the Premises are located, which may
include being self-insured to the extent permitted by law to protect
Mortgagor against claims for injuries sustained in the course of
employment at the Premises;
(iv) Boiler and machinery insurance in respect of any
boilers and similar apparatus located on the Premises or comprising
any Equipment, with policy limits and deductibles in such amounts as
Mortgagee may from time to time reasonably require, and, if Mortgagee
shall not have imposed any such requirements, in such amounts as would
be maintained by a prudent operator of property similar in use and
configuration to the Premises and the Equipment and located in the
locality where the Premises and the Equipment are located;
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(v) During the performance of any alterations,
renovations, repairs, restorations or construction, broad form
Builders Risk Insurance on an all-risk completed value basis;
(vi) Such other insurance, against such risks and with
policy limits and deductibles in such amounts as Mortgagee may from
time to time reasonably require, and, if Mortgagee shall not have
imposed any such requirements, in such amounts as would be maintained
by a prudent operator of property similar in use and configuration to
the Premises and located in the locality in which the Premises are
located; and
(vii) If the Premises are located in an area designated by
the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968, as amended,
flood insurance in such amounts as would be maintained by a prudent
operator of property similar in use and configuration to the Premises
and located in the locality where the Premises are located.
1.7.2 Mortgagor may maintain or cause to be
maintained the coverages required by this Section 1.7 under blanket policies
covering the Premises and other locations owned or operated by Mortgagor (and
which may include coverage over locations owned or operated by the Company, the
other Guarantors and their subsidiaries) if the terms of such blanket policies
otherwise comply with the provisions of this Section 1.7 and contain specific
coverage allocations in respect of the Premises determined in accordance with
the provisions of this Section 1.7. All insurance policies in respect of the
coverages required by subsections 1.7.1(i), 1.7.1(iv), 1.7.1(v) and, if
applicable, 1.7.1(vi) shall be in amounts at least sufficient to prevent
coinsurance liability and all losses thereunder shall be payable to Mortgagee,
as sole loss payee with respect to any loss involving any of the Mortgaged
Property (in the case of insurance covering property other than the Mortgaged
Property, Mortgagee will be sole loss payee only with respect to losses
involving such Mortgaged Property) pursuant to a standard noncontributory New
York mortgagee endorsement or local equivalent, and each such policy shall
<PAGE> 21
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(i) include effective waivers (whether under the terms of such policy
or otherwise) by the insurer of all claims for insurance premiums against all
loss payees and named insureds other than Mortgagor and all rights of
subrogation against any named insured, and (ii) provide that any losses
thereunder shall be payable notwithstanding (a) any act, failure to act,
negligence of, or violation or breach of warranties, declarations or conditions
contained in such policy by Mortgagor or Mortgagee or any other named insured
or loss payee, (b) the occupation or use of the Premises for purposes more
hazardous than permitted by the terms of the policy, (c) any foreclosure or
other proceeding or notice of sale relating to the Premises or the Equipment or
(d) any change in the title to or ownership or possession of the Premises or
the Equipment; provided, however, that (with respect to items contemplated in
clauses (c) and (d) above) any notice requirements of the applicable policies
are satisfied. All insurance policies in respect of the coverages required by
subsections 1.7.1(ii) and, if applicable, 1.7.1(vi) and 1.7.1(vii) shall name
Mortgagee as an additional insured. Each policy of insurance required under
this Section 1.7 shall provide that (i) notices of any failure by Mortgagor to
pay any insurance premium in respect of any insurance policy required to be
maintained under this Section 1.7 be furnished to Mortgagee contemporaneously
with any notice given to Mortgagor and (ii) it may not be cancelled or
otherwise terminated without at least thirty (30) days' prior written notice to
Mortgagee and shall permit Mortgagee to pay any premium therefor within thirty
(30) days after receipt of any notice stating that such premium has not been
paid when due. The policy or policies of such insurance or certificates of
insurance evidencing the required coverages and all renewals or extensions
thereof shall be delivered to Mortgagee. Settlement of any claim under any of
the insurance policies referred to in this Section 1.7 shall require the prior
approval of Mortgagee and Mortgagor shall use its best efforts to cause each
such insurance policy to contain a provision to such effect.
1.7.3 At least thirty (30) days prior
to the expiration of any insurance policy required by subsections 1.7.1(i),
(ii), (iv), (v) and, if applicable, 1.7.1(vi) and 1.7.1(vii), a policy or
policies renewing or extending such
<PAGE> 22
expiring policy or renewal or extension certificates or other evidence of
renewal or extension shall be delivered to Mortgagee.
1.7.4 Mortgagor shall not purchase separate
insurance policies concurrent in form or contributing in the event of loss with
those policies required to be maintained under this Section 1.7, unless
Mortgagee is included thereon as a named insured and, if applicable, with loss
payable to Mortgagee under an endorsement containing the provisions described
in subsection 1.7.2. Mortgagor immediately shall notify Mortgagee whenever any
such separate insurance policy is obtained and promptly shall deliver to
Mortgagee the policy or certificate evidencing such insurance.
1.7.5 Mortgagor shall, immediately upon receipt of
any written notice of any failure by Mortgagor to pay any insurance premium in
respect of any insurance policy required to be maintained under this Section
1.7, furnish a copy of such notice to Mortgagee.
1.7.6 Mortgagor shall maintain, or cause to be
maintained, the insurance described in this Section 1.7 with primary insurers
rated (for claims paying purposes) in one of the two highest generic categories
by the Rating Agency (as hereinafter defined). All insurers under policies
required hereunder shall be licensed and authorized to issue insurance in the
state in which the Land is located.
SECTION 1.8 Failure To Make Certain Payments. If Mortgagor
shall fail to perform any of the covenants contained in this Mortgage,
including, without limitation, Mortgagor's covenants to (i) pay the premiums in
respect of all required insurance coverages, (ii) pay taxes and assessments,
(iii) make repairs, (iv) discharge Liens or (v) pay or perform any obligations
of Mortgagor under the Leases, Mortgagee may, but shall not be obligated to,
make advances to perform such covenant on Mortgagor's behalf and all sums so
advanced shall be included in the Secured Obligations and shall be secured
hereby. Mortgagor shall repay on demand all sums so advanced by Mortgagee on
behalf of Mortgagor, with interest at the Default Rate. Neither the provisions
of this
<PAGE> 23
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Section 1.8 nor any action taken by Mortgagee pursuant to the provisions of
this Section 1.8 shall prevent any such failure to observe any covenant
contained in this Mortgage from constituting an Event of Default.
SECTION 1.9 Inspection. Mortgagor shall permit
Mortgagee, by its agents, accountants and attorneys, to visit and inspect the
Mortgaged Property at such times as may be requested by Mortgagee.
SECTION 1.10 Mortgagor To Maintain Improvements. Mortgagor
shall not commit any waste on the Premises or with respect to any Equipment or
make any change in the use of the Premises or any Equipment. Mortgagor
represents and warrants that (i) the Premises are served by all utilities
required or necessary for the current use thereof, (ii) all streets necessary
to serve the Premises are completed and serviceable and have been dedicated and
accepted as such by the appropriate Governmental Authorities and (iii)
Mortgagor has access to the Premises from public roads or by reason of private
contractual rights sufficient to allow Mortgagor and its tenants and invitees
to conduct its and their businesses at the Premises in accordance with sound
commercial and industrial practices. Mortgagor shall, at all times, maintain
the Premises and the Equipment in good operating order, condition and repair
and shall make all repairs, structural or nonstructural, when necessary.
Mortgagor shall (a) not alter materially the occupancy or use of all or any
part of the Premises without the prior written consent of Mortgagee, and (b) do
all other acts which from the character or use of the Premises and the
Equipment may be necessary or appropriate to maintain and preserve their value,
except (in connection with the completion of the modernization project) the
elimination of the existing facilities which will become unnecessary and which
were covered by the $8.3 million non-cash charge recorded concurrently with the
issuance of the Notes as set forth in the Prospectus. No Improvements
comprising a portion of the Premises may be demolished nor shall any Equipment
be removed, except in accordance with the appropriate provisions of the
Indenture Documents.
<PAGE> 24
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SECTION 1.11 Mortgagor's Obligations with Respect to Leases.
1.11.1 Mortgagor shall manage and operate the
Mortgaged Property or cause the Mortgaged Property to be managed and operated
in a reasonably prudent manner and, except as otherwise permitted under Section
1.12, will not without the written consent of Mortgagee, enter into any Lease
(or any amendment or modification thereof) or other agreement subsequent to the
date hereof with any Person which would (i) interfere with the present or
future operations of Mortgagor with respect to the Mortgaged Property or (ii)
decrease the value or utility of the Mortgaged Property.
1.11.2 If Mortgagor shall be permitted to enter into any
Leases under this Mortgage or any Leases exist on the date hereof, Mortgagor
shall not in respect of such Leases:
(i) receive or collect, or permit the receipt or
collection of, any rental or other payments under any Lease more than
one (1) month in advance of the respective period in respect of which
they are to accrue, except that (a) in connection with the execution
and delivery of any Lease or of any amendment to any Lease, rental
payments thereunder may be collected and received in advance in an
amount not in excess of one (1) month's rent and (b) Mortgagor may
receive and collect escalation and other charges in accordance with
the terms of each Lease;
(ii) assign, transfer or hypothecate (other than to
Mortgagee hereunder or as otherwise permitted under Section 1.12 of
this Mortgage) any rental or other payment under any Lease whether
then due or to accrue in the future, the interest of Mortgagor as
lessor under any Lease or the rents, issues, revenues, profits or
other income of the Mortgaged Property;
(iii) enter into any Lease after the date hereof that does
not contain terms to the effect as follows:
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(a) such Lease and the rights of the tenant
thereunder shall be subject and subordinate to the rights of
Mortgagee under and the Lien of this Mortgage;
(b) such Lease has been assigned as collateral
security by Mortgagor as landlord thereunder to Mortgagee
under this Mortgage;
(c) in the case of any foreclosure hereunder, the
rights and remedies of the tenant in respect of any
obligations of any successor landlord thereunder shall be
limited to the equity interest of such successor landlord in
the Premises and any successor landlord shall not (1) be
liable for any act, omission or default of any prior landlord
under the Lease or (2) be required to make or complete any
tenant improvements or capital improvements or repair,
restore, rebuild or replace the demised premises or any part
thereof in the event of damage, casualty or condemnation or
(3) be required to pay any amounts to tenant arising under the
Lease prior to such successor landlord taking possession;
(d) the tenant's obligation to pay rent and any
additional rent shall not be subject to any abatement,
deduction, counterclaim or setoff as against any
mortgagee or purchaser upon the foreclosure of any of the
Premises or the giving or granting of a deed in lieu thereof
by reason of a landlord default occurring prior to such
foreclosure and such mortgagee or purchaser will not be bound
by any advance payments of rent in excess of one month or any
security deposits unless such security was actually received;
and
(e) the tenant agrees to attorn, at the option of
Mortgagee or any purchaser of the Premises, upon a foreclosure
of the Premises or the giving or granting of a deed in lieu
thereof; and
(iv) terminate or permit the termination of any Lease of
space, accept surrender of all or any portion of the space
<PAGE> 26
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demised under any Lease prior to the end of the term
thereof or accept assignment of any Lease to Mortgagor unless:
(a) Mortgagor determines in its reasonable
business judgment that such termination, surrender or
assignment would not result in a material adverse effect on
the value or utility of the Mortgaged Property or the lien on
such property; or
(b) Mortgagor shall deliver to Mortgagee an
Officers' Certificate (as defined in each Indenture as in
effect on the date hereof).
1.11.3 Mortgagor timely shall perform and observe
all the terms, covenants and conditions required to be performed and observed
by Mortgagor under each Lease such that there will be no impairment of the fair
market value of the Premises and will not engage in any conduct in respect of
any Lease which would impair the fair market value of the Mortgaged Property or
the Lien of this Mortgage or the security interest created hereby. Mortgagor
promptly shall notify Mortgagee of the receipt of any notice from any lessee
under any Lease claiming that Mortgagor is in default in the performance or
observance of any of the terms, covenants or conditions thereof to be performed
or observed by Mortgagor and will cause a copy of each such notice to be
delivered promptly to Mortgagee.
1.11.4 Mortgagor shall deliver to Mortgagee, within
thirty (30) days after the end of each calendar year ending after the date of
this Mortgage, an Officers' Certificate, dated as of the last day of such year,
(i) containing a list of names of all tenants under Leases and the property
location of such leased space and the annual rental currently payable by each
of them, (ii) stating for which, if any, Leases then in force Mortgagor has
issued a notice of default and the nature of such default and (iii) stating
that, to the best of such officers' knowledge, each Lease complies with the
provisions of this Mortgage. Mortgagor shall deliver to Mortgagee within
thirty (30) days after the end of each calendar quarter copies, certified by an
officer of Mortgagor, of all Leases not theretofore delivered to Mortgagee.
<PAGE> 27
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SECTION 1.12 Transfer Restrictions. Mortgagor may not,
without the prior written consent of Mortgagee, further mortgage, encumber,
hypothecate, sell, convey or assign all or any part of the Mortgaged Property
or suffer any of the foregoing to occur by operation of law or otherwise.
Notwithstanding the provisions of the foregoing sentence, Mortgagor shall have
the right to grant or suffer the following Liens or conveyances, in respect of
the Mortgaged Property:
(i) Liens in respect of amounts payable by Mortgagor
pursuant to Section 1.5 if and to the extent such amounts are not yet
due and payable or are being bonded in accordance with the provisions
of subsection 1.5.3 or are being contested in accordance with the
provisions of subsection 1.5.5;
(ii) Liens of the type described in clause (vii) of the
definition of Permitted Liens in each Indenture as in effect on the
date hereof; provided, however, that such Liens shall in no event
interfere in any material respect with the use or operation of the
Mortgaged Property or diminish the value thereof or impair the Lien of
this Deed of Trust thereon; and
(iii) Any permitted disposition of Mortgaged Property by
Mortgagor in accordance with the appropriate provisions of the
Indenture Documents.
Each of the Liens and other transfers permitted by this
Section 1.12 shall in all respects be subject and subordinate in priority to
the Lien and security interest created and evidenced by this Mortgage except
(x) any Lien permitted by clause (i) of this Section if and to the extent the
law or regulation creating or authorizing such Lien provides that such Lien
must be superior to the Lien and security interest created and evidenced by
this Mortgage and (y) transfers permitted under clause (iii) of this Section,
which shall be made free of the Lien and security interest created and
evidenced hereby.
SECTION 1.13 Destruction; Condemnation.
<PAGE> 28
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1.13.1 Destruction; Insurance Proceeds.
If there shall occur any damage to, or loss or destruction of, the
Improvements and Equipment, or any part of any thereof (each, a "Destruction"),
Mortgagor shall promptly send to Mortgagee a notice setting forth the nature
and extent of such Destruction. The proceeds of any insurance payable in
respect of any such Destruction are hereby assigned and shall be paid to
Mortgagee. All insurance and other proceeds, less the amount of any expenses
incurred in litigating, arbitrating, compromising or settling any claim arising
out of such Destruction or claim resulting in Title Loss (the "Net Proceeds"),
shall constitute Trust Moneys and be applied in accordance with the provisions
of subsections 1.13.3, 1.13.4 and 1.13.5.
1.13.2 Condemnation; Assignment of Award. If there shall
occur any taking of the Mortgaged Property or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any law, general
or special, or by reason of the temporary requisition of the use or occupancy
of the Mortgaged Property or any part thereof, by any governmental authority,
civil or military (each, a "Taking"), Mortgagor immediately shall notify
Mortgagee upon receiving notice of such Taking or commencement of proceedings
therefor. Mortgagee may, but shall not be obligated to, participate in any
proceedings or negotiations which might result in any Taking. Mortgagee may be
represented by counsel satisfactory to it at the expense of Mortgagor.
Mortgagor shall deliver or cause to be delivered to Mortgagee all instruments
requested by it to permit such participation. Mortgagor shall in good faith
and with due diligence file and prosecute what would otherwise be Mortgagor's
claim for any such award or payment and cause the same to be collected and paid
over to Mortgagee, and hereby irrevocably authorizes and empowers Mortgagee, in
the name of Mortgagor as its true and lawful attorney-in-fact or otherwise, to
collect and to receipt for any such award or payment, and, in the event
Mortgagor fails so to act or is otherwise in default hereunder, to file and
prosecute such claim. Mortgagor shall pay all costs, fees and expenses
incurred by Mortgagee in connection with any Taking and seeking and obtaining
any award or payment on account thereof. Any proceeds, award or payment in
respect of any Taking are hereby assigned and shall be paid to Mortgagee.
<PAGE> 29
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Mortgagor shall take all steps necessary to notify the condemning authority of
such assignment. Such award or payment, less the amount of any expenses
incurred in litigating, arbitrating, compromising or settling any claim arising
out of such Taking ("Net Award"), shall be applied in accordance with the
provisions of subsections 1.13.3, 1.13.4 and 1.13.5.
1.13.3 Restoration. So long as no Event of Default
shall have occurred and be continuing, in the event there shall be a Net Award
or Net Proceeds in an amount less than or equal to $1,000,000, Mortgagor shall
have the right, at Mortgagor's option, to apply such Net Award or Net Proceeds
to the payment of the Secured Obligations in accordance with the appropriate
provisions of the Indenture Documents or to perform a restoration (each, a
"Restoration") of the Premises and the Equipment. In the event that Mortgagor
elects to make such payment, such Net Award or Net Proceeds shall be delivered
to Mortgagee to be held as Trust Moneys subject to withdrawal and application
by Mortgagor in accordance with the appropriate provisions of the Indenture
Documents. In the event Mortgagor elects to perform a Restoration, Mortgagor
shall give written notice ("Restoration Election Notice") of such election to
Mortgagee within ten (10) days after the date that Mortgagee receives the
applicable Net Proceeds or Net Award, as the case may be. In the event
Mortgagee does not receive a Restoration Election Notice within such ten (10)
day period, Mortgagor shall deposit such Net Proceeds or Net Award with
Mortgagee to be held as Trust Moneys and Mortgagee shall be authorized to apply
such Net Proceeds or Net Award to the payment of the Secured Obligations in
accordance with the appropriate provisions of the Indenture Documents.
Mortgagor shall, within thirty (30) days following the date of delivery of a
Restoration Election Notice, commence and diligently continue to perform the
Restoration of that portion or portions of the Premises and Equipment subject
to such Destruction or affected by such Taking or Title Loss so that, upon the
completion of the Restoration, the Mortgaged Property will be in the same
condition and shall be of at least equal value and utility for its intended
purposes as the Mortgaged Property was immediately prior to such Destruction,
Taking or Title Loss. Mortgagor shall so complete such Restoration
<PAGE> 30
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with its own funds to the extent that the amount of any Net Award or Net
Proceeds is insufficient for such purpose.
1.13.4 Major Restoration. In the event there shall
be a Net Award or Net Proceeds other than as described in subsection 1.13.3,
the Mortgagor shall perform a Restoration of the Mortgaged Property unless
there shall have occurred and be continuing an Event of Default, in which case
such Net Award or Net Proceeds shall constitute Trust Moneys and be applied by
Mortgagor to the payment of the Secured Obligations in accordance with the
appropriate provisions of the Indenture Documents. In the event a Restoration
is to be performed under this subsection 1.13.4, Mortgagee shall not release
any part of the Net Award or the Net Proceeds except in accordance with the
provisions of subsection 1.13.5 and Mortgagor shall, prior to commencing any
work to effect a Restoration of the Premises and the Equipment, promptly (but
in no event later than ninety (90) days following any Destruction, Taking or
Title Loss) furnish to Mortgagee:
(a) complete plans and specifications (the "Plans and
Specifications") for the Restoration;
(b) an Officers' Certificate stating that all permits and
approvals required by law to commence work in connection with the
Restoration have been obtained;
(c) a certificate (an "Architect's Certificate") of an
independent, reputable architect, engineer or appraiser licensed in
the state where the Premises are located (A) stating that the Plans
and Specifications have been reviewed and approved by the signatory
thereto, (B) containing such signatory's estimate (an "Estimate") of
the costs of completing the Restoration, and (C) upon completion of
such Restoration in accordance with the Plans and Specifications, the
value and utility of the Premises and the Equipment will be equal to
or greater than the value and utility thereof immediately prior to the
Destruction or Taking relating to such Restoration; and
<PAGE> 31
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(d) if the Estimate exceeds the Net Proceeds or the Net
Award, as the case may be, by $1,000,000 or more, an Additional
Undertaking in an amount equal to not less than the Estimate less the
amount of the Net Proceeds or the Net Award, as the case may be, then
held by Mortgagee for application toward the cost of such Restoration.
Upon receipt by Mortgagee of each of the items required
pursuant to clauses (a) through (d) above, Mortgagee shall acknowledge receipt
of the Plans and Specifications. Promptly upon such acknowledgment of receipt
by Mortgagee, Mortgagor shall commence and diligently continue to perform the
Restoration in accordance with such approved Plans and Specifications.
Mortgagor shall so complete such Restoration with its own funds to the extent
that the amount of any Net Award or Net Proceeds is insufficient for such
purpose.
1.13.5 Restoration Advances Following Destruction or
Taking of Mortgaged Property. In the event Mortgagor shall be required to
perform a Restoration of the Premises and Equipment as provided in subsection
1.13.4, Mortgagee shall apply any Net Proceeds or the Net Award held by
Mortgagee on account of the Destruction, Taking or Title Loss to the payment of
the cost of performing such Restoration and shall pay portions of the same,
from time to time, to Mortgagor or, at Mortgagor's direction, directly to the
contractors, subcontractors, materialmen, laborers, engineers, architects, and
other persons rendering services or material for such Restoration, subject to
the conditions set forth in the appropriate provisions of the Indenture
Documents. In the event there shall be any surplus after application of the
Net Award or the Net Proceeds to Restoration of the Premises and the Equipment,
such surplus shall be paid to Mortgagor; provided, however, that if an Event of
Default shall have occurred and be continuing, such surplus shall be applied to
the payment of the Secured Obligations in accordance with the appropriate
provisions of the Indenture Documents or, at the option of Mortgagee, held by
Mortgagee as additional collateral to secure the performance by Mortgagor of
the Secured Obligations.
<PAGE> 32
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SECTION 1.14 Alterations. In the event Mortgagor shall make
any structural addition, modification or change (each, an "Alteration") to the
Premises or the Equipment, Mortgagor shall (a) complete each Alteration
promptly, in a good and workmanlike manner and in compliance with all
applicable local laws, ordinances and requirements and (b) pay when due all
claims for labor performed and materials furnished in connection with such
Alteration, unless contested in accordance with the provisions of subsection
1.5.5.
SECTION 1.15 Hazardous Material.
1.15.1 Except as otherwise disclosed in the
Prospectus, Mortgagor represents and warrants that: (i) it has obtained all
Permits which are currently required with respect to the ownership and
operation of its business at the Mortgaged Property under any and all federal,
state, local and foreign laws or regulations, codes, orders, decrees, judgments
or injunctions issued, promulgated, approved or entered thereunder relating to
pollution or protection of the environment, including, without limitation, laws
relating to handling, use, storage, treatment, disposal, removal, emission,
discharge or release of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes ("Hazardous Materials") into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws") as they relate to the Premises; (ii) it is in compliance with all terms
and conditions of all such Permits as they relate to the Premises, and also is
in compliance with, and not subject to liability under, Environmental Laws,
including, without limitation, all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws as they relate to the Premises, except
where such noncompliance could not result in a material adverse effect on the
value or utility of the Premises; (iii) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice or violation,
governmental investigation, proceeding, notice
<PAGE> 33
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of demand letter pending or, to its knowledge, threatened against it under the
Environmental Laws relating to the Premises which could be expected to result
in a fine, penalty or other cost, expense or liability (collectively,
"Liabilities"), except where such Liabilities could not result in a material
adverse effect on the value or utility of the Premises; (iv) to the knowledge
of Mortgagor after reasonable inquiry there are no past or present events,
conditions, circumstances, activities, practices, incidents, actions or plans
which are expected to interfere with or prevent compliance with the
Environmental Laws relating to the Premises, or which are expected to give rise
to any common law or legal liability, including, without limitation, liability
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, or similar state, local or foreign laws, or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing or notice of
violation, governmental study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened
release into the environment of any Hazardous Material.
1.15.2 Mortgagor shall (i) comply with any and all
applicable present and future Environmental Laws relating to the Premises; (ii)
pay in a timely fashion the cost of any investigation, study, removal, response
or corrective action relating to any Hazardous Materials required by any
present or future Environmental Law or by any order, regulation, consent decree
or similar agreement or instrument; (iii) not release, discharge or dispose of
any Hazardous Materials on, under or from the Mortgaged Property in violation
of any Environmental Law; (iv) shall apply any insurance proceeds or other sums
received by it in respect of the removal of any Hazardous Material or any other
remedial, response or corrective action relating to any Hazardous Material to
such removal, remedial, response or corrective action; and (v) not take, or
fail to take, any action with respect to any Environmental Laws or in
connection with any Hazardous Materials that could be expected to result in the
incurrence of any obligation or liability of the holders of the Notes or the
Mortgagee. In the event Mortgagor fails to comply with the covenants in the
preceding sentence, Mortgagee may, in addition to
<PAGE> 34
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any other remedies set forth herein, but shall have no duty or obligation to,
as trustee for and at Mortgagor's sole cost and expense cause to be taken, any
necessary remedial, removal, response or other corrective action relating to
Hazardous Materials. Any costs or expenses incurred by Mortgagee for such
purpose shall be immediately due and payable by Mortgagor and shall bear
interest at the Default Rate. Mortgagor shall provide to Mortgagee and its
agents and employees access to the Mortgaged Property and hereby specifically
grants to Mortgagee a license to take all removal, remedial, response or
corrective action regarding any Hazardous Material located thereon, or to take
any action with respect to any Environmental Laws or in connection with any
Hazardous Materials that could be expected to result in the incurrence of any
obligation or liability of the holders of the Notes or Mortgagee if Mortgagor
fails to do so and such action is required under any Environmental Laws as
provided above; provided that, Mortgagee shall have no duty or obligation to
undertake any such action. Upon written request by Mortgagee, which shall
include a reasonably specific statement of the basis thereof (which shall be
specific to the condition of the Mortgaged Property) and which shall be made
not more frequently than once in any twelve-month period or at any time that
Mortgagee is exercising its remedies under this Mortgage, Mortgagee shall have
the right, but shall not be obligated nor have any duty, at the sole cost and
expense of Mortgagor, to conduct an environmental audit or review of the
Mortgaged Property relating to the specific items as required in writing or
relating to the remedy that the Mortgagee is exercising under this Mortgage by
such persons or firms appointed by Mortgagee, and Mortgagor shall cooperate in
all respects in the conduct of such environmental audit or review, including,
without limitation, providing access to the Mortgaged Property and to all
records relating thereto. Mortgagor shall indemnify and hold Mortgagee
harmless from and against all loss, cost, damage or expense (including, without
limitation, attorneys' fees) that Mortgagee may sustain by reason of the
assertion against Mortgagee by any party of any claim relating to such
Hazardous Materials or actions taken with respect thereto as authorized
hereunder. Nothing contained herein or in any other Document shall result in
Mortgagee being deemed an "owner" or "operator" or otherwise deemed responsible
for any Hazardous Materials under applicable
<PAGE> 35
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Environmental Law. The Mortgagee shall not be responsible in any way
for, nor shall it have any duty or obligation to, monitor, manage, or perform
the Company's policies, practices, or compliance with Environmental Laws or
Hazardous Materials relating to the Mortgaged Property.
SECTION 1.16 Asbestos. Mortgagor shall not install nor
permit to be installed in the Mortgaged Property friable asbestos or any
asbestos-containing material (collectively, "ACM") except in compliance with
all applicable federal, state or local laws or regulations or orders
respecting such material. With respect to any ACM currently present in the
Mortgaged Property, Mortgagor shall comply in all respects with all federal,
state or local laws, regulations or orders applicable to ACM located on the
Premises, all at Mortgagor's sole cost and expense. If Mortgagor shall fail so
to comply with such laws or regulations, Mortgagee may, but shall have no duty
or obligation to, in addition to any other remedies set forth herein, take
whatever steps it deems necessary or appropriate to comply with applicable law,
regulations or orders. Any costs or expenses incurred by Mortgagee for such
purpose shall be immediately due and payable by Mortgagor and bear interest at
the Default Rate. Mortgagor shall provide to Mortgagee and its agents and
employees access to the Mortgaged Property and hereby specifically grants to
Mortgagee a license to remove such ACM if Mortgagor fails to do so and removal
is required under any law as provided for above; provided, however, that
nothing contained herein shall obligate Mortgagee to exercise any rights under
such license. Mortgagor shall indemnify and hold Mortgagee harmless from and
against all loss, cost, damage and expense that Mortgagee may sustain as a
result of the presence of any ACM and any removal thereof or compliance with
any applicable laws, regulations or orders.
SECTION 1.17 Books and Records; Reports. Mortgagor shall
keep proper books of record and account, which shall accurately represent the
financial condition of Mortgagor and the business and affairs of Mortgagor
relating to the Mortgaged Property. Mortgagee and its authorized
representatives shall have the right from time to time, but not the duty or
obligation to
<PAGE> 36
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examine the books and records of Mortgagor relating to the operation of the
Mortgaged Property.
SECTION 1.18 No Claims Against Mortgagee. Nothing contained
in this Mortgage shall constitute any consent or request by Mortgagee, express
or implied, for the performance of any labor or services or the furnishing of
any materials or other property in respect of the Premises or any part thereof,
nor as giving Mortgagor any right, power or authority to contract for or permit
the performance of any labor or services or the furnishing of any materials or
other property in such fashion as would permit the making of any claim against
Mortgagee in respect thereof or any claim that any Lien based on the
performance of such labor or services or the furnishing of any such materials
or other property is prior to the Lien of this Mortgage.
SECTION 1.19 Utility Services.
Mortgagor shall pay, or cause to be paid, when due all charges
for all public or private utility services, all public or private rail and
highway services, all public or private communication services, all sprinkler
systems, and all protective services, any other services of whatever kind or
nature at any time rendered to or in connection with the Premises or any part
thereof, shall comply with all contracts relating to any such services, and
shall do all other things required for the maintenance and continuance of all
such services to the extent required to fulfill the obligations set forth in
Section 1.10 unless contested in accordance with the provisions of subsection
1.5.5.
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ARTICLE II
ASSIGNMENT OF RENTS; SECURITY AGREEMENT
SECTION 2.1 Assignment of Leases, Rents, Issues and Profits.
2.1.1 Mortgagor absolutely, presently and
irrevocably assigns, transfers and sets over to Mortgagee and grants to
Mortgagee, subject to the terms and conditions hereof, all Mortgagor's estate,
right, title, interest (the "Mortgagor's Interest") in the Leases including,
without limitation, as follows:
(i) the immediate and continuing right to receive and
collect Rents payable by all tenants or other parties pursuant to the
Leases;
(ii) all claims, rights, powers, privileges and remedies
of Mortgagor, whether provided for in any Lease or arising by statute
or at law or in equity or otherwise, consequent on any failure on the
part of any tenant to perform or comply with any term of any Lease;
(iii) all rights to take all actions upon the happening of
a default under any Lease as shall be permitted by such Lease or by
law, including, without limitation, the commencement, conduct and
consummation of proceedings at law or in equity; and
(iv) the full power and authority, in the name of
Mortgagor or otherwise, to enforce, collect, receive and receipt for
any and all of the foregoing and to do any and all other acts and
things whatsoever which Mortgagor or any landlord is or may be
entitled to do under the Leases.
2.1.2 Any Rents receivable by Mortgagee hereunder,
after payment of all proper costs and charges, shall be applied to all amounts
due and owing under and as provided in this Mortgage, the Indenture and the
Term Loan Agreement. Mortgagee shall be accountable to Mortgagor only for
Rents actually received by
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Mortgagee pursuant to this assignment. The collection of such Rents and the
application thereof shall not cure or waive any Event of Default or waive,
modify or affect notice of Event of Default or invalidate any act done pursuant
to such notice.
2.1.3. So long as no Event of Default shall have
occurred and be continuing, Mortgagor shall have a license to collect and apply
the Rents and to enforce the obligations of tenants under the Leases.
Immediately upon the occurrence and during the continuance of any Event of
Default, the license granted in the immediately preceding sentence shall cease
and terminate, with or without any notice, action or proceeding. Upon such
Event of Default and during the continuance thereof, Mortgagee may, to the
fullest extent permitted by the Leases (i) exercise any of Mortgagor's rights
under the Leases, (ii) enforce the Leases, (iii) demand, collect, sue for,
attach, levy, recover, receive, compromise and adjust, and make, execute and
deliver receipts and releases for all Rents or other payments that may then be
or may thereafter become due, owing or payable with respect to the Leases and
(iv) generally do, execute and perform any other act, deed, matter or thing
whatsoever that ought to be done, executed and performed in and about or with
respect to the Leases, as fully as allowed or authorized by Mortgagor's
Interest.
2.1.4 Mortgagor hereby irrevocably authorizes and
directs the tenant under each Lease to pay directly to, or as directed by,
Mortgagee all Rents accruing or due under its Lease. Mortgagor hereby
authorizes the tenant under each Lease to rely upon and comply with any notice
or demand from Mortgagee for payment of Rents to Mortgagee and Mortgagor shall
have no claim against any tenant for Rents paid by such tenant to Mortgagee
pursuant to such notice or demand.
2.1.5 Mortgagor at its sole cost and expense shall
enforce the Leases in accordance with their terms. Neither this Mortgage nor
any action or inaction on the part of Mortgagee shall release any tenant under
any Lease, any guarantor of any Lease or Mortgagor from any of their respective
obligations under the Leases or constitute an assumption of any such obligation
on the part of Mortgagee. No action or failure to act on the part of Mortgagor
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shall adversely affect or limit the rights of Mortgagee under this Mortgage or,
through this Mortgage, under the Leases.
2.1.6 All rights, powers and privileges of Mortgagee
herein set forth are coupled with an interest and are irrevocable, subject to
the terms and conditions hereof, and Mortgagor shall not take any action under
the Leases or otherwise which is inconsistent with this Mortgage or any of the
terms hereof and any such action inconsistent herewith or therewith shall be
void. Mortgagor shall, from time to time, upon request of Mortgagee, execute
all instruments and further assurances and all supplemental instruments and
take all such action as Mortgagee from time to time may request in order to
perfect, preserve and protect the interests intended to be assigned to
Mortgagee hereby.
2.1.7 Mortgagor shall not, unilaterally or by
agreement, subordinate, amend, modify, extend, discharge, terminate, surrender,
waive or otherwise change any term of any of the Leases in any manner which
would violate this Mortgage. If the Leases shall be amended as permitted
hereby, they shall continue to be subject to the provisions hereof without the
necessity of any further act by any of the parties hereto.
2.1.8 Nothing contained herein shall operate or be
construed to (i) obligate Mortgagee to perform any of the terms, covenants or
conditions contained in the Leases or otherwise to impose any obligation upon
Mortgagee with respect to the Leases (including, without limitation, any
obligation arising out of any covenant of quiet enjoyment contained in the
Leases in the event that any tenant under a Lease shall have been joined as a
party defendant in any action by which the estate of such tenant shall be
terminated) or (ii) place upon Mortgagee any responsibility for the operation,
control, care, management or repair of the Premises.
SECTION 2.2 Security Interest in Personal Property.
2.2.1 This Mortgage shall constitute a security
agreement and shall create and evidence a security interest or common law Lien
in all the Equipment and in all the other items of Mortgaged Property in which
a security interest may be granted or
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a common law pledge created pursuant to the Uniform Commercial Code as in
effect in the state in which the Premises are located or under the common law
in such state (collectively, "Personal Property").
2.2.2 Upon the occurrence of any Event of Default,
in addition to the remedies set forth in Article III, Mortgagee shall have the
power to sell the Personal Property in accordance with the Uniform Commercial
Code as enacted in the state in which the Premises are located or under other
applicable law. It shall not be necessary that any Personal Property offered
be physically present at any such sale or constructively in the possession of
Mortgagee or the person conducting the sale.
2.2.3 Upon the occurrence of any Event of Default,
Mortgagee may sell the Personal Property or any part thereof at public or
private sale with notice to Mortgagor as hereinafter provided. The Proceeds of
any such sale, after deducting all expenses of Mortgagee in taking, storing,
repairing and selling the Personal Property (including, without limitation,
attorneys' fees) shall be applied in the manner set forth in subsection 3.3.3.
At any sale, public or private, of the Personal Property or any part thereof,
Mortgagee may purchase any or all of the Personal Property offered at such
sale.
2.2.4 Mortgagee shall give Mortgagor notice of any
sale of any of the Personal Property pursuant to the provisions of this Section
2.2. Notwithstanding the provisions of Section 5.2, any such notice shall
conclusively be deemed to be reasonable and effective if such notice is mailed
at least ten (10) days prior to any sale, by first class or certified mail,
postage prepaid to Mortgagor at its address determined in accordance with the
provisions of Section 5.2.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES
SECTION 3.1 Remedies in Case of an Event of Default. If an
Event of Default (as defined in the Collateral Agency Agreement)
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shall have occurred, Mortgagee may, but shall have no duty or obligation to, in
addition to any other action permitted by law (and not limited in any manner by
the remedies contained in the Debt Instruments or other Security Documents),
take one or more of the following actions:
3.1.1 by written notice to Mortgagor, declare the
entire principal amount of the Secured Obligations to be due and payable
immediately;
3.1.2 personally, or by its agents or attorneys, (i)
enter into and upon all or any part of the Mortgaged Property and exclude
Mortgagor, its agents and servants wholly therefrom, (ii) use, operate, manage
and control the Premises and the Equipment and conduct the business thereof,
(iii) maintain and restore the Mortgaged Property, (iv) make all reasonably
necessary or proper repairs, renewals and replacements and such useful
Alterations thereto and thereon as Mortgagee may deem advisable, (v) manage,
lease and operate the Mortgaged Property and carry on the business thereof and
exercise all rights and powers of Mortgagor with respect thereto either in the
name of Mortgagor or otherwise, or (vi) collect and receive all earnings,
revenues, rents, issues, profits and income of the Mortgaged Property and any
or every part thereof;
3.1.3 with or without entry, personally or by its
agents or attorneys, (i) sell the Mortgaged Property and all estate, right,
title and interest, claim and demand therein at one or more sales in one or
more parcels, in accordance with the provisions of Section 3.2 or (ii)
institute and prosecute proceedings for the complete or partial foreclosure of
the Lien and security interests created and evidenced hereby; or
3.1.4 take such steps to protect and enforce its
rights whether by action, suit or proceeding at law or in equity for the
specific performance of any covenant, condition or agreement in any Indenture
Document or in aid of the execution of any power granted in this Mortgage, or
for any foreclosure hereunder, or for the enforcement of any other appropriate
legal or equitable remedy or otherwise as Mortgagee shall elect.
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SECTION 3.2 Sale of Mortgaged Property If Event of Default
Occurs; Proceeds of Sale.
3.2.1 If any Event of Default shall have occurred,
Mortgagee may institute an action to foreclose this Mortgage or take such other
action as may be permitted and available to Mortgagee at law or in equity for
the enforcement of the Debt Instruments and realization on the Mortgaged
Property and proceeds thereon through power of sale or to final judgment and
execution thereof for the Secured Obligations, and in furtherance thereof
Mortgagee may sell the Mortgaged Property at one or more sales, as an entirety
or in parcels, at such time and place, upon such terms and after such notice
thereof as may be required or permitted by law or statute or in equity.
Mortgagee may execute and deliver to the purchaser at such sale a conveyance of
the Mortgaged Property in fee simple and an assignment or conveyance of all
Mortgagor's interest in the Leases and the Mortgaged Property, each of which
conveyances and assignments shall contain recitals as to the Event of Default
upon which the execution of the power of sale herein granted depends and
Mortgagor hereby constitutes and appoints Mortgagee the true and lawful
attorney-in-fact of Mortgagor to make any such recitals, sale, assignment and
conveyance, and all of the acts of Mortgagee as such attorney-in-fact are
hereby ratified and confirmed. Mortgagor agrees that such recitals shall be
binding and conclusive upon Mortgagor and that any assignment or conveyance to
be made by Mortgagee shall divest Mortgagor of all right, title, interest,
equity and right of redemption, including any statutory redemption, in and to
the Mortgaged Property. The power and agency hereby granted are coupled with
an interest and are irrevocable by death or dissolution, or otherwise, and are
in addition to any and all other remedies which Mortgagee may have hereunder,
at law or in equity. So long as the Secured Obligations, or any part thereof,
remain unpaid, Mortgagor agrees that possession of the Mortgaged Property by
Mortgagor, or any person claiming under Mortgagor, shall be as tenant and, in
case of a sale under power or upon foreclosure as provided in this Mortgage,
Mortgagor and any person in possession under Mortgagor, as to whose interest
such sale was not made subject, shall, at the option of the purchaser at such
sale, then become and be tenants holding over, and shall forthwith deliver
possession to such purchaser, or be summarily dispossessed
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in accordance with the laws applicable to tenants holding over. In case of any
sale under this Mortgage by virtue of the exercise of the powers herein
granted, or pursuant to any order in any judicial proceeding or otherwise, the
Mortgaged Property may be sold as an entirety or in separate parcels in such
manner or order as Mortgagee in its sole discretion may elect. One or more
exercises of powers herein granted shall not extinguish or exhaust such powers,
until the entire Mortgaged Property is sold or all amounts secured hereby are
paid in full.
3.2.2 In the event of any sale made under or by
virtue of this Article III, the entire principal of and interest in respect of
the Secured Obligations, if not previously due and payable, shall, at the
option of Mortgagee, immediately become due and payable, anything in this
Mortgage to the contrary notwithstanding.
3.2.3 The proceeds of any sale made under or by
virtue of this Article III, together with any other sums which then may be held
by Mortgagee under this Mortgage, whether under the provisions of this Article
III or otherwise, shall be applied in accordance with the provisions of the
Collateral Agency Agreement.
3.2.4 Mortgagee may bid for and acquire the
Mortgaged Property or any part thereof at any sale made under or by virtue of
this Article III and, in lieu of paying cash therefor, may make settlement for
the purchase price by crediting against the purchase price the unpaid amounts
outstanding to Mortgagee whether or not then due and owing in respect of the
Secured Obligations, after deducting from the sales price the expense of the
sale and the reasonable costs of the action or proceedings and any other sums
that Mortgagee is authorized to deduct under this Mortgage.
3.2.5 Mortgagee may adjourn from time to time any
sale by it to be made under or by virtue of this Mortgage by announcement at
the time and place appointed for such sale or for such adjourned sale or sales
and Mortgagee, without further notice or publication, may make such sale at the
time and place to which the same shall be so adjourned.
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Notwithstanding anything to the contrary contained in this
Mortgage, the Indenture, the Term Loan Agreement or any of the other Security
Documents, in the event the Mortgagee is entitled or required to commence an
action to foreclose the Mortgage or otherwise exercise its remedies to acquire
control or possession of the Mortgaged Property, the Mortgagee shall not be
required to commence any such action or exercise any such remedy if the
Mortgagee has determined in good faith that the Mortgagee may incur liability
under the Environmental Laws as the result of the presence at, or release on or
from, the Facility of any Hazardous Materials unless the Mortgagee has received
security or indemnity, from a Secured Party or holders of Indebtedness
benefiting from this Mortgage, in an amount and in a form all satisfactory to
the Mortgagee in its sole discretion, protecting the Mortgagee from all such
liability.
SECTION 3.3 Additional Remedies in Case of an Event of Default.
3.3.1 Mortgagee shall be entitled to recover
judgment as aforesaid either before, after or during the pendency of any
proceedings for the enforcement of the provisions of this Mortgage, and the
right of Mortgagee to recover such judgment shall not be affected by any entry
or sale hereunder, or by the exercise of any other right, power or remedy for
the enforcement of the provisions of this Mortgage, or the foreclosure of, or
absolute conveyance pursuant to, this Mortgage. In case of proceedings against
Mortgagor in insolvency or bankruptcy or any proceedings for its reorganization
or involving the liquidation of its assets, Mortgagee shall be entitled to
prove the whole amount of principal and interest and other payments, charges
and costs due in respect of the Secured Obligations to the full amount thereof
without deducting therefrom any proceeds obtained from the sale of the whole or
any part of the Mortgaged Property; provided, however, that in no case shall
Mortgagee receive a greater amount than the aggregate of such principal,
interest and such other payments, charges and costs (with interest at the
Default Rate) from the proceeds of the sale of the Mortgaged Property and the
distribution from the estate of Mortgagor.
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3.3.2 Any recovery of any judgment by Mortgagee and
any levy of any execution under any judgment upon the Mortgaged Property shall
not affect in any manner or to any extent the Lien and security interest
created and evidenced hereby upon the Mortgaged Property or any part thereof,
or any conveyances, powers, rights and remedies of Mortgagee hereunder, but
such conveyances, powers, rights and remedies shall continue unimpaired as
before.
3.3.3 Any moneys collected by Mortgagee under this
Section 3.3 shall be applied in accordance with the provisions of subsection
3.2.3.
SECTION 3.4 Legal Proceedings After an Event of Default.
3.4.1 After the occurrence of any Event of Default
and immediately upon the commencement of any action, suit or legal proceedings
to obtain judgment for the Secured Obligations or any part thereof, or of any
proceedings to foreclose the Lien and security interest created and evidenced
hereby or otherwise enforce the provisions of this Mortgage or of any other
proceedings in aid of the enforcement of this Mortgage, Mortgagor shall enter
its voluntary appearance in such action, suit or proceeding.
3.4.2 Upon the occurrence of an Event of Default,
Mortgagee shall be entitled forthwith as a matter of right, concurrently or
independently of any other right or remedy hereunder either before or after
declaring the Secured Obligations or any part thereof to be due and payable, to
the appointment of a receiver or other custodian ex parte and without giving
notice to any party and without regard to the adequacy or inadequacy of any
security for the Secured Obligations or the solvency or insolvency of any
person or entity then legally or equitably liable for the Secured Obligations
or any portion thereof. Mortgagor hereby consents to the appointment of such
receiver. Notwithstanding the appointment of any receiver or other custodian,
Mortgagee shall be entitled as pledgee to the possession and control of any
cash, deposits or instruments at the time held by or payable or deliverable
under the terms of the Indenture and the Term Loan Agreement to Mortgagee.
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3.4.3 Mortgagor shall not (i) at any time insist
upon or plead or in any manner whatsoever claim or take any benefit or
advantage of any stay or extension or moratorium law, any exemption from
execution or sale of the Mortgaged Property or any part thereof, wherever
enacted, now or at any time hereafter in force, which may affect the covenants
and terms of performance of this Mortgage, (ii) claim, take or insist on any
benefit or advantage of any law now or hereafter in force providing for the
valuation or appraisal of the Mortgaged Property, or any part thereof, prior to
any sale or sales of the Mortgaged Property which may be made pursuant to this
Mortgage, or pursuant to any decree, judgment or order of any court of
competent jurisdiction or (iii) after any such sale or sales, claim or exercise
any right under any statute heretofore or hereafter enacted to redeem the
property so sold or any part thereof. Mortgagor hereby expressly (i) waives
all benefit or advantage of any such law or laws, including, without
limitation, any statute of limitations applicable to this Mortgage, (ii) waives
and Mortgagee by acceptance of this Mortgage waives any and all rights to trial
by jury in any action or proceeding related to the enforcement of this
Mortgage, (iii) waives any objection which it may now or hereafter have to the
laying of venue of any action, suit or proceeding brought in connection with
this Mortgage and further waives and agrees not to plead that any such action,
suit or proceeding brought in any such court has been brought in an
inconvenient forum and (iv) covenants not to hinder, delay or impede the
execution of any power granted or delegated to Mortgagee by this Mortgage, but
to suffer and permit the execution of every such power as though no such law or
laws had been made or enacted. Mortgagor, for itself and all who may claim
under it, waives all rights to have the Mortgaged Property marshalled on any
foreclosure of this Mortgage.
SECTION 3.5 Remedies Not Exclusive. No remedy conferred upon
or reserved to Mortgagee by this Mortgage is intended to be exclusive of any
other remedy or remedies, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Mortgage or now
or hereafter existing at law or in equity. Any delay or omission of Mortgagee
to exercise any right or power accruing on any Event of Default shall not
impair any such right or power and shall not be construed to be a
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waiver of or acquiescence in any such Event of Default. Every power and remedy
given by this Mortgage may be exercised from time to time concurrently or
independently, when and as often as may be deemed expedient by Mortgagee in
such order and manner as Mortgagee, in its sole discretion, may elect. If
Mortgagee accepts any moneys required to be paid by Mortgagor under this
Mortgage after the same become due, such acceptance shall not constitute a
waiver of the right either to require prompt payment, when due, of all other
sums secured by this Mortgage or to declare an Event of Default with regard to
subsequent defaults. If Mortgagee accepts any moneys required to be paid by
Mortgagor under this Mortgage in an amount less than the sum then due, such
acceptance shall be deemed an acceptance on account only and on the condition
that it shall not constitute a waiver of the obligation of Mortgagor to pay the
entire sum then due, and Mortgagor's failure to pay the entire sum then due
shall be and continue to be a default hereunder notwithstanding acceptance of
such amount on account.
ARTICLE IV
CERTAIN DEFINITIONS
The following terms shall have the following respective
meanings:
"Additional Undertaking" means (a) cash or Cash Equivalents
(as defined in each Indenture and the Term Loan Agreement as all are in effect
on the date hereof) or (b) a Surety Bond, Guaranty or Letter of Credit which is
(i) provided by a Person, (ii) whose long-term unsecured debt is rated at least
AA (or equivalent) and (iii) is otherwise satisfactory to Mortgagee.
Additional Undertakings shall be addressed directly to Mortgagee and shall name
Mortgagee as the beneficiary thereof and the party entitled to make claims
thereunder.
"Cost of Construction" means the sum, so far as it relates to
the reconstructing, renewing, restoring or replacing of the Improvements, of
(i) obligations incurred or assumed by Mortgagor or undertaken by tenants
pursuant to the terms of the Leases for labor, materials and other expenses and
to contractors,
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builders and materialmen; (ii) the cost of contract bonds and of insurance of
all kinds that may reasonably be deemed by Mortgagor to be necessary during the
course of construction; (iii) the expenses incurred or assumed by Mortgagor (or
tenant under the Lease performing such Restoration) for test borings, surveys,
estimates, any Plans and Specifications and preliminary investigations
therefor, and for supervising construction, as well as for the performance of
all other duties required by or reasonably necessary for proper construction;
(iv) ad valorem property taxes levied upon the Premises during performance of
any Restoration and (v) any costs or other charges in connection with obtaining
title insurance and counsel opinions that may be required or necessary in
connection with a Restoration.
"Guaranty" means the unconditional guarantee of payment of any
corporation or partnership organized and existing under the laws of the United
States of America or any State or the District of Columbia or Canada or
province thereof that has a long-term unsecured debt rating (as determined by
each Rating Agency) at the time such guarantee is delivered equal to or higher
than the then current rating of the Notes, given to Mortgagee, accompanied by
an opinion of counsel to such guarantor to the effect that such guarantee has
been duly authorized, executed and delivered by such guarantor and constitutes
the legal, valid and binding obligation of such guarantor enforceable against
such guarantor by Mortgagee in accordance with its terms subject to customary
exceptions at the time for opinions for such instruments, together with an
opinion of counsel to the effect that, taking into account the purpose under
this Mortgage for which such guarantee will be given, such guarantee and
accompanying opinion are responsive to the requirements of this Mortgage.
"Letter of Credit" means a clean, irrevocable, unconditional
letter of credit in favor of Mortgagee and entitling Mortgagee to draw thereon
in The City of New York issued by a bank with a letter of credit evaluation
determined by each Rating Agency, at the time such letter of credit is
delivered, in one of the three highest generic rating categories of such Rating
Agency, accompanied by an opinion of counsel to such bank to the effect that
such letter of credit has been duly authorized, executed and
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delivered by such bank and constitutes the legal, valid and binding
obligation of such bank enforceable against such bank by Mortgagee in
accordance with its terms subject to customary exceptions at the time for
opinions for such instruments, together with an Opinion of Counsel to the
effect that, taking into account the purpose under this Mortgage for which such
letter of credit will be given, such letter of credit and accompanying opinion
are responsive to the requirements of this Mortgage.
"Prospectus" means the final prospectus with respect to the
Notes filed with the SEC pursuant to paragraph (1) or (4) of Rule 424(b) of the
rules and regulations under the Securities Act or, if no such filing is made,
the final prospectus contained in the registration statement relating to the
Notes.
"Rating Agency" means A.M. Best Company, if such Person shall
then be rating corporate obligations, or, if such Person shall be rating
corporate obligations, then any other organization of generally recognized
standing, selected by Mortgagee.
"rated or rating" in connection with long-term unsecured debt,
means that the Person in question has, or has been determined to be qualified
for, the rating in question by the Rating Agency.
"Surety Bond" means a clean irrevocable surety bond or credit
insurance policy in favor of Mortgagee issued by an insurance company the
claims paying ability rating of which at the time such surety bond or credit
insurance policy is delivered is in one of the three highest generic rating
categories of each Rating Agency, accompanied by an opinion of counsel to such
insurance company to the effect that such surety bond or credit insurance
policy has been duly authorized, executed and delivered by such insurance
company and constitutes the legal, valid and binding obligation of such
insurance company enforceable against such insurance company by Mortgagee in
accordance with its terms subject to customary exceptions at the time for
opinions for such instruments, together with an Opinion of Counsel to the
effect that, taking into account the purpose under this Mortgage for which
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such surety bond will be given, such surety bond and accompanying opinion
are responsive to the requirements of this Mortgage.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Severability. In the event any one or more of
the provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Mortgage, but
this Mortgage shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein. The invalidity of any
provision of this Mortgage in any one jurisdiction shall not affect or impair
in any manner the validity of such provision in any other jurisdiction.
SECTION 5.2 Notices. Unless otherwise provided herein, any
notice or other communication herein shall be given in the manner and at the
address set forth in the Collateral Agency Agreement, or as to any party at
such other address as shall be designated by such party in a written notice to
the other party.
SECTION 5.3 Covenants To Run with the Land. All of the
grants, covenants, terms, provisions and conditions in this Mortgage shall run
with the land and shall apply to, and bind the successors and assigns of
Mortgagor.
SECTION 5.4 Captions; Gender and Number. The captions and
section headings of this Mortgage are for convenience only and are not to be
used to define the provisions hereof. All terms contained herein shall be
construed, whenever the context of this Mortgage requires, so that the singular
includes the plural and so that the masculine includes the feminine.
SECTION 5.5 Limitation on Interest Payable. It is the
intention of the parties to conform strictly to the usury laws, whether state
or federal, that are applicable to the transaction of which this Mortgage is a
part. All agreements between Mortgagor
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and the Mortgagee, whether now existing or hereafter arising and whether oral
or written, are hereby expressly limited so that in no contingency or event
whatsoever shall the amount paid or agreed to be paid by Mortgagor for the use,
forbearance or detention of the money to be loaned or advanced under any
Indenture Document, or for the payment or performance of any covenant or
obligation contained herein or in any Indenture Document, exceeds the maximum
amount permissible under applicable federal or state usury laws. If under any
circumstances whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity. If under any circumstances Mortgagor
shall have paid an amount deemed interest by applicable law, which would exceed
the highest lawful rate, such amount that would be excessive interest under
applicable usury laws shall be applied to the reduction of the principal amount
owing in respect of the Secured Obligations and not to the payment of interest,
or if such excessive interest exceeds the unpaid balance of principal and any
other amounts due hereunder, the excess shall be refunded to Mortgagor. All
sums paid or agreed to be paid for the use, forbearance or detention of the
principal under any extension of credit or advancement of funds by Mortgagee
shall, to the extent permitted by applicable law, and to the extent necessary
to preclude exceeding the limit of validity prescribed by law, be amortized,
prorated, allocated and spread from the date of this Mortgage until payment in
full of the Secured Obligations so that the actual rate of interest on account
of such principal amounts is uniform throughout the term hereof.
SECTION 5.6 Indemnification; Reimbursement. Each and every
obligation of Mortgagor to indemnify and hold harmless the Trustees under the
Indentures, contained in Section 7.07 of each Indenture as in effect on the
date hereof and the Agent under the Term Loan Agreement contained in Section
9.3 of the Term Loan Agreement as in effect on the date hereof is incorporated
herein mutatis mutandis as an obligation of Mortgagor hereunder to indemnify
Mortgagee and the officers, directors, employees, agents and affiliates of
Mortgagee (each, an "Indemnified Party") in each and every matter relating to
or arising out of this Mortgage and the Mortgaged Property, including, without
limitation, claims
<PAGE> 52
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concerning Environmental Laws, Hazardous Materials, or strict liability in
tort. In addition to the foregoing, Mortgagor shall reimburse Mortgagee, upon
demand, for all costs and expenses incurred by Mortgagee in connection with the
administration and enforcement of this Mortgage. If any action or proceeding,
including, without limitation, bankruptcy or insolvency proceedings, is
commenced to which action or proceeding Mortgagee is made a party or in which
it becomes necessary to defend or uphold the Lien or validity of this Mortgage,
Mortgagor shall, upon demand, reimburse Mortgagee for all expenses (including,
without limitation, attorneys' and agents' fees and disbursements) incurred by
Mortgagee in such action or proceeding. In any action or proceeding to
foreclose this Mortgage or to recover or collect the Secured Obligations, the
provisions of law relating to the recovery of costs, disbursements and
allowances shall prevail unaffected by this covenant. Mortgagor's obligations
under this Section 5.6 shall survive the satisfaction of this Mortgage and the
discharge of Mortgagor's other obligations hereunder.
SECTION 5.7 Choice of Law. The terms and provisions of this
Mortgage and the enforcement hereof shall be governed by and construed in
accordance with the laws of the state where the Land is located.
SECTION 5.8 Changes in Writing. This Mortgage may not be
modified, amended, discharged or waived in whole or in part except by an
instrument in writing signed by Mortgagor and Mortgagee, in accordance with the
provisions of the Collateral Agency Agreement.
SECTION 5.9 No Merger. The rights and estate created by this
Mortgage shall not, under any circumstances, be held to have merged into any
other estate or interest now owned or hereafter acquired by Mortgagee unless
Mortgagee shall have consented to such merger in writing.
SECTION 5.10 Concerning Mortgagee.
5.10.1 Mortgagee shall be entitled to rely upon any
written notice, statement, certificate, order or other document
<PAGE> 53
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believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Mortgage and its duties hereunder, upon advice of counsel selected by it.
5.10.2 Mortgagor shall recognize as the mortgagee
under this instrument any party who has succeeded to the interest of Mortgagee
under the Collateral Agency Agreement.
5.10.3 If any item of Mortgaged Property also
constitutes collateral granted to Mortgagee under any other mortgage, security
agreement, pledge or instrument of any type, in the event of any conflict
between the provisions of this Mortgage and the provisions of such other
mortgage, security agreement, pledge or instrument of any type in respect of
such collateral, Mortgagee, in its sole discretion, shall select which
provision or provisions shall control.
5.10.4 Mortgagee may resign from the performance of
all its functions and duties hereunder at any time by giving ten (10) days'
prior written notice to Mortgagor. Such resignation shall take effect upon the
appointment of a successor Mortgagee pursuant to the provisions of the
Collateral Agency Agreement.
SECTION 5.11 Waiver of Stay.
5.11.1 Mortgagor agrees that in the event that
Mortgagor or any property or assets of Mortgagor shall hereafter become the
subject of a voluntary or involuntary proceeding under the Bankruptcy Code or
Mortgagor shall otherwise be a party to any federal or state bankruptcy,
insolvency, moratorium or similar proceeding to which the provisions relating
to the automatic stay under Section 362 of the Bankruptcy Code or any similar
provision in any such law is applicable, then, in any such case, whether or not
Mortgagee has commenced foreclosure proceedings under this Mortgage, Mortgagee
shall be entitled to relief from any such automatic stay as it relates to the
exercise of any of the rights and remedies (including, without limitation, any
foreclosure proceedings) available to Mortgagee as provided in this Mortgage or
<PAGE> 54
- 50 -
in any other document evidencing or securing the Secured Obligations.
5.11.2 Mortgagee shall have the right
to petition or move any court having jurisdiction over any proceeding described
in subsection 5.12.1 for the purposes provided therein, and Mortgagor agrees
(i) not to oppose any such petition or motion and, (ii) at Mortgagor's sole
cost and expense, to assist and cooperate with Mortgagee, as may be requested
by Mortgagee from time to time, in obtaining any relief requested by Mortgagee,
including, without limitation, by filing any such petitions, supplemental
petitions, requests for relief, documents, instruments or other items from time
to time requested by Mortgagee or any such court.
SECTION 5.12 No Credit for Payment of Taxes or Impositions.
Mortgagor shall not be entitled to any credit against the principal, premium,
if any, or interest payable on the Notes, and Mortgagor shall not be entitled
to any credit against any other sums which may become payable under the terms
thereof or hereof by reason of the payment of any tax or other impositions on
the Mortgaged Property or any part thereof.
SECTION 5.13 Stamp and Other Taxes. Subject to the
provisions of subsection 1.5.5 relating to permitted contests, Mortgagor shall
pay any United States documentary stamp taxes, with interest and fines and
penalties, and any mortgage recording taxes or fees, with interest and fines
and penalties, that may hereafter be levied, imposed or assessed under or upon
or by reason of this Mortgage or the Secured Obligations or any instrument or
transaction affecting or relating to either thereof and in default thereof
Mortgagee may advance the same and the amount so advanced shall be payable by
Mortgagor to Mortgagee within ten (10) days after demand therefor, together
with interest thereon at the Default Rate.
SECTION 5.14 Estoppel Certificates. Mortgagor shall, from
time to time, upon twenty (20) days' prior written request by Mortgagee,
execute, acknowledge and deliver to the Mortgagee a certificate signed by an
authorized officer or officers stating that this Mortgage and the other
Indenture Documents are unmodified
<PAGE> 55
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and in full force and effect (or, if there have been modifications,
that this Mortgage and such other Indenture Documents, as applicable, are in
full force and effect as modified and setting forth such modifications) and
stating the date to which payments have been made in respect of the Secured
Obligations.
SECTION 5.15 Additional Security. Without notice to or
consent of Mortgagor and without impairment of the Lien and rights created by
this Mortgage, Mortgagee may accept (but Mortgagor shall not be obligated to
furnish) from Mortgagor or from any other Person or Persons, additional
security for the Secured Obligations. Neither the giving of this Mortgage nor
the acceptance of any such additional security shall prevent Mortgagee from
resorting, first, to such additional security, and, second, to the security
created by this Mortgage without affecting Mortgagee's Lien and rights under
this Mortgage.
SECTION 5.16 Release. The Lien of this Mortgage shall be
released from the Mortgaged Property in accordance with the provisions of the
Collateral Agency Agreement. Mortgagee, on the written request and at the
expense of Mortgagor, will execute and deliver such proper instruments of
release and satisfaction or assignment as may reasonably be requested to
evidence such release or assignment, and any such instrument, when duly
executed by Mortgagee and duly recorded by Mortgagor in the places where this
Mortgage is recorded, shall conclusively evidence the release or assignment of
this Mortgage.
SECTION 5.17 Expenses of Collection. In the event this
Mortgage or any other instrument evidencing the Secured Obligations is placed
in the hands of counsel for collection of any amount payable hereunder or
thereunder or for the enforcement of any of the provisions hereof or thereof,
Mortgagor agrees to pay all costs associated therewith incurred by Mortgagee,
either with or without the institution of an action, suit or other proceeding,
in addition to all costs, disbursements and allowances provided by law, all
such costs to be paid upon demand, together with interest thereon at the
Default Rate from the date of notice or incurring thereof, and the same shall
be deemed to be secured hereby.
<PAGE> 56
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SECTION 5.18 Business Days. In the event any time period or
any date provided in this Mortgage ends or falls on a day other than a Business
Day (as defined in each Indenture or the Term Loan Agreement as all are in
effect on the date hereof), then such time period shall be deemed to end and
such date shall be deemed to fall on the next succeeding Business Day, and
performance herein may be made on such Business Day, with the same force and
effect as if made on such other day.
<PAGE> 57
IN WITNESS WHEREOF, this Mortgage has been duly executed by
Mortgagor as of the date first written above.
ACME STEEL COMPANY, as Mortgagor
By: /s/ Stephen D. Bennett
--------------------------
Name: Stephen D. Bennett
Title: President
This instrument prepared by:
Daniel J. Zubkoff, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
<PAGE> 58
ACKNOWLEDGMENTS
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the 11th day of August, 1994, before me personally came
Stephen D. Bennett to me known, who, being the President of Acme Steel Company,
the corporation described in and which executed the above instrument; and that
he signed his name thereto by authority of the board of directors of said
corporation as his free act and deed and the free act and deed of the
corporation.
/s/ Peter Z. Sivere
-------------------
Notary Public
<PAGE> 59
SCHEDULE A
LEGAL DESCRIPTION
Riverdale, Illinois
Tract 292
PARCEL 1
ALL THAT PART OF THE SOUTHEAST 1/4 OF SECTION OF SECTION 33, TOWNSHIP 37 NORTH,
RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING NORTH OF A LINE PARALLEL
WITH AND 658.08 FEET SOUTH OF THE NORTH LINE OF THE SOUTHEAST 1/4 OF SECTION 33
AND WEST OF THE RIGHT-OF-WAY OF PITTSBURGH CINCINNATI CHICAGO AND ST. LOUIS
RAILROAD COMPANY, IN COOK COUNTY, ILLINOIS.
ALSO
PARCEL 2
THAT PART OF PERRY AVENUE (66 FOOT WIDE) AS HERETOFORE DEDICATED FOR PUBLIC
STREET, RECORDED OCTOBER 16, 1925 AS DOCUMENT NUMBER 9067934, BOUNDED AND
DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WEST LINE OF PERRY AVENUE,
SAID WEST LINE BEING 551 FEET EASTERLY OF AND PARALLEL TO THE WEST LINE OF THE
SOUTHEAST QUARTER OF SECTION 33, TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE THIRD
PRINCIPAL MERIDIAN, ALSO SAID POINT BEING 658.08 FEET SOUTHERLY OF THE NORTH
LINE OF SAID SOUTHEAST QUARTER OF SECTION 33; THENCE EASTWARDLY ON A LINE THAT
IS 658.08 FEET SOUTHERLY OF AND PARALLEL TO THE NORTH LINE OF THE SOUTHEAST
QUARTER OF SECTION 33, A DISTANCE OF 66 FEET TO A POINT ON A LINE THAT IS 617
FEET EASTERLY OF AND PARALLEL TO THE WEST LINE OF THE SOUTHEAST QUARTER OF
SECTION 33; THENCE SOUTHERLY ON THE LAST DESCRIBED LINE, A DISTANCE OF 160 FEET
TO A POINT 818.08 FEET SOUTHERLY OF SAID NORTH LINE OF THE SOUTHEAST QUARTER OF
SECTION 33; THENCE WESTERLY ON A STRAIGHT LINE A DISTANCE OF 70.09 FEET MORE OR
LESS TO A POINT ON THE WEST LINE OF SAID PERRY AVENUE, SAID POINT BEING 136.50
FEET SOUTHERLY (AS MEASURED ON THE WEST LINE OF SAID PERRY AVENUE) OF THE POINT
OF BEGINNING; THENCE NORTHERLY A DISTANCE OF 136.50 FEET TO THE POINT OF
BEGINNING, IN COOK COUNTY, ILLINOIS.
ALSO
<PAGE> 60
Riverdale, Illinois
Tract 292
PARCEL 3
AN IRREGULAR PARCEL OF LAND SITUATED IN THE NORTHEAST QUARTER OF THE SOUTHWEST
QUARTER OF SECTION 33, TOWNSHIP 37 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL
MERIDIAN, AND IN BLOCK 20 IN OWNERS SUBDIVISION IN THE SOUTHEAST QUARTER OF
SAID SECTION 33, TOWNSHIP 37 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL
MERIDIAN, LOCATED IN THE VILLAGE OF RIVERDALE DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE WEST LINE OF PERRY AVENUE AS DEDICATED OCTOBER 16,
1925. SAID WEST LINE BEING 551 FEET EASTERLY OF AND PARALLEL TO THE WEST LINE
OF SAID SOUTHEAST QUARTER OF SECTION 33, SAID POINT BEING 658.08 FEET SOUTHERLY
OF THE NORTH LINE OF SAID SOUTHEAST QUARTER OF SECTION 33; THENCE SOUTHWARDLY
ALONG SAID WEST LINE OF PERRY AVENUE A DISTANCE OF 136.5 FEET; THENCE
NORTHWESTWARDLY ON A STRAIGHT LINE 77.85 FEET TO A POINT 73.35 FEET WESTERLY OF
THE SAID WEST LINE OF PERRY AVENUE AND 768.49 FEET SOUTHERLY OF SAID NORTH LINE
OF SAID SOUTHEAST QUARTER OF SECTION 33; THENCE NORTHWESTWARDLY ON A CURVED
LINE WITH A RADIUS OF 1910 FEET CONVEX TO THE NORTHEAST A DISTANCE OF 652.6
FEET MORE OR LESS TO A POINT ON THE NORTHERLY PROPERTY LINE OF THE BALTIMORE
AND OHIO CHICAGO TERMINAL RAILROAD COMPANY IN THE NORTHEAST QUARTER OF THE
SOUTHWEST QUARTER OF SECTION 33, SAID POINT BEING 162.40 FEET WESTERLY FROM THE
WEST LINE OF THE SOUTHEAST QUARTER OF SECTION 33, SAID NORTHERLY PROPERTY LINE
BEING ALSO THE SOUTH LINE OF ACME FOREST VIEW SUBDIVISION, SAID CURVED LINE
INTERSECTING THE SAID WEST LINE OF THE SOUTHEAST QUARTER OF SECTION 33, 665.0
FEET SOUTHERLY OF THE SAID NORTH LINE OF THE SOUTHEAST QUARTER OF SECTION 33;
THENCE EASTWARDLY FROM THE LAST DESCRIBED POINT AND ALONG THE SAID NORTHERLY
PROPERTY LINE OF THE BALTIMORE AND OHIO CHICAGO TERMINAL RAILROAD COMPANY
162.40 FEET TO A POINT ON THE SAID WEST LINE OF THE SOUTHEAST QUARTER OF
SECTION 33; SAID POINT BEING 658.08 FEET SOUTHERLY OF THE SAID NORTH LINE OF
THE SOUTHEAST QUARTER OF SECTION 33; THENCE CONTINUING EASTWARDLY ON A LINE
THAT IS 658.08 FEET SOUTHERLY OF AND PARALLEL TO SAID NORTH LINE OF THE
SOUTHEAST QUARTER OF SECTION 33, A DISTANCE OF 551 FEET TO THE PLACE OF
BEGINNING.
<PAGE> 61
Riverdale, Illinois
Tract 292
ALSO
PARCEL 4
AN IRREGULAR PARCEL OF LAND IN BLOCKS 20 AND 21 IN OWNERS SUBDIVISION IN THE
SOUTHEAST QUARTER OF SECTION 33, TOWNSHIP 37 NORTH, RANGE 14, EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE EAST LINE OF PERRY AVENUE AS DEDICATED
OCTOBER 16, 1925, SAID EAST LINE OF STREET BEING 617 FEET EASTERLY OF AND
PARALLEL TO THE WEST LINE OF SAID SOUTHEAST QUARTER OF SECTION 33, SAID POINT
OF BEGINNING BEING 658.08 FEET SOUTH OF THE NORTH LINE OF SAID SOUTHEAST
QUARTER OF SAID SECTION 33, THENCE EASTWARDLY ON A STRAIGHT LINE PARALLEL WITH
AND 658.08 FEET BY RECTANGULAR MEASUREMENT SOUTH OF THE SAID NORTH LINE OF SAID
SOUTHEAST QUARTER OF SECTION 33, A DISTANCE OF 310.8 FEET MORE OR LESS TO A
POINT ON THE SOUTHWESTERLY LINE OF THE PITTSBURGH CINCINNATI CHICAGO AND ST.
LOUIS RAILROAD'S 100 FOOT RIGHT OF WAY; THENCE SOUTHEASTWARDLY ALONG THE SAID
SOUTHWESTERLY LINE OF THE PITTSBURGH CINCINNATI CHICAGO AND ST. LOUIS RAILROAD,
A DISTANCE OF 476.00 FEET, THENCE NORTHWESTWARDLY ON A STRAIGHT LINE 640.7 FEET
MORE OR LESS TO A POINT ON THE SAID EAST LINE OF PERRY AVENUE 818.08 FEET SOUTH
OF SAID NORTH LINE OF THE SOUTHEAST QUARTER OF SECTION 33; THENCE
NORTHWESTWARDLY ALONG SAID EAST LINE OF PERRY AVENUE 160 FEET TO POINT OF
BEGINNING ALL IN RIVERDALE;
(EXCEPTING THEREFROM THAT PART THEREOF DESCRIBED AS FOLLOWS:)
BEGINNING AT A POINT ON THE SOUTHWESTERLY LINE OF 100 FOOT RIGHT OF WAY OF
PITTSBURGH CINCINNATI CHICAGO AND ST. LOUIS RAILROAD, WHICH IS 476 FEET
(MEASURED ALONG SAID SOUTHWESTERLY RIGHT OF WAY LINE) SOUTHEAST FROM THE POINT
OF INTERSECTION OF SAID SOUTHWESTERLY RIGHT OF WAY LINE WITH A LINE 658.08 FEET
(BY RECTANGULAR MEASUREMENT) SOUTH OF AND PARALLEL WITH THE NORTH LINE OF THE
SOUTHEAST QUARTER OF SAID SECTION 33 AND RUNNING THENCE NORTHWESTWARDLY ALONG A
STRAIGHT LINE (WHICH LINE IF EXTENDED WOULD
<PAGE> 62
Riverdale, Illinois
Tract 292
INTERSECT A LINE 617 FEET EASTERLY FROM AND PARALLEL WITH THE WEST LINE OF SAID
SOUTHEAST QUARTER OF SECTION 33 AT A POINT 818.08 FEET SOUTH OF THE NORTH LINE
OF SAID SOUTHEAST QUARTER) A DISTANCE OF 106.67 FEET TO A POINT; THENCE
NORTHEASTWARDLY ALONG A STRAIGHT LINE A DISTANCE OF 64.62 FEET MORE OR LESS TO
A POINT ON SAID SOUTHWESTERLY RIGHT OF WAY LINE OF THE PITTSBURGH CINCINNATI
CHICAGO AND ST. LOUIS RAILROAD; THENCE SOUTHEASTWARDLY ALONG SAID SOUTHWESTERLY
RIGHT OF WAY LINE OF THE PITTSBURGH CINCINNATI CHICAGO AND ST. LOUIS RAILROAD A
DISTANCE OF 120.09 FEET TO THE PLACE OF BEGINNING.
ALSO
PARCEL 5
LOTS 1 THROUGH 3, 6 THROUGH 10 IN ACME FOREST VIEW SUBDIVISION OF THE NORTH 20
ACRES OF THE EAST 1/2 OF THE SOUTH WEST 1/4 OF SECTION 33, TOWNSHIP 37 NORTH,
RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.
ALSO
THAT PART OF THE NORTH 20 ACRES OF THE EAST 1/2 OF THE SOUTHWEST 1/4 OF
SECTION 33, TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN
(EXCEPTING THEREFROM THE NORTH 33 FEET THEREOF) LYING EAST OF THE WEST LINE OF
SCHOOL STREET (66 FEET WIDE) AND SAID WEST LINE EXTENDED SOUTHERLY TO THE SOUTH
LINE OF ACME AVENUE AND LYING EAST OF THE WEST LINE OF LOT 104 IN ACME FOREST
VIEW SUBDIVISION OF THE NORTH 20 ACRES OF THE EAST 1/2 OF THE SOUTHWEST 1/4 OF
SECTION 33, TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN,
SOUTH OF THE INDIAN BOUNDARY LINE, AND LYING WEST OF THE WEST LINE OF THE 16
FOOT PUBLIC ALLEY (LYING IMMEDIATELY EAST OF AND ADJOINING LOTS 12 THROUGH 22
IN SAID SUBDIVISION) AND SAID WEST ALLEY LINE EXTENDED SOUTHERLY TO THE SOUTH
LINE OF ACME AVENUE IN SAID SUBDIVISION, AND LYING SOUTH OF THE SOUTH LINE OF
ACME AVENUE AND SAID SOUTH LINE EXTENDED EASTERLY
<PAGE> 63
Riverdale, Illinois
Tract 292
TO THE EAST LINE OF THE SOUTHWEST 1/4 OF SAID SECTION 33, ALL IN COOK COUNTY,
ILLINOIS.
ALSO
THAT PART OF THE NORTH 20 ACRES OF THE EAST 1/2 OF THE SOUTHWEST 1/4 OF
SECTION 33, TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN
LYING WEST OF THE WEST LINE OF SCHOOL STREET (66 FEET WIDE) AND LYING WEST OF
THE WEST LINE OF LOT 104 IN ACME FOREST VIEW SUBDIVISION OF THE NORTH 20 ACRES
OF THE EAST 1/2 OF THE SOUTH 1/4 OF SECTION 33, TOWNSHIP 37 NORTH, RANGE 14
EAST OF THE THIRD PRINCIPAL MERIDIAN, SOUTH OF THE INDIAN BOUNDARY LINE, IN
COOK COUNTY, ILLINOIS.
ALSO
PARCEL 6
THE NORTH 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHWEST 1/4 OF SECTION 33,
TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN (EXCEPTING
THEREFROM THE WEST 208.00 FEET THEREOF) AND (EXCEPTING THEREFROM THE NORTH
33.00 FEET THEREOF), IN COOK COUNTY, ILLINOIS.
ALSO
PARCEL 7
THAT PART OF SECTIONS 28 AND 33, TOWNSHIP 37 NORTH, RANGE 14, EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS, TO WIT:
BEGINNING AT A POINT ON THE NORTH AND SOUTH CENTER LINE OF SECTION 33; LYING
SOUTH OF THE INDIAN BOUNDARY LINE, WHERE THE NORTHEASTERLY LINE OF RIGHT OF WAY
LINE OF THE PITTSBURGH AND CINCINNATI AND CHICAGO AND ST. LOUIS RAILWAY
COMPANY, INTERSECTS SAID NORTH AND SOUTH CENTER LINE OF SAID SECTION 33, WHICH
POINT IS 689.91 FEET NORTH OF THE CENTER OF SAID SECTION; RUNNING THENCE
<PAGE> 64
Riverdale, Illinois
Tract 292
NORTHWESTERLY ALONG THE NORTHEASTERLY LINE OF THE RIGHT OF WAY OF THE SAID
PITTSBURGH CINCINNATI CHICAGO AND ST. LOUIS RAILWAY COMPANY, 1704.52 FEET MORE
OR LESS TO THE MIDDLE OF THE CALUMET RIVER; THENCE FOLLOWING THE MIDDLE OF SAID
RIVER NORTHEASTERLY, EASTERLY, SOUTHEASTERLY, SOUTHERLY, SOUTHWESTERLY,
SOUTHERLY, SOUTHEASTERLY AND EASTERLY TO THE NORTHWESTERLY LINE OF THE RIGHT OF
WAY OF THE ILLINOIS CENTRAL RAILROAD COMPANY; THENCE SOUTHWESTERLY ALONG THE
NORTHWESTERLY LINE OF THE RIGHT OF WAY OF SAID ILLINOIS CENTRAL RAILROAD
COMPANY, 521.32 FEET MORE OR LESS TO A POINT WHERE THE NORTHEASTERLY LINE OF
THE RIGHT OF WAY OF THE PITTSBURGH CINCINNATI CHICAGO AND ST. LOUIS RAILWAY
COMPANY INTERSECTS THE NORTHWESTERLY LINE OF THE RIGHT OF WAY OF THE SAID
ILLINOIS CENTRAL RAILROAD COMPANY; THENCE NORTHWESTERLY ALONG THE NORTHEASTERLY
LINE OF THE RIGHT OF WAY OF THE SAID PITTSBURGH CINCINNATI CHICAGO AND ST.
LOUIS RAILWAY COMPANY, 2123.48 FEET TO THE PLACE OF BEGINNING.
EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PARCELS OF REAL ESTATE:
(1) A STRIP OF LAND 50 FEET WIDE LOCATED IN THE SOUTHEAST 1/4 OF SECTION 33,
TOWNSHIP 37 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING ON THE
WESTERLY SIDE OF AND ADJOINING THE 200 FOOT RIGHT OF WAY OF THE ILLINOIS
CENTRAL RAILROAD COMPANY BOUNDED AND DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE WESTERLY LINE OF THE ILLINOIS CENTRAL
RAILROAD COMPANY'S RIGHT OF WAY WITH THE NORTHERLY LINE OF THE RIGHT OF WAY OF
THE PITTSBURGH CINCINNATI CHICAGO AND ST. LOUIS RAILROAD COMPANY AND RUNNING
THENCE WESTERLY ALONG SAID NORTHERLY RIGHT OF WAY LINE TO A POINT 50 FEET
WESTERLY FROM THE WESTERLY LINE OF THE ILLINOIS CENTRAL RAILROAD COMPANY, RIGHT
OF WAY MEASURED PERPENDICULARLY THERETO, THENCE NORTHERLY PARALLEL TO THE RIGHT
OF WAY OF THE ILLINOIS CENTRAL RAILROAD COMPANY TO THE CALUMET RIVER; THENCE
EAST ALONG CALUMET RIVER 50 FEET MORE OR LESS TO THE WESTERLY LINE OF THE
ILLINOIS CENTRAL RAILROAD COMPANY'S 200 FEET RIGHT OF WAY, THENCE SOUTHERLY
ALONG SAID WESTERLY LINE OF RIGHT OF WAY TO THE PLACE OF BEGINNING.
<PAGE> 65
Riverdale, Illinois
Tract 292
(2) THAT PART OF THE SOUTHEAST 1/4 OF SECTION 33, TOWNSHIP 37 NORTH, RANGE 14,
EAST OF THE THIRD PRINCIPAL MERIDIAN, (SOUTH OF THE INDIAN BOUNDARY LINE)
DESCRIBED AS FOLLOWS:
BEGINNING AT THE POINT OF INTERSECTION OF THE NORTHEASTERLY LINE OF THE 100
FOOT RIGHT OF WAY OF THE PENNSYLVANIA RAILROAD (FORMERLY THE PITTSBURGH
CINCINNATI CHICAGO AND ST. LOUIS RAILROAD COMPANY) WITH A LINE 50 FEET
(MEASURED PERPENDICULARLY) NORTHWESTERLY FROM AND PARALLEL WITH THE
NORTHWESTERLY LINE OF THE 200 FOOT RIGHT OF WAY OF THE ILLINOIS CENTRAL
RAILROAD COMPANY AND RUNNING THENCE NORTHEASTWARDLY ALONG THE ABOVE MENTIONED
PARALLEL LINE A DISTANCE OF 387.45 FEET THENCE SOUTHWESTWARDLY A DISTANCE OF
193.96 FEET TO A POINT 146.98 FEET (MEASURED PERPENDICULARLY) NORTHWESTERLY
FROM SAID NORTHWESTERLY RIGHT OF WAY LINE OF THE ILLINOIS CENTRAL RAILROAD
COMPANY; THENCE SOUTHWESTERLY A DISTANCE OF 160.75 FEET TO A POINT ON SAID
NORTHEASTERLY LINE OF THE 100 FOOT RIGHT OF WAY OF THE PENNSYLVANIA RAILROAD
WHICH IS 151.84 FEET (MEASURED PERPENDICULARLY) NORTHWESTERLY FROM SAID
NORTHWESTERLY RIGHT OF WAY LINE OF THE ILLINOIS CENTRAL RAILROAD COMPANY AND
THENCE SOUTHEASTWARDLY ALONG SAID NORTHEASTERLY RIGHT OF WAY LINE A DISTANCE OF
117.59 FEET TO THE PLACE OF BEGINNING), IN COOK COUNTY, ILLINOIS.
PARCEL 8
THAT PART OF THE CONSOLIDATED RAIL CORPORATION (FORMERLY THE PENNSYLVANIA
RAILROAD ORIGINAL) 100 FOOT WIDE RIGHT OF WAY IN SECTION 33, SOUTH OF THE
INDIAN BOUNDARY LINE, IN TOWNSHIP 37 NORTH, RANGE 14, EAST OF THE THIRD
PRINCIPAL MERIDIAN, WHICH LIES SOUTH OF THE GOVERNMENT'S SOUTHERLY CHANNEL LINE
OR EXTENSION THEREOF, IN THE LITTLE CALUMET RIVER, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE NORTHERLY LINE OF SAID RIGHT OF WAY, WHICH IS 80.24
FEET SOUTH OF SAID SOUTHERLY CHANNEL LINE; THENCE SOUTH 81 DEGREES, 26 MINUTES,
40 SECONDS EAST, ALONG SAID NORTHERLY LINE 89.12 FEET TO A POINT OF CURVE;
THENCE SOUTHEASTERLY ALONG SAID NORTHERLY LINE WHICH IS THE ARC OF A CIRCLE,
CONVEX TO THE
<PAGE> 66
Riverdale, Illinois
Tract 292
SOUTHWEST, HAVING A RADIUS OF 3,994.51 FEET, A DISTANCE OF 596.47 FEET TO A
POINT OF TANGENCY; THENCE SOUTH 90 DEGREES, 00 MINUTES, 00 SECONDS EAST, ALONG
SAID NORTHERLY LINE, A DISTANCE OF 1,763.55 FEET; THENCE SOUTH 00 DEGREES, 00
MINUTES, 00 SECONDS WEST, A DISTANCE OF 27.97 FEET; THENCE NORTH 87 DEGREES, 17
MINUTES, 24 SECONDS WEST, A DISTANCE OF 60.07 FEET; THENCE SOUTH 85 DEGREES, 55
MINUTES, 43 SECONDS WEST A DISTANCE OF 68.17 FEET; THENCE SOUTH 82 DEGREES, 50
MINUTES, 46 SECONDS WEST, A DISTANCE OF 205.01 FEET; THENCE SOUTH 80 DEGREES,
55 MINUTES, 47 SECONDS WEST, A DISTANCE OF 19.22 FEET; THENCE SOUTH 88 DEGREES,
34 MINUTES, 14 SECONDS WEST, A DISTANCE OF 123.07 FEET; THENCE SOUTH 86
DEGREES, 40 MINUTES, 53 SECONDS WEST, A DISTANCE OF 93.29 FEET; THENCE NORTH 90
DEGREES, 00 MINUTES, 00 SECONDS WEST ALONG A LINE 67.00 FEET SOUTHERLY OF AND
PARALLEL WITH SAID NORTHERLY RIGHT OF WAY LINE, A DISTANCE OF 1,158.00 FEET;
THENCE SOUTH 83 DEGREES, 42 MINUTES, 04 SECONDS WEST, A DISTANCE OF 120.34
FEET; THENCE SOUTH 88 DEGREES, 21 MINUTES, 26 SECONDS WEST, A DISTANCE OF 77.33
FEET; THENCE NORTH 66 DEGREES, 17 MINUTES, 40 SECONDS, A DISTANCE OF 54.32
FEET; THENCE SOUTH 88 DEGREES, 02 MINUTES, 18 SECONDS WEST, A DISTANCE OF
112.22 FEET; THENCE NORTH 89 DEGREES, 48 MINUTES, 58 SECONDS WEST, A DISTANCE
OF 86.68 FEET; THENCE NORTH 81 DEGREES, 26 MINUTES, 40 SECONDS WEST, ALONG A
LINE 80.00 FEET SOUTHERLY OF AND PARALLEL WITH SAID NORTHERLY LINE, A DISTANCE
OF 284.83 FEET; THENCE NORTH 04 DEGREES, 07 MINUTES, 03 SECONDS EAST, A
DISTANCE OF 80.24 FEET TO THE POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.
13500 South Perry Avenue
Riverdale, Illinois
<PAGE> 67
Riverdale, Illinois
Tract 292
Tax Identification Numbers
1. 25-28-426-002
2. 25-28-429-001
3. 25-33-200-001
4. 25-33-306-024
5. 25-33-306-025
6. 25-33-307-014
7. 25-33-307-018
8. 25-33-307-019
9. 25-33-307-020
10. 25-33-307-023
11. 25-33-307-024
12. 25-33-309-034
13. 25-33-310-012
14. 25-33-400-001
15. 25-33-400-002
16. 25-33-400-012
17. 25-33-400-014
18. 25-33-400-024
19. 25-33-306-003
20. 25-33-306-004
21. 25-33-306-005
22. 25-33-306-006
<PAGE> 68
Riverdale, Illinois
Tract 292
23. 25-33-306-007
24. 25-33-306-023
25. 25-33-307-010
26. 25-33-307-011
27. 25-33-310-008
28. 25-33-307-021
29. 25-33-307-017
30. 25-33-500-011
<PAGE> 69
Chicago, Illinois
Main Parcels - Tract 292B
SCHEDULE A CONTINUED
PARCEL 1:
THAT PART OF SECTION 18, TOWNSHIP 37 NORTH, RANGE 15 EAST OF THE THIRD
PRINCIPAL MERIDIAN, BOUNDED AND DESCRIBED AS FOLLOWS: BEGINNING AT A POINT
WHICH IS 1500 FEET NORTH OF THE CENTER LINE OF EAST 111TH STREET (NOW VACATED)
AND 121.80 FEET WEST OF THE WEST LINE OF BURLEY AVENUE; THENCE NORTH 0 DEGREES
21 MINUTES 13 SECONDS EAST, 1025.17 FEET PARALLEL TO THE WEST LINE OF SOUTH
BURLEY AVENUE TO A POINT ON THE NORTHWESTERLY RIGHT OF WAY LINE OF THE SOUTH
CHICAGO AND SOUTHERN RAILROAD COMPANY AS CONVEYED BY DOCUMENT DATED SEPTEMBER
1, 1887 AND RECORDED JANUARY 25, 1888 IN THE RECORDERS OFFICE OF COOK COUNTY,
ILLINOIS AS DOCUMENT NUMBER 916702; THENCE ALONG THE NORTHWESTERLY RIGHT OF WAY
LINE OF SAID RAILROAD TO THE NORTH LINE OF LOT 3 OF MC REYNOLDS ELEVATOR
SUBDIVISION OF PART OF THE NORTHWEST 1/4 OF THE NORTHEAST 1/4 OF SECTION 18,
AFORESAID, LYING EAST OF THE CALUMET RIVER; THENCE WEST ALONG THE NORTH LINE OF
SAID LOT 3 TO THE EASTERLY DOCK LINE OF THE CALUMET RIVER (AS SAID LINE IS
SHOWN ON GOVERNMENT SURVEY MAP THEREOF RECORDED MAY 17, 1889 IN BOOK 39 OF
PLATS, PAGES 1 TO 9); THENCE SOUTHWESTERLY, SOUTHERLY AND SOUTHEASTERLY ALONG
SAID EASTERLY DOCK LINE TO THE CENTER OF EAST 111TH STREET (NOW VACATED);
THENCE EASTERLY ALONG THE CENTER OF SAID EAST 111TH STREET TO A POINT WHICH IS
456.20 FEET WEST OF THE WEST LINE OF BURLEY AVENUE; THENCE NORTHEASTERLY ALONG
A CURVED LINE WITH A RADIUS OF 400 FEET CONVEX TO THE SOUTHEAST, AN ARC
DISTANCE OF 484.63 FEET TO A POINT OF TANGENCY, SAID POINT BEING 376.02 FEET
NORTH OF THE CENTER LINE OF EAST 111TH STREET (NOW VACATED); THENCE NORTH 0
DEGREES 21 MINUTES 13 SECONDS EAST ALONG THE LINE THAT IS TANGENT TO THE LAST
DESCRIBED CURVE, A DISTANCE OF 673.98 FEET TO A POINT THAT IS 1050.0 FEET NORTH
OF THE CENTER LINE OF EAST 111TH STREET (NOW VACATED) MEASURED ALONG THE LAST
DESCRIBED COURSE; THENCE NORTH 9 DEGREES 49 MINUTES 33 SECONDS EAST, A DISTANCE
OF 455.76 FEET TO THE POINT OF BEGINNING, (EXCEPTING FROM THE ABOVE DESCRIBED
PROPERTY ALL THAT PART OF THE ABOVE DESCRIBED PROPERTY LYING NORTHWESTERLY,
NORTHERLY AND NORTHEASTERLY OF THE SOUTHEASTERLY, SOUTHERLY AND SOUTHWESTERLY
<PAGE> 70
Chicago, Illinois
Main Parcels - Tract 292B
PROPERTY LINES AS DESCRIBED AS PARCELS A AND B IN DOCUMENT 88081403, RECORDED
FEBRUARY 25, 1988, ALSO EXCEPTING THEREFROM THAT PART OF THE NORTHEAST 1/4 OF
SAID SECTION 18 LYING NORTH OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT THE
SOUTHWEST CORNER OF THE NORTHWEST 1/4 OF THE NORTHEAST 1/4 OF SAID SECTION 18;
THENCE NORTH 0 DEGREES 14 MINUTES 58 SECONDS WEST ALONG THE WEST LINE OF THE
NORTHWEST 1/4 OF THE NORTHEAST 1/4 OF SAID SECTION 18, A DISTANCE OF 8.58 FEET
TO THE POINT OF BEGINNING; THENCE NORTH 89 DEGREES 18 MINUTES 29 SECONDS EAST,
A DISTANCE OF 42.42 FEET, MORE OR LESS, TO A POINT ON THE MOST WESTERLY LIMITS
OF PARCEL 5 (TRACT B) AS DESCRIBED IN DOCUMENT 88081403, RECORDED ON FEBRUARY
25, 1988), IN COOK COUNTY, ILLINOIS.
10730 South Burley Avenue
Chicago, Illinois 60617
PARCEL 2
THAT PART OF THE SOUTH 1/2 OF SECTION 18, TOWNSHIP 37 NORTH, RANGE 15 EAST OF
THE THIRD PRINCIPAL MERIDIAN, BOUNDED AND DESCRIBED AS FOLLOWS: BEGINNING AT A
POINT ON THE CENTER LINE OF EAST 111TH STREET (NOW VACATED), A DISTANCE OF
456.20 FEET WEST OF THE WEST LINE OF SOUTH BURLEY AVENUE; THENCE SOUTH 84
DEGREES 52 MINUTES 7 SECONDS WEST, A DISTANCE OF 1273.04 FEET TO A POINT ON THE
EASTERLY CHANNEL LINE OF THE CALUMET RIVER AS ESTABLISHED BY THE SURVEY OF THE
UNITED STATES ENGINEERS OFFICE WAR DEPARTMENT (AS SHOWN ON SHEET NUMBER 6 DATED
MARCH 1939 AND SHEET NUMBER 7 DATED MARCH 1938) TITLED: "CONTROL SURVEY CALUMET
RIVER"; THENCE NORTH 0 DEGREES 39 MINUTES 3 SECONDS WEST ALONG SAID EASTERLY
CHANNEL LINE OF SAID RIVER, A DISTANCE OF 129.26 FEET TO THE POINT OF
INTERSECTION OF THE CENTER LINE OF EAST 111TH STREET (NOW VACATED) WITH SAID
EASTERLY CHANNEL LINE OF SAID RIVER; THENCE SOUTH 89 DEGREES 18 MINUTES 20
SECONDS EAST ALONG THE CENTER LINE OF SAID EAST 111TH STREET (NOW VACATED), A
DISTANCE OF 1269.56 FEET TO THE POINT OF BEGINNING, ALL IN COOK COUNTY,
ILLINOIS.
10730 South Burley Avenue
Chicago, Illinois 60617
<PAGE> 71
Chicago, Illinois
Main Parcels - Tract 292B
PARCEL 3
THAT PART OF THE SOUTH 778.66 FEET OF THAT PART OF THE NORTH 1/2 OF THE
SOUTHWEST 1/4 OF SECTION 18, TOWNSHIP 37 NORTH, RANGE 15, EAST OF THE THIRD
PRINCIPAL MERIDIAN LYING WESTERLY OF THE WESTERLY LINE OF THE CALUMET RIVER AS
SAID WESTERLY LINE IS ESTABLISHED BY THE UNITED STATES GOVERNMENT SURVEY AND
SHOWN ON THE PLAT RECORDED MAY 17, 1889 AS DOCUMENT 1102284 IN BOOK 39 OF
PLATS, PAGES 1 TO 9, BOUNDED AND DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON
THE SOUTH LINE OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18, 724.54
FEET EAST OF (AS MEASURED ON SAID SOUTH LINE OF THE NORTH 1/2 OF THE SOUTHWEST
1/4 OF SECTION 18), THE WEST LINE OF THE SOUTHWEST 1/4 OF SECTION 18; THENCE
SOUTH 89 DEGREES 49 MINUTES 21 SECONDS EAST ON THE SOUTH LINE OF THE NORTH 1/2
OF THE SOUTHWEST 1/4 OF SECTION 18; A DISTANCE OF 348.56 FEET TO THE POINT OF
BEGINNING, THENCE NORTH 46 DEGREES 50 MINUTES 14 SECONDS EAST ON A STRAIGHT
LINE, A DISTANCE OF 1134.54 FEET TO A POINT ON THE NORTH LINE OF SAID SOUTH
778.66 FEET; THENCE SOUTH 89 DEGREES 49 MINUTES 21 SECONDS EAST ON SAID 778.66
FOOT LINE, A DISTANCE OF 24.28 FEET TO THE WESTERLY LINE OF THE CALUMET RIVER
AS ESTABLISHED BY THE UNITED STATES GOVERNMENT SURVEY AFORESAID; THENCE SOUTH
34 DEGREES 53 MINUTES 52 SECONDS EAST ON THE WESTERLY LINE OF THE CALUMET RIVER
AS ESTABLISHED BY THE UNITED STATES GOVERNMENT SURVEY AFORESAID, A DISTANCE OF
84.20 FEET; THENCE SOUTH 46 DEGREES 50 MINUTES 14 SECONDS WEST, A DISTANCE OF
1034.12 FEET TO A POINT ON THE SOUTH LINE OF THE NORTH 1/2 OF THE SOUTHWEST
1/4 OF SECTION 18, SAID POINT BEING 1218.80 FEET EAST OF (AS MEASURED ON SAID
SOUTH LINE OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18), THE WEST LINE
OF THE SOUTHWEST 1/4 OF SECTION 18; THENCE NORTH 89 DEGREES 49 MINUTES 21
SECONDS WEST ON THE SOUTH LINE OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF
SECTION 18, A DISTANCE OF 145.70 FEET TO THE POINT OF BEGINNING (EXCEPTING
THEREFROM THE SOUTH 33.00 FEET THEREOF) IN COOK COUNTY, ILLINOIS.
ALSO
<PAGE> 72
Chicago, Illinois
Main Parcels - Tract 292B
THAT PART OF THE SOUTH 83.00 FEET OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF
SECTION 18, TOWNSHIP 37 NORTH, RANGE 15, EAST OF THE THIRD PRINCIPAL MERIDIAN,
LYING WEST OF A LINE DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE SOUTH
LINE OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18, 724.54 FEET EAST OF
(AS MEASURED ON SAID SOUTH LINE OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF
SECTION 18), THE WEST LINE OF THE SOUTHWEST 1/4 OF SECTION 18; THENCE NORTH 00
DEGREES 05 MINUTES 07 SECONDS EAST ON A STRAIGHT LINE TO A POINT ON THE NORTH
LINE OF THE SOUTH 778.66 FEET OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION
18, SAID POINT BEING 732.89 FEET (MEASURED ON SAID NORTH LINE) EAST OF THE WEST
LINE OF THE SOUTHWEST 1/4 OF SECTION 18, AND LYING EAST OF A LINE DESCRIBED AS
FOLLOWS: BEGINNING AT A POINT ON THE SOUTH LINE OF THE NORTH 1/2 OF THE
SOUTHWEST 1/4 OF SECTION 18, 300.72 FEET EAST OF (MEASURED ON SAID SOUTH LINE
OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18), THE WEST LINE OF THE
SOUTHWEST 1/4 OF SECTION 18; THENCE NORTHWESTERLY ON A STRAIGHT LINE TO A POINT
245.50 FEET EAST OF THE WEST LINE AND 386.79 FEET NORTH OF THE SOUTH LINE
(MEASURED AT RIGHT ANGLES TO AND PARALLEL WITH SAID WEST LINE) OF THE NORTH
1/2 OF THE SOUTHWEST 1/4 OF SECTIONS 18, IN COOK COUNTY, ILLINOIS.
ALSO
THE SOUTH 33.00 FEET OF THAT PART OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF
SECTION 18, TOWNSHIP 37 NORTH, RANGE 15, EAST OF THE THIRD PRINCIPAL MERIDIAN,
LYING WESTERLY OF THE WESTERLY LINE OF THE CALUMET RIVER, AS SAID WESTERLY LINE
IS ESTABLISHED BY THE UNITED STATES GOVERNMENT SURVEY AND SHOWN ON THE PLAT
RECORDED MAY 17, 1889 AS DOCUMENT 1102284 IN BOOK 39 OF PLATS, PAGES 1 TO 9 AND
LYING EAST OF A LINE DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE SOUTH
LINE OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18, 724.54 FEET EAST OF
(AS MEASURED ON SAID SOUTH LINE OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF
SECTION 18), THE WEST LINE OF THE SOUTHWEST 1/4 OF SECTION 18; THENCE NORTH 00
DEGREES 05 MINUTES 07 SECONDS EAST ON A STRAIGHT LINE TO A POINT ON THE NORTH
LINE OF THE SOUTH 778.66 FEET OF THE NORTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION
18, SAID POINT BEING 732.89 FEET (MEASURED ON SAID NORTH LINE) EAST OF THE
<PAGE> 73
Chicago, Illinois
Main Parcels - Tract 292B
WEST LINE OF THE SOUTHWEST 1/4 OF SECTION 18, IN COOK COUNTY, ILLINOIS.
ALSO
ALL THAT PART OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF SECTION 18, TOWNSHIP
37 NORTH, RANGE 15, EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING EAST OF A LINE
PARALLEL TO AND DISTANT 505 FEET EAST OF THE WEST LINE OF SECTION 18 AND LYING
NORTHWEST OF THE FOLLOWING DESCRIBED LINE: BEGINNING AT A POINT ON THE EAST
LINE OF THE WEST 505 FEET AFORESAID, SAID POINT BEING 529.98 FEET SOUTH OF THE
NORTH LINE OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF SAID SECTION 18, SAID
EAST LINE OF THE WEST 505 FEET HAVING A BEARING OF NORTH 00 DEGREES 31 MINUTES
45 SECONDS WEST; THENCE NORTH 46 DEGREES 50 MINUTES 14 SECONDS EAST, A DISTANCE
OF 772.13 FEET TO A POINT ON THE NORTH LINE OF THE SOUTHWEST 1/4 OF THE
SOUTHWEST 1/4 OF SECTION 18, SAID POINT BEING 1073.10 FEET EAST OF (AS MEASURED
ON THE NORTH LINE OF THE SOUTHWEST 1/4 OF SECTION 18), THE WEST LINE OF THE
SOUTHWEST 1/4 OF SECTION 18, SAID POINT ALSO BEING 568.10 FEET EAST OF THE
POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.
ALSO
THAT PART OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF SECTION 18, TOWNSHIP 37
NORTH, RANGE 15, EAST OF THE THIRD PRINCIPAL MERIDIAN, BOUNDED AND DESCRIBED AS
FOLLOWS: BEGINNING AT A POINT ON THE NORTH LINE OF THE SOUTHWEST 1/4 OF THE
SOUTHWEST 1/4 OF SECTION 18, 1073.10 FEET EAST OF (AS MEASURED ON THE NORTH
LINE OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF SECTION 18), THE WEST LINE OF
THE SOUTHWEST 1/4 OF SECTION 18; THENCE SOUTH 89 DEGREES 49 MINUTES 21 SECONDS
EAST ON THE NORTH LINE OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF SECTION 18,
145.70 FEET; THENCE SOUTH 46 DEGREES 50 MINUTES 14 SECONDS WEST, 902.19 FEET TO
A POINT ON A LINE 555 FEET EAST OF (AS MEASURED ON THE NORTH LINE OF THE
SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF SECTION 18), THE WEST LINE OF THE
SOUTHWEST 1/4 OF SECTION 18; THENCE SOUTH 00 DEGREES 31 MINUTES 45 SECONDS
<PAGE> 74
Chicago, Illinois
Main Parcels -- Tract 292B
EAST OF SAID LINE 555 FEET EAST OF THE WEST LINE OF THE SOUTHWEST 1/4 OF
SECTION 18, 702.65 FEET TO THE SOUTH LINE OF THE SOUTHWEST 1/4 OF SECTION 18;
THENCE NORTH 89 DEGREES 47 MINUTES 35 SECONDS WEST ON THE SOUTH LINE OF THE
SOUTHWEST 1/4 OF SECTION 18, 50.0 FEET TO A POINT ON A LINE 505 FEET EAST OF
(AS MEASURED ON THE NORTH LINE OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF
SECTION 18), THE WEST LINE OF THE SOUTHWEST 1/4 OF SECTION 18; THENCE NORTH 00
DEGREES 31 MINUTES 45 SECONDS WEST ON SAID LINE 505 FEET EAST OF THE WEST LINE
OF THE SOUTHWEST 1/4 OF SECTION 18, 791.90 FEET TO A POINT 529.98 FEET SOUTH OF
THE NORTH LINE OF THE SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 OF SECTION 18; THENCE
NORTH 46 DEGREES 50 MINUTES 14 SECONDS EAST, 772.13 FEET TO THE POINT OF
BEGINNING (EXCEPTING THEREFROM THE SOUTH 33 FEET THEREOF) IN COOK COUNTY,
ILLINOIS.
ALSO
THAT PART OF THE SOUTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18, TOWNSHIP 37
NORTH, RANGE 15 EAST OF THE THIRD PRINCIPAL MERIDIAN IN COOK COUNTY, ILLINOIS
LYING WESTERLY OF THE WESTERLY LINE OF THE CALUMET RIVER AS SAID WESTERLY LINE
IS ESTABLISHED BY THE UNITED STATES GOVERNMENT SURVEY AND SHOWN ON THE PLAT
RECORDED MAY 17, 1889 AS DOCUMENT 1102284 IN BOOK 39 OF PLATS, PAGES 1 TO 9,
AND LYING EAST AND SOUTHEASTERLY OF THE FOLLOWING DESCRIBED LINE: BEGINNING AT
A POINT ON THE NORTH LINE OF THE SOUTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18,
1218.80 FEET EAST OF (AS MEASURED ON THE NORTH LINE OF THE SOUTH 1/2 OF THE
SOUTHWEST 1/4 OF SECTION 18), THE WEST LINE OF THE SOUTHWEST 1/4 OF SECTION 18.
SAID NORTH LINE OF THE SOUTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION 18 HAVING A
BEARING OF SOUTH 89 DEGREES 49 MINUTES 21 SECONDS EAST; THENCE SOUTH 46 DEGREES
50 MINUTES 14 SECONDS WEST, 902.19 FEET TO A POINT ON A LINE 555 FEET OF (AS
MEASURED ON THE NORTH LINE OF THE SOUTH 1/2 OF THE SOUTHWEST 1/4 OF SECTION
18), THE WEST LINE OF THE SOUTHWEST 1/4 OF SECTION 18; THENCE SOUTH 00 DEGREES
31 MINUTES 45 SECONDS EAST ON SAID LINE 555 FEET EAST OF THE WEST LINE OF THE
SOUTHWEST 1/4 OF SECTION 18, 702.65 FEET TO THE SOUTH LINE OF THE SOUTHWEST 1/4
OF SECTION 18, (EXCEPTING THEREFROM THE SOUTH 33 FEET OF THAT PART OF THE
SOUTHWEST 1/4 OF THE SOUTHWEST 1/4 LYING EAST OF THE
<PAGE> 75
Chicago, Illinois Main Parcels - 292B
WEST 555 FEET THEREOF, AND LYING WEST OF A LINE 837 FEET EAST OF THE WEST LINE
OF THE SOUTHWEST 1/4) IN COOK COUNTY, ILLINOIS.
PARCEL 4
THE EAST 1/2 OF THE SOUTHEAST 1/4 OF SECTION 13, LYING SOUTH OF THE INDIAN
BOUNDARY LINE, TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL
MERIDIAN, (EXCEPTING THEREFROM, ALL RAILROAD RIGHTS OF WAY NOW LAID OUT AND
EXISTING ACROSS SAID PREMISES; ALSO EXCEPTING THEREFROM, THAT CERTAIN TRACT OF
LAND LOCATED AT THE SOUTHWEST CORNER OF 110TH STREET AND TORRENCE AVENUE, BEING
DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHWEST CORNER OF THE 110TH STREET
AND TORRENCE AVENUE; THENCE SOUTH ON THE WEST LINE OF TORRENCE AVENUE; A
DISTANCE OF 600.19 FEET; THENCE WEST 274 FEET 4 INCHES, MORE OR LESS, TO THE
NORTHEASTERLY LINE OF THE RIGHT OF WAY OF THE CHICAGO AND WESTERN INDIANA
RAILROAD; THENCE NORTHWESTERLY ON THE NORTHEASTERLY LINE OF SAID RIGHT OF WAY,
A DISTANCE OF 714 FEET AND 4 INCHES, MORE OF LESS, TO THE SOUTH LINE OF 110TH
STREET; THENCE EAST ON THE SOUTH LINE OF 110TH STREET, A DISTANCE OF 665 FEET,
MORE OR LESS, TO THE POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.
PARCEL 5
THE NORTHEAST 1/4 OF THE NORTHEAST 1/4 (EXCEPT THE WEST 33 FEET THEREOF) OF
SECTION 24, TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN,
IN COOK COUNTY, ILLINOIS.
11236 South Torrence
Chicago, Illinois 60617
<PAGE> 76
Chicago, Illinois
Main Parcels - Tract 292B
Tax Identification Numbers
1. 25-13-400-008
2. 25-18-200-019
3. 25-18-200-020
4. 25-18-200-021
5. 25-24-201-001
6. 26-18-100-005
7. 26-18-200-007
8. 26-18-200-009
9. 26-18-200-011
10. 26-18-200-013
11. 26-18-210-021
12. 26-18-210-023
13. 26-18-300-019
14. 26-18-300-023
15. 26-18-300-024
16. 26-18-300-026
17. 26-18-301-006
18. 26-18-301-010
19. 26-18-301-011
20. 26-18-400-003
21. 26-18-402-005
22. 26-18-408-005
23. 26-18-500-003
<PAGE> 77
Chicago, Illinois
Main Parcels -- Tract 292B
24. 25-13-400-008
<PAGE> 78
Chicago, Illinois
Additional Parcel -- Tract 292E
SCHEDULE A CONTINUED
PARCEL 1:
A PARCEL OF LAND 30 FEET IN WIDTH LOCATED IN THE SOUTHEAST 1/4 (SOUTH OF THE
INDIAN BOUNDARY LINE) OF SECTION 13, TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE
THIRD PRINCIPAL MERIDIAN, COOK COUNTY, ILLINOIS, AND MORE PARTICULARLY,
DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHEAST CORNER OF SAID SOUTHEAST QUARTER OF SECTION 13, AND
THENCE SOUTH ALONG THE EAST LINE OF SAID SOUTHEAST QUARTER, A DISTANCE OF SIX
HUNDRED FORTY AND EIGHT ONE-HUNDREDTHS (640.08) FEET TO A POINT; THENCE
WESTERLY ALONG A LINE PERPENDICULAR TO THE LAST DESCRIBED A COURSE A DISTANCE
OF FORTY (40) FEET TO A POINT; THENCE WESTERLY ALONG A LINE FORMING AN ANGLE OF
0 DEGREES 42 MINUTES 30 SECONDS TO THE RIGHT WITH A PROLONGATION OF THE LAST
DESCRIBED COURSE, A DISTANCE OF TWO HUNDRED THIRTY-EIGHT AND NINE
ONE-HUNDREDTHS (238.09) FEET MORE OR LESS TO A POINT OF INTERSECTION WITH A
LINE WHICH IS PARALLEL TO AND 30 FEET NORTHEASTERLY OF (MEASURED
PERPENDICULARLY) THE EASTERLY LINE OF THE NEW RIGHT OF WAY OF THE CHICAGO AND
WESTERN INDIANA RAILROAD, SAID POINT OF INTERSECTION BEING THE POINT OF
BEGINNING OF THE PARCEL HEREIN DESCRIBED; THENCE CONTINUING WEST ALONG THE LAST
DESCRIBED COURSE, A DISTANCE OF THIRTY-SIX AND TWENTY-FOUR ONE-HUNDREDTHS
(36.24) FEET, MORE OR LESS, TO A POINT IN THE EASTERLY LINE OF THE NEW RIGHT OF
WAY OF THE CHICAGO AND WESTERN INDIANA RAILROAD; THENCE NORTHWESTERLY ALONG
SAID EASTERLY RIGHT OF WAY LINE, A DISTANCE OF FOUR HUNDRED NINETY-ONE AND
FIFTY-THREE ONE-HUNDREDTHS (491.53) FEET MORE OR LESS TO A POINT WHICH IS TWO
HUNDRED TWENTY-TWO AND EIGHTY ONE-HUNDREDTHS (222.80) FEET SOUTHEASTERLY
(MEASURED ALONG SAID EASTERLY RIGHT OF WAY LINE) OF A LINE WHICH IS PARALLEL TO
AND FORTY (40) FEET SOUTH OF (MEASURED PERPENDICULARLY) THE NORTH LINE OF THE
SOUTHEAST QUARTER OF SAID SECTION 13; THENCE NORTHEASTERLY ALONG A LINE
PERPENDICULAR TO SAID EASTERLY RIGHT OF WAY LINE A DISTANCE OF THIRTY (30) FEET
TO A
<PAGE> 79
Chicago, Illinois
Additional Parcel -- Tract 292E
POINT: THENCE SOUTHEASTERLY ALONG A LINE WHICH IS PARALLEL TO AND THIRTY (30)
FEET NORTHEASTERLY OF (MEASURED PERPENDICULARLY) SAID EASTERLY RIGHT OF WAY
LINE, A DISTANCE OF FIVE HUNDRED ELEVEN AND EIGHT-SEVEN ONE-HUNDREDTHS (511.87)
FEET, MORE OR LESS, TO THE POINT OF BEGINNING.
PARCEL 2
THAT PART OF THE EAST 1/2 OF THE SOUTHEAST 1/4 (SOUTH OF THE INDIAN BOUNDARY
LINE) OF SECTION 13, TOWNSHIP 37 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL
MERIDIAN, IN COOK COUNTY, ILLINOIS DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON A LINE FORTY (40) FEET SOUTH AND FOUR HUNDRED
EIGHTY-FOUR AND NINE-TENTHS (484.9) FEET WEST OF THE INTERSECTION OF THE NORTH
LINE OF THE SOUTHEAST ONE-QUARTER (SE 1/4) (SOUTH OF THE INDIAN BOUNDARY LINE)
OF SECTION THIRTEEN (13), TOWNSHIP THIRTY-SEVEN (37) NORTH, RANGE FOURTEEN (14)
EAST OF THE THIRD PRINCIPAL MERIDIAN WITH THE EAST LINE OF SAID SECTION, SAID
POINT BEING ON A LINE PARALLEL TO THE NORTH LINE OF SAID SECTION; THENCE SOUTH
FOR A DISTANCE OF ONE HUNDRED NINETEEN AND EIGHT-TENTHS FEET (119.8) ON A LINE
PERPENDICULAR TO SAID LINE; THENCE SOUTHWESTERLY FOR A DISTANCE OF ONE HUNDRED
TWENTY AND FIVE-TENTHS, (120.5) FEET TO A POINT ON THE EASTERLY LINE OF RIGHT
OF WAY OF THE CHICAGO AND WESTERN INDIANA RAILROAD COMPANY, SAID RIGHT-OF-WAY
LINE BEING PERPENDICULAR TO SAID SOUTHWESTERLY LINE; THENCE IN A NORTHWESTERLY
DIRECTION ALONG SAID EASTERLY RIGHT-OF-WAY LINE FOR A DISTANCE OF TWO HUNDRED
TWENTY-TWO AND EIGHT-TENTHS (222.8) FEET TO A POINT ON A LINE FORTY (40) FEET
SOUTH AND SEVEN HUNDRED EIGHT (708) FEET WEST OF THE INTERSECTION OF THE NORTH
LINE OF SAID SOUTHEAST ONE-QUARTER (SE 1/4) OF SAID SECTION WITH THE EAST LINE
OF SAID SECTION; THENCE EAST ALONG SAID LINE PARALLEL TO THE NORTH LINE OF
SAID SECTION FOR A DISTANCE OF TWO HUNDRED TWENTY-THREE AND ONE-TENTH (223.1)
FEET TO THE POINT OF BEGINNING.
11236 South Torrence
Chicago, Illinois 60617
<PAGE> 80
Chicago, Illinois
Additional Parcel -- Tract 292E
Tax Identification Numbers
1. 25-13-400-003
2. 25-13-400-006
<PAGE> 81
Riverdale, Illinois
Wildwood -- Tract 292C
SCHEDULE A CONTINUED
THOSE PARTS OF FRACTIONAL SECTIONS 28 AND 33 SOUTH OF THE INDIAN BOUNDARY LINE
AND OF FRACTIONAL SECTION 33 NORTH OF THE INDIAN BOUNDARY LINE IN TOWNSHIP 37
NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
LYING NORTHEASTERLY OF THE NORTHEASTERLY LINE OF THE CONSOLIDATED RAIL
CORPORATION (FORMERLY THE PENNSYLVANIA RAILROAD ORIGINAL) 100 FOOT WIDE RIGHT
OF WAY; LYING SOUTH OF THE SOUTH LINE OF 127TH STREET (PER DOCUMENT NUMBER
11045051) AND AS EXTENDED WEST TO THE NORTHEASTERLY 100 FOOT WIDE RIGHT OF WAY
OF THE CONSOLIDATED RAIL CORPORATION (FORMERLY THE PENNSYLVANIA RAILROAD);
LYING NORTHWESTERLY OF THE U.S. CHANNEL LINE BY GRANT RECORDED FEBRUARY 6, 1939
AS DOCUMENT NUMBER 12268331; AND LYING WEST AND SOUTHWESTERLY OF THE FOLLOWING
DESCRIBED LINE: COMMENCING AT THE POINT OF INTERSECTION OF THE SOUTH LINE OF
WEST 127TH STREET (66 FEET WIDE) AS RECORDED UNDER DOCUMENT NUMBER 11045051 IN
COOK COUNTY, RECORDER'S OFFICE WITH THE SOUTHERLY PROLONGATION OF THE CENTER
LINE OF SOUTH WENTWORTH AVENUE; THENCE WESTERLY ALONG THE SOUTH LINE OF SAID
WEST 127TH STREET A DISTANCE OF 468.65 FEET TO THE PLACE OF BEGINNING FOR SAID
LINE; THENCE SOUTH A DISTANCE OF 646.52 FEET, THENCE SOUTH 46 DEGREES 47
MINUTES 38 SECONDS EAST A DISTANCE OF 525.85 FEET, MORE OR LESS TO THE U.S.
CHANNEL LINE BY GRANT RECORDED FEBRUARY 6, 1939 AS DOCUMENT NUMBER 12268331,
BEING THE POINT OF TERMINATION OF SAID LINE, ALL IN COOK COUNTY, ILLINOIS.
Vacant land at West 127th Street and the Southerly prolongation of
South Wentworth Avenue in Chicago, Illinois.
<PAGE> 82
Riverdale, Illinois
Wildwood Parcel -- Tract 292C
Tax Identification Numbers
1. 25-28-426-004
2. 25-33-109-001
3. 25-33-109-003
<PAGE> 83
Riverdale, Illinois
Wildwood Parcel -- Tract 292C
SCHEDULE B
PRIOR LIENS
1. Taxes for the year 1994 which constitute a lien not yet due and
payable.
2. Document No. 12101891 dated December 14, 1937, recorded January 3,
1938 in the records of Cook County, Illinois.
3. Right of the public, the Sanitary District of Chicago, the State of
Illinois and the United States Government in that portion of land
falling in the Little Calumet River.
4. Rights of the owners of the lands abutting said river to have
maintained the free and unobstructed flow of the waters of said
river.
5. Rights of the City of Chicago granted by an unrecorded instrument
dated July 30, 1938 under Trust Agreement dated January 30, 1924
known as Trust No. 12929.
6. Document No. 12268331 dated July 30, 1938, recorded February 6,
1939, in the records of Cook County, Illinois.
7. Rights of the public, the Municipality and the State of Illinois in
and to that portion of the land taken and used for roads and
highways.
8. Right of way for drainage tiles, drainage ditches, feeders and
laterals, and other drainage easements.
9. Document No. 19704156 recorded January 7, 1966 in the records of Cook
County, Illinois.
<PAGE> 84
Riverdale, Illinois
Burly Lot -- Tract 292D
SCHEDULE B
PRIOR LIENS
1. Taxes for the year 1994 which constitute a lien not yet due and
payable.
<PAGE> 85
Riverdale, Illinois
Tract 292
SCHEDULE B
PRIOR LIENS
1. Taxes for the year 1994 which constitute a lien not yet due and
payable.
2. Rights of the public and the Village of Riverdale in and to that
portion of the land dedicated for street purposes.
3. Rights of the public and the Village of Riverdale in and to that
portion of the land used as a public street.
4. Rights of the Public Service Company of Northern Illinois to
maintain and operate gas and electric facilities located in
Wentworth, Acme and Perry Avenues.
5. Rights of the public and the Village of Riverdale in and to that
portion of the land dedicated for street purposes.
6. Document No. 14978909 dated December 12, 1950 and recorded in the
records of Cook County, Illinois.
7. Document No. 7726349 dated September 29, 1922, recorded November 24,
1922 in the records of Cook County, Illinois.
8. Rights of the public and of the State of Illinois in and to that
portion of the land dedicated for road purposes.
9. Rights of the muncipality, the State of Illinois, the public and the
adjoining owners in and to that portion of the land on Wentworth
Avenue.
10. Document No. 9067935 recorded October 16, 1925 in the records of Cook
County, Illinois.
<PAGE> 86
Riverdale, Illinois
Tract 292
11. Document No. 15937190 recorded June 18, 1954 in the records of Cook
County, Illinois. 12. Rights of the public, the Sanitary District
of Chicago, the State of Illinois and the United States
Government in that portion of the land falling in the Little
Calumet River.
13. Rights of the owners of the lands abutting said river to have
maintained the free and unobstructed flow of the waters of said
river.
14. A 25 foot building line as shown on the plat of Acme Forest View
Subdivision.
15. Document No. 11700787 dated August 20, 1935, recorded October 29,
1935 in the records of Cook County, Illinois.
16. Document No. 10616365 dated March 14, 1930, recorded March 18, 1930
in the records of Cook County, Illinois.
17. Document No. 10905661 recorded in the records of Cook County,
Illinois.
18. Document No. 10796559 dated November 20, 1930, recorded November 24,
1930 in the records of Cook County, Illinois.
19. Document No. 10644929 dated April 22, 1930, recorded April 25, 1930
in the records of Cook County, Illinois.
20. Document No. 10705608 dated July 2, 1930, recorded July 16, 1930 in
the records of Cook County, Illinois.
21. Document No. 10804643 dated November 14, 1930, recorded December 8,
1930 in the records of Cook County, Illinois.
22. Document No. 10617505 dated March 6, 1930, recorded March 19, 1930
in the records of Cook County, Illinois.
<PAGE> 87
Riverdale, Illinois
Tract 292
23. Document No. 10728390 dated August 15, 1930, recorded August 18,
1930 in the records of Cook County, Illinois.
24. Document No. 10710843 dated March 25, 1930, recorded July 23, 1930
in the records of Cook County, Illinois.
25. Document No. 10885011 and Document No. 9565725 recorded in the
records of Cook County, Illinois.
26. Document No. 11689956 dated August 20, 1935, recorded October 18,
1935 in the records of Cook County, Illinois.
27. Document No. 10796559 dated November 20, 1930, recorded November 24,
1930 in the records of Cook County, Illinois.
28. Rights of the public, the State of Illinois and the municipality in
and to that portion of land taken or used for road purposes.
29. Document No. 10173670 dated September 19, 1928, recorded October 11,
1928 in the records of Cook County.
30. Document No. 15822853 dated January 28, 1954, recorded in the records
of Cook County.
31. Document No. 15831589 dated January 27, 1954. recorded February 11,
1954 in the records of Cook County together with Document No.
20600678 dated August 12, 1968, recorded August 30, 1968 in the
records of Cook County.
32. Rights, title and interests of the United States of America in and
to that portion of land acquired by judgment entered December 5,
1938 in Case No. 44147.
33. Document No. 23761352 dated October 5, 1976, recorded December 28,
1976 in the records of Cook County, Illinois.
<PAGE> 88
Riverdale, Illinois
Tract 292
34. Document No. 24312793 dated August 25, 1977, recorded February 3,
1978 in the records of Cook County, Illinois.
35. Document No. 21291385 dated October 9, 1970, recorded October 15,
1970 in the records of Cook County, Illinois.
36. Document No. 19216853 and Document No. 19216854 recorded August 17,
1964 in the records of Cook County, Illinois.
37. Document No. 18702982 recorded January 23, 1963 in the records of
Cook County, Illinois.
38. Document No. 24693101 and Document No. 24693102 recorded October 30,
1978 in the records of Cook County, Illinois.
39. Document No. 26600848 recorded May 11, 1983 in the records of Cook
County, Illinois.
40. Order entered October 5, 1976 in Case No. 76L11683 recorded in the
Circuit Court of Cook County, Illinois.
41. Document No. 25027856 recorded June 28, 1979 in the records of Cook
County, Illinois.
42. Any lien, or right to a lien, for services, labor or material
heretofore or hereafter furnished, imposed by law and not shown by
the public records, arising under the contract between Acme Steel
Company and Raytheon Engineers and Constructors, Inc.
43. Document No. 11714132 recorded in the records of Cook County,
Illinois.
44. Document No. 12502488 recorded in the records of Cook County,
Illinois.
<PAGE> 89
Riverdale, Illinois
Tract 292
45. Document No. 12651149 recorded in the records of Cook County,
Illinois.
46. Document No. 12357759 recorded in the records of Cook County,
Illinois.
47. Document No. 12758342 recorded in the records of Cook County,
Illinois.
48. Document No. 12705445 recorded in the records of Cook County,
Illinois.
49. Document No. 10728391 recorded in the records of Cook County,
Illinois.
50. Document No. 10728388 recorded in the records of Cook County,
Illinois.
51. State of facts disclosed on the survey dated July 12, 1994 as Survey
Number 109316RB prepared by Robert A. Nowicki and Associates Ltd.
<PAGE> 90
Chicago, Illinois
Main Parcels -- Tract 292B
SCHEDULE B
PRIOR LIENS
1. Rights of the United States of America to establish dock lines on
that part of the land bordering on the Calumet River.
2. Document No. 6987187 and Document No. 6987188 recorded November 6,
1920 in the records of Cook County, Illinois.
3. Document No. 19134312 dated May 19, 1964, recorded May 21, 1964 in
the records of Cook County, Illinois.
4. Rights of the United States of America, the State of Illinois, the
City of Chicago and the Sanitary District of Chicago in and to that
part of the land bordering on the Calumet River (New Channel).
5. Document No. 88081403, recorded February 25, 1988 in the records of
Cook County, Illinois.
6. Document No. 12970304 dated September 14, 1942, recorded October 18,
1942 in the records of Cook County, Illinois.
7. Document No. 10637293 dated April 11, 1930, recorded April 16, 1930
in the records of Cook County, Illinois.
8. Document No. 3411544 dated April 25, 1903, recorded July 1, 1903 in
the records of Cook County, Illinois.
9. Document No. 15201550 dated August 9, 1951, recorded October 25,
1951 in the records of Cook County, Illinois.
10. Rights of the public, the City of Chicago and the adjoining owners
in and to the ship canal.
<PAGE> 1
EXHIBIT 4.11
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT (the "Agreement"), dated as of August
11, 1994, by and among ACME METALS INCORPORATED, a Delaware corporation, having
its principal place of business at 13500 South Perry Avenue, Riverdale,
Illinois 60627 (together with its successors and assigns, "AMI"), ACME STEEL
COMPANY, a Delaware corporation having its principal place of business at 13500
South Perry Avenue, Riverdale, Illinois 60627 (together with its successors and
assigns, the "Company"), Harris Trust and Savings Bank, an Illinois banking
corporation with its mailing address at 111 West Monroe Street, Chicago,
Illinois, 60690, as agent (in such capacity and together with its successors
and assigns in such capacity, the "Agent") for the Banks (as hereinafter
defined), and Shawmut Bank Connecticut, National Association, a national
banking association, having an address at 777 Main Street, Hartford,
Connecticut 06115, as collateral agent (in such capacity and together with its
successor and assigns in such capacity, the "Collateral Agent") for the Senior
Note Secured Parties (as hereinafter defined).
R E C I T A L S :
1. Pursuant to that certain Credit Agreement dated as of
August 11, 1994, among the Agent, the lenders party thereto (collectively
including parties subsequently becoming lenders pursuant thereto, the "Banks"),
AMI, the Company, Acme Packaging Corporation, a Delaware corporation, Alpha
Tube Corporation, a Delaware corporation, and Universal Tool and Stamping
Company, Inc., an Indiana corporation (together with the other agreements
executed in connection with the Credit Agreement referred to above among such
entities, and as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Working Capital Facility"), the Banks agreed
to make certain loans and advances from time to time to the borrowers under the
Working Capital Facility.
<PAGE> 2
-2-
2. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Note Indenture"), dated as of August 11, 1994, by and among AMI, the Company,
as subsidiary guarantor of AMI's obligations, each of the other subsidiaries of
AMI, as guarantors (collectively, the "Guarantors") of AMI's obligations, and
Shawmut Bank Connecticut, National Association, as trustee (in such capacity
and together with its successors and assigns in such capacity, the "Note
Trustee") for the holders of the Senior Secured Notes (as hereinafter
defined), AMI is issuing its 12 1/2% senior secured notes due 2002 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Senior Secured Notes") in the aggregate principal amount of $125,000,000.
3. Pursuant to that certain indenture (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Discount Note Indenture"; together with the Note Indenture, the "Indentures"),
dated as of August 11, 1994, by and among AMI, the Company, the Guarantors and
Shawmut Bank Connecticut, National Association, as trustee (in such capacity
and together with its successors and assigns in such capacity, the "Discount
Note Trustee"; together with the Note Trustee, the "Trustees") for the holders
of the Senior Secured Discount Notes (as hereinafter defined), AMI is issuing
its 13 1/2% senior secured discount notes due 2004 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Senior
Secured Discount Notes"; together with the Senior Secured Notes, the "Notes")
in the aggregate principal amount of $117,958,000.
4. Pursuant to that certain term loan agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Term Loan Agreement"), dated as of August 4, 1994 by and among AMI,
Lehman Commercial Paper Inc., as agent (in such capacity and together with its
successors and assigns in such capacity, the "Term Loan Agent"), and the
lenders party thereto (together with all subsequent lenders party to the Term
Loan Agreement, the "Lenders") AMI is borrowing $50,000,000.
<PAGE> 3
-3-
5. The Collateral Agent is the collateral agent under
that certain collateral agency agreement (the "Collateral Agency Agreement"),
dated as of August 11, 1994, for the Trustees (for the benefit of the holders
of the Notes), the Term Loan Agent (for the benefit of the Lenders) and such
other parties which may from time to time become additional lenders to AMI, the
Company and/or the Guarantors (each such lender, a "Permitted Additional
Lender" and collectively, the "Permitted Additional Lenders"; together with the
Trustees, the Term Loan Agent and the Collateral Agent, the "Senior Note
Secured Parties") which may, in accordance with the provisions of clause (xi)
of the definition of "Permitted Liens" in each Indenture and the Term Loan
Agreement as all are in effect on the date hereof, take a security interest in
the Shared Collateral (as defined in the Collateral Agency Agreement) to
secure the financing provided by the Permitted Additional Lenders (such
financing, the "Permitted Replacement Financing") upon the execution and
delivery by each Permitted Additional Lender of a supplement to the Collateral
Agency Agreement as contemplated therein.
6. To secure the payment and performance of the
Noteholder Claim (as hereinafter defined), the Company has granted mortgage
liens on and security interests in the Noteholder Collateral (as hereinafter
defined) to the Collateral Agent for the benefit of the Senior Note Secured
Parties.
7. To secure the payment and performance of the Bank
Claim (as hereinafter defined), the Company has granted security interests in
and liens on the Bank Collateral (as hereinafter defined) to the Agent for the
benefit of the Banks.
8. It is contemplated in the Indentures and the Term
Loan Agreement that the Company may from time to time enter into Permitted
Replacement Financings and/or Permitted Bank Refinancings (as hereinafter
defined).
9. The parties hereto are executing and delivering this
instrument to evidence their agreement in respect of their relative rights with
respect to the Collateral (as hereinafter defined) and
<PAGE> 4
-4-
certain other rights, priorities and interests under the Working Capital
Facility, the Indentures and the Term Loan Agreement and the other documents
executed in connection therewith.
A G R E E M E N T :
In consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the parties
hereby agree as follows:
I. DEFINITIONS
Definitions. Unless otherwise defined herein, the following
terms shall have the meanings specified below:
"Accounts" shall mean all of the Company's presently existing
and hereafter arising or acquired accounts, accounts receivable, margin
accounts, futures positions, book debts, instruments, documents, contracts,
contract rights, choses-in- action, notes, drafts, acceptances, chattel paper,
and other forms of obligations and receivables now or hereafter owned or held
by or payable to the Company relating in any way to Inventory or arising from
the sale of Inventory or the rendering of services by the Company, including
the right to payment of any interest or finance charge with respect thereto,
together with all merchandise represented by any of the accounts; all such
merchandise that may be reclaimed or repossessed or returned to the Company;
all of the Company's rights as an unpaid vendor, including stoppage in transit,
reclamation, replevin and sequestration; all pledged assets and all letters of
credit, guaranty claims, liens, and security interests held by or granted to
the Company to secure payment of any accounts and which are delivered for or on
behalf of any account debtor; all accessions to all of the foregoing described
properties and interests in properties; all guarantees, endorsements and
indemnifications on, or of, any of the foregoing; and all customer lists,
invoices, ledgers, books of account, records, files (whether in printed form or
stored electronically), computer programs, computer disks or tape files,
computer
<PAGE> 5
-5-
printouts, computer runs and other computer-prepared information relating to
any of the foregoing.
"Bank Claim" shall mean all obligations of the Company to the
Agent as set forth in the Working Capital Facility or in the documents
evidencing or securing any Permitted Bank Refinancing, all sums loaned,
advanced to or for the benefit of the borrowers thereunder at any time, any
interest thereon, any future advances, any costs of collection or enforcement,
including, without limitation, reasonable attorneys' and paralegals' costs and
fees, and any prepayment fees with respect thereto.
"Bank Collateral" shall mean the Collateral in which the Agent
has a lien or security interest as described in and provided by subsection
2.1(a).
"Bank Intangibles" shall mean all of the Company's now owned
or hereafter acquired contract rights relating to Bank Collateral, goodwill,
descriptions, name plates, choses-in-action, causes of action, catalogs,
confidential information, consulting agreements, engineering contracts, and
such other assets which relate to the goodwill of the business of the Company
and rights to refunds or indemnification to the extent the foregoing relate to
Bank Collateral, deposit accounts, letters of credit, documents, instruments,
chattel paper, and income tax refunds to the extent relating to Bank
Collateral, claims for tax or other refunds against any city, county, state, or
federal government, or any agency or authority or other subdivision thereof
relating to Bank Collateral, lease agreements relating to Bank Collateral,
corporate or other business records relating to Bank Collateral and all other
general intangibles of every kind and description relating to Bank Collateral;
provided, however, that Bank Intangibles shall in no event include Intellectual
Property.
"Bank Primary Collateral" shall mean, collectively, the
Accounts, Inventory and Bank Intangibles.
"Collateral" shall mean all of the Noteholder Collateral and
Bank Collateral.
<PAGE> 6
-6-
"Copyrights" shall mean all of the Company's now owned or
hereafter acquired copyrights of the United States or any other country, and
all registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States Copyright
Office or in any similar office or agency of the United States or in any
similar office or agency of any other country or any political subdivision
thereof and all copyrights in derivative works, extensions or renewals thereof.
"Enforcement" shall mean, collectively or individually, for
either of the Agent or the Collateral Agent to make demand for payment or
accelerate the indebtedness of the Company (other than any acceleration which
may occur automatically upon the filing of a bankruptcy petition by the
Company) held by such person, repossess any Collateral or commence the judicial
or other enforcement of any of the rights and remedies of the Secured Party
under the Indentures, the Term Loan Agreement, the Working Capital Facility,
the instruments evidencing any Permitted Replacement Financing or any Permitted
Bank Refinancing or any related mortgages, guarantees or agreements or under
applicable law.
"Enforcement Notice" shall mean a written notice delivered, at
a time when an "Event of Default" (as defined in the Indentures, the Term Loan
Agreement or the Working Capital Facility, as applicable) or any event of
default as set forth in the documents evidencing or securing a Permitted
Replacement Financing or Permitted Bank Refinancing has occurred and is
continuing, by either the Collateral Agent or the Agent to the other Secured
Party announcing that Enforcement has commenced, specifying the relevant Event
of Default (as defined in the Indentures, the Term Loan Agreement or the
Working Capital Facility, as applicable) or event of default (as set forth in
the documents evidencing or securing such Permitted Replacement Financing or
Permitted Bank Refinancing, as applicable), stating the current amount of the
Noteholder Claim or Bank Claim and requesting the current amount of the others'
claims.
"Enforcement Period" shall mean the period of time following
the giving by a Secured Party of an Enforcement Notice to
<PAGE> 7
-7-
the other Secured Party until either (i) the final payment or satisfaction in
full of either the Noteholder Claim or the Bank Claim, or (ii) the Collateral
Agent and the Agent agree in writing to terminate the Enforcement Period.
"Equipment" shall mean all of the Company's now owned or
hereafter acquired machinery, apparatus, equipment, fittings, fixtures,
improvements and articles of personal property of every kind and nature
whatsoever attached or affixed to, or located on, the Real Property or used in
connection with the use and enjoyment of the Real Property or the maintenance
or preservation thereof, including, without limitation, all equipment
comprising the Modernization Project (as defined in each Indenture and the Term
Loan Agreement), all manufacturing, storage, handling and other equipment
utilized in connection with the production and marketing of steel,
semi-finished steel, steel ingots, slabs, steel strips and coils, tools,
utility systems, fire sprinkler and alarm systems, HVAC equipment, boiler,
electronic data processing, telecommunications or computer equipment,
refrigeration, electronic monitoring, water or lighting systems, power,
sanitation, waste removal, pollution abatement or control, elevators, window
cleaning, maintenance or other systems or equipment, all indoor or outdoor
furniture, appliances or supplies, and all other articles used or useful in
connection with the use, operation, maintenance or repair of any part of the
Real Property, together with any and all parts, improvements, additions,
replacements, accessions, and substitutions thereto or therefor, and all
licenses and other rights of the Company relating thereto, whether in the
possession and control of the Company, or in the possession and control of a
third party for the account of the Company and all maintenance and warranty
records relating thereto.
"Intellectual Property" shall mean, collectively, all
Copyrights, Patents and Trademarks and all licenses therefor and all licenses
under the patents, trademarks, copyrights and trade secrets of third parties to
the Company.
"Inventory" shall mean all now owned or hereafter acquired
inventory of the Company including, without limitation,
<PAGE> 8
-8-
all goods, merchandise, raw materials, work-in-process and finished goods
intended for sale or lease, of every kind and description now or at any time
hereafter owned by the Company, together with all the containers, packing,
packaging, shipping and similar materials related thereto, and including such
inventory as is temporarily out of the Company's custody or possession and
items in transit and including any returns and repossessions upon any accounts,
documents, instruments or chattel paper relating to or arising from the sale of
inventory (as such documents, instruments or chattel paper relate to the sale
of such inventory) and including, without limitation, all other classes of
merchandise, materials, parts, supplies, work-in-process, inventories and
finished products intended for sale by the Company and all substitutions
therefor or replacements thereof, and all additions and accessions thereto, and
all invoices, ledgers, books of account, records, files (whether in printed
form or stored electronically), computer programs, computer disks or tape
files, computer printouts, computer runs and other computer-prepared
information relating to any of the foregoing.
"Noteholder Claim" shall mean all obligations of the Company
to the Collateral Agent and the other Senior Note Secured Parties under the
Indentures, the Term Loan Agreement, the Notes, any instruments evidencing or
securing a Permitted Replacement Financing and any mortgages or other security
instruments securing the Company's obligations in respect of its guarantee of
the Notes, including in each case, without limitation, all principal and
interest owing by AMI, any future advances, any costs of collection or
enforcement, and reasonable attorneys' and paralegals' costs and fees.
"Noteholder Collateral" shall mean the Collateral in which the
Collateral Agent and the Secured Parties have a lien or security interest as
described in and provided by subsection 2.1(b).
"Noteholder Intangibles" shall mean all of the Company's now
owned or hereafter acquired contract rights relating to Noteholder Collateral,
goodwill, descriptions, name plates, choses-in-action, causes of action,
catalogs, confidential
<PAGE> 9
-9-
information, consulting agreements, engineering contracts, and such other
assets which relate to the goodwill of the business of the Company and rights
to refund or indemnification to the extent the foregoing relate to Noteholder
Collateral, deposit accounts, letters of credit, documents, instruments,
chattel paper, and income tax refunds to the extent relating to Noteholder
Collateral, claims for tax or other refunds against any city, county, state, or
federal government, or any agency or authority or other subdivision thereof
relating to Noteholder Collateral, lease agreements relating to Noteholder
Collateral, corporate or other business records relating to Noteholder
Collateral and all other general intangibles of every kind and description
relating to Noteholder Collateral.
"Noteholder Primary Collateral" shall mean, collectively, the
Real Property, Equipment, Noteholder Intangibles, Securities and Intellectual
Property.
"Patents" shall mean all of the Company's now owned or
hereafter acquired letters patent of the United States or any other country,
and all patent applications therefor, including, without limitation, patents
and patent applications in the United States Patent and Trademark Office (the
"PTO") or in any similar office or agency of the United States or in any
similar office or agency of any other country or any political subdivision
thereof, and all reissues, re-examinations, continuations, divisionals,
continuations-in-part or extensions thereof and all associated priority rights.
"Permitted Bank Refinancing" means any amendment, supplement,
refinancing or replacement of the Working Capital Facility as permitted by the
Indentures and the Term Loan Agreement in accordance with the definition of
"Working Capital Facility" therein that is secured by a lien on the Bank
Collateral; provided, however, that a representative of the lenders thereunder
executes a supplement to this Agreement under which it becomes the "Agent" for
all purposes hereunder, and agrees to comply with all the terms hereof.
<PAGE> 10
-10-
"Proceeds" shall have the meaning assigned to the term
"proceeds" under the UCC and, in any event, shall include, without limitation,
any and all (i) proceeds of any insurance, indemnity, warranty or guarantee
payable to the Collateral Agent, to the Agent or to the Company from time to
time with respect to any of the Collateral, (ii) payments (in any form
whatsoever) made or due and payable to the Company from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting under color of a governmental authority), (iii) products
of the Collateral and (iv) other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Real Property" shall mean the real property described on
Schedule I hereto and mortgaged to the Collateral Agent pursuant to a certain
mortgage to be recorded as soon as practicable following the execution and
delivery of this Agreement and all other real property mortgaged to the
Collateral Agent, and all improvements and fixtures on and interests in such
real property, including, without limitation, such improvements and fixtures on
and interests in such real property as to which security interests are
perfected by UCC-1 financing statements for fixtures.
"Secured Party" shall mean any of the Collateral Agent (for
the benefit of the Senior Note Secured Parties) or the Agent (for the benefit
of the Banks).
"Securities" shall mean all present and future securities
owned by the Company, including but not limited to, the capital stock of
Alabama Metallurgical Corporation, a Washington corporation, held by the
Collateral Agent pursuant to a certain stock pledge agreement dated as of the
date hereof and all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital, income, profits and other property or
interests from time to time received, receivable or otherwise distributed to
the Company in respect of or in exchange for any or all of the foregoing.
<PAGE> 11
-11-
"Trademarks" shall mean all of the Company's now owned or
hereafter acquired trademarks, trade names, trade styles, service marks,
designs and general intangibles of like nature, and all registrations and
recordings thereof, including, without limitation, applications, registrations
and recordings in the PTO or in any similar office or agency of the United
States or any State thereof, or in any similar office or agency of any other
country or any political subdivision thereof, together with the goodwill
associated therewith, and all reissues, amendments, extensions or renewals
thereof.
"UCC" shall mean the Uniform Commercial Code as in effect in
any relevant jurisdiction.
II. INTERCREDITOR PROVISIONS
2.1. Liens. Notwithstanding the date, manner or order of
perfection of the security interests and liens granted to the Agent or the
Collateral Agent, and notwithstanding any provisions of the UCC, or any
applicable law or decision or the Working Capital Facility, the Indentures, the
Term Loan Agreement or any instruments evidencing any Permitted Replacement
Financing or Permitted Bank Refinancing, or whether the Agent or the Collateral
Agent holds possession of all or any part of the Collateral, or the granting
provisions of any mortgage or security instrument or the provisions of any
financing statement, the following, as between the Agent and the Collateral
Agent, shall be the relative rights with respect to the various security
interests and liens of the Agent and the Collateral Agent in the Collateral:
(a) The Agent shall have a first and prior security
interest in or lien on the Bank Primary Collateral and Proceeds
thereof to the extent such Proceeds do not constitute Noteholder
Primary Collateral and the Collateral Agent shall have no lien thereon
or security interest therein.
(b) The Collateral Agent shall have a first and prior
security interest in or mortgage lien on the Noteholder Primary
Collateral and Proceeds thereof to the extent such
<PAGE> 12
-12-
Proceeds do not constitute Bank Primary Collateral and the Agent shall
have no lien thereon or security interest therein.
2.2. Distribution of Proceeds of Collateral. All Proceeds of
Collateral shall be distributed in accordance with the following procedure:
(a) Proceeds of the Noteholder Collateral shall be
applied to the Noteholder Claim (to be distributed pro rata among the
Trustees, the Agent and any Permitted Additional Lender to the extent
that such Noteholder Collateral secures Permitted Replacement
Financing of such Permitted Additional Lender, on the basis of the
respective outstanding principal amounts of the Notes, the Loans (as
defined in the Term Loan Agreement) and the applicable Permitted
Replacement Financing or as may be otherwise determined pursuant to
the Collateral Agency Agreement). After the Noteholder Claim is paid
in full or otherwise satisfied, any remaining proceeds of the
Noteholder Collateral shall be paid over to the Company or as
otherwise required by applicable law.
(b) Proceeds of the Bank Collateral shall be applied to
the Bank Claim. After the Bank Claim is paid in full or otherwise
satisfied, any remaining proceeds of the Bank Collateral shall be paid
over to the Company or as otherwise required by applicable law.
2.3. Enforcement Actions. The Agent agrees not to commence
Enforcement with respect to the Working Capital Facility and/or any security
instrument relating thereto or any instrument evidencing or securing any
Permitted Bank Refinancing until an Enforcement Notice has been given to and
received by the Collateral Agent. The Collateral Agent agrees not to commence
Enforcement with respect to the Indentures, the Notes, the Term Loan Agreement
and/or any security instrument relating thereto or any instrument evidencing or
securing any Permitted Replacement Financing until an Enforcement Notice has
been given to and received by the Agent. The Agent, on the one hand, and the
Collateral Agent, on the other hand, agree that during an Enforcement Period:
<PAGE> 13
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(a) The Agent may, at its option, take any action to
accelerate payment of the Bank Claim and to foreclose or realize upon
or enforce any of its rights with respect to the Bank Collateral,
without the prior written consent of the Collateral Agent.
(b) The Collateral Agent may, at its option, take any
action to accelerate payment of the Noteholder Claim and to foreclose
or realize upon or enforce any of its rights with respect to the
Noteholder Collateral, without the prior written consent of the Agent.
(c) For up to one-hundred and twenty (120) days following
the issuance of an Enforcement Notice, the Agent may (i) enter upon
any or all of the Company's premises, whether leased or owned, without
force or process of law and without obligation to pay rents, royalties
or compensation to the Collateral Agent or the Company (except that
the Agent shall pay rents payable to lessors of leased Real Property
used or occupied by the Agent); and (ii) use the Equipment,
Intellectual Property, Noteholder Intangibles and the Real Property to
the extent necessary to complete the manufacture of the Inventory,
collect the Accounts and sell or otherwise dispose of the Bank
Collateral. In the event any occurrence beyond the reasonable control
of the Agent shall prevent or otherwise prohibit the Agent or its
designees from taking any action with respect to the Bank Collateral
as contemplated in this subsection 2.3(c), including, without
limitation, any bankruptcy, insolvency or similar proceeding with
respect to the Company or its properties, such 120-day period shall be
extended by the number of days that the Agent's or its designees'
access to the Bank Collateral shall have been prevented thereby;
provided, however, that the number of days within such extension
period shall in no event exceed sixty (60) days. During such 120-day
period and thereafter, as applicable, if the Agent has entered upon
the Company's premises as provided herein, the Agent shall use its
best efforts to complete the manufacture of the Inventory and sell or
otherwise dispose of the Bank Collateral, and the
<PAGE> 14
-14-
Collateral Agent and their designees shall have unrestricted access to
the Noteholder Collateral for the purpose of evaluating the Noteholder
Collateral and showing it to potential purchasers.
2.4. Additional Credit Extensions. Subject to any
restrictions on the Company contained in the Indentures, the Term Loan
Agreement, the Working Capital Facility or the instruments evidencing or
securing any Permitted Replacement Financing or any Permitted Bank Refinancing,
any Secured Party shall have the right, without the consent of the other, to
extend credit to the Company in excess of the maximum amounts set forth in the
Working Capital Facility, the Indentures, the Term Loan Agreement or the
instruments evidencing or securing any Permitted Replacement Financing or any
Permitted Bank Refinancing, as applicable, and whether under such agreements or
under any other agreements with the Company, secured by the Bank Collateral or
the Noteholder Collateral, as the case may be, and otherwise having the same
rights as herein contained. Notwithstanding the foregoing, if any such
advance(s) are secured by collateral other than the Collateral, the Secured
Party making such advances shall have no obligation to marshal the assets of
the Company before enforcing its rights in the Collateral hereunder. Each
Secured Party shall use its best efforts to give to the others notice of its
intent to extend credit, but the failure to do so shall not affect the validity
of the extension of credit, create a cause of action against the party failing
to give such notice or create any claim or right on behalf of any third party.
2.5. Notices of Default. The Agent, on the one hand, and the
Collateral Agent, on the other hand, agree to use their best efforts to give to
the other copies of any notice of the occurrence or existence of an Event of
Default, an event of default under the Term Loan Agreement or any event of
default under the instruments evidencing or securing any Permitted Replacement
Financing or any Permitted Bank Refinancing sent to the Company and/or AMI
simultaneously with the sending of such notice to the Company and/or AMI, but
the failure to do so shall not affect the validity of such notice or create a
cause of action against the
<PAGE> 15
-15-
Secured Party failing to give such notice or create any claim or right on
behalf of any third party. The sending of such notice shall not give the
recipient the obligation to cure such Event of Default or event of default.
2.6. Agent for Perfection; Actions with Respect to
Collateral. The Agent and the Collateral Agent hereby appoint each other as
agent for purposes of perfecting their respective security interests in and
liens on Collateral which is of a type such that perfection of a security
interest therein may be accomplished only by possession thereof by the secured
party. To the extent that either the Collateral Agent, on the one hand, or the
Agent, on the other hand, obtains possession of the other's Collateral, the
Secured Party having possession shall notify the other Secured Party of such
fact and shall deliver such Collateral to the Secured Party having the claims
in respect thereof under Section 2.1 upon request of such Secured Party.
2.7. Insurance. Notwithstanding anything to the contrary
herein or in any agreement referred to herein, the Company shall obtain
satisfactory lender's loss payable endorsements naming the Secured Parties, as
their interests may appear, with respect to policies which insure Collateral,
or with such other designation as the Agent, on the one hand, and the
Collateral Agent, on the other hand, may agree. Each of the Agent, on the one
hand, and the Collateral Agent, on the other hand, shall have the sole and
exclusive right, as against the other, to adjust settlement of such insurance
policy in the event of any loss to its Collateral and to exercise the rights
provided in any security instrument to waive or amend insurance requirements or
to give consents relating to the application of any proceeds of insurance,
including, without limitation, consents relating to restoration of Collateral
following a casualty. All proceeds of such policy shall be paid to the Secured
Party named in the applicable loss payable endorsement and having the claim as
set forth herein and disbursed in accordance with the applicable provisions of
the relevant governing documents.
<PAGE> 16
-16-
2.8. UCC Notices. In the event that any Secured Party shall
be required by the UCC or any other applicable law to give notice to any other
Secured Party of any intended disposition of Collateral, such notice shall be
given in accordance with Section 3.1 hereof and ten (10) days' notice shall be
deemed to be commercially reasonable.
III. MISCELLANEOUS
3.1. Notices. All notices hereunder shall be effective upon
receipt, and shall be in writing and sent by certified mail, return receipt
requested, courier service guaranteeing next day delivery, telegram or telex,
to: (a) the Company or AMI, at the address set forth above, Attention:
Corporate Secretary with a copy to the Treasurer, (b) the Agent, at the address
set forth above, Attention: Mr. Richard H. Robb, or (c) the Collateral Agent,
at the address set forth above, Attention: Corporate Trust Administration or
to such other address or person as any of the parties hereto may designate in
writing to the other parties.
3.2. Contesting Liens or Security Interest. Neither the
Agent, on the one hand, nor the Collateral Agent, on the other hand, shall
contest the validity, perfection or enforceability of any lien or security
interest granted to the other or others and each shall cooperate in the defense
of any action contesting the validity, perfection or enforceability of such
liens or security interests brought by the Company or any third party;
provided, however, that such cooperation shall not include the expenditure of
amounts other than de minimis amounts; and provided, further, that the
cooperating Secured Party shall, upon the reasonable request of the other
Secured Party, continue to cooperate in the defense of any such action
notwithstanding that such cooperation shall include the expenditure of amounts
in excess of de minimis amounts so long as the requesting Secured Party
advances to the cooperating Secured Party sufficient amounts, in cash, to cover
any and all costs and expenses reasonably incurred by the cooperating Secured
Party in compliance with such request. Each Secured Party shall also use its
best efforts to notify the other Secured Party of any change in the location of
any of the Collateral or the business operations of
<PAGE> 17
-17-
the Company or of any change in law which would make it necessary or advisable
for any other Secured Party to file additional financing statements in another
location as against the Company, but the failure to do so shall not create a
cause of action against the Secured Party failing to give such notice or
create any claim or right on behalf of any third party.
3.3. No Additional Rights for Company Hereunder. If any
Secured Party shall enforce its rights or remedies in violation of the terms of
this agreement, the Company agrees that it shall not raise such violation as a
defense to the enforcement by any other Secured Party under the Working Capital
Facility, the Indentures, the Term Loan Agreement and/or any instrument
evidencing or securing any Permitted Replacement Financing or Permitted Bank
Refinancing, nor assert such violation as a counterclaim or basis for setoff or
recoupment against any Secured Party.
3.4. Independent Credit Investigations. None of the Agent,
the Collateral Agent, any Permitted Additional Lender and their respective
directors, officers, agents or employees, shall be responsible to the other or
to any other person, firm or corporation, for the Company's solvency, financial
condition or ability to repay the Bank Claim or the Noteholder Claim, or for
statements of the Company, oral or written, or for the validity, sufficiency or
enforceability of the Bank Claim, the Noteholder Claim, the Working Capital
Facility, the Indentures, the Term Loan Agreement, the instruments evidencing
any Permitted Replacement Financing or Permitted Bank Refinancing or any liens
or security interests granted by the Company in connection therewith. Each
Secured Party has entered into its respective financing agreements with the
Company based upon its own independent investigation, and makes no warranty or
representation to the other Secured Party nor does it rely upon any
representation of any other Secured Party with respect to matters identified or
referred to in this Section.
3.5. Limitation of Liability. Except as provided in this
Agreement, neither the Agent, on the one hand, nor the Collateral Agent, on the
other hand, shall have any liability to
<PAGE> 18
-18-
the other or others except for gross negligence or willful misconduct.
3.6. Amendments to Financing Arrangements or to this
Agreement. The Agent, on the one hand, and the Collateral Agent, on the other
hand, shall each use their best efforts to notify the other of any amendment or
modification to the Working Capital Facility or any related security
instrument, the Term Loan Agreement or any related security instrument or the
Indentures or any related security instrument or the instruments evidencing or
securing any Permitted Replacement Financing or Permitted Bank Refinancing,
but the failure to do so shall not create a cause of action against the party
failing to give such notice or create any claim or right on behalf of any third
party. The Agent, on the one hand, and the Collateral Agent, on the other
hand, shall, upon request of the other or others, provide copies of all such
modifications or amendments and copies of all other documentation relevant to
the Collateral except as prohibited by the Indentures or the Term Loan
Agreement. All modifications or amendments of this agreement must be in
writing and duly executed by an authorized officer of each party to be binding
and enforceable.
3.7. Marshalling of Assets. The Agent hereby waives any and
all rights to have the Noteholder Collateral, or any part thereof, marshalled
upon any foreclosure of any liens of the Collateral Agent. The Collateral
Agent hereby waives any and all rights to have the Bank Collateral, or any part
thereof, marshalled upon any foreclosure of any liens of the Agent.
3.8. Successors and Assigns. This agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of each
of the parties hereto, but does not otherwise create, and shall not be
construed as creating, any rights enforceable by any other person not a party
to this agreement.
3.9. Information. Upon the request of either the Agent, on
the one hand, or the Collateral Agent, on the other hand, each of the Secured
Parties shall use its best efforts to provide the others with all information
relating to the transactions
<PAGE> 19
-19-
contemplated by the Working Capital Facility, the Indentures, the Term Loan
Agreement and any Permitted Replacement Financing or Permitted Bank Refinancing
and with any credit or other information with respect to any of the Collateral
except as prohibited by the Indenture or the Term Loan Agreement.
3.10. Permitted Bank Refinancing. The Company shall have the
right from time to time to effect a Permitted Bank Refinancing. Each of the
Agent and the Collateral Agent shall cooperate in all reasonable respects upon
request made from time to time by the Company to accomplish and document any
Permitted Bank Refinancing. Such cooperation shall include, in the case of the
Collateral Agent, without limitation, (i) the execution and delivery of
estoppel letters and counsel opinions, in customary form, as may be reasonably
requested by the Company or the counterparty to any Permitted Bank Refinancing
or any title insurer in connection therewith, (ii) the execution and delivery
of an appropriate amendment and/or supplement to this Agreement (including,
without limitation, to the extent reasonably required, amendments to the
definitions of "Bank Claim" and the "Agent"), and of any related certificates,
notices or other instruments reasonably requested to be executed in connection
with such Permitted Bank Refinancing and (iii) attendance at meetings related
to, and any closing of, a Permitted Bank Refinancing. Notwithstanding the
foregoing, no action requested and no document required to be executed and
delivered hereunder shall adversely affect the Collateral Agent's substantive
rights hereunder. All reasonable expenses incurred by any Secured Party in
complying with the provisions of this Section shall be reimbursed by the
Company.
3.11. Permitted Replacement Financings. The Company shall
have the right from time to time to effect Permitted Replacement Financings and
refinancings thereof. The Agent shall cooperate in all reasonable respects to
accomplish and document any Permitted Replacement Financing requested by the
Company. Such cooperation shall include, without limitation, (i) the execution
and delivery of estoppel letters and counsel opinions in customary form, as may
reasonably be requested by the Company, the Collateral Agent or the
counterparty to any Permitted Replacement Refinancing
<PAGE> 20
-20-
or any title insurer in connection therewith, (ii) the execution and delivery
of supplements or amendments to this Agreement and the delivery of any related
certificates, notices or other instruments reasonably requested to be executed
in connection with such Permitted Replacement Financing or refinancing thereof
and (iii) attendance at meetings relating to, and any closing of, a Permitted
Replacement Financing. Notwithstanding the foregoing, no action requested and
no document required to be executed and delivered hereunder shall adversely
affect the Agent's substantive rights hereunder. All reasonable expenses
incurred by any Secured Party in complying with the provisions of this Section
shall be reimbursed by the Company.
3.12. Termination. The Agreement will terminate
contemporaneously with the earlier to occur of (i) the termination of the
Collateral Agency Agreement, when all of the Notes have been repaid in full and
all of the obligations of the Company under the Indentures, the guarantee of
the Notes and the obligations under the Term Loan Agreement have terminated or
(ii) all of the Company's obligations now or hereafter evidenced by the
Working Capital Facility or the documents evidencing or securing any Permitted
Bank Refinancing shall have been repaid in full and terminated in accordance
with the terms thereof.
3.13. Further Assurances. Each of the parties hereto shall
execute and file all such further documents and instruments, and perform such
other acts, as may be necessary or advisable to effectuate the purposes of this
Agreement.
3.14. Inconsistent Provisions. If any provision of this
Agreement shall be inconsistent with, or contrary to, any provision in the
Working Capital Facility, the Indentures, the Term Loan Agreement, the Notes,
the documents evidencing or securing any Permitted Replacement Financing or
Permitted Bank Refinancing or any other instrument delivered in connection with
the transactions contemplated thereby, the applicable provision in this
Agreement shall be controlling and shall supersede such inconsistent provision
to the extent necessary to give full effect to all provisions contained in this
Agreement.
<PAGE> 21
-21-
3.15. CONSENT TO JURISDICTION. THE PARTIES HERETO HEREBY
CONSENT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
WITHIN NEW YORK COUNTY, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT
TO THE COLLATERAL AGENT'S OR THE AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS
RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY
HERETO ACCEPTS FOR AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, IN ANY SUCH ACTIONS OR PROCEEDINGS THE EXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT, WITH ANY JUDGMENT SUBJECT TO RIGHTS OF APPEAL IN THE
JURISDICTIONS SET FORTH ABOVE.
3.16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
3.17. Authority. Each of the parties represents and warrants
to all other parties hereto that the execution, delivery and performance by or
on behalf of such party to this Agreement has been duly authorized by all
necessary action, corporate or otherwise, does not violate any provision of
law, governmental regulation, or any Agreement or instrument by which such
party is bound, and requires no governmental or other consent that has not been
obtained and is not in full force and effect.
3.18. Counterparts. This Agreement may be executed in any
number of counterparts, each counterpart, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together,
shall constitute one and the same Agreement.
3.19. Severability of Provisions. Any provision of this
Agreement that is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability, without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
<PAGE> 22
3.20. Headings. The article and section headings used in
this Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
3.21. Concerning Collateral Agent. Notwithstanding anything
to the contrary set forth herein, no provision of this Agreement shall require
the Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of its duties hereunder, or in the
exercise of any of its powers, if it shall have reasonable grounds for
believing repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it including, without limitation,
liability relating in any way to Environmental Laws or Hazardous Materials (as
such terms are defined in the mortgage relating to the Real Property).
<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as an instrument under seal as of the date and year first above
written.
HARRIS TRUST AND SAVINGS BANK
By: /s/ Richard H. Robb
-------------------------------
Name: Richard H. Robb
Title: Vice President
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ Susan T. Keller
------------------------------
Name: Susan T. Keller
Title: Vice President
<PAGE> 24
The undersigned hereby acknowledge and agree to the foregoing
terms and provisions. By executing this agreement, the undersigned agree to be
bound by the provisions hereof as they relate to the relative rights of the
Collateral Agent, any Permitted Additional Lender and the Agent as among such
parties; provided, however, that nothing in this agreement shall amend, modify,
change or supersede the respective terms of the Indentures, the Term Loan
Agreement or the Working Capital Facility or the documents evidencing or
securing any Permitted Replacement Financing or Permitted Bank Refinancing (or
any other document to which the undersigned may be parties) as between each
party and the undersigned as a borrower and/or guarantor, and in the event of
any conflict or inconsistency between the terms of this Agreement and the
Indentures, the Term Loan Agreement or the Working Capital Facility or the
documents evidencing or securing any Permitted Replacement Financing or
Permitted Bank Refinancing (or any such other documents as the case may be),
the terms of the Indentures, the Term Loan Agreement, the Working Capital
Facility or the documents evidencing or securing any Permitted Replacement
Financing or Permitted Bank Refinancing, as the case may be, shall govern the
relationship between each such party and the undersigned, as borrower and/or
guarantor. The undersigned further agree that the terms of this Agreement
shall not give the undersigned any substantive rights vis-a-vis the holders of
the Notes, the Lenders, any Permitted Additional Lender, the Collateral Agent,
the Banks or the Agent.
ACME METALS INCORPORATED
By: /s/ Jerry F. Williams
----------------------------
Name: Jerry F. Williams
Title: Vice President
ACME STEEL COMPANY
By: /s/ S. D. Bennett
----------------------------
Name: Stephen D. Bennett
Title: President
<PAGE> 1
EXHIBIT 4.12
DISBURSEMENT AGREEMENT
DISBURSEMENT AGREEMENT ("Agreement"), dated as of August 11,
1994, between Shawmut Bank Connecticut, National Association, a national
banking association, as collateral agent (in such capacity and together with
its successors and assigns in such capacity, the "Collateral Agent") and Acme
Metals Incorporated, a Delaware corporation (together with its successors and
assigns, the "Company").
R E C I T A L S
A. Pursuant to an indenture, dated as of the date hereof
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Note Indenture"), among the Company, its subsidiaries as
guarantors, and the Trustee, as defined therein (the "Note Trustee"), the
Company has issued $125,000,000 aggregate principal amount of its 12 1/2%
Senior Secured Notes due 2002 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the "Senior Secured Notes").
B. Pursuant to an indenture, dated as of the date hereof
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Discount Note Indenture" and, together with the Note Indenture,
the "Indentures") among the Company, its subsidiaries as guarantors, and the
Trustee, as defined therein (the "Discount Note Trustee" and, together with the
Note Trustee, the "Trustees"), the Company has issued $117,958,000 aggregate
principal amount of its 13 1/2% Senior Secured Discount Notes due 2004 (as
amended, amended and restated, supplemented of otherwise modified from time to
time, the "Senior Secured Discount Notes" and, together with the Senior Secured
Notes, the "Notes").
C. Pursuant to that certain term loan agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Term Loan Agreement"), dated as of August 4, 1994 by and among the
Company, Lehman Commercial Paper Inc., as agent (in such capacity and together
with its successors and assigns in such capacity, the "Agent"), and the lenders
party
<PAGE> 2
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thereto (together with all subsequent lenders party to the Term Loan Agreement,
the "Lenders"), the Company is borrowing $50,000,000.
D. As security for the Secured Obligations (as
hereinafter defined), the Company is granting to the Collateral Agent
hereunder, as collateral agent for the benefit of the Secured Parties (as
hereinafter defined), a security interest in the proceeds of the Notes and
other amounts held in the Disbursement Account (as hereinafter defined).
E. The parties hereto are entering into this Agreement
in order to set forth the conditions upon which, and the manner in which, funds
will be disbursed from the Disbursement Account and released from the security
interest and lien described above.
A G R E E M E N T
In consideration of the foregoing and the mutual covenants
herein contained, and for good and valuable consideration, the parties hereto
agree as follows:
1. Defined Terms. As used in this Agreement the
following terms shall have the meanings specified below:
"Available Funds" means (A) the sum of (i) the Net Proceeds
and (ii) interest earned or dividends paid on the funds in the Disbursement
Account (including holdings of Permitted Investments), less (B) the aggregate
disbursements pursuant to this Agreement.
"Collateral" shall have the meaning given in Section 5(a)
hereof.
"Collateral Agency Agreement" means the collateral agency
agreement dated as of the date hereof, among the Collateral Agent, as
collateral agent thereunder, the Trustees, the Agent, the Company and the
Company's subsidiaries, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Default" shall have the meaning set forth in the Indentures
and the Term Loan Agreement.
<PAGE> 3
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"Disbursement Request" means a request by the Company for
disbursement of funds from the Disbursement Account in substantially the form
of Exhibit A hereto. Each Disbursement Request shall be signed by two officers
of the Company, one of which shall be the Treasurer.
"Disbursement Account" means an account established by the
Collateral Agent and maintained by it at the office of the Collateral Agent or
as may be directed by the Company in accordance with the provisions of Section
2(b)(iv) hereof at the office of the Disbursement Agent and, in each case,
entitled the "Disbursement Account".
"Disbursement Account Statement" shall have the meaning given
in Section 2(c) hereof.
"Disbursement Agent" means the agent of the Collateral Agent
which is unaffiliated with the Company, and which, pursuant to a written
direction from the Company, maintains at its offices the Disbursement Account
and who acknowledges this Agreement in the space provided.
"Event of Default" shall have the meaning set forth in the
Indentures and the Term Loan Agreement.
"Loan" or "Loans" shall have the meanings set forth in the
Term Loan Agreement.
"Modernization Project" shall have the meaning set forth in
the Indentures and the Term Loan Agreement.
"Mortgage" shall have the meaning set forth in the Indentures
and the Term Loan Agreement.
"Net Proceeds" means the gross proceeds from the offering of
the Notes and the making of the Loans minus (i) approximately $42,000,000 to be
paid to Raytheon Engineers & Constructors Inc. as the initial payment on the
Construction Contract, (ii) the discounts and all other out-of-pocket expenses
incurred by the Company in connection with the Term Loan Agreement including
Agent's fees, and (iii) underwriting discounts and all other out-of-pocket
expenses incurred by the Company in connection with the offering of the Notes,
including, without limitation, fees and expenses of counsel, accountants and
other professionals, closing
<PAGE> 4
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costs with respect to the Mortgage, and accompanying title insurance, printing
expenses, registration and qualification fees and the Trustees' fees.
"Permitted Investments" means (i) obligations of or guaranteed
by the U.S. government, its agencies or government-sponsored enterprises; (ii)
short-term commercial bank and corporate obligations that have received the
highest short-term rating from two of the following rating organizations:
Standard & Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Duff & Phelps Credit Rating Co., Fitch Investor Service, Inc.,
IBCA Ltd. and Thomson Bankwatch Inc.; (iii) money market preferred stocks
which, at the date of acquisition and at all times thereafter, are accorded
ratings of at least AA- or Aa3 by S&P or Moody's, respectively; (iv) tax-exempt
obligations that are accorded the highest short-term rating by S&P or Moody's
or a long-term rating of at least A- or A3 by S&P or Moody's, respectively at
the time of purchase; (v) master repurchase agreements with foreign or domestic
banks having a capital and surplus of not less than $250,000,000 or primary
dealers so long as such agreements are collateralized with obligations of the
U.S. government or its agencies at a ratio of 102%, or with other collateral
rated at least AA or Aa2 by S&P or Moody's, respectively, at a ratio of 103%
and, in either case, marked-to-market weekly and so long as such securities
shall be held by a third-party agent; (vi) guaranteed investment contracts
and/or agreements of a bank, insurance company or other institution whose
unsecured, uninsured and unguaranteed obligations (or claims-paying ability)
have at the time of purchase ratings of AAA or Aaa by S&P or Moody's,
respectively; and (vii) money market funds the portfolio of which is limited to
investments described in clauses (i) through (vi) above. In no event shall any
of the Permitted Investments described in clauses (i) through (vi) above have a
final maturity more than two years from the date of purchase.
"Person" shall have the meaning set forth in the Indentures
and the Term Loan Agreement.
"Secured Parties" means the Collateral Agent, in its capacity
as such, the Trustees, in their capacities as such, the holders of the Notes,
the Agent, in its capacity as such, and the Lenders.
<PAGE> 5
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"Secured Obligations" means the Company's obligations,
liabilities and indebtedness with respect to the payment and performance in
full when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the filing of a petition in bankruptcy or
the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)) of (i) all obligations, liabilities and
indebtedness now or hereafter existing under or in respect of each Indenture,
the Notes, the Term Loan Agreement and the notes related thereto and all other
charges, fees, expenses, commissions, reimbursements, premiums, indemnities and
all other amounts due or to become due under or in connection with the
Indentures, the Notes, the Term Loan Agreement and the notes related thereto
and (ii) without duplication of amounts described in clause (i), all
obligations, indebtedness and liabilities of the Company now existing or
hereafter arising under or in respect of this Agreement including, without
limitation, with respect to all charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in this Agreement.
"Title Insurer" means First American Title Insurance Company,
by its agent Near North National Title Corporation.
2. Disbursement Account; Delivery of Net Proceeds.
(a) Establishment of Disbursement Account. Concurrently
with the execution and delivery hereof, the Collateral Agent shall establish
the Disbursement Account at its offices or, at the direction of the Company in
accordance with the provisions of Section 2(b)(iv) hereof at the offices of the
Disbursement Agent. Subject to the other terms and conditions of this
Agreement, all funds accepted by the Collateral Agent or the Disbursement
Agent, as the case may be, pursuant to this Agreement shall be held in the
Disbursement Account in trust for the benefit of the Secured Parties and shall
not be commingled with any other account. All such funds shall be held in the
Disbursement Account until disbursed in accordance with the terms hereof.
Concurrently with the execution and delivery hereof, the Company shall deliver
to the Collateral Agent (i) a certificate stating the amount of the Net
Proceeds (including good faith estimates of any expenses incurred but not yet
paid) and (ii) all of the Net Proceeds for deposit into
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the Disbursement Account against the Collateral Agent's written acknowledgment
and receipt of such Net Proceeds.
(b) Investment of Funds in Disbursement Account. Funds
deposited in the Disbursement Account shall be invested and reinvested upon the
following terms and conditions:
(i) Acceptable Investments. To the extent funds are
available, all such funds shall be invested and reinvested by the
Collateral Agent in Permitted Investments in accordance with the
Company's written instructions to the Collateral Agent, which
instructions shall specify the type of Permitted Investments. After
an initial investment pursuant to the Company's written instructions,
the Collateral Agent shall reinvest such funds (and all interest
earned and dividends paid thereon) after maturity of any Permitted
Investment initially designated by the Company, in Permitted
Investments in accordance with the Company's written instruction or,
in the absence of any written instructions from the Company, in a
money market fund permitted under clause (vii) of the definition of
Permitted Investments. All such Permitted Investments shall be
assigned to and held in the possession of, or, in the case of
Permitted Investments maintained in book entry form with the Federal
Reserve Bank, transferred to a book entry account in the name of the
Collateral Agent for the benefit of the Secured Parties subject to the
other terms and conditions of this Agreement, with such guarantees as
are customary, except that Permitted Investments maintained in book
entry form with the Federal Reserve Bank shall be transferred to a
book entry account in the name of the Collateral Agent at the Federal
Reserve Bank that includes only Permitted Investments held by the
Collateral Agent for its customers and segregated by separate
recordation in the books and records of the Collateral Agent.
(ii) Interest and Dividends. All interest earned and
dividends paid on funds invested in such Permitted Investments shall
be deposited in the Disbursement Account for the benefit of the
Secured Parties, subject to the other terms and conditions of this
Agreement.
(iii) Limitation on Collateral Agent's Responsibilities.
The Collateral Agent's sole responsibilities under this Section 2
shall be (A) to retain possession of certificated
<PAGE> 7
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Permitted Investments (except, however, that Collateral Agent may
surrender possession to the issuer of any such Permitted Investment
for the purposes of effecting assignment, crediting interest, or
reinvesting or reducing to cash) and to be the registered or
designated owner of Permitted Investments which are not certificated,
(B) to follow the Company's instructions given in accordance with
Section 2(b)(i) hereof, (C) to invest and reinvest funds pursuant to
this Section 2(b) and (D) to use reasonable efforts to reduce to cash
such Permitted Investments as may be required to fund any
disbursement in accordance with Section 3 hereof. In connection with
clause (A) above, the Collateral Agent will maintain continuous
possession of certificated Permitted Investments and money included in
the Collateral and will cause uncertificated Permitted Investments to
be registered in the book-entry system of, and transferred to an
account of the Collateral Agent at, the Federal Reserve Bank.
(iv) Disbursement Agent. The Company may, from time to
time, in a written notice (each, a "Notice") to the Collateral Agent
direct that the Disbursement Account be established at or transferred
to the offices of the Disbursement Agent. In the Notice, the Company
shall indicate the identity of the Disbursement Agent, specifically
acknowledging that the Disbursement Agent will have the benefits
provided for in this clause (iv) and shall certify that the
Disbursement Agent is not an affiliate of the Company and otherwise
conform to the requirements set forth in the definition of
"Disbursement Agent". The Notice shall be accompanied by (i) such
instruments and documents as shall be necessary or appropriate in
connection with the establishment of the Disbursement Account with the
Disbursement Agent and the transfer of all funds for deposit therein
in order to maintain, protect and preserve the security interest in
and lien on the Collateral granted to the Collateral Agent hereunder
and (ii) an opinion of counsel confirming that all action in
connection with the establishment of the Disbursement Account with the
Disbursement Agent and the transfer of all funds for deposit therein
has been taken as is necessary to maintain, protect and preserve the
security interest in and lien on the Collateral granted to the
Collateral Agent hereunder. Upon receipt of the Notice and the
instruments, documents and opinion contemplated in the immediately
preceding sentence, the Collateral Agent shall establish the
Disbursement Account
<PAGE> 8
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with the Disbursement Agent, as agent for the Collateral Agent, and
transfer all funds on deposit or delivered to the Collateral Agent for
deposit, as the case may be, in the Disbursement Account to the
Disbursement Agent. The Disbursement Agent shall thereafter receive
copies of all instructions and notices sent by the Company and/or the
Collateral Agent under this Agreement. After its appointment and
until the Collateral Agent has received a Notice from the Company
requesting a retransfer of the Disbursement Account to the Collateral
Agent or another Disbursement Agent, the Disbursement Agent shall be
entitled to the rights and protections afforded the Collateral Agent
by this Agreement under Sections 2(b)(iii), 3(d), 4 and 7(a);
provided, however, that the benefits of Sections 4 and 7(a) (and any
claims thereunder existing at the time) shall survive the retransfer
of such Disbursement Account. Other than with respect to Section
2(b)(i) where the Disbursement Agent may act upon the written
instructions of the Company, the Disbursement Agent shall act solely
on the written instructions of the Collateral Agent and shall be
entitled to rely on such written instructions without any
responsibility to independently verify any information or request
contained therein. The Company and the Collateral Agent shall have no
claim against the Disbursement Agent for any action taken by the
Disbursement Agent consistent with such written instructions.
(c) Disbursement Account Statement. Each month the
Collateral Agent shall deliver or cause to be delivered to the Company a
statement signed by the Collateral Agent or the Disbursement Agent, as the case
may be, in a form setting forth with reasonable particularity the balance of
funds in such account and the activity which occurred during the month (such
statement, the "Disbursement Account Statement"). The Company irrevocably
instructs the Collateral Agent that on the first date upon which the balance in
the Disbursement Account (including the holdings of all Permitted Investments)
is reduced to zero, the Collateral Agent shall deliver or cause to be delivered
to the Company, to the Agent and to the Trustees a notice stating that the
balance in the Disbursement Account has been reduced to zero.
3. Disbursements.
(a) Review of Disbursement Requests; Disbursements. The
Company shall have the right from time to time during the term of
<PAGE> 9
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this Agreement (but no more than two times per month, exclusive of
resubmittals made pursuant to the final sentence of this Section 3(a), to
submit to the Collateral Agent a completed Disbursement Request. The
Collateral Agent shall approve such Disbursement Request if the Company has
satisfied the applicable conditions set forth in Section 3(c) hereof. Provided
such Disbursement Request is not disapproved, the Collateral Agent, within five
(5) business days following submission of such Disbursement Request, shall
disburse or cause to be disbursed the funds requested in such Disbursement
Request in the manner requested by the Company in a writing accompanying the
Disbursement Request or by wire transfer of immediately available funds to the
account of the Company if not otherwise so indicated. The Collateral Agent
shall notify the Company as soon as reasonably possible (but not later than two
(2) business days from the date of receipt of the Disbursement Request) if any
Disbursement Request is disapproved and the reason(s) therefor, but the failure
to so notify the Company shall not affect any of the rights of the Trustees,
the Agent, the Collateral Agent, the holders of the Notes or the Lenders. The
Company may thereupon resubmit the Disbursement Request with appropriate
changes.
(b) Commercially Reasonable Efforts. The Collateral
Agent and the Disbursement Agent, if any, shall exercise commercially
reasonable efforts and utilize commercially prudent practices in the
performance of its duties hereunder.
(c) Conditions Precedent to Disbursement. The
disbursement of funds from the Disbursement Account to the Company pursuant to
each and every Disbursement Request shall be subject to the satisfaction of
each of the following conditions.
(i) The Company shall have submitted a Disbursement
Request as provided for herein to the Collateral Agent and the
Disbursement Request on its face shall have been completed as to the
information required therein and the required attachments as stated in
the Disbursement Request, shall have been attached thereto.
(ii) The Collateral Agent shall not have received any
written notice from the Trustees or the Company that any Default or
Event of Default has occurred and is continuing or from the Agent or
the Company that any Default or Event of Default under the Term Loan
Agreement has occurred and is continuing.
<PAGE> 10
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(iii) To the extent the Disbursement Request is for funds
as certified under paragraph 1(a) of the form of such Disbursement
Request, the Collateral Agent shall have received the Title Insurer's
commitment (in the form attached to the Disbursement Request as
Attachment 1 (the "Title Letter")) committing, upon the Collateral
Agent's advice to the Title Insurer (in the form attached to the
Disbursement Request as Attachment 2), that the requested funds have
been disbursed to issue its endorsement to Title Policy Nos. N941
292, N941 292B, N941 292C, N941 292D and N941 292E in the form, and
completed in the manner described, in the attachment to the Title
Letter.
In the event that the Collateral Agent has received a notice
from the Agent or either or both of the Trustees pursuant to clause (ii) above,
the Collateral Agent shall not disburse or cause to be disbursed any additional
funds from the Disbursement Account until notified in writing by the Trustee,
Trustees and/or Agent, as the case may be, that such disbursements may
continue.
Upon each submission of a Disbursement Request, the Company
will be deemed to have represented, warranted and agreed as set forth in such
Disbursement Request.
(d) Limitation of Collateral Agent's Liability;
Responsibilities of Collateral Agent.
(i) The Collateral Agent's responsibility and liability
under this Agreement shall be limited as follows: (A) the Collateral Agent does
not represent, warrant or guaranty to the holders of the Notes or the Lenders
from time to time the performance of the Company or any of the Company's
contracting counterparties; (B) the Collateral Agent shall have no
responsibility to the Company, the holders of the Notes or the Lenders from
time to time as a consequence of performance by the Collateral Agent or the
Disbursement Agent hereunder, except for any gross negligence or wilful
misconduct of the Collateral Agent; (C) the Company shall remain solely
responsible for all aspects of the Company's business and conduct; and (D) the
Collateral Agent is not obligated to supervise, inspect or inform the Company
or any third party of any aspect of the Modernization Project or any other
matter referred to above.
<PAGE> 11
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(ii) No implied covenants or obligations shall be inferred
from this Agreement against the Collateral Agent, nor shall the Collateral
Agent be bound by the provisions of any agreement beyond the specific terms
hereof. Specifically and without limiting the foregoing, the Collateral Agent
shall in no event have any liability in connection with its investment,
reinvestment or liquidation, in good faith and in accordance with the terms
hereof, of any funds or Permitted Investments held by it hereunder including,
without limitation, any liability for any delay not resulting from gross
negligence or willful misconduct in such investment, reinvestment or
liquidation, or for any loss of income incident to any such delay.
(iii) The Collateral Agent shall be entitled to rely upon
any judicial order or judgment, upon any written opinion of counsel or upon any
certification, instruction, notice, or other writing delivered to it by the
Company, either of the Trustees or the Agent in compliance with the provisions
of this Agreement without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of service
thereof. The Collateral Agent may act in reliance upon any instrument
complying with the provisions of this Agreement or signature believed by it to
be genuine and may assume that any Person purporting to give notice or receipt
or advice or make any statement or execute any documents in connection with the
provisions hereof has been duly authorized to do so.
(iv) At any time the Collateral Agent may request in
writing an instruction in writing from the Company, and may at its own option
include in such request the course of action it proposes to take and the date
on which it proposes to act, regarding any matter arising in connection with
its duties and obligations hereunder; provided, however, that the Collateral
Agent shall state in such request that it believes in good faith that such
proposed course of action is consistent with another, identified provision of
this Agreement. The Collateral Agent shall not be liable to the Company for
acting without the Company's consent in accordance with such a proposal on or
after the date specified therein, provided that the specified date shall be at
least two (2) business days after the Company receives the Collateral Agent's
request for instructions and its proposed course of action, and provided,
further, that prior to so acting, the Collateral Agent has not received the
written instructions requested.
<PAGE> 12
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(v) The Collateral Agent may act pursuant to the written
advice of counsel chosen by it with respect to any matter relating to this
Agreement and (subject to Section 3(d)(ii)) shall not be liable for any action
taken or omitted in accordance with such advice.
(vi) The Collateral Agent shall not be called upon to
advise any party as to selling or retaining, or taking or refraining from
taking any action with respect to, any securities or other property deposited
hereunder.
(vii) In the event of any ambiguity in the provisions of
this Agreement with respect to any funds or property deposited hereunder, the
Collateral Agent shall be entitled, at its sole option, to refuse to comply
with any and all claims, demands or instructions with respect to such property
or funds, and the Collateral Agent shall not be or become liable for its
failure or refusal to comply with conflicting claims, demands or instructions.
The Collateral Agent shall be entitled to refuse to act until, at its sole
option, either any conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by agreement
between the conflicting claimants as evidenced in a writing, satisfactory to
the Collateral Agent, or the Collateral Agent shall have received security or
an indemnity satisfactory to the Collateral Agent sufficient to save the
Collateral Agent harmless from and against any and all loss, cost, liability or
expense which the Collateral Agent may incur by reason of its acting. The
Collateral Agent may in addition elect in its sole option to commence an
interpleader action or seek other judicial relief or orders as the Collateral
Agent may deem necessary.
(viii) The Company hereby grants to the Collateral Agent a
lien on the property in the Disbursement Account such that, in the event that
any and all charges payable under Section 2 and Section 4 shall not be timely
paid by the Company, the Collateral Agent shall have the right to pay itself
from the property in the Disbursement Account the full amount owed, provided
that written notice of the Collateral Agent's intent to proceed under this
clause be given at least five business days in advance of such action.
(ix) No provision of this Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise incur
<PAGE> 13
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any financial liability in the performance of any of its duties hereunder
(including, without limitation, liability relating in any way to Environmental
Laws and/or Hazardous Materials, as such terms are defined in the Mortgage).
4. Indemnity.
(a) Indemnity. The Company agrees to indemnify, pay and
hold harmless the Collateral Agent and the officers, directors, employees,
agents and affiliates of the Collateral Agent (collectively, the "Indemnitees")
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs (including, without
limitation, settlement costs and claims for strict liability in tort and
environmental or hazardous waste claims of any nature), expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated a party
thereto), which may be imposed on, incurred by, or asserted against such
Indemnitee, in any manner relating to or arising out of this Agreement, the
Collateral Agency Agreement, the Indentures, the Term Loan Agreement or the
Notes (including, without limitation, any misrepresentation by the Company in
this Agreement) (the "Indemnified Liabilities"); provided, however, that the
Company shall have no obligation to an Indemnitee hereunder with respect to
Indemnified Liabilities if it has been determined by a final decision (after
all appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such Indemnified Liability arose from the gross negligence or
willful misconduct of such Indemnitee, or, in the case of environmental laws,
the willful violation of such laws. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Company
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnities or any of them.
(b) Survival. The obligations of the Company contained
in this Section 4 shall survive the termination of this Agreement and the
discharge of the Company's other obligations under this Agreement.
<PAGE> 14
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(c) Reimbursement. Any amounts paid by any Indemnitee as
to which such Indemnitee has the right to reimbursement shall constitute
Secured Obligations secured by the Collateral.
5. Grant of Security Interest; Instructions to
Collateral Agent.
(a) The Company hereby irrevocably grants a first
priority security interest in, pledges, assigns and sets over to the Collateral
Agent, as collateral agent for the Secured Parties, all of its respective
right, title and interest in, to and under the Disbursement Account, all funds
held therein and all Permitted Investments held by (or otherwise maintained in
the name of) the Collateral Agent pursuant to Section 2 hereof (collectively,
the "Collateral"), in order to secure the prompt payment and performance of the
Secured Obligations. The Company shall take all actions necessary to insure
the continuation of a first priority security interest in the Collateral in
favor of the Collateral Agent, as collateral agent for the Secured Parties, in
order to secure all Secured Obligations.
(b) In addition to the rights provided under Section
5(c)(ii) hereof, upon an Event of Default and for so long as such Event of
Default continues the Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party under
the New York Uniform Commercial Code ("UCC") or other applicable law, and the
Collateral Agent may also upon obtaining possession of the Collateral as set
forth herein, without notice to the Company except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker's board or at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Collateral Agent may deem commercially reasonable. The
Company acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale. The Company agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days' notice to the Company of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale regardless of notice of sale having been given. The
Collateral Agent may adjourn any
<PAGE> 15
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public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(c) The Company hereby irrevocably instructs the
Collateral Agent to, and the Collateral Agent will (i) take all actions
necessary to (A) maintain dominion and control over funds in the Disbursement
Account sufficient for the Collateral Agent to enjoy a continuous first
priority security interest therein, (B) maintain possession of all certificated
Permitted Investments purchased hereunder that are physically possessed by the
Collateral Agent in order for the Collateral Agent to enjoy a continuing
perfected first priority security interest therein (the Company hereby agreeing
that in the event any certificated Permitted Investments are in the possession
of the Company or a third party, the Company shall deliver or cause to be
delivered promptly all such certificates to the Collateral Agent) and (C) cause
the Collateral Agent to enjoy a continuous perfected first priority security
interest under the UCC and any applicable law in all Permitted Investments
purchased hereunder that are not certificated all as instructed in an opinion
of counsel provided to the Collateral Agent by the Company; and (ii) upon
receipt of notice from either of the Trustees or the Agent of the acceleration
of the maturity of the Senior Secured Notes and/or the Senior Secured Discount
Notes and/or the obligations outstanding under the Term Loan Agreement, as the
case may be, or the failure by the Company to pay principal at maturity or upon
redemption or mandatory repurchase of all or any portion of the Senior Secured
Notes and/or the Senior Secured Discount Notes and/or the obligations
outstanding under the Term Loan Agreement, and direction from either of the
Trustees or the Agent, as promptly as practicable disburse all funds held in
the Disbursement Account to the Collateral Agent (in its capacity as such under
the Collateral Agency Agreement) and transfer title to all Permitted
Investments held by the Collateral Agent hereunder to the Collateral Agent (in
its capacity as such under the Collateral Agency Agreement), in each case for
the benefit of Secured Parties. The lien and security interest provided for by
this Section 5(c) shall automatically terminate and cease as to, and shall not
extend or apply to, and the Collateral Agent shall have no security interest
in, any funds disbursed by the Collateral Agent to the Company.
<PAGE> 16
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(d) Any proceeds collected by the Collateral Agent
pursuant to Section 5(b) and/or 5(c) shall be applied in the following order:
First: To the payment of all amounts due the Collateral
Agent, in its capacity as such under this Agreement; and
Second: To the Collateral Agent, in its capacity as
collateral agent under the Collateral Agency Agreement for payment of
the other Secured Obligations in the priority and pursuant to the
terms set forth in the Collateral Agency Agreement.
(e) Upon demand, the Company will execute and deliver to
the Collateral Agent such instruments and documents as are necessary or
advisable to confirm or perfect the rights of the Collateral Agent under this
Agreement and the Collateral Agent's interest in the Collateral. Subject to
the terms and conditions of the Collateral Agency Agreement, the Indentures and
the Term Loan Agreement, including, but not limited to, the receipt of required
certificates and opinions of counsel, the Collateral Agent will take all
necessary action to preserve and protect the security interest created hereby
as a lien and encumbrance upon the Collateral.
(f) If the Company shall fail to do any act or thing that
it has covenanted to do hereunder or if any warranty on the part of the Company
contained herein shall be breached, the Collateral Agent or any Secured Party
may (but shall not be obligated to) do the same or cause it to be done or
remedy any such breach, and may reasonably expend funds for such purpose. Any
and all amounts so expended by the Collateral Agent or such Secured Party shall
be paid by the Company promptly upon demand therefor, with interest at the
Default Rate (as defined in the Indentures) during the period from and
including the date on which such funds were so expanded to the date of
repayment. The Company's obligations under this paragraph shall survive the
termination of this Agreement and the discharge of the Company's other
obligations under this Agreement. The Company hereby appoints the Collateral
Agent as its attorney-in-fact with an interest, with full authority in the
place and stead of the Company and in the name of the Company, or otherwise,
from time to time in the Collateral Agent's discretion, to take any action and
to execute any instrument consistent with the terms of this Agreement, the
Collateral Agency
<PAGE> 17
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Agreement, the Indentures, the Term Loan Agreement and the Notes which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement. The foregoing grant of authority is a power of attorney
coupled with an interest and such appointment shall be irrevocable for the term
of this Agreement. The Company hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue and in accordance with the terms
hereof.
6. Termination. This Agreement shall terminate
automatically ten (10) days following disbursement of all funds remaining in
the Disbursement Account (including Permitted Investments), unless sooner
terminated by agreement of the parties hereto; provided, however, that the
obligations of the Company under Sections 4, 5(f) and 7(a) (and any existing
claims hereunder) shall survive termination of this Agreement or the
resignation of the Collateral Agent.
7. Miscellaneous.
(a) Expenses. The Company will upon demand pay to the
Collateral Agent the amount of any and all expenses, including the reasonable
fees and expenses of its counsel and the allocated fees and expenses of staff
counsel and the fees and expenses of any experts and agents (including, without
limitation, the Disbursement Agent) which the Collateral Agent may incur in
connection with (i) the collection of the Secured Obligations, (ii) the
enforcement and administration of this Agreement, (iii) the custody or
preservation of, or the sale of, collection from, or other realization upon,
any of the Collateral, (iv) the exercise or enforcement of any of the rights of
Collateral Agent hereunder or (v) the failure by the Company to perform or
observe any of the provisions hereof. All amounts payable by the Company under
this the Section 7 (a) shall be due upon demand and shall be part of the
Secured Obligations. The Company's obligations under this paragraph shall
survive the termination of this Agreement and the discharge of the Company's
other obligations hereunder.
(b) No Waiver; Discontinuance of Proceeding.
(i) No Waiver. No failure on the part of Collateral
Agent to exercise, no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial
<PAGE> 18
-18-
exercise by the Collateral Agent of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein provided are to the fullest extent
permitted by the law cumulative and are not exclusive of any remedies provided
by law.
(ii) Discontinuance of Proceeding. In the event the
Collateral Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale, entry or otherwise,
and such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Agent, then and in every
such case the Company, the Collateral Agent and each Secured Party shall be
restored to their respective former positions and rights hereunder with respect
to the Collateral, and all rights, remedies and powers of the Collateral Agent
and the Secured Parties shall continue as if no such proceeding had been
instituted.
(c) Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision of this Agreement, nor
consent to any departure by the Company therefrom, shall be effective unless
the same shall be done in accordance with the terms of the Collateral Agency
Agreement and unless in writing and signed by Collateral Agent and the Company.
Any amendment, modification or supplement of or to any provision of this
Agreement, any waiver of any provision of this Agreement, and any consent to
any departure by the Company from the terms of any provision of this Agreement,
shall be effective only in the specific instance and for the specific purpose
for which made or given. Except where notice is specifically required by this
Agreement, the Indentures or the Term Loan Agreement, no notice to or demand on
the Company in any case shall entitle the Company to any other or further
notice or demand in similar or other circumstances.
(d) Notices. Unless otherwise provided herein, any
notice or other communication herein shall be given in the manner set forth in
the Collateral Agency Agreement and at the addresses set forth in the
Collateral Agency Agreement, or at such other address as shall be designated by
any party in a written notice to the other party.
(e) Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the
<PAGE> 19
-19-
Collateral and shall (i) be binding upon the Company, its successors and
assigns, and (ii) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent and the
other Secured Parties and each of their respective successors, transferees and
assigns; no other persons (including, without limitation, any other creditor of
the Company) shall have any interest herein or any right or benefit with
respect hereto other than the Disbursement Agent, if any. Without limiting the
generality of the foregoing clause (ii), any holder of the Notes or Lender may
assign or otherwise transfer any Note or Loan held by it secured by this
Agreement to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such herein, herein
or otherwise, subject however, to the applicable provisions of the Notes, the
Indentures and the Term Loan Agreement.
(f) GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
(g) CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
BOROUGH OF MANHATTAN, STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT THE COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. THE COMPANY DESIGNATES AND APPOINTS CT
CORPORATION SYSTEM, WITH AN ADDRESS AT 1633 BROADWAY, NEW YORK, NEW YORK 10019
AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY THE COMPANY IRREVOCABLY
AGREEING IN WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF, SERVICE
OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY THE COMPANY TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL
TO THE COMPANY AT ITS ADDRESS PROVIDED FOR IN PARAGRAPH (d) ABOVE EXCEPT THAT
UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY
SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY
THE COMPANY REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, THE COMPANY HEREBY
AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT
<PAGE> 20
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THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT OF THE COLLATERAL AGENT TO BRING PROCEEDINGS AGAINST THE COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION.
(h) Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
(i) Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all such counterparts together shall constitute one and
the same Agreement.
(j) Headings. The Section and subsection headings used
in this Agreement are for convenience of reference only and shall not affect
the construction of this Agreement.
(k) Obligations Absolute. All obligations of the Company
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the
Company;
(ii) any lack of validity or enforceability of any Note,
or any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
either of the Indentures, the Term Loan Agreement or the Notes, or any
other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured
Obligations;
<PAGE> 21
-21-
(v) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect of this
Agreement, either Indenture, the Term Loan Agreement or the Notes
except as specifically set forth in a waiver granted pursuant to the
provisions of paragraph (c) of this Section 7; or
(vi) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, the Company.
(l) Substitution of Collateral Agent or Resignation. The
Agent and the Trustees shall have the right, upon the expiration of thirty (30)
days following delivery of written notice of substitution to the Collateral
Agent and the Company, to cause the Collateral Agent to be relieved of its
duties hereunder and to select a substitute Collateral Agent to serve
hereunder. The Collateral Agent may resign at any time upon 30 days' written
notice to all parties hereto. Such resignation shall take effect upon receipt
by the Collateral Agent of an instrument of acceptance executed by a successor
collateral agent and consented to by the other parties hereto. Upon selection
of such substitute Collateral Agent, the Trustees, the Agent, the Company and
the substitute Collateral Agent shall enter into an agreement substantially
identical to this Agreement and, thereafter, the original Collateral Agent
shall be relieved of its duties and obligations to perform hereunder, except
that the Collateral Agent shall transfer to the substitute Collateral Agent
upon request therefor copies of all books, records and other documents in the
Collateral Agent's possession relating to this Agreement and all funds in the
Disbursement Account.
<PAGE> 22
-22-
IN WITNESS WHEREOF, the parties have executed and delivered
this Disbursement Agreement as of the day first above written.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ Susan T. Keller
------------------------
Name: Susan T. Keller
Title: Vice President
ACME METALS INCORPORATED
By: /s/ Jerry F. Williams
------------------------
Name: Jerry F. Williams
Title: Vice President
Acknowledged by:
______________________, 19__
___________________________,
as Collateral Agent
By: ______________________
Name:
Title:
<PAGE> 23
EXHIBIT A TO DISBURSEMENT AGREEMENT
Form of Disbursement Request
[Letterhead of the Company]
[Date]
Re: Disbursement Request No. ____
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Disbursement Agreement ("Agreement") dated as of
August 11, 1994 between you ("Collateral Agent") and Acme Metals Incorporated,
a Delaware corporation (the "Company"). Capitalized terms used herein shall
have the meanings assigned to such terms in the Agreement.
This letter constitutes a Disbursement Request under the Agreement.
The undersigned Company hereby requests a disbursement of funds
contained in the Disbursement Account in the amount of $ ___.
In connection with the requested disbursement, the undersigned Company
hereby represents, warrants, certifies and agrees as follows:
1. (a) Funds comprising this Disbursement Request will
be promptly, in accordance with prudent commercial practice, used for
the payment of amounts due but not yet paid to contractors,
materialmen or other parties for services rendered or supplies
delivered in connection with the construction of the Modernization
Project or for the reimbursement of payments previously made to such
contractors, materialmen or other parties; or
(b) Funds comprising the Disbursement Request will be
promptly paid to either the Note Trustee for the payment of interest
on the 12-1/2% Senior Secured Notes due 2002, or the Lenders for the
payment of interest on the Loans, which scheduled interest payment is
to be made no more than 5 business days from the date hereof; or
<PAGE> 24
-2-
(c) A Change of Control has occurred; pursuant and in
accordance with Section 4.15(b) of each of the Indentures and Section
5.6 of the Term Loan Agreement notices have been sent to the holders
of the Notes and the Lenders; the Repurchase Date is within 5 business
days of the date hereof; the Company reasonably believes that the
amount requested in this Disbursement Request does not exceed the
amount necessary to repurchase Notes pursuant to the terms of such
sections 4.15 and to repay Loans under Section 5.15 of the Term Loan
Agreement; and funds comprising this Disbursement Request will be
promptly (i) paid to the Trustees for the repurchase of the Notes
pursuant to Section 4.15(d) of each of the Indentures, (ii) paid to
the Lenders to repay Loans pursuant to Section 5.15(d) of the Term
Loan Agreement or (iii) returned to the Collateral Agent for deposit
in the Disbursement Account.
2. All prior disbursements from the Disbursement Account
have been, or will be promptly; (a) in accordance with prudent
commercial practice; expended for the payment of amounts due but not
yet paid to contractors, materialmen or other parties for services
rendered or supplies delivered in connection with the construction of
the Modernization Project or for the reimbursement of payments
previously made to such contractors, materialmen or other parties or
(b) used to pay interest on the Notes and/or the Loans or (c) used to
repurchase Notes or prepay Loans following a Change of Control.
3. It has taken all actions deemed necessary or
advisable to be taken by the Company to cause the Collateral Agent to
continue to have a first priority perfected security interest in the
Collateral.
4. No Event of Default has occurred and is continuing
and, to the best of the Company's knowledge, no event, omission or
failure of a condition has occurred which would constitute an Event of
Default after notice or lapse of time or both.
5. The construction performed as of the date hereof is
in substantial accordance with the plans for the Modernization Project
(including agreed upon Charge Orders (as defined in the Construction
Contract)) and the disbursement is
<PAGE> 25
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appropriate in light of the percentage of construction completed and
the amount of stored materials.
6. Appropriate evidence of lien releases or title
insurance endorsements have been received for all work, materials
and/or services performed and/or delivered in connection with the
Modernization Project. To the extent required, the Title Letter set
forth in Section 3(c)(iii) of the Disbursement Agreement is either
attached hereto or being delivered to you under separate cover by the
Title Insurer.
The foregoing representations, warranties and certifications are true
and correct and the Collateral Agent is entitled to rely on the foregoing in
disbursing funds relating to this Disbursement Request.
ACME METALS INCORPORATED
By: _______________________
Name:
Title:
I certify that to the best of my knowledge after due inquiry the foregoing
representations, warranties and certifications are true and correct.
_______________________
Name:
Title: Treasurer
<PAGE> 26
Attachment 1
[Letterhead of Near North National Title Corporation]
[Address of Collateral Agent]
Ladies and Gentlemen:
Near North National Title Corporation has examined the sworn
general contractor's statement dated _______________________ executed by
__________________________________ and supporting documentation in the amount
of $______________ and find it satisfactory.
Our title search covering ____________________ since
______________________ shows no mechanic lien claims of record.
Upon receipt of your disbursement letter, we are prepared to
issue our endorsement in the attached form.
Please contact the undersigned at (312) 419-3913 with questions or comments.
Sincerely,
Shirley Scott
Vice President/Sr. Construction
Escrow Officer
<PAGE> 27
ENDORSEMENT
ISSUED BY
FIRST AMERICAN TITLE INSURANCE COMPANY
ATTACHED TO POLICY NUMBER ______
This endorsement is made a part of the policy and is subject to all of the
terms and provisions thereof and of any prior endorsements thereto. Except to
the extent expressly stated, it neither modifies any of the terms and
provisions of the policy and any prior endorsements, nor does it increase the
face amount thereof.
1. SCHEDULE A OF THE ABOVE POLICY IS HEREBY AMENDED IN THE FOLLOWING
PARTICULARS:
(a) The effective date of the policy is hereby extended to:DATE OF
DISBURSEMENT OF FUNDS
(b) The estate or interest described in Schedule A is at the extended date
of policy vested in:PARTY IN TITLE
2. SCHEDULE B OF THE ABOVE POLICY IS HEREBY AMENDED IN THE FOLLOWING
PARTICULARS:
(a) The exceptions in Schedule B relating to "Any lien, or right to a lien
for services, labor or material as a result of the contract let with
_______________________ and to the "Rights of mechanics and
materialmen" etc., are hereby deleted and the following exceptions are
substituted therefor:
(1) Any lien, or right to a lien, for services labor or material furnished
after ________________ (DATE OF GENERAL CONTRACTOR'S STATEMENT)
executed by _____________________ (NAME OF GENERAL CONTRACTOR).
(2) Rights of mechanics or materialmen who are named on the contractor's
statement dated ____________________________ and of mechanics or
materialmen claiming by, through or under them, to the extent, if any,
that the amounts shown in said statement as being unpaid relate to
work, labor and material actually in place on said land on the date
covered by said statement
1 of 2
<PAGE> 28
(b) The following exceptions are hereby added to Schedule B.
ANY NEW EXCEPTIONS SINCE THE PRIOR ENDORSEMENT
FIRST AMERICAN TITLE INSURANCE COMPANY
BY: _________________________________
DATED: ______________________________
2 of 2
<PAGE> 29
Attachment 2
[Letterhead of Shawmut Bank Connecticut,
National Association]
[Address of Title Insurer]
Ladies and Gentlemen:
Shawmut Bank Connecticut, National Association is in receipt of a
Disbursement Request, dated, 19__ from Acme Metals Incorporated (the "Company")
pursuant to that certain Disbursement Agreement, dated as of August 11, 1994
between the Company and us (the "Agreement"). Accompanying such Disbursement
Request is a letter from you, dated ___________, 19__ as required by Section
3(c)(iii) of the Agreement. This letter will serve to notify you, as called
for by your letter to us referred to above, that the disbursement referred to
in such Disbursement Request has been made in accordance with its terms.
Capitalized terms used herein shall have the meanings assigned to such terms in
the Agreement.
SHAWMUT BANK CONNECTICUT,
National Association
By:_______________________
Name:
Title:
<PAGE> 1
EXHIBIT 10.8
================================================================================
TERM LOAN AGREEMENT
dated as of
August 4, 1994
among
ACME METALS INCORPORATED,
THE LENDERS LISTED HEREIN
and
LEHMAN COMMERCIAL PAPER INC.
as AGENT
<PAGE> 2
<TABLE>
<CAPTION>
ACME METALS INCORPORATED
TERM LOAN AGREEMENT
dated as of August 4, 1994
TABLE OF CONTENTS
Section Heading Page
- ------- ------- ----
<S> <C> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 DEFINITION
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1.3 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2 AMOUNT AND TERMS OF LOANS; NOTES
2.1 Loans and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.2 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.4 Prepayments and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.6 Special Provisions Governing Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 3 CONDITIONS TO FUNDING
3.1 Conditions to Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Section Heading Page
- ------- ------- ----
<S> <C>
Section 4 REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE GUARANTORS
4.1 Due Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.3 Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.4 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.5 Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.6 Absence of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.7 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.8 Marketable Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.10 Governmental Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.11 Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.13 Tax Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.14 Material Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.15 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.16 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.17 Foreign Corrupt Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Section Heading Page
- ------- ------- ----
<S> <C> <C>
4.19 Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.20 Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.21 Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.22 Pledged Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.23 Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 5 COVENANTS OF THE COMPANY
5.1 Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.2 [This Section intentionally left blank] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.3 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.4 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.5 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.6 Limitation on Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.7 Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.8 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.9 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.10 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.11 Maintenance of Properties, Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.12 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.13 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.14 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Section Heading Page
- ------- ------- ----
<S> <C> <C>
5.15 Repayment of Loans upon Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.16 Limitation on Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.17 Limitation on Dividend and Other Payment Restrictions Affecting . . . . . . . . . . . . . . . . . 70
5.18 Limitation on Actions Affecting Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
5.19 Inspection and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
5.20 Limitations on Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . 72
5.21 Additional Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 6 MERGER; SUCCESSOR CORPORATION
6.1 Restriction on Mergers and Consolidations and Sales of Assets . . . . . . . . . . . . . . . . . . 73
6.2 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 7 EVENTS OF DEFAULT
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.2 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.3 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.4 Waiver of Past Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
7.5 Control by Requisite Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
7.6 Rights of Lenders To Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8 AGENTS
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<CAPTION>
Section Heading Page
- ------- ------- ----
<S> <C> <C>
8.2 Powers; General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
8.3 No Responsibility for Appraisal of Creditworthiness . . . . . . . . . . . . . . . . . . . . 82
8.4 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
8.5 Payee of Note Treated as Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8.6 Resignation; Successor Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8.7 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 9 MISCELLANEOUS
9.1 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.4 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.5 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
9.6 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.8 Survival of Warranties and Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . 91
9.9 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . 92
9.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.11 Obligations Several; Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . 92
9.12 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
</TABLE>
-v-
<PAGE> 7
<TABLE>
<CAPTION>
Section Heading Page
- ------- ------- ----
<S> <C> <C>
9.13 APPLICABLE LAW; CONSENT TO JURISDICTION
AND SERVICE OF PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.14 Successors and Assigns; Subsequent Holders
of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 94
9.15 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.16 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
</TABLE>
-vi-
<PAGE> 8
EXHIBITS
--------
Exhibit A - Form of Note
Exhibit B - Form of Security Agreement
Exhibit C - Form of Mortgage
Exhibit D - Form of Stock Pledge Agreement
Exhibit E - Form of Disbursement Agreement
Exhibit F - Form of Collateral Agency Agreement
Exhibit G - Form of Intercreditor Agreement
Exhibit H - Form of Subsidiary Guarantee
Exhibit I-1 - Form of Opinion of Coffield Ungaretti & Harris
Exhibit I-2 - Form of Opinion of Edward P. Weber, Jr.
Exhibit J - Form of Opinion of Cahill Gordon & Reindel
Exhibit K - Form of Assignment and Assumption Agreement
SCHEDULES
---------
Schedule 1 - Lenders' Pro Rata Shares
-vii-
<PAGE> 9
ACME METALS INCORPORATED
TERM LOAN AGREEMENT
DATED AS OF AUGUST 4, 1994
This Term Loan Agreement is dated as of August 4, 1994 and
entered into by and among ACME METALS INCORPORATED, a Delaware corporation (the
"Company"), THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "Lender" and collectively as the "Lenders") and Lehman
Commercial Paper Inc. ("Lehman"), as Agent for the Lenders (including its
successors, the "Agent").
RECITALS
WHEREAS, the Company and its Subsidiaries, desire that the
Lenders extend a term loan to the Company to provide a portion of the financing
for the construction of the Modernization Project (as hereinafter defined);
WHEREAS, the Lenders are willing, upon the terms and subject
to the conditions set forth herein, to make such a term loan to the Company;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the Company, the Lenders
and the Agent agree as follows:
Section 1 DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the
following meanings:
"Accreted Value" means, as of any date of determination prior
to August 1, 1997, the sum of (a) the initial offering price
<PAGE> 10
-2-
of each Senior Secured Discount Note and (b) the portion of the excess of the
principal amount of each Senior Secured Discount Note over such initial
offering price which shall have been amortized through such date, such amount
to be so amortized on a daily basis and compounded semi-annually on each
February 1 and August 1 at the rate of 13 1/2% per annum from the date of
issuance of the Senior Secured Discount Notes through the date of
determination computed on the basis of a 360-day year of twelve 30-day months.
"Acme Packaging" means Acme Packaging Corporation, a Delaware
corporation, and a Wholly Owned Subsidiary of the Company.
"Acme Steel" means Acme Steel Company, a Delaware corporation,
and a Wholly Owned Subsidiary of the Company.
"Acquired Indebtedness" means (i) with respect to any Person
that becomes a Subsidiary of the Company (or is merged into the Company or any
of its Subsidiaries) after the Funding Date, Indebtedness of, or Preferred
Stock issued by, such Person or any of its Subsidiaries existing at the time
such Person becomes a Subsidiary of the Company (or is merged into the Company
or any of its Subsidiaries), whether or not such Indebtedness was incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary of
the Company (or being merged into the Company or any of its Subsidiaries), and
(ii) with respect to the Company or any of its Subsidiaries, any Indebtedness
assumed by the Company or any of its Subsidiaries in connection with the
acquisition of any assets from another Person (other than the Company or any of
its Subsidiaries), whether or not such Indebtedness was incurred by such other
Person in connection with, or in contemplation of, such acquisition.
"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
<PAGE> 11
-3-
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. Notwithstanding the foregoing, the term
"Affiliate" shall not include, (i) with respect to the Company, any Subsidiary
of the Company, (ii) with respect to any Subsidiary of the Company, the Company
or any other Subsidiary of the Company, (iii) with respect to the Company or
any Subsidiary of the Company, any benefit plan in existence on the Issue Date
or any comparable plans established subsequent thereto or (iv) Wabush.
"Agent" means the party named as such in this Agreement until
a successor replaces it in accordance with the provisions of this Agreement and
thereafter means such successor.
"Agreement" means this Term Loan Agreement as amended, amended
and restated, supplemented or otherwise modified from time to time.
"Applicable LIBO Rate" means for each Quarterly Period during
which any of the Loans are outstanding, the rate determined by the Agent equal
to the sum of: (i) the quotient obtained (rounded upward, if necessary, to the
next higher 1/100 of 1%) by dividing (x) LIBOR for such Quarterly Period by (y)
1.00 minus the Eurodollar Reserve Percentage, and (ii) 400 basis points (one
basis point equalling 1/100 of 1%). The Applicable LIBO Rate will be adjusted
automatically on and as of the effective date of any change in the Eurodollar
Reserve Percentage.
"Applicable Portion" with respect to any Available Proceeds
Amount shall mean such Available Proceeds Amount times a fraction the numerator
of which shall be the aggregate principal amount of all Loans then outstanding
under this Agreement plus all accrued and unpaid interest on the Loans to the
Unapplied Proceeds Offer Payment Date and the denominator of which shall be the
sum of (x) such amount, (y) the aggregate principal amount of the then
outstanding Senior Secured Notes plus all accrued and unpaid interest thereon
to the Unapplied Proceeds Offer Payment Date and (z) either (a) if the
Unapplied Proceeds Offer Payment Date is prior to August 1, 1997, the Accreted
Value of the then outstanding Senior Secured Discount Notes through the
Unapplied Proceeds Offer
<PAGE> 12
-4-
Payment Date or (b) if the Unapplied Proceeds Offer Payment Date is on and
after August 1, 1997, the aggregate principal amount of the then outstanding
Senior Secured Discount Notes plus all accrued and unpaid interest thereon to
the Unapplied Proceeds Offer Payment Date.
"Asset Sale" means 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) of any Property (each, a "transaction") by the Company or any of
its Subsidiaries to any Person; provided, that (i) transactions involving
Property other than Collateral between the Company and a Subsidiary of the
Company or transactions involving Property other than Collateral between
Subsidiaries of the Company; and (ii) transactions (including sales or other
transfers or dispositions of receivables relating to the incurrence of
Indebtedness permitted pursuant to Section 5.4 hereof) in the ordinary course
of business (including such a transaction with or between Subsidiaries) shall
not constitute Asset Sales. For purposes of this definition, the term "Asset
Sale" shall not include any sale, transfer, conveyance, lease or other
disposition of assets and properties of the Company that is governed by Section
5.7 or Section 6.1 (except to the extent indicated therein).
"Available Proceeds Amount" means the amount of funds (whether
held in the Collateral Account or by the Company or any of its Subsidiaries)
constituting: (i) the portion of any Net Award or Net Proceeds that, pursuant
to the Security Documents, the Company is not required to, or that the Company
has elected not to, apply to a Restoration of the affected Collateral or (ii)
the portion, if any, of the Net Cash Proceeds of an Asset Sale (net, in the
case of an Asset Sale of property that does not constitute Collateral, of any
Indebtedness repaid with the proceeds of such Asset Sale to the extent so
applied within 180 days of such Asset Sale to the repayment of such
Indebtedness; provided, that Indebtedness subordinated to (a) the Indebtedness
outstanding under this Agreement or (b) any other Indebtedness of the Company
or any of its Subsidiaries may not be so repaid; provided, further, that
<PAGE> 13
-5-
with respect to any Indebtedness so repaid outstanding under a revolving credit
facility there shall be an equivalent permanent reduction in the committed
amount thereof) that has not been applied by the Company, within 180 days after
the date of the Asset Sale giving rise to such Net Cash Proceeds, to either (x)
the acquisition or construction of property constituting a Related Business
Investment, in the case of Net Cash Proceeds of property not constituting
Collateral, or (y) the acquisition or construction of property constituting a
Related Business Investment, which property has been made subject to the Liens
of the Security Documents as contemplated by Section 5.6 hereof and the
applicable provisions of the Collateral Agency Agreement within such 180-day
period, in the case of Net Cash Proceeds of property constituting Collateral;
provided, however, that Net Cash Proceeds shall be deemed to have been so
applied, and the Liens contemplated above shall be deemed to have been granted,
within such 180-day period if (A) within such 180-day period, the Board of
Directors of the Company shall have adopted a capital expenditure plan
contemplating the application of such Net Cash Proceeds to a Related Business
Investment and the Company shall have taken significant steps to implement such
plan, (B) such plan shall have been fully implemented within 180 days after the
date of adoption of such plan and (C) to the extent such plan involves the
acquisition or construction of property required to be made subject to the
Liens of the Security Documents, as contemplated above, such Liens shall have
been granted in accordance with the provisions hereof and the applicable
provisions of the Collateral Agency Agreement within 180 days after the date of
adoption of such plan.
"Bankruptcy Law" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute
thereto.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of that Board.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
<PAGE> 14
-6-
"Business Day" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which is (a) a legal holiday under the laws of the State of New York, (b) a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close or (c) a day on which the New York
Stock Exchange is closed and (ii) with respect to all notices, determinations,
fundings and payments in connection with the LIBO Rate, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the London interbank Eurodollar market.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, or other equivalents (however designated) of
or in such Person's capital stock, and options, rights or warrants to purchase
such capital stock, whether outstanding on or issued after the Funding Date,
including, without limitation, all Common Stock and Preferred Stock.
"Capitalized Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.
"Cash Equivalents" means (i) United States Government
Obligations, (ii) commercial paper rated the highest grade by Moody's Investors
Service, Inc. ("Moody's") and Standard & Poor's Corporation ("S&P") and
maturing not more than one year from the date of creation thereof, (iii) time
deposits with, and certificates of deposit and banker's acceptances issued by,
any bank having capital surplus and undivided profits aggregating at least
$500,000,000 and maturing not more than one year 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
<PAGE> 15
-7-
having one of the two highest rating categories obtainable from either Moody's
or S&P.
"Change of Control" means (i) any sale, lease or other
transfer (in one transaction or a series of related transactions) by the
Company or any of its Subsidiaries of all or substantially all of the
consolidated 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 Company))
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of Capital Stock of the Company representing 40% or more 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.
"Collateral" means, collectively, all of the property and
assets that are from time to time subject to the Lien of any of the Security
Documents.
"Collateral Account" means the collateral account established
pursuant to the Collateral Agency Agreement.
"Collateral Agency Agreement" means the Collateral Agency
Agreement dated as of the date hereof between the Company, Acme Steel, Acme
Packaging, the Note Trustee, the Discount Note Trustee, the Agent and the
Collateral Agent in substantially the form attached hereto as Exhibit F as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with its terms.
"Collateral Agent" means Shawmut Bank Connecticut, National
Association, as collateral agent under the Collateral Agency Agreement and the
other Security Documents until a successor replaces it in accordance with the
provisions of the Collateral Agency Agreement, this Agreement and the other
Security Documents and thereafter means such successor.
<PAGE> 16
-8-
"Company" means the Person named as the "Company" in this
Agreement until a successor shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "Company" shall mean such
successor.
"Company Order" means a written order or request signed in the
name of the Company by its President or Vice President, and by its Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary, and delivered to the
Agent.
"Commodity Agreement" of any Person means any option or
futures contract or similar agreement or arrangement designed to protect such
Person or any of its Subsidiaries against fluctuations in commodity prices.
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such Person's common stock,
whether outstanding on the Funding Date or issued after the Funding Date, and
includes, without limitation, all series and classes of such common stock.
"Consolidated Cash Flow Available for Fixed Charges" means,
for any period, on a consolidated basis for the Company and its Subsidiaries,
the sum for such period of (i) Consolidated Net Income, (ii) income taxes with
respect to such period determined in accordance with GAAP, (iii) interest
expense for such period determined in accordance with GAAP and (iv)
depreciation and amortization expenses (including, without duplication,
amortization of debt discount and debt issue costs and amortization of
previously capitalized interest to cost of sales) and other non-cash charges to
earnings which reduced Consolidated Net Income (excluding any non-cash charge
to the extent that such non-cash charge requires an accrual of or a reserve for
cash charges for any future period), determined in accordance with GAAP.
"Consolidated Fixed Charges" of the Company for any period
means the sum of: (i) the aggregate amount of interest which, in conformity
with GAAP, would be set forth opposite the
<PAGE> 17
-9-
caption "interest expense" or any like caption on a consolidated income
statement for the Company and its Subsidiaries (including, but not limited to,
imputed interest included on Capitalized Lease Obligations, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
banker's acceptance financing, the net costs associated with Commodity
Agreements, Currency Agreements and Interest Protection Agreements,
amortization of other financing fees and expenses, the interest portion of any
deferred payment obligation, amortization of discount, premium, if any, and all
other non-cash interest expense other than previously capitalized interest
amortized to cost of sales), plus (ii) interest incurred during the period and
capitalized by the Company and its Subsidiaries, on a consolidated basis in
accordance with GAAP, plus (iii) the amount of Preferred Stock Dividends
declared by the Company and any of its Subsidiaries on Disqualified Stock
(other than such Preferred Stock Dividends payable to the Company or any Wholly
Owned Subsidiary), whether or not paid during such period, provided that, in
making such computation, the Consolidated Fixed Charges attributable to
interest on any Indebtedness computed on a pro forma basis and bearing a
floating interest rate shall be computed as if the rate in effect (after giving
effect to any Interest Protection Agreement) on the date of computation will be
the applicable rate for the entire period.
"Consolidated Net Income" of the Company for any period means
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 the computation of net income (loss) (to the extent
otherwise included therein) without duplication: (i) the net income (or loss)
of any Person (other than a Subsidiary of the Company) in which any Person
other than the Company or any of its Subsidiaries has an ownership interest,
except to the extent that any such income has actually been received by the
Company or any of its Subsidiaries in the form of cash dividends or similar
cash distributions during such period; (ii) the net income (or loss) of any
Person that accrued prior to the date that (a) such Person becomes a Subsidiary
of the Company or is merged into or consolidated with the Company or any of its
<PAGE> 18
-10-
Subsidiaries or (b) the assets of such Person are acquired by the Company or
any of its Subsidiaries, except for purposes of a pro forma calculation
pursuant to clause (c) of the second sentence of the first paragraph of Section
5.4, the net income (or loss) of such Person shall be taken into account for
the full four-quarter period for which the calculation is being made; (iii) the
net income of any Subsidiary of the Company to the extent that (but only as
long as) the declaration or payment of dividends or similar distributions by
such Subsidiary of that income is not permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to the Subsidiary during such
period; (iv) any gain or loss, together with any related provisions for taxes
on any such gain or loss, realized during such period by the Company or any of
its Subsidiaries upon (a) the acquisition of any securities, or the
extinguishment of any Indebtedness, of the Company or any of its Subsidiaries
or (b) any Asset Sale by the Company or any of its Subsidiaries; (v) any
extraordinary gain or loss, together with any related provision for taxes on
any such extraordinary gain or loss, realized by the Company or any of its
Subsidiaries during such period; and (vi) in the case of a successor to the
Company by consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets.
"Consolidated Tangible Net Worth" means, with respect to any
Person, the consolidated stockholder's equity (including any Preferred Stock
that is classified as equity under GAAP, other than Disqualified Stock) of such
Person and its Subsidiaries, as determined in accordance with GAAP, less the
book value of all Intangible Assets reflected on the consolidated balance sheet
of the Company and its Subsidiaries as of such date.
"Construction Contract" means the engineering, procurement and
construction contract dated as of July 28, 1994 between Acme Steel and Raytheon
Engineers & Constructors, Inc., pursuant to which the Modernization Project
shall be constructed.
<PAGE> 19
-11-
"Continuing Director" means a director who either was a member
of the Board of Directors of the Company on the Funding Date 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, either by a specific vote or by approval of the proxy statement issued
by the Company on behalf of the entire Board of Directors of the Company in
which such individual is named as nominee for director.
"Currency Agreement" of any Person means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries 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.
"Disbursement Account" has the meaning assigned to that term
in the Disbursement Agreement.
"Disbursement Agreement" means the Disbursement Agreement
dated as of the date hereof between the Company and the Collateral Agent,
substantially in the form attached hereto as Exhibit E, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms.
"Discount Note Indenture" means the indenture under which the
Senior Secured Discount Notes are issued as it may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"Discount Note Trustee" means the party named as trustee in
the Discount Note Indenture until a successor replaces it in accordance with
the provisions of the Discount Note Indenture and thereafter means such
successor.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible
<PAGE> 20
-12-
or for which it is exchangeable), or upon the happening of any event, (i)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part, on or prior to the Maturity Date or (ii) is convertible into or
exchangeable for (whether at the option of the issuer or the holder thereof)
(a) debt securities or (b) any Capital Stock referred to in clause (i) above,
in each case, at any time prior to the Maturity Date.
"Eligible Transferee" means an institution or other
"accredited investor" (as defined in Regulation D under the Securities Act).
"Eurodollar Reserve Percentage" means the daily average for
the Quarterly Period of the maximum rate at which reserves (including, without
limitation, any supplemental, marginal and emergency reserves) are imposed
during such Quarterly Period by the Board of Governors of the Federal Reserve
System (or any successor) under Regulation D on "eurocurrency liabilities," as
defined in such Board's Regulation D (or in respect of any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Loans is determined or any category of extension of credit or other
assets that include loans by non-United States offices of any Lender to United
States residents), subject to any amendments of such reserve requirement by
such Board or its successor, taking into account any transitional adjustments
thereto. For purposes of this definition, the Loans shall be deemed to be
"eurocurrency liabilities" as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Funding Date" means the date five Business Days after the
date hereof or such other date as the Company and the Agent shall agree in
writing.
<PAGE> 21
-13-
"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 Funding
Date.
"Guarantee" means a guarantee agreement pursuant to which each
Guarantor guarantees the obligations of the Company owing to the Lenders, in
substantially the form of Exhibit H hereto, executed and delivered by each
Guarantor, as such guarantee agreement may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the terms hereof and thereof and any additional Guarantee executed by any
Subsidiary of the Company.
"Guarantor" means each of (i) Acme Steel, Alabama
Metallurgical Corporation, a Washington corporation, Acme Packaging, Alpha Tube
Corporation, a Delaware corporation, Universal Tool & Stamping Company, Inc.,
an Indiana corporation, Alta Slitting Corporation, a Delaware corporation, and
Acme Steel Company International, Inc., a Barbados corporation, and (ii) each
of the Company's Subsidiaries that becomes a guarantor of the Securities
pursuant to the provisions of Section 5.21 hereof.
"Indebtedness" of any Person means, without duplication, (i)
any liability of such Person (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 Indebtedness of
others that such person 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) Disqualified
<PAGE> 22
-14-
Stock of such Person and (v) all Indebtedness of others secured by a Lien on
any asset of such Person, and which is not otherwise assumed by such Person,
provided that Indebtedness shall not include accounts payable (including,
without limitation, accounts payable to such Person by any of its Subsidiaries
or to any such Subsidiary by such Person or any of its other Subsidiaries, in
each case, in accordance with customary industry practice) or liabilities to
trade creditors of such Person arising in the ordinary course of business. The
amount of Indebtedness of any Person at any date shall be (a) the outstanding
balance at such date of all unconditional obligations as described above, (b)
the maximum liability of such Person for any contingent obligations under
clause (ii) above at such date and (c) in the case of clause (v) above, the
lesser of (1) the fair market value of any asset subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (2) the amount of
the Indebtedness secured.
"Indentures" means the Note Indenture and the Discount Note
Indenture, collectively.
"Initial Quarterly Period" means the period from and including
August 11, 1994, through and including November 1, 1994.
"Intangible Assets" of any Person means all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, write-ups of assets over
their prior carrying values (other than write-ups which occurred prior to the
Funding Date and other than, in connection with the acquisition of an asset,
the write-up of the value of such asset (within one year of its acquisition) to
its fair market value in accordance with GAAP) and all other items which would
be treated as intangibles on the consolidated balance sheet of the Company and
its Subsidiaries prepared in accordance with GAAP.
"Intercreditor Agreement" means the Intercreditor Agreement
dated as of the date hereof among the Collateral Agent (on behalf of the
Lenders, the holders of the Senior Secured Notes,
<PAGE> 23
-15-
the Senior Secured Discount Notes and the holders of Permitted Replacement
Financing, if any, incurred in accordance with the provisions hereof), the
agent under the Working Capital Facility (and any successor or successors
thereto or assignee or assignees therefrom), the Company and Acme Steel, in
substantially the form attached hereto as Exhibit G, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with its terms.
"Interest Payment Date" means the last day of each Quarterly
Period applicable to such Loan.
"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.
"Interest Rate Determination Date" means, with respect to any
Quarterly Period (other than the Initial Quarterly Period), the third Business
Day prior to the first day of such Quarterly Period, and with respect to the
Initial Quarterly Period, August 8, 1994.
"Investment" 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.
"Lender" and "Lenders" have the meanings assigned to those
terms in the introduction to this Agreement.
"LIBOR" means, for each Quarterly Period during which any of
the Loans are outstanding, the rate determined by the Agent
<PAGE> 24
-16-
equal to the average (rounded upward, if necessary, to the nearest 1/16 of 1%)
of the offered rates for deposits in U.S. dollars for a period of three
months, as set forth on the Reuters Screen LIBO Page as of 11:00 a.m., London
time, on the Interest Rate Determination Date for such Quarterly Period;
provided that if only one such offered rate appears on the Reuters Screen LIBO
Page, LIBOR for such Quarterly Period shall mean such offered rate. If such
rate is not available at 11:00 a.m., London time, on the Interest Rate
Determination Date for such Quarterly Period, then LIBOR for such Quarterly
Period shall mean the arithmetic mean (rounded upward, if necessary, to the
nearest 1/16 of 1%) of the interest rates per annum at which deposits in
amounts equal to $1,000,000 in U.S. dollars are offered by the Reference Banks
to leading banks in the London Interbank Market for a period of three months as
of 11:00 a.m., London time, on the Interest Rate Determination Date for such
Quarterly Period. If on any Interest Rate Determination Date at least two of
the Reference Banks provide such offered quotations, then LIBOR for such
Quarterly Period shall be determined in accordance with the preceding sentence
on the basis of the offered quotation of those Reference Banks providing such
quotations; provided that if less than two of the Reference Banks are so
quoting such interest rate as mentioned above, then (i) for such Quarterly
Period other than the Initial Quarterly Period, LIBO shall be deemed to be
LIBOR for the next preceding Quarterly Period; and (ii) for the Initial
Quarterly Period, LIBOR shall be deemed to be 8.75%.
"LIBOR Fraction" means the actual number of days in the
Initial Quarterly Period or Quarterly Period, as applicable, divided by 360;
provided, however, that the number of days in the Initial Quarterly Period and
each Quarterly Period shall be calculated by including the first day of such
Initial Quarterly Period or Quarterly Period and excluding the last.
"Lien" means, with respect to any Property, any mortgage, deed
of trust, lien, pledge, lease, easement, restriction, covenant, right-of-way,
charge, security interest or encumbrance of any kind or nature in respect of
such Property. For purposes of this definition, the Company shall be deemed to
own subject to a
<PAGE> 25
-17-
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.
"Loan Parties" means the Company and the Guarantors,
collectively.
"Loans" and "Loan" mean, respectively, (i) the loans made by
the Lenders to the Company pursuant to Section 2.1 hereof and (ii) a single
such loan.
"Maturity Date" means August 1, 2001.
"Modernization Project" means the continuous thin slab
castor/hot strip mill complex to be constructed at Acme Steel's Riverdale,
Illinois plant pursuant to the Construction Contract and all architectural,
engineering and construction plans, utility and other installations and permits
together with all land, improvements, additions, furniture, fixtures and
equipment associated with such project.
"Mortgage" means the mortgage (or deed of trust) dated as of
the date hereof between Acme Steel and the Collateral Agent, in substantially
the form of Exhibit C hereto, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Net Award" has the meaning assigned to such term in the
Security Documents.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents received by the Company or by any of its Subsidiaries from such
Asset Sale (except to the extent that such obligations are sold with recourse
to the Company or to any Subsidiary of the Company) net of (a) reasonable
out-of-pocket expenses and fees relating to such Asset Sale
<PAGE> 26
-18-
(including, without limitation, brokerage, legal, accounting and investment
banking fees and sales commissions) to the extent actually paid, (b) taxes
paid or payable ((1) including, without limitation, income taxes reasonably
estimated to be actually payable as a result of any disposition of property
within two years of the date of disposition and (2) after taking into account
any reduction in tax liability due to available tax credits or deductions and
any tax sharing arrangements), (c) in the case of any Asset Sale that does not
involve any portion of the Collateral, repayment of Indebtedness that is
required by the terms thereof to be repaid in connection with such Asset Sale
to the extent so repaid in cash and (d) appropriate amounts to be provided by
the Company or by any Subsidiary of the Company, as the case may be, as a
reserve, in accordance with GAAP consistently applied, against any liabilities
associated with such Asset Sale and retained by the Company or by any
Subsidiary of the Company, as the case may be, after such Asset Sale, including
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale.
"Net Proceeds" has the meaning assigned to such term in the
Security Documents.
"Note Indenture" means the indenture under which the Senior
Secured Notes are issued as it may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"Note Trustee" means the party named as trustee in the Note
Indenture until a successor replaces it in accordance with the provisions of
the Note Indenture and thereafter means such successor.
"Notes" and "Note" mean, respectively, (i) the promissory
notes of the Company issued pursuant to Section 2.1 hereof in substantially the
form of Exhibit A annexed hereto and relating to Loans and (ii) a single such
promissory note.
<PAGE> 27
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"Obligations" means any principal, premiums, interest,
penalties, fees and other liabilities payable under the documentation governing
any Indebtedness.
"Officer" means the Chairman, the President, any Vice
President, the Chief Financial Officer, the Treasurer, or the Secretary of the
Company.
"Officers' Certificate" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its Chairman of the
Board (if an officer) or its President or one of its Vice Presidents and by its
Chief Financial Officer or its Treasurer or any Assistant Treasurer; provided
that every Officers' Certificate hereunder shall, if applicable, include (i) a
statement that the officers making or giving such Officers' Certificate have
read the covenant or other obligation and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers, such
covenant or other obligation has been complied with.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Agent, and who may be an employee
of or counsel to the Company or the Agent.
"Payment Office" means the office of the Agent designated as
such on the signature pages of this Agreement or such other offices as to which
the Agent shall notify the Company.
"Permitted Additional Lender" means a lender to the Company or
a Guarantor under any Permitted Replacement Financing.
"Permitted Indebtedness" means (i) Indebtedness of the Company
and its Subsidiaries outstanding immediately following the Funding Date; (ii)
Indebtedness under the Working Capital Facility
<PAGE> 28
-20-
which does not exceed $80 million principal amount outstanding at any one time;
(iii) Indebtedness outstanding under this Agreement, the Senior Secured Notes
and the Senior Secured Discount Notes; (iv) the Guarantees and the guarantees
of the Senior Secured Notes and of the Senior Secured Discount Notes; (v)
Indebtedness in respect of obligations of the Company to the Agent hereunder,
to the Trustees under the Indentures and to the Collateral Agent under the
Security Documents; (vi) 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 Loans shall become due and
payable (whether at stated maturity, by acceleration or otherwise) to the
payment and performance of the Company's obligations under this Agreement;
provided, further, that any Indebtedness of the Company or any of its
Subsidiaries owed to any other Subsidiary of the Company that ceases to be such
a Subsidiary shall be deemed to be incurred and shall be treated as an
incurrence for purposes of the first paragraph of Section 5.4 at the time the
Subsidiary in question ceases to be a Subsidiary of the Company; and (vii)
Indebtedness of the Company or its Subsidiaries under any Currency Agreements,
Commodity Agreements or Interest Protection Agreements.
"Permitted Investments" means (i) obligations of or guaranteed
by the U.S. government, its agencies or government-sponsored enterprises; (ii)
short-term commercial bank and corporate obligations that have received the
highest short-term rating from two of the following rating organizations:
Standard & Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Duff & Phelps Credit Rating Co., Fitch Investor Service, Inc.,
IBCA Ltd. and Thomson Bankwatch Inc.; (iii) money market preferred stocks
which, at the date of acquisition and at all times thereafter, are accorded
ratings of at least AA- or Aa3 by S&P or Moody's, respectively; (iv) tax-exempt
obligations that are accorded the highest short-term rating by S&P or Moody's
or a long-term rating of at least A- or A3 by S&P or Moody's,
<PAGE> 29
-21-
respectively, at the time of purchase; (v) master repurchase agreements with
foreign or domestic banks having a capital and surplus of not less than
$250,000,000 or primary dealers so long as such agreements are collateralized
with obligations of the U.S. government or its agencies at a ratio of 102%, or
with other collateral rated at least AA or Aa2 by S&P or Moody's, respectively,
at a ratio of 103% and, in either case, marked-to-market weekly and so long as
such securities shall be held by a third-party agent; and (vi) guaranteed
investment contracts and/or agreements of a bank, insurance company or other
institution whose unsecured, uninsured and unguaranteed obligations (or
claims-paying ability) have at the time of purchase ratings of AAA or Aaa by
S&P or Moody's, respectively; (vii) time deposits with, and certificates of
deposit and banker's acceptances issued by, any bank having capital surplus
and undivided profits aggregating at least $500,000,000 and maturing not more
than one year from the date of creation thereof; and (viii) money market funds
the portfolio of which is limited to investments described in clauses (i)
through (vii) above. In no event shall any of the Permitted Investments
described in clauses (i) through (vi) above have a final maturity more than two
years from the date of purchase; provided, however, that in the event of a
Qualified Defeasance Transaction, Permitted Investments used to defease the
defeased Indebtedness may have a final maturity up to the date of the final
maturity of the Indebtedness so defeased.
"Permitted Liens" means (i)(x) with respect to Property other
than Collateral, Liens existing on the Funding Date to the extent and in the
manner such Liens are in effect on the Funding Date and (y) with respect to
Collateral, Liens existing on the Funding Date to the extent specifically
permitted in the appropriate Security Document, (ii) Liens on accounts
receivable and inventory of the Company and its Subsidiaries securing
Indebtedness incurred under the Working Capital Facility and/or any other
working capital facility; provided, however, that the Indebtedness under such
other working capital facility is permitted to be incurred under Section 5.4
hereof (other than as Permitted Indebtedness) and the amount outstanding at any
time under such facility is not in excess of the amount permitted to be
incurred
<PAGE> 30
-22-
thereunder pursuant to the borrowing base formula set forth therein, (iii)
Liens securing Indebtedness collateralized by Property of, or any shares of
stock of or debt of, any corporation existing at the time such corporation
becomes a Subsidiary of the Company or at the time such corporation is merged
into the Company or any of its Subsidiaries, provided that such Liens are not
incurred in connection with, or in contemplation of, such corporation becoming
a Subsidiary of the Company or merging into the Company or any of its
Subsidiaries and the Acquired Indebtedness could have been incurred pursuant to
the first paragraph of Section 5.4 hereof (other than as Permitted
Indebtedness), (iv) Liens securing Refinancing Indebtedness used to refund,
refinance or extend Indebtedness referred to in the preceding clause (iii),
provided that any such Lien does not extend to or cover any Property, shares or
debt other than the Property, shares or debt securing the Indebtedness so
refunded, refinanced or extended, (v) Liens other than on Collateral in favor
of the Company or any of its Subsidiaries, (vi) Liens on Property (other than
Collateral) of the Company or any of its Subsidiaries acquired after the
Funding Date in favor of governmental bodies to secure progress or advance
payments relating to such Property, (vii) Liens on Property (other than the
Collateral) of the Company or any of its Subsidiaries acquired after the
Funding Date securing industrial revenue or pollution control or other tax
exempt bonds issued in connection with the acquisition or refinancing of such
Property to the extent the incurrence of such Indebtedness is permitted
pursuant to the provisions of Section 5.4 hereof, (viii) Liens to secure
certain Indebtedness that is otherwise permitted under this Indenture and that
is used to finance the cost of Property of the Company or any of its
Subsidiaries acquired after the Funding Date, provided that (a) any such Lien
is created solely for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, the cost (including sales and excise
taxes, installation and delivery charges and other direct costs of, and other
direct expenses paid or charged in connection with, such purchase or
construction) of such Property, (b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost, (c) the Indebtedness
secured by such Lien is incurred by the Company or its Subsidiary within 90
<PAGE> 31
-23-
days of the acquisition of such Property by the Company or its Subsidiary, as
the case may be, (d) such Lien does not extend to or cover any Property other
than such item of Property and any improvements on such item, (e) no Net Cash
Proceeds derived from Collateral are used to fund all or any portion of the
cost of acquisition of such Property, and (f) prior to completion of the
Modernization Project, Acme Steel shall not incur or permit any Lien otherwise
permitted under this clause (viii) and no Liens at any time may encumber assets
which comprise the Modernization Project, (ix) Liens on Property (other than
Collateral) to secure Indebtedness that is otherwise permitted under this
Agreement the aggregate principal amount of which does not exceed $35 million
outstanding at any one time, (x) statutory liens or landlords', 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 and, with
respect to any such Liens arising in respect of any of the Collateral, only to
the extent specifically permitted under the provisions of the appropriate
Security Document, (xi) Liens on the Collateral for the benefit of (a) holders
of the Senior Secured Notes and of the Senior Secured Discount Notes or (b)
holders of Indebtedness arising at any time after retirement of the Senior
Secured Notes or of the Senior Secured Discount Notes; provided, that the
principal amount of such Indebtedness does not exceed the original principal
amount of such Senior Secured Notes or Senior Secured Discount Notes,
respectively, and the holders of such replacement Indebtedness (acting through
a designated representative) enter into a supplement to the Collateral Agency
Agreement in substantially the form annexed thereto and the Company and such
holders otherwise comply with the applicable provisions thereof, (xii) Liens on
the Collateral for the benefit of the Agent and Lenders and (xiii) easements,
restrictions, reservations or rights of others for right-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes and
other similar charges or encumbrances not interfering in any material respect
with the conduct of the business of the Company or any of
<PAGE> 32
-24-
its Subsidiaries or, in the case of such charges or encumbrances which affect
the Collateral, to the extent permitted by the provisions of the Mortgage.
"Permitted Replacement Financing" means Indebtedness of the
Company or a Guarantor incurred in compliance with this Agreement which may, in
accordance with the provisions of clause (xi) of the definition of Permitted
Liens take a security interest in certain of the Collateral upon the execution
and delivery by each Permitted Additional Lender (or a representative thereof)
of a supplement to the Collateral Agency Agreement as contemplated therein and
upon satisfaction of the other conditions set forth in Section 8.11 of the
Collateral Agency Agreement relating thereto.
"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.
"Preferred Stock Dividend" of any Person means, for any
dividend payable with regard to Preferred Stock issued by such Person, the
amount of such dividend multiplied by a fraction, the numerator of which is one
and the denominator of which is one minus the maximum statutory combined
federal, state and local income tax rate (expressed as a decimal number between
1 and 0) then applicable to such Person.
"Prepayment Date," when used with respect to any Loan to be
prepaid, means the date fixed for such repayment pursuant to Section 5.6 or
5.15 hereof.
"Prepayment Offer" shall mean the offer to prepay the Loans
pursuant to Section 5.6 or 5.15 hereof.
<PAGE> 33
-25-
"Principal" of a debt security means the principal of the
security plus, when appropriate, the premium, if any, on the security.
"Pro Rata Share" means the percentage designated as such
Lender's Pro Rata Share set forth opposite the name of such Lender on Schedule
1 annexed hereto; provided that (i) if a Lender is replaced herein or sells,
assigns, transfers or negotiates (but not with respect to participations) all
of its Loans hereunder, the Pro Rata Share of such replacement Lender,
purchaser, assignee, transferee or negotiatee (but not participant) shall be
the percentage designated as the Pro Rata Share of the Lender from whom such
replacement Lender, purchaser, assignee, transferee or negotiatee (but not
participant), replaced or received such Loans, as the case may be; (ii) if a
Lender sells, assigns, transfers, or negotiates (but not with respect to
participations) only a portion of its Loans hereunder, the Pro Rata Share of
the Lender shall be decreased proportionally to the extent of such sale,
assignment, transfer or negotiation (but not with respect to participations)
and the Pro Rata Share of the entity receiving such portion of the Loans shall
be equal to the proportion received of the Pro Rata Share of the Lender from
whom it received such portion of the Loans; provided, that a Lender's ability
to sell, assign, transfer or negotiate all or a portion of its Loans hereunder
is subject to Section 9.1 hereof; and (iii) in the event of a Prepayment Offer
pursuant to Sections 5.6 or 5.15, the Pro Rata Share for each Lender shall be
adjusted as set forth in Section 2.4B hereof.
"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.
"Prospectus" means the final prospectus with respect to the
Securities filed with the SEC pursuant to paragraph (1) or (4) of Rule 424(b)
of the Rules and Regulations or, if no such filing is made, the final
prospectus contained in the Registration Statement.
<PAGE> 34
-26-
"Qualified Defeasance Transaction" means any transaction by
the Company or any of its Subsidiaries in which Indebtedness is defeased;
provided, however, that in the case of Indebtedness which is subordinate to
any other Indebtedness of such Person, such Indebtedness is being defeased in
compliance with Section 5.7 hereof; and provided, further, that in order for
such defeasance to be a Qualified Defeasance Transaction the net present value
of the cost of such defeasance, including but not limited to the actual costs
of any Permitted Investments, the cost of any trustee or agent overseeing such
defeasance and any costs associated with the closing of such transaction, must
be less than the net present value of all present and future payments on the
Indebtedness to be defeased including but not limited to principal, interest
and premium, if any.
"Quarterly Interest Payment Date" means the Stated Maturity of
an installment of interest on the Loans.
"Reference Banks" means each of Barclays Bank PLC, London
Branch, The Bank of Tokyo Ltd., London Branch, Bankers Trust Company, London
Branch, and National Westminster Bank PLC, London Branch, and their respective
successors and if any of such banks are not at the applicable time providing
interest rates as contemplated within the definition of "LIBOR", Reference
Banks shall mean the remaining bank or banks so providing such rates. In the
event that less than two of such banks are providing such rate, the Agent shall
use reasonable efforts to appoint additional Reference Banks so that there are
at least two such banks providing such rates, provided that such banks
appointed by the Agent shall be London offices of leading banks engaged in the
Eurodollar Market.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Company or its Subsidiaries
outstanding on the Funding Date or other Indebtedness permitted to be incurred
by the Company or its Subsidiaries pursuant to the terms of this Agreement, but
only to the extent that (i) the Refinancing Indebtedness is subordinated to the
Indebtedness outstanding under this Agreement to the same
<PAGE> 35
-27-
extent as the Indebtedness being refunded, refinanced or extended, if at all,
(ii) the Refinancing Indebtedness is scheduled to mature either (a) no earlier
than the Indebtedness being refunded, refinanced or extended, or (b) after the
Maturity Date, (iii) the portion, if any, of the Refinancing Indebtedness that
is scheduled to mature on or prior to the Maturity Date has a weighted average
life to maturity at the time such Refinancing Indebtedness is incurred that is
equal to or greater than the weighted average life to maturity of the portion
of the Indebtedness being refunded, refinanced or extended that is scheduled
to mature on or prior to the Maturity Date, and (iv) such Refinancing
Indebtedness is in an aggregate principal amount that is equal to or less than
the sum of (a) the aggregate principal amount then outstanding under the
Indebtedness being refunded, refinanced or extended, (b) the amount of accrued
and unpaid interest, if any, on such Indebtedness being refunded, refinanced or
extended and (c) the amount of customary fees, expenses and costs related to
the incurrence of such Refinancing Indebtedness; provided that Indebtedness
which is in an aggregate principal amount greater than the sum of (a), (b) and
(c) of this clause (iv) shall constitute Refinancing Indebtedness to the extent
of the sum of (a), (b) and (c) if the amount of Indebtedness in excess of the
sum of (a), (b) and (c) could otherwise be incurred pursuant to Section 5.4.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System of the United States as in effect from time to time.
"Related Business Investment" means any Investment, capital
expenditure or other expenditure by the Company or any Subsidiary of the
Company in Property or assets (other than the Property or assets subject to any
Lien except for (1) with respect to any Available Proceeds Amount resulting
from an Asset Sale involving Collateral, the Lien of the Security Documents and
(2) with respect to any Available Proceeds Amount resulting from an Asset Sale
not involving Collateral, the Lien of any instruments or documents that secured
Indebtedness that was secured by the assets subject to such Asset Sale) which
is related to the business of the
<PAGE> 36
-28-
Company and its Subsidiaries as it is conducted on the date of the Asset Sale
giving rise to the Asset Sale Proceeds to be reinvested.
"Registration Statement" means the Registration Statement with
respect to the Securities, as amended, when it became effective under the
Securities Act, or the most recent post-effective amendment thereto, including
all information, if any, contained in the final prospectus filed with the SEC
pursuant to Rule 424(b) of the Rules and Regulations.
"Repurchase Date" has the meaning assigned to such term in the
Indentures as in existence on the Funding Date.
"Requisite Lenders" means Lenders holding 50.1% or more of the
aggregate principal amount of the outstanding Loans.
"Restoration" has the meaning assigned to such term in each of
the Mortgages.
"Restricted Investment" means, with respect to any Person, any
Investment by such Person in any (i) of its Affiliates or in any Person that
becomes an Affiliate as a result of such Investment, (ii) executive officer or
director of such Person and (iii) executive officer or director of any
Affiliate of such Person; provided that loans or advances made in the ordinary
course of business for travel, relocation or similar purposes shall not
constitute Restricted Investments.
"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 (a) dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock)
and (b) 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
<PAGE> 37
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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 of the Company or any of
its Subsidiaries which is subordinated in right of payment to the Securities
(including any Guarantees thereof); and (iv) the making of any Restricted
Investment or guarantee of any Restricted Investment in any Person.
"Reuters Screen LIBO Page" means the display designated as
page "LIBO" on the Reuter Monitor Money Rates Service (or such other page as
may replace the LIBO page on that service for the purpose of displaying London
Interbank offered rates of major banks).
"Rules and Regulations" means the rules and regulations of the
SEC under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" has the meaning assigned to such term in the
Collateral Agency Agreement.
"Securities" means the Senior Secured Notes and the Senior
Secured Discount Notes, collectively.
"Security Agreement" means the Security Agreement dated as of
the date hereof between Acme Steel and the Collateral Agent, in substantially
the form attached hereto as Exhibit B, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with its terms.
"Security Documents" means, collectively, the Security
Agreement, the Mortgage, the Stock Pledge Agreements, the Disbursement
Agreement, the Collateral Agency Agreement and the Intercreditor Agreement and
all security agreements, mortgages, deeds of trust, collateral assignments, or
other instruments
<PAGE> 38
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evidencing or creating any security interest in favor of the Collateral Agent
in all or any portion of the Collateral in each case, as amended, amended and
restated, supplemented or otherwise modified from time to time.
"Senior Secured Discount Notes" means those certain Senior
Secured Discount Notes due 2004, as amended or supplemented from time to time
pursuant to the terms of the Discount Note Indenture, that are issued under the
Discount Note Indenture.
"Senior Secured Notes" means those certain Senior Secured
Notes due 2002, as amended or supplemented from time to time pursuant to the
terms of the Note Indenture, that are issued under the Note Indenture.
"Significant Subsidiary" means any Subsidiary of the Company
which would constitute a "significant subsidiary" as defined in Rule 1.02 of
Regulation S-X under the Securities Act of 1933, as amended, and the Exchange
Act.
"Special Stock Purchase Warrants" means the 5,600,000 special
common stock purchase warrants issued and sold by the Company in March 1994 and
the Common Stock for which they can be exercised.
"Stated Maturity," when used with respect to any Loan or any
installment of interest thereon, means the date specified herein as the fixed
date on which the principal of such Loan or such installment of interest is due
and payable.
"Stock Pledge Agreements" means, collectively, the Stock
Pledge Agreement dated the date hereof between (i) the Company or (ii) Acme
Steel and Acme Packaging, and, in each case, the Collateral Agent, in
substantially the form attached hereto as Exhibit D, as each may be amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
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"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 or controlled by such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Agreement.
"Trustees" means the Note Trustee and the Discount Note
Trustee, collectively.
"Unapplied Proceeds Offer" has the meaning assigned to such
term in the Indentures as in existence on the Funding Date.
"Unapplied Proceeds Offer Payment Date" has the meaning
assigned to such term in the Indentures as in existence on the Funding Date.
"Underwriters" means the parties named as such in the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement,
dated the date hereof, among the Company, its Subsidiaries and the
Underwriters, as the same may be amended or supplemented from time to time.
"United States Government Obligations" means securities which
are direct obligations of (i) the United States or (ii) an agency or
instrumentality of the United States, the payment of which is unconditionally
guaranteed by the United States, which, in either case, are full faith and
credit obligations of the United States and are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such United
States Government Obligations or a specific payment of interest on or principal
of any such United States Government Obligations held by such custodian for the
account of the holder of
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a depository receipt; provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount received by the
custodian in respect of the United States Government Obligations for the
specific payment of interest or principal of the United States Government
Obligations evidenced by such depository receipt.
"Wabush" means the entity called Wabush Mines, a Canadian
joint venture, including Wabush Iron Co. Ltd., an Ohio corporation and one of
the joint venturers of Wabush Mines, which is engaged in the mining,
beneficiation and pelletizing of iron ore or any successor to either such
entity, any entity of approximately equivalent value substituted therefor or
any investment of approximately equivalent value and purpose.
"Wholly Owned Subsidiary" of any Person means, at any time, a
Subsidiary all of the Capital Stock of which (except director's qualifying
shares, if any) is at the time owned directly or indirectly by such Person.
"Working Capital Facility" means the revolving credit
facility, as the same may be amended or supplemented from time to time, and any
refinancing or replacement of such credit facility or any successor credit
facility so long as the aggregate amount permitted to be borrowed under any
such amended, supplemented, refinanced, replaced or successor credit facility
does not exceed the lesser of (i) $80 million outstanding at any time or (ii)
an amount equal to the sum of 85% of the face value of all "eligible
receivables" of the Company and its Subsidiaries party to such credit facility
plus 50% of the lower of the fair market value or cost of their "eligible
inventory" (as such terms are defined for purposes of such credit facility).
1.2 Other Definitions
Term Defined in Section
---- ------------------
"Affiliate Transaction" 5.03
"Code" 4.12
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"Custodian" 7.01
"ERISA" 4.12
"Event of Default" 7.01
"Financing Statements" 4.23
"incurrence" 5.04
"Interest Period" 2.2B
"Personal Property" 4.20
"Surviving Entity" 6.01
"Treasury Rate" 2.6E
"UCC" 4.20
"UCC Property" 4.20
1.3 Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in effect on the Funding Date, and any other reference in
this Agreement to "generally accepted accounting principles" refers to
GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) "herein," "hereof" and other words of similar import
refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.
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Section 2 AMOUNT AND TERMS OF LOANS; NOTES
2.1 Loans and Notes
A. Loans. Subject to the terms and conditions of this
Agreement, each Lender, severally and for itself alone, hereby agrees to lend
to the Company, on the Funding Date, the amounts set forth opposite its name on
Schedule 1 hereto. Such Loans shall be made only on the Funding Date and shall
not exceed an aggregate principal amount of $50,000,000. The aggregate
principal amount of Loans owing to any Lender hereunder shall not at any time
exceed such Lender's Pro Rata Share multiplied by the total principal amount
of Loans then outstanding. Loans, once repaid, cannot be reborrowed.
B. Notice. In the event the Company desires to borrow
an aggregate principal amount of Loans less than $50,000,000, the Company shall
give notice in writing thereof to the Agent, at its office at 3 World Financial
Center (8th floor) to the attention of Janine Shugan, prior to 10:00 a.m. (New
York time) at least three Business Days prior to the Funding Date. This notice
shall be irrevocable upon delivery and shall specify the aggregate principal
amount of the Loans to be made hereunder. The Agent shall as promptly as
practicable give each Lender written notice (or telephonic notice promptly
confirmed in writing) of the proposed Loans and each Lender's Pro Rata Share
together with the other matters covered by the Company's notice.
C. Disbursement of Funds. No later than 12:00 noon (New
York time) on the Funding Date each Lender will make available its Pro Rata
Share. All amounts that a Lender is to fund shall be made available in U.S.
dollars and in immediately available funds to the Agent at its Payment Office
and the Agent shall make such Funds available to the Company as it may direct
in writing. Unless the Agent has received written notice from a Lender prior
to the Funding Date that it does not intend to make available its Pro Rata
Share of the Loans (in which case the Agent shall promptly telephonically
notify the Company) the Agent may assume that such Lender has made such amount
available to the Agent on the Funding
<PAGE> 43
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Date and the Agent, in reliance upon assumption, may (in its sole discretion
and without any obligation to do so) make available to the Company the amount
of such Loan. If such corresponding amount is not in fact made available to
the Agent, the Agent shall be entitled to recover such corresponding amounts
from the Lender together with interest on such amounts at the rate borne by the
Loan.
D. Notes. The Company shall execute and deliver to each
Lender on the Funding Date a Note to evidence that Lender's Loans initially
outstanding on the Funding Date, in the principal amount of that Lender's Loans
and with other appropriate insertions. In accordance with the requirements
hereof and of the Subsidiary Guarantee, each Guarantor shall acknowledge their
guarantee of the obligations of the Company with respect to the Loans by
executing the Guarantee.
2.2 Interest on the Loans
A. Rate of Interest. The Loans shall bear interest on
the unpaid principal amount thereof from and including the date made to but not
including the date repaid at a rate determined by reference to the Applicable
LIBO Rate. Each determination of the Applicable LIBO Rate made by the Agent
shall be conclusive and binding on the Loan Parties and the Lenders absent
manifest error.
B. Interest Payments. Interest on each Loan shall be
payable in arrears on and to each Quarterly Interest Payment Date, upon any
prepayment of that Loan (to the extent accrued on the amount being prepaid), on
the date on which each installment thereof shall become due and at maturity.
Interest will be calculated on a formula basis by: (i) multiplying the
principal amount of Loans outstanding on the applicable Quarterly Interest
Payment Date by the Applicable LIBO Rate, and (ii) multiplying such product by
the LIBOR Fraction.
2.3 Fees
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A. Administrative Fee. The Company and the Guarantors,
jointly and severally, agree to pay to the Agent an annual fee (the
"Administrative Fee") of $15,000. Such Administrative Fee shall be payable
annually in advance commencing on August 11, 1994 and on each successive
anniversary of the Funding Date, so long as any Loans are outstanding on such
date.
B. Time of Payment. The Company shall make payment of
the Agent's Administrative Fees hereunder, not later than 12:00 noon (New York
time) on the date when due in freely transferable U.S. Dollars and in
immediately available funds, to the Agent at its Payment Office.
2.4 Prepayments and Payments
A. Voluntary Prepayments. The Company shall have the
right to prepay any Loan, on the last day of any Interest Period with respect
thereto, without premium or penalty. The Company shall give notice (by telex
or telecopier, or by telephone (confirmed in writing promptly thereafter))
(which shall be irrevocable) to the Agent of each proposed prepayment hereunder
at least three Business Days prior to the Business Day of the proposed
repayment and, in each case, shall specify the proposed prepayment date (which
shall be a Business Day) and the aggregate principal amount of the proposed
prepayment. No such prepayment of any Loan pursuant to this Section 2.4A shall
be in an amount less than $5,000,000 or in an amount which is not an integral
multiple of $1,000,000 (or such lesser amount as shall then be outstanding).
All voluntary prepayments shall be applied pro rata among the Lenders. All
such voluntary prepayments shall be applied to reduce outstanding Loans
pursuant to the payment schedule set forth in Section 2.4B(i) hereof on a pro
rata basis across the then remaining amortization schedule. Notice of
prepayment having been given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the prepayment date.
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B. Mandatory Prepayments and Repayments.
(i) Amortization Payments. The Company shall repay its
outstanding Loans on the following dates pursuant to the following schedule:
<TABLE>
<CAPTION>
Repayment Date Payment Amount
-------------- --------------
<S> <C>
November 1, 1998 $3,750,000
February 1, 1999 3,750,000
May 1, 1999 3,750,000
August 1, 1999 3,750,000
November 1, 1999 3,750,000
February 1, 2000 3,750,000
May 1, 2000 3,750,000
August 1, 2000 3,750,000
November 1, 2000 5,000,000
February 1, 2001 5,000,000
May 1, 2001 5,000,000
August 1, 2001 5,000,000
</TABLE>
(ii) Prepayments Due to Asset Sales and a Change of
Control. Upon receipt by the Company or any Subsidiary of the Company of any
Net Cash Proceeds from any Asset Sale occurring after the Funding Date, the
Company shall be obligated to make a Prepayment Offer as required by Section
5.6. Upon the occurrence of a Change of Control, the Company shall be
obligated to make a Prepayment Offer as required by Section 5.15 hereof. Such
prepayments shall be applied to reduce the outstanding Loans pursuant to the
payment schedule set forth in Section 2.4B(i) hereof in inverse order of
maturity. In the event that any Lender chooses to accept a Prepayment Offer
for all or any portion of such Lender's Loan, the Company shall notify the
Agent and each Lender of such prepayment on the Prepayment Date. Such notice
shall include a copy of Schedule 1 hereto adjusted to reflect each Lender's new
Pro Rata Share which shall be calculated by dividing the aggregate principal
amount of each Lender's Loan by the aggregate principal amount of all Loans
outstanding hereunder, in each case immediately following the Prepayment Date.
Unless the
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Agent shall reasonably object to such Schedule within 10 Business Days (or such
lesser period ending at the expiration of the Interest Period next expiring) of
receipt of such notice, such Schedule shall be deemed to reflect each Lender's
Pro Rata Share and be final, conclusive and binding upon all parties hereto.
C. Manner and Time of Payment. All payments of
principal, interest and fees hereunder and under the Notes by the Company shall
be made without defense, set off or counterclaim and in freely transferable
U.S. Dollars in immediately available funds and delivered to the Agent, unless
otherwise noted, for the ratable account of each Lender not later than 12:00
noon (New York time) on the date due at the Agent's Payment Office. Whenever
any payment with respect to any Loan shall be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension; provided, however, that
if the next succeeding Business Day falls in another calendar month, such
payments shall be made on the next preceding Business Day.
D. Order of Payment. Except as otherwise provided in
Sections 5.6 and 5.15, all payments made by the Company to the Agent shall be
applied by the Agent, to the extent due and owing (a) first, to the payment of
expenses referred to in Section 9.2 hereof, (b) second, to the payment of the
fees referred to in Section 2.3 hereof, (c) third, to the payment of accrued
and unpaid interest on the Loans until all such accrued interest has been paid
and (d) fourth, to the payment of the unpaid principal amount of the Loans.
E. Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all Loans
and principal payments previously made thereon and of the date to which
interest thereon has been paid and will notify the Company and the Agent of the
name and address of the transferee of that Note; provided that the failure to
make (or any error in the making of) a notation of any Loan or
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payment made under or on such Notes or to notify the Company or the Agent of
the name and address of such transferee shall not limit or otherwise affect the
obligation of the Company hereunder or under such Notes with respect to any
Loan and payments of principal or interest on any such Note.
2.5 Use of Proceeds
The proceeds of the Loans made by the Lenders to the Company
hereunder will be paid over to the Collateral Agent to be placed in the
Disbursement Account for payment to the Company pursuant to the terms thereof.
2.6 Special Provisions Governing Loans
Notwithstanding other provisions of this Agreement, the
following provisions shall govern with respect to Loans as to the matters
covered:
A. Determination of Interest Rate. As soon as
practicable after 10:00 a.m. (New York time) on an Interest Rate
Determination Date, the Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon
all parties) the interest rate which shall apply to the Loans for
which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or
by telephone confirmed in writing) to the Company and to each Lender.
B. Compensation. The Company shall compensate each
Lender, upon written request by that Lender, for all losses, expenses
and liabilities (including, without limitation, any interest paid by
that Lender to lenders of funds borrowed by it to make or carry its
Loans and any loss sustained by that Lender in connection with the
re-employment of such funds but excluding any loss of margin of that
Lender), which that Lender may sustain with respect to Loans: (i) if
any prepayment or repayment (as required by Section 2.4A hereof, by
acceleration or otherwise) occurs on a date which is not
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the last day of the Interest Period applicable to that Loan, (ii) if
any prepayment or repayment of any such Lender's Loans is not made on
any date specified in a notice of prepayment or repayment given by the
Company or (iii) as a consequence of any other failure by the Company
to repay such Lender's Loans when required by the terms of this
Agreement. Compensation owing under this Section 2.6B shall be equal
to the excess, if any, of (a) the amount of interest which would have
accrued on the amount of principal prepaid or repaid for the period
from the date of such prepayment or repayment to the last day of the
then Quarterly Period for the relevant Loan at the applicable rate of
interest for such Loan provided for herein over (b) the amount of
interest (as reasonably determined by such Lender) which would be
earned by reinvesting the principal amount to which such prepayment or
repayment relates at the Treasury Rate (defined below) for such
period. For purposes of this Section 2.6B, the term "Treasury Rate"
means, for any period with respect to any amount of principal of such
Loan which is prepaid or repaid, as aforesaid, a rate per annum
(computed on the basis of a year of 360 days and the actual number of
days elapsed) equal to the rate determined by the Agent on the date
which is three Business Days prior to the date of such action or
failure to act (or such later date when the Agent shall have knowledge
of such prepayment or repayment) to be the yield expressed as a rate
in the secondary market on United States Treasury securities having
substantially the same term to maturity as such period (such
determination to be based upon quotes obtained by the Agent from three
established dealers in such market). A certificate as to the amount
of such losses, expenses and liabilities submitted to the Company by
such Lender shall, absent manifest error, be final, conclusive and
binding for all purposes.
C. Booking of Loans. Any Lender may make, carry or
transfer Loans at, to, or for the account of, any of its branch
offices or the office of an Affiliate of that Lender; provided,
however, that the Company shall not be obligated to pay any costs
related to such transfer.
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Section 3 CONDITIONS TO FUNDING
3.1 Conditions to Funding
The obligations of the Lenders to extend the Loans on the
Funding Date are subject to prior satisfaction of the following conditions:
A. On or before the Funding Date, the Company, its
Subsidiaries and the Underwriters shall have entered into the
Underwriting Agreement. On or before the Funding Date the
Underwriters shall have purchased the Securities.
B. On or before the Funding Date, the Company shall
execute and deliver or shall cause to be executed and delivered to the
Lenders the following:
1. Copies of the Note executed in accordance
with Section 2.1D hereof drawn to the order of each Lender and
with appropriate insertions;
2. Executed copies of this Agreement; and
3. Executed copies of the Guarantees.
C. On or before the Funding Date, the Company shall have
furnished to the Agent the following:
1. Executed copies of the Security Documents;
2. A certificate, dated the Funding Date, of its
(a) Chief Executive Officer or its President and (b) its
Vice-President-Finance stating that the representations and
warranties of the Company and its Subsidiaries contained in
the Mortgage, the Security Agreement, the Stock Pledge
Agreements, the Intercreditor Agreement, the Collateral Agency
Agreement, the Disbursement Agreement and this Agreement are
true and correct as of the Funding Date; the Company and its
Subsidiaries have complied with
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all of their agreements contained herein; and the conditions
set forth in this Section 3.1 have been fulfilled; and
3. Such other documents as the Agent may
reasonably request.
D. On or before the Funding Date, all corporate
proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Security Documents and the
Notes, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in
all respects to counsel for the Agent, and the Company shall have
furnished to such counsel all documents and information that it may
reasonably request to enable it to pass upon such matters.
E. On the Funding Date, the Agent shall have received
originally executed copies of one or more favorable written opinions,
each dated such date, of (i) Coffield, Ungaretti and Harris, special
counsel for the Company and the Guarantors, in substantially the form
of Exhibit I-1 annexed hereto and covering such other matters as shall
be requested by the Agent and (ii) Edward P. Weber, Jr., counsel of
the Company and the Guarantors, in substantially the form of Exhibit
I-2 annexed hereto and covering such other matters as shall be
requested by the Agent.
F. On the Funding Date, the Agent shall have received
originally executed copies of the favorable written opinion of Cahill
Gordon & Reindel, special counsel to the Agent and the Lenders, dated
as of such date, substantially in the form of Exhibit J hereto.
<PAGE> 51
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Section 4 REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE GUARANTORS
The Company and the Guarantors, jointly and severally,
represent and warrant to the Agent that the following statements are true,
correct and complete:
4.1 Due Incorporation
The Company and each of its Subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under
the laws of their respective jurisdictions of incorporation, are duly qualified
to do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification except for
jurisdictions in which the failure to so qualify, together with all other such
failures, would not have a material adverse effect upon the business,
properties, assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and its subsidiaries taken as a whole, and have all
corporate power and authority necessary to own or hold their respective
properties and to conduct the businesses as described in the Prospectus; and
the Company has no other subsidiaries other than the Guarantors.
4.2 Capitalization
The Company had at the date indicated in the Prospectus a duly
authorized and outstanding capitalization as set forth in the column entitled
"Actual" under the caption "Capitalization" as set forth in the Prospectus,
and, based on the assumptions stated in the Prospectus, the Company will have
on the Funding Date the adjusted capitalization as set forth in the column
entitled "As Adjusted" under the caption "Capitalization" as set forth in the
Prospectus; all of the Special Stock Purchase Warrants have been duly and
validly authorized and issued, are fully paid and non-assessable and conform to
the description thereof contained in the Prospectus; all of the issued shares
of Capital Stock of the Company have been duly and validly authorized and
issued, are fully
<PAGE> 52
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paid and non-assessable; at the Funding Date, all conditions to the exercise of
the Special Stock Purchase Warrants and the release from escrow of the net
proceeds of the sale thereof will have been satisfied or waived and, upon
exercise of the Special Stock Purchase Warrants, each share of Common Stock
issuable in respect thereof will be validly issued, fully paid and
non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
4.3 Due Authorization
This Agreement, the Security Documents, the Notes and the
Guarantees have been duly and validly authorized by the Loan Parties (to the
extent each is a party thereto); and on the Funding Date, (i) the Agreement
will have been duly and validly authorized, executed and delivered by the
Company and, when duly and validly authorized, executed and delivered by the
Agent and the Lenders, will constitute a valid and legally binding obligation
of the Company enforceable against it in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); (ii) the
Security Agreement will have been duly and validly authorized, executed and
delivered by Acme Steel and, when duly and validly authorized, executed and
delivered by the Collateral Agent, will constitute a valid and legally binding
obligation of Acme Steel enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
(iii) the Mortgage will have been duly and validly authorized, executed and
delivered by Acme Steel and will constitute a valid and legally binding
obligation of Acme Steel enforceable against it
<PAGE> 53
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in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law); (iv) the Stock Pledge Agreements will have
been duly and validly authorized, executed and delivered by each of the Loan
Parties (to the extent each is a party thereto) and, when duly and validly
authorized, executed and delivered by the Collateral Agent, will constitute
valid and legally binding obligations of each of the Loan Parties (to the
extent each is a party thereto) enforceable against each such Loan Party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law); (v) the Intercreditor Agreement will have been
duly and validly authorized, executed and delivered by each of the Company and
Acme Steel and, when duly and validly authorized, executed and delivered by the
Collateral Agent and the Agent (as defined in the Intercreditor Agreement),
will constitute a valid and legally binding obligation of each of the Company
and Acme Steel enforceable against them in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); (vi) the
Collateral Agency Agreement will have been duly and validly authorized,
executed and delivered by each of the Loan Parties (to the extent each is a
party thereto) and, when duly and validly authorized, executed and delivered by
the Collateral Agent, the Trustees and the Agent, will constitute a valid and
legally binding obligation of each of the Loan Parties (to the extent each is a
party thereto) enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether such
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enforceability is considered in a proceeding in equity or at law); (vii) the
Disbursement Agreement will have been duly and validly authorized, executed and
delivered by the Company and, when duly and validly authorized, executed and
delivered by the Collateral Agent, will constitute a valid and legally binding
obligation of the Company enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
(viii) the Notes will have been duly and validly authorized for issuance by the
Company and, upon execution, delivery and payment therefor as provided in this
Agreement, will be validly issued and outstanding and will constitute valid and
legally binding obligations of the Company entitled to the benefits of this
Agreement and enforceable against the Company in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
and (ix) each of the Guarantors will have duly and validly authorized its
Guarantee and, upon execution of the Notes by the Company and upon the making
of the Loans as contemplated in this Agreement, its Guarantee will be validly
issued and outstanding and will constitute a valid and legally binding
obligation of such Guarantor enforceable against each such Guarantor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
4.4 No Breach
The execution, delivery and performance of this Agreement by each of
the Loan Parties and the consummation by each of the Loan Parties of the
transactions contemplated hereby, the execution
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and delivery of the Security Documents, the Notes and the Guarantees by each of
the Loan Parties (to the extent each is a party thereto) and compliance by each
of the Loan Parties with all of the provisions hereof and, if applicable,
thereof will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement (other than as may arise pursuant to the
Company's existing revolving credit agreement dated as of June 26, 1992 and the
Note Agreements, dated as of October 16, 1989, as amended, which will either be
terminated or prepaid, as the case may be) or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or assets;
and no consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by each of the Loan
Parties or, except as may be previously obtained, the consummation of the
transactions contemplated hereby, or the execution and delivery of this
Agreement, the Security Documents, the Notes and the Guarantees by each of the
Loan Parties (to the extent each is a party thereto) or compliance with all of
the provisions hereof and, if applicable, thereof.
4.5 Corporate Power and Authority
Each of the Loan Parties has the requisite corporate power and
authority to execute and deliver this Agreement, the Security Documents, the
Notes and the Guarantees (to the extent each is a party thereto) and to perform
its obligations hereunder and, if applicable, thereunder; and all corporate
action required to be taken for the due and proper authorization and delivery
of this Agreement and the consummation of the transactions
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contemplated by the Security Documents and this Agreement have been duly and
validly taken.
4.6 Absence of Certain Events
Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements, any material loss or
interference with their respective businesses from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth
in the Prospectus; and, since such date, there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth in the Prospectus.
4.7 Financial Statements
The most recent quarterly consolidated financial statements
and financial data (including the related notes and supporting schedules) filed
with the SEC present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved, except as indicated therein, and the pro forma financial data filed
as part of the Registration Statement or included in the Prospectus have been
prepared in accordance with the SEC's rules and guidelines with respect to pro
forma financial data and the assumptions used in the preparation thereof are,
in the Loan Parties' opinion, reasonable.
4.8 Marketable Title
The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and
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marketable title to all personal property reflected in the financial
statements, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not materially
affect the value of such property as reflected in the Company's consolidated
financial statements and do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries; and
all real property and buildings held under lease by the Company and its
subsidiaries which are described in the Prospectus are held by them under valid
and binding leases.
4.9 Insurance
The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks for the conduct of their
respective businesses and the value of their respective properties as is
customary for companies engaged in similar businesses in similar industries.
4.10 Governmental Proceedings
Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company or
any of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, could reasonably be expected to have a
material adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries; and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
4.11 Labor
Except as described in the Prospectus, no labor disturbance by
the employees of the Company or any of the Company's subsidiaries exists or, to
the knowledge of the Company, is imminent which, in either case, could
reasonably be expected to
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have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries.
4.12 ERISA
The Company and each of its subsidiaries are in compliance in
all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company or any of its subsidiaries would have any
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Section 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company or any of its subsidiaries would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
4.13 Tax Liabilities
The Company and each of its subsidiaries have filed all
federal, state and local income and franchise tax returns required to be filed
through the date hereof and have paid all taxes due thereon (other than those
assessments being contested in good faith), and except as described in the
Prospectus, no tax deficiency has been determined adversely to the Company or
any of its subsidiaries which has had (nor does the Company have any knowledge
of any tax deficiency which, if determined adversely to the Company or any of
its subsidiaries, could reasonably have) a material adverse effect on the
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries.
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4.14 Material Changes
Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, neither the Company nor any of its subsidiaries has (i) issued
or granted any securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in the
ordinary course of business, (iii) entered into any transaction not in the
ordinary course of business or (iv) declared or paid any dividend on its
capital stock other than, in the case of the subsidiaries, directly or
indirectly, to the Company.
4.15 Books and Records
Each of the Company and its subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported accountability
for its assets is compared with existing assets at reasonable intervals.
4.16 No Defaults
Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default, in any respect
material to the business, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and its subsidiaries taken
as a whole, and except as set forth in the Prospectus, no event has occurred
which, with notice or lapse of time or both, would constitute such a default,
in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject
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or (iii) is in violation, in any respect material to the business, properties,
assets, rights, operations condition (financial or otherwise) or prospects of
the Company and its subsidiaries taken as a whole, of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business.
4.17 Foreign Corrupt Practices
Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or, to the Company's knowledge, any other
person associated with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made
any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
4.18 Environmental Matters
Other than as set forth in the Prospectus, there has been no
storage, disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, medical wastes, hazardous wastes or
hazardous substances by the Company or any of its subsidiaries (or, to the
knowledge of the Company, any of their predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which would not
have, or could not be reasonably likely to have, singularly or in the aggregate
with all such violations and remedial actions, a material adverse effect on
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the general affairs, management, consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries; other than
as set forth in the Prospectus, there has been no spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused
by the Company or any of its subsidiaries or with respect to which the Company
or any of its subsidiaries has knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not have or
would not be reasonably likely to have, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a material adverse effect on the general affairs, management,
consolidated financial position, stockholders' equity or results of operations
of the Company and its subsidiaries; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
4.19 Investment Company
None of the Loan Parties is an "investment company" within the
meaning of such term under the Investment Company Act of 1940, as amended, and
the rules and regulations of the SEC thereunder.
4.20 Mortgage
Upon execution and delivery by Acme Steel, on the Funding Date
and assuming due recording, each Mortgage will create and constitute (A) a
valid and enforceable mortgage lien on the real property and fixtures described
therein (the "Real Property"), (B) a valid and enforceable security interest in
such of the Mortgaged Property (as defined in the Mortgage), other than
fixtures, as is subject to the provisions of Article 9 (the "UCC Property") of
the Uniform Commercial Code (the "UCC") as in effect in the state in which such
Mortgaged Property is located and (C) a valid common law
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lien on or pledge of such of the Mortgaged Property as is not UCC Property or
Real Property (such property, together with the UCC Property, the "Personal
Property"). Each Mortgage will be in proper form under the laws of the state
in which the Mortgaged Property encumbered thereby is located, to be accepted
for recording in the county where such Mortgaged Property is located.
4.21 Security Agreement
Upon execution and delivery by Acme Steel on the Funding Date
and assuming due filing of the Financing Statements, the Security Agreement
will create and constitute a valid and enforceable security interest in, lien
on or pledge of all of the Pledged Collateral (as defined in the Security
Agreement).
4.22 Pledged Collateral
Upon execution and delivery by each of the Loan Parties (to
the extent each is a party thereto) on the Funding Date and assuming delivery
of certificates representing the stock constituting the Pledged Collateral,
each of the Stock Pledge Agreements will create and constitute a valid and
enforceable security interest in, lien on or pledge of all of the Pledged
Collateral (as defined in each Stock Pledge Agreement).
4.23 Financing Statements
Upon filing of the UCC-1 financing statements (the "Financing
Statements") relating to (A) each Mortgage with the Office of the Secretary of
State in the states in which the Mortgaged Property encumbered by such Mortgage
is located, and with the recorder in the county where real property on which
fixtures are present is located and (B) each Security Agreement with the Office
of the Secretary of State in the states in which the Pledged Collateral
described therein is located and with the recorder in the county where real
property on which fixtures are present is located, the security interest, lien
or pledge created by (x) each Security Agreement in all of the Pledged
Collateral described therein will be a perfected security interest prior to all
other
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claims or security interests therein which may be perfected by the filing of a
Financing Statement or by possession, except for prior liens and encumbrances
permitted by such Security Agreement, (y) each Stock Pledge Agreement in all of
the Pledged Collateral described therein will be a perfected security interest
prior to all other claims or security interests therein which may be perfected
by the filing of a Financing Statement or by possession, except for prior liens
and encumbrances permitted by such Stock Pledge Agreement, and (z) each
Mortgage in UCC Property will be a perfected security interest prior to all
other security interests therein which may be perfected by filing a Financing
Statement or by possession, except for prior liens and encumbrances permitted
by such Mortgage.
Section 5 COVENANTS OF THE COMPANY
The Company covenants and agrees that, until payment in full
of all of the Loans and Notes unless the Requisite Lenders shall otherwise give
prior written consent, the Company shall perform all of its covenants in this
Section 5.
5.1 Lender Meeting
At the request of the Agent or the Requisite Lenders, the
Company will participate in a meeting of the Agent and the Lenders once during
each fiscal year (commencing with the 1995 fiscal year) to be held at a
location in New York, New York (or such other location mutually acceptable to
the Company and the Agent) at a time reasonably selected by the Agent.
5.2 [This Section intentionally left blank]
5.3 Limitation on Transactions with Affiliates
The Company will not, and will not permit any of its
Subsidiaries to, make any loan, advance, guarantee or capital contribution to,
or for the benefit of, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or
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enter into or amend any contract, agreement or understanding with, or for the
benefit of, any Affiliate of the Company or any Affiliate of any of the
Company's Subsidiaries or any holder of 10% or more of any class of Capital
Stock of the Company (including any Affiliates of such holders) (each, an
"Affiliate Transaction") except for any Affiliate Transaction 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 an Affiliate of the Company or any of the Company's
Subsidiaries.
In addition, the Company will not, and will not permit any
Subsidiary of the Company to, enter into an Affiliate Transaction, or any
series of related Affiliate Transactions, unless with respect to such
transaction or transactions involving or having a value of more than
$1,000,000, the Company has (x) obtained the approval of a majority of the
Board of Directors in the exercise of their fiduciary duties and (y) either
obtained the approval of a majority of the members of the full Board of
Directors not having any interest in such transaction or transactions or
obtained an opinion of a qualified independent financial advisor to the effect
that such transaction or transactions are fair to the Company or such
Subsidiary, as the case may be, from a financial point of view.
5.4 Limitation on Indebtedness
The Company will not, and will not permit any of its
Subsidiaries, directly or indirectly, to, create, incur, assume, become liable
for or guarantee the payment of (collectively, an "incurrence") any
Indebtedness (including Acquired Indebtedness); provided the Company and its
Subsidiaries may incur Indebtedness, including Acquired Indebtedness, if (i) at
the time of such event and after giving effect thereto, on a pro forma basis,
the ratio of Consolidated Cash Flow Available for Fixed Charges to Consolidated
Fixed Charges for the four full fiscal quarters immediately preceding such
event, taken as one period and calculated using the
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assumptions and adjustments set forth in the following sentence, would have
been greater than 2.0 to 1.0, and (ii) no Default or Event of Default shall
have occurred and be continuing at the time of or occur as a consequence of the
incurrence of such Indebtedness. The following assumptions and adjustments
shall be used in calculating the ratio of Consolidated Cash Flow Available for
Fixed Charges to Consolidated Fixed Charges for the four-quarter period
preceding the incurrence of Indebtedness giving rise to such determination:
(a) the Indebtedness being incurred will be assumed to have been incurred on
the first day of such four-quarter period; (b) any other Indebtedness incurred
during, and remaining outstanding at the end of, such four-quarter period or
incurred subsequent to such four-quarter period will be assumed to have been
incurred on the first day of such four-quarter period; (c) with respect to the
incurrence of Acquired Indebtedness, the related acquisition (whether by means
of purchase, merger or otherwise) and any related repayment of any Indebtedness
will be assumed to have occurred on the first day of such four-quarter period
with the appropriate adjustments with respect to such acquisition and repayment
being included in such pro forma calculations; (d) with respect to Indebtedness
repaid (other than a repayment of revolving credit obligations) during such
four-quarter period (or subsequent thereto) out of the proceeds of sales of
Capital Stock or operating cash flows in such four-quarter period, such
Indebtedness will be assumed to have been repaid on the first day of such
four-quarter period; and (e) any permanent reduction in the committed amount of
a revolving credit facility during such four-quarter period (or subsequent
thereto) will be deemed to have occurred on the first day of such four-quarter
period and interest paid on any amounts drawn on such revolving credit facility
during such four-quarter period in excess of such reduced committed amount
shall, for the period during which such drawn amounts were actually
outstanding, be excluded from such calculation.
The foregoing limitations shall not apply to the incurrence of
(i) Permitted Indebtedness, (ii) Refinancing Indebtedness and (iii) additional
Indebtedness of the Company or
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any of its Subsidiaries the aggregate principal amount of which does not exceed
$35 million outstanding at any one time.
5.5 Limitation on Liens
The Company will not, and will not permit any Subsidiary of
the Company to, issue, assume, guarantee or suffer to exist any Indebtedness
secured by a Lien (other than a Permitted Lien) of or upon any Property of the
Company or any Subsidiary of the Company or any shares of stock or debt of any
Subsidiary of the Company, whether such Property is owned at the Funding Date
or thereafter acquired.
5.6 Limitation on Disposition of Assets
(a) The Company will not, and will not cause or permit
any of its Subsidiaries to, consummate any Asset Sale unless (i) the
consideration in respect of such Asset Sale is at least equal to the fair
market value of the assets subject to such Asset Sale, (ii) at least 75% of
the value of the consideration therefrom received by the Company or such
Subsidiary is in the form of cash or Cash Equivalents, and (iii) to the extent
such Asset Sale involves Collateral, (x) such Asset Sale is not between the
Company and any of its Subsidiaries or between Subsidiaries of the Company and
(y) the Company shall cause the cash consideration received in respect thereof
to be deposited in the Collateral Account as and when received by the Company
or by any Subsidiary of the Company and shall otherwise comply with the
provisions hereof and of the Collateral Agency Agreement applicable to such
Collateral and Asset Sale. The Company may, for so long as no Default or Event
of Default exists hereunder or would be caused thereby, apply Net Cash Proceeds
held by it (or in compliance with the provisions hereof and the Collateral
Agency Agreement, direct the Collateral Agent to release Net Cash Proceeds held
in the Collateral Account for application) to the acquisition or construction
of Property constituting a Related Business Investment; provided, however, that
if such application is not made in the manner and within the times contemplated
by the definition of Available Proceeds Amount, the
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Company shall be required to make an Unapplied Proceeds Offer (as defined
below) pursuant to paragraph (b) below.
(b) In the event there shall be any Available Proceeds
Amount, the Company shall make an offer to prepay (the "Prepayment Offer") to
all Lenders on the Prepayment Date a principal amount of the Loans equal to the
Applicable Portion of such Available Proceeds Amount (as such amount may be
increased in accordance with clause (iv) of paragraph (f) hereof). In the case
of any prepayment hereunder, the Company shall also prepay all accrued and
unpaid interest to the Prepayment Date. Notwithstanding the foregoing, (A) the
Company may defer the Prepayment Offer until there is an aggregate unutilized
Available Proceeds Amount equal to or in excess of $5,000,000 (at which time
the entire unutilized Available Proceeds Amount, whether or not withdrawn by
the Company pursuant to Section 3.4 of the Collateral Agency Agreement, and not
just the amount in excess of $5,000,000, shall be applied as required pursuant
hereto), (B) in connection with any Asset Sale, the Company and its
Subsidiaries will not be required to comply with the requirements of clause
(ii) of paragraph (a) to the extent that the aggregate non-cash consideration
received in connection with such Asset Sale, together with the sum of all
non-cash consideration received in connection with all prior Asset Sales that
has not yet been converted into cash, does not exceed $5 million, provided
that when any non-cash consideration is converted into cash, such cash shall
constitute Net Cash Proceeds and be subject to clause (ii) of paragraph (a),
and (C) in connection with any Asset Sale relating to the Company's interest in
Wabush, the Company need not comply with the provisions of clauses (i) and (ii)
of paragraph (a). To the extent that following the Prepayment Date, not all of
the Available Proceeds Amount shall have been used by the Company in connection
with the Prepayment Offer and the Unapplied Proceeds Offer, the Company may,
subject to the terms hereof and of the Collateral Agency Agreement, obtain a
release of the unutilized portion of the Available Proceeds Amount relating to
such offers from the Lien of the Security Documents.
(c) If at any time any non-cash consideration is received
by the Company or by any Subsidiary of the Company, as the
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case may be, in connection with any Asset Sale involving Collateral, such
non-cash consideration shall be made subject to the Lien of the Security
Documents in the manner contemplated hereby and the Collateral Agency
Agreement. If and when any non-cash consideration received from any Asset Sale
(whether or not relating to Collateral) is converted into or sold or otherwise
disposed of for cash, then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this Section.
(d) All Net Proceeds and all Net Awards required to be
delivered to the Collateral Agent pursuant to any Security Document shall
constitute Trust Moneys and shall be delivered by the Company to the Collateral
Agent contemporaneously with receipt by the Company and be deposited in the
Collateral Account. Net Proceeds and Net Awards so deposited that are required
to be applied or may be applied by the Company to effect a Restoration of the
affected Collateral under the applicable Security Document may be withdrawn
from the Collateral Account, only in accordance with the provisions of this
Indenture and the Collateral Agency Agreement. Net Proceeds and Net Awards so
deposited that are not required to be applied to effect a Restoration of the
affected Collateral under the applicable Security Document may be withdrawn
only in accordance with the provisions of this Agreement and the Collateral
Agency Agreement.
(e) The Company shall provide the Lenders, the Agent and
the Collateral Agent with prompt notice of the occurrence of a Prepayment
Offer. Such notice shall be accompanied by an Officers' Certificate setting
forth (i) a statement to the effect that (x) the Company or a Subsidiary of the
Company has made an Asset Sale and/or (y) there has occurred a destruction or
condemnation in respect of Collateral resulting in Net Proceeds or Net Awards
which are not required to be applied to effect a Restoration of such affected
Collateral under the applicable Security Document and (ii) the aggregate
principal amount of the Loans offered to be prepaid and the basis of
calculation in determining such aggregate principal amount. The Company is
obligated, with respect to this Section 5.6, to set the Prepayment
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Date on the same date as the Unapplied Proceeds Offer Payment Date or at the
expiration of the Interest Period next succeeding the Unapplied Proceeds Offer
Payment Date; provided, however, that, in the latter case, the Collateral Agent
continues to hold in the Collateral Account all of the Applicable Portion as
determined pursuant to clause (f)(iv).
In the event of the transfer of substantially all (but not
all) of the Property of the Company and its Subsidiaries as an entirety to a
Person in a transaction permitted under Section 6.1 hereof, the successor
corporation shall be deemed to have sold the Properties of the Company and its
Subsidiaries not so transferred for purposes of this Section, and shall comply
with the provisions of this Section with respect to such deemed sale as if it
were an Asset Sale. In addition, the fair market value of such properties and
assets of the Company or its Subsidiaries deemed to be sold shall be deemed to
be Net Cash Proceeds for purposes of this Section.
(f) The Company shall provide the Agent and the
Collateral Agent with written notice of the Prepayment Offer at least 45 days
before any notice of any Prepayment Offer is mailed to the Lenders (unless
shorter notice is acceptable to the Agent). Notice of a Prepayment Offer shall
be mailed by the Company, or by the Agent in the name of and at the expense of
the Company, to all the Lenders not less than 30 days nor more than 60 days
before the Prepayment Date at their address pursuant to Section 9.8 hereof.
The Prepayment Offer shall remain open from the time of mailing for at least 20
Business Days and until at least 4:00 p.m., New York City time, on the Business
Day next preceding the Prepayment Date. The notice, which shall govern the
terms of the Prepayment Offer, shall include such disclosures as are required
by law and shall state:
(i) that the Prepayment Offer is being made pursuant to
this Section 5.6;
(ii) the Prepayment Date;
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(iii) that Lenders will be entitled to withdraw their
election if the Agent receives, not later than 4:00 p.m., New York
City time, three Business Days preceding the Prepayment Date, a tested
telex, facsimile transmission or letter setting forth the name of the
Lender, the principal amount of the Loan the Lender desired to have
repaid and a statement that such Lender is withdrawing his or her
election to have such Loan repaid;
(iv) that if Lenders having Loans in a principal amount in
excess of the Applicable Portion plus the excess, if any, of (A) the
Available Proceeds Amount over (B) the sum of (x) the Applicable
Portion and (y) the aggregate principal amount of Securities accepted
by the Company for repurchase pursuant to the Unapplied Proceeds Offer
in each case arising as a result of the Asset Sale giving rise to the
Prepayment Offer elect to have their Loans prepaid, the Company shall
prepay such Loans on a pro rata basis.
On or before the Prepayment Date, the Company shall (i)
deposit, or cause to be deposited, the Applicable Portion plus any additional
amounts determined pursuant to clause (iv) of this paragraph (f) (which amount
may consist of Trust Moneys already held by the Collateral Agent) together with
any accrued but unpaid interest in immediately available funds with the Agent.
The Agent shall promptly pay to the Lenders so accepted an amount equal to
their prepayment amount plus all accrued but unpaid interest on any of the
Loans so repaid and any additional amounts due pursuant to Section 2.6B hereof.
Any such prepayments shall be recorded by the Lenders on their Notes as
required by Section 2.4E hereof.
5.7 Limitation on Restricted Payments
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make any Restricted Payment unless:
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(i) no Default or Event of Default shall have occurred
and be continuing at the time of or after giving effect to such
Restricted Payment;
(ii) immediately after giving effect to such Restricted
Payment, the Company could incur at least $1.00 of Indebtedness (other
than Permitted Indebtedness) pursuant to the first paragraph of
Section 5.4; and
(iii) immediately after giving effect to such Restricted
Payment, the aggregate amount of all Restricted Payments (the fair
market value of any such Restricted Payment if other than cash as
determined in good faith by the Board of Directors and evidenced by a
Board Resolution) declared or made after the Funding Date does not
exceed 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 the first full fiscal quarter of
the Company commencing after the Funding Date 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 Board of
Directors and evidenced by a Board Resolution) received by the Company
from (1) the issue or sale after the Funding Date of Capital Stock of
the Company (other than the issue or sale of (A) Disqualified Stock,
(B) Capital Stock of the Company to any Subsidiary of the Company or
(C) the exercise of the Special Stock Purchase Warrants); and (2) the
issue or sale after the Funding Date of 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.
The foregoing clauses (ii) and (iii) will not prohibit: (A)
the payment of any dividend within 60 days of its declaration if such dividend
could have been made on the date of its
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declaration without violation of the provisions of this Agreement; (B) the
repurchase, redemption or retirement of any shares of Capital Stock of the
Company or any of its Subsidiaries in exchange for, or out of the net proceeds
of the substantially concurrent sale (other than to a Subsidiary of the
Company) of, other shares of Capital Stock (other than Disqualified Stock) of
the Company; (C) the repurchase, redemption or retirement of subordinated
Indebtedness of the Company or any of its Subsidiaries in exchange for, by
conversion into, or out of the net proceeds of, a substantially concurrent (x)
issue or sale of Capital Stock (other than Disqualified Stock) of the Company
or (y) incurrence of Refinancing Indebtedness with respect to such subordinated
Indebtedness; (D) the purchase of options or Capital Stock issued to members of
management of the Company pursuant to the terms of their employment agreements
upon termination of employment, death or disability of any such Person in an
amount not to exceed $1,000,000 per annum; and (E) payments to taxing
authorities by the Company or a Subsidiary of the Company on behalf of a holder
of Capital Stock of the Company (or an option to purchase such Capital Stock)
pursuant to Section 4 of the Company's Grant of Stock Award dated January 29,
1994; provided, that each Restricted Payment described in clauses (A) through
(D) (other than subclause (y) of clause (C)) of this sentence shall be taken
into account for purposes of computing the aggregate amount of all Restricted
Payments pursuant to clause (iii) of the immediately preceding paragraph.
5.8 Corporate Existence
Subject to Section 6.1, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
of its Subsidiaries in accordance with the respective organizational documents
of each Subsidiary and the rights (charter and statutory) and material
franchises of the Company and each of its Subsidiaries; provided, that the
Company shall not be required to preserve any such right or franchise, or the
corporate existence of any Subsidiary, if the Board of Directors shall
determine that the preservation thereof is no
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longer desirable in the conduct of the business of the Company and each of its
Subsidiaries, taken as a whole, and that the loss thereof is not, and will not
be, adverse in any material respect to the Holders.
5.9 Payment of Taxes and Other Claims
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges (including any penalties, interest and
additions to taxes) levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any of
its Subsidiaries and (2) all lawful claims for labor, materials and supplies
which, in each case, if unpaid, might by law become a material liability, or
Lien upon the Property, of the Company or any of its Subsidiaries; provided,
that, subject to the applicable provisions of the Security Documents, the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and an adequate
reserve has been established therefor to the extent required by GAAP.
5.10 Notice of Defaults
(1) In the event that any Indebtedness of the Company or
any of its Subsidiaries is declared due and payable before its maturity because
of the occurrence of any default (or any event which, with notice or lapse of
time, or both, would constitute such a default) under such Indebtedness, the
Company shall promptly give written notice to the Lenders and the Agent of such
declaration, the status of such default or event and what action the Company is
taking or proposes to take with respect thereto.
(2) Upon becoming aware of any Default or Event of
Default, the Company shall promptly deliver an Officers'
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Certificate to the Lenders and the Agent specifying the Default or Event of
Default.
5.11 Maintenance of Properties, Insurance
(a) Subject to the applicable provisions of the Security
Documents, the Company shall cause all material Properties owned by or leased
to it or any of its Subsidiaries and used or useful in the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept
in normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
that nothing in this Section shall prevent the Company or any of its
Subsidiaries from discontinuing the use, operation or maintenance of any of
such properties (other than Properties constituting items of Collateral except
to the extent permitted by Section 10.03 of the Indentures as in existence on
the date hereof), or disposing of any of them (other than Properties
constituting items of collateral except to the extent permitted by Section
10.03 of the Indentures as in existence on the date hereof) if such
discontinuance or disposal is, in the reasonable good faith judgment of the
Board of Directors or of the board of directors of any Subsidiary of the
Company concerned, or of an officer (or other agent employed by the Company or
of any of its Subsidiaries) of the Company or any of its Subsidiaries having
managerial responsibility for any such Property, desirable in the conduct of
the business of the Company or any Subsidiary of the Company, and if such
discontinuance or disposal is not adverse in any material respect to the
Holders.
(b) Subject to the applicable provisions of the Security
Documents, the Company shall maintain, and shall cause its Subsidiaries to
maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar businesses of
similar size,
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including property and casualty loss, workers' compensation and interruption of
business insurance. The Company shall provide, and shall cause its
Subsidiaries to provide, an Officers' Certificate as to compliance with the
foregoing requirements to the Lenders and the Agent prior to the anniversary or
renewal date of each such policy, together with satisfactory evidence of such
insurance, which certificate shall expressly state such expiration date for
each policy listed.
5.12 Compliance Certificate
The Company shall deliver to the Lenders and the Agent within
100 days after the close of each fiscal year an Officers' Certificate stating
that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a
Default or Event of Default has occurred and whether or not the signers know of
any Default or Event of Default by the Company that occurred during such fiscal
quarter or fiscal year, as the case may be. If they do know of such a Default
or Event of Default, the certificate shall describe all such Defaults or Events
of Default, their status and the action the Company is taking or proposes to
take with respect thereto. The first certificate to be delivered by the
Company pursuant to this Section 5.12 shall be for the fiscal year ending
December, 1994.
5.13 Reports
The Company shall, within 15 days after they are required to
be filed with the SEC, send to each Lender copies of the annual reports,
quarterly reports and other documents which the Company is required to file
with the SEC pursuant to Sections 13(a) and 15(d) of the Exchange Act if the
Company is then subject to such Sections. In the event the Company is not then
subject to such Sections 13(a) and 15(d) of the Exchange Act, the Company shall
send to each lender annual reports, quarterly reports and such other documents
as the Company would have been required to file if it were subject to such
Sections 13(a) and 15(d) within 15 days of the time it would have been required
to file such documents. The
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Company shall promptly upon written request supply copies of such documents to
any prospective Lender.
5.14 Waiver of Stay, Extension or Usury Laws
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law, which would prohibit or forgive the Company from
paying all or any portion of the principal of and/or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Agreement; and (to
the extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Agent, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
5.15 Repayment of Loans upon Change of Control
(a) Upon the occurrence of a Change of Control, the
Company shall make an offer to prepay (the "Prepayment Offer") to all Lenders
all or any part of such Lender's Loan on a date specified in the notice
referred to below (the "Prepayment Date") which date shall be the same date as
the Repurchase Date and is no later than 60 days after notice of the Change of
Control, at 100% of the principal amount thereof, plus accrued interest to the
Prepayment Date.
(b) On or before the thirtieth day after the Change of
Control, the Company shall deliver, or cause to be delivered, by first-class
mail, to all Lenders and the Agent a notice regarding the Change of Control and
the Prepayment Offer. Each such notice shall state
(i) the Prepayment Date;
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(ii) the date by which the Prepayment Offer must be
exercised;
(iii) the premium (including the amount of accrued
interest, if any) for such Loans; and
(iv) the procedure which the Lender must follow to accept
the Prepayment Offer.
(c) To accept the Prepayment Offer, the Lender must
deliver at least ten days prior to the Prepayment Date written notice to the
Company (or any agent designated by the Company for such purpose) of such
Lender's acceptance of the Prepayment Offer.
(d) In the event a Prepayment Offer shall be accepted in
accordance with the terms hereof, the Company shall prepay or cause to be
prepaid the Loan, or portion thereof as to which the Prepayment Offer has been
accepted in cash to the Lender, on the Prepayment Date. The Company shall also
pay (i) all accrued but unpaid interest with respect to the Loans prepaid under
this Section 5.15 and (ii) all amounts due such Lender as required in
accordance with Section 2.6B hereof. Any prepayments made hereunder shall be
recorded by the Lenders on their Notes as required by Section 2.4E hereof.
5.16 Limitation on Sale and Leaseback Transactions
The Company will not, and will not permit any Subsidiary of
the Company to, enter into any sale and leaseback transaction with respect to
any Property (whether now owned or hereafter acquired) unless (i) (a) the
Property that is subject of such sale and leaseback transaction does not
constitute Collateral and (b) the sale or transfer of the Property to be leased
complies with the requirements of Section 5.6 and (ii) the Company or such
Subsidiary would be entitled under Section 5.4 to incur any Capitalized Lease
Obligations in respect of such sale and leaseback transaction.
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5.17 Limitation 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 (i) (a) pay dividends or make any
other distributions on its Capital Stock, or any other interest or
participation in or measured by its profits, owned by the Company or any other
Subsidiary of the Company, or (b) pay any Indebtedness owed to the Company or
any other Subsidiary of the Company, (ii) make loans or advances to the Company
or a Subsidiary of the Company or (iii) transfer any of its properties or
assets to the Company or any other Subsidiary of the Company, except for
Permitted Liens and such other encumbrances or restrictions existing under or
by reason of (a) any restrictions, with respect to a Subsidiary that is not a
Subsidiary of the Company on the Funding Date, under any agreement in existence
at the time such Subsidiary becomes a Subsidiary of the Company (unless such
agreement was entered into in connection with, or in contemplation of, such
entity becoming a Subsidiary of the Company on or after the Funding Date), (b)
any restrictions under any agreement evidencing any Acquired Indebtedness of a
Subsidiary of the Company incurred pursuant to the provisions of Section 5.4;
provided that such restrictions shall not restrict or encumber any assets of
the Company or its Subsidiaries other than such Subsidiary, (c) terms relating
to the nonassignability of any operating lease, (d) any restrictions under the
Working Capital Facility, (e) any encumbrance or restriction existing under any
agreement that refinances or replaces the agreements containing restrictions
described in clauses (a) through (d), provided that the terms and conditions of
any such restrictions are not materially less favorable to the Holders of the
Securities than those under the agreement so refinanced or replaced, or (f) any
encumbrance or restriction due to applicable law.
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5.18 Limitation on Actions Affecting Security
The Company shall not, and shall not permit any Subsidiary of
the Company to, take or omit to take any action, which action or omission would
have the result of materially adversely affecting or impairing the Liens and
security interests in the Collateral in favor of the Collateral Agent on behalf
of the Secured Parties, nor shall the Company or any such Subsidiary grant any
interest whatsoever in the Collateral except as expressly permitted by this
Agreement and the Security Documents.
5.19 Inspection and Confidentiality
(a) The Company shall, and shall cause each of its
Subsidiaries to, permit authorized representatives of the Lenders, the Agent
and the Collateral Agent to visit and inspect the properties of the Company and
its Subsidiaries, and any or all books, records and documents in the possession
of the Company relating to the Collateral, and to make copies and take extracts
therefrom and to visit and inspect the Collateral, all upon reasonable prior
notice and at such reasonable times during normal business hours and as often
as may be reasonably requested.
(b) The Lenders, the Agent and the Collateral Agent and
their respective authorized representatives referred to in Section 5.19(a)
agree not to use any information obtained pursuant to this Section 5.19 for any
unlawful purpose and, prior to the occurrence of an Event of Default, to keep
confidential any proprietary information identified to the Lenders, the Agent,
the Collateral Agent or such representative (as applicable) as proprietary
information and not to disclose any such proprietary information to any Person
except that (i) the recipient of the information may disclose any information
that becomes publicly available other than as a result of disclosure by such
recipient, and (ii) the recipient of the information may disclose any
information that its counsel reasonably concludes is necessary to be disclosed
by law, pursuant to any court or administrative order or ruling or in any
pending legal or administrative proceeding or investigation after prior written
notice, reasonable under the circumstances, to the Company.
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5.20 Limitations on Investments, Loans and Advances
The Company will not make and will not permit any of its
Subsidiaries to make any Investments in any Person, except (i) Investments by
the Company in or to any Subsidiary (or an entity which, following and as a
result of such Investment, becomes a Subsidiary of the Company) and Investments
in or to the Company or a Subsidiary (or an entity which, following and as a
result of such Investment, becomes a Subsidiary of the Company) by any
Subsidiary, (ii) Investments represented by accounts receivable created or
acquired in the ordinary course of business, (iii) advances to employees,
officers and directors in the ordinary course of business, (iv) Investments
under or pursuant to Interest Protection Agreements, (v) Permitted Investments,
(vi) Restricted Investments made pursuant to Section 5.7 hereof, (vii)
Investments in Wabush and (viii) other Investments in Persons other than
Subsidiaries or Affiliates of the Company or any of the Company's Subsidiaries
not to exceed $10,000,000 at any one time outstanding. For purposes of
calculating the amount of any outstanding Investment pursuant to clause (viii),
any return of capital or repayment of a loan or advance constituting all or a
portion of the original amount of the Investment shall be deducted.
5.21 Additional Guarantors
If the Company or any of its Subsidiaries transfers or causes
to be transferred, in one or a series of related transactions, any Property
having a book value in excess of $500,000 to any Subsidiary that is not a
Guarantor, or if the Company or any of its Subsidiaries shall organize, acquire
or otherwise invest in another Subsidiary having total assets with a book value
in excess of $500,000, then such transferee or acquired or other Subsidiary
shall (i) execute and deliver to the Agent a supplemental Guarantee in the form
of Exhibit H hereto pursuant to which such Subsidiary shall unconditionally
guarantee all of the Company's obligations under the Notes and this Agreement
and (ii) deliver to the Agent an Opinion of Counsel that such supplemental
Guarantee has been duly authorized, executed and delivered by such Subsidiary
and constitutes the legal, valid, binding and
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enforceable obligation of such Subsidiary. Thereafter, such Subsidiary shall
be a Guarantor for all purposes hereof.
Section 6 MERGERS; SUCCESSOR CORPORATION
6.1 Restriction on Mergers and
Consolidations and Sales of Assets
The Company shall not consolidate or merge with or into any
Person, and the Company will not, and will not permit any of its Subsidiaries
to, sell, lease, convey or otherwise dispose of all or substantially all of the
Company's consolidated assets (as an entirety or substantially an entirety in
one transaction or a series of related transactions, including by way of
liquidation or dissolution) to, any Person unless, in each such case:
(i) 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;
(ii) the Surviving Entity assumes by supplemental
agreement all of the obligations of the Company on the Notes and under
this Agreement and the Security Documents;
(iii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
(iv) immediately after giving effect to such transaction
and the use of any net proceeds therefrom on a pro forma basis, the
Consolidated Tangible Net Worth of the Company or the Surviving
Entity, as the case may be, would be at least equal to the
Consolidated Tangible Net Worth of the Company immediately prior to
such transaction; and
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(v) immediately after giving effect to such transaction
and the use of any net proceeds therefrom on a pro forma basis, the
Company or the Surviving Entity, as the case may be, could incur at
least $1.00 of Indebtedness (other than Permitted Indebtedness)
pursuant to the first paragraph of Section 5.4.
6.2 Successor Corporation Substituted
Upon any conveyance, lease or transfer in accordance with
Section 6.1, the surviving Person to which such conveyance, lease or transfer
is made will succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Agreement with the same effect as if such
surviving Person had been named as the Company herein and thereafter the
predecessor corporation will be relieved of all further obligations and
covenants under this Agreement, the Notes and the Security Documents to which
it was a party or bound.
Section 7 EVENTS OF DEFAULT
7.1 Events of Default
An "Event of Default" occurs if:
(i) the Company fails to pay interest on any Note when
the same becomes due and payable and such failure continues for a
period of 30 days;
(ii) the Company fails to pay the principal of or premium
on any Note when the same becomes due and payable whether at maturity,
upon acceleration, mandatory repayment or otherwise;
(iii) any Guarantee ceases to be in full force and effect
or is declared to be null and void and unenforceable or is found to be
invalid or any Guarantor denies its liability under its Guarantee
(other than by reason of release of a Guarantor in accordance with the
terms hereof);
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(iv) the Company or any Guarantor fails to observe or
perform any other covenant in this Agreement or in any of the Security
Documents for 60 days after notice from the Agent, the Collateral
Agent or the Requisite Lenders (except in the case of a default with
respect to Section 5.15 and Section 6.1, which will constitute Events
of Default with such notice but without passage of time);
(v) the Company or any of its Subsidiaries fails to make
any payment when due (after giving effect to any applicable grace
period) under the Securities or any other Indebtedness in excess of $5
million which is not subordinated to the Loans (including, without
limitation, Indebtedness under the Working Capital Facility);
(vi) the Company or any of its Subsidiaries fails to
perform any term, covenant, condition or provision of the Securities
or any other Indebtedness in excess of $5 million individually or $10
million in the aggregate, which failure results in the acceleration of
the maturity of such Indebtedness;
(vii) a final judgment or judgments for the payment of
money not fully covered by insurance, which judgments exceed $5
million individually or $10 million in the aggregate, is entered
against the Company or any of its Subsidiaries and is not satisfied,
stayed, annulled or rescinded within 60 days of being entered;
(viii) any Person, after the occurrence of an event of
default under any instrument evidencing Indebtedness secured by
Collateral, shall commence judicial proceedings to foreclose any
material portion of the Collateral or shall exercise any legal or
contractual right to the ownership of any material portion of the
Collateral in lieu of foreclosure;
(ix) the Company or any Guarantor pursuant to or within
the meaning of any Bankruptcy Law:
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(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors; or
(x) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Guarantor in an involuntary case or proceeding,
(B) appoints a Custodian of the Company or any
Guarantor or for all or substantially all of its property, or
(C) orders the liquidation of the Company or any
Guarantor,
and in each case the order or decree remains unstayed and in effect
for 30 days; provided that if the entry of such order or decree is
appealed and dismissed on appeal then the Event of Default hereunder
by reason of the entry of such order or decree shall be deemed to have
been cured.
The term "Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.
The Agent shall, within 90 days after the occurrence of any
Default known to it, give to the Lenders 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 Loans, the Agent shall be protected in withholding such
notice if it in good faith
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determines that the withholding of such notice is in the interest of the
Lenders.
7.2 Acceleration
In case an Event of Default (other than an Event of Default
described in clause (ix) or (x) of Section 7.1 above with respect to the
Company and any Significant Subsidiaries) shall occur and be continuing, the
Agent or the Requisite Lenders, by notice in writing to the Company (and to the
Agent if given by the Lenders), may declare all unpaid principal and accrued
interest on the Loans then outstanding to be due and payable immediately. Any
such declaration with respect to the Loans may be annulled by the Requisite
Lenders in accordance with Section 7.4.
If an Event of Default specified in clause (ix) or (x) of
Section 7.1 occurs with respect to the Company or any Significant Subsidiary
and is continuing, then all unpaid principal of, premium, if any, and accrued
interest on the outstanding Loans shall ipso facto become immediately due and
payable without any declaration or other act on the part of the Agent or any
Lender.
7.3 Other Remedies
If an Event of Default occurs and is continuing, the Requisite
Lenders may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Loans or to enforce the
performance of any provision of the Notes, this Agreement or the Security
Documents.
Each Lender acknowledges that the exercise of remedies by it
with respect to the Collateral is subject to the terms and conditions of the
Security Documents and the proceeds received upon realization of the Collateral
shall be applied by the Agent in accordance with Section 2.4D hereof.
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7.4 Waiver of Past Default
The Requisite Lenders, by written notice to the Agent and the
Company, may waive an existing Default or Event of Default and its
consequences, except, unless theretofore cured, a Default in the payment of
principal of or interest on any Loan as specified in clauses (i) and (ii) of
Section 7.1. When a Default or Event of Default is so waived, it is cured.
7.5 Control by Requisite Lenders
The Requisite Lenders may direct the time, method and place of
conducting any proceeding for any remedy available to the Lenders or exercising
any power conferred on them.
A Lender may not use this Agreement to prejudice the rights of
another Lender or to obtain a preference or priority over such other Lender.
7.6 Rights of Lenders To Receive Payment
Notwithstanding any other provision of this Agreement, the
right of any Lender to receive payment of principal of and interest on the
Loan, on or after the respective due dates expressed in this Agreement and the
Notes, 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 Lender except to the extent that the institution or prosecution of such
suit or entry of judgment therein would, under applicable law, result in the
surrender, impairment or waiver of the Lien of this Agreement and the Security
Documents upon the Collateral. All amounts collected under this Article 7
shall be applied pursuant to Section 2.4D hereof.
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Section 8 AGENT
8.1 Appointment
Lehman is hereby appointed Agent hereunder by each Lender, and
each Lender hereby authorizes the Agent to act hereunder and under the other
instruments and agreements referred to herein as its agent hereunder and
thereunder. Lehman agrees to act as such upon the express conditions contained
in this Section 8. The provisions of this Section 8 are solely for the benefit
of the Agent; the Company and its Subsidiaries shall not have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Agent shall act solely as agent
of the Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for the Company
or its Subsidiaries.
The Agent is authorized and directed to enter into the
Collateral Agency Agreement and the Collateral Agent is authorized and directed
to enter into the Security Documents. In the event that pursuant to clause
(xi)(b) of the definition of "Permitted Liens" the Company shall elect to grant
additional Liens on assets that comprise Collateral to secure Permitted
Replacement Financing, the Agent and the Collateral Agent are authorized and
directed to execute and deliver a supplement to the Collateral Agency Agreement
as contemplated therein. In addition, in the event of any Permitted Bank
Refinancing (as defined in the Intercreditor Agreement) the Collateral Agent is
authorized to execute and deliver a supplement to the Intercreditor Agreement
as contemplated therein. Each Lender, in executing this Agreement, agrees to
all of the terms and provisions of the Security Documents, as the same may be
amended from time to time pursuant to the provisions of the Security Documents
and this Agreement.
Each Lender agrees that no Lender shall have any right
individually to realize upon the security granted by any Security Document, it
being understood and agreed that such rights and
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remedies may be exercised only by the Collateral Agent for the benefit of the
Lenders upon the terms of the Security Documents.
8.2 Powers; General Immunity
A. Duties Specified. Each Lender irrevocably authorizes
the Agent to take such action on such Lender's behalf and to exercise such
powers hereunder and under the other instruments and agreements referred to
herein (including, without limitation, the Collateral Agency Agreement) as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. The Agent shall have
only those duties and responsibilities which are expressly specified in this
Agreement and the Collateral Agency Agreement and it may perform such duties by
or through its agents or employees and the benefits accorded to the Agent
herein shall inure to the benefit of such agents or employees. The duties of
the Agent shall be mechanical and administrative in nature; and the Agent shall
not have by reason of this Agreement a fiduciary or trust relationship in
respect of any Lender; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or the other instruments and
agreements referred to herein except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. The Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement, any Security Document or any Loan, or for any representations,
warranties, recitals or statements made herein or therein or made in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or
therewith furnished or made by any Agent to the Lenders or by or on behalf of
the Company to the Agent or any Lender, or be required to ascertain or inquire
as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or
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as to the use of the proceeds of the Loans or of the existence or possible
existence of Default or any Event of Default.
C. Exculpatory Provisions. Neither the Agent nor any of
its officers, directors, employees or agents shall be liable to the Lenders for
any action taken or omitted under this Agreement or any of the Security
Documents or in connection therewith unless caused by its or their gross
negligence or willful misconduct. If the Agent shall request instructions from
the Lenders with respect to any act or action (including the failure to take an
action) in connection with this Agreement, the Agent shall be entitled to
refrain from such act or taking such action unless and until the Agent shall
have received instructions from the Requisite Lenders or such other Lenders as
specifically set forth herein. Without prejudice to the generality of the
foregoing, (i) the Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and shall be entitled to rely and shall be protected in
relying on opinions and judgments of attorneys (who may be attorneys for the
Company), accountants, experts and other professional advisors selected by it;
and (ii) no Lender shall have any right of action whatsoever against the Agent
as a result of the Agent acting or (where so instructed) refraining from acting
under this Agreement or the other instruments and agreements referred to herein
in accordance with the instructions of the Requisite Lenders or the applicable
percentage of Lenders, as the case may be. The Agent shall be entitled to
refrain from exercising any power, discretion or authority vested in it under
this Agreement or the other instruments and agreements referred to herein
unless and until it has obtained the instructions of the Requisite Lenders.
D. Agents Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, the Agent in its individual capacity as
a Lender hereunder if it is so acting. With respect to its participation in
the Loans, the Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not performing the
duties
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and functions delegated to it hereunder, and the term "Lender" or "Lenders" or
any similar term shall, unless the context clearly otherwise indicates, include
the Agent in its individual capacity. The Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking,
trust, financial advisory or other business with the Company or any Affiliate
of the Company as if it were not performing the duties specified herein, and
may accept fees and other consideration from the Company for services in
connection with this Agreement and otherwise without having to account for the
same to the Lenders.
8.3 No Responsibility for Appraisal of
Creditworthiness
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of each Loan
Party in connection with the making of the Loans hereunder and has made and
shall continue to make its own appraisal of the creditworthiness of each Loan
Party. The Agent shall not have any duty or responsibility either initially or
on a continuing basis to make any such investigation or any such appraisal on
behalf of the Lenders or to provide any Lender with any credit or other
information with respect thereto whether coming into its possession before the
making of the Loans or any time or times thereafter, and the Agent shall
further not have any responsibility with respect to the accuracy of or the
completeness of the information provided to the Lenders.
8.4 Right to Indemnity
Each Lender severally agrees to indemnify the Agent,
proportionately to its Pro Rata Share, to the extent the Agent shall not have
been reimbursed by the Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent or in performing its duties under any
Security Document or in any way relating to or arising out of this
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Agreement; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. If any indemnity furnished to the Agent for
any purpose shall, in the opinion of the Agent, be insufficient or become
impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
8.5 Payee of Note Treated as Owner
The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Notes issued in exchange therefor.
8.6 Resignation; Successor Agents
(a) The Agent may resign from the performance of all its
functions and duties hereunder at any time by giving 30 Business Days' prior
written notice to the Company and the Lenders. Such resignation shall take
effect upon the acceptance by a successor Agent pursuant to clauses (b) and (c)
below.
(b) Upon any such notice of resignation, the Requisite
Lenders shall have the right to appoint a successor Agent who shall be
satisfactory to the Company. Such successor agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from all its duties
and obligations (in its capacity as Agent) under this Agreement.
(c) If a successor Agent shall not have been so appointed
within said 30 Business Day period, a resigning Agent,
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with the consent of the Company, shall then appoint a successor Agent who shall
serve as Agent until such time, if any, as the Requisite Lenders, with the
consent of the Company and the Requisite Lenders, appoint a successor Agent as
provided above.
(d) If no successor Agent has been appointed pursuant to
clause (b) or (c) by the 35th Business Day after the date such notice of
resignation has been given by the resigning Agent, the Agent's resignation
shall become effective and the Requisite Lenders shall thereafter perform all
the duties of the Agent hereunder until such time, if any, as the Requisite
Lenders, with the consent of the Company, appoint a successor Agent as provided
above.
8.7 Successor Agent
Upon the acceptance of any appointment as the Agent hereunder
by a successor Agent, that successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations as the Agent (in its capacity as Agent) under this Agreement.
After any retiring Agent's resignation hereunder as the Agent the provisions of
Sections 8 and 9.3 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Agent under this Agreement.
Section 9 MISCELLANEOUS
9.1 Benefit of Agreement
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto; provided, however, no Loan Party may, other than as provided in
Section 6.1 hereof and in its Guarantee, directly or indirectly, assign or
transfer any of its rights, obligations or interest hereunder or under any
Security Document without the prior written consent of the Requisite Lenders;
and provided, further, that no Lender shall transfer or
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grant any participation under which the participant shall have rights to
approve or direct the approval of any amendment to or waiver of this Agreement
or any other Security Document except to the extent such amendment or waiver
would (i) extend the final scheduled maturity of any Loan or Note in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default shall not constitute a change in
the terms of such participation, and that an increase in any Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Company of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly provided in
the Loan Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall
not have any rights under this Agreement or any of the other Security Documents
(the participant's rights against such Lender in respect of such participation
to be those set forth in the agreement executed by such Lender in favor of the
participant relating thereto) and all amounts payable by the Company hereunder
shall be determined as if such Lender had not sold such participation.
(b) Notwithstanding the foregoing, any Lender (or any
Lender together with one or more other Lenders) may (x) assign all or a portion
of its Loans hereunder to (i) its parent company and/or (ii) any Affiliate of
such Lender which is at least 50% owned by such Lender or its parent company
and/or (iii) one or more Lenders or (y) assign all or, if less than all, a
portion equal to at least $1,000,000 in the aggregate and integral multiples of
$500,000 in excess thereof for the assigning Lender or assigning Lenders, of
such Loan hereunder to one or more Eligible Transferees, each of which
assignees shall become a party to this
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Agreement as a Lender by execution of an Assignment and Assumption Agreement,
provided that (i) at such time Schedule 1 shall be deemed modified to reflect
the Loans of such new Lender and of the existing Lender, (ii) new Notes will be
issued, at the Company's expense, to such new Lender and to the assigning
Lender upon the request of such new Lender or assigning Lender, such new Notes
to be in conformity with the requirements of Section 2 hereof (with appropriate
modifications) to the extent needed to reflect the revised Loans and (iii) the
acknowledgement of the Agent shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) above. To the
extent of any assignment pursuant to this Section 9.1(b), the assigning Lender
shall be relieved of its obligations hereunder with respect to its assigned
Loan. At the time of each assignment pursuant to this Section 9.1(b) to a
Person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended from time to time, and any successor code or statute
thereto) for United States federal income tax purposes, the respective assignee
Lender shall, to the extent legally entitled to do so, provide to the Company
Form 4224, Form 1001, Form W-8 or any successor form, as the case may be, that
establishes an exemption from, or reduction in the rate of, withholding for
United States federal income taxes.
(c) Nothing in this Agreement shall prevent or prohibit
any Lender from pledging its Loans and Notes hereunder to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal Reserve
Bank.
(d) Upon an assignment by any Lender to a financial
institution not presently a Lender or to a Lender pursuant to Section 9.1(b)
hereof, the Agent shall be paid a non-refundable fee of $2,000, in each case by
such Lender or its assignee to cover administrative expenses which may be
incurred in connection with such assignment.
(e) The Company acknowledges and agrees that the Agent
has sought and will continue to seek after the Funding Date to
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conduct an orderly syndication process and that, in connection therewith, the
Agent will require the reasonable cooperation of the Company and its officers,
including with respect to presentations (written and oral) by management to
potential Lenders. The Company agrees to reasonably cooperate with the Agent
in such process, and will use reasonable efforts to ensure that its officers so
cooperate.
9.2 Expenses
The Company and the Guarantors, jointly and severally, agree
to promptly pay (i) the fees, costs and expenses of creating and perfecting
Liens in favor of the Lenders pursuant to any of the Security Documents,
including filing and recording fees and expenses, title insurance, fees and
expenses of counsel for providing such opinions as the Agent may request; and
(ii) all reasonable costs and expenses (including attorneys' fees, expenses and
disbursements, allocated costs of internal counsel, and costs of settlement and
the reasonable fees, expenses and disbursements of any other experts or
advisors) incurred by the Agent and the Lenders in enforcing any Obligations of
or in collecting any payments due from any Loan Party under this Agreement or
any of the Security Documents to which it is a party by reason of any Event of
Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or of
any insolvency or bankruptcy proceedings, or otherwise.
9.3 Indemnity
In addition to the payment of expenses pursuant to Section 9.2
hereof, whether or not the transactions contemplated hereby shall be
consummated, the Company and the Guarantors, jointly and severally, agree to
indemnify, pay, reimburse and hold the Agent, each Lender and any holder of any
of the Notes, and the officers, directors, employees, agents, and Affiliates of
the Agent, each Lender and such holders (collectively called the "Indemnitees")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions,
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judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable fees, expenses
and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto), which may
be imposed on, incurred by, or asserted against that Indemnitee, in any manner
relating to or arising out of this Agreement or any Security Document, the
Lenders' having made the Loans or the use of the proceeds of any of the Loans
hereunder (the "indemnified liabilities"); provided that the Company and the
Guarantors shall have no obligation to an Indemnitee hereunder to the extent it
is finally judicially determined that such indemnified liabilities arose solely
from the gross negligence or willful misconduct of that Indemnitee. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy or otherwise, the Company and the Guarantors shall contribute
the maximum portion which it is permitted to pay and satisfy under applicable
law to the payment and satisfaction of all indemnified liabilities incurred by
the Indemnitees or any of them.
9.4 Setoff
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Lender and each subsequent holder of
any Note is hereby authorized by the Company, to the extent permitted by law,
at any time or from time to time, without notice to the Company, or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured but not including trust accounts) and any other
indebtedness at any time held or owing by that Lender or that subsequent holder
(including, without limitation, any branches or agencies thereof, wherever
located) to or for the credit of the account of the Company against and on
account of the obligations and liabilities of the Company to that
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Lender or that subsequent holder under this Agreement or any of the other
Security Documents or the Notes, including, but not limited to, all claims of
any nature or description arising out of or connected with this Agreement or
any of the Security Documents or the Notes, irrespective of whether or not (a)
that Lender or that subsequent holder shall have made any demand hereunder or
(b) that Lender or that subsequent holder shall have declared the principal or
the interest on the Loans and Notes, and other amounts due hereunder to be due
and payable as permitted by Section 7 hereof and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
9.5 Ratable Sharing
Except as otherwise provided as the result of a Prepayment
Offer, each Lender and each subsequent holder by acceptance of a Note agree
among themselves that (i) with respect to all amounts received by them which
are applicable to the payment of principal of or interest on the Notes,
equitable adjustment will be made so that, in effect, all such amounts will be
shared among the Lenders proportionately to their respective Pro Rata Shares
whether received by voluntary payment, by the exercise of the right of setoff
or banker's lien, by counterclaim or cross action or by the enforcement of any
or all of the Notes, (ii) if any of them shall exercise any right of
counterclaim, setoff, banker's lien or similar right with respect to amounts
owed by the Company hereunder or under the Notes that Lender or holder, as the
case may be, shall apportion the amount recovered as a result of the exercise
of such right pro rata in accordance with each Lender's Pro Rata Share, and
(iii) if any of them shall thereby through the exercise of any right of
counterclaim, setoff, banker's lien or otherwise or as adequate protection of a
deposit treated as cash collateral under Bankruptcy Law, receive payment or
reduction of a proportion of the aggregate amount of principal and interest due
with respect to the Notes held by the Lender or holder, or any other amount
payable hereunder which is greater than the proportion received by any other
holder of the Notes in respect of the aggregate amount of principal and
interest due with respect to the Notes held by it or any other amount payable
hereunder that Lender or that holder of
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the Notes receiving such proportionately greater payments shall (y) notify each
other Lender and the Agent of such receipt and (z) purchase participations
(which it shall be deemed to have done simultaneously upon the receipt of such
payment) in the Notes held by the other holders so that all such recoveries of
principal and interest with respect to the Notes shall be proportionate to
their respective Pro Rata Shares; provided that if all or part of such
proportionately greater payment received by such purchasing holder is
thereafter recovered from such holder, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that
holder to the extent of such recovery, but without interest. The Company
expressly consent to the foregoing arrangement and agree that any holder of a
participation in any such Note so purchased and any other subsequent holder of
a participation in any Note otherwise acquired may exercise any and all rights
of banker's lien, setoff or counterclaim with respect to any and all monies
owing by the Company to that holder as fully as if that holder were a holder of
such a Note in the amount of the participation held by that holder.
Notwithstanding anything to the contrary in this Section 9.5, upon the
occurrence and during the continuance of a Default or an Event of Default, the
ratable sharing arrangements set forth in this Section 9.5 shall be based on
each Lender's pro rata share of all Loans outstanding at such time, rather than
on each Lender's Pro Rata Share.
9.6 Amendments and Waivers
No amendment, modification, termination or waiver of any
provision of this Agreement or consent to any departure by the Company
therefrom shall in any event be effective without the written concurrence of
the Requisite Lenders; except that any amendment, modification, termination or
waiver of the definitions of "Requisite Lenders" and "Maturity Date," any
provision expressly requiring the approval or concurrence of all Lenders, the
interest rates borne by the Loans and the method of calculation thereof, the
fees payable hereunder and the provisions contained in Sections 2.6B and 7.1
and this Section 9.6 shall be effective only if evidenced by a writing signed
by or on behalf of all Lenders. No amendment, modification, termination or
waiver of any provision of
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Section 8 hereof or any of the rights, duties, indemnities or obligations of
the Agent, as agent, shall be effective without the written concurrence of the
Agent. The Agent may, but shall have no obligation to, with the concurrence of
any Lender, execute amendments, modifications, waivers or consents on behalf of
that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on the Company in any case shall entitle the Company to any further
notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 9.6 shall be binding upon each holder of the Notes at the time
outstanding, each future holder of the Notes, and, if signed by the Company, on
the Company.
9.7 Notices
Unless otherwise provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served against written receipt, telecopied, telexed or sent
by United States mail and shall be deemed to have been given when delivered in
person, upon receipt of telecopy or telex or four Business Days after
depositing it in the United States mail, registered or certified, with postage
prepaid and properly addressed; provided that notices to the Agent shall not be
effective until received by the Agent. For the purposes hereof, the addresses
of the parties hereto (until notice of a change thereof is delivered as
provided in this Section 9.8) shall be set forth under each party's name on the
signature pages hereto.
9.8 Survival of Warranties and Certain Agreements
A. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement, the making
of the Loans hereunder and the execution and delivery of the Notes.
B. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of the Company set
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forth in Sections 9.2 and 9.3 hereof and the agreements of the Lenders set
forth in Sections 8.2C, 8.4, 9.2, 9.5 and 9.6 hereof shall survive the payment
of the Loans and the Notes and the termination of this Agreement.
9.9 Failure or Indulgence Not Waiver;
Remedies Cumulative
No failure or delay on the part of any Lender or any holder of
any Note in the exercise of any power, right or privilege hereunder or under
the Notes shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under this Agreement or the Notes or the Loans are cumulative
to and not exclusive of, any rights or remedies otherwise available.
9.10 Severability
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
9.11 Obligations Several; Independent
Nature of Lenders' Rights
The obligation of each Lender hereunder is several, and no
Lender shall be responsible for the obligation or commitment of any other
Lender hereunder. Nothing contained in this Agreement and no action taken by
the Lenders pursuant hereto shall be deemed to constitute the Lenders to be a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and
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enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
9.12 Headings
Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
9.13 APPLICABLE LAW; CONSENT TO JURISDICTION
AND SERVICE OF PROCESS_________________
A. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.
B. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY
OR ANY GUARANTOR WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT EACH OF THE COMPANY AND THE GUARANTORS
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY
JURY, AND THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY WAIVE ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS. EACH OF THE COMPANY AND THE GUARANTORS DESIGNATES
AND APPOINTS CT CORPORATION SYSTEM, 1633 BROADWAY, NEW YORK, NEW YORK 10019,
AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY ANY OF THEM WHO
IRREVOCABLY AGREE IN WRITING TO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY
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ACKNOWLEDGED BY ALL OF THEM TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL
TO THE COMPANY AT ITS ADDRESS PROVIDED ON THE APPLICABLE SIGNATURE PAGE HERETO.
IF ANY AGENT APPOINTED BY THE COMPANY REFUSES TO ACCEPT SERVICE, THE COMPANY
AND THE GUARANTORS HEREBY AGREE THAT SERVICE UPON THEM BY MAIL SHALL CONSTITUTE
SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY LENDER TO
BRING PROCEEDINGS AGAINST THE COMPANY AND THE GUARANTORS IN THE COURTS OF ANY
OTHER JURISDICTION.
9.14 Successors and Assigns; Subsequent Holders of Notes
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of the Lenders. The terms and
provisions of this Agreement shall inure to the benefit of any assignee or
transferee of the Notes, and in the event of such transfer or assignment, the
rights and privileges herein conferred upon the Lenders shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof. The Company's rights or any interest therein
hereunder may not be assigned without the written consent of all Lenders except
pursuant to a merger or consolidation or sale, lease or transfer of assets
permitted by Section 6.1 hereof. The Lenders' rights of transfer and
assignment are subject to Section 9.1 hereof.
9.15 Counterparts
This Agreement and any amendments, waivers, consents or
supplements may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
<PAGE> 103
9.16 Independence of Covenants
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitation of, another covenant shall not avoid the
occurrence of a Default or Event of Default if such action is taken or
condition exists.
<PAGE> 104
WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written above.
THE COMPANY:
ACME METALS INCORPORATED
By: /s/ Jerry F. Williams
-----------------------
Name: Jerry F. Williams
Title: Vice President
Notice Address:
Acme Metals Incorporated
13500 South Perry Avenue
Riverdale, Illinois 60627
Attn: Corporate Secretary with
a copy to the Treasurer
With a copy to:
Coffield Ungaretti & Harris
3500 Three First National Plaza
Chicago, Illinois 60602
Attn: Alton B. Harris
<PAGE> 105
AGENT AND LENDERS:
LEHMAN COMMERCIAL PAPER INC.,
individually as a
Lender and as Agent
By: /s/ Christopher R. Ryan
------------------------
Name: Christopher R. Ryan
Title: Authorized Signatory
Notice Address:
Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Neil Ullman
Telephone: 212-526-6383
Telecopier: 212-619-9716
<PAGE> 106
[NAME OF LENDER]
By:
-------------------------
Name:
Title:
Notice Address:
Attention:
Telephone:
Telecopier:
<PAGE> 107
As of August 11, 1994
Schedule 1
<TABLE>
<CAPTION>
Name of Lender Amount of Loans Percent of Total Loans
- -------------- --------------- ----------------------
<S> <C> <C>
Lehman Commercial
Paper, Inc. $50,000,000 100
</TABLE>
