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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
November 6, 1998
(Date of Report - Date of earliest event reported)
REPUBLIC ENGINEERED STEELS, INC.
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(Exact name of registrant as specified in its charter)
Commission File Number: 0-25900
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Delaware 52-1635079
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
410 Oberlin Road, S.W.
Massillon, Ohio 44647 (330) 837-6000
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(Address of principal executive offices) (Registrant's telephone number)
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Item 5. Other Events
The following exhibits are being filed herewith.
Exhibit Index
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Number Description
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(10.29) Credit Agreement dated as of November 6, 1998, by and among the registrant,
the guarantors named therein, the lenders named therein, and The Chase
Manhattan Bank, DLJ Bridge Finance, Inc. and BancBoston, N.A., as
agents.
(10.30) Open End Mortgage dated as of November 6, 1998, between registrant and The
Chase Manhattan Bank related to the registrant's Cast-Roll(Trademark) facility.
(10.31) Form of Exchange Notes Indenture.
(10.32) Form of Exchange Notes Registration Rights Agreement.
(10.33) Assignment Agreement dated November 6, 1998, by and among Chase Securities Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation, BancBoston
Robertson Stephens Inc. and the registrant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REPUBLIC ENGINEERED STEELS, INC.
Date: December 30, 1998 By: /s/ Thomas N. Tyrrell
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Thomas N. Tyrrell
Chief Executive Officer
Date: December 30, 1998 By: /s/ Brenda K. Brown
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Brenda K. Brown
Vice President of Finance and Controller
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CREDIT AGREEMENT
dated as of
November 6, 1998
among
REPUBLIC ENGINEERED STEELS, INC.,
as Borrower,
THE GUARANTORS named herein,
THE LENDERS named herein,
THE CHASE MANHATTAN BANK,
as Administrative Agent, Collateral Agent, Document Agent,
Syndication Agent and as an Agent,
and
DLJ BRIDGE FINANCE, INC. and
BANKBOSTON, N.A., as Agents
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TABLE OF CONTENTS
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RECITALS .....................................................................................1
SECTION 1 DEFINITIONS...................................................................1
1.1 Certain Defined Terms.........................................................1
1.2 Accounting Terms.............................................................29
1.3 Other Definitional Provisions; Anniversaries.................................29
SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS; NOTES.........................29
2.1 Initial Loans and Initial Note...............................................29
A. Initial Loan Commitment................................................29
B. Notice of Borrowing....................................................31
C. Disbursement of Funds..................................................31
D. Initial Notes..........................................................31
E. Scheduled Payment of Initial Loans.....................................32
F. Termination of Closing Date Loan Commitment and Subsequent Loan
Commitments............................................................32
G. Pro Rata Borrowings and Election.......................................32
2.2 Term Loan and Term Note......................................................32
A. Term Loan Commitment...................................................32
B. Notice of Conversion/Borrowing.........................................33
C. Making of Term Loan....................................................33
D. Maturity of Term Loan..................................................33
E. Term Notes.............................................................33
2.3 Interest on the Loans........................................................33
A. Rate of Interest.......................................................33
B. Interest Payments......................................................33
C. Post-Maturity Interest.................................................34
D. Computation of Interest................................................34
2.4 Letter Agreements............................................................34
2.5 Prepayments and Payments.....................................................34
A. Prepayments............................................................34
B. Manner and Time of Payment.............................................36
C. Payments on Non-Business Days..........................................36
D. Notation of Payment....................................................36
2.6 Use of Proceeds..............................................................37
A. Initial Loans..........................................................37
B. Term Loan..............................................................37
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C. Margin Regulations.....................................................37
2.7 Conversion of Debt Tender Offer Loans........................................37
SECTION 3 CONDITIONS...................................................................38
3.1A Conditions to Initial Loans on Closing Date..................................38
3.1B Conditions to Subsequent Loans...............................................45
3.2 Conditions to Term Loan......................................................47
SECTION 4 REPRESENTATIONS AND WARRANTIES...............................................48
4.1 Organization and Good Standing; Capitalization...............................48
4.2 Authorization and Power......................................................49
4.3 No Conflicts or Consents.....................................................49
4.4 Enforceable Obligations......................................................50
4.5 Properties; Liens............................................................50
4.6 Financial Condition..........................................................51
4.7 Full Disclosure..............................................................51
4.8 No Default...................................................................51
4.9 Compliance with Contracts, Etc...............................................52
4.10 No Litigation................................................................52
4.11 Use of Proceeds; Margin Stock, Etc...........................................52
4.12 Taxes........................................................................52
4.13 ERISA........................................................................53
4.14 Compliance with Law..........................................................53
4.15 Government Regulation........................................................53
4.16 Capital Structure and Subsidiaries...........................................54
4.17 Intellectual Property........................................................54
4.18 Environmental Matters........................................................54
4.19 Solvency.....................................................................55
4.20 Insurance....................................................................55
4.21 Labor Matters................................................................56
4.22 Guarantees...................................................................56
4.23 Indenture; Etc...............................................................56
4.24 Investment Company Act; Public Utility Holding Company Act...................57
4.25 Security Interests...........................................................57
4.26 Year 2000....................................................................57
SECTION 5 AFFIRMATIVE COVENANTS........................................................58
5.1 Financial Statements and Other Reports.......................................58
5.2 Corporate Existence, Etc.....................................................60
5.3 Payment of Taxes and Claims; Tax Consolidation...............................60
5.4 Maintenance of Properties; Insurance.........................................61
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5.5 Compliance with Environmental Laws;
Preparation of Environmental Reports......................................62
5.6 Security Interests; Additional Subsidiaries..................................62
5.7 Compliance with Laws, Etc....................................................63
5.8 Maintaining Records; Access to Properties
and Inspections...........................................................63
5.9 Take-Out Financing; Redemption...............................................63
5.10 Exchange of Term Notes.......................................................64
5.11 ERISA Compliance.............................................................65
5.12 Litigation and Other Notices.................................................65
5.13 Register.....................................................................66
5.14 Equity Reserve; Exchange Notes...............................................66
5.15 Existing Notes Indenture.....................................................67
5.16 Redemption Documents.........................................................67
5.17 Post-Closing Obligations.....................................................67
SECTION 6 NEGATIVE COVENANTS...........................................................68
6A Prior to Conversion Date.....................................................68
6A.1 Indebtedness.................................................................68
6A.2 Liens........................................................................70
6A.3 Dividends and Distributions..................................................73
6A.4 Investments..................................................................74
6A.5 Mergers, Consolidations, Sales of Assets and Acquisitions....................75
6A.6 Sale and Lease-Back Transactions.............................................77
6A.7 Transactions with Affiliates.................................................77
6A.8 Business Activities..........................................................78
6A.9 Material Agreements..........................................................78
6A.10 Capital Expenditures.........................................................78
6A.11 Fixed Charge Coverage Ratio..................................................79
6B Following the Conversion Date................................................79
SECTION 7 EVENTS OF DEFAULT............................................................79
7.1 Failure To Make Payments When Due............................................79
7.2 Default in Other Agreements..................................................79
7.3 Breach of Certain Covenants..................................................80
7.4 Breach of Warranty...........................................................80
7.5 Other Defaults Under This Agreement or Other Loan Documents..................80
7.6 Involuntary Bankruptcy; Appointment of Custodian, Etc........................81
7.7 Voluntary Bankruptcy; Appointment of Custodian, Etc..........................81
7.8 Judgments and Attachments....................................................81
7.9 Dissolution..................................................................82
7.10 Loan Documents...............................................................82
7.11 Foreclosure..................................................................82
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7.12 ERISA........................................................................82
7.13 Collective Bargaining Agreement..............................................83
7.14 Security Documents...........................................................83
7.15 Satisfaction Date............................................................83
SECTION 8 THE AGENTS...................................................................84
8.1 Appointment..................................................................84
8.2 Delegation of Duties.........................................................84
8.3 Exculpatory Provisions.......................................................85
8.4 Reliance by Agents...........................................................85
8.5 Notice of Default............................................................86
8.6 Non-Reliance on Agents and Other Lenders.....................................86
8.7 Indemnification..............................................................86
8.8 Agents in Their Individual Capacity..........................................87
8.9 Resignation of Any Agent; Successor Agent....................................87
8.10 Collateral Agent.............................................................87
SECTION 9 GUARANTEE....................................................................89
9.1 Unconditional Guarantee......................................................89
9.2 Severability.................................................................90
9.3 Release of a Guarantor.......................................................90
9.4 Limitation of Guarantor's Liability..........................................90
9.5 Guarantors May Consolidate, Etc., on Certain Terms...........................90
9.6 Contribution.................................................................91
9.7 Waiver of Subrogation........................................................91
9.8 Evidence of Guarantee........................................................92
9.9 Waiver of Stay, Extension or Usury Laws......................................92
SECTION 10 MISCELLANEOUS................................................................92
10.1 Representation of the Lenders................................................92
10.2 Participations in and Assignments of Loans and Notes.........................93
10.3 Expenses.....................................................................95
10.4 Indemnity....................................................................95
10.5 Setoff.......................................................................96
10.6 Amendments and Waivers; Payments for Consent.................................96
10.7 Independence of Covenants....................................................97
10.8 Entirety.....................................................................98
10.9 Notices......................................................................98
10.10 Survival of Warranties and Certain Agreements................................98
10.11 Failure or Indulgence Not Waiver; Remedies Cumulative........................98
10.12 Severability.................................................................99
10.13 Headings.....................................................................99
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10.14 Applicable Law...............................................................99
10.15 Successors and Assigns; Subsequent Holders of Notes..........................99
10.16 Counterparts; Effectiveness..................................................99
10.17 Consent to Jurisdiction; Venue; Waiver of Jury Trial........................100
10.18 Payments Pro Rata...........................................................100
10.19 Taxes and Other Taxes.......................................................101
10.20 Waiver of Stay, Extension or Usury Laws.....................................103
10.21 Requirements of Law.........................................................103
10.22 Confidentiality.............................................................103
SIGNATURE PAGES......................................................................................106
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SCHEDULES
A SUBSIDIARIES
B EXISTING INDEBTEDNESS
C HOLDINGS CAPITALIZATION
D EXISTING LIENS
E TAXES
F EXISTING LITIGATION
G-1 CLOSING DATE MORTGAGED REAL PROPERTY
G-2 SATISFACTION DATE MORTGAGED REAL PROPERTY
H ENVIRONMENTAL MATTERS
I EXISTING TRANSACTIONS WITH AFFILIATES
J INSURANCE
K LABOR MATTERS
EXHIBITS
I FORM OF INITIAL NOTE
II FORM OF TERM NOTE
III FORM OF WARRANT AGREEMENT
IV-A FORM OF NOTICE OF BORROWING
IV-B FORM OF NOTICE OF CONVERSION
V FORM OF INDENTURE
VI FORM OF REGISTRATION RIGHTS AGREEMENT
VII-A FORM OF CLOSING DATE OPINION OF SIMPSON THACHER & BARTLETT AND SQUIRE, SANDERS & DEMPSEY -
SPECIAL COUNSEL FOR THE COMPANY AND THE GUARANTORS
VII-B FORM OF ALTERNATE TENDER OFFER CLOSING DATE OPINION OF SIMPSON THACHER & BARTLETT AND
SQUIRE, SANDERS & DEMPSEY - SPECIAL COUNSEL FOR THE COMPANY AND THE GUARANTORS
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VIII FORM OF OPINION OF CAHILL GORDON & REINDEL - SPECIAL COUNSEL FOR THE LENDERS
IX FORM OF OPINION OF LOCAL COUNSEL TO THE COMPANY
IX-A DRAFT OPINION OF SQUIRE SANDERS - OHIO
IX-B DRAFT OF OPINION OF DAY, BERRY - CONNECTICUT
IX-C DRAFT OPINION OF BAKER & DANIELS - INDIANA
IX-D DRAFT OPINION OF JONES DAY - ILLINOIS
IX-E DRAFT OPINION OF JONES DAY - PENNSYLVANIA
X FORM OF NOTATION OF GUARANTEE
XI FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
XII FORM OF SECURITY AGREEMENT
XIII FORM OF MORTGAGE
XIII-A FORM OF CAST ROLL FACILITY MORTGAGE
XIII-B FORM OF OHIO MORTGAGE
XIII-C FORM OF INDIANA MORTGAGE
XIII-D FORM OF ILLINOIS MORTGAGE
XIII-E FORM OF PENNSYLVANIA MORTGAGE
XIII-F FORM OF CONNECTICUT MORTGAGE
XIV FORM OF EQUITY RESERVE REGISTRATION RIGHTS AGREEMENT
XV FORM OF WARRANT ESCROW AGREEMENT
XVI FORM OF HOLDINGS SIDE LETTER
XVII FORM OF ASSIGNMENT AGREEMENT
XVIII [INTENTIONALLY OMITTED]
XIX MARKED SATISFACTION DATE TITLE COMMITMENTS
XX FORM OF SECTION 10.2E(ii) CERTIFICATE
XXI FORM OF CAST ROLL COMMITMENT TIE IN ENDORSEMENT
XXII FORM OF NOTICE OF ELECTION
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This Credit Agreement is dated as of November 6, 1998, and
entered into by and among Republic Engineered Steels, Inc., a Delaware
corporation (the "Company"), the Guarantors named on the signature pages
hereto, the Lenders named on the signature pages hereto (the "Lenders"), and
The Chase Manhattan Bank ("Chase", the "Administrative Agent", the "Collateral
Agent", the "Documentation Agent" or the "Syndication Agent"), DLJ Bridge
Finance, Inc. ("DLJ") and BankBoston, N.A. ("BankBoston"), as agents for the
Lenders (Chase, DLJ and BankBoston, collectively, the "Agents").
RECITALS
WHEREAS, the Company desires that the Lenders extend a credit
facility to the Company in connection with (v) the purchase of Existing Notes
tendered in the Debt Tender Offer, (w) the subsequent monetization of Existing
Notes acquired by the Company in the Debt Tender Offer, (x) the purchase of
Existing Notes tendered in the Alternate Tender Offer, (y) the redemption of
Existing Notes pursuant to a Redemption or (z) the refinancing of Bank
Indebtedness;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereby agree
as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the
following meanings:
"Acquired Indebtedness" has the meaning ascribed to such term
in the Indenture.
"Adjusted Net Assets" has the meaning ascribed to such term
in Section 9.6.
"Administrative Agent" has the meaning ascribed to such term
in the introduction to this Agreement.
"Affiliate," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of that Person, whether through the ownership of voting securities
or by contract or otherwise.
"Agents" has the meaning ascribed to such term in the
introduction to this Agreement. Except where the context otherwise requires,
all references herein to the "Agents" shall include the Collateral Agent.
"Agreement" means this Credit Agreement dated as of November
6, 1998, as it may be amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
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"Alternate Base Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(i) the Prime Rate in effect on such day and (ii) the Federal Funds Rate in
effect on such day plus 1/2 of 1%, in either case minus 1%. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Rate, including the failure of the Federal Reserve Bank of New York to
publish rates or the inability of the Administrative Agent to obtain quotations
in accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (ii) of the preceding sentence until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective on the effective date of such change in the Prime Rate or
the Federal Funds Rate, respectively.
"Alternate Tender Offer" means the offer by the Company to
purchase the outstanding Existing Notes at a price equal to 104.23% of their
principal amount, plus accrued and unpaid interest, to the date of purchase in
accordance with the Alternate Tender Offer Documents.
"Alternate Tender Offer Closing Date" means the date of the
consummation of the Alternate Tender Offer in accordance with the Alternate
Tender Offer Documents.
"Alternate Tender Offer Documents" means the Offer to
Purchase dated October 29, 1998 and the documents related thereto and
distributed to the holders of Existing Notes, as supplemented or amended prior
to the effectiveness of this Agreement (including, without limitation, all
amendments and supplements thereto subsequent to the effectiveness of this
Agreement if permitted hereby), all of which describe the terms and conditions
of the Alternate Tender Offer.
"Alternate Tender Offer Expiration Date" means the earlier of
(i) June 30, 1999 and (ii) date of expiration of the Alternate Tender Offer in
accordance with the Alternate Tender Offer Documents.
"Applicable Rate" means (i) for each Interest Period prior to
and ending on the Conversion Date, the LIBOR Rate then in effect, or if (x)
with respect to any Debt Tender Offer Loans made on the Closing Date or (y) the
LIBOR Rate cannot be determined or any Lender is unable to maintain a Loan
accruing interest at the LIBOR Rate, the Alternate Base Rate and (ii) for each
Interest Period after the Conversion Date, the Term Loan Rate.
"Applicable Spread" means (i) 7.0% for the period from and
including the initial Borrowing Date to but excluding the third Monthly
Anniversary following such date, (ii) 7.5% for the period from and including
the third Monthly Anniversary following such initial Borrowing Date to but
excluding the sixth Monthly Anniversary following such date, (iii) 8.0% for the
period from and including the sixth Monthly Anniversary following initial
Borrowing Date to but excluding the ninth Monthly Anniversary following such
date and (iv) 8.5% for the period from and including the ninth Monthly
Anniversary following initial Borrowing Date to but excluding the Conversion
Date.
"Asset Acquisition" has the meaning ascribed to such term in
the Indenture.
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"Asset Sale" has the meaning ascribed to such term in the
Indenture.
"Assignment Agreement" means any assignment agreement
substantially in the form of Exhibit XVII annexed hereto.
"Available Loan Commitments" means on any Borrowing Date, (A)
with respect to a Subsequent Loan (other than a Subsequent Loan to be made on a
Bank Indebtedness Refinancing Date), an aggregate principal amount equal to (i)
the Total Commitments minus (ii) the aggregate principal amount of Initial
Loans made on the initial Borrowing Date minus (iii) the aggregate principal
amount of Subsequent Loans made pursuant to Section 2.1(A)(ii) during the
period from the Closing Date through such Borrowing Date and (B) with respect
to a Subsequent Loan to be made on a Bank Indebtedness Refinancing Date, the
Available Loan Commitments referred to in the preceding clause (A), but not to
exceed the greater of (x) the amount of Bank Indebtedness, if any, incurred to
finance the Debt Tender Offer and (y) $20,000,000.
"Baltimore Property" means any Property of the Company and
its Subsidiaries located at 3501 East Biddle Street, Baltimore, Maryland 21213
or used primarily in connection with the Company's business and operations at
such location.
"Bank Credit Agreement" means the Second Amended and Restated
Revolving Credit Agreement dated as of April 25, 1997, among the Company, the
lenders party thereto from time to time and BankBoston, as agent, together with
the documents related thereto (including, without limitation, any guarantee
agreements, promissory notes and collateral documents), in each case as such
agreements may be amended, supplemented or otherwise modified from time to
time, or refunded, refinanced, restructured, replaced, renewed, repaid or
extended from time to time.
"Bank Indebtedness" means any and all amounts, whether
outstanding on the Closing Date or thereafter Incurred, payable under or in
respect of the Bank Credit Agreement and any related notes, collateral
documents, letters of credit and guarantees, including principal, premium (if
any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or any
Subsidiary of the Company whether or not a claim for post-filing interest is
allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
"Bank Indebtedness Refinancing Date" means any date after the
Closing Date in respect of which the Company has delivered a Notice of
Borrowing for the purpose of repaying Bank Indebtedness due to the liquidity
requirements of the Company and its Subsidiaries.
"Bank Security Agreement" means that certain security and
pledge agreement, dated as of November 28, 1989 and amended on December 21,
1993 and April 25, 1997, between the Company and BankBoston, as agent, as
amended, supplemented or otherwise modified from time to time, including any
security agreement executed in connection with a refinancing of the Bank
Indebtedness permitted hereunder to the extent the Lien granted pursuant to
such security agreement is permitted hereunder.
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"BankBoston Letter Agreement" means the letter agreement
dated August 4, 1998 among Holdings, BankBoston, BankBoston Securities Inc.,
Chase, Chase Securities Inc., DLJ Capital Funding, Inc., DLJ and Donaldson,
Lufkin & Jenrette Securities Corporation.
"Bankruptcy Law" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute
or any other United States federal, state or local law or the law of any other
jurisdiction relating to bankruptcy, insolvency, winding up, liquidation,
reorganization or relief of debtors, whether in effect on the date hereof or
hereafter.
"Bankruptcy Order" means any court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation, winding
up, dissolution or reorganization, or appointing a custodian of a debtor or of
all or any substantial part of a debtor's property, or providing for the
staying, arrangement, adjustment or composition of indebtedness or other relief
of a debtor.
"Beneficial Owners" means, with respect to a Chase Fund, the
holders of the beneficial interests in such Chase Fund and the Loans held by
such Chase Fund.
"Blackstone" means Blackstone Capital Partners II Merchant
Banking Fund L.P., a Delaware limited partnership, Blackstone Offshore Capital
Partners II L.P., a Cayman Islands exempted limited partnership, and Blackstone
Family Investment Partnership II L.P., a Delaware limited partnership.
"Blackstone Related Party" means any of Blackstone or any of
their respective Affiliates and each general partner of any of Blackstone or
any of their respective Affiliates who is a partner or employee of The
Blackstone Group L.P.
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person or any duly authorized committee of that
Board.
"Borrowing Date" means the date of any borrowing under
Section 2.1A.
"Business Day" means any day other than a Saturday, Sunday or
day on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Loan accruing interest
based on the LIBOR Rate, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"Capital Expenditures" shall mean, for any Person in respect
of any period, the aggregate of all expenditures Incurred by such Person during
such period that, in accordance with GAAP, are or should be included in
"additions to property, plant or equipment" or similar items reflected in the
statement of cash flows of such Person (which shall be deemed to include
expenditures by such Person to acquire stock or other evidence of beneficial
ownership of any other Person for the purpose of acquiring the capital assets
of such Person (as opposed to acquiring such Person as a going concern));
provided, however, that Capital Expenditures for the Company and its
Subsidiaries shall not
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include (i) expenditures to the extent they are made with the proceeds of the
issuance of Capital Stock of the Company or from a capital contribution to the
Company after the Closing Date (to the extent not previously used to prepay
Indebtedness or make any Investment or capital expenditure or used for any
other purpose), (ii) expenditures of proceeds of insurance settlements,
condemnation awards and other settlements in respect of lost, destroyed,
damaged or condemned assets, equipment or other property to the extent such
expenditures are made to replace or repair such lost, destroyed, damaged or
condemned assets, equipment or other property or otherwise to acquire assets or
properties useful in the business of the Company and its Subsidiaries within 12
months of receipt of such proceeds, (iii) interest capitalized during such
period, (iv) expenditures that are accounted for as capital expenditures of
such Person and that actually are paid for by a third party (excluding any
Subsidiary of the Company) and for which neither the Company nor any of its
Subsidiaries has provided or is required to provide or Incur, directly or
indirectly, any consideration or obligation to such third party or any other
Person (whether before, during or after such period) or (v) the book value of
any asset owned by such Person prior to or during such period to the extent
that such book value is included as a capital expenditure during such period as
a result of such Person reusing or beginning to reuse such asset during such
period without a corresponding expenditure actually having been made in such
period, provided that any expenditure necessary in order to permit such asset
to be reused shall be included as a Capital Expenditure during the period that
such expenditure actually is made and such book value shall have been included
in Capital Expenditures when such asset was originally acquired. "Capital
Stock" of any Person means any and all shares, interests, rights to purchase,
warrants, options, participation or other equivalents of or interests in
(however designated) equity of such Person, including any Preferred Stock, any
limited or general partnership interest and any limited liability company
membership interest, but excluding any debt securities convertible into such
equity.
"Capitalized Lease Obligation" of any Person means
obligations to pay rent or other amounts under a lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, that are required to be classified and accounted for as capital leases
on a balance sheet of such Person under GAAP, and the amount of Indebtedness
represented by such obligations shall be the capitalized amount of such
obligations determined in accordance with GAAP.
"Cash Equivalents" means (i) direct obligations of the United
States of America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof; (ii) time deposit accounts,
certificates of deposit and money market deposits maturing within 180 days of
the date of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any state thereof or
any foreign country recognized by the United States of America having capital,
surplus and undivided profits aggregating in excess of $500,000,000 (or the
foreign currency equivalent thereof) and whose long-term debt, or whose parent
holding company's long-term debt, is rated A (or such similar equivalent rating
or higher by at least one nationally recognized statistical rating organization
(as defined in Rule 436 under the Securities Act)); (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above; (iv) commercial paper, maturing
not more than 180 days after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company or Holdings) organized and in existence
under the laws of the United States of America or any foreign country
recognized by the United States
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of America with a rating at the time as of which any investment therein is made
of P-1 (or higher) according to Moody's Investors Service, Inc., or A-1 (or
higher) according to Standard & Poor's Ratings Service; (v) securities with
maturities of six months or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least A by Standard & Poor's Ratings Service or A by Moody's Investors
Service, Inc.; (vi) in the case of any Subsidiary of the Company organized in a
jurisdiction outside the United States: (x) direct obligations of the sovereign
nation (or any agency thereof) in which such Subsidiary is organized and is
conducting business or in obligations fully and unconditionally guaranteed by
such sovereign nation (or any agency thereof), (y) investments of the type and
maturity described in clauses (i) through (v) above of foreign obligors, which
investments or obligors (or the parents of such obligors) have ratings
described in such clauses or equivalent ratings from comparable foreign rating
agencies or (z) investments of the type and maturity described in clauses (i)
through (v) above of foreign obligors (or the parents of such obligors), which
investments or obligors (or the parents of such obligors) are not rated as
provided in such clauses or in clause (y) above but which are, in the
reasonable judgment of the Company, comparable in investment quality to such
investments and obligors (or the parents of such obligors); (vii) shares of
mutual funds whose investment guidelines restrict 95% of such funds'
investments to those satisfying the provisions of clauses (i) through (v)
above; and (viii) time deposit accounts, certificates of deposit and money
market deposits in an aggregate face amount not in excess of 1/2 of 1% of total
assets of the Company and its Subsidiaries, on a consolidated basis, as of the
end of the Company's most recently completed fiscal year.
"Cast Roll Commitment" has the meaning ascribed to such term
in Section 5.16.
"Casualty Event" means, with respect to any Property
(including Real Property) of any Person, any loss of title with respect to Real
Property or any loss of or damage to or destruction of, or any condemnation or
other taking (including by any Tribunal) of, such Property (including Real
Property) for which such Person or any of its Subsidiaries receives insurance
proceeds or proceeds of a condemnation award or other compensation. "Casualty
Event" shall include, without limitation, any taking of any Mortgaged Real
Property or other Real Property of the Company or any Subsidiary 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 any Mortgaged Real Property or other Real Property of the Company
or any of its Subsidiaries, including, without limitation, by any Tribunal,
civil or military.
"Change of Control" (A) prior to the Conversion Date, means
the occurrence of one any more of the following events: (i) any Person or group
(within the meaning of Rule 13d-5 of the Exchange Act as in effect on the date
hereof), other than the Principals or any combination of Principals, shall own
beneficially, directly or indirectly, in the aggregate shares representing more
than 25% of the aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of Holdings at a time when the Principals or any
combination of Principals shall fail to own beneficially, directly or
indirectly, shares representing at least a majority of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of
Holdings; (ii) at any time prior to the Conversion Date, the Principals or any
combination of Principals shall fail to own beneficially, directly or
indirectly, in the aggregate Capital Stock representing at least 51% of the
aggregate ordinary voting
<PAGE>
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power represented by the issued and outstanding Capital Stock of Holdings;
(iii) a majority of the seats (excluding vacant seats) on the Board of
Directors of Holdings or the Company shall at any time after the Closing Date
have been occupied by Persons who were neither (a) nominated by any one or more
Principals or by a majority of the Board of Directors of Holdings or the
Company, respectively, nor (b) appointed by directors so nominated; (iv) a
change in control with respect to Holdings or the Company (or similar event,
however denominated) shall occur under any indenture or agreement in respect of
Indebtedness in an aggregate outstanding principal amount in excess of
$5,000,000 to which Holdings, the Company or any of their respective
Subsidiaries is party; or (v) Holdings shall cease to own, directly or
indirectly, beneficially and of record, 100% of the outstanding Capital Stock
of the Company; provided that a merger of Holdings with any entity which is an
Affiliate of Blackstone shall not constitute a Change of Control and (B) after
the Conversion Date, shall have the meaning ascribed to such term in the
Indenture.
"Change of Control Offer" has the meaning ascribed to such
term in Section 2.5A(iv).
"Chase Fund" means any bridge loan fund managed or
controlled by Chase.
"Closing Date" means the effective date of this Agreement,
which shall be the date on or before November 6, 1998 that the conditions set
forth in Section 3.1A are satisfied or waived in accordance with Section 10.6.
"Closing Date Collateral" means the Closing Date Mortgaged
Real Property and any other Property made subject to a Lien in favor of the
Collateral Agent (for the benefit of the Secured Parties) pursuant to the
Closing Date Security Documents, including, without limitation, any and all
Equipment (as such term is defined in the Mortgage annexed hereto as Exhibit
XIII) located at the Closing Date Mortgaged Real Property.
"Closing Date Mortgaged Real Property" means the Mortgaged
Real Property set forth in Schedule G-1 annexed hereto.
"Closing Date Security Documents" means any Security
Documents which pursuant to the terms of this Agreement are required to be
delivered on the Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor code or statute, and the
regulations promulgated and rulings issued thereunder. Section references to
the Code are to the Code as in effect at the date of this Agreement and any
subsequent provisions of the Code amendatory thereof, supplemental thereto or
substituted therefor.
"Collateral" means, collectively, all of the Mortgaged Real
Property and Security Agreement Collateral and any other Property made subject
to a Lien in favor of the Collateral Agent (for the benefit of the Secured
Parties) pursuant to the Security Documents, including, without limitation,
Closing Date Collateral; provided, however, that "Collateral" shall not include
the Baltimore Property or the Harrison Property.
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"Collateral Agent" means Chase, in its capacity as collateral
agent for the Secured Parties under the Security Documents or any successor
Collateral Agent appointed pursuant to Section 8.10.
"Collective Bargaining Agreement" means the Collective
Bargaining Agreement dated as of August 2, 1998, between the Company and the
members of the United Steelworkers of America, as amended, supplemented or
otherwise modified from time to time.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or non-voting) of, such Person's common stock, whether
outstanding on the Closing Date or issued after the Closing Date, and includes,
without limitation, all series and classes of such common stock.
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Company Redemption Date" has the meaning ascribed to
such term in Section 2.1.A(ii).
"Consolidated Cash Flow Available for Fixed Charges" means,
with respect to the Company for any period, (a) the sum of, without
duplication, the amounts for such period, taken as a single accounting period,
of (i) Consolidated Net Income, (ii) Consolidated Non-cash Charges, (iii)
Consolidated Interest Expense, (iv) Consolidated Income Tax Expense, (v) any
fees, expenses or charges related to any issuance of Capital Stock, Permitted
Investments, the acquisition or recapitalization of Indebtedness permitted to
be incurred hereby (in each case, whether or not successful) and fees, expenses
or charges related to the Merger and the Transactions (including fees to
Blackstone and Veritas) reducing Consolidated Net Income for such period, (vi)
the amount of any nonrecurring charges (including any one-time costs incurred
in connection with acquisitions after the Closing Date) reducing Consolidated
Net Income for such period and (vii) cash and non-cash OPEB expense determined
in accordance with GAAP to the extent reducing Consolidated Net Income, for
such period less (b) any non-cash items increasing Consolidated Net Income for
such period.
"Consolidated Fixed Charge Coverage Ratio" as of any date of
determination means the ratio of (i) the aggregate amount of Consolidated Cash
Flow Available for Fixed Charges for the four quarter period of the most recent
four consecutive fiscal quarters ending prior to the date of such determination
(the "Calculation Date") for which consolidated financial statements are
available (the "Four Quarter Period") to (ii) Consolidated Fixed Charges for
such Four Quarter Period; provided that (i) for the Four Quarter Period ending
June 30, 1999, Consolidated Cash Flow Available for Fixed Charges and
Consolidated Fixed Charges shall equal the Consolidated Cash Flow Available for
Fixed Charges and Consolidated Fixed Charges, respectively, for the fiscal
quarters ending March 31, 1999 and June 30, 1999 multiplied by two (2) and (ii)
for the Four Quarter Period ending September 30, 1999, Consolidated Cash Flow
Available for Fixed Charges and Consolidated Fixed Charges shall equal the
Consolidated Cash Flow Available for Fixed Charges and Consolidated Fixed
Charges, re-
<PAGE>
-9-
spectively, for the fiscal quarters ending March 31, 1999, June 30, 1999 and
September 30, 1999 multiplied by four-thirds (4/3). In addition to and without
limitation of the foregoing, for purposes of this definition, "Consolidated Cash
Flow Available for Fixed Charges" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to, without duplication, (a) the Incurrence of any Indebtedness by
the Company or any of its Subsidiaries (and the application of the net proceeds
thereof) during the period commencing on the first day of the Four Quarter
Period to and including the Calculation Date (the "Reference Period"), as if
such Incurrence (and application) occurred on the first date of the Reference
Period, (b) an adjustment to eliminate or include, as the case may be, the
Consolidated Cash Flow Available for Fixed Charges and Consolidated Fixed
Charges of such Person directly or indirectly attributable to assets which are
the subject of any Asset Sale or Asset Acquisition occurring during the
Reference Period, as if such Asset Sale or Asset Acquisition occurred on the
first day of the Reference Period, (c) the retirement of Indebtedness during the
Reference Period which cannot thereafter be reborrowed occurring as if retired
on the first day of the Reference Period, (d) an adjustment to eliminate any net
after-tax extraordinary gains or losses, and (e) an adjustment to eliminate any
charges arising out of the Merger and the Transactions. For purposes of
calculating "Consolidated Fixed Charges" for this "Consolidated Fixed Charge
Coverage Ratio", (a) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Calculation Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Calculation
Date, (b) if interest on any Indebtedness actually Incurred on the Calculation
Date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the Calculation Date will be deemed to have
been in effect during the Reference Period and (c) notwithstanding clauses (a)
and (b) of this sentence, interest on Indebtedness determined on a fluctuating
basis, to the extent such interest is covered by agreements relating to Interest
Rate Protection Obligations for the twelve month period following the
Calculation Date, shall be deemed to have accrued at the rate per annum
resulting after giving effect to the operation of such agreements to the extent
then applicable. If the Company or any of its Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, this definition shall give
effect to the Incurrence of such guaranteed Indebtedness as if such Person had
directly Incurred or otherwise assumed such guaranteed Indebtedness.
Notwithstanding the foregoing, for the purposes of making the computation
referred to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period. For purposes of
this definition, whenever pro forma effect is to be given to a transaction, the
pro forma calculations shall be made in good faith by a responsible financial or
accounting Officer of the Company. In addition, for purposes of this definition,
whenever pro forma effect is to be given to an Asset Acquisition or Investment,
pro forma calculations (including, without limitation, with respect to cost
savings and synergies) shall be determined in accordance with Regulation S-X
under the Securities Act and the interpretations thereof by the Commission;
provided that such computation shall be adjusted from time to time following the
Asset Acquisition to eliminate cost savings and synergies that have either been
realized (and therefore are reflected in actual results) or cannot reasonably be
expected to be realized (whether based upon information and results obtained
following the applicable Asset Acquisition or Investment or otherwise) by the
Company and its Subsidiaries. In no event shall the Consolidated Fixed Charge
Coverage Ratio reflect any anticipated, but unrealized, cost savings resulting
from the Merger or the Col-
<PAGE>
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lective Bargaining Agreement (whether or not determined in accordance with
Regulation S-X under the Securities Act and interpretations thereof by the
Commission).
"Consolidated Fixed Charges" means, with respect to the
Company for any period, the sum of, without duplication, the amounts for such
period of (a) the Consolidated Interest Expense of the Company and (b) the
aggregate amount of dividends and other distributions paid or accrued during
such period in respect of Disqualified Capital Stock of the Company and its
Subsidiaries on a consolidated basis.
"Consolidated Income Tax Expense" means, with respect to the
Company for any period, the provision for Federal, state, local and foreign
income taxes of the Company and its Subsidiaries for such period as determined
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the
Company for any period, without duplication, the sum of (i) the interest
expense (whether cash or non-cash) of the Company and its Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP to the
extent deducted in calculating Consolidated Net Income, including, without
limitation, (a) any amortization of debt discount, (b) the net cost under
Interest Rate Protection Obligations relating to interest (including any
amortization of discounts), (c) the interest portion of any deferred payment
obligation, (d) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (e) all
capitalized interest and all accrued interest but excluding non-cash
amortization of deferred financing fees and other issuance costs, and (f) all
scheduled payments of interest payable by Holdings and referred to in Section
6A.3(b) and (ii) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by the Company and its
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, with respect to the Company
for any period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period as determined in accordance with GAAP, adjusted,
to the extent included in calculating such net income, by excluding, without
duplication, (a) all net after-tax extraordinary gains or losses (including any
net after-tax income (loss) from the Baltimore Property and the Harrison
Property and any net after-tax gains or losses on disposal of discontinued
operations), (b) the portion of net income (but not losses) of the Company and
its Subsidiaries allocable to minority interests in unconsolidated Persons to
the extent that cash dividends or distributions have not actually been received
by the Company or one of its Subsidiaries, (c) net income (or loss) of any
Person combined with the Company or one of its Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(d) any gain or loss realized upon the termination of any employee pension
benefit plan, on an after-tax basis, (e) gains or losses in respect of any
Asset Sales by the Company or one of its Subsidiaries, (f) the cumulative
non-cash effect of any change in any accounting principle, (g) the non-cash
effect of compensation expense related to the contribution of shares held by
any qualified employee stock ownership trust formed for employees of the
Company and its Subsidiaries and (h) the net income of any Subsidiary of the
Company to the extent that the declaration of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the
<PAGE>
-11-
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, law, rule or governmental regulation applicable to that Subsidiary or
its stockholder(s).
"Consolidated Non-cash Charges" means, with respect to the
Company for any period, the aggregate depreciation, amortization and other
non-cash expenses of the Company and its Subsidiaries (including any non-cash
charges related to any employee stock ownership plan) reducing Consolidated Net
Income of the Company and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges
constituting an extraordinary item or loss or any such charge which required an
accrual of or a reserve for cash charges for any future period).
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties or assets is
bound or to which it or any of its properties or assets is subject.
"Conversion Date" means the one year anniversary of the
Closing Date or such later date to which the Conversion Date may be deferred
pursuant to Section 3.2D.
"Credit Event" means (a) an Event of Default described in any
of Sections 7.1, 7.6, 7.7 or 7.9 has occurred and is continuing or (b) in the
judgment of (i) the manager of any Chase Fund that is a Lender or (ii) a
majority-in-interest (within the meaning of the trust agreement pursuant to
which any such Chase Fund was formed) of the Beneficial Owners of such Chase
Fund, either (x) the fair market value of the Loans held by such Chase Fund has
substantially decreased, or is likely to substantially decrease, as a result of
an adverse change in the business or financial condition of the Company or (y)
a material Event of Default has occurred and is continuing.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against fluctuations in currency values.
"Custodian" means any receiver, interim receiver, receiver
and manager, trustee, assignee, liquidator, sequestrator or similar official
charged with maintaining possession or control over property for one or more
creditors, whether under any Bankruptcy Law or otherwise.
"Debt Tender Offer" means the offer by the Company to
purchase the outstanding Existing Notes at a price equal to 101% of their
principal amount, plus accrued and unpaid interest, to the date of purchase in
accordance with the Debt Tender Offer Documents.
"Debt Tender Offer Closing Date" means the date of the
consummation of the Debt Tender Offer in accordance with the Debt Tender Offer
Documents.
"Debt Tender Offer Documents" means the Notice of Change of
Control and Change of Control Offer dated October 5, 1998 and the documents
related thereto and distributed to the holders of Existing Notes, as
supplemented or amended prior to the effectiveness of this Agreement
(in-
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-12-
cluding, without limitation, all amendments and supplements thereto
subsequent to the effectiveness of this Agreement if permitted hereby), all of
which describe the terms and conditions of the Debt Tender Offer.
"Debt Tender Offer Loan Commitment" has the meaning ascribed
to such term in Section 2.1A(i).
"Debt Tender Offer Loans" has the meaning ascribed to such
term in Section 2.1A(i).
"Default" means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an
Event of Default.
"Disqualified Capital Stock" means, with respect to any
Person, any Capital Stock which, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is exchangeable for Indebtedness, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Notes.
"Documentation Agent" has the meaning ascribed to such term
in the introduction to this Agreement.
"Dollars" or the sign "$" means the lawful money of the
United States of America.
"Draft Opinions" means those certain opinions of local
counsel in draft form attached hereto as Exhibits IX-A through IX-E, which
relate to the Satisfaction Date Collateral.
"Election" means the election of the Lenders evidenced by a
Notice of Election, made by the Administrative Agent, in lieu of making Initial
Loans requested by the Company to purchase all or a portion of (x) the Existing
Notes tendered in the Debt Tender Offer and/or the Alternate Tender Offer or
(y) any Existing Notes purchased by the Company in connection with the Debt
Tender Offer that are reissued and outstanding in accordance with the Indenture
on a Bank Refinancing Indebtedness Date, in each case, under the Assignment
Agreement.
"Eligible Assignee" means (A) (i) a commercial bank organized
under the laws of the United States of America or any state thereof; (ii) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof; (iii) a commercial bank organized under the
laws of any other country or a political subdivision thereof; provided that (x)
such bank is acting through a branch or agency located in the United States or
(y) such bank is organized under the laws of a country that is a member of the
organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses including, but not limited to,
insurance companies, mutual funds and lease financing companies, in each case
(under clauses (i) through (iv) above) that is reasonably acceptable to the
Agents; and (B) any Lender and any Affiliate of any Lender.
<PAGE>
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"environment" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, the workplace or as otherwise defined in any
Environmental Law.
"Environmental Claim" shall mean any written accusation,
allegation, notice of violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any Tribunal or any Person
for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon: (a) the threat, the
existence, or the continuation of the existence of a Release (including sudden
or non-sudden, accidental or non-accidental Releases); (b) exposure to any
Hazardous Material; (c) the presence, use, handling, transportation, storage,
treatment or disposal of any Hazardous Material; or (d) the violation or
alleged violation of any Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable current
and future treaties, laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Tribunal, relating in any way to the
protection of the environment, preservation or reclamation of natural
resources, the treatment, storage, disposal, Release or threatened Release of
any Hazardous Material or to human health or safety as relating to the
environment, including the Hazardous Materials Transportation Act, 49 U.S.C.
ss.ss. 1801 et seq., the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. ss.ss. 9601 et seq.
("CERCLA"), the Solid Waste Disposal Act, as amended, 42 U.S.C. ss.ss. 6901 et
seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss.ss.
1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C. ss.ss. 7401 et
seq., the Toxic Substances Control Act of 1976, 15 U.S.C. ss.ss. 2601 et seq.,
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
ss.ss. 11001 et seq., the National Environmental Policy Act of 1975, 42 U.S.C.
ss.ss. 4321 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C.
ss.ss. 300(f) et seq., and any similar or implementing state, local or foreign
law, and all amendments or regulations promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any Tribunal pursuant to any Environmental Law.
"Equity Reserve Registration Rights Agreement" means the
registration rights and stockholders agreement substantially in the form of
Exhibit XIV annexed hereto.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether
or not incorporated) that, together with the Company, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
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"Event of Default" means each of the events set forth in
Section 7.
"Excess Cash Flow" shall mean, for any period, Consolidated
Cash Flow Available for Fixed Charges for such period (calculated for this
definition by adding back the cash portion of all extraordinary or
non-recurring items of income (other than from Asset Sales) to the extent
excluded in the calculation of Consolidated Net Income and by deducting the
cash portion of all extraordinary or non-recurring items of expense to the
extent excluded in the calculation of Consolidated Net Income) plus any net
decrease in Working Capital, minus the sum of (i) combined cash interest
expense of the Company and its Subsidiaries for such period to the extent
deducted in computing Consolidated Net Income, (ii) the combined sum of all
scheduled principal payments on any Indebtedness (including, without
duplication, Capitalized Lease Obligations) of the Company and its Subsidiaries
made during such period from internally generated funds other than pursuant to
Section 2.5A(ii)(d) hereof, (iii) combined Capital Expenditures made during
such period from internally generated funds of the Company and its
Subsidiaries, (iv) Consolidated Income Tax Expense, (v) cash payments made
pursuant to the PBGC Agreement, and (vi) net increases in Working Capital.
"Excess Cash Flow Certificate" has the meaning ascribed to
such term in Section 5.1(xiii).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Exchange Note Obligations" means all obligations of any
nature of the Company and its Subsidiaries from time to time owed to the
holders of the Exchange Notes under the Indenture and the Exchange Notes,
whether for principal, reimbursements, interest, fees, expenses, indemnities or
otherwise, and whether primary, secondary, direct, indirect, contingent, fixed
or otherwise (including obligations of performance).
"Exchange Notes" has the meaning ascribed to it in Section
5.10.
"Exchange Request" has the meaning ascribed to such term in
Section 5.10.
"Existing Notes" means the Company's 9-7/8% First Mortgage
Notes Due 2001 issued under the Existing Notes Indenture.
"Existing Notes Indenture" means the indenture dated as of
December 15, 1993 pursuant to which the Existing Notes were issued, as amended
and supplemented to the date hereof and as the same may be amended and
supplemented from time to time in accordance with the terms hereof.
"Existing Notes Trustee" means the trustee under the
Existing Notes Indenture.
"Federal Funds Rate" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the
<PAGE>
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quotations for the day of such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by the
Administrative Agent.
"Funding Guarantor" has the meaning provided in Section 9.6.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, applied on a consistent basis.
"Guarantee Obligations" means the Indebtedness and other
obligations evidenced by the Guarantees.
"Guarantees" means, collectively, the guarantees delivered to
the Lenders by the Guarantors pursuant to Section 9 which are evidenced by
notations of guarantee substantially in the form of Exhibit X hereto.
"Guarantors" means (i) all Subsidiary Guarantors and (ii)
each of the Company's Subsidiaries which becomes a Subsidiary Guarantor
pursuant to Section 5.6 hereof.
"Harrison Property" means any Property of the Company and its
Subsidiaries located at 2201 Harrison Avenue, S.W., Canton, Ohio 44706 or used
primarily in connection with the Company's business and operations at such
location.
"Hazardous Materials" means any material meeting the
definition of a "hazardous substance" in CERCLA 42 U.S.C. ss. 9601(14) and all
explosive or radioactive substances or wastes; hazardous or toxic substances or
wastes; pollutants; solid, liquid or gaseous wastes, including petroleum,
petroleum distillates or fractions or residues, asbestos or asbestos containing
materials, polychlorinated biphenyls ("PCBs") or materials or equipment
containing PCBs, radon gas, infectious or medical wastes, and all other
substances or wastes of any nature regulated pursuant to any Environmental Law,
or that reasonably could form the basis of an Environmental Claim.
"Holdings" means RES Holding Corporation, a Delaware
corporation.
"Holdings Side Letter" means the letter agreement
substantially in the form of Exhibit XVI annexed hereto.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, Incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring"
shall have meanings correlative to the foregoing); provided, however, that any
amendment, modification or waiver of any document pursuant to which
Indebtedness was previously Incurred shall only be deemed to be an Incurrence
of Indebtedness if and to the extent such amendment, modification or waiver (i)
increases the principal thereof or interest rate or premium payable thereon or
(ii) changes to an earlier date the stated maturity thereof or the date of any
scheduled or required principal payment thereon or the time or circumstances
under which such Indebtedness shall be redeemed; provided, further, that any
Indebtedness of
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a Person existing at the time such Person becomes (after the Closing Date) a
Subsidiary of the Company (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
becomes a Subsidiary of the Company.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all liabilities of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any trade accounts
payables and other accrued current liabilities Incurred in the ordinary course
of business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letter of credit, bankers'
acceptance or other similar credit transaction, (b) all obligations of such
Person evidenced by bonds, notes, debentures or other similar instruments, (c)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade accounts payable arising in the ordinary course of business,
(d) all Capitalized Lease Obligations of such Person, (e) all Indebtedness
referred to in the preceding clauses of other Persons and all dividends of
other Persons, the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness (the amount of such
obligation being deemed to be the lesser of the value of such property or asset
or the amount of the obligation so secured), (f) all guarantees of Indebtedness
referred to in this definition by such Person, (g) all Disqualified Capital
Stock of such Person valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued dividends, (h) all Interest Rate
Protection Obligations of such Person and (i) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of the
types referred to in clauses (a) through (h) above. For purposes hereof, the
"maximum fixed repurchase price" of any Disqualified Capital Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to be
determined pursuant hereto, and if such price is based upon, or measured by,
the fair market value of such Disqualified Capital Stock, such fair market
value shall be determined in good faith by the Board of Directors of the
Company. For purposes of Section 6A, in determining the principal amount of any
Indebtedness (a) to be Incurred by the Company or any of its Subsidiaries or
which is outstanding at any date, (x) the principal amount of any Indebtedness
which provides that an amount less than the principal amount thereof shall be
due upon any declaration of acceleration thereof shall be the accreted value
thereof at the date of determination and (y) effect shall be given to the
impact of any Currency Agreements with respect to such Indebtedness and (b)
outstanding at any time under any Currency Agreement of the Company or any of
its Subsidiaries shall be the net payment obligation under such Currency
Agreement at such time. When any Person becomes a Subsidiary of the Company,
there shall be deemed to have been an Incurrence by such Subsidiary of all
Indebtedness for which it is liable at the time it becomes a Subsidiary. If the
Company or any of its Subsidiaries, directly or indirectly, guarantees
Indebtedness of a third Person, there shall be deemed to be an Incurrence of
such guaranteed Indebtedness as if the Company or such Subsidiary had directly
Incurred or otherwise assumed such guaranteed Indebtedness.
"indemnified liabilities" has the meaning ascribed to such
term in Section 10.4.
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"Indemnitees" has the meaning ascribed to such term in
Section 10.4.
"Indenture" means an indenture between the Company, the
Collateral Agent and a trustee substantially in the form of Exhibit V annexed
hereto (with such changes therein as the Agents and the Company shall approve
(including, without limitation, any changes required in order to comply with
applicable law and any changes regarding the Collateral Agent or reasonably
requested or deemed necessary by the Collateral Agent, including, without
limitation, to effect the purpose and intention of the parties set forth
herein), and, at such time as notes issued thereunder are sold in a public
offering, with other appropriate changes to reflect such public offering), as
the same may at any time be amended, modified and supplemented and in effect.
"Independent Financial Advisor" means an accounting,
appraisal, investment banking or consulting firm of nationally recognized
standing that is, in the good faith determination of the Company, qualified to
perform the task for which such firm has been engaged and disinterested and
independent with respect to the Company and its Affiliates.
"Initial Loan Commitment" has the meaning ascribed to such
term in Section 2.1A(ii).
"Initial Loans" has the meaning ascribed to such term in
Section 2.1A(ii).
"Initial Notes" has the meaning ascribed to such term in
Section 2.1D.
"Intellectual Property" means all patents, trademarks and
copyrights of the Company and any licenses, other agreements or rights relating
thereto subject, as of the Closing Date, to a security interest securing
repayment of amounts borrowed under the Bank Credit Agreement.
"Intercreditor Agreement" means the agreement substantially
in the form of Exhibit XIV annexed hereto between the Collateral Agent and the
agent under the Bank Credit Agreement, as the same may be amended, supplemented
or otherwise modified from time to time.
"Interest Period" means with respect to any Loan, (x)
initially, the period commencing on the Borrowing Date thereof and ending three
months thereafter and (y) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable thereto and ending three months
thereafter; provided that all of the foregoing is subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, with respect to any Loans
accruing interest based on the LIBOR Rate, the result of such
extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond
the Conversion Date or the Maturity Date, as applicable, shall,
subject to clause (i) above, end on the Conversion Date or the
Maturity Date, as applicable; and
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(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period.
"Interest Rate Determination Date" means, with respect to any
Interest Period, the second Business Day on which banks in New York and London
are open prior to the first Business Day of such Interest Period.
"Interest Rate Protection Obligations" means the obligations
of any Person pursuant to any arrangement with any other Person whereby,
directly or indirectly, such Person is entitled to receive from time to time
periodic payments calculated by applying either a floating or a fixed rate of
interest on a stated notional amount in exchange for periodic payments made by
such Person calculated by applying a fixed or a floating rate of interest on
the same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements.
"Investment" means (i) any direct or indirect purchase or
other acquisition of, or of a beneficial interest in, any securities of any
other Person or (ii) any direct or indirect loan, advance (other than advances
to customers and employees for moving, entertainment, travel expenses and
commissions, drawing accounts and similar expenditures in the ordinary course
of business), extension of credit (other than trade credit) or capital
contribution to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business.
"Investments" shall not include accounts receivable and extensions of trade
credit by any Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees of any
state, commonwealth, nation, territory, possession, province, county, parish,
town, township, village, municipality or Tribunal, and "Law" means each of the
foregoing.
"Lenders" has the meaning ascribed to that term in the
introduction to this Agreement and shall include any assignee of any Loan, Note
or Loan Commitment to the extent of such assignment and as permitted by the
terms of the Loan Documents, including Section 10.2.
"Letter of Intent" means the Exclusive Letter of Intent dated
October 16, 1998 from American Commercial Holdings, Inc. to the Company
regarding the sale of the Baltimore Property and the Harrison Property.
"LIBOR Base Rate" means, for any Interest Period, the rate
(rounded upwards, if necessary, to the next 1/16 of 1%) at which Dollar
deposits approximately equal in principal amount to Chase's portion of the
Loans being borrowed and for a maturity comparable to such Interest Period are
offered to the principal London office of Chase in immediately available funds
in the London inter-
<PAGE>
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bank market at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period.
"LIBOR Rate" means, for any Interest Period, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the product of
(i) the LIBOR Base Rate in effect for such Interest Period and (ii) Statutory
Reserves. For purposes hereof, "Statutory Reserves" means a fraction (expressed
as a decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve percentages
(including, without limitation, any marginal, special, emergency, or
supplemental reserves) expressed as a decimal established by the Board of
Governors of the Federal Reserve System and any other banking authority,
domestic or foreign, to which the Lenders are subject for Eurocurrency
Liabilities (as defined in Regulation D) or other categories of liabilities or
deposits imposed pursuant to such Regulation D. Such reserve percentages shall
include, without limitation, those imposed under Regulation D. Loans accruing
interest at the LIBOR Rate shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
which may be available from time to time to any Lender under Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Lien" means any mortgage, lien (statutory or other), pledge,
security interest, hypothecation, assignment for security or other security
agreement of any kind or nature whatsoever. For purposes of this Agreement, a
Person 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.
"Loan Commitment" means the Initial Loan Commitment and the
Term Loan Commitment.
"Loan Documents" means this Agreement, the Security
Documents, the Initial Notes, the Term Notes, the Guarantees, the Indenture,
the Exchange Notes, the Registration Rights Agreement, the Warrants, the
Warrant Agreement, the Equity Reserve Registration Rights Agreement, the
Warrant Escrow Agreement, the Holdings Side Letter and the Assignment
Agreement.
"Loans" means the Initial Loans and the Term Loans as each
may be outstanding.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"Material Adverse Change" means a material adverse change in
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole,
after June 30, 1998.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole,
after June 30, 1998, (ii) the material impairment of the ability of the
<PAGE>
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Company and its Subsidiaries to perform the Obligations or to consummate the
Transactions or (iii) the impairment of the validity or enforceability of, or a
material impairment of the rights, remedies or benefits available to the Agents
or Lenders under any Loan Document.
"Maturity Date" has the meaning ascribed to such term in
Section 2.2D.
"Merger" means the merger of RES Acquisition Corporation, a
wholly-owned Subsidiary of Holdings, with and into the Company, with the
Company as the surviving entity, in September 1998.
"Merger Agreement" means the Agreement and Plan of Merger
dated as of July 23, 1998, among the Company, Holdings and RES Acquisition
Corporation, as amended, supplemented or otherwise modified from time to time.
"Monthly Anniversary" has the meaning ascribed to such term
in Section 1.3.
"Mortgage" means an agreement, including, without limitation,
a fee or leasehold mortgage, deed of trust or other document acceptable to the
Collateral Agent creating and evidencing a Lien on Mortgaged Real Property,
which shall be substantially in the form of Exhibit XIII annexed hereto,
including such additional provisions or other deviations from such Exhibit as
shall be necessary to conform such Mortgage to applicable local law or the
terms of this Agreement, as the case may be, as the same may be amended,
supplemented or otherwise modified from time to time.
"Mortgaged Real Property" means each Real Property of the
Company and its Subsidiaries, including, without limitation, the Closing Date
Mortgaged Real Property and the Satisfaction Date Mortgaged Real Property, all
of which shall, at the times contemplated herein, be subject to a Mortgage in
accordance with Section 3.1A.A.9 and Section 5.6, and all rights in respect
thereof including, without limitation, all equipment.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o)
of Code Section 414) is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Net Cash Proceeds" means (i) with respect to any Asset Sale,
the proceeds thereof in the form of cash or Cash Equivalents, including
payments in respect of deferred payment obligations when received in the form
of cash or Cash Equivalents, net of (a) brokerage commissions and other
reasonable fees and expenses (including fees and expenses of counsel,
accountants and investment bankers) related to such Asset Sale; (b) provisions
for all taxes payable as a result of such Asset Sale; (c) amounts required to
be applied to the repayment of principal, premium (if any) and interest on
Indebtedness required to be paid as a result of such transaction to the extent
secured by a Lien on such Property that is permitted hereunder or under the
applicable Security Document and (d) appropriate amounts to be provided by the
Company or any of its Subsidiaries, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by the
<PAGE>
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Company or any of its Subsidiaries, 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 representations, warranties or indemnification obligations associated with
such Asset Sale; and (ii) in the case of any Casualty Event, the aggregate
amount of proceeds of insurance, condemnation awards and other compensation
received by the Company or any Subsidiary thereof in respect of such Casualty
Event net of (a) fees and expenses incurred by the Company or any Subsidiary
thereof in connection with recovery thereof, (b) repayments of Indebtedness
(other than Indebtedness hereunder) to the extent secured by a Lien on such
Property that is permitted hereunder or under the applicable Security Document
and to the extent the operative agreement relating to such Indebtedness
requires or permits such a repayment as a result of such Casualty Event and (c)
any taxes (including income, transfer, stamp, duty, customs, withholding and
any other taxes) paid or payable by the Company or any Subsidiary thereof in
respect of the amount so recovered (after application of all credits and other
offsets).
"Notes" means, collectively, the Initial Notes and the Term
Notes.
"Notice of Borrowing" means a notice substantially in the
form of Exhibit IV-A annexed hereto with respect to a proposed borrowing.
"Notice of Conversion" means a notice substantially in the
form of Exhibit IV-B annexed hereto with respect to a proposed conversion.
"Notice of Election" means a notice substantially in the form
of Exhibit XXII annexed hereto with respect to an Election.
"Obligations" means all obligations of every nature of the
Company and its Subsidiaries from time to time owed to the Lenders and the
Agents under the Loan Documents, whether for principal, reimbursements,
interest, fees, expenses, indemnities or otherwise, and whether primary,
secondary, direct, indirect, contingent, fixed or otherwise (including
obligations of performance).
"Officer" means the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Controller, the Treasurer or the Secretary of the Company and any
other officer or similar official thereof responsible for the administration of
the obligations of the Company and its Subsidiaries in respect of this
Agreement.
"Officers' Certificate" means, as applied to any corporation,
a certificate executed on behalf of such corporation by two Officers; provided,
however, that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of the Loans hereunder shall include (i) a
statement that the Officers making or giving such Officers' Certificate have
read such condition and any definitions or other provisions contained in this
Agreement relating thereto and (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.
"Other Taxes" has the meaning ascribed to such term in
Section 10.19.
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"Payment Office" means the office of Chase located at 270
Park Avenue, New York, New York, 10017 or such other office as Chase may
designate to the Company and the Lenders from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation, and
any successor to all or any of the Pension Benefit Guaranty Corporation's
functions under ERISA.
"PBGC Agreement" means the memorandum of understanding dated
November 2, 1998 between the Company and the PBGC.
"Permitted Encumbrances" has the meaning ascribed to such
term in Section 6A.2.
"Permitted Indebtedness" has the meaning ascribed to such
term in Section 6A.1.
"Permitted Investments" has the meaning ascribed to such
term in the Indenture.
"Person" means and includes natural Persons, corporations,
limited liability companies, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions
thereof.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code and in respect of which the Company or any ERISA Affiliate is
(or, if such plan were terminated, would under Section 4069 of ERISA be deemed
to be) an "employer" as defined in Section 3(5) of ERISA.
"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights (as compared to any other Capital
Stock of such Person) with respect to dividends or redemptions or upon
liquidation.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Chase at its principal office in New York City
as its prime rate in effect at such time. The Prime Rate is not intended to be
the lowest rate of interest charged by Chase in connection with extensions of
credit.
"Principals" means Blackstone and the Blackstone Related
Parties.
"Prior Liens" means Liens which, pursuant to the provisions
of any Security Document, are or may be superior to the Lien of or are
otherwise permitted by such Security Document, which in the case of Prior Liens
to be scheduled in the Security Documents to be delivered on any Satisfaction
Date, as shall be reasonably acceptable to the Collateral Agent.
"Productive Assets" means assets (including Capital Stock) of
a kind used or usable in the businesses of the Company and its Subsidiaries as,
or related to such business, conducted on the date of the relevant Asset Sale.
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"Property" means any right, title or interest in or to
property or assets of whatever kind or nature, whether real, personal or mixed
and whether tangible or intangible and including ownership interests of any
Person.
"Purchased Notes" means the Existing Notes, if any, purchased
by the Lenders or Affiliates thereof pursuant to any Assignment Agreement on
the Debt Tender Offer Closing Date, any Bank Indebtedness Refinancing Date or
the Alternate Tender Offer Closing Date.
"Real Property" means all interests in land, buildings,
improvements and appurtenant fixtures, easements and other property and rights
incidental to the ownership, lease or operation thereof, in each case owned or
leased (as lessee) by the Company or its Subsidiaries, including the Mortgaged
Real Property.
"Redemption" means the redemption and defeasance by the
Company of all of the outstanding Existing Notes in accordance with the
Redemption Documents and the Existing Notes Indenture.
"Redemption Date" means, on or after the occurrence of any
Redemption Demand Condition, any date on which the Redemption of the Existing
Notes occurs as required by the Administrative Agent, acting on behalf of the
Required Lenders, require a Redemption (other than pursuant to the Alternate
Tender Offer).
"Redemption Demand Condition" means any time after the
occurrence of any of the following: (i) a Default under Section 7 (which
remains uncured 10 Business Days after an Officer of the Company becomes aware
of such Default or becomes aware of the facts forming the basis for such
Default), (ii) a Material Adverse Change, as determined in the Administrative
Agent's sole discretion, (iii) the earlier of (x) the expiration or termination
of the Alternate Tender Offer or (y) March 31, 1999, (iv) the consummation of
the Alternate Tender Offer or (v) the date on which there are Loans outstanding
hereunder and Purchased Notes held by Lenders in an aggregate principal amount
equal to or in excess of $100,000,000 (accounting for the Purchased Notes at
the purchase price therefor without regard to the accrued interest portion of
the purchase price).
"Redemption Documents" means the documents related to any
Redemption by the Company delivered pursuant to Section 5.16, all of which
shall have been approved by the Existing Notes Trustee.
"Register" has the meaning ascribed to such term in Section
5.13.
"Registration Rights Agreement" means a registration rights
agreement substantially in the form of Exhibit VI annexed hereto (with such
changes therein as the Agents and the Company shall approve).
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"Release" shall have the meaning given such term in CERCLA,
42 U.S.C. ss. 9601(22).
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"Remedial Action" means (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions,
including studies and investigations, required by any Tribunal or voluntarily
undertaken to (i) clean up, remove, treat, abate or in any other way respond to
any Hazardous Material in the environment or (ii) prevent the Release or
threatened Release, or minimize the further Release, of any Hazardous Material.
"Reportable Event" means any reportable event as defined in
Section 4043 of ERISA or the regulations issued thereunder (other than any
reportable event waived pursuant to such Section or regulations) with respect
to a Plan (other than a Plan maintained by an ERISA Affiliate that is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code
Section 414).
"Required Lenders" means Lenders holding in the aggregate
more than 50% of the outstanding principal amount of Notes and Purchased Notes
or, if there are no outstanding Notes or Purchased Notes, of the Available Loan
Commitments; provided that if one Lender holds more than 50% of the outstanding
principal amount of Notes and Purchased Notes or Available Loan Commitments, as
the case may be, then "Required Lenders" shall mean such majority Lender and
one other Lender.
"Requisite Obligees" means, as of the applicable date of
determination thereof, Secured Parties holding (or representing) in the
aggregate more than 50% of the sum of the outstanding principal amounts of (x)
all Loans and (y) all Exchange Notes.
"Sale and Lease-Back Transaction" has the meaning ascribed
to such term in Section 6A.6.
"Satisfaction Date" means any date upon which the Company and
its Subsidiaries repay or otherwise satisfy in full the Company's and its
Subsidiaries' obligations (other than obligations which by the express terms of
the applicable agreement survive repayment in full of the applicable underlying
obligations, including, without limitation, indemnification obligations) under
(i) the Existing Notes, the Existing Notes Indenture and the other documents,
instruments and agreements executed in connection therewith and/or (ii) to the
extent applicable under Section 5.6, the termination of commitments in respect
of the Bank Credit Agreement in effect as of the date hereof and the other
documents, instruments and agreements executed in connection therewith, if, on
such date, the obligations thereunder have been repaid in full and the
commitments of the lenders thereunder to lend are terminated.
"Satisfaction Date Collateral" means the Satisfaction Date
Mortgaged Real Property and the Satisfaction Date Security Agreement Collateral
"Satisfaction Date Mortgaged Real Property" means the
Mortgaged Real Property set forth in Schedule G-2 annexed hereto.
"Satisfaction Date Security Agreement Collateral" means the
Security Agreement Collateral which is permitted to be encumbered by the
Contractual Obligations of the Company and its Subsidiaries as of the
Satisfaction Date, including, without limitation, any and all collateral
securing the obligations of the Company and its Subsidiaries under the Existing
Notes Indenture and, to the extent applicable under Section 5.6, the Bank
Credit Agreement, as the case may be.
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"Secured Parties" means the Collateral Agent, the Lenders,
the Agents, the holders of the Exchange Notes (if any) and the trustee under
the Indenture (if any); provided, however, that with respect to the Closing
Date Security Documents and the Closing Date Collateral, such term shall
include the holders of the Existing Notes and the Existing Notes Trustee if any
Existing Notes remain outstanding on the Closing Date after giving effect to
the Transactions.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options, warrants,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Securities Demand Date" means at any time after the earlier
to occur of (i) the Alternate Tender Offer Expiration Date if on such date
there are Loans outstanding hereunder and Purchased Notes held by Lenders in an
aggregate principal amount equal to or in excess of $35,000,000, (ii) the
Alternate Tender Offer Closing Date, (iii) the Redemption Date (other than a
Redemption Date which occurs prior to June 30, 1999), (iv) the date on which
there occurs a Change of Control or (v) March 31, 1999 if the sum of (A) the
principal amount of Loans made on the Debt Tender Offer Closing Date and any
Bank Refinancing Indebtedness Date and (B) the principal amount of Purchased
Notes acquired on the Debt Tender Offer Closing Date and any Bank Refinancing
Indebtedness Date is equal to or in excess of $80,000,000 (accounting for the
principal amount of the Purchased Notes at the purchase price therefor).
"Security Agreement" means an agreement which shall be
substantially in the form of Exhibit XII annexed hereto, including such
additional provisions or other deviations from such Exhibit as shall be
necessary to conform such Security Agreement to applicable local law or the
terms of this Agreement, as the case may be, as the same may be amended,
supplemented or otherwise modified from time to time.
"Security Agreement Collateral" means all of the collateral
in which the Collateral Agent, on behalf of the Secured Parties, receives a
security interest pursuant to any Security Agreement.
"Security Documents" means the Security Agreement, the
Mortgages, the Intercreditor Agreement and all UCC financing statements
evidencing the security interests created in favor of the Collateral Agent (for
the benefit of the Secured Parties) pursuant to the Security Agreement, any
Mortgage and any other document or instrument utilized to pledge, as collateral
for the Obligations and the Exchange Notes Obligations (if any), any Property,
including, without limitation, any and all
<PAGE>
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documents and instruments executed and delivered pursuant to the provisions of
Section 3.1A.9, including, without limitation, the Closing Date Security
Documents.
"Senior Officers" means each of the Chief Executive Officer,
Senior Vice President and Chief Financial Officer of the Company.
"Stockholders Agreement" means any stockholders agreement,
subscription agreement or other similar agreement that may be entered into by
the Company upon terms reasonably satisfactory to the Agents.
"Subsequent Loan Commitment" has the meaning ascribed to
such term in Section 2.1A(ii).
"Subsequent Loans" has the meaning ascribed to such term
in Section 2.1A(ii).
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity (a) of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or more than 50% of the
general partnership interests are, at the time any determination is being made,
directly or indirectly, owned, controlled or held, or (b) that is, at the time
any determination is made, otherwise controlled, by such Person or one or more
subsidiaries of such Person.
"Subsidiary Guarantors" means each of the domestic
Subsidiaries of the Company (other than The Oberlin Insurance Company).
"Supplemental Indenture" means the supplemental indenture
dated as of November 4, 1998 between the Company and the Existing Notes
Trustee, facilitating the assignment pursuant to the terms of the Assignment
Agreement.
"Survey" means a survey of any Mortgaged Real Property (and
all improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the jurisdiction where such Mortgaged Real 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 Mortgaged
Real Property, in which event such survey shall be dated (or redated) after the
completion of such construction or if such construction shall not have been
completed as of such date of delivery, not earlier than 20 days prior to such
date of delivery, or dated otherwise if acceptable to the Collateral Agent,
(iii) certified by the surveyor (in a manner reasonably acceptable to the
Collateral Agent) to the Agents, the Collateral Agent, the trustee under the
Indenture (if any), and the Title Company and (iv) sufficient to cause the
Title Company to issue the survey endorsements to the title insurance
commitment and policy required hereunder relating to the Mortgaged Real
Property described in such Survey.
"Syndication Agent" has the meaning ascribed to such term in
the introduction to this Agreement.
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"Take-Out Banks" means Chase Securities Inc., Donaldson,
Lufkin & Jenrette Securities Corporation and BancBoston Robertson Stephens,
Inc. (f/k/a BancBoston Securities Inc.), which have been engaged to publicly
sell or privately place the Take-Out Notes pursuant to the (i) Engagement
Letter dated July 22, 1998 among Holdings, Chase Securities Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation and (ii) the BankBoston Letter
Agreement.
"Take-Out Notes" means senior notes of the Company issued
under an indenture substantially similar to the Indenture the proceeds of which
shall be used to repay the Initial Notes in whole or in part, which Take-Out
Notes shall be guaranteed by each entity that guarantees the Initial Loan;
provided that the Take-Out Notes shall not be secured by any property or assets
of the Company and its Subsidiaries unless the proceeds thereof are used to
repay the Initial Notes in full.
"Taxes" has the meaning ascribed to such term in Section
10.19.
"Term Loan Commitment" has the meaning ascribed to such term
in Section 2.2A.
"Term Loan Rate" means the rate per annum equal to 15.5%.
"Term Loans" has the meaning ascribed to such term in Section
2.2A.
"Term Notes" has the meaning ascribed to such term in Section
2.2E.
"Title Company" means Chicago Title Insurance Company or such
other title insurance or abstract company as shall be designated by the Company
and reasonably acceptable to the Collateral Agent.
"Total Commitments" means an aggregate principal amount of $208,460,000.
"Transaction Costs" means the fees, costs and expenses
payable by the Company pursuant hereto and other fees, costs and expenses
payable by the Company or a Subsidiary of the Company in connection with the
Transactions.
"Transactions" shall mean, collectively, (i) the consummation
of the Debt Tender Offer, (ii) the purchase or redemption and/or discharge of
any Existing Notes not tendered in the Debt Tender Offer in accordance with the
Existing Notes Indenture occurring on or after the Closing Date pursuant to the
Alternate Tender Offer or a Redemption, (iii) the Incurrence of the Loans
hereunder on any Borrowing Date, (iv) the transactions contemplated by one or
more of the Assignment Agreements, (v) any other transaction contemplated in
relation to the foregoing and (vi) the payment of fees and expenses in
connection with the foregoing.
"Tribunal" means any government, any arbitration panel, any
court or any governmental department, commission, board, bureau, agency,
authority or instrumentality of the United States or any state, province,
commonwealth, nation, territory, possession, county, parish, town, township,
village or municipality, whether now or hereafter constituted and/or existing.
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"UCC" means the Uniform Commercial Code as in effect in any
applicable jurisdiction.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Veritas" means The Veritas Capital Fund, L.P. and its
Affiliates.
"Waiver and Amendments" means (x) the agreement dated July
31, 1998 among the Company, the lenders party thereto and BankBoston, as agent,
whereby the required lenders waived any event of default thereunder which would
have occurred as a result of the Merger and amended the covenants thereof to
permit the Incurrence of all the Obligations (up to $202,000,000) hereunder and
the granting of security interests under the Security Documents and (y) the
agreement dated November 5, 1998 among the Company, the lenders party thereto
and BankBoston, as agent, whereby the required lenders amended the covenants
thereof to permit the Incurrence of all Obligations (up to $208,460,000)
hereunder and the terms of the Loan Documents, including the consummation of
the Alternate Tender Offer, the Redemptions and the refinancing of Bank
Indebtedness.
"Warrant Agreement" means the warrant agreement substantially
in the form of Exhibit III annexed hereto.
"Warrant Escrow Agreement" means the warrant escrow agreement
substantially in the form of Exhibit XV annexed hereto.
"Warrants" means warrants of Holdings representing the right
to purchase Common Stock of Holdings (calculated as of the Closing Date), with
terms and conditions substantially as set forth in the Warrant Agreement.
"Waste Revenue Bonds" means the Company's $53,700,000
aggregate principal amount of 9% Solid Waste Revenue Bonds, Series 1996, Due
2021 and $20,200,000 aggregate principal amount of 8 1/4% Solid Waste Revenue
Bonds, Series 1994, Due 2014.
"Weighted Average Life to Maturity" means, when applied to
any Indebtedness at any date, the number of years obtained by dividing (a) the
then outstanding aggregate principal amount of such Indebtedness into (b) the
total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"wholly-owned Subsidiary" means, with respect to any Person,
any corporation, association or other business entity of which at least 99%
(other than directors' qualifying shares or investments by foreign nationals
mandated by applicable law) of the total voting power of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other wholly-owned
Subsidiaries of that Person or a combination thereof.
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"Withdrawal Liability" means liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital" means an amount determined for the Company
and its Subsidiaries equal to the sum of all current assets less the sum of all
current liabilities.
1.2 Accounting Terms
For the purposes of this Agreement, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as
in effect from time to time; provided, however, that for purposes of
determining compliance with the covenants contained in Section 6 all accounting
terms herein shall be interpreted and all accounting determinations hereunder
(in each case, unless otherwise provided for or defined herein) shall be made
in accordance with GAAP as in effect on the date of this Agreement and applied
on a basis consistent with the application used in the financial statements
referred to in Section 4.6; and provided, further, that if the Company notifies
the Administrative Agent that the Company wishes to amend any covenant in
Section 6 or any related definition to eliminate the effect of any change in
GAAP occurring after the date of this Agreement on the operation of such
covenant (or if the Administrative Agent notifies the Company that the Required
Lenders wish to amend Section 6 or any related definition for such purpose),
then (i) the Company and the Administrative Agent shall negotiate in good faith
to agree upon an appropriate amendment to such covenant and (ii) the Company's
compliance with such covenant shall be determined on the basis of GAAP in
effect immediately before the relevant change in GAAP became effective until
such covenant is amended in a manner satisfactory to the Company and the
Required Lenders.
1.3 Other Definitional Provisions; Anniversaries
Any of the terms defined in Section 1.1 may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference. For purposes of this Agreement, a monthly anniversary of any day
(each, a "Monthly Anniversary") shall occur on the same day of the immediately
succeeding month as the day of the month on which such day occurred; provided,
however, that if the applicable month has no such day (i.e., 29, 30 or 31), the
Monthly Anniversary shall be deemed to occur on the last day of the applicable
month.
SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS; NOTES
2.1 Initial Loans and Initial Note
A. Initial Loan Commitment. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Company herein set forth:
(i) the Lenders hereby agree to lend to the Company on the
Debt Tender Offer Closing Date (the "Debt Tender Offer Loan"), up to
$202,000,000 in the aggregate, each such Lender committing to lend the
percentage of such amount set forth next to such Lender's name on the
signature pages hereto; provided that the Agents may, at their sole
option, make an Election for the Lenders to satisfy their
proportionate obligations, in whole or in part, to
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make the Debt Tender Offer Loan by purchasing or having Affiliates
thereof purchase Existing Notes pursuant to an Assignment Agreement,
such obligations to be deemed satisfied by an amount equal to the
aggregate purchase price paid for such Existing Notes less that
portion of the purchase price attributable to accrued and unpaid
interest. The Lenders' commitments to make the Debt Tender Offer Loan
to the Company pursuant to this Section 2.1A(i) are herein called
individually, the "Debt Tender Offer Loan Commitment" and,
collectively, the "Debt Tender Offer Loan Commitments."
(ii) the Lenders hereby agree to lend to the Company on the
Alternate Tender Offer Closing Date, on any Redemption Date, on any
Bank Indebtedness Refinancing Date and on the Company Redemption Date
(each, a "Subsequent Loan") up to the Available Loan Commitments on
each such date, each such Lender committing to lend the percentage of
such amount set forth next to such Lender's name on the signature
pages hereto; provided that (x) the Agents may, at their sole option,
make an Election for the Lenders to satisfy their proportionate
obligations, in whole or in part, to make a Subsequent Loan on the
Alternate Tender Offer Closing Date by purchasing or having Affiliates
thereof purchase Existing Notes (at not more than 104.23% of their
principal amount, plus accrued and unpaid interest thereon) pursuant
to an Assignment Agreement (except with respect to Subsequent Loans
made on the Company Redemption Date), such obligations to be reduced
by an amount equal to the aggregate purchase price paid for such
Existing Notes less that portion of the purchase price attributable to
accrued and unpaid interest and (y) the Agents may, at their sole
option, make an Election for the Lenders to satisfy their
proportionate obligations, in whole or in part, to make a Subsequent
Loan on the Bank Refinancing Indebtedness Date by purchasing or having
Affiliates thereof purchase Existing Notes (at 100% of their principal
amount, plus accrued and unpaid interest thereon) that are reissued
and outstanding under the Existing Notes Indenture pursuant to an
Assignment Agreement, such obligations to be deemed satisfied by an
amount equal to the aggregate purchase price paid for such Existing
Notes less that portion of the purchase price attributable to accrued
and unpaid interest. In addition, not later than 5 Business Days
following the Alternate Tender Offer Closing Date, to the extent that
the aggregate principal amount of Existing Notes not held by the
Lenders or their Affiliates as of the Alternate Tender Offer Closing
Date (after giving effect thereto) is equal to or less than
$10,000,000, the Company shall be permitted, by delivering a Notice of
Borrowing, to require that the Lenders make on a date not later than
10 Business Days following the Alternate Tender Offer Closing Date
(the "Company Redemption Date") Subsequent Loans in an amount equal to
the product of (x) 1.0423 and (y) such aggregate principal amount of
Existing Notes for the purpose of effecting a redemption of all of the
outstanding Existing Notes pursuant to the terms of the Indenture. The
Lenders' Commitments to make Subsequent Loans to the Company pursuant
to this Section 2.1A(ii) are herein called individually, the
"Subsequent Loan Commitment" and, collectively, the "Subsequent Loan
Commitments". The Debt Tender Offer Loan Commitments and the
Subsequent Loan Commitments are herein called the "Initial Loan
Commitments" and the Debt Tender Offer Loans and the Subsequent Loans
are herein called the "Initial Loans."
At any time, Purchased Notes held by any Lender may be
exchanged for Initial Notes representing Initial Loans in accordance with
Section 6 of an Assignment Agreement.
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B. Notice of Borrowing. When the Company desires to borrow
under this Section 2.1, it shall deliver to the Agents a Notice of Borrowing
(i) no later than 11:00 A.M. (New York time), at least three Business Days in
advance of a Borrowing Date with respect to Loans accruing interest based on
the LIBOR Rate and (ii) not later than 9:00 A.M. (New York time) on the Closing
Date with respect to any Initial Loans to be made on such day, or, in each
case, such later date as shall be agreed to by the Agents. The Notice of
Borrowing shall specify the applicable Borrowing Date (which shall be a
Business Day), the aggregate principal amount of such borrowing and whether
such Loans will accrue interest based on the LIBOR Rate or the Alternate Base
Rate. Upon receipt of such Notice of Borrowing, the Agents shall promptly
notify each Lender of its share of the applicable Initial Loan and the other
matters covered by the Notice of Borrowing.
C. Disbursement of Funds. (a) No later than 11:00 A.M. (New
York time) on each Borrowing Date, each Lender will make available its pro rata
share of the Initial Loan requested to be made on such date in the manner
provided below. All amounts shall be made available to the Agents in Dollars
and immediately available funds at the Payment Office and the Agents promptly
will make available to the Company (in the case of the Loans) by depositing to
its account at the Payment Office and/or to the paying agent (in the case of an
Election) to an account specified by the Company in the Notice of Borrowing the
aggregate of the amounts so made available in the type of funds received.
Unless the Agents shall have been notified by any Lender prior to the
applicable Borrowing Date that such Lender does not intend to make available to
the Agents its portion of the Initial Loan (or the funds required to purchase
Purchased Notes under the Election) to be made on such date, the Agents may
assume that such Lender has made such amount available to the Agents on such
date, and the Agents, in reliance upon such assumption, may (in their sole
discretion and without any obligation to do so) make available to the Company a
corresponding amount. If such corresponding amount is not in fact made
available to the Agents by such Lender and the Agents have made the same
available to the Company, the Agents shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agents' demand therefor, the Agents
shall promptly notify the Company, and the Company shall immediately pay such
corresponding amount to the Agents. The Agents shall also be entitled to
recover from such Lender or the Company, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agents to the Company to the date such
corresponding amount is recovered by the Agents, at a rate per annum equal to
(x) if paid by such Lender, the overnight Federal Funds Rate or (y) if paid by
the Company, the then applicable rate of interest on the Loans.
(b). Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its Initial Loan Commitment hereunder or to
prejudice any rights which the Company may have against any Lender as a result
of any default by such Lender hereunder.
D. Initial Notes. The Company shall execute and deliver to
each Lender on the Closing Date an Initial Note dated the Closing Date
substantially in the form of Exhibit I annexed hereto to evidence such Lender's
percentage of the Total Commitments and with appropriate insertions ("Initial
Notes"). In the case of any Initial Loan made or held by any Chase Fund, such
Chase Fund shall be entitled to have the Initial Note that would otherwise be
deliverable to such Chase Fund under this Section 2.1D (a "Whole Initial Note")
subdivided into a sufficient number of Initial Notes
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as are necessary to evidence the respective beneficial ownership percentages of
the Beneficial Owners in such Chase Fund and such Initial Loan, with each such
subdivided Initial Note being payable to such Chase Fund in an amount equal to
the respective beneficial ownership percentage multiplied by the amount of such
Whole Initial Note (and the Company hereby agrees to execute and deliver such
subdivided Initial Notes to such Chase Fund upon receipt of a request therefor
by or on behalf of such Chase Fund specifying such beneficial ownership
percentages).
E. Scheduled Payment of Initial Loans. The Company shall pay
in full or convert to Term Loans pursuant to Section 2.2 the outstanding amount
of the Initial Loans and all other Obligations owing hereunder no later than
the Conversion Date.
F. Termination of Debt Tender Offer Loan Commitment and
Subsequent Loan Commitments. The Debt Tender Offer Loan Commitment hereunder
shall terminate on November 18, 1998 if the Debt Tender Offer Loan is not made
on or before such date. The Subsequent Loan Commitments hereunder shall
terminate on the earlier of (i) the date on which the Subsequent Loan
Commitments are fully utilized or (ii) five Business Days after the Alternate
Tender Offer Closing Date (other than as provided in clause (iii)) or (iii) on
the Company Redemption Date. The Company shall have the right, without premium
or penalty, to reduce or terminate the Initial Loan Commitment of the Lenders
hereunder at any time.
G. Pro Rata Borrowings and Election. Each Initial Loan made
under this Agreement and/or purchase of Purchased Notes pursuant to an
Assignment Agreement shall be made by the Lenders pro rata on the basis of
their respective Initial Loan Commitments. It is understood that no Lender
shall be responsible for any default by any other Lender of its obligation to
make its portion of any Initial Loan hereunder and/or to satisfy its
obligations under an Assignment Agreement and that each Lender shall be
obligated to make its portion of each Initial Loan hereunder and/or to satisfy
its obligations under an Assignment Agreement, regardless of the failure of any
other Lender to fulfill its commitments hereunder or thereunder.
2.2 Term Loan and Term Note
A. Term Loan Commitment. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lenders hereby agree, on the Conversion Date,
if the Initial Loans have not been repaid to convert the then outstanding
principal amount of the Initial Loans into a term loan (the "Term Loan"), such
Term Loan to be equal to the aggregate principal amount of the then outstanding
Initial Loans. The Lenders' commitments under this Section 2.2A are herein
called collectively, the "Term Loan Commitment."
B. Notice of Conversion/Borrowing. If the Company has not
repaid the Initial Loans in full on or prior to the Conversion Date, then the
Company shall convert the then outstanding principal amount of the Initial
Notes into a Term Loan under this Section 2.2. The Company shall deliver to the
Lenders a Notice of Conversion no later than 11:00 A.M. (New York time), at
least two Business Days in advance of the Conversion Date. The Notice of
Conversion shall specify the principal amount of the Initial Notes outstanding
on the Conversion Date to be converted into the Term Loan.
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C. Making of Term Loan. Upon satisfaction or waiver of the
conditions precedent specified in Section 3.2 hereof, each Lender shall extend
to the Company the Term Loan to be issued on the Conversion Date by such Lender
by cancelling on its records a corresponding principal amount of the Initial
Notes held by such Lender, which corresponding principal amount of the Initial
Notes shall be satisfied by the conversion into a Term Loan in accordance with
this Section 2.2.
D. Maturity of Term Loan. Subject to Section 5.10, the Term
Loan shall mature and the Company shall pay in full the outstanding principal
amount thereof and accrued interest thereon on the eighth anniversary of the
Closing Date (the "Maturity Date").
E. Term Notes. The Company, as borrower, shall execute
and deliver to each Lender on the Conversion Date a Term Note dated the
Conversion Date substantially in the form of Exhibit II annexed hereto to
evidence the Term Loan made on such date, in the principal amount held by such
Lender on such date and with other appropriate insertions (collectively, the
"Term Notes").
2.3 Interest on the Loans
A. Rate of Interest. (i) The Initial Loans shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by prepayment, acceleration or otherwise), for each Interest
Period in the case of Initial Loans accruing interest based on the LIBOR Rate,
at a rate per annum, equal to the Applicable Rate for such period plus the
Applicable Spread. The Term Loans shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by prepayment,
acceleration or otherwise), for each Interest Period at a rate per annum equal
to the Term Loan Rate.
(ii) Notwithstanding clause (i) of this Section 2.3A or any
other provision herein, but subject to Section 2.3C, in no event will the
interest rate applicable to any portion of the principal amount of the Loans
exceed 15.5% per annum.
B. Interest Payments. Interest shall be payable (i)
with respect to the Initial Loans accruing interest based on the LIBOR Rate, in
arrears on the last day of each Interest Period, upon any prepayment of the
Initial Loans (to the extent accrued on the amount being prepaid) and on the
Conversion Date in respect of any amounts paid on such date and not converted
to Term Loans, (ii) with respect to the Initial Loans accruing interest based
on the Alternate Base Rate, in arrears on the last day of each fiscal quarter
of the Company, commencing on the first of such dates following the Closing
Date (with respect to any Initial Loan which is converted to an Initial Loan
accruing interest based on the LIBOR Rate pursuant to Section 2.7, to the
extent accrued on the date of such conversion), upon any prepayment of the
Initial Loans (to the extent accrued on the amount being prepaid) and on the
Conversion Date in respect of any amounts paid on such date and not converted
to Term Loans and (iii) with respect to the Term Loan, in arrears on the last
day of each fiscal quarter of the Company, commencing on the first of such
dates following the Conversion Date (with respect to any Term Note that is
exchanged for an Exchange Note on any day other than the last day of a fiscal
quarter of the Company, to the extent accrued on the date of such exchange),
upon any prepayment of the Term Loan (to the extent accrued on the amount being
prepaid) and at maturity of the Term Loan.
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C. Post-Maturity Interest. Any principal payments on
the Loans not paid when due and, to the extent permitted by applicable law, any
interest payment on the Loans not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate which is 2.00% per annum
in excess of the rate of interest otherwise payable under this Agreement for
the Loans.
D. Computation of Interest. Interest on the Loans shall
be computed on the basis of a 360-day year (or a 365- or 366-day year in the
case of Loans accruing interest based on the Alternate Base Rate) and the
actual number of days elapsed in the period during which it accrues. In
computing interest on the Loans, the date of the making of the Loans shall be
included and the date of payment shall be excluded; provided, however, that if
a Loan is repaid on the same day on which it is made, one day's interest shall
be paid on that Loan.
E. Breakage. The Company shall reimburse each Lender
for any "breakage" costs incurred in connection with the prepayment of any Loan
bearing interest based on the LIBOR Rate on any day other than the last day of
the Interest Period applicable thereto.
2.4 Letter Agreements.
The Company agrees to pay to Chase, DLJ, BankBoston and
certain of their Affiliates, as applicable, the fees set forth in (i) the
amended and restated bridge facility fee letter dated November 6, 1998 among
the Company, Chase, Chase Securities Inc., DLJ and BankBoston and (ii) the
Assignment Agreement, and the Company agrees to perform its other obligations
under the foregoing agreements.
2.5 Prepayments and Payments.
A. Prepayments.
(i) Voluntary Prepayments. The Company may, upon not less
than three Business Days' prior written or telephonic notice confirmed
in writing to the Agents at any time and from time to time, prepay the
Loans made to the Company without penalty or premium and in whole or
in part in an aggregate minimum amount of $500,000 and integral
multiples of $100,000 in excess of that amount.
Notice of prepayment having been given as aforesaid, the
principal amount of the Loans to be prepaid shall become due and
payable on the prepayment date. Amounts of the Loans so prepaid may
not be reborrowed.
(ii) Mandatory Prepayments. So long as any Existing Notes
are outstanding, the following mandatory prepayments under
subparagraph (a) shall be required only to the extent permitted under
the Existing Notes Indenture, subject to Section 5.15.
(a) Prepayments from Asset Sales. At any time following
receipt by the Company or any Subsidiary of the Company of cash
proceeds of any Asset Sale occurring after the Closing Date, the
Company or any Subsidiary of the Company (i) in the case of any Asset
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Sale made on or prior to the Conversion Date, shall immediately use
the Net Cash Proceeds of such Asset Sale to prepay the Loans or (ii)
in the case of any Asset Sale made subsequent to the Conversion Date,
may use the Net Cash Proceeds of such Asset Sale as and to the extent
permitted and subject to the terms and conditions hereunder and under
the Indenture. Concurrently with the consummation of an Asset Sale,
the Company shall deliver to the Agents an Officers' Certificate
demonstrating the derivation of Net Cash Proceeds from the gross sales
price of such Asset Sale.
If any Exchange Notes are outstanding at the time any
repayment of Loans is required under this Section 2.5A(ii)(a), such
repayment shall be made pro rata with the repurchase of Exchange Notes
that are required to be repurchased under the Indenture.
(b) Prepayments from Issuances of Securities or Incurrence of
Indebtedness. Concurrently with the receipt by the Company of proceeds
from (i) the issuance of Securities (other than (x) Securities issued
under circumstances where no cash proceeds are received and (y)
Securities issued to directors, officers and employees of the Company
and its Subsidiaries), and (ii) the Incurrence of any Indebtedness
(other than Indebtedness permitted by Section 6A.1 (except clause (ix)
thereof)), the Company shall prepay the Loans in a principal amount
equal to the lesser of the proceeds thereof (net of expenses and taxes
payable by the Company in connection with the issuance thereof and net
of accrued interest due pursuant to Section 2.5A(iii) as a result of
such prepayment) or the aggregate principal amount of the Notes then
outstanding.
(c) Prepayments from Net Cash Proceeds of a Casualty Event.
If any of the Collateral is the subject of a Casualty Event, all Net
Cash Proceeds received by the Collateral Agent, the Company or any
Subsidiary thereof as a result of any Collateral being the subject of
a Casualty Event shall constitute Trust Moneys (as defined in the
Indenture) under the Indenture and be held by the Collateral Agent
(for the benefit of the Secured Parties) and applied in accordance
with the provisions of Article XII of the Indenture.
(d) Excess Cash Flow. Not later than 10 Business Days after
the delivery of the Excess Cash Flow Certificate required by Section
5.1(xiii), the Company shall prepay the Loans in an amount equal to
75% of Excess Cash Flow for the fiscal year ending June 30, 1999 and
shall be applied as provided in Section 2.5A(iii).
(e) Notice. The Company shall notify the Agents of any
prepayment to be made pursuant to this Section 2.5A(ii) at least two
Business Days prior to such prepayment date (unless shorter notice is
satisfactory to the Required Lenders).
(iii) Company's Mandatory Prepayment Obligation; Application
of Prepayments. All prepayments shall include payment of accrued
interest on the principal amount so prepaid, any breakage costs
resulting from a prepayment of Loans accruing interest based on the
LIBOR Rate on any day other than the last day of an Interest Period,
and shall be applied to payment of interest before application to
principal.
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(iv) Mandatory Offer to Repay Notes. Upon the occurrence of
a Change of Control at any time following the Conversion Date, the
Lenders shall have the right, in accordance with this Section
2.5A(iv), to require the repayment of all of the Notes pursuant to an
offer to purchase (the "Change of Control Offer") at a purchase price
equal to 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest thereon to the date of repayment. All of the terms
and conditions of any such Change of Control Offer shall be as set
forth in Section 4.15 of the Indenture.
B. Manner and Time of Payment. All payments of
principal and interest and fees hereunder and under the Notes by the Company
shall be made without defense, set-off or counterclaim and in same-day funds
and delivered to the Agents, unless otherwise specified, not later than 12:00
Noon (New York time) on the date due at the Payment Office for the account of
the Lenders; funds received by the Agents after that time shall be deemed to
have been paid by the Company on the next succeeding Business Day. The Company
hereby authorizes the Agents to charge its account with the Agents in order to
cause timely payment to be made of all principal, interest and fees due
hereunder (subject to sufficient funds being available in its account for that
purpose).
C. Payments on Non-Business Days. Whenever any payment
to be made hereunder or under the Notes shall be stated to be due on a day
which is not a Business Day, the payment shall be due on the next succeeding
Business Day except as set forth in the definition of "Interest Period" and
such extension of time shall be included in the computation of the payment of
interest hereunder or under the Notes or of the commitment and other fees
hereunder, as the case may be.
D. 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), such Lender will make a notation thereon of all
principal payments previously made thereon and of the date to which interest
thereon has been paid (which notation shall be conclusive absent manifest
error) and will notify the Company of the name and address of the transferee of
that Note; provided, however, that the failure to make (or any error in the
making of) such a notation or to notify the Company 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 the Loans and payments of
principal or interest on any such Note; and provided, further, that the failure
to make (or any error in the making of) such a notation shall not confer upon
the transferee thereof any greater rights than it would have had if the proper
notation had been made.
2.6 Use of Proceeds
A. Initial Loans. The proceeds of the Initial Loans
shall be applied by the Company, (together with any borrowings under the Bank
Credit Agreement described in Section 3.1A.C and cash on hand (if necessary))
to pay Transaction Costs, to consummate the Debt Tender Offer, to consummate
the Alternate Tender Offer and/or any Redemption and/or to refinance
Indebtedness under the Bank Credit Agreement to the extent of the Available
Loan Commitments therefor, as applicable.
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B. Term Loan. The proceeds of the Term Loan shall be
used to cancel any outstanding amount of Initial Notes converted to Term Notes
on such date.
C. Margin Regulations. No portion of the proceeds of
any borrowing under this Agreement shall be used by the Company in any manner
which might cause the borrowing or the application of such proceeds to violate
the applicable requirements of Regulation U, Regulation T or Regulation X of
the Board of Governors of the Federal Reserve System or any other regulation of
the Board or to violate the Exchange Act, in each case as in effect on the date
or dates of such borrowing and such use of proceeds.
2.7 Conversion of Debt Tender Offer Loans
By 11:00 A.M. on the Closing Date, the Company shall deliver
to the Administrative Agent a Notice of Conversion with respect to all Debt
Tender Offer Loans made on the Closing Date to convert such Loans to Loans
accruing interest based on the LIBOR Rate, subject in each case to the
following:
(i) such conversion shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the
Loans comprising the converted Debt Tender Offer Loans; and
(ii) such conversion shall be effected by each Lender by
recording for the account of such Lender the new Loan accruing
interest based on the LIBOR Rate and reducing the Loan accruing
interest based on the Alternate Base Rate by an equivalent principal
amount; accrued interest on such Loan being converted shall be paid by
the Company at the time of conversion.
SECTION 3 CONDITIONS
3.1A Conditions to Initial Loans on Closing Date
The effectiveness of this Agreement on the Closing Date and
the obligation of the Lenders to make the Debt Tender Offer Loans on or after
the Closing Date is subject to prior or concurrent satisfaction of each of the
following conditions, unless otherwise indicated below (for purposes of any
Election, each of the following conditions shall apply to the Lenders'
obligations under the Assignment Agreement in the case of any purchase of
Purchased Notes on the Closing Date and as required by Section 3.1B thereafter,
in each case as though it were a condition to the making of the Initial Loans):
A. On or before the Closing Date (unless otherwise
noted), all corporate and other proceedings taken or to be taken in connection
with the transactions contemplated hereby and all documents incidental thereto
not previously found acceptable by the Agents shall be reasonably satisfactory
in form and substance to the Agents, and the Agents shall have received on
behalf of the Lenders the following items, each of which shall be in form and
substance reasonably satisfactory to the Agents and, unless otherwise noted,
dated the Closing Date:
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1. (i) a copy of the certificate or articles of incorporation
or other organizational document, including all amendments thereto, of
the Company and each Guarantor, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of the Company and each Guarantor as of a
recent date from such Secretary of State and by the appropriate
government officials of each jurisdiction in which it owns any
material assets or carries on any material business, each to be dated
a recent date prior to the Closing Date; (ii) a certificate of the
Secretary or Assistant Secretary of the Company and each Guarantor
dated the Closing Date and certifying (A) that attached thereto is a
true and complete copy of the bylaws or other organizational document
of such Person as in effect on the Closing Date and at all times since
a date prior to the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such Person
authorizing the execution, delivery and performance of the Loan
Documents to which such Person is a party and, in the case of the
Company, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect,
and (C) that the certificate or articles of incorporation or other
organizational document of such Person has not been amended since the
date of the last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (i) above, and (D) as to the
incumbency and specimen signature of each Officer executing any Loan
Document or any other document delivered in connection herewith on
behalf of such Person; and (iii) a certificate of another Officer as
to the incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to clause (ii) above;
2. a certificate of the Chief Executive Officer or the Chief
Financial Officer of the Company confirming that:
(i) the representations and warranties set forth
in Section 4 are true and correct in all material respects on
and as of the Closing Date with the same effect as though
made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier
date; and
(ii) at the time of and immediately after the
initial borrowing hereunder, no Event of Default or Default
shall have occurred and be continuing;
3. executed copies of this Agreement and the Initial Notes
substantially in the form of Exhibit I annexed hereto executed in
accordance with Section 2.1D drawn to the order of the Lenders and
with appropriate insertions;
4. on or prior to the date specified in Section 2.1B, an
originally executed Notice of Borrowing substantially in the form of
Exhibit IV-A annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company in writing delivered
to the Agents;
5. originally executed copies of one or more written opinions
of (I) Simpson Thacher & Bartlett and Squire, Sanders & Dempsey,
special counsel for the Company and the
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Guarantors, together, substantially in the form of Exhibit VII annexed
hereto and addressed to the Lenders, (II) on the Closing Date and each
Satisfaction Date, appropriate local counsel to the Company and its
applicable Subsidiaries with respect to the Security Documents, which
opinions shall address the matters contained in Exhibit IX annexed
hereto, and otherwise be in form and substance reasonably acceptable
to the Collateral Agent, including, without limitation, (i) on the
Closing Date, such an opinion of Squire, Sanders & Dempsey relating to
the Closing Date Collateral and (ii) on the Satisfaction Date, such an
opinion from each counsel which has provided a Draft Opinion, in each
case in form and substance substantially the same as each respective
Draft Opinion, relating to the Satisfaction Date Collateral, and (III)
Cahill Gordon & Reindel, special counsel to the Lenders, substantially
in the form of Exhibit VII hereto and addressed to the Lenders;
6. on or prior to the Debt Tender Offer Closing Date, (i)
true and correct copies of the Debt Tender Offer Documents, which
shall not have been amended in any material respect subsequent to the
date hereof without the Agents' consent and which shall be in full
force and effect relating to any, and any Existing Notes tendered
pursuant thereto shall have been accepted for payment and (ii) an
Officer's Certificate from the Company certifying as to the aggregate
principal amount of Existing Notes tendered in accordance with clause
(i) above;
7. (i) executed or conformed copies of the Bank Credit
Agreement and any amendments thereto made on or prior to the Closing
Date or Satisfaction Date, as applicable, including the Waiver and
Amendments and (ii) an Officers' Certificate from the Company to the
effect that such party has performed or complied with all agreements
and conditions contained in the Bank Credit Agreement and any
agreements or documents referred to therein required to be performed
or complied with by such party on or before the Closing Date, and the
Company is not in default in the performance or compliance with any of
the terms or provisions thereof;
8. a notation of Guarantee, executed and delivered by each
Guarantor, dated the Closing Date, substantially in the form of
Exhibit X annexed hereto; and
9. (a) on the Closing Date, with respect to the Closing Date
Mortgaged Real Property listed on Schedule G-1 annexed hereto, and on
each Satisfaction Date with respect to each Satisfaction Date
Mortgaged Real Property securing the obligations of the Company and
its Subsidiaries under the Existing Notes Indenture listed on Schedule
G-2 annexed hereto, the following dated as of and/or delivered on the
Closing Date or the Satisfaction Date, as applicable:
(i) executed copies of a Mortgage encumbering such
Mortgaged Real Property in favor of the Collateral Agent, for
the benefit of the Secured Parties, (y) with respect to the
Closing Date Mortgaged Real Property, substantially in the
form of Exhibit XIII-A attached hereto and (z) with respect
to the Satisfaction Date Mortgaged Real Property,
substantially in the applicable form of Exhibit XIII-B
through XIII-F, duly executed and acknowledged by the
Company or a Guarantor, as applica-
<PAGE>
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ble, in form and substance reasonably satisfactory to the
Collateral Agent and otherwise in compliance with and in
accordance with local law in the jurisdiction where such
Mortgaged Real Property is located together with such
certificates, affidavits, questionnaires or returns as shall
be required in connection with the recording or filing thereof
to create a Lien under applicable law, and such UCC-1
financing statements and other similar statements as are
contemplated by the counsel opinions described in Section
3.1A.A.5(II) in respect of such Mortgage, all of which shall
be in form and substance reasonably satisfactory to the
Collateral Agent, and any other instruments necessary to grant
a mortgage Lien under the laws of any applicable jurisdiction,
which Mortgage and financing statements and other instruments
shall be effective to create a first priority Lien on such
Mortgaged Real Property subject to no Liens other than Prior
Liens;
(ii) the Company shall use its commercially
reasonable efforts to obtain such consents, approvals,
amendments, supplements, estoppels, tenant subordination
agreements or other instruments as necessary or required to
consummate the transactions contemplated hereby or as shall
reasonably be deemed necessary by the Collateral Agent in
order for the owner or holder of the fee or leasehold
interest constituting such Mortgaged Real Property to grant
the Lien contemplated by the Mortgage with respect to such
Mortgaged Real Property;
(iii) policies or certificates of insurance as
required by the Mortgage relating thereto, which policies or
certificates shall comply with the insurance requirements
contained in such Mortgage;
(iv) UCC, judgment and tax lien searches (or
foreign jurisdiction equivalents) confirming that the
personal property comprising a part of such Mortgaged Real
Property is subject to no Liens other than Prior Liens;
(v) evidence acceptable to the Collateral Agent of
payment by the Company or Subsidiary, as appropriate, of all
applicable title insurance expenses, search and examination
charges, survey costs and related charges, mortgage recording
taxes and fees, charges, costs and expenses required for the
recording of the Mortgages;
(vi) copies of all leases, subleases, leases in
which the Company or any Subsidiary holds the tenant's
interest or other agreements relating to possessory
interests, to the extent any of the foregoing affect any
Mortgaged Real Property, and the Company shall use its
commercially reasonable efforts to cause such agreements to
be subordinate to the Mortgage to be recorded against such
Mortgaged Real Property and, if so obtained, such agreements
shall be subordinate to the Mortgage to be recorded against
such Mortgaged Real Property pursuant to an agreement in form
and substance reasonably acceptable to the Collateral Agent;
(vii) a Survey;
<PAGE>
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(viii) a title insurance policy (or commitment to
issue a Policy) issued by the Title Company covering such
Mortgaged Real Property, in form and substance reasonably
satisfactory to the Collateral Agent insuring that the Lien
of the Mortgage encumbering such Mortgaged Real Property
constitutes a valid first priority Lien on the real property
and fixtures described therein subject only to Prior Liens
permitted by such Mortgage. Each policy (or commitment to
issue a policy) of title insurance shall be in an amount not
less than 115% of the fair market value thereof or other
amount reasonably acceptable to the Collateral Agent and
shall (1) include such reinsurance arrangements (with
provisions for direct access) as shall be reasonably
acceptable to the Collateral Agent, (2) have been
supplemented by such endorsements (or where such endorsements
are not available, opinions of special counsel or other
professionals reasonably acceptable to the Collateral Agent)
as shall be requested by the Collateral Agent and shall be
available in the applicable jurisdiction at commercially
reasonable rates (including, without limitation, endorsements
on matters relating to usury, first loss, last dollar,
zoning, contiguity, doing business, road access, fixtures,
variable rate and so-called comprehensive coverage over
covenants and restrictions), (3) include such affidavits and
instruments of indemnifications by the Company and/or the
applicable Subsidiary as shall be reasonably required to
induce the Title Company to issue the policy (or commitment)
and endorsements contemplated in this subparagraph and (4)
contain no exceptions to title other than exceptions for
Prior Liens; provided, however, that with respect to the
Satisfaction Date Mortgaged Real Property, the Company shall
cause the Title Company to issue title insurance policies (or
commitments to issue policies) providing substantially the
same coverage as shown on the marked title insurance
commitments attached hereto as Exhibit XIX; provided,
further, that with respect to commitments #N9800-1808(7) and
N9800-1808(11), the exceptions set forth therein shall be
subject to the reasonable approval of the Collateral Agent;
(ix) an Officers' Certificate or other evidence
reasonably satisfactory to the Collateral Agent that as of
the date thereof there (x) has been issued and is in effect a
valid and proper certificate of occupancy or other local
equivalent, if any, for the use then being made of such
Mortgaged Real Property and that there is not outstanding any
citation, violation or similar notice indicating that such
Mortgaged Real Property contains conditions which are not in
compliance (except where non-compliance would not result in a
material impairment of the value or utility of such Mortgaged
Real Property) with local codes or ordinances relating to
building or fire safety or structural soundness, (y) has not
occurred any Casualty Event affecting all or any material
portion of any Mortgaged Real Property and (z) are no
disputes regarding boundary lines, location, encroachment or
possession of any portions of such Mortgaged Real Property
and no state of facts existing which could give rise to any
such claim; and
(x) such other documents, instruments,
certificates or information as shall be reasonably necessary
in the opinion of counsel to the Collateral Agent to cre-
<PAGE>
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ate a valid perfected first priority mortgage Lien on such
Mortgaged Real Property subject only to Prior Liens permitted
by the applicable Mortgage;
(b) on each Satisfaction Date with respect to Security
Agreement Collateral, the following dated as of and/or delivered on
any Satisfaction Date:
(i) executed copies of a Security Agreement;
and
(ii) subject to Section 5.6, on any Satisfaction
Date with respect to the Bank Credit Agreement, stock
certificates representing Capital Stock of Subsidiaries of
the Company securing the obligations of the Company and its
Subsidiaries under the Bank Credit Agreement, intercompany
notes, and all related blank stock powers or assignments in
blank, and all UCC financing statements for each jurisdiction
necessary to perfect a security interest in such Security
Agreement Collateral;
(c) evidence of the completion of all recordings and filings
of, or with respect to, Security Documents and delivery of such other
security and other documents as may be necessary or, in the opinion of
the Collateral Agent, reasonably desirable to perfect the Liens
created, or purported or intended to be created, by the Security
Documents, which Liens shall be subject only to Prior Liens;
(d) certified copies of Requests for Information (Form UCC-11
or the equivalent), or equivalent reports or lien search reports
listing all effective financing statements or comparable documents
which name either the Company or any Subsidiary as debtor and which
are filed in those jurisdictions in which any of the Collateral is
located and the jurisdictions in which either the Company's or any
Subsidiary's principal place of business is located, none of which
shall encumber the Collateral covered or intended or purported to be
covered by any Security Agreement executed and delivered on the
Closing Date or the Satisfaction Date, as applicable; and
(e) on the Closing Date, executed copies of the Intercreditor
Agreement and on each Satisfaction Date, of any and all amendments,
modifications or supplements thereto reasonably necessary to effect
the intent of the parties thereto.
B. On or before the Closing Date, all authorizations,
consents and approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect, except for such
authorizations, consents and approvals as may be required under the Securities
Act and state securities or "blue sky" laws in connection with Transactions not
occurring on the Closing Date.
C. (i) No default or event of default shall have
occurred and be continuing under the Bank Credit Agreement, all conditions to
borrowing thereunder shall have been satisfied or waived and the Company shall
have used its commercially reasonable efforts to secure availability of at
least $20,000,000 thereunder to fund up to $20,000,000 of the aggregate
principal amount of the
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Existing Notes tendered in the Debt Tender Offer in lieu of such funds being
borrowed under this Agreement for such purpose.
(ii) On the Closing Date and the Debt Tender Offer
Closing Date, the Company and its Subsidiaries shall have outstanding no
Preferred Stock and no Indebtedness other than (A) Bank Indebtedness, (B) the
Waste Revenue Bonds, (C) an aggregate principal amount of Existing Notes equal
to $200,000,000 minus, on the Debt Tender Offer Closing Date, the aggregate
principal amount of Existing Notes tendered and accepted for payment in the
Debt Tender Offer for retirement or otherwise redeemed in accordance with the
Existing Notes Indenture and (D) up to $20,000 of Indebtedness described on
Schedule B annexed hereto.
D. On or before the Closing Date, the Company shall
have paid the fees payable on the Closing Date pursuant to Section 2.4 and any
other fees payable to Chase, DLJ and BankBoston and their respective Affiliates
on the Closing Date.
E. None of the Company or any of the Company's
Subsidiaries shall have sustained any loss or interference with respect to its
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, which loss or interference, in the sole
reasonable judgment of the Agents, has had or could reasonably be expected to
have a Material Adverse Effect; and there shall not have been any Material
Adverse Change, or any development involving a prospective Material Adverse
Change.
F. No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by the initial
Notice of Borrowing which would constitute a Default or an Event of Default.
G. As of the Closing Date and the Debt Tender Offer
Closing Date, no order, judgment or decree of any court, arbitrator or other
Tribunal shall purport to enjoin or restrain the Lenders from making the
Initial Loans.
H. There shall not be pending or, to the knowledge of
the Company, threatened any action, suit, proceeding, governmental
investigation or arbitration against or affecting, the Company or any of the
Company's Subsidiaries, or any property or asset of the Company or any of the
Company's Subsidiaries which has not been disclosed by the Company in writing
to the Agents (and the Agents shall have received on the Closing Date an
Officers' Certificate dated the Closing Date attesting to the same) and there
shall have occurred no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so disclosed, which, in
each case, singly or in the aggregate, in the reasonable opinion of the Agents,
could reasonably be expected to have a material adverse effect on the making of
the Initial Loans. No injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to restrain, enjoin, delay, prohibit or otherwise prevent
the consummation of, or to recover any damages or obtain relief as a result of,
the Transactions to occur on the Closing Date. There shall not be threatened,
instituted or pending any action, proceeding or application before or by any
Tribunal, or any other Person, do-
<PAGE>
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mestic or foreign (i) challenging the Transactions to occur on the Closing Date
or seeking to restrain, delay or prohibit the consummation thereof; (ii)
seeking to prohibit or impose material limitations on the Company's ownership
or operation of all or any portion of the Company's business or assets or to
compel the Company to dispose of or hold separate all or any portion of the
Company's business or assets (including the business or assets of any
Subsidiary of the Company); or (iii) seeking to impose any materially adverse
conditions upon the Transactions to occur on the Closing Date.
I. The making of the Initial Loan on the Closing Date
or the Debt Tender Offer Closing Date, as applicable, in the manner
contemplated in this Agreement shall not violate the applicable provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve Board or
any other regulation of the Board.
J. The consolidated financial statements of the Company
and the Company's Subsidiaries (without the financial information relating to
the Baltimore Property and the Harrison Property) for the fiscal quarter ending
September 30, 1998 after giving effect to the Transactions shall have been
delivered to and shall be reasonably satisfactory to the Agents.
K. There shall not have been any disclosure of
information relating to conditions or events not previously disclosed to the
Agents, or new information regarding previously disclosed matters, in the
course of the Agents' continuing legal, financial, tax, environmental, business
and accounting due diligence review which the Agents shall reasonably determine
is material and adverse to the Company.
L. The Agents shall have received a solvency opinion
from Murray, Devine & Co., Inc., addressed to the Lenders and dated the Closing
Date and supporting the conclusions, that, after giving effect to the
Transactions and the Incurrence of all financings contemplated thereby, the
Company and its Subsidiaries (on a consolidated basis) are not insolvent and
will not be rendered insolvent by the Indebtedness Incurred in connection
herewith, will not be left with unreasonably small capital with which to engage
in their respective businesses and will not have Incurred debts beyond their
ability to pay such debts as they mature and become due.
M. The Agents shall be satisfied that audited and
unaudited consolidated financial statements meeting the requirements of
Regulation S-X under the Securities Act of the Company and its Subsidiaries are
available as of the Closing Date.
N. The Agents and their counsel shall be reasonably
satisfied that the consummation of the Debt Tender Offer, including the funding
of the Debt Tender Offer Loans on the Debt Tender Offer Closing Date, shall be
in compliance with all applicable Laws. There shall not have been any statute,
rule, regulation, injunction or order applicable to the Debt Tender Offer, or
the financing thereof, promulgated, enacted, entered or enforced by any
Tribunal, nor shall there be pending any action or proceeding by or before any
such Tribunal involving a substantial likelihood of an order, that would
prohibit, restrict, delay or otherwise materially affect the Debt Tender Offer
or the financing thereof.
<PAGE>
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O. The Holdings Side Letter shall have been executed
and delivered by Holdings.
P. The Agents shall have received an executed copy of
the PBGC Agreement.
Q. The Agents shall have received an executed copy of
the Supplemental Indenture.
R. The Agents shall have received an executed copy of
the Notice of Conversion pursuant to Section 2.7.
3.1B. Conditions to Subsequent Loans
A. Notwithstanding anything herein to the contrary, the
obligation of the Lenders to make Subsequent Loans on the Alternate Tender
Offer Closing Date is subject only to the prior or concurrent satisfaction of
each of the following conditions:
1. The Agents shall have received a certificate of the Chief
Executive Officer or the Chief Financial Officer of the Company
confirming that the representations and warranties set forth in
Sections 4.1(i), 4.2, 4.3, 4.4, 4.11, 4.22 and 4.25 are true and
correct in all material respects on and as of the Alternate Tender
Offer Closing Date as though made on such date;
2. The Agents shall have received (a) an originally executed
Notice of Borrowing substantially in the form of Exhibit IV-A annexed
hereto, signed by the President or a Vice President of the Company on
behalf of the Company, (b) an Officers' Certificate from the Company
certifying as to the aggregate principal amount of Existing Notes
validly tendered and not properly withdrawn pursuant to the Alternate
Tender Offer and (c) true and correct copies of the Alternate Tender
Offer Documents, which shall not have been amended in any material
respect without the Agents' consent (which shall not be unreasonably
withheld) and shall be in full force and effect;
3. The Agents and their counsel shall be reasonably satisfied
that the consummation of the Alternate Tender Offer, including the
funding of such Subsequent Loan, shall be in compliance with all
applicable Laws. No injunction or other restraining order shall have
been issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any
action, suit or proceeding seeking to restrain, enjoin, delay,
prohibit or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the Alternate Tender Offer or
the making of such Subsequent Loan. There shall not be threatened,
instituted or pending any action, proceeding or application before or
by any Tribunal, or any other Person, challenging the legality of the
Alternate Tender Offer or the making of such Subsequent Loan, as
applicable, or seeking to restrain or prohibit the consummation
thereof. The making of such Subsequent Loan in the manner contemplated
in this Agreement shall not violate the applicable provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve
Board or any other regulation of the Board;
<PAGE>
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4. The absence of any Default or Event of Default under
Section 7.6, 7.7 or 7.9 (in each case, with respect to the Company);
5. All authorizations, consents and approvals necessary in
connection with the Alternate Tender Offer shall have been obtained
and remain in full force and effect, except for such authorizations,
consents and approvals as may be required under the Securities Act and
state securities or "blue sky" laws in connection with Transactions
not occurring on the Alternate Tender Offer Closing Date. No Default
or Event of Default would result from the making of the Subsequent
Loan in connection with the Alternate Tender Offer or the delivery of
certain documentation in escrow as contemplated by the following
sentence. The Company shall execute and deliver, or cause to be
executed and delivered, to the Title Company, as escrow agent, or to
such other escrow agent reasonably acceptable to the Collateral Agent
and the Company, to be held by such escrow agent in escrow for release
to the Collateral Agent upon the occurrence of the Satisfaction Date
with respect to the Existing Notes, all documentation (including
signed legal opinions) that would be required to be delivered to the
Collateral Agent pursuant to Section 5.6 in respect of Satisfaction
Date Mortgaged Real Property in the form required hereunder if such
Alternate Tender Offer Closing Date constituted a Satisfaction Date
with respect to the Existing Notes; and
6. The Agents shall have received originally executed copies
of one or more written opinions of Simpson Thacher & Bartlett and
Squire, Sanders & Dempsey, special counsel for the Company and the
Guarantors, substantially in the form of Exhibit VII-B annexed hereto
and addressed to the Lenders.
B. Notwithstanding anything herein to the contrary,
unless otherwise obligated under Section 3.1B.A., the Lenders shall be under no
obligation to make Subsequent Loans on any Redemption Date, unless the
Administrative Agent, on behalf of the Agents, so elects, but the conditions
set forth in Section 3.1A (other than clauses A.1, A.3, A.6, A.7, A.8, A.9(e),
C(ii), J, L, M, N, O, P, Q and R), as applicable, shall be satisfied or waived
in any event as though the Redemption Date were the Closing Date. In the case
of a Subsequent Loan on a Redemption Date, Section 5.6 and Section 3.1A.A(9)
with respect to all collateral previously securing the Existing Notes shall be
satisfied. Notwithstanding anything herein to the contrary, the Company shall
not be obligated to effect a Redemption on a Redemption Date to the extent that
the Lenders do not make available the funds contemplated by Section 2.1A(ii)
for that purpose in connection therewith.
C. The obligations of the Lenders to make Subsequent
Loans on any Bank Indebtedness Refinancing Date is subject to prior or
contemporaneous satisfaction of each of the conditions set forth in Section
3.1A A.2(ii) (other than to the extent the Default or Event of Default is based
on Section 7.4), A.4, A.5, F (other than to the extent the Default or Event of
Default is based on Section 7.4), H and I as though the Bank Indebtedness
Refinancing Date were the Closing Date.
D. The obligations of the Lenders to make available the
Subsequent Loans on any Company Redemption Date is subject to the prior or
contemporaneous satisfaction of those conditions set forth in Section 3.1A
applicable to a Satisfaction Date, as well as those set forth in Section
3.1B.,A.1, A.2(a), A.(3) (with respect to the respect to the Redemption), 4 and
6.
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3.2 Conditions to Term Loan
The obligation of the Lenders to convert Initial Loans into
Term Loan on the Conversion Date is subject to the prior or concurrent
satisfaction or waiver of the following conditions precedent:
A. The Agents shall have received in accordance with
the provisions of Section 2.2B an originally executed Notice of Conversion.
B. The Company or any of its Subsidiaries shall not be
subject to a Bankruptcy Order or a bankruptcy or other insolvency proceeding
and a Default or an Event of Default shall not have occurred under Section 7.6,
7.7 or 7.9.
C. No Default or Event of Default (whether matured or not)
shall have occurred under Section 7.1.
D. No Event of Default shall have occurred under
Section 7.2; provided that if an event described in this Section 3.2D is
continuing at the Conversion Date but 30 days has not passed since the date of
written notice of the commencement of such 30-day period from the holder or
holders of not less than 25% in aggregate principal amount of the Loans then
outstanding (the "Grace Period"), the Conversion Date shall be deferred until
the earlier to occur of (x) the cure of such event or (y) the expiration of
such Grace Period.
E. On the Conversion Date, the Agents shall have
received an Officers' Certificate from the Company dated the Conversion Date
and reasonably satisfactory in form and substance to the Agents, to the effect
that the conditions in this Section 3.2 are satisfied on and as of the
Conversion Date.
F. The Company shall have executed and delivered to the
Agents on the Conversion Date for delivery to the Lenders Term Notes dated the
Conversion Date substantially in the form of Exhibit II annexed hereto to
evidence the Term Loan, in the principal amount of (which principal amount
shall be the aggregate principal amount of the Initial Loans outstanding on the
Conversion Date) the Term Loan and with other appropriate insertions.
G. The Company shall have paid in cash any fees due and
owing to the Agents and their Affiliates.
H. The making of the Term Loan shall not violate
Regulation T, U or X of the Board of Governors of the Federal Reserve Board or
any other regulation of the Board.
In the event on any date on which a borrowing is to be made
hereunder, the making of such borrowing would violate the Existing Indenture,
as now in effect, solely by reason of the maturity of the Initial Loans on the
Conversion Date, then the Lenders shall agree that the conversion of the
Initial Loans into Term Loans shall occur automatically, without prejudice to
the rights and remedies of the Lenders under Section 7 hereof.
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SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement
and to make the Loans, the Company represents and warrants to the Lenders that,
at the time of execution hereof and after consummation of the Transactions
(unless otherwise indicated) to occur at such time, the following statements
are true, correct and complete:
4.1 Organization and Good Standing; Capitalization
(i) Each of the Company and the Company's Subsidiaries is
a corporation or other entity duly organized and existing and in good standing
under the laws of its jurisdiction of organization. Each of the Company and the
Company's Subsidiaries has the requisite power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted and is duly qualified as a foreign corporation or other entity and
in good standing in all jurisdictions in which it is doing business, except
where failure to be so qualified or in good standing, singly or in the
aggregate, has not had and will not have a Material Adverse Effect.
(ii) All of the Subsidiaries of the Company as of the
Closing Date, after giving effect to the Transactions, are identified in
Schedule A annexed hereto. The Capital Stock of each of the Company's
Subsidiaries identified in Schedule A annexed hereto is duly authorized,
validly issued, fully paid and nonassessable and none of such Capital Stock
constitutes Margin Stock.
(iii) As of the date hereof, and after giving effect to the
Transactions to occur at such time, (a) the authorized Capital Stock of the
Company shall consist of 1,000 shares of Common Stock, $.01 par value per
share, 1 of which shares shall be issued and outstanding and owned by Holdings
and (b) the authorized Capital Stock of Holdings shall consist of 4,000 shares
of Common Stock, $.01 par value per share. All such outstanding shares have
been duly and validly issued, and are fully paid and nonassessable. Neither
Holdings nor the Company has outstanding any securities convertible into or
exchangeable for its Capital Stock or outstanding any rights to subscribe for
or to purchase, or any options for the purchase of, or any agreements providing
for the issuance (contingent or otherwise) of, or any calls, commitments or
claims of any character relating to, its Capital Stock (other than the
Warrants).
4.2 Authorization and Power
Each of Holdings, the Company and the Company's Subsidiaries
has (or, in the case of the applicable Loan Documents or other documents or
instruments to be executed and delivered after the Closing Date, will have) the
corporate or other power and requisite authority, and has taken (or, in the
case of the applicable Loan Documents or other documents or instruments to be
executed and delivered after the Closing Date, will have taken) all corporate
or other action necessary, to consummate the Transactions and to execute,
deliver and perform its obligations under the Loan Documents and each other
document and instrument to be delivered in connection with the Transactions
executed or to be executed by it, to issue the Notes and the Exchange Notes and
to issue the Warrants.
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4.3 No Conflicts or Consents
(i) The execution and delivery of the Loan Documents and
each other document to be executed and delivered in connection with the
Transactions, the consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and provisions hereof or
thereof, and the issuance, delivery and performance of the Notes and the
Exchange Notes, do not and will not (a) violate any provision of any law or any
governmental rule or regulation applicable to any of Holdings, the Company and
its Subsidiaries, the certificate or articles of incorporation or bylaws or
other organizational documents or regulations of any of them or any order,
judgment or decree of any court or other agency of government binding on any of
them which, in the case of any violation of any provision of any law or any
governmental rule or regulation, could reasonably be expected to, singly or in
the aggregate, result in a Material Adverse Effect, (b) conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of any of Holdings, the Company and
its Subsidiaries which could reasonably be expected to result in a Material
Adverse Effect, (c) result in or require the creation or imposition of any Lien
(other than pursuant to the Security Documents) upon any of the properties or
assets of any of the Company and its Subsidiaries (other than as permitted by
any Security Document), or (d) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of any of
Holdings, the Company and its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to the Lenders or such approvals or consents the failure to obtain
which could not reasonably be expected to, singly or in the aggregate, result
in a Material Adverse Effect.
(ii) No consent, approval, authorization or order of any
Tribunal or other Person is required in connection with the execution and
delivery by the Company or any of its Subsidiaries of the Loan Documents or any
other document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated hereby or
thereby, other than any such consent, approval, authorization or order which
has been obtained and remains in full force and effect or which has been waived
in writing by the Agents on behalf of the Lenders or the failure to obtain
which would not, singly or in the aggregate, have a Material Adverse Effect and
except for such filings, qualifications and consents as may be required under
the Securities Act and state securities or "blue sky" laws.
4.4 Enforceable Obligations
Each of the Loan Documents and each other document or
instrument to be delivered in connection therewith has been (or, in the case of
the applicable Loan Documents to be executed and delivered after the Closing
Date, will have been) duly authorized; each of the Loan Documents and each
other document or instrument to be delivered in connection therewith to be
executed and delivered on or prior to the Closing Date has been duly executed
and delivered by Holdings, the Company and each of the Company's Subsidiaries
that are a party thereto; and each of the Loan Documents and each other
document or instrument to be delivered in connection therewith to be executed
and delivered on or prior to the Closing Date is, and each of the Loan
Documents to be executed and delivered after the Closing Date will be, upon
such execution and delivery, the legal, valid and binding obligations of
Holdings, the Company and each such Subsidiary (to the extent a party thereto),
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enforceable in accordance with their respective terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally, by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair dealing and
except as enforceability of indemnification and contribution provisions may be
limited by public policy considerations.
4.5 Properties; Liens
(i) Each of the Company and its Subsidiaries has good and
marketable title to, or valid leasehold interests in, or easements or other
limited property interests in, all of its material properties and assets, except
for defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6A.2.
(ii) Each of the Company and its Subsidiaries has complied
with all obligations under all material leases to which it is a party, except
where the failure to comply would not have a Material Adverse Effect, and all
such leases are in full force and effect, except leases in respect of which the
failure to be in full force and effect could not reasonably be expected to have
a Material Adverse Effect. Each of the Company and its Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases, other than
leases which, individually or in the aggregate, are not material to the Company
and the Subsidiaries, taken as a whole, and in respect of which the failure to
enjoy peaceful and undisturbed possession could not reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Effect.
4.6 Financial Condition
(i) The Company has heretofore furnished to the Lenders
with respect to it and its Subsidiaries, consolidated balance sheets and
consolidated statements of operations, cash flows and stockholders' equity as
of and for the fiscal years ended June 30, 1996, June 30, 1997 and June 30,
1998, audited by and accompanied by the opinion of KPMG Peat Marwick LLP,
independent public accountants. Such financial statements present fairly the
financial condition and results of operations of the Company and its
Subsidiaries as of such dates and for such periods. None of the Company and its
consolidated Subsidiaries has or shall have as of the Closing Date any material
guarantee, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including any interest rate or
foreign currency hedging transaction, other than those disclosed in such
financial statements, the Alternate Tender Offer Documents or in the Loan
Documents. Such financial statements were prepared in accordance with GAAP.
(ii) Since June 30, 1998, nothing has occurred that has had
or could reasonably be expected to have a Material Adverse Effect other than
matters relating to the Transactions and the matters disclosed in the Alternate
Debt Tender Offer Documents.
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4.7 Full Disclosure
(i) The written information, reports, financial
statements, exhibits and schedules furnished by or on behalf of the Company or
any of its Subsidiaries to the Agents or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto (but excluding the financial projections referred to in Section
4.7(ii)), when taken as a whole, did not contain, and as they may be amended,
supplemented or modified from time to time, will not contain, any material
misstatement of fact and did not omit, and as they may be amended, supplemented
or modified from time to time, will not omit, to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not materially misleading in their
presentation of the Transactions or of the Company and its Subsidiaries taken
as a whole.
(ii) All financial projections concerning the Company and
its Subsidiaries that are or have been made available to the Agents or any
Lender by the Company or any of its Subsidiaries have been or will be prepared
in good faith based upon assumptions believed by the Company to be reasonable
on the Closing Date.
4.8 No Default
No event has occurred and is continuing which constitutes a
Default or an Event of Default.
4.9 Compliance with Contracts, Etc.
None of the Company or any of the Company's Subsidiaries is
in violation of (A) its certificate or articles of incorporation, bylaws or
regulations or other organizational documents or (B) any applicable Law,
ordinance, administrative or governmental rule or regulation or (C) any order,
decree or judgment of any Tribunal having jurisdiction over any of them or (D)
no event of default or event that but for the giving of notice or the lapse of
time, or both, would constitute an event of default exists under any material
Contractual Obligation, except, with respect to clauses (A) through (D), for
such violations or events that would not, singly or in the aggregate, have a
Material Adverse Effect.
4.10 No Litigation
Except as set forth in Schedule F annexed hereto, there are
not any material actions, suits or proceedings at law or in equity or by or
before any Tribunal now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries or any business,
property or rights of any such Person (i) which involve any Loan Document or
the Transactions or (ii) as to which there is a reasonable possibility of an
adverse determination and which, if adversely determined, could, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.
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4.11 Use of Proceeds; Margin Stock, Etc.
The proceeds of the Initial Loans will be used solely for the
purposes specified herein. None of the Company and its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock. No
part of the proceeds of any Loan will be used, whether directly or indirectly,
and whether immediately, incidentally or ultimately, for any purpose which
entails a violation of, or which is inconsistent with, the provisions of the
regulations of the Board of Governors of the Federal Reserve System, including
Regulation U or X.
4.12 Taxes
All Federal, material state and other material returns,
statements, forms and reports for taxes (the "Returns") required to be filed by
or with respect to the income, properties or operations of the Company and/or
any of its Subsidiaries have been timely filed with the appropriate taxing
authority. The Returns accurately reflect all liability for material taxes of
the Company and its Subsidiaries for the periods covered thereby. The Company
and each of its Subsidiaries have paid all taxes, interest, penalties and
additions to tax ("taxes") payable by them other than immaterial taxes and
other taxes which are not yet due and payable, and other than taxes contested
in good faith and for which adequate reserves have been established in
accordance with GAAP. Except as disclosed in the financial statements referred
to in Section 4.6(i), and except as set forth on Schedule E annexed hereto,
there is no material action, suit, proceeding, investigation, audit, or claim
now pending or, to the knowledge of the Company, threatened by any authority
regarding any taxes relating to the Company or any of its Subsidiaries. As of
the Closing Date, neither the Company nor any of its Subsidiaries has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of any material tax of the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries has provided, with respect to
themselves or property held by them, any consent under Section 341(F) of the
Code.
4.13 ERISA
Each of the Company and the ERISA Affiliates is in compliance
with the applicable provisions of ERISA and the provisions of the Code relating
to ERISA and the regulations and published interpretations thereunder and any
similar applicable non-U.S. law except for such noncompliance which could not
reasonably be expected to result in a Material Adverse Effect. No Reportable
Event has occurred as to which the Company or any ERISA Affiliate was required
to file a report with the PBGC, other than reports for which the 30-day notice
requirement is waived, reports that have been filed and reports the failure of
which to file could not reasonably be expected to result in a Material Adverse
Effect. As of the date hereof, the present value of all benefit liabilities
under each Plan of the Company and the ERISA Affiliates (on an accumulated
benefits obligation basis and based on those assumptions used to fund such
Plan) did not, as of the last annual valuation date applicable thereto for
which a valuation is available, exceed by more
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than $18,000,000 the value of the assets of such Plan, and the present value of
all benefit liabilities of all underfunded Plans (on an accumulated benefits
obligation basis and based on those assumptions used to fund each such Plan)
did not, as of the last annual valuation dates applicable thereto for which
valuations are available, exceed by more than $21,000,000 the value of the
assets of all such underfunded Plans. None of the Company and the ERISA
Affiliates have Incurred or could reasonably be expected to Incur any
Withdrawal Liability that could reasonably be expected to result in a Material
Adverse Effect. None of the Company and the ERISA Affiliates have received any
written notification that any Multiemployer Plan is in reorganization or has
been terminated within the meaning of Title IV of ERISA, and no Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated, where
such reorganization or termination has resulted or could reasonably be expected
to result, through increases in the contributions required to be made to such
Plan or otherwise, in a Material Adverse Effect.
4.14 Compliance with Law
Each of the Company and its Subsidiaries is in compliance
with all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
(including compliance with all applicable Environmental Laws with respect to
any Real Property or governing its business and the requirements of any
Environmental Permits with respect to any such Real Property or the operations
of the Company or any of its Subsidiaries), except such non-compliance as is
not likely to, individually or in the aggregate, have a Material Adverse
Effect.
4.15 Government Regulation
None of the Company or any of the Company's Subsidiaries is
subject to regulation under the Federal Power Act or other Law which regulates
the Incurrence by the Company or any of its Subsidiaries of Indebtedness,
including, but not limited to, Laws relating to common contract carriers or the
sale of electricity, gas, steam, water or other public utility services.
4.16 Capital Structure and Subsidiaries
After giving effect to the Transactions, the Company will
have no interest in any Person other than the Subsidiaries of the Company set
forth on Schedule A annexed hereto and other Investments of the Company as of
the Closing Date, as permitted by Section 6A.4, and the Company will own, free
and clear of all Liens, claims or restrictions on voting or transfer (other
than as permitted by this Agreement), 100% of all classes of outstanding
Capital Stock of each of the entities set forth on such Schedule A, except as
specified therein.
4.17 Intellectual Property
Each of the Company and its Subsidiaries owns or possesses,
or could obtain ownership or possession of, on terms not materially adverse to
it, all patents, trademarks, service marks, trade names, copyrights, licenses
and rights with respect thereto necessary for the present conduct of its
business, without any known conflict with the rights of others, and free from
any burdensome restrictions, except where such conflicts and restrictions could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
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4.18 Environmental Matters.
Except as set forth on Schedule H annexed hereto:
(i) There has not been a Release or threatened Release of
Hazardous Materials at, on, under or around the properties currently
or formerly owned, operated or leased by the Company and its
Subsidiaries (the "Properties") in amounts or concentrations which (a)
constitute or constituted a violation of Environmental Laws, except as
could not reasonably be expected to have a Material Adverse Effect;
(b) would reasonably be expected to give rise to an Environmental
Claim that, in any such case or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect; or (c) could
reasonably be expected to give rise to an obligation to conduct a
Remedial Action that could reasonably be expected to result in a
Material Adverse Effect;
(ii) The Properties and all operations of the Company and
its Subsidiaries are in compliance, and in all prior periods have been
in compliance, with all Environmental Laws, and all necessary
Environmental Permits have been obtained and are in effect, except to
the extent that such non-compliance or failure to obtain any necessary
Environmental Permits, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect;
(iii) None of the Company and its Subsidiaries have received
any Environmental Claim in connection with the Properties or the
operations of the Company or its Subsidiaries or with regard to any
Person whose liabilities for environmental matters the Company or any
of its Subsidiaries has retained or assumed, in whole or in part,
contractually, by operation of law or otherwise, which, in either such
case or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;
(iv) Hazardous Materials have not been transported from the
Properties, nor have Hazardous Materials been generated, treated,
stored or disposed of at, on, under or around any of the Properties in
a manner that could reasonably be expected to give rise to liability
under any Environmental Law, nor have any of the Company and its
Subsidiaries retained or assumed any liability, contractually, by
operation of law or otherwise, with respect to the generation,
treatment, storage or disposal of Hazardous Materials, which, in each
case, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect; and
(v) No Lien in favor of any Tribunal for (a) any liability
under any Environmental Law or (b) damages arising from or costs
Incurred by such Tribunal in response to a Release or threatened
Release of Hazardous Materials into the environment has been recorded
with respect to the Properties, except for Liens permitted by Section
6A.2.
4.19 Solvency
(i) Immediately after the consummation of the Transactions
and the other transactions contemplated hereby and immediately following the
making of each Loan and after giving
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effect to the application of the proceeds thereof, (a) the fair value of the
assets of the Company and its Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, direct, subordinated,
contingent or otherwise, of the Company and its Subsidiaries on a consolidated
basis; (b) the present fair saleable value of the property of the Company and
its Subsidiaries on a consolidated basis will be greater than the amount that
will be required to pay the probable liability of the Company and its
Subsidiaries on a consolidated basis on their debts and other liabilities,
direct, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Company and its Subsidiaries
on a consolidated basis will be able to pay their debts and liabilities,
direct, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (d) the Company and its Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted following the Closing Date.
(ii) The Company does not intend to, and does not believe
that it or any of its Subsidiaries will, Incur debts beyond its ability to pay
such debts as they mature, taking into account the timing and amounts of cash
to be received by it or any such Subsidiary and the timing and amounts of cash
to be payable on or in respect of its Indebtedness or the Indebtedness of any
such Subsidiary.
4.20 Insurance
Schedule J annexed hereto sets forth a true, complete and
correct description of all insurance maintained by or on behalf of the Company
and its Subsidiaries as of the Closing Date. As of such date, such insurance is
in full force and effect and all premiums have been duly paid.
4.21 Labor Matters
Except as set forth on Schedule K annexed hereto, there are
no strikes pending or threatened against the Company or any of its Subsidiaries
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. The hours worked and payments made to employees
of the Company and its Subsidiaries have not been in violation in any material
respect of the Fair Labor Standards Act or any other applicable Law dealing
with such matters. All material payments due from the Company or any of its
Subsidiaries or for which any claim may be made against the Company or any of
its Subsidiaries, on account of wages and employee health and welfare insurance
and other benefits, have been paid or accrued as a liability on the books of
the Company or such Subsidiary to the extent required by GAAP.
4.22 Guarantees
Each Guarantor shall, on the date it executes and delivers a
Guarantee hereunder, have the full corporate or other power, authority and
capacity to execute and deliver such Guarantee and to perform all of its
obligations to be performed thereunder; all corporate and other acts,
conditions and things required to be done and performed or to have occurred
prior to such execution and delivery to constitute such Guarantee as a valid
and legally binding obligation of such Guarantor enforceable in accordance with
its terms shall have been done and performed and shall have occurred in
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due compliance with all applicable Laws; on the date of such execution and
delivery, the execution, delivery and performance of such Guarantee by such
Guarantor will not (i) violate any provision of Law or any provision of the
charter or bylaws or other organizational document of such Guarantor, or (ii)
result in a breach of, a default under (including, without limitation, any
event which with notice or lapse of time, or both, would constitute a breach of
or a default under), or the creation of any Lien on the properties or assets of
such Guarantor, the Company or any other Subsidiary of the Company under any
Contractual Obligation to which such Guarantor or the Company or any other
Subsidiary of the Company is a party or by which the properties or assets of
such Guarantor, the Company or any other Subsidiary of the Company may be bound
or affected (except as permitted under the Security Documents), except if any
of the foregoing breaches, defaults or Liens would not result in a Material
Adverse Effect; on the date of such execution and delivery, each Guarantee
executed and delivered by a Guarantor shall constitute legal, valid, binding
and unconditional obligations of the Guarantor executing and delivering it to
the Lenders hereunder, enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally, by general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing; and
the foregoing representations and warranties of the Company shall be deemed for
all purposes to have been made on each date when a Guarantee is delivered
hereunder with respect solely to that Guarantee and the Guarantor so issuing
such Guarantee.
4.23 Indenture; Etc.
Each of the Company and the Guarantors shall, on the date it
executes and delivers the Indenture and the Exchange Notes and the Take-Out
Notes and the indenture governing the Take-Out Notes (or the guarantees related
thereto, as the case may be), have the full corporate or other power, authority
and capacity to do so and to perform all of its obligations to be performed
thereunder; all corporate and other acts, conditions and things required to be
done and performed or to have occurred prior to such execution and delivery to
constitute them as valid and legally binding obligations of the Company
enforceable against the Company and the Guarantors in accordance with their
respective terms, shall have been done and performed and shall have occurred in
due compliance with all applicable Laws; on the date of such execution and
delivery by the Company and the Guarantors, the Indenture and the Exchange
Notes and the Take-Out Notes (and the guarantees) and the indenture governing
the Take-Out Notes shall constitute legal, valid, binding and unconditional
obligations of the Company and the Guarantors, as the case may be, enforceable
against the Company and the Guarantors, as the case may be, in accordance with
their respective terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally, by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
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4.24 Investment Company Act; Public Utility Holding
Company Act
None of the Company or any of its Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
4.25 Security Interests
As of the date of execution thereof, (i) the Security
Documents will create, in favor of the Collateral Agent for the benefit of the
Secured Parties, as security for the obligations purported to be secured
thereby, a valid and enforceable first priority security interest in and Lien
upon all of the Collateral covered thereby, superior to and prior to the rights
of all third Persons and subject to no other Liens except Prior Liens
applicable to such Collateral, (ii) the mortgagor under each Mortgage will have
good and marketable title to or a valid leasehold interest in the Mortgaged
Real Property free and clear of all Liens other than Prior Liens, (iii) the
respective pledgor or assignor, as the case may be, will have good and
marketable title to all items of Security Agreement Collateral covered by the
Security Agreement free and clear of all Liens except Prior Liens and (iv) no
filings or recordings will be required in order to perfect the security
interests created under any Security Document, except for filings or recordings
required in connection with any such Security Document which shall have been
made prior to or contemporaneously with the execution and delivery thereof or
executed and delivered by the Company to the Collateral Agent for filing
thereof and such security interests and Liens shall be perfected upon the
completion of all such required filings and recordings.
4.26 Year 2000
Each of the Company and its Subsidiaries has reviewed its
respective operations with a view to assessing whether its business or
operations will, in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission or other utilization of data, be vulnerable
to any significant risk that computer hardware, software or any equipment
containing embedded microchips used in its business or operations will not in
the case of dates or time periods occurring after December 31, 1999 function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000. Each of the Company and its Subsidiaries believes that the
risks associated with the Year 2000 issue could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5 AFFIRMATIVE COVENANTS
The Company covenants and agrees that, until the Loans and
the Notes and all other amounts due under this Agreement have been indefeasibly
paid in full and there are no Available Loan Commitments, it shall perform all
covenants in this Section 5 required to be performed by it:
5.1 Financial Statements and Other Reports
The Company will furnish to each Lender:
(i) within 90 days after the end of each fiscal year, a
consolidated balance sheet and related statements of operations, cash
flows and stockholders' equity showing the finan-
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cial condition of the Company and its Subsidiaries as of the close
of such fiscal year and the consolidated results of their operations
during such year, all audited by independent public accountants of
recognized national standing reasonably acceptable to the Agents and
accompanied by an opinion of such accountants (which shall not be
qualified in any material respect) to the effect that such
consolidated financial statements fairly present the financial
condition and results of operations of the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP;
(ii) within 45 days after the end of each of the first
three fiscal quarters of each fiscal year, a consolidated balance
sheet and related statements of operations, cash flows and
stockholders' equity showing the financial condition of the Company
and its Subsidiaries as of the close of such fiscal quarter and the
consolidated results of their operations during such fiscal quarter
and the then-elapsed portion of the fiscal year, all certified by one
of its financial Officers on behalf of the Company as fairly
presenting the financial condition and results of operations of the
Company and its Subsidiaries on a consolidated basis in accordance
with GAAP (except for the absence of footnotes), subject to normal
year-end audit adjustments;
(iii) at any time during which any Initial Loans are
outstanding, within 30 days after the end of each fiscal month of the
Company (commencing with the fiscal month ending November 30, 1998),
the consolidated balance sheet of the Company and its Subsidiaries as
at the end of such fiscal month and the related consolidated
statements of income and retained earnings and of cash flows for such
fiscal month and for the elapsed portion of the fiscal year ended with
the last day of such fiscal month, in each case setting forth
comparative figures for the corresponding fiscal month in the prior
fiscal year (to the extent comparable figures can be obtained) and
comparable budgeted figures for such fiscal month, all of which shall
be certified by the Chief Financial Officer or other Senior Officer of
the Company, subject to normal year-end audit adjustments and the
absence of footnotes;
(iv) concurrently with any delivery of financial statements
under (i) or (ii) above, a certificate of the accounting firm or
financial Officer on behalf of the Company opining on or certifying
such statements (which certificate, when furnished by an accounting
firm, may be limited to accounting matters and disclaim responsibility
for legal interpretations) (a) certifying that no Event of Default or
Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (b)
setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenant
contained in Sections 6A.10 and 6A.11 (it being understood that the
information required by this clause (b) may be provided in a
certificate of a financial Officer on behalf of the Company instead of
from such accounting firm);
(v) promptly after the same become publicly available,
copies of all periodic and other publicly available reports, proxy
statements and, to the extent requested by the Agents, other materials
filed by the Company or any of its Subsidiaries with the Commission,
or any governmental authority succeeding to any of or all the
functions of the Commission, or with
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any national securities exchange, or distributed to its shareholders
generally, as the case may be;
(vi) if, as a result of any change in accounting principles
and policies from those as in effect on the Closing Date, the
consolidated financial statements of the Company and its Subsidiaries
delivered pursuant to paragraph (i) or (ii) above will differ in any
material respect from the consolidated financial statements that would
have been delivered pursuant to such clauses had no such change in
accounting principles and policies been made, then, together with the
first delivery of financial statements pursuant to paragraph (i) and
(ii) above following such change, a schedule prepared by a financial
Officer on behalf of the Company reconciling such changes to what the
financial statements would have been without such changes;
(vii) prior to the end of each fiscal year, a copy of an
operating and capital expenditure budget for the Company for the next
succeeding fiscal year and projections in GAAP format for each
succeeding fiscal year through the Maturity Date;
(viii) promptly following the creation or acquisition of any
Subsidiary of the Company, a certificate from an Officer, identifying
such new Subsidiary and the ownership interest of the Company and its
Subsidiaries therein;
(ix) simultaneously with the delivery of any financial
statements pursuant to paragraph (i) or (ii) above, a balance sheet
and related statements of operations, cash flows and stockholder's
equity for each unconsolidated subsidiary for the applicable period;
(x) promptly, a copy of all reports submitted in
connection with any material interim or special audit made by
independent accountants of the books of the Company or any Subsidiary
of the Company;
(xi) promptly, after any borrowing base report shall have
been delivered to the lenders under the Bank Credit Agreement, a copy
of such report;
(xii) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Company or any of its Subsidiaries, or compliance with the terms
of any Loan Document, or such consolidating financial statements, as
in each case the Agents or any Lender, acting through the Agents, may
reasonably request; and
(xiii) together with the consolidated financial statements of
the Company and its Subsidiaries for the fiscal year ending June 30,
1999 delivered pursuant to paragraph (i) above, an Officer's
Certificate showing the calculation of Excess Cash Flow for such
fiscal year together with all supporting data used in such calculation
(an "Excess Cash Flow Certificate").
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5.2 Corporate Existence, Etc.
(i) The Company will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence, except as otherwise
expressly permitted under Section 6A.5, and except for the liquidation or
dissolution of Subsidiaries if the assets of such corporations or other
entities to the extent they exceed estimated liabilities are acquired by the
Company or one of its wholly owned Subsidiaries in such liquidation or
dissolution.
(ii) The Company will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and trade
names material to the conduct of its business.
5.3 Payment of Taxes and Claims; Tax Consolidation
The Company will, and will cause each of its Subsidiaries to,
pay all material taxes, assessments and other governmental charges imposed upon
it or any of its material properties or assets or in respect of any of its
franchises, business, income or property before any material penalty accrues
thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums which have become due and payable
and which by Law have or may become a Lien upon any of its properties or assets
prior to the time when any material penalty or fine shall be Incurred with
respect thereto; provided, however, that no such Tax, assessment, charge or
claim need be paid if (a) the validity or amount of such charge or claim is
being diligently contested in good faith and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor, (b) such tax, assessment, charge or claim is in
respect of property taxes for property that the Company or one of its
Subsidiaries has determined to abandon and the sole recourse for such tax,
assessment, charge or claim is to such property or (c) the amount of such
taxes, assessments, charges and claims and interest and penalties thereon does
not exceed $5,000,000 in the aggregate.
5.4 Maintenance of Properties; Insurance
(i) The Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of the Company and its Subsidiaries and from
time to time promptly will make or cause to be made all necessary repairs,
renewals and replacements thereof; provided, however, that nothing in this
Section 5.4 shall prevent the Company or any of its Subsidiaries from
discontinuing the use, operation or maintenance of any such properties, or
disposing of any of them, if such action is in the ordinary course of business
or, in the reasonable good faith judgment of the Company, necessary or
desirable in the conduct of its business or otherwise permitted by this
Agreement, including the sale of the Baltimore Property and the Harrison
Property.
(ii) The Company will, and will cause each of its
Subsidiaries to, keep its insurable properties insured at all times by
financially sound and reputable insurers in such amounts as
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shall be customary for similar businesses and maintain such other reasonable
insurance (including, to the extent consistent with past practices,
self-insurance), of such types, to such extent and against such risks, as is
customary with companies in the same or similar businesses, and maintain such
other insurance as may be required by Law or any other Loan Document.
(iii) The Company will, and will cause each of its
Subsidiaries to, notify the Agents promptly whenever any separate insurance
concurrent in form or contributing in the event of loss with that required to
be maintained under this Section 5.4 is taken out by the Company or any of its
Subsidiaries; and promptly deliver to the Agents a duplicate original copy of
such policy or policies, or insurance certificate with respect thereto.
(iv) In connection with the covenants set forth in this
Section 5.4, it is understood and agreed that:
(a) none of the Agents, the Lenders and their respective
agents or employees shall be liable for any loss or damage insured by
the insurance policies required to be maintained under this Section
5.4, it being understood that (A) the Company and its Subsidiaries
shall look solely to their insurance companies or any other parties
other than the aforesaid parties for the recovery of such loss or
damage and (B) such insurance companies shall have no rights of
subrogation against the Agents, the Lenders or their agents or
employees. If, however, the insurance policies do not provide waiver
of subrogation rights against such parties, as required above, then
the Company hereby agrees to the extent permitted by Law, to waive,
and to cause each of its Subsidiaries to waive, its right of recovery,
if any, against the Agents, the Lenders and their agents and
employees; and
(b) the designation of any form, type or amount of insurance
coverage by the Agents or the Required Lenders under this Section 5.4
shall in no event be deemed a representation, warranty or advice by
the Agents or the Lenders that such insurance is adequate for the
purposes of the business of the Company and the Subsidiaries or the
protection of their properties.
5.5 Compliance with Environmental Laws;
Preparation of Environmental Reports
(i) The Company will, and will cause each of its
Subsidiaries to, comply, and make reasonable efforts to cause all lessees and
other Persons occupying its properties to comply, with all Environmental Laws
and Environmental Permits applicable to its operations and properties; obtain
and renew all material Environmental Permits necessary for its operations and
properties; and conduct any Remedial Action required under Environmental Laws
in accordance with Environmental Laws, except, in each case with respect to
this Section 5.5, to the extent the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(ii) If a Default caused by reason of a breach of Section
4.18 or 5.5(i) shall have occurred and be continuing, at the reasonable request
of the Required Lenders through the Agents, the Company will, and will cause
each of its Subsidiaries to, provide to the Lenders within 90 days after
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such request, at the expense of the Company, an environmental site assessment
report of reasonable scope and content for the properties which are the subject
of such Default, prepared by an environmental consulting firm reasonably
acceptable to the Agents, indicating the presence or absence of Hazardous
Materials and the estimated cost of any Remedial Action reasonably likely to be
required under any applicable Environmental Law in connection with such
properties.
5.6 Security Interests; Additional Subsidiaries
(i) The Company will, and will cause each of its
Subsidiaries to, on each Satisfaction Date, cause all of their respective
Properties (other than inventory, accounts receivable and related intangibles,
documents and proceeds thereof, the Baltimore Property and the Harrison
Property) which were subject to a Lien securing the obligations of the Company
and its Subsidiaries under the Existing Notes, the Existing Notes Indenture
and/or the Bank Credit Agreement (but, in the case of the Bank Credit
Agreement, the Company shall be required to comply with the requirements of
this Section 5.6 and the related provisions herein only to the extent the
Company, through the utilization of reasonable efforts, causes the Capital
Stock of Subsidiaries, Intellectual Property of the Company and the
intangibles, documents and proceeds that do not relate to inventory and
accounts receivable to be free and clear of the Lien of the Bank Security
Agreement), as the case may be, to be released from any and all such Liens in a
manner satisfactory to the Collateral Agent. On each such Satisfaction Date,
the Company will, and will cause each of its Subsidiaries to, at the Company's
sole cost and expense, (i) execute, acknowledge and deliver any and all
Security Documents necessary or appropriate in the reasonable opinion of the
Collateral Agent to create in favor of the Collateral Agent for the benefit of
the Secured Parties, a valid, perfected first priority Lien on such Properties
(subject only to Prior Liens), (ii) take any and all action and deliver any and
all documentation reasonably required with respect to the applicable Collateral
on such Satisfaction Date pursuant to Section 3.1A including, without
limitation, subsections A.5(II) and A.9 thereof and (iii) register, file or
record, in the appropriate governmental offices, any documents or instruments
in addition to, supplemental to or confirmatory of the Security Documents or
otherwise reasonably deemed by the Collateral Agent necessary or reasonably
desirable to create a valid, perfected Lien (subject only to Prior Liens) on
such Properties in favor of the Collateral Agent for the benefit of the Secured
Parties.
The Company will, and will cause each of its Subsidiaries to,
deliver or cause to be delivered to the Collateral Agent from time to time such
other documentation, consents, authorizations, approvals and orders in form and
substance reasonably satisfactory to the Collateral Agent as it shall
reasonably deem necessary or appropriate to perfect or maintain the Liens on
the Collateral covered by the Security Documents.
(ii) Upon the acquisition or creation of a Subsidiary by
the Company after the Closing Date, the Company shall promptly cause such
Subsidiary to execute a Guarantee, whereby such Subsidiary shall become a
Subsidiary Guarantor for all purposes of this Agreement.
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5.7 Compliance with Laws, Etc.
The Company will, and will cause each of its Subsidiaries to,
comply with the requirements of all applicable Laws of any Tribunal,
noncompliance with which, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.8 Maintaining Records; Access to Properties
and Inspections
The Company will, and will cause each of its Subsidiaries to,
maintain all financial records in accordance with GAAP and permit any Persons
designated by the Agents or any Lender to visit and inspect the financial
records and the properties of the Company or any of its Subsidiaries at
reasonable times, upon reasonable prior notice to the Company, and as often as
reasonably requested and to make extracts from and copies of such financial
records, and permit any Persons designated by the Agents or any Lender upon
reasonable prior notice to the Company to discuss the affairs, finances and
condition of the Company or any Subsidiary with the Officers thereof and
independent certified public accountants therefor (subject to reasonable
requirements of confidentiality, including requirements imposed by law or by
contract).
5.9 Take-Out Financing; Redemption
(i) The Company agrees that, upon request by the
Administrative Agent, on behalf of the Required Lenders (a "Request"), at any
time on or after a Securities Demand Date, the Company will take all reasonable
actions necessary or desirable, to the extent within its power, so that the
Take-Out Banks can, as soon as practicable after such Request, publicly sell or
privately place the Take-Out Notes (the "Initial Request Date"). The Company
further agrees that upon notice by the Take-Out Banks, at any time and from
time to time following the Initial Request Date, the Company will issue and
sell Take-Out Notes upon such terms and conditions as specified in such notice;
provided that (i) the interest rate thereon (whether floating or fixed) shall
be determined by the Take-Out Banks, in light of the then prevailing market
conditions but in no event shall the interest rate on the Take-Out Notes exceed
15.5% per annum; (ii) the Company, in its reasonable discretion after
consultation with the Take-Out Banks, shall determine whether the Take-Out
Notes shall be issued through a public offering or a private placement and, if
issued in a private placement, the Take-Out Notes will be accompanied by
customary registration rights; (iii) the maturity of any Take-Out Notes shall
not be earlier than the eighth anniversary of the Closing Date; (iv) the
aggregate principal amount of Take-Out Notes to be issued by the Company shall
be determined by the Take-Out Banks in light of the then prevailing market
conditions, provided that the aggregate principal amount of Take-Out Notes
shall not exceed the amount calculated to yield net proceeds sufficient to
repay the Initial Notes in full; and (v) all other arrangements with respect to
the Take-Out Notes shall be reasonably satisfactory in all respects to the
Take-Out Banks and the Company in light of the then prevailing market
conditions. The foregoing shall not limit the Company's right to refinance the
Initial Loans or the Term Loan by any other means.
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(ii) The Company will borrow funds hereunder on any
Redemption Date and (subject to the Company's receipt of such funds) effect the
Redemption, if required by the Agents in the event that any of the Redemption
Demand Conditions are satisfied.
(iii) The Agents shall have received an offering memorandum,
reasonably satisfactory in form and substance to the Agents, which may be
updated from time to time as necessary to the extent a Request may be
reasonably anticipated, for an offering of securities of the Company to
refinance the Loans hereunder at least 60 days prior to the Securities Demand
Date (determined without reference to clause (v) of the definition thereof).
5.10 Exchange of Term Notes
If after the Conversion Date any Loans are outstanding, the
Company will, on the 10th Business Day following the written request (the
"Exchange Request") of the holder of any Term Note (or beneficial owner of a
portion thereof):
(i) Execute and deliver, cause each Guarantor to execute
and deliver, and cause a bank or trust company acting as trustee
thereunder to execute and deliver, the Indenture substantially in the
form of Exhibit V annexed hereto, if such Indenture has not previously
been executed and delivered;
(ii) Execute and deliver to such holder or beneficial owner
in accordance with the Indenture a note in the form attached to the
Indenture (each such note and any note issued in exchange therefor
pursuant to the terms of the Indenture, an "Exchange Note" and
collectively, the "Exchange Notes") bearing interest at 15.5% per
annum in exchange for such Term Note dated the date of the issuance of
such Exchange Note, payable to the order of such holder or owner, as
the case may be, in the same principal amount as such Term Note (or
portion thereof) being exchanged, and cause each Guarantor to endorse
its guarantee thereon; and
(iii) Execute and deliver, and cause each Guarantor to
execute and deliver, to such holder or owner, as the case may be, a
Registration Rights Agreement in the form of Exhibit VI annexed
hereto, if such Registration Rights Agreement has not previously been
executed and delivered or, if such Registration Rights Agreement has
previously been executed and delivered and such holder or owner is not
already a party thereto, permit such holder or owner to become a party
thereto.
The Exchange Request shall specify the principal amount of
the Term Notes to be exchanged pursuant to this Section 5.10 which shall be at
least $5,000,000 and integral multiples of $500,000 in excess thereof. Term
Notes delivered to the Company under this Section 5.10 in exchange for Exchange
Notes shall be cancelled by the Company and the corresponding amount of the
Term Loan deemed repaid and the Exchange Notes shall be governed by and
construed in accordance with the terms of the Indenture.
The bank or trust company acting as trustee under the
Indenture shall at all times be a corporation organized and doing business
under the laws of the United States of America or the State
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of New York, in good standing and having its principal offices in the Borough
of Manhattan, in The City of New York, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal or State authority and which has a combined capital and surplus of not
less than $50,000,000.
5.11 ERISA Compliance
Each of the Company and its Subsidiaries will (i) comply in
all material respects with the applicable provisions of ERISA and the
provisions of the Code relating to ERISA and any applicable similar non-U.S.
law, except to the extent that failure to comply therewith could not reasonably
be expected to result in a Material Adverse Effect, and (ii) furnish to the
Agents (a) as soon as possible after, and in any event within 30 days after any
Officer of the Company or any ERISA Affiliate knows or has reason to know that,
any Reportable Event has occurred, a statement of a financial Officer setting
forth details as to such Reportable Event and the action proposed to be taken
with respect thereto, together with a copy of the notice, if any, of such
Reportable Event given to the PBGC, (b) promptly after any Officer learns of
receipt thereof, a copy of any notice that the Company or any ERISA Affiliate
may receive from the PBGC relating to the intention of the PBGC to terminate
any Plan or Plans (other than a Plan maintained by an ERISA Affiliate that is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code
Section 414) or to appoint a trustee to administer any such Plan, (c) within 30
days after the due date for filing with the PBGC pursuant to Section 412(n) of
the Code a notice of failure to make a required installment or other payment
with respect to a Plan, a statement of a financial Officer setting forth
details as to such failure and the action proposed to be taken with respect
thereto, together with a copy of any such notice given to the PBGC and (d)
promptly after any Officer learns thereof and in any event within 30 days after
receipt thereof by the Company or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by the Company or any ERISA
Affiliate concerning (A) the imposition of Withdrawal Liability or (B) a
determination that a Multiemployer Plan is, or is expected to be, terminated or
in reorganization, in each case within the meaning of Title IV of ERISA;
provided that in the case of each of clauses (a) through (d) above, notice to
the Agents shall only be required if such event or condition, together with all
other events or conditions referred to in clauses (a) through (d) above, could
reasonably be expected to result in a Material Adverse Effect.
5.12 Litigation and Other Notices
The Company will, and will cause each of its Subsidiaries to,
furnish to the Agents written notice of the following promptly after any
Officer thereof obtains actual knowledge thereof:
(i) any Event of Default or Default, specifying the nature
and extent thereof and the corrective action (if any) proposed to be
taken with respect thereto;
(ii) the filing or commencement of, or any written threat
or notice of intention of any person to file or commence, any action,
suit or proceeding, whether at law or in equity or by or before any
Tribunal, against the Company or any of its Subsidiaries in respect of
which there is a reasonable possibility of an adverse determination
and which, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect; and
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(iii) any other development specific to the Company or any
of its Subsidiaries that is not a matter of general public knowledge
and that has resulted in, or could reasonably be expected to result
in, a Material Adverse Effect.
5.13 Register
The Company hereby designates the Administrative Agent to
serve as the Company's agent, solely for purposes of this Section 5.13, to
maintain a register (the "Register") on which it will record the Loans made by
each of the Lenders and each repayment in respect of the principal amount of
the Loans of each Lender. Failure to make any such recordation, or any error in
such recordation shall not affect the Company's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Loan Commitments
(whether or not evidenced by a Note) of such Lender and the rights to the
principal of, and interest on, any Loan made pursuant to such Loan Commitments
shall not be effective until such transfer is recorded on the Register
maintained by the Administrative Agent with respect to ownership of such Loan
Commitments and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Loan Commitments and Loans shall remain owing
to the transferor. The registration of assignment or transfer of all or part of
any Loan Commitments and Loans shall be recorded by the Administrative Agent on
the Register only upon the receipt by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
10.2A. Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, the assigning or transferor
Lender shall surrender the Note evidencing such Loan, and thereupon one or more
new Notes of the same type and in the same aggregate principal amount shall be
issued to the assigning or transferor Lender and/or the new Lender and the
surrendered Note shall be returned to the Company marked "canceled."
5.14 Equity Reserve; Exchange Notes
The Company will, and will cause Holdings or any applicable
Surviving Person (as defined in the Warrant Agreement) to, (i) execute and
deliver the Warrant Agreement, the Warrants, the Equity Reserve Registration
Rights Agreement and the Warrant Escrow Agreement, (ii) obtain CUSIP numbers
for the Warrants and Exchange Notes, (iii) satisfy all requirements for the
Warrants and Exchange Notes to be eligible for trading in the PORTAL market and
(iv) satisfy (with the cooperation of the Agents) all eligibility requirements
of the Depository Trust Company with respect to the Warrants and the Exchange
Notes, in each case on or prior to the date that is 60 days prior to the
Conversion Date.
5.15 Existing Notes Indenture
If any Existing Notes are outstanding, upon receipt by the
Company or any of its Subsidiaries of cash proceeds of any Asset Sale occurring
after the Closing Date, the Company or such Subsidiary will (i) apply the net
cash proceeds (if equal to or in excess of $10,000,000) thereof to either repay
the Bank Indebtedness and/or promptly make an offer to purchase the Existing
Notes in accordance with Section 4.13 of the Existing Notes Indenture and (ii)
thereafter, apply any remaining Net Cash Proceeds pursuant to Section
2.5.A(ii)(a).
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5.16 Redemption Documents
The Company will deliver to the Agents within one week of the
Closing Date drafts of Redemption Documents for the Existing Notes (which shall
be subject to such changes as the Agents and the Company shall approve in
connection with any Redemption (including, without limitation, any changes
reasonably requested or deemed necessary by the Agents or the Company)).
5.17 Post-Closing Obligations
The Company shall, and shall cause each of its Subsidiaries
to, obtain and deliver to the Collateral Agent and counsel to the Collateral
Agent the following:
(a) with respect to the Closing Date Mortgaged Real Property,
(i) as soon as possible but in no event later than 75 days after the
Closing Date, a Survey sufficient to cause the Title Company to issue
access, contiguity, survey and so-called comprehensive endorsements to
the title commitment and/or title policy covering the Closing Date
Mortgaged Real Property (the "Cast-Roll Commitment") and (ii) as soon
as possible but in no event later than 75 days after the Closing Date,
a revised Cast-Roll Commitment which omits the survey and unrecorded
easements exceptions contained therein, reflects any state of facts
shown on such Survey and contains such access, contiguity, survey and
comprehensive endorsements, and
(b) with respect to each Satisfaction Date Mortgaged Real
Property, (i) within 120 days after the Closing Date (but in no event
later than the Satisfaction Date), a Survey sufficient to cause the
Title Company to, on the Satisfaction Date, with respect to the marked
title insurance commitments attached hereto as Exhibit XIX, (y) issue
the endorsements issued with respect to each such Satisfaction Date
Mortgaged Real Property in connection with the offering of the
Existing Notes and (z) to remove the survey and unrecorded easements
exceptions from such marked commitments, and (ii) within 60 days after
the Closing Date (but in no event later than the Satisfaction Date), a
zoning endorsement or letter from the appropriate Governmental
Authority confirming that (x) such real property is in compliance with
or (y) such Governmental Authority is not aware of any noncompliance
with the applicable current zoning regulations and (iii) a tie-in
endorsement to the Cast Roll Commitment aggregating the amount of
title insurance with respect to the Closing Date Mortgaged Real
Property and the Satisfaction Date Mortgaged Real Property, a form of
which attached hereto as Exhibit XXI, together with a first loss
endorsement to the Cast Roll Commitment, and
(c) with respect to the Property formerly known as "Fuel Oil
Storage Tank and Surrounding Areas" located in Stark County,
Massillon, Ohio, prior to or within 120 days after the Closing Date
(but in no event later than the Satisfaction Date), the Company, as
tenant, shall enter into a lease agreement with Lukens Steel Company,
as landlord, which lease agreement shall (i) not prohibit the creation
and existence of a leasehold mortgage lien on the tenants' interest
thereunder and (ii) be recorded (or a memorandum thereof shall be
recorded) in the appropriate local real estate records office.
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SECTION 6 NEGATIVE COVENANTS
6A Prior to Conversion Date
The Company covenants and agrees that from the date hereof (whether or not
any Loans are outstanding so long as any Lender holds Purchased Notes) until the
earlier of (x) the Conversion Date or (y) the satisfaction in full of the Loans
and the Notes and all other Obligations due under this Agreement and the
redemption or repurchase by the Company of the Purchased Notes held by any
Lender and the Available Loan Commitments shall be zero, it will fully and
timely perform all covenants in this Section 6A, unless consent of the Required
Lenders is obtained.
6A.1 Indebtedness
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, Incur, or remain or become directly or
indirectly liable with respect to, any Indebtedness, except for the following
("Permitted Indebtedness"):
(i) the Company and the Subsidiary Guarantors may Incur and remain
liable with respect to the Obligations and the Guarantee Obligations;
(ii) the Company and the Subsidiary Guarantors may Incur and remain
liable with respect to the Bank Indebtedness in an aggregate principal
amount of Indebtedness not to exceed $150,000,000;
(iii) the Company and the Subsidiary Guarantors may Incur and remain
liable with respect to the Initial Notes, the Term Notes, the Take-Out
Notes and the Exchange Notes;
(iv) the Company and its Subsidiaries may Incur and remain liable with
respect to Interest Rate Protection Obligations entered into in order to
fix the effective rate of interest on any Indebtedness; provided that such
Interest Rate Protection Obligations are Incurred to hedge actual interest
rate exposure and not for the purpose of speculation;
(v) the Company and its Subsidiaries may Incur and remain liable with
respect to (a) Indebtedness of the Company to any of its Subsidiaries, and
(b) Indebtedness of any Subsidiary of the Company to the Company or any
Subsidiary of the Company arising from an Investment made pursuant to
Section 6A.4;
(vi) the Company and its Subsidiaries may remain liable with respect
to the Indebtedness which is existing on the Closing Date (including the
Existing Notes (but not with respect to any reissuances of Existing Notes
for the purposes of satisfying an Election hereunder except to the extent
permitted by the final proviso of this paragraph below) and the Waste
Revenue Bonds) and set forth on Schedule B annexed hereto, but not any
extensions, renewals or replacements of such Indebtedness, except (i)
renewals and extensions expressly provided for in the agreements
evidencing any such Indebtedness (other than the Existing Notes) as the
same are in effect on the Closing Date and (ii) refinancings and
extensions of any such Indebtedness (other than the Existing Notes) if
the Weighted Average Life to Maturity thereof is greater than or equal to
that of the Indebtedness being refi-
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nanced or extended; provided that such extending, renewal or replacement
Indebtedness shall not be (A) Indebtedness of an obligor that was not an
obligor with respect to the Indebtedness being extended, renewed or
refinanced, (B) in a principal amount which exceeds the Indebtedness being
renewed, extended or refinanced (plus unpaid accrued interest and premium
thereon) or (C) Incurred, created or assumed if any Default or Event of
Default has occurred and is continuing or would result therefrom; provided,
further, that Existing Notes purchased or otherwise acquired by the Company
may be reissued by the Company and remain outstanding as contemplated
hereby on any Bank Indebtedness Refinancing Date;
(vii) the Company and its Subsidiaries may Incur or remain liable with
respect to Indebtedness consisting of Capitalized Lease Obligations,
mortgage financings and purchase money Indebtedness Incurred by the Company
or any of its Subsidiaries prior to or within 270 days after a Capital
Expenditure permitted under Section 6A.10 in order to finance such Capital
Expenditure, and extensions, renewals and refinancings thereof in an
aggregate principal amount outstanding at any time not in excess of
$10,000,000; provided that any such refinancing Indebtedness shall not be
(A) Indebtedness of an obligor that was not an obligor with respect to the
Indebtedness being extended, renewed or refinanced or (B) in a principal
amount which exceeds the Indebtedness being renewed, extended or
refinanced;
(viii) the Company and its Subsidiaries may Incur and remain liable
with respect to Indebtedness in respect of surety bonds or other
obligations in favor of the PBGC entered into pursuant to the Merger
Agreement or the Settlement Agreement referred to in the Merger Agreement,
and not in respect of obligations violating any of the provisions of this
Agreement or the Bank Credit Agreement;
(ix) the Company and its Subsidiaries may Incur and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed at any time outstanding $10,000,000;
(x) the Company and its Subsidiaries may Incur and remain liable with
respect to Indebtedness which represents the assumption by the Company or
any such Subsidiary of Indebtedness of a Subsidiary in connection with the
permitted merger of such Subsidiary with or into the assuming Person or the
purchase of all or substantially all the assets of such Subsidiary;
(xi) the Company and its Subsidiaries may Incur and remain liable with
respect to Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or other similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business; provided that such Indebtedness is extinguished within two
Business Days of its Incurrence;
(xii) the Company and its Subsidiaries may Incur and remain liable
with respect to Indebtedness owed to (including obligations in respect of
letters of credit for the benefit of) any Person providing worker's
compensation, health, disability or other employee benefits or
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property, casualty or liability insurance to the Company or any of its
Subsidiaries, pursuant to reimbursement or indemnification obligations to
such Person;
(xiii) the Company and its Subsidiaries may Incur and remain liable
with respect to obligations in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations and trade-related
letters of credit, in each case provided in the ordinary course of
business, including those Incurred to secure health, safety and
environmental obligations in the ordinary course of business, and any
extension, renewal or refinancing thereof to the extent not provided to
secure the repayment of other Indebtedness and to the extent that the
amount of refinancing Indebtedness is not greater than the amount of
Indebtedness being refinanced;
(xiv) the Company and its Subsidiaries may Incur and remain liable for
all premium (if any), interest (including post-petition interest), fees,
expenses, indemnities, charges and additional or contingent interest on
obligations described in clauses (i) through (xiii) above; and
(xv) Indebtedness arising from Currency Agreements with respect to
Indebtedness or obligations of the Company or any Subsidiary entered into
to hedge actual currency exposure and not for the purpose of speculation.
6A.2 Liens
As of the Closing Date and each Satisfaction Date, the Company shall not,
nor shall it cause or permit any of its Subsidiaries to, directly or indirectly,
create, Incur, assume or permit or suffer to exist any Lien upon or with respect
to (i) any Property constituting Collateral as of the Closing Date or any such
Satisfaction Date in accordance with the provisions of Section 5.6 except for
any Lien of, or permitted by, the Security Document encumbering such Property
and Prior Liens applicable thereto and (ii) any Property not constituting
Collateral as of the Closing Date or any such Satisfaction Date except the
following (other than the Liens described in Section 6A.2(iii) if and when, in
accordance with the provisions of Section 5.6, such Liens are required to be
released in connection with and on any such Satisfaction Date) (collectively,
"Permitted Encumbrances"):
(i) Liens on property or assets of the Company and its Subsidiaries
existing on the date hereof and set forth in Schedule D annexed hereto;
provided that such Liens shall secure only those obligations which they
secure on the Closing Date (and extensions, renewals and refinancings of
such obligations permitted by Section 6A.1(vi), subject to Section 5.6) and
shall not subsequently apply to any other Property of the Company or any of
its Subsidiaries (other than pursuant to existing after-acquired property
clauses);
(ii) any Lien created under the Loan Documents and, subject to Section
5.6, any Lien securing the Existing Notes;
(iii) any Lien securing Bank Indebtedness in respect of the types of
assets pledged as of the date hereof under the Bank Security Agreement;
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(iv) any Lien existing on any property or asset of the Company or any
of its Subsidiaries prior to the acquisition thereof by the Company or any
of its Subsidiaries; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition and (ii) such Lien
does not apply to any other property or asset of the Company or any of its
Subsidiaries;
(v) Liens for taxes, assessments or other governmental charges or
levies not yet delinquent, or which are for less than $500,000 in the
aggregate, or which are being contested in compliance with Section 5.3 or
for property taxes on property that the Company or any of its Subsidiaries
has determined to abandon if the sole recourse for such Tax, assessment,
charge, levy or claim is to such property;
(vi) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, suppliers' or other like Liens on property of the Company or
any of its Subsidiaries arising in the ordinary course of business and
securing obligations that are not due and payable or that are being
contested in good faith by appropriate negotiations or proceedings and in
respect of which, if applicable, the Company or the relevant Subsidiary
shall have set aside on its books reserves in accordance with GAAP;
(vii) pledges and deposits made in the ordinary course of business by
the Company or any of its Subsidiaries in compliance with the Federal
Employers Liability Act or any other workmen's compensation, unemployment
insurance and other social security laws or regulations and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements in respect of such obligations;
(viii) deposits by the Company or any of its Subsidiaries to secure
the performance of tenders, bids, contracts (other than for Indebtedness),
leases (other than Capitalized Lease Obligations), statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature Incurred in the ordinary course of business, including those
Incurred to secure health, safety and environmental obligations in the
ordinary course of business;
(ix) zoning restrictions, easements, trackage rights, leases (other
than Capitalized Lease Obligations), licenses, special assessments,
rights-of-way, restrictions on use of Real Property and other similar
encumbrances Incurred by the Company or any of its Subsidiaries in the
ordinary course of business which, individually and in the aggregate, are
not substantial in amount and do not materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of the
business of the Company or any of its Subsidiaries;
(x) purchase money security interests in Real Property, improvements
thereto or equipment hereafter acquired (or, in the case of improvements,
constructed) by the Company or any of its Subsidiaries (including the
interests of vendors and lessors under conditional sale and title retention
agreements); provided that (a) such security interests secure Indebtedness
or Sale and Lease-Back Transactions permitted by Section 6A (including
Sections 6A.1, 6A.6 and 6A.11), (b) such security interests are Incurred,
and the Indebtedness secured thereby is
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created, within 270 days after such acquisition (or construction), (c) the
Indebtedness secured thereby does not exceed 100% of the cost of such Real
Property, improvements or equipment at the time of such acquisition (or
construction), including transaction costs Incurred by the Company or any
of its Subsidiaries in connection with such acquisition (or construction),
(d) such expenditures are permitted by this Agreement and (e) such security
interests do not apply to any other Property of the Company or any of its
Subsidiaries (other than to accessions to such Real Property, improvements
or equipment and provided that individual financings of equipment provided
by a single lender may be cross-collateralized to other financings of
equipment provided solely by such lender);
(xi) Liens consisting of interests of lessors under capital or
operating leases not prohibited by Section 6A.1 or 6A.6;
(xii) Liens securing judgments, decrees or orders against the Company
or any of its Subsidiaries, so long as such Lien is being contested in good
faith and is adequately bonded, any appropriate legal proceedings which may
have been duly initiated for the review of such judgment, decree or order
shall not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(xiii) any leases or subleases to other Persons of Properties owned or
leased by the Company or any of its Subsidiaries;
(xiv) any Lien arising by operation of law pursuant to Section 107(1)
of the CERCLA, 42 U.S.C. ss. 9607(1), or pursuant to analogous state law,
for costs or damages which are not yet due (by virtue of a written demand
for payment by a Tribunal) or which are being contested in compliance with
the standard set forth in Section 5.3, or on property that the Company or
any of the Company's Subsidiaries have determined to abandon if the sole
recourse for such costs or damages is to such property; provided that the
liability of the Company and its Subsidiaries with respect to the matter
giving rise to all such Liens shall not, in the reasonable estimate of the
Company (in light of all attendant circumstances, including the likelihood
of contribution by third parties), exceed $2,000,000;
(xv) Liens that are contractual rights of setoff (a) relating to the
establishment by the Company or any of its Subsidiaries of depository
relations with banks not given in connection with the Incurrence of
Indebtedness or (b) pertaining to pooled deposit and/or sweep accounts of
the Company and/or any of its Subsidiaries to permit satisfaction of
overdraft or similar obligations Incurred in the ordinary course of
business of the Company and its Subsidiaries;
(xvi) Liens securing obligations in respect of trade-related letters
of credit permitted under Section 6A.1 and covering the goods (or the
documents of title in respect of such goods) financed by such letters of
credit;
(xvii) the sale of accounts receivable in connection with collection
in the ordinary course of business;
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(xviii) construction Liens arising in the ordinary course of business,
including Liens for work performed for which payment has not been made,
securing obligations that are not due and payable or are being contested in
good faith by appropriate proceedings and in respect of which, if
applicable, the Company or the relevant Subsidiary shall have set aside on
its books reserves in accordance with GAAP;
(xix) Liens on assets of the Company and its Subsidiaries not
constituting Collateral securing Indebtedness to the extent permitted under
Section 6A.1(viii); provided that if any such Liens cover property on which
any such Collateral is located, the holders of such Liens shall have
entered into an intercreditor agreement satisfactory to the Agents;
(xx) Liens on assets of the Company and its Subsidiaries not
constituting Collateral, securing approximately $8,300,000 of severance
payments required to be funded into a "rabbi trust" upon a change in
control of the Company under the Bank Credit Agreement; and
(xxi) the replacement, extension or renewal of any Lien permitted by
clause (iii), (iv), (ix) or (xviii) above; provided that such replacement,
extension or renewal Lien shall not cover any property other than the
property that was subject to such Lien prior to such replacement, extension
or renewal; and provided, further, that the Indebtedness and other
obligations secured by such replacement, extension or renewal Lien are
permitted by this Agreement.
Notwithstanding any of the foregoing to the contrary, the Company shall
not, nor shall it cause or permit any of its Subsidiaries to, directly or
indirectly, create, Incur, assume or permit to exist any Lien on any item of
Property securing the obligations of the Company and its Subsidiaries under the
Bank Credit Agreement, the Existing Notes and the Existing Notes Indenture,
other than pursuant to clauses (i), (ii), (iii), (ix) and (xiv) and, to the
extent the creation and existence of any such Lien complies in all respects with
the form of Mortgage and form of Security Agreement attached hereto, as
applicable, clauses (vi), (vii) and (xiv), above.
6A.3 Dividends and Distributions
The Company shall not, nor shall it cause or permit any of its Subsidiaries
to, directly or indirectly declare or pay, directly or indirectly, any dividend
or make any other distribution (by reduction of capital or otherwise), whether
in cash, property, securities or a combination thereof, with respect to any
shares of its Capital Stock (other than dividends and distributions on the
Common Stock of the Company payable solely by the issuance of additional shares
of Common Stock of the Company) or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any of its Subsidiaries to
purchase or acquire) any shares of any class of its Capital Stock or set aside
any amount for any such purpose; provided that:
(a) any Subsidiary of the Company may declare and pay dividends to,
repurchase its Capital Stock from or make other distributions to the
Company or to any wholly-owned Subsidiary of the Company (or, in the case
of non-wholly owned Subsidiaries, to the Company or any Subsidiary and to
each other owner of Capital Stock of such Subsidiary on a pro
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rata basis (or more favorable basis from the perspective of the Company or
such Subsidiary) based on their relative ownership interests); and
(b) (i) so long as no Default or Event of Default has occurred and is
continuing, the Company may make distributions to Holdings to allow
Holdings to pay its operating and administrative expenses (including fees
permitted by Section 6A.7(ii)) and to make any scheduled payments of
interest due after July 15, 1999 under the credit agreement dated as of
September 8, 1998 among Holdings, the lenders named therein, Chase, as
administrative agent, and DLJ Capital Funding, Inc., as documentation
agent; provided that at the time of any such distribution the Company is
not in default under Section 6A.11 and (ii) the Company may make
distributions to Holdings in amounts equal to amounts required for Holdings
to pay taxes to the extent Holdings is liable for such taxes and such taxes
are attributable to the operations of the Company and its Subsidiaries;
provided, however, that the Company shall not make any such tax
distributions in excess of its and its Subsidiaries stand alone tax
liability in respect of such taxes.
6A.4 Investments
The Company shall not, nor shall it cause or permit any of its Subsidiaries
to, directly or indirectly, purchase, hold or acquire any Capital Stock,
evidences of Indebtedness or other securities of, make or permit to exist any
loans or advances to, or make or permit to exist any Investment or any other
interest in, any other Person, except:
(i) Investments of the Company and its Subsidiaries (a) existing on
the Closing Date in the Capital Stock of their respective Subsidiaries; (b)
by the Company or any of its Subsidiaries in any wholly-owned Subsidiary of
the Company (so long as such Subsidiary shall remain a wholly-owned
Subsidiary after giving effect to such Investment); and (c) by any
wholly-owned Subsidiary of the Company in any other wholly-owned Subsidiary
of the Company;
(ii) Investments in Cash Equivalents or Permitted Investments and
Investments that were Cash Equivalents or Permitted Investments when made;
(iii) Investments arising out of the receipt by the Company or any of
its Subsidiaries of non-cash consideration for the sale of assets permitted
under Section 6A.5;
(iv) intercompany loans permitted to be Incurred as Indebtedness under
Section 6A.1;
(v) (a) loans and advances to directors, officers and employees of the
Company or the Company's Subsidiaries not to exceed $600,000 in the
aggregate at any time outstanding and (b) advances of payroll payments and
expenses to such employees in the ordinary course of business;
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(vi) (a) accounts receivable arising and trade credit granted in the
ordinary course of business and any securities received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to
the extent reasonably necessary in order to prevent or limit loss and (b)
prepayments and other credits to suppliers made in the ordinary course of
business;
(vii) Interest Rate Protection Obligations permitted pursuant to
Section 6A.1(iv);
(viii) Investments of the Company and its Subsidiaries, other than
Investments listed in paragraphs (i) through (vii) of this Section,
existing on the Closing Date and set forth on Schedule E annexed hereto;
(ix) Investments resulting from pledges and deposits referred to in
Section 6A.2(vi) or (vii);
(x) subject to Section 5.6, Investments of the Company and the
Company's Subsidiaries consisting of repurchases of the Existing Notes
pursuant to the Debt Tender Offer or otherwise; and
(xi) Investments, loans or advances of the Company and the Company's
Subsidiaries in addition to those permitted by paragraphs (i) through (x)
not exceeding in the aggregate $500,000 at any time outstanding.
6A.5 Mergers, Consolidations, Sales of Assets and Acquisitions
The Company shall not, nor shall it cause or permit any of its Subsidiaries
to, directly or indirectly, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its assets (whether now owned or
hereafter acquired), or any Capital Stock of the Company or any of its
Subsidiaries, or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person, except that this Section shall not prohibit:
(i) the purchase and sale of inventory in the ordinary course of
business by the Company or any of its Subsidiaries or the acquisition by
the Company or any of its Subsidiaries of any asset of any Person in the
ordinary course of business, in each case subject to Section 6A.4;
(ii) if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be
continuing, the merger or consolidation of any Subsidiary of the Company
into or with any wholly-owned Subsidiary of the Company in a transaction in
which the surviving entity is a wholly-owned Subsidiary of the Company
(which shall be a domestic Subsidiary if the non-surviving Person shall be
a domestic Subsidiary) and, in each case, no Person other than the Company
or a wholly-owned Subsidiary of the Company receives any consideration;
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(iii) Liens permitted by Section 6A.2 and Sale and Lease-Back
Transactions permitted by Section 6A.6;
(iv) Investments permitted by Section 6A.4;
(v) subject to Section 6A.7, sales, leases or transfers (a) from the
Company or any Subsidiary of the Company to the Company or to a domestic
wholly-owned Subsidiary of the Company or (b) from any foreign Subsidiary
of the Company to any foreign wholly-owned Subsidiary of the Company or to
the Company;
(vi) sales, leases or other dispositions of equipment or Real Property
of the Company or its Subsidiaries determined by the Board of Directors or
senior management of the Company to be no longer useful or necessary in the
operation of the business of the Company or its Subsidiaries;
(vii) sales, leases or other dispositions of inventory of the Company
and any Subsidiary of the Company not made in the ordinary course of
business determined by the Board of Directors or senior management of the
Company to be no longer useful or necessary in the operation of the
business of the Company and its Subsidiaries;
(viii) sales, leases or other dispositions of property by the Company
and the Subsidiaries of the Company having a net book value not in excess
of $1,000,000 in the aggregate during the term of this Agreement; provided
that no sale may be made of the Capital Stock of any Subsidiary of the
Company except the Capital Stock of a Subsidiary of the Company in
connection with the sale of all its outstanding Capital Stock that is held
by the Company and any other Subsidiary of the Company; and
(ix) the sale of the Baltimore Property and the Harrison Property
substantially in accordance with the Letter of Intent or on such other
terms as are not materially adverse to the Lenders in comparison to the
terms of the Letter of Intent;
provided that the proceeds from any Asset Sale permitted by the foregoing shall
consist of at least 90% cash and/or Cash Equivalents and the Net Cash Proceeds
thereof shall be applied in accordance with Section 2.5A(ii)(a).
6A.6 Sale and Lease-Back Transactions
The Company shall not, nor shall the Company cause or permit any of it
Subsidiaries to, enter into any arrangement, directly or indirectly, with any
Person whereby it shall sell or transfer any property, real or Personal, used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property which it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred (a "Sale and Lease-Back Transaction"), other than any Sale and
Lease-Back Transaction that involves a sale by the Company or a Subsidiary of
the Company solely for cash consideration on terms not less favorable than would
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prevail in an arm's-length transaction and that results in a Capitalized Lease
Obligation and Liens associated therewith permitted under Sections 6A.1(vii) and
6A.2(x).
6A.7 Transactions with Affiliates
(i) The Company shall not, nor shall it cause or permit any of its
Subsidiaries to, directly or indirectly, sell or transfer any property or assets
to, or purchase or acquire any property or assets from, or otherwise engage in
any other transaction with, any of its Affiliates or any known direct or
indirect holder of 10% or more of any class of Capital Stock of the Company,
unless such transaction forms a part of the Transactions or is (a) otherwise
permitted under this Agreement and (b) upon terms no less favorable to the
Company or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's-length transaction with a Person which was not an Affiliate;
provided that the foregoing restriction shall not apply to (A) the payment of
the monitoring and management fees referred to in paragraph (ii) below or (B)
the indemnification of officers and directors of the Company and its
Subsidiaries in accordance with customary practice.
(ii) The foregoing paragraph shall not prohibit, to the extent otherwise
permitted under this Agreement, (a) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock ownership plans
approved by the Board of Directors of the Company, (b) loans or advances to
directors, officers and employees of the Company or any of its Subsidiaries in
accordance with Section 6A.4(v), (c) transactions among the Company and
wholly-owned Subsidiaries of the Company and transactions among wholly-owned
Subsidiaries of the Company otherwise permitted by this Agreement, (d) the
payment of fees and indemnities to directors, officers and employees of the
Company and the Subsidiaries of the Company in the ordinary course of business,
(e) transactions pursuant to permitted agreements in existence on the Closing
Date and set forth on Schedule I annexed hereto, (f) any employment agreements
entered into by any of the Company or any of the Subsidiaries of the Company in
the ordinary course of business, (g) dividends and repurchases permitted under
Section 6A.3, (h) any purchase by the Principals of Capital Stock of the
Company, and (i) (x) prior to the Conversion Date, the accrual (but not the
payment) of, and (y) after the Conversion Date and so long as no Default or
Event of Default has occurred and is continuing, the
payment of, (A) acquisition, financial and other transaction fees and expenses
consistent with Blackstone's customary practice with respect to portfolio
companies and (B) annual management, consulting,
monitoring and advisory fees and related expenses to Blackstone, Veritas and
their Affiliates not to exceed $1,000,000 in the aggregate for each annual
period.
6A.8 Business Activities
The Company shall not, nor shall the Company cause or permit any of its
Subsidiaries to, directly or indirectly engage at any time in any business or
business activity other than any business or business activity conducted by it
on the Closing Date and any business or business activities incidental or
related thereto and, the performance of its Obligations under and in connection
with the Loan Documents and under the Stockholders Agreement executed in
connection with the Merger Agreement and other agreements contemplated thereby
and actions required by law to maintain its status as a corporation.
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6A.9 Material Agreements
The Company shall not, nor shall it cause or permit any of its Subsidiaries
to, directly or indirectly:
(i) (a) make any optional payment, retirement, repurchase or
redemption on account of the principal of the Existing Notes or Waste
Revenue Bonds, or directly or indirectly prepay or defease any such
Indebtedness prior to the stated maturity date of such Indebtedness, (b)
make any optional payment of any such Indebtedness that would violate the
terms of this Agreement or of such Indebtedness, any agreement or document
evidencing, related to or securing the payment or performance of such
Indebtedness or any subordination agreement or provision applicable to such
Indebtedness or (c) pay in cash any amount in respect of such Indebtedness
that may at the Company's option be paid in kind thereunder; provided that
the Existing Notes may be retired, repurchased or redeemed subject to
Sections 5.6 and 5.15;
(ii) amend or modify in any manner materially adverse to the Lenders,
or grant any waiver or release under or terminate in any manner (if such
action shall be materially adverse to the Lenders), (a) the certificate or
articles of incorporation, bylaws or other organizational document in any
material respect of the Company or any of its Subsidiaries, (b) the
Stockholders Agreement or (c) the Collective Bargaining Agreement;
(iii) amend or modify in any manner materially adverse to the Lenders,
or grant any waiver or release under or terminate in any manner (if such
action shall be materially adverse to the Lenders) the terms of the
instruments governing the Existing Notes (other than to comply with
applicable law), or any Indebtedness existing on the date hereof other than
the Bank Credit Agreement;
(iv) permit any of its Subsidiaries to enter into any agreement or
instrument that by its terms restricts the payment of dividends or the
making of cash advances by such Subsidiary to the Company or any Subsidiary
of the Company that is a direct or indirect parent of such Subsidiary other
than those arising under any Loan Document, the Bank Credit Agreement, or
the Existing Notes Indenture.
6A.10 Capital Expenditures
The Company shall not, and shall not permit any of its Subsidiaries to,
make Capital Expenditures on or after the Closing Date exceeding $35,000,000 for
the 12 months following the Closing Date.
6A.11 Fixed Charge Coverage Ratio
The Company shall not permit its Consolidated Fixed Charge Coverage Ratio
as of the end of any fiscal quarter ending on or after June 30, 1999 to be less
than 2.00:1.
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6B Following the Conversion Date
The Company covenants and agrees that from the Conversion Date until the
satisfaction in full of the Loans and the Notes and all other Obligations due
under this Agreement it will fully and timely perform all of the following
covenants, unless consent of the Required Lenders is obtained:
(i) all of the covenants in Sections 4.9, 4.10, 4.11, 4.12, 4.14,
4.16, 4.17, 4.18, 4.19, 4.20, 4.22 and 5.1 of the Indenture, all of which
are incorporated by reference herein; and
(ii) all of the covenants in Sections 6A.8 and 6A.9 of this Agreement.
With respect to all of the covenants referred to in clause (i) of this
Section 6B, all capitalized terms used therein shall have the meanings ascribed
to such terms in the Indenture, all of which are incorporated by reference
herein.
SECTION 7 EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur and be continuing:
7.1 Failure To Make Payments When Due
Failure to pay any installment of principal of the Loans when due, whether
at stated maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest on the Loans or any other amount due under this
Agreement or an Assignment Agreement within five days or more after the date
due; or
7.2 Default in Other Agreements
Either (x) failure of the Company or any of its Subsidiaries to pay any
principal, interest or premium, whether at stated maturity or otherwise, on one
or more issues of Indebtedness of the Company or of any of its Subsidiaries
(other than Indebtedness referred to in Section 7.1) or (y) breach or default by
the Company or any of its Subsidiaries with respect to any other term of any one
or more issues of Indebtedness of the Company or of any of its Subsidiaries or
any agreement or instrument evidencing or securing such Indebtedness and, such
default or breach results in the acceleration of that Indebtedness prior to its
stated maturity and, in either the case of clause (x) and (y), the principal
amount of such Indebtedness and all other such Indebtedness of the Company and
its Subsidiaries in respect of which there is a failure to pay principal or
interest or under which there is a breach or default or which has been so
accelerated equals $7,500,000 or more; or
7.3 Breach of Certain Covenants
A. The occurrence of a Change of Control prior to the Conversion Date; or
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B. Failure of the Company to perform or comply with any covenant, term or
condition contained in Section 2.5A(iv), 4.11 or 5.2(i) (with respect to the
Company); or
7.4 Breach of Warranty
Any representation, warranty or certification made by the Company in any
Loan Document or in any statement or certificate at any time given by the
Company in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false or incorrect in any material respect on the date as of
which made or deemed made; provided that, on or prior to the earlier of the
repurchase or retirement by the Company of all Existing Notes or the date after
the Alternate Tender Offer Closing Date (the "Expiry Date"), if (x) such false
or incorrect representation, warranty or certification does not involve
intentional fraud or relate solely to a matter covered by Sections 4.1(i) (with
respect to the Company, but not with respect to good standing), 4.2 (with
respect to the Company), 4.4 (with respect to the Company and Holdings) and 4.25
(in respect of Collateral with a fair market value of at least $250,000) (in any
such case, the "Applicable Breach") and (y) the facts, circumstances and/or
conditions (in any such case, the "Applicable Conditions") giving rise to the
Applicable Breach are capable of being altered or eliminated within 30 days so
that the Applicable Breach would no longer exist, then an Event of Default under
this Section 7.4 shall not be deemed to have occurred until the earlier of (1)
the Expiry Date or (2) the 30th day after the date that an Officer of the
Company shall have become actually aware of the Applicable Breach and only then
to the extent that, Applicable Conditions shall not have been altered or
eliminated so that the Applicable Breach no longer exists; or
7.5 Other Defaults Under This Agreement or Other Loan Documents
The Company shall default in the performance of or compliance with any
covenant, term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 7.1, 7.3, 7.4, 7.10 or 7.14);
provided that if (x) such default is capable of being cured or remedied within
30 days and (y) the default has not resulted from bad faith by the Company or
any of its Subsidiaries, then an Event of Default shall not be deemed to have
occurred until the 30th day after the date of written notice of such default
from the holder or holders of not less than 25% in aggregate principal amount of
the Loans then outstanding if such default shall not have been remedied or
waived in accordance with this Agreement; or
7.6 Involuntary Bankruptcy; Appointment of Custodian, Etc.
A court of competent jurisdiction enters a Bankruptcy order under any
Bankruptcy Law that:
(A) is for relief against the Company or any of its Subsidiaries in an
involuntary case or proceeding, or
(B) appoints a Custodian of the Company or any of its Subsidiaries for
all or substantially all of its properties, or
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(C) orders the liquidation of the Company or any of its Subsidiaries,
and in each case the order or decree remains unstayed and in effect for 60
days; or
7.7 Voluntary Bankruptcy; Appointment of Custodian, Etc.
The Company or any of its Subsidiaries pursuant to or within the meaning of
any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of a Bankruptcy Order for relief against it
in an involuntary case or proceeding, or
(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
files a proposal or scheme of arrangement involving the rescheduling or
composition of its indebtedness, or
(E) consents to the filing of a petition in bankruptcy against it, or
(F) shall generally not pay its debts when such debts become due or
shall admit in writing its inability to pay its debts generally; or
7.8 Judgments and Attachments
Any money judgment, writ or warrant of attachment, or similar process
involving in any individual case or in the aggregate at any time an amount in
excess of $500,000 (to the extent not covered by third-party insurance as to
which the insurance company has not denied coverage) shall be entered or filed
against the Company or any of its Subsidiaries or any of their respective
properties or assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 30 days or in any event later than five days prior to
the date of any proposed sale thereunder; or
7.9 Dissolution
Any order, judgment or decree shall be entered against the Company or any
of its Subsidiaries decreeing the dissolution or split-up of the Company or such
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
7.10 Loan Documents
(i) Any Loan Document or any material provision thereof shall cease to be
in full force or effect (other than in accordance with its express terms or as a
result of the actions of any Agent or Lender), or (ii) any Guarantor or any
Person acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under its Guarantee and such Guarantee or Guarantor
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would be material; or (iii) the Company or any of its Subsidiaries or any other
Person shall deny or disaffirm the security interests created by any of the
Security Documents; or
7.11 Foreclosure
The agent under the Bank Credit Agreement or the trustee or the collateral
agent for the Existing Notes or any other party entitled to act thereunder
commences judicial proceedings to foreclose on the collateral securing the Bank
Indebtedness or the Existing Notes or exercises any right under applicable Law
or any instrument evidencing a security interest or other encumbrance in respect
of such collateral to take ownership or effect the transfer of such collateral
in lieu of foreclosure; or
7.12 ERISA
(i) A Reportable Event or Reportable Events, or a failure to make a
required installment or other payment (within the meaning of Section 412(n)(1)
of the Code), shall have occurred with respect to any Plan or Plans, (ii) a
trustee shall be appointed by a United States district court to administer any
Plan or Plans, (iii) the PBGC shall institute proceedings (including giving
notice of intent thereof) to terminate any Plan or Plans, (iv) the Company or
any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer
Plan that it has incurred Withdrawal Liability to such Multiemployer Plan and
the Company or such ERISA Affiliate does not have reasonable grounds for
contesting such Withdrawal Liability or is not contesting such Withdrawal
Liability in a timely and appropriate manner, (v) the Company or any ERISA
Affiliate shall have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, (vi) the Company or any ERISA Affiliate shall
engage in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (vii) any other similar event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vii) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; provided that, on or prior to the Expiry Date, an event
referred to in the foregoing clauses (other than clause (iii)) shall not be
deemed to be an Event of Default until the earlier of (1) the Expiry Date or (2)
the 30th day after the date of such event written notice of such default from
the holder or holders of not less than 25% in aggregate principal amount of the
Loans then outstanding such default shall not have been remedied or waived in
accordance with this Agreement; or
7.13 Collective Bargaining Agreement
The Collective Bargaining Agreement shall cease to be in effect; or
7.14 Security Documents
Any Security Document shall cease to be in full force and effect, or shall
cease to give the Collateral Agent the Liens, rights, powers and privileges
purported to be created thereby, in favor of the Collateral Agent, superior to
and prior to the rights of all third Persons and subject to no Liens other than
Prior Liens, in each case in respect of Collateral with a fair market value of
at least $250,000; or
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7.15 Satisfaction Date
(i) The Company or its Subsidiaries fail to deliver to the Collateral Agent
all documentation and take all action required hereunder to grant to the
Collateral Agent (for the benefit of the Secured Parties) a perfected first
priority Lien on and security interest in (subject only to applicable Prior
Liens) any Collateral on the applicable Satisfaction Date as contemplated by the
terms of this Agreement or (ii) the agent under the Bank Credit Agreement or the
Existing Notes Trustee or any other party entitled to act thereunder fails, as
of the applicable Satisfaction Date, to release its respective interest in the
collateral (other than, with respect to the Bank Indebtedness, inventory,
accounts receivable and related intangibles) securing the Bank Indebtedness or
the Existing Notes, as applicable, in a manner reasonably satisfactory to the
Collateral Agent;
THEN (i) upon the occurrence of any Event of Default described in the
foregoing Sections 7.6, 7.7 or 7.9, all of the unpaid principal amount of and
accrued interest on the Loans and all other outstanding Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by the Company, and the commitments of the Lenders hereunder shall
thereupon terminate, and (ii) upon the occurrence of any other Event of Default,
the Agents shall, upon written notice of the holder or holders of at least 25%
in aggregate principal amount of the Loans then outstanding, by written notice
to the Company, declare all of the unpaid principal amount of and accrued
interest on the Loans and all other outstanding obligations to be, and the same
shall forthwith become, due and payable, and the obligations of the Lenders
hereunder shall thereupon terminate (except to the extent limited below);
provided, however, that if any declaration of acceleration under this Agreement
occurs solely because an Event of Default set forth in Section 7.2 has occurred
and is continuing, such declaration of acceleration shall be automatically
annulled if the holders of the Indebtedness which is the subject of such Event
of Default have rescinded their declaration of acceleration in respect of such
Indebtedness within thirty days of such acceleration of such Indebtedness and
the Agents have received written notice thereof within such time and if no other
Event of Default has occurred during such thirty-day period which has not been
cured or waived in accordance with this Agreement. Nevertheless, if at any time
after acceleration of the maturity of the Loans, the Company shall pay all
arrears of interest and all payments on account of the principal thereof which
shall have become due otherwise than by acceleration (with interest on principal
and, to the extent permitted by law, on overdue interest, at the rates specified
in this Agreement or the Notes) and all Defaults and Events of Default (other
than non-payment of principal of and accrued interest on the Loans and the Notes
due and payable solely by virtue of acceleration) shall be remedied or waived
pursuant to Section 10.6, then the Agents shall, upon written notice of the
holders of a majority in aggregate principal amount of the Loans then
outstanding, by written notice to the Company rescind and annul the acceleration
and its consequences; but such action shall not affect any subsequent Default or
Event of Default or impair any right consequent thereon. Notwithstanding
anything herein to the contrary, the Lenders' rights of acceleration under
clause (ii) above shall not be deemed waived solely by reason of Lenders making
Loans available to the Company after the occurrence of a Default or Event of
Default. In addition, notwithstanding anything to the contrary, until after the
Alternate Tender Offer Closing Date, the obligations and the commitments to make
Subsequent Loans to fund the Alternate Tender Offer shall not be relieved by
reason of a Default or Event of Default except to the extent expressly set forth
in Section 3.1B.A.
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SECTION 8 THE AGENTS
8.1 Appointment
Each Lender hereby irrevocably designates and appoints Chase, DLJ and
BankBoston as Agents of such Lender (such term to include Chase acting as
Administrative Agent hereunder and Collateral Agent under the Loan Documents) to
act as specified herein and in the other Loan Documents, and each Lender hereby
irrevocably authorizes Chase, DLJ and BankBoston as the Agents to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agents by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Agents agree to act as such upon the express conditions contained in this
Section 8. Notwithstanding any provision to the contrary elsewhere in this
Agreement or in any other Loan Document, the Agents shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Loan
Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agents. The
provisions of this Section 8 are solely for the benefit of the Agents and the
Lenders, and neither the Company nor any of its Subsidiaries shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing their functions and duties under this Agreement, the Agents shall act
solely as agents of the Lenders and the Agents do not assume and shall not be
deemed to have assumed any obligation or relationship of agent or trust with or
for the Company or any of its Subsidiaries.
8.2 Delegation of Duties
The Agents may execute any of their duties under this Agreement or any
other Loan Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agents shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by them with reasonable care except to the
extent otherwise required by Section 8.3.
8.3 Exculpatory Provisions
None of the Agents nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by the Company or any of its Subsidiaries or any of their
respective officers contained in this Agreement, any other Loan Documents, or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for any failure of the Company or any of its Subsidiaries
or any of their respective officers to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or the other Loan
Documents, or to inspect the properties, books or
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records of the Company or any of its Subsidiaries. The Agents shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document 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 the Agents to
the Lenders or by or on behalf of the Company or any of its Subsidiaries to the
Agents 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 as to the use of the proceeds of
the Loans or of the existence or possible existence of any Default or Event of
Default.
8.4 Reliance by Agents
The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation believed by them to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company or any of its Subsidiaries), independent
accountants and other experts selected by the Agents. The Agents shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless they shall first receive such advice or concurrence
of the Required Lenders (or, after the Conversion Date, in the case of the
Collateral Agent, the Requisite Obligees) as they deem appropriate or they shall
first be indemnified to their satisfaction by the Lenders against any and all
liability and expense which may be Incurred by them by reason of taking or
continuing to take any such action. As between the Agents and the Lenders, the
Agents shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders (or, after the Conversion Date, in the case of
the Collateral Agent, the Requisite Obligees), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
8.5 Notice of Default
The Agents shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agents have
actually received notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agents receive such a
notice, the Agents shall give prompt notice thereof to the Lenders. Except as
otherwise set forth in Section 8.10, the Agents shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided that as between the Agents and the Lenders unless
and until the Agents shall have received such directions, the Agents may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as they shall deem advisable in
the best interests of the Lenders.
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8.6 Non-Reliance on Agents and Other Lenders
Each Lender expressly acknowledges that none of the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Agents hereinafter taken, including any review of the affairs of the Company
or any of its Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agents to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon the Agents or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Company or its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agents or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Company and its Subsidiaries. The Agents shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial and other
condition, prospects or creditworthiness of the Company or any of its
Subsidiaries which may come into the possession of the Agents or any of their
officers, directors, employees, agents, attorneys-in-fact or affiliates.
8.7 Indemnification
The Lenders agree to indemnify each Agent in its capacity as such ratably
according to their respective "percentages" as used in determining the Required
Lenders at such time, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, Incurred by or asserted against any Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Loan Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby of any action taken or omitted to be taken
by the Agents under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Company or any of its
Subsidiaries; provided that no Lender shall be liable to any Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence or willful misconduct of such Agent. If any
indemnity furnished to the Agents for any purpose shall, in the opinion of the
Agents, be insufficient or become impaired, the Agents may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section 8.7 shall
survive the payment of all Obligations.
8.8 Agents in Their Individual Capacity
The Agents and their Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Company and its Subsidiaries
as though the Agents were
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not the Agents hereunder. With respect to the Loans made by them and all
Obligations owing to them, the Agents shall have the same rights and powers
under this Agreement as any Lender and may exercise the same as though they were
not the Agents and the terms "Lender" and "Lenders" shall include the Agents in
their individual capacity.
8.9 Resignation of Any Agent; Successor Agent
Except as otherwise set forth in Section 8.10, any Agent may resign as an
Agent upon 20 days' notice to the Lenders and the Company. Except as otherwise
set forth in Section 8.10, upon the resignation of an Agent, the Required
Lenders shall appoint from among the Lenders a successor agent which is a bank
or a trust company for the Lenders subject to prior approval by the Company
(such approval not to be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of such Agent,
and the term "Agent" shall include such successor agent effective upon its
appointment, and the resigning Agent's rights, powers and duties as an Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. After the resignation
of any Agent hereunder, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
8.10 Collateral Agent
By acceptance of the benefits of this Agreement and the Security Documents
each Lender and Agent, as applicable, (i) consents to the appointment of Chase
as the Collateral Agent hereunder and under the Security Documents and grants
the Collateral Agent all rights and powers necessary for the Collateral Agent to
perform its obligations hereunder and under the Security Documents, (ii)
confirms that the Collateral Agent shall have the authority to act as the
exclusive agent of such Lender or Agent, as applicable, to make claims under and
otherwise act in all respects as the beneficiary of and for enforcement of any
remedies under or with respect to any Security Document and the giving or
withholding of any consent or approval relating to any Collateral or the
Security Documents or any obligations with respect thereto or otherwise take any
action on behalf of such Lenders and Agents pursuant to and in accordance with
this Agreement or the Security Documents, (iii) acknowledges that the
transactions contemplated by this Agreement will by their nature require the
execution and delivery of certain amendments, modifications and supplements to
the Loan Documents, and each Lender and Agent hereby agrees that the Collateral
Agent is authorized, to execute, deliver, file and record any such amendment,
modification or supplement necessary or desirable for any purpose not
inconsistent with the terms of this Agreement or any other Loan Document or to
cure any ambiguity or to correct or supplement any provision contained herein or
in any other Loan Document which may be defective or inconsistent with any other
provision contained herein or in any other Loan Document, or to make such other
provisions in regard to matter or questions arising under this Agreement or any
other Loan Document which shall not be inconsistent with the provisions of this
Agreement or other Loan Document and which shall not adversely affect the
interests of the Lenders or the Agents and (iv) agrees that such Lender or
Agent, as applicable, shall not give any approval or consent relating to or
bring any suit, action or proceeding to enforce any term or provision of the
Security Documents or to enforce any of its rights in respect of the Collateral,
except through the Collateral Agent in accordance with this Agreement and the
Security Documents.
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Prior to the Conversion Date, the Collateral Agent shall make such demands
and give such notices under any of the Security Documents, and to take such
action to enforce the Security Documents and to foreclose upon, collect, dispose
of or release the Collateral or any portion thereof, in each case as may be
directed by the Required Lenders, except as otherwise set forth above. On or
after the Conversion Date, the Collateral Agent shall take the actions
contemplated in the immediately preceding sentence, in each case as directed by
the Requisite Obligees, except as otherwise set forth above. The Collateral
Agent shall consent to amendments, modifications or waivers to any of the
Security Documents as directed in accordance with Section 10.6.
The Collateral Agent may at any time, prior to the Conversion Date, request
directions from the Required Lenders or, on or after the Conversion Date, the
Requisite Obligees with respect to the Security Documents as to any course of
action or other matter relating hereto or to such Security Documents. On or
after the Conversion Date, directions given by the Requisite Obligees to the
Collateral Agent shall be binding on all Secured Parties for all purposes
(provided such directions do not conflict with the express terms of any Loan
Document). As to any matters not expressly provided for by the Loan Documents,
the Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with instructions signed, at all times
prior to the Conversion Date, by the Required Lenders, and at all times on or
after the Conversion Date, by the Requisite Obligees, and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders or the
Secured Parties, as applicable. The Collateral Agent shall not be required to
take any action that is in its opinion contrary to Law or to the terms of any
Loan Document, or which would in its opinion subject it or any of its officers,
employees or directors to liability.
Each Lender and Agent shall, upon request of the Collateral Agent, execute
and deliver such further instruments and do such further acts as may be
reasonably necessary or appropriate to carry out more effectively the provisions
of this Section 8.10 and the other provisions of this Agreement and the Security
Documents relating to the intercreditor arrangements among the Secured Parties.
Any and all amounts actually received (i) by the Collateral Agent in
connection with the enforcement of the Security Documents, (ii) in accordance
with the Indenture or (iii) by the Collateral Agent as agent for the Secured
Parties in connection with a distribution in a bankruptcy, insolvency or similar
proceeding, including, without limitation, the proceeds of any collection, sale
or other disposition of the Collateral or any portion thereof, shall be applied
promptly by the Collateral Agent as provided for in the respective Security
Documents. Until such amounts are so applied, the Collateral Agent shall hold
such amounts in its custody in accordance with its regular procedures for
handling deposited funds.
Prior to the Conversion Date, the Collateral Agent may resign (and a
successor Collateral Agent shall be appointed) in accordance with Section 8.9.
On or after the Conversion Date, the Collateral Agent may at any time, by giving
written notice to the Company and the Secured Parties, resign and be discharged
of the responsibilities hereby created, such resignation to become effective
upon (i) the appointment of a successor Collateral Agent by the Requisite
Obligees and (ii) the acceptance of such appointment by such successor
Collateral Agent.
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SECTION 9 GUARANTEE
9.1 Unconditional Guarantee
Each Guarantor hereby unconditionally, jointly and severally, guarantees
(such guarantee to be referred to herein as the "Guarantee"), to each of the
Lenders and to the Agents and their respective successors and assigns, that: (i)
the principal of and interest on the Loans 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 Loans and all other
Obligations of the Company to the Lenders or the Agents under the Loan Documents
will be promptly paid in full or performed, all in accordance with the terms of
the Loan Documents; and (ii) in case of any extension of time of payment or
renewal of any of the Loans 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 9.4. Each Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Loans or this
Agreement, the absence of any action to enforce the same, any waiver or consent
by any of the Lenders 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 Loans, this Agreement and in this Guarantee. If any
Lender or the Agents are 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 Agents or such Lender, 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 Lenders and the Agents, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 7 for
the purposes 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 Section 7, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Guarantor for the purpose of this
Guarantee.
9.2 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.
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9.3 Release of a Guarantor
Upon the sale or disposition (whether by merger, stock purchase, asset sale
or otherwise) of a Subsidiary Guarantor (or all or substantially all its assets)
to an entity which is not a Subsidiary of the Company and which sale or
disposition is otherwise in compliance with the terms of this Agreement, such
Subsidiary Guarantor shall be deemed released from all obligations under this
Section 9 without any further action required on the part of the Agents or any
Lender.
The Agents shall 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 9.3. Any Guarantor not so
released remains liable for the full amount of principal of and interest on the
Loans as provided in this Section 9.
9.4 Limitation of Guarantor's Liability
Each Guarantor and by its acceptance hereof each of the Lenders 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 any 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 Lenders 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 9.6, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
9.5 Guarantors May Consolidate, Etc., on Certain Terms
(a) Nothing contained in this Agreement or in the Loans shall prevent any
consolidation or merger of a Guarantor with or into the Company or, in the case
of a Subsidiary Guarantor, another Subsidiary 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, in the case of a Subsidiary
Guarantor, another Subsidiary Guarantor. Upon any such consolidation, merger,
sale or conveyance, the Guarantee given by such non-surviving Guarantor shall no
longer have any force or effect.
(b) Except as set forth in Section 6A.7, nothing contained in this
Agreement or in the Loans shall prevent any consolidation or merger of a
Guarantor with or into a corporation or corporations other than the Company or
another Guarantor (whether or not affiliated with the Guarantor); provided that,
subject to Sections 9.3 and 9.5(a), (i) immediately after such transaction, and
giving effect thereto, no Default or Event of Default shall have occurred as a
result of such transaction and be continuing, and (ii) upon any such
consolidation, merger, sale or conveyance, the Guarantee of such Guarantor set
forth in this Section 9, and the due and punctual performance and observance of
all of the covenants and conditions of this Agreement and the Security Documents
to be performed by such Guarantor, shall be expressly assumed (in the event that
the Guarantor is not the surviving cor-
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poration in the merger), by supplemental indenture satisfactory in form to the
Agents, executed and delivered to the Agents, by the corporation formed by such
consolidation, or into which the Guarantor shall have merged, or by the
corporation that shall have acquired such property. In the case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture executed and delivered to the
Agents and satisfactory in form to the Agents of the due and punctual
performance of all of the covenants and conditions of this Agreement to be
performed by the Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor.
9.6 Contribution
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses Incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Obligations. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of (x) the amount by which the fair
value of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities Incurred or assumed on such date),
but excluding liabilities under the Guarantee, of such Guarantor at such date
and (y) the amount by which the present fair salable value of the assets of such
Guarantor at such date exceeds the amount that will be required to pay the
probable liabilities of such Guarantor on its debts (after giving effect to all
other fixed and contingent liabilities Incurred or assumed on such date and
after giving effect to any collection from any Subsidiary of such Guarantor in
respect of the obligations of such Subsidiary under the Guarantee), excluding
debt in respect of the Guarantee of such Guarantor, as they become absolute and
matured.
9.7 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 its
Guarantee and this Agreement, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any Lender 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 Loans 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 Lenders, and shall forthwith be paid to the Agents for
the benefit of such Lenders to be credited and applied upon the Loans, whether
matured or unmatured, in accordance with the terms of this Agreement. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Agreement and that the waiver
set forth in this Section 9.7 is knowingly made in contemplation of such
benefits.
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9.8 Evidence of Guarantee
To evidence their guarantees to the Lenders set forth in this Section 9,
each of the Guarantors hereby agrees to execute the notation of Guarantee in
substantially the form included in Exhibit X annexed hereto. Each such notation
of Guarantee shall be signed on behalf of each Guarantor by two Officers, or an
officer and an Assistant Secretary or one Officer shall sign and one officer or
an Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to such notation of
Guarantee.
9.9 Waiver of Stay, Extension or Usury Laws
Each Guarantor covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive such Guarantor from performing its
Guarantee 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) each Guarantor hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Agents, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 10 MISCELLANEOUS
10.1 Representation of the Lenders
Each Lender hereby represents that it is a commercial lender which makes
loans in the ordinary course of its business and that it will make the Loans
hereunder for its own account or the account of its affiliates in the ordinary
course of such business.
10.2 Participations in and Assignments of Loans and Notes
A. Each Lender shall have the right at any time to sell, assign, transfer
or negotiate all or any portion of its Notes, or its Loan Commitment to one or
more Eligible Assignees. In the case of any sale, transfer or negotiation of all
or part of the Notes or any Loan Commitment authorized under this Section 10.2A,
the assignee, transferee or recipient shall become a party to this Agreement as
a Lender by execution of an Assignment and Assumption Agreement substantially in
the form of Exhibit XI hereto; provided that (i) at such time Section 2.1A or
2.2A, as the case may be, shall be deemed modified to reflect the Loan
Commitment of such new Lender and of the existing Lenders, (ii) upon surrender
of the Notes, new Notes will be issued, at the Company's expense, to such new
Lender and to the assigning Lender, such new Notes to be in conformity with the
requirements of Section 2.1D or 2.2E as the case may be (with appropriate
modifications) to the extent needed to reflect the revised Loan Commitment and
the surrendered Notes will be returned to the Company marked "canceled," and
(iii) the Agents shall receive at the time of each such assignment, from the
assigning or assignee Lender, the payment of a non-refundable assignment fee of
$3,500; and provided, further, that such transfer or assignment will not be
effective until recorded by the Agents
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on the Register pursuant to Section 5.13. To the extent of any assignment
pursuant to this Section 10.2A, the assigning Lender shall be relieved of its
obligations hereunder with respect to its assigned Loan Commitment, and the
assignee, transferee or recipient shall have, to the extent of such sale,
assignment, transfer or negotiation, the same rights, benefits and obligations
as it would if it were a Lender with respect to such Notes or Loan Commitment,
including, without limitation, the right to approve or disapprove actions which,
in accordance with the terms hereof, require the approval of a Lender. At the
time of each assignment pursuant to this Section 10.2A 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 Code) for Federal income tax purposes,
such Person shall provide to the Company and the Agents the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 10.2E(ii) Certificate)
described in Section 10.2E. All transfers by the Lenders of any Loans or Notes
shall be in accordance with applicable Law.
Notwithstanding anything herein to the contrary, the Purchased Notes may be
assigned at any time in accordance with the terms and conditions of the
Assignment Agreement.
B. Each Lender may grant participations in all or any part of its Notes or
its Loan Commitment to one or more Eligible Assignees, other than to an Eligible
Assignee which has, or has an Affiliate which has, a material line of business
similar to any principal line of business of the Company or any of its
Subsidiaries.
C. The Company shall, at its own cost and expense, provide such
certificates, acknowledgments and further assurances in respect of this
Agreement and the Loans as any Lender may reasonably require in connection with
any participation, transfer or assignment pursuant to this Section 10.2.
D. Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loan and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
E. Each Lender that is an assignee or transferee of an interest under this
Agreement pursuant to Section 10.2A (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer) and that is
not a United States Person (as such term is defined in Section 7701(a)(30) of
the Code) agrees to deliver to the Company and the Agents, on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note (or, with respect to an assignee Lender, at least as
extensive as the assigning Lender), or (ii) if the Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) and a certificate substantially in the form of Exhibit
XX annexed hereto (a "Section 10.2E(ii) Certificate") certifying to such
Lender's entitlement to a complete exemption from United States withholding tax
with respect to payments of interest to be made under this Agreement and under
any Note (or, with respect to an assignee Lender, at least as
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extensive as the assigning Lender). In addition, each Lender agrees that, when a
lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the Company
and the Agents two new accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001, or Form W-8, as the case may be, and such
other forms as may be required in order to confirm or establish the entitlement
of such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Company and the Agents of its inability to
deliver any such Form or Certificate. Subject to Section 10.2A and the
immediately succeeding sentence, the Company shall be entitled, to the extent it
is required to do so by law, to deduct or withhold income or similar taxes
imposed by the United States (or any political subdivision or taxing authority
thereof or therein) from interest, fees or other amounts payable hereunder or
made on any other Loan Document for the account of any Lender which is not a
United States Person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Lender has
not provided to the Company U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding. Notwithstanding anything
to the contrary contained in the preceding sentence or elsewhere in this Section
10.2E and except as set forth in Section 10.2A, the Company agrees to pay
additional amounts and to indemnify and hold harmless each Lender (without
regard to the identity of the jurisdiction requiring the deduction or
withholding), and reimburse such Lender upon its written request, in respect of
any amounts deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the date of any assignment or transfer
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of income or similar taxes; provided that such Lender will provide
the Company with any refund received by such Lender for which the Company
reimbursed such Lender pursuant to this Section 10.2E.
F. Notwithstanding anything to the contrary in Section 10.2A, (i) Chase may
sell, assign, transfer or negotiate all or any portion of its Initial Loans or
Initial Notes to a Chase Fund; (ii) any Chase Fund that is a Lender may, upon
the occurrence of a Credit Event, assign all or any portion of its Initial Loans
and Initial Notes to the "Beneficial Owners" pro rata according to their
respective beneficial ownership percentages in such Chase Fund and in the
Initial Loans held by such Chase Fund; and (iii) any Chase Fund that is a Lender
may distribute any evidences of indebtedness or securities received by such
Lender in exchange for, or in satisfaction of, its Initial Loans or Initial
Notes held by such Lender to the Beneficial Owners of such Chase Fund pro rata
according to their respective beneficial ownership percentages in such Chase
Fund and in the Initial Loan held by such Chase Fund.
G. Notwithstanding anything to the contrary in Section 10.2A, each Lender
shall have the right at any time to sell, assign or transfer all or any portion
of its right to receive Warrants and other rights and interests under the
Warrant Agreement, the Equity Reserve Registration Rights Agreement and the
Warrant Escrow Agreement in accordance with the respective terms and conditions
thereof.
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10.3 Expenses
Whether or not the transactions contemplated hereby shall be consummated,
the Company agrees to promptly pay (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents, all costs and expenses Incurred
by the Agents (including the Collateral Agent) in connection with the
syndication of the Loans hereunder and all the costs of furnishing all opinions
by counsel for the Company (including, without limitation, any opinions
requested by the Lender as to any legal matters arising hereunder), and of the
Company's performance of and compliance with all agreements and conditions
contained herein on its part to be performed or complied with; (ii) the
reasonable fees, expenses and disbursements of counsel to the Lenders and the
Collateral Agent in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loans hereunder, and any
amendments, modifications and waivers hereto or thereto and consents to
departures from the terms hereof and thereof; and (iii) after the occurrence of
an Event of Default, all reasonable costs and expenses (including documentary
taxes, reasonable attorneys fees, including allocated costs of internal counsel,
and costs of settlement) actually Incurred by the Lenders or the Agents
(including the Collateral Agent) in enforcing any obligations of or in
collecting any payments due from the Company hereunder or under the Notes by
reason of such 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.
10.4 Indemnity
In addition to the payment of expenses pursuant to Section 10.3, whether or
not the transactions contemplated hereby shall be consummated, the Company
agrees to indemnify, pay and hold each of the Lenders, the Agents and any holder
of any of the Notes, and each of their officers, directors, employees, agents,
and affiliates (collectively called the "Indemnitees"), harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated as a party thereto), which
may be suffered by, imposed on, Incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect of,
relating to or arising out of this Agreement, the other Loan Documents, the
Lenders' agreements to make the Loans or the use or intended use of any of the
proceeds of the Loans hereunder, the issuance of the Exchange Notes or the
Take-Out Notes or the Transactions (the "indemnified liabilities"); provided,
however, that the Company shall have no obligation to an Indemnitee hereunder
with respect to indemnified liabilities (i) to the extent Incurred by reason of
the gross negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document or (C)
such Indemnitee's violation of law or (ii) in connection with the obligations of
any Indemnitee under any Loan Document or for any transfer fees. 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 Indemnitees or any
of them.
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10.5 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, the Agents and each subsequent holder of any Note is
hereby authorized by the Company 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 or any other accounts held for the benefit of another
Person) and any other Indebtedness at any time held or owing by such Person or
that subsequent holder to or for the credit or the account of the Company
against and on account of the obligations and liabilities of the Company to such
Person or that subsequent holder under this Agreement and the Notes, including,
but not limited to, all claims of any nature or description arising out of or
connected with this Agreement or the Notes, irrespective of whether or not (a)
such Person or that subsequent holder shall have made any demand hereunder or
(b) such Person or that subsequent holder shall have declared the principal of
or the interest on its portion of the Loans and its Notes and other amounts due
hereunder to be due and payable as permitted by Section 7 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
10.6 Amendments and Waivers; Payments for Consent
(a) Except as otherwise set forth in Section 8.10, no amendment,
modification, termination or waiver of any term or provision of this Agreement,
of the Notes, any Guarantee or any other Loan Document or, prior to the
execution and delivery thereof, of the form of the Registration Rights Agreement
or the form of the Indenture or consent to any departure by the Company or any
Guarantor therefrom, shall in any event be effective without the prior written
concurrence of the Company or such Guarantor, as the case may be, and the
Required Lenders (or, on or after the Conversion Date, in the case of the
Security Documents, the Requisite Obligees), and, upon the reasonable request of
any Lender, the receipt of a written opinion of counsel of the Company addressed
to the Lenders to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms and
provisions of the Bank Credit Agreement or any other Contractual Obligation of
the Company in any material respect; provided, however, that, without the prior
written consent of each Lender affected, an amendment, modification, termination
or waiver of this Agreement, any Notes, any Guarantee or any other Loan
Document, and, prior to the execution and delivery thereof, of the form of
Registration Rights Agreement and the form of Indenture or consent to departure
from a term or provision hereof or thereof may not: (i) reduce the principal
amount of Notes whose holders must consent to any such amendment, modification,
termination, waiver or consent; (ii) reduce the rate of or extend the time for
payment of principal or interest on any Note; (iii) reduce the principal amount
of any Note; (iv) make any Note payable in money other than that stated in the
Note; (v) make any change in Section 2.5A(iv), in the definition of Change of
Control, in Section 5.10, in the last paragraph of Section 7 or in this Section
10.6; (vi) reduce the rate or extend the time of payment of fees or other
compensation payable to the Lenders hereunder; or (vii) waive performance by the
Company of its obligations under, or consent to any departure from any of the
terms and provisions of, Section 2.5A(iv); provided, further, that without the
consent of the Agents, no such amendment, modification, termination or waiver
may amend, modify, terminate or waive any
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provision of Section 8 as the same applies to the Agents or any other provision
of this Agreement as it relates to the rights or obligations of the Agents; and
provided, further, any modification of Section 10.2F or of the definitions of
"Chase Fund" or "Credit Event" shall require the consent of each Lender that is
a Chase Fund; and provided, further, without the consent of each Lender and
holders of a majority of the outstanding Exchange Notes no material portion of
the Collateral shall be released other than (whether prior to or following the
Conversion Date) in accordance with Article XI of the Indenture; provided,
however, that (x) no release of Collateral with a fair market value,
individually or in the aggregate, in excess of $500,000 shall be permitted
pursuant to Section 11.4, 11.5 or Article XII of the Indenture without the
consent of the Required Lenders and (y) any application of trust moneys pursuant
to Section 12.2 of the Indenture shall be applied pro rata to the Lenders and
the holders of outstanding Exchange Notes based on the aggregate principal
amounts owing to the Lenders and the holders of Exchange Notes on the date of
any such application. 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 10.6(a)
shall be binding upon each holder of the Notes at the time outstanding, each
further holder of the Notes, and, if signed by the Company or a Guarantor, on
the Company and such Guarantor.
(b) Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Agreement or the Notes unless such consideration is offered to be paid or agreed
to be paid to all holders of the Notes which so consent, waive or agree to amend
in the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
10.7 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 an Event of
Default or Default if such action is taken or condition exists.
10.8 Entirety
The Loan Documents embody the entire agreement of the parties and supersede
all prior agreements and understandings, if any, relating to the subject matter
hereof and thereof.
10.9 Notices
Unless otherwise provided herein, any notice or other communications herein
required or permitted to be given shall be in writing and may be Personally
served, telecopied or sent by mail and shall be deemed to have been given when
delivered in Person, upon receipt of telecopy against receipt of answer back or
four Business Days after depositing it in the mail, registered or certified,
with postage prepaid and properly addressed; provided that notices shall not be
effective until
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received. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 10.9) shall
be set forth under each party's name on the signature pages hereto and any
additional Guarantors shall (until notice of a change thereof is delivered as
provided in this Section 10.9) have the address set forth under the Company's
name on the signature page hereto.
10.10 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 and, notwithstanding the making of
the Loans, the execution and delivery of the Notes or any investigation made by
or on behalf of any party, shall continue in full force and effect. The closing
of the transactions herein contemplated shall not prejudice any right of one
party against any other party in respect of anything done or omitted hereunder
or in respect of any right to damages or other remedies.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Company set forth in Sections 10.3, 10.4 and
10.22 and the agreements of the Lenders set forth in Section 10.22 shall survive
the payment of the Loans and the Notes and the termination of this Agreement.
10.11 Failure or Indulgence Not Waiver; Remedies Cumulative
No failure or delay on the part of the Agents or any Lender or any holder
of any Note in the exercise of any power, right or privilege hereunder, under a
Guarantee 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, under a Guarantee or the
Notes are cumulative to and not exclusive of any rights or remedies otherwise
available.
10.12 Severability
In case any provision in or obligation under this Agreement, a Guarantee,
the Notes or the other Loan Documents 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.
10.13 Headings
Sections and 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.
<PAGE>
-99-
10.14 Applicable Law
THIS AGREEMENT, EACH GUARANTEE AND THE NOTES SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
10.15 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, each Guarantee, the Security Documents and the other Loan
Documents shall inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 10.2A, 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. Except as provided in Section 10.6, in determining
whether the holders of a sufficient aggregate principal amount of the Loans
shall have consented to any action under this Agreement, any amount of the Loans
owned or held by the Company, any Guarantor or any of their respective
Affiliates shall be disregarded. The Company's rights or any interest therein
hereunder may not be assigned without the prior express written consent of each
of the Lenders.
10.16 Counterparts; Effectiveness
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. This Agreement shall become effective on the Closing
Date upon the execution of a counterpart hereof by each of the parties hereto,
and delivery thereof to the Agents or, in the case of the Lenders, written or
facsimile notice or telephonic notification (confirmed in writing) of such
execution and delivery. The Agents will give the Company and each Lender prompt
notice of the effectiveness of this Agreement.
10.17 Consent to Jurisdiction; Venue; Waiver of Jury Trial
A. Any legal action or proceeding with respect to this Agreement, any Note
or any Guarantee may be brought in the courts of the State of New York or of the
United States for the Southern District of New York, and, by execution and
delivery of this Agreement, each of the parties to this Agreement hereby
irrevocably accepts for itself and in respect of its respective property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each of
the parties to this Agreement hereby further irrevocably waives any claim that
any such courts lack jurisdiction over itself, and agrees not to plead or claim,
in any legal action or proceeding with respect to this Agreement, the Notes or
the Guarantees brought in any of the aforesaid courts, that any such court lacks
jurisdiction over such party. Each of the parties to this Agreement irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such party, at its respective address for notices pursuant to Section 10.9, such
service
<PAGE>
-100-
to become effective 30 days after such mailing. To the extent permitted by
law, each of the parties to this Agreement hereby irrevocably waives any
objection to such service of process and further irrevocably waives and agrees
not to plead or claim in any action or proceeding commenced hereunder or under
any Note or any Guarantee that service of process was in any way invalid or
ineffective if performed in such manner. Nothing herein shall affect the right
of any party to this Agreement to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against any party in
any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement, the Notes or the Guarantees brought in the courts referred to in
clause A above and hereby further irrevocably waives and agrees not to plead or
claim in any such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
C. Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement, the Notes or the Guarantees or the
transactions contemplated hereby or thereby.
10.18 Payments Pro Rata
A. The Agents (other than the Collateral Agent) agree that promptly after
their receipt of each payment of any interest or premium on or principal of the
Notes from or on behalf of the Company or any Guarantor, they shall, except as
otherwise provided in this Agreement, distribute such payment to the Lenders
(other than any Lender that has consented in writing to waive its pro rata share
of such payment) pro rata based upon their respective pro rata shares, if any,
of such payment.
B. Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents, or otherwise)
which is applicable to the payment of the principal of, or interest on, the
Loans of a sum which with respect to the related sum or sums received by other
Lenders is in a greater proportion than the total of such Obligation then owed
and due to such Lender bears to the total of such Obligation then owed and due
to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the Company to
such Lenders in such amount as shall result in a proportional participation by
all of the Lenders in such amount; provided that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
10.19 Taxes and Other Taxes
(A) Any and all payments by the Company to the Agents or the Lenders
hereunder or under the other Loan Documents shall be made, in accordance with
Section 2.5, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions,
<PAGE>
-101-
charges or withholdings, and all liabilities with respect thereto,
excluding (i) in the case of each Lender and the Agents, taxes, levies, imposts,
deductions, charges or withholdings that would not be imposed but for a present
or former connection between such Lender or Agent (as the case may be) and the
jurisdiction imposing such tax, other than a connection arising solely by virtue
of the activities of such Lender or Agent (as the case may be) pursuant to or in
respect of this Agreement or under any other Loan Document, including entering
into, lending money or extending credit pursuant to, receiving payments under,
or enforcing, this Agreement or any other Loan Document, and (ii) in the case of
each Lender and each Agent, any United States withholding taxes payable with
respect to any payments made hereunder or under the other Loan Documents under
laws (including any statute, treaty, ruling, determination or regulation) in
effect on the Initial Date (as hereinafter defined) applicable to such Lender or
Agent, as the case may be, but not excluding any United States withholding taxes
payable solely as a result of any change in such laws occurring after the
Initial Date (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). For
purposes of this Section 10.19, the term "Initial Date" shall mean (i) in the
case of the Agents or any Lender, the date on which such Person became a party
to this Agreement and (ii) in the case of any assignment, including any
assignment by a Lender to a new lending office, the date of such assignment. If
any Taxes shall be required by law to be deducted from or in respect of any sum
payable hereunder or under any other Loan Document to any Lender or Agent, (i)
the sum payable by the Company shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 10.19) such Lender or Agent, as the
case may be, receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Company shall make such deductions and (iii)
the Company shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. The Company
shall not, however, be required to pay any amounts pursuant to clause (i) of the
preceding sentence to any Lender or Agent not organized under the laws of the
United States of America or a state thereof if such Lender or Agent fails to
comply with the requirements of paragraph 10.2E or 10.19(F).
(B) In addition, the Company agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from the execution, delivery or registration of this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(C) The Company will indemnify each Lender and Agent for the full amount of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 10.19) paid by such Lender or
Agent, as the case may be, and any interest, penalties or other additions to tax
and expenses arising therefrom or with respect thereto whether or not such Taxes
or Other Taxes were correctly or legally asserted. A certificate as to the
amount of such payment or liability prepared by a Lender (or transferee thereof)
or Agent, absent manifest error, shall be final, conclusive and binding for all
purposes, provided that if the Company reasonably believes that such Taxes were
not correctly or legally asserted, such Lender or Agent, as the case may be,
shall use reasonable efforts to cooperate with the Company to obtain a refund of
such Taxes or Other Taxes. Such indemnification shall be made within 10 days
after the date any Lender or Agent, as the case may be, makes written demand
therefor. If a Lender or Agent shall become aware that it is entitled to receive
a refund in respect of Taxes or Other Taxes, it shall promptly notify the
Company
<PAGE>
-102-
of the availability of such refund and shall, within 30 days after receipt
of a request by the Company, pursue or timely claim such refund at the Company's
expense. If any Lender or Agent receives a refund in respect of any Taxes or
Other Taxes for which such Lender or Agent has received payment from the Company
hereunder, it shall promptly repay such refund (plus any interest received) to
the Company (but only to the extent of indemnity payments made, or additional
amounts paid, by the Company under this Section 10.19 with respect to the Taxes
or Other Taxes giving rise to such refund); provided that the Company, upon the
request of such Lender or Agent, agrees to return such refund (plus any
penalties, interest or other charges required to be paid) to such Lender or
Agent in the event such Lender or Agent is required to repay such refund to the
relevant taxing authority.
(D) Within 30 days after the date of any payment of Taxes or Other Taxes
withheld by the Company in respect of any payment to any Lender or Agent, the
Company will furnish to the Administrative Agent the original or a certified
copy of a receipt evidencing payment thereof.
(E) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 10.19 shall
survive the payment in full of principal and interest hereunder and the
repayment of the Loans and the other Obligations hereunder.
(F) Any Lender claiming any additional amounts payable pursuant to this
Section 10.19 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested in writing by the
Company to change the jurisdiction of its applicable lending office, if the
making of such a filing or change would avoid the need for or reduce the amount
of any such additional amounts which would be payable or may thereafter accrue
and would not, in the sole reasonable determination of such Lender, be otherwise
materially disadvantageous to such Lender.
(G) Nothing contained in this Section 10.19 shall require any Lender or
Agent to make available any of its tax returns (or any other information that it
deems to be confidential or proprietary).
10.20 Waiver of Stay, Extension or Usury Laws
The Company and the Guarantors covenant (to the extent that they may
lawfully do so) that they will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company or the Guarantors from paying all or any portion of the principal of or
interest on the Loans 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 they may lawfully do so) the Company and
the Guarantors hereby expressly waive all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agents, but will suffer and permit the execution of
every such power as though no such law had been enacted.
<PAGE>
-103-
10.21 Requirements of Law
(a) In the event that any change in law occurring after the date that any
lender becomes a Lender party to this Agreement with respect to such Lender
shall, in the reasonable opinion of such Lender, require that any Initial Loan
Commitment of such Lender be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
such Lender or any corporation controlling such Lender, and such change in law
shall have the effect of reducing the rate of return on such Lender's or such
corporation's capital, as the case may be, as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation, as the case may be, could have achieved but for such change in law
(taking into account such Lender's or such corporation's policies, as the case
may be, with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time following notice by such Lender to the
Company of such change in law as provided in paragraph (b) of this Section
10.21, within 15 days after demand by such Lender, the Company shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
corporation, as the case may be, for such reduction.
(b) The Company shall not be required to make any payments to any Lender
for any additional amounts pursuant to this Section 10.21 unless such Lender has
given written notice to the Company, through the Agents, of its intent to
request such payments prior to or within 60 days after the date on which such
Lender became entitled to claim such amounts. If any Lender requests
compensation from the Company under this Section 10.21, the Company may, by
notice to such Lender (with a copy to the Agents), suspend the obligation of
such Lender thereafter to make or continue Loans, until the requirement of law
giving rise to such request ceases to be in effect; provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
10.22 Confidentiality
Each Lender shall hold all non-public information obtained pursuant to the
requirements of or in connection with this Agreement in accordance with such
Lender's customary procedures (which shall be reasonably prudent for purposes of
maintaining confidentiality) for handling confidential information of this
nature and in accordance with safe and sound banking practices, and shall use
such information only in connection with the rights and remedies of the Lenders,
the protection of the Lenders' legal and economic interests in its capacity as a
Lender, extensions of credit, and other transactions contemplated by the Loan
Documents, it being understood and agreed by the Company that in any event a
Lender may make disclosures (i) reasonably required by any bona fide Assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participation therein or as required
or requested by any governmental agency or representative thereof or pursuant to
legal process; provided that unless specifically prohibited by applicable law or
court order, each Lender shall notify the Company of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information and (ii) with respect to information
that has been publicly disclosed other than in breach of this Agreement;
provided, further,
<PAGE>
-104-
that in no event shall any Lender be obligated or required to
return any materials furnished by the Company or any of its Subsidiaries. In
connection with any sales, assignments or transfers referred to in Section
10.2A, a Lender shall obtain agreements from the purchasers, assignees or
transferees, as the case may be, reasonably satisfactory to the Company, that
such parties will comply with this Section 10.22.
<PAGE>
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER:
REPUBLIC ENGINEERED STEELS, INC.
By: /s/ Joseph F. Lapinsky
-----------------------------
Name: Joseph F. Lapinsky
Title: President and Chief Operating
Officer
Notice Address:
Telephone:
Telecopy:
GUARANTOR:
NIMISHILLEN & TUSCARAWAS RAILWAY
COMPANY
By: /s/ John B. George
--------------------------------
Name: John B. George
Title: Assistant Treasurer
Notice Address:
Telephone:
Telecopy:
<PAGE>
-104-
AGENTS:
THE CHASE MANHATTAN BANK,
as Collateral Agent, Documentation Agent,
Syndication Agent, an Agent and a Lender
Commitment: 60% By: /s/ James H. Ramage
--------------------------------
Name: JAMES H. RAMAGE
Title: Vice President
Notice Address:
Loan and Agency Services Group
1 Chase Plaza
New York, New York 10081
Attention: Laura Rebecca
Telephone: (212) 552-7253
Telecopy: (212) 552-7490
with a copy to:
270 Park Avenue
New York, New York 10017
Attention, James Ramage
Telephone: (212) 270-1373
Telecopy: (212) 270-4724
<PAGE>
-105-
ONE BAR FUNDING, INC.,
as a Lender
Commitment: 32% By: /s/ Harold J. Philipps
-------------------------------
Name: Harold J. Philipps
Title: Managing Director
Notice Address:
Telephone:
Telecopy:
DLJ BRIDGE FINANCE, INC.,
as Agent
By: /s/ Harold J. Philipps
--------------------------------
Name: Harold J. Philipps
Title: Managing Director
Notice Address:
Telephone:
Telecopy:
<PAGE>
-106-
BANKBOSTON, N.A.,
as Agent and a Lender
Commitment: 8% By: /s/ Robert S. Allen
-------------------------------
Name: Robert S. Allen
Title: Director
Notice Address:
Telephone:
Telecopy:
<PAGE>
[CAST-ROLL OHIO]
================================================================================
OPEN-END MORTGAGE, ASSIGNMENT OF LEASES,
SECURITY AGREEMENT AND FIXTURE FILING
BY
REPUBLIC ENGINEERED STEELS, INC.,
Mortgagor,
TO
THE CHASE MANHATTAN BANK,
Mortgagee;
Securing the Maximum Principal Indebtedness of: $208,460,000;
Relating to Premises in:
Stark County, Ohio
Dated as of: November 6, 1998
===============================================================================
This instrument secures, inter alia, obligations which may
provide for a variable rate of interest.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
INTRODUCTION ............................................................................................... 1
R E C I T A L S : .......................................................................................... 1
G R A N T I N G C L A U S E S : .......................................................................... 3
C O V E N A N T S : ........................................................................................ 6
ARTICLE I WARRANTIES, REPRESENTATIONS AND COVENANTS OF
MORTGAGOR ............................................................................... 6
Section 1.1. Payment and Performance ................................................................. 6
Section 1.2. Authority and Validity .................................................................. 6
Section 1.3. Good Title .............................................................................. 7
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 .................................................................13
Section 1.7. Required Insurance Policies .............................................................13
Section 1.8. Failure To Make Certain Payments ........................................................17
Section 1.9. Inspection ..............................................................................17
Section 1.10. Mortgagor To Maintain Improvements ......................................................17
Section 1.11. Mortgagor's Obligations with Respect to
Leases ..............................................................................18
Section 1.12. Transfer Restrictions ...................................................................21
Section 1.13. Destruction; Condemnation ...............................................................22
Section 1.14. Alterations .............................................................................23
Section 1.15 Hazardous Material.......................................................................23
Section 1.16. [Reserved] ..............................................................................23
Section 1.17. Books and Records: Reports ..............................................................24
Section 1.18. No Claims Against Mortgagee .............................................................24
Section 1.19. Utility Services ........................................................................24
ARTICLE II ASSIGNMENT OF RENTS; SECURITY AGREEMENT .......................................................25
Section 2.1. Assignment of Leases, Rents, Issues and
Profits .............................................................................25
Section 2.2. Security Interest in Personal Property...................................................27
ARTICLE III EVENTS OF DEFAULT AND REMEDIES ...............................................................29
Section 3.1. Remedies in Case of an Event of Default .................................................29
Section 3.2. Sale of Mortgaged Property If Event of
Default Occurs; Proceeds of Sale ....................................................30
i
<PAGE>
Page
Section 3.3. Additional Remedies in Case of an Event
of Default .........................................................................33
Section 3.4. Legal Proceedings After an Event of
Default ............................................................................34
Section 3.5. Remedies Not Exclusive ..................................................................35
Section 3.6 Foreclosure .............................................................................36
ARTICLE IV CERTAIN DEFINITIONS ..........................................................................36
ARTICLE V MISCELLANEOUS .................................................................................38
Section 5.1. Severability ............................................................................38
Section 5.2. Notices .................................................................................39
Section 5.3. Covenants To Run with the Land...........................................................39
Section 5.4. Captions; Gender and Number .............................................................39
Section 5.5. Limitation on Interest Payable ..........................................................39
Section 5.6. Indemnification; Reimbursement ..........................................................40
Section 5.7. Choice of Law ...........................................................................41
Section 5.8. Changes in Writing ......................................................................41
Section 5.9. No Merger ...............................................................................41
Section 5.10. Concerning Mortgagee ....................................................................41
Section 5.11. Mortgagee's Right To Sever Indebtedness .................................................42
Section 5.12. Waiver of Stay ..........................................................................44
Section 5.13. No Credit for Payment of Taxes or
Impositions .........................................................................44
Section 5.14. Stamp and Other Taxes ...................................................................44
Section 5.15. Estoppel Certificates ...................................................................45
Section 5.16. Additional Security .....................................................................45
Section 5.17. [Reserved] ..............................................................................45
Section 5.18. Expenses of Collection ..................................................................45
Section 5.19. Business Days ...........................................................................46
Section 5.20. Future Advances .........................................................................46
Section 5.21. Termination .............................................................................46
Section 5.22. No Liability to Other Secured Parties....................................................47
SIGNATURE PAGE
SCHEDULE A LEGAL DESCRIPTION
SCHEDULE B PRIOR LIENS
ii
<PAGE>
OPEN-END MORTGAGE, ASSIGNMENT OF LEASES,
SECURITY AGREEMENT AND FIXTURE FILING
OPEN-END MORTGAGE, ASSIGNMENT OF LEASES, SECURITY AGREEMENT AND FIXTURE FILING
("Mortgage"), dated as of November 6, 1998, made by REPUBLIC ENGINEERED STEELS,
INC., a Delaware corporation having an office at 410 Oblerlin Road SW,
Massillon, Ohio 44647, as mortgagor, assignor and debtor (together with any
successors or assigns, "Mortgagor"), in favor of THE CHASE MANHATTAN BANK, a New
York banking corporation having an office at 270 Park Avenue, New York, New York
10017, as collateral agent for the Secured Parties (as hereinafter defined)
pursuant to the Credit Agreement, the Letter Agreement and the Exchange
Indenture (each as hereinafter defined), as mortgagee, assignee and secured
party (in such capacity and together with any successors or 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 made a part hereof and all the improvements
situated thereon.
2. Mortgagor, certain other affiliates of Mortgagor and
Mortgagee have, in connection with the execution and delivery of this Mortgage,
entered into a certain credit agreement (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Credit Agreement), dated as of November 6, 1998,
pursuant to which the Lenders have agreed to make Loans to Mortgagor in a
maximum aggregate principal amount of $208,460,000. The Lenders may, as of the
Conversion Date, convert their respective percentage of the Loans into exchange
notes (the "Exchange Notes") to be issued by Mortgagor upon any such conversion
pursuant to that certain Indenture (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Exchange Indenture";
together with the Exchange Notes, the "Exchange Notes Documents") annexed to the
Credit Agreement as Exhibit V.
3. On December 15, 1993, Mortgagor and Bankers Trust
Company, as trustee (the "Trustee"), entered into a certain indenture (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Existing Indenture"), pursuant to which Mortgagor issued its 9 7/8%
First Mortgage Notes due 2001 (the "Existing Notes"; together with
<PAGE>
-2-
the Existing Indenture, the "Existing Notes Documents") in the aggregate
principal amount of $200,000,000. The Trustee has appointed The Chase
Manhattan Bank as collateral agent for itself and the holders of the
Existing Notes pursuant to that certain letter agreement (the "Letter
Agreement"), dated as of November 6, 1998, by and between the Trustee and
Mortgagee, as collateral agent.
4. 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 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.
ss. 362(a)), of (i) all Obligations of Mortgagor entered into with any Lender
now existing or hereafter arising under or in respect of the Credit
Agreement and all Interest Rate Protection obligations of Mortgagor now
existing or hereafter arising, including, without limitation, Mortgagor's
obligations to pay principal, interest and all other charges, fees,
expenses, commissions, reimbursements, premiums, indemnities and other
payments related to or in respect of the Obligations contained in the Credit
Agreement or any agreement creating or evidencing such Interest Rate
Protection Obligations, (ii) all Obligations of Mortgagor now or hereafter
existing under or in respect of the Existing Notes Documents (including,
without limitation, the obligations of Mortgagor to pay principal of,
premium, if any, and interest on the Existing Notes when due and payable)
and all other charges, fees, premiums, indemnities and other amounts due or
to become due under or in connection with the Existing Notes Documents,
(iii) all obligations of Mortgagor now or hereafter arising under or in
respect of the Exchange Notes Documents (including, without limitation, the
obligations of Mortgagor to pay principal of, premium, if any, and interest
on the Exchange Notes when due and payable) and all other charges, fees,
premiums, indemnities and other amounts due or to become due under or in
connection with the Exchange Notes Documents and (iv) without duplication of
the amounts described in clauses (i), (ii) and (iii), 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").
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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 mortgage lien 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 annexed hereto, together with all
Mortgagor's reversionary rights in and to any and all lots, parcels,
alterations, partitions, easements, rights-of-way, sidewalks, strips and
gores of land, drives, roads, curbs, streets, lanes, ways, alleys, passages,
passageways, sewer rights, waters, woods, watercourses, 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; provided, however, that Mortgaged
Property shall not include any items of property described in this Granting
Clause C to the extent that Mortgagor is expressly prohibited from granting
a Lien thereon or applicable law provides for the involuntary forfeiture of
the property in the event that a Lien is granted thereon without the consent
of the appropriate Person, governmental authority, agency or
instrumentality; provided, further, that in the event of the termination or
elimination of any prohibition or re-
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quirement for any consent contained in any law, rule, regulation, license,
franchise, certificate, consent, approval, authorization or other document,
or upon the granting of any consent, the items of property so excluded from
the definition of Mortgaged Property by virtue of the immediately preceding
proviso shall (without any act or delivery by any Person) constitute
Mortgaged Property hereunder;
D. Any and all interest of Mortgagor in all "equipment",
as such term is defined in the UCC (as hereinafter defined), located at or
used in connection with the operation of Mortgagor's business conducted at
the Premises, whether or not affixed to the Premises, and shall specifically
include, without limitation, (i) goods which would be considered a "fixture"
under Section 9-313 of the UCC or otherwise would be considered a "fixture"
or a part of the Premises under applicable law, except for Real Estate
Fixtures, (ii) all machinery, facilities, installations, apparatus,
equipment, office machinery, electronic data processing equipment, computers
and computer hardware and software (whether owned or licensed), all indoor
or outdoor furniture, tools, materials, automotive equipment, motor
vehicles, manufacturing, storage and handling equipment, overhead cranes,
cutting and bending machines and other equipment for the fabrication of
steel bars, rods and wire products, furnaces, electric arc furnaces, ladle
arc furnaces, billet mills, reheat furnaces, rolling mills, conveyors,
coilers, cooling beds and all other equipment of any kind or nature and
owned by Mortgagor or in which Mortgagor may have any interest (but only to
the extent of such interest), (iii) all modifications, renewals,
improvements, alterations, repairs, substitutions, attachments, additions,
accessions and other property now or hereafter affixed thereto or used in
connection therewith and (iv) all replacements and all parts therefor
(collectively, the "Equipment");
E. Any and all interest of Mortgagor in all "equipment",
as such term is defined in the UCC, which is (i) affixed to the Premises, (ii)
considered a fixture or a part of the Premises under applicable law and
(iii) integral to the occupancy or customarily used by occupants in
connection with the occupancy of the Land or the operation of the
Improvements thereon as such, as opposed to manufacturing or other business
operations conducted therein or therefrom and, in any event, shall include,
without limitation, all switchboards, utility systems, sprinkler and alarm
systems or other fire prevention or extinguishing apparatus and materials,
HVAC equipment, boilers, oil boilers, telecommunications equipment,
refrigeration, electronic monitoring, water or lighting systems, power,
sani-
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tation, waste removal, pollution abatement or control, elevators, window
cleaning, maintenance or other systems or equipment, appliances or supplies,
all heating apparatus, generators, plumbing, lighting and gas fixtures,
laundry, ventilating and airconditioning equipment, all awnings, blinds,
screens, storm sash, pumping equipment, electrical equipment, including
transformers, radiators and piping, coal stokers, plumbing and bathroom
fixtures, wash-tubs, sinks, stoves, ranges, window shades, motors,
generators, dynamos, kitchen cabinets, incinerators, plants and shrubbery
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
modifications, renewals, improvements, alterations, repairs, substitutions,
attachments, additions, accessions and other property now or hereafter
affixed thereto or used in connection therewith, all replacements and all
parts therefor, and all substitutes for any of the foregoing (collectively,
the "Real Estate Fixtures");
F. All Mortgagor's right, title and interest, as
landlord, franchisor, licensor or grantor, in all leases and subleases of
space, tenancies, lettings, franchise agreements, licenses, occupancy or
concession agreements, all books and records which contain payments under
the leases, contracts and other agreements, written or otherwise, now
existing or hereafter entered into relating in any manner to the Premises,
the Equipment or the Real Estate Fixtures and any and all amendments,
modifications, supplements and renewals of any thereof (each such lease,
license, contract 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, rental income, receipts, 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, issues,
profits and income, advance rental payments, payments incident to
assignment, sublease or surrender of a Lease, claims for forfeited deposits,
claims for damages and awards, now due or hereafter to become due, with
respect to any Lease (collectively, the "Rents");
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, the Equipment or the Real Estate Fixtures
or the
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construction of any Alteration or the maintenance of any Permit (as hereinafter
defined);
H. All the estate, right, title, interest, claim, and
demand whatsoever, of Mortgagor, in law, equity, or otherwise howsoever, of,
in, and to the same and every part of the foregoing; and
I. 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 any unearned
premiums thereon), condemnation or eminent domain, judgment or other awards
or payments with respect thereto or settlement in lieu thereof (including,
without limitation, any Net Proceeds or Net Award (each as hereinafter
defined)), including, without limitation, interest thereon (collectively,
"Proceeds").
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee
and Mortgagee's successors and assigns forever, for the purpose of securing
the payment and performance of the Secured obligations.
C O V E N A N T S :
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
as and when the same shall become due, whether at its stated maturity, by
acceleration or otherwise, each and every amount payable by Mortgagor in
respect of the Secured Obligations and shall perform, at or prior to the
time such performance shall be due, all other obligations of Mortgagor which
constitute Secured Obligations.
SECTION 1.2. Authority and Validity. Mortgagor represents,
warrants and covenants that (i) Mortgagor (x) is duly authorized to execute
and deliver this Mortgage and the Credit Agreement, (y) will be duly
authorized to execute and deliver the Exchange Notes Documents as of the
date of execu-
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tion and delivery thereof and (z) was duly authorized to execute and deliver
the Existing Notes Documents as of the execution and delivery thereof, and
the other documents or instruments evidencing or securing the Secured
Obligations (this Mortgage, the Credit Agreement, the Exchange Notes
Documents, the Existing Notes Documents and such other documents or
instruments, collectively, the "Debt Instruments"), and all corporate and
governmental actions, consents, authorizations and approvals necessary or
required therefor have been (or, with respect to the Exchange Notes
Documents, will be as of the effective date thereof) duly and effectively
taken or obtained except for such approvals or consents the failure to
obtain could not reasonably be expected to, individually or in the
aggregate, result in a material adverse effect on the value or utility of
the Mortgaged Property, (ii) this Mortgage and the other Debt Instruments
are (or, with respect to the Exchange Notes Documents, will be as of the
effective date thereof) valid, binding and enforceable obligations of
Mortgagor, enforceable in accordance with their respective terms, except as
the enforceability of such obligations may be limited by bankruptcy,
insolvency, reorganization, moratorium and 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 (iii) Mortgagor has the requisite corporate power and
requisite authority to execute and deliver this Mortgage and the other Debt
Instruments (or with respect to the Exchange Notes Documents, will have) and
to mortgage and grant a security interest in the Mortgaged Property as
contemplated herein.
SECTION 1.3. Good Title.
1.3.1 Mortgagor represents, warrants and covenants that
(i) Mortgagor has (a) good and legal title to the Premises pursuant to the
Deed recorded at Vol. 3146, page 617 of the Stark County, Ohio Officials
Records, (b) valid leasehold interest to the landlord's interest and estate
under or in respect of the Leases and (c) good title to the interest it
purports to own in and to each of the Permits, the Equipment and the Real
Estate Fixtures, 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 material rights and appurtenances to or
that constitute a part of the Mortgaged Property which are necessary for the
conduct of Mortgagor's business at the Mortgaged Property, (iii) Mortgagor
will protect, preserve and defend its interest in the Mortgaged Property and
title thereto, (iv) Mortgagor will comply in all material respects with each
of the terms,
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conditions and provisions of any obligation of Mortgagor which is secured by
the Mortgaged Property or the noncompliance with which could reasonably be
expected to result in the imposition of a Lien on the Mortgaged Property
(other than as provided in Section 1.12), (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 Lien on the Mortgaged Property, (except as the enforceability of
such obligations may be limited by bankruptcy, insolvency, reorganization,
moratorium and 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, to
the extent any of the Mortgaged Property shall consist of personalty, a
security interest in the Mortgaged Property, which Lien and 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
and which, pursuant to the provisions of subsection 1.12(i), 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 and evidenced hereby against the
claims of all Persons, (vii) there has been issued (or applied for, as
applicable) and there remain in effect each and every certificate of
occupancy or use or other material Permit currently required for the
existing use and occupancy by Mortgagor and its tenants of the Premises and
(viii) the Premises comply in all material respects 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 or
receiving notice, as the case may be, 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
reasonably 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 reasonably requested by Mortgagee to permit such participation.
In any such proceedings Mortgagee may be represented by counsel reasonably
satisfactory to Mortgagee and the reasonable fees and disbursements
<PAGE>
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of such counsel shall be 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 to be
applied in the manner set forth in Section 3.2.3 hereof.
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, cause this Mortgage and any financing 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 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 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 and if such failure shall constitute an Event of Default
(as hereinafter defined), Mortgagee may execute the same as the
attorney-in-fact for Mortgagor, such power of attorney being coupled with an
interest and irrevocable.
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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 before the same shall become
delinquent, 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. Except to the extent contemplated in Section 1.6
hereof, this subsection 1.5.1 shall not obligate Mortgagor to pay and
discharge any charges imposed upon Mortgagee in respect of franchise, income
or other similar taxes.
1.5.2 Upon the occurrence and during the continuance of an
Event of Default, at the written request of Mortgagee, Mortgagor shall
deposit with Mortgagee, on the first day of each month, an amount reasonably
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.
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
reasonable judgment, be insufficient (when added to the installments
anticipated to be paid thereafter) to discharge any of such obligations when
due, Mortgagor shall, within five (5) Business Days after 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 the
highest rate then payable under the Credit Agreement 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.
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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 an Event of Default,
Mortgagee may apply all or any part of the sums held pursuant to this
subsection 1.5.2 in the manner set forth in Section 3.2.3 hereof.
1.5.3 Unless contested in accordance with the provisions
of subsection 1.5.5, Mortgagor shall timely pay, 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, would be likely to result in the creation of a Lien on the Mortgaged
Property or any part thereof or the Rents arising therefrom, or which would
be likely to result in forfeiture of all or any part of the Mortgaged
Property.
1.5.4 Mortgagor shall maintain, or cause to be maintained,
in full force and effect, all material permits, certificates, authorizations,
consents, approvals, licenses, franchises or other instruments now or hereafter
required to be maintained 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, the Real
Estate Fixtures and the Equipment for their 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, to the best knowledge of
Mortgagor, by 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 in all material respects with, (i) all requirements
set forth in the Permits and (ii) all requirements of any law, ordinance, rule,
regulation or similar statute or case law (collectively, "Legal Requirements")
of 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 would be likely to diminish the value of the Mortgaged
Property or impair Mortgagee's rights or benefits hereunder, without the prior
written consent of Mortgagee.
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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 and 1.5.4 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 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 reasonable 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 Secured Party to any possible criminal
liability or, unless Mortgagor shall have furnished an Additional
Undertaking (as hereinafter defined) therefor reasonably satisfactory to
Mortgagee, 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, the Real Estate Fixtures or the Equipment (including, without
limitation, in the making of any Alteration) take any action that could
reasonably be expected to be the basis for termination, revocation or denial
of any insurance coverage required to be maintained under this Mortgage or
that could reasonably be expected to be the basis for a defense to any claim
under any insurance policy maintained in respect of the Premises, the Real
Estate Fixtures or the Equipment (unless Mortgagor shall have obtained in
substitution for any such insurance an insurance policy or policies
complying with the provisions of Section 1.7 hereof such that there would
not result any period of time during which the insurance coverage required
to be maintained hereunder would not be so maintained) and Mortgagor shall
otherwise comply in all respects with the requirements of any insurer that
issues a policy of insurance in respect of the Premises, the Real Estate
Fixtures or the Equipment.
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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, Mortgagee or any Debt Instrument, 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 in respect of the Premises
the following insurance coverages:
(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, the Real Estate Fixtures and all Equipment,
with such deductibles 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 Construction (as hereinafter
defined) to replace the Improvements, the Real Estate Fixtures 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 any Person
selected by 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
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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 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 to protect Mortgagor
against claims for injuries sustained in the course of employment
at the Premises;
(iv) Explosion insurance in respect of any boilers and
similar apparatus located on the Premises or comprising any Real
Estate Fixtures or Equipment, with policy limits and deductibles in
such amounts as would be maintained by a prudent operator of
property similar in use and configuration to the Premises, the Real
Estate Fixtures and the Equipment and located in the locality where
the Premises, the Real Estate Fixtures and the Equipment are
located;
(v) To the extent available, 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 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 the coverages required by
this Section 1.7 under blanket policies covering the Premises and other
locations owned or operated by Mortgagor if the
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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 required by this Section 1.7 shall be in form
customarily 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. 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 loss
payee pursuant to a standard noncontributory New York mortgagee endorsement
or local equivalent, and each such policy shall (i) to the extent available on
a commercially reasonable basis, 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, the Real Estate Fixtures or the Equipment or (d)
any change in the title to or ownership or possession of the Premises, the
Real Estate Fixtures 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
it may not be canceled 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. Prior to the occurrence of an Event of Default, settlement of any
claim in an amount in excess of $1,000,000 under any of the insurance
policies referred to in this Section 1.7 shall require the prior approval of
Mortgagee, which shall not be unreasonably withheld
<PAGE>
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or delayed, and Mortgagor shall use its best efforts to cause each such
insurance policy to contain a provision to such effect; provided, however,
that Mortgagor shall not settle any such claim which in Mortgagor's
reasonable judgment involves loss in an amount greater than $250,000 but
less than $1,000,000 unless Mortgagor shall have delivered to Mortgagee,
prior to such settlement, an Officers' Certificate (i) describing the
incident giving rise to such claim, (ii) setting forth the amount of the
proposed settlement in respect of such claim and (iii) stating that such
settlement amount constitutes a reasonable settlement in respect of such
claim. During the continuance of any Event of Default, Mortgagor shall not
settle any claim under any of the insurance policies referred to in this
Section 1.7 without the prior approval of Mortgagee.
1.7.3 At least thirty (30) days prior to the expiration of
any insurance policy required by subsection 1.7.1, 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
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 an additional insured and, if applicable, with loss
payable to Mortgagee under an endorsement containing the provisions
described in subsection 1.7.2. Mortgagor promptly 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 each
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
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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), and such
failure shall constitute an Event of Default, 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 within five Business Days
after demand therefor all sums so advanced by Mortgagee on behalf of
Mortgagor, with interest at the Default Rate. Neither the provisions of this
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 Mortagee,
by its agents, representatives, accountants and attorneys, to visit and
inspect the Premises, the Real Estate Fixtures and the Equipment at such
reasonable times and upon reasonable notice to Mortgagor as may be
reasonably requested by Mortgagee. To the extent practicable, such
inspection shall not unreasonably interfere with the normal operation or
business conducted by Mortgagor.
SECTION 1.10. Mortgagor To Maintain Improvements.
Mortgagor shall not commit any waste on the Premises or with respect to any
Real Estate Fixtures or 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 sufficient to allow Mortgagor and its tenants
and invitees to conduct its and their businesses at the Premises in the
manner in which a prudent operator of property similar in use and
configuration to the Premises and located in the locality where the Premises
are located would conduct its business. Mortgagor shall, at all times,
maintain the Premises, the Real Estate Fixtures and the Equipment (other
than any portion thereof which shall be obsolete and/or disposed of (y)
prior to the Conversion Date, in accordance with the provisions of the
Credit Agreement and (z) on or after the Conversion Date, in accordance with
the provisions of the Exchange Indenture) in good operating order, condition
and repair and shall make all repairs necessary, structural or
nonstructural, for the operation of Mortgagor's
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business. Mortgagor shall (a) not alter the occupancy or use of all or any
part of the Premises, or any Real Estate Fixtures or Equipment, if such
action would be reasonably likely to diminish the value of the Mortgaged
Property or impair Mortgagee's rights and benefits hereunder, without the
prior written consent of Mortgagee, and (b) do all other acts which from the
character or use of the Premises, the Real Estate Fixtures and the Equipment
may be reasonably necessary or appropriate to maintain and preserve their
value.
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 will not, without the written consent of
Mortgagee, enter into any Lease (or any amendment or modification thereof)
with any Person other than Leases entered into by Mortgagor in the ordinary
course of business or permitted (y) prior to the Conversion Date, in
accordance with the Credit Agreement and (z) on or after the Conversion
Date, in accordance with the provisions of the Exchange Indenture.
1.11.2 Mortgagor shall not in respect of any 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 substantially 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;
or
(iv) terminate or permit the termination of any Lease of
space, accept surrender of all or any portion of the space demised
under any Lease prior to the end of the term thereof or accept
assignment of any Lease to Mortgagor unless:
<PAGE>
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(a) the tenant under such Lease has not paid the
equivalent of two months' rent and Mortgagor has made reasonable
efforts to collect such rent or the tenant under such Lease is
otherwise in default and such default remains uncured after notice by
Mortgagor to such tenant; or
(b) Mortgagor shall deliver to Mortgagee an Officers
Certificate to the effect that Mortgagor has entered into a new Lease
(or Leases) for the space covered by the terminated or assigned Lease
with a term (or terms) which expire(s) no earlier than the date on
which the terminated or assigned Lease was to expire (excluding renewal
options), and with a tenant (or tenants) having a creditworthiness (as
reasonably determined by Mortgagor) sufficient to pay the rent and
other charges due under the new Lease (or Leases), and the tenant(s)
shall have commenced paying rent, including, without limitation, all
operating expenses and other amounts payable under the new Lease (or
Leases) without any abatement or concession in an amount at least equal
to the amount which would have then been payable under the terminated
or assigned Lease.
1.11.3 Mortgagor timely shall, in all material respects,
perform and observe all the terms, covenants and conditions required to be
performed and observed by Mortgagor under each Lease. Mortgagor promptly
shall notify Mortgagee of the receipt of any notice from any lessee under
any material 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 at the
request of Mortgagee (not more than once in each calendar year), an
Officers' Certificate, dated as of the last day of such year, (i) containing
a list of names of all tenants under Leases, if any, and the net square
footage leased 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 which default has not been cured 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. Upon the request
of Mortgagee, Mortgagor shall deliver to Mortgagee copies, certified by an
officer
<PAGE>
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of Mortgagor, of all Leases not theretofore delivered to Mortgagee.
SECTION 1.12. Transfer Restrictions. Except as permitted
(y) prior to the Conversion Date, by the provisions of the Credit Agreement
and (z) on and after the Conversion Date, by the provisions of the Exchange
Indenture, and under Section 1.11.1 of this Mortgage, Mortgagor shall not
sell, convey, assign or otherwise dispose of, or grant any option with
respect to, any of the Mortgaged Property. Mortgagor shall not create or
permit to exist any Lien upon or with respect to any of the Mortgaged
Property other than the following Liens:
(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 (to the extent required) in
accordance with the provisions of subsection 1.5.3 or are being
contested in accordance with the provisions of subsection 1.5.5;
provided, however, that such Liens shall in all respects be subject
and subordinate in priority to the Lien and security interest
created and evidenced by this Mortgage except 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.
(ii) Prior Liens.
(iii) The Lien and security interest granted to Mortgagee
pursuant to this Mortgage.
SECTION 1.13. Destruction; Condemnation.
1.13.1 Destruction; Insurance Proceeds. If there shall
occur any damage to, or loss or destruction of, the Improvements, Real
Estate Fixtures 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; provided, however, that
Mortgagor shall not be required to deliver the notice contemplated in this
sentence in the event that any Destruction would give rise to insurance
proceeds in an amount less than or equal to $250,000. All such proceeds,
less the amount of any expenses incurred in litigating, arbitrating,
compromising or settling any claim arising out of such Destruction (the "Net
Proceeds"), are hereby assigned and shall be paid to Mortgagee. Such Net
Proceeds shall constitute Trust Moneys (as defined in the Exchange
<PAGE>
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Indenture) and be applied in accordance with the provisions of the Exchange
Indenture and in connection therewith Mortgagee is authorized and directed to
pay from Trust Moneys any and all expenses deemed reasonably necessary by
Mortgagee in connection with the foregoing.
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 promptly shall notify Mortgagee upon
receiving notice of such Taking or commencement of proceedings therefor.
Mortgagee may participate in any proceedings or negotiations which might result
in any Taking. Mortgagee may be represented by counsel reasonably satisfactory
to it and the reasonable fees and disbursements of such counsel shall be at the
expense of Mortgagor. Mortgagor shall deliver or cause to be delivered to
Mortgagee all instruments reasonably 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 beyond any applicable notice and grace period set
forth herein or in the Exchange Indenture, 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 shall
constitute Trust Moneys and are hereby assigned and shall be paid to Mortgagee.
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
the Exchange Indenture. Mortgagee is hereby authorized and directed to pay from
Trust Moneys any and all such expenses deemed necessary and reasonable by
Mortgagee in connection with the foregoing.
SECTION 1.14. Alterations. Mortgagor shall not make any
structural addition, modification or change (each, an
<PAGE>
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"Alteration") to the Premises, the Real Estate Fixtures or the Equipment except
as permitted (y) prior to the Conversion Date, by the Credit Agreement and (z)
on or after the Conversion Date, by the Exchange Indenture. Mortgagor shall (a)
complete each Alteration promptly (provided, however, that in the event of the
occurrence of any Force Majeure, Mortgagor shall exercise all reasonable efforts
to complete the Alteration affected thereby as promptly as practicable), in a
good and workmanlike manner and, in all material respects, in compliance with
all applicable local laws, ordinances and requirements and (b) pay when due all
lawful 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 Environmental Representations and Warranties. Each
and every representation and warranty of Mortgagor contained in Section 4.18 of
the Credit Agreement is incorporated herein mutatis mutandis as a representation
and warranty of Mortgagor hereunder.
1.15.2 Environmental Covenants. Each and every covenant of
Mortgagor contained in Section 5.5 of the Credit Agreement is incorporated
herein mutatis mutandis as a covenant of Mortgagor hereunder.
SECTION 1.16. [Reserved]
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 upon reasonable advance notice, and at reasonable times,
from time to time, to 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
<PAGE>
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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 in
all material respects 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.
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, claim and demand as landlord to collect rent and other sums
due under all existing Leases and any other Leases, including, without
limitation, all extensions of the terms of the Leases (such assigned rights,
"Mortgagor's Interest"), 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
<PAGE>
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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 in the manner set
forth in Section 3.2.3 hereof. Mortgagee shall be accountable to Mortgagor
only for Rents actually received by 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 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. At such time as any Event of Default which shall have caused
Mortgagor's rights described in the first sentence of this subsection 2.1.3
to cease shall have been cured, Mortgagor shall thereafter be entitled to
exercise the rights described in the first sentence of this subsection 2.1.3
until such time as any other Event of Default shall have occurred and be
continuing.
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
<PAGE>
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Lease upon receipt of a notice from Mortgagee to the effect that an Event of
Default exists hereunder and requesting such payment. 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 use
commercially reasonable efforts to 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 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 reasonably 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 (i)
materially increase landlord's obligations thereunder, (ii) reduce landlord's
rights thereunder, (iii) materially decrease tenant's obligations thereunder,
(iv) impair the value or utility of the Mortgaged Property or the Lien of this
Mortgage or (v) otherwise 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 oth-
<PAGE>
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erwise 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 in all the Equipment and in
all the other items of Mortgaged Property (collectively, "Personal Property") in
which a security interest may be granted pursuant to the Uniform Commercial Code
as in effect in the state in which the Premises are located (the "UCC").
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 UCC 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 and during the continuance 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 3.2.3. 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 reasonable 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.
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2.2.5 Mortgagor shall not change its name until (i) it
shall have given Mortgagee thirty (30) days' prior written notice of its
intention to do so, clearly describing such new name and providing such other
information in connection therewith as Mortgagee may reasonably request and (ii)
with respect to such new name, Mortgagor shall have taken all action reasonably
required by Mortgagee to maintain the perfection and priority of the security
interest intended to be granted hereby.
2.2.6 All Personal Property now located at the Premises or
subsequently acquired to be used at the Premises shall at all times be kept
at the Premises except as otherwise provided (y) prior to the Conversion
Date, in Section 5.4(i) of the Credit Agreement and (z) on and after the
Conversion Date, in Section 11.3 of the Exchange Indenture.
2.2.7 Mortgagor shall at all times keep the Personal
Property insured in favor of Mortgagee, at Mortgagor's own expense, against
fire, theft and all other risks to which the Personal Property may be
subject, in such amounts and with such deductibles as from time to time
would be maintained by a prudent operator of businesses similar to the
business of Mortgagor. Each policy or certificates with respect to such
insurance shall be endorsed to Mortgagee's reasonable satisfaction for the
benefit of Mortgagee (including, without limitation, by naming Mortgagee as
an additional named insured or loss payee as its interest may appear) and
such policy or certificate shall be delivered to Mortgagee. Each such policy
shall state that it cannot be cancelled without thirty (30) days' prior
written notice to Mortgagee. At least thirty (30) days prior to the
expiration of any such policy of insurance, Mortgagee shall deliver to
Mortgagee an extension or renewal policy or an insurance certificate
evidencing renewal or extension of such policy. If Mortgagee shall fail to
insure such Personal Property to Mortgagee's reasonable satisfaction or if
Mortgagor shall fail to so endorse and deposit, or to extend or renew, all
such insurance policies or certificates with respect thereto, Mortgagee
shall have the right (but shall be under no obligation) to advance funds to
procure or renew or extend such insurance and Mortgagor agrees to reimburse
Mortgagee for any and all costs and expenses thereof, with interest on all
such funds from the date advanced at the Default Rate. Any proceeds of
insurance in respect of the Personal Property are hereby assigned and shall
be paid to Mortgagee. In case of any loss or damage to any of the Personal
Property, all proceeds of insurance maintained by Mortgagor shall constitute
Trust Moneys and
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be applied in accordance with the provisions of the Exchange Indenture.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES
SECTION 3.1. Remedies in Case of an Event of Default. Subject
to Section 3.6, if an Event of Default shall have occurred and be continuing,
Mortgagee may, but shall not be obligated to, in addition to any other action
permitted by law (and not limited in any manner by the remedies contained in any
Debt Instrument), take one or more of the following actions:
3.1.1 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, the Real Estate Fixtures 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;
3.1.2 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
3.1.3 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 the Debt Instruments 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 Subject to Section 3.6, if an Event of Default shall
have occurred and be continuing, 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. Subject to Section
3.6, 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. Subject to
Section 3.6, 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 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,
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subject to Section 3.6, 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 each
respective Secured Obligation, if not previously due and payable, shall, at
the option of the holder or holders (or their representatives) of each
respective Secured Obligation, 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, except as otherwise required by law or otherwise
set forth herein, be applied as follows:
FIRST: to pay the costs and expenses incurred by Mortgagee
in enforcing its remedies under this Mortgage;
SECOND: to pay the costs and expenses of the sale and of any
receiver of the Mortgaged Property or any part thereof appointed
pursuant to subsection 3.5.2;
THIRD: to each of the Secured Parties in an amount equal
to the unpaid principal amount of the Secured Obligations owed to
such Secured Party then outstanding, due and payable and, if such
moneys shall be insufficient to pay all such amounts in full, then
ratably to the Secured Parties in proportion to such outstanding,
due and payable amounts thereof on the date fixed by Mortgagee, as
collateral agent for the Secured Parties, for a distribution of
such proceeds;
FOURTH: without duplication of the amounts applied
pursuant to clauses FIRST, SECOND and THIRD above, to the
indefeasible payment in full in cash pro rata of the Interest
Rate Protection Obligations of the Company entered into with any
Lender in accordance with the terms of the agreements creating or
evidencing the same; and
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FIFTH: the balance, if any, to the Person lawfully entitled
thereto (including Mortgagor or its successors or assigns).
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, to the extent permitted by applicable law, 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 To the extent permitted by applicable law, 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.
SECTION 3.3. Additional Remedies in Case of an Event of
Default.
3.3.1 Subject to Section 3.6, Mortgagee shall be entitled
to recover judgment 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 in accordance
with the terms hereof, 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 the Secured
Obligations or any part thereof are declared 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
this Mortgage to Mortgagee.
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
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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. To the extent permitted by applicable law, 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
in any jurisdiction to which it has consented under any Debt Instrument and
further waives and agrees not to plead that any such action, suit or proceeding
brought in any such jurisdiction has been brought in an inconvenient forum and
(iv) covenants not to 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 upon the occurrence of an Event of Default
shall not impair any such right or power and shall not be construed to be a
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
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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.
SECTION 3.6 Foreclosure. Notwithstanding anything to the
contrary contained in this Mortgage or any other Debt Instrument, Mortgagee
shall not commence any action, suit or legal proceedings to foreclose the Lien
and security interest created and evidenced by this Mortgage unless and until it
has received the prior written approval of (y) prior to the Satisfaction Date,
the Agents under the Credit Agreement and (z) on or after the Satisfaction Date,
the Requisite Obligees.
ARTICLE IV
CERTAIN DEFINITIONS
The following terms shall have the following respective
meanings:
"Additional Undertaking" means (a) cash or Cash Equivalents
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, 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,
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surveys, estimates, permits, 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; (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; and (vi) any
costs or other charges in connection with obtaining services (including
legal counsel) that may reasonably be deemed by Mortgagor to be necessary in
connection with the construction.
"Event of Default" means an Event of Default under any
then effective Debt Instrument.
"Force Majeure" means any acts of God, fires,
explosions, floods, epidemic, abnormal storms, acts of a public enemy, wars,
blockades, riots, rebellions, sabotage, insurrections, restraints of
government or civil disturbances, national, regional or local labor strikes,
work stoppages, boycotts, walkouts or other labor disputes, but only to the
extent that any such act, event or circumstances (i) is beyond the reasonable
control of Mortgagor and (ii) is reasonably unforeseen.
"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, prior to the
Satisfaction Date, the Existing Notes or, on or after the Satisfaction Date,
the Exchange 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 enti-
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tling 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.
"Rating Agency" means Standard & Poor's Corporation, if such
Person shall then be rating corporate obligations, and Moody's Investors
Service, Inc., if such Person shall then be rating corporate obligations, or,
if neither 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.
"Satisfaction Date" means any date upon which Mortgagor and
its Subsidiaries repay or otherwise satisfy in full Mortgagor's and its
Subsidiaries' obligations (other than obligations which by the express terms of
the applicable agreement survive repayment in full of the applicable underlying
obligations, including, without limitation, indemnification obligations) under
the Existing Notes Documents and the other documents, instruments and agreements
executed in connection therewith.
"Secured Parties" means (i) the Trustee, as trustee under the
Existing Indenture for the holders of the Existing Notes until the occurrence of
the Satisfaction Date, (ii) the Agents, as agents under the Credit Agreement and
the Lenders and (iii) the trustee under the Exchange Indenture for the holders
of the Exchange Notes, if any.
"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.
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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 each respective Debt Instrument, 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 and 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 Debt Instrument or
any related document, or for the payment or performance of any covenant or
obligation contained herein or in any Debt Instrument, exceed the maximum
amount
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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 on a pro
rata basis 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 Mortgagee,
as collateral agent, contained in Section 10.4 of the Credit Agreement and
Article VII of the Exchange Indenture 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 addition to the foregoing, Mortgagor
shall reimburse Mortgagee, within five (5) Business Days after demand, for
all costs and expenses reasonably incurred by Mortgagee in connection with
the administration and enforcement of this Mortgage, except to the extent
any such costs or expenses result from the gross negligence or willful
misconduct of Mortgagee. 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) reasonably 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
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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 executed in accordance with the Indenture and signed by
(i) Mortgagor, to the extent any modification, amendment, discharge or waiver is
sought to be enforced against Mortgagor, and (ii) Mortgagee, in accordance with
the provisions of the applicable Debt Instruments to the extent any
modification, amendment, discharge or waiver is sought to be enforced against
Mortgagee.
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 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
Credit Agreement and the Exchange Indenture, if any.
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.
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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
Credit Agreement and the Exchange Indenture, if any.
5.10.5 Mortgagee has been appointed as collateral agent
pursuant to the Credit Agreement, the Letter Agreement and the Exchange
Indenture, if any. The actions of Mortgagee hereunder are subject to the
provisions of the Credit Agreement, the Letter Agreement and the Exchange
Indenture, if any. Mortgagee 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 Mortgaged Property), in accordance with this
Mortgage, the Credit Agreement and the Exchange Indenture, if any.
SECTION 5.11. Mortgagee's Right To Sever Indebtedness
5.11.1 Mortgagor acknowledges that (a) the Mortgaged
Property does not constitute the sole source of security for the payment and
performance of the Secured Obligations and that the Secured Obligations are
also secured by property of Mortgagor and its affiliates in other
jurisdictions (all such property, collectively, the "Collateral"), (b) the
number of such jurisdictions and the nature of the transaction of which this
instrument is a part are such that it would have been impracticable for the
parties to allocate to each item of Collateral a specific loan amount and to
execute in respect of such item a separate indenture and (c) Mortgagor
intends that Mortgagee have the same rights with respect to the Mortgaged
Property, in foreclosure or otherwise, that Mortgagee would have had if each
item of Collateral had been mortgaged or pledged pursuant to a separate
indenture and mortgage or security document. In furtherance of such intent,
Mortgagor agrees that Mortgagee may at any time by notice (an "Allocation
Notice") to Mortgagor allocate a portion (the "Allocated Indebtedness") of
the Secured Obligations to the Mortgaged Property and sever from the
remaining Secured Obligations the Allocated Indebtedness. From and after the
giving of an Allocation Notice with respect to the Mortgaged Property, the
Secured Obligations hereunder shall be limited to the extent set forth in
the Allocation Notice and (as so limited) shall, for all purposes, be
construed as a separate loan obligation of Mortgagor unrelated to the other
transactions contemplated by the Indenture or any document re-
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lated to either thereof. To the extent that the proceeds on any foreclosure of
the Mortgaged Property shall exceed the Allocated Indebtedness, such proceeds
shall belong to Mortgagor and shall not be available hereunder to satisfy any
Secured Obligations of Mortgagor other than the Allocated Indebtedness. In any
action or proceeding to foreclose the Lien of this Mortgage or in connection
with any power of sale foreclosure or other remedy exercised under this Mortgage
commenced after the giving by Mortgagee of an Allocation Notice, the Allocation
Notice shall be conclusive proof of the limits of the Secured Obligations hereby
secured, and Mortgagor may introduce, by way of defense or counterclaim,
evidence thereof in any such action or proceeding.
5.11.2 Mortgagor hereby waives, to the greatest extent
permitted under law, the right to a discharge of any of the Secured Obligations
under any statute or rule of law now or hereafter in effect which provides that
foreclosure of the Lien of this Mortgage or other remedy exercised under this
Mortgage constitutes the exclusive means for satisfaction of the Secured
Obligations or which makes unavailable a deficiency judgment or any subsequent
remedy because Mortgagee elected to proceed with a power of sale, foreclosure or
such other remedy or because of any failure by Mortgagee to comply with laws
that prescribe conditions to the entitlement to a deficiency judgment. In the
event that, notwithstanding the foregoing waiver, any court shall for any reason
hold that Mortgagee is not entitled to a deficiency judgment, Mortgagor shall
not (a) introduce in any other jurisdiction such judgment as a defense to
enforcement against Mortgagor of any remedy in any Debt Instrument or any
document related thereto or (b) seek to have such judgment recognized or entered
in any other jurisdiction, and any such judgment shall in all events be limited
in application only to the state or jurisdiction where rendered.
5.11.3 In the event any instrument in addition to the
Allocation Notice is necessary to effectuate the provisions of this Section
5.11, including, without limitation, any amendment to this Mortgage, any
substitute promissory note or affidavit or certificate of any kind, Mortgagee
may execute, deliver or record such instrument as the attorney-in-fact of
Mortgagor in the event that Mortgagor fails to deliver such instrument within
ten (10) days after delivery to Mortgagor of a request therefor. Such power of
attorney is coupled with an interest and is irrevocable.
<PAGE>
-43-
SECTION 5.12. Waiver of Stay.
5.12.1 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 in any other document evidencing or securing
the Secured Obligations.
5.12.2 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 5.13. 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 any Debt Instrument, 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 5.14. 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
<PAGE>
-44-
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 5.15. Estoppel Certificates. Each party hereto
shall, from time to time, upon twenty (20) days, prior written request by
the other party, execute, acknowledge and deliver to such other party a
certificate signed by an authorized officer or officers stating that this
Mortgage and the other Debt Instruments are unmodified and in full force and
effect (or, if there have been modifications, that this Mortgage and such
other Debt Instruments, 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 5.16. 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 5.17. (Reserved]
SECTION 5.18. Expenses of Collection. In the event this
Mortgage or any other Debt Instrument 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 reasonable 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.
SECTION 5.19. 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, 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
<PAGE>
-45-
such Business Day, with the same force and effect as if made on such other
day.
SECTION 5.20. Future Advances. This Mortgage constitutes
an "Open-End Mortgage" under ss. 5301.232 of the Ohio Revised Code and is
given to secure not only existing indebtedness, but also such future
advances and loans, whether such advances and loans are obligatory or are to
be made at the option of the existing and future holders of the Notes, or
otherwise, as are made by the existing and future holders of the Notes, to
the same extent as if such future advances and loans were made on the date
of the execution of this Mortgage. The total amount of indebtedness that may
be so secured may decrease or increase from time to time, but the maximum
total unpaid principal balance outstanding at any one time shall not exceed
$208,460,000, plus interest thereon, collection costs, sums advanced for the
payment of taxes, assessments, maintenance and repair charges, insurance
premiums and any other costs incurred to protect the security encumbered
hereby or the lien of this Mortgage, expenses incurred by Mortgagee or the
existing and future holders of the Notes by reason of any default by the
Mortgagee under the terms of this Mortgage, together with all other sums
secured hereby.
SECTION 5.21. Termination.
5.21.1 Upon (i) receipt by Mortgagee from Mortgagor of a
written notice (countersigned by the Administrative Agent) stating that all
of the Secured Obligations arising under or in connection with the Credit
Agreement have been paid in full, (ii) receipt by Mortgagee from Mortgagor
(countersigned by the trustee under the Exchange Indenture, if any) of a
written notice stating that all of the Secured Obligations arising under or
in connection with the Exchange Notes Documents and the Exchanges Notes
issued thereunder have been paid or deemed paid in full, (iii) receipt by
Mortgagee from Mortgagor (countersigned by the Trustee) of a written notice
stating that the Satisfaction Date has occurred and that all of the Secured
Obligations arising under or in connection with the Existing Notes Documents
and the Existing Notes issued thereunder have been paid or deemed paid in
full, and (iv) the payment in full of all amounts payable to Mortgagee
hereunder, the Liens created by this Mortgage shall terminate forthwith and
all right, title and interest of Mortgagee in and to the Mortgaged Property
shall revert and be released to Mortgagor, its successors and assigns.
<PAGE>
-46-
5.21.2 Upon the termination of the Mortgagee's security
interests and the release of the Mortgaged Property in accordance with
subsection 5.21.1, Mortgagee will promptly at Mortgagor's written request
and expense, (i) execute and deliver to Mortgagor such documents as
Mortgagor shall reasonably request to evidence the termination of such
security interest or the release of the Mortgaged Property and (ii) deliver
or cause to be delivered to Mortgagor all property of Mortgagor then held by
Mortgagee or any agent thereof.
5.21.3 Nothing herein shall be construed to prevent
Mortgagee from releasing Mortgaged Property in accordance with the terms of
the Debt Instruments.
SECTION 5.22. No Liability to Other Secured Parties. None
of the Secured Parties shall incur any liability to any other Secured Party
with respect to any decision or determination permitted or required to be
taken or made by it in its capacity as a Secured Party hereunder and the
existence or exercise of any right by the Agents or the Requisite Obligees
to take any action or make any determination hereunder shall not impose on
any Secured Party taking or failing to take any such action or exercise such
right any duty or liability to any other Secured Party with respect thereto
or to any of the Mortgaged Property affected thereby.
<PAGE>
IN WITNESS WHEREOF, this Mortgage has been duly executed
by Mortgagor as of the date first written above.
REPUBLIC ENGINEERED STEELS, INC.,
Mortgagor
By: /s/ David Blitzer
--------------------
Name: David Blitzer
Title: Secretary
Signed and Acknowledged
in the Presence of:
/s/ Victor E. Salerno, III
- ------------------------------------
Printed Name: Victor E. Salerno, III
/s/ Gregory J. Moundas
- ------------------------------------
Printed Name: Gregory J. Moundas
<PAGE>
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
BEFORE ME, a Notary Public in and for said County and
State, personally appeared David Blitzer, known to me to be the Secretary of
Republic Engineered Steels, Inc., a Delaware corporation, who acknowledged that
he did sign the foregoing instrument on behalf of said corporation by authority
of its Board of Directors and that the same is his free act and deed as such
officer and the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal at New York County, New York, this 6th day of November, 1998.
------------------------------------
Notary Public
My commission expires: -------------
[Notary Seal]
Notary Public
This instrument was prepared GARY POLLARD
by and after recording please NOTARY PUBLIC. State of New York
return to: No 31-4827351
Qualified in New York County
Commission Expires March 30, 2000
Jonathan Schaffzin, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
<PAGE>
SCHEDULE A
LEGAL DESCRIPTION
* To be completed upon receipt of Title Commitment.
<PAGE>
SCHEDULE B
PRIOR LIENS
* To be completed upon receipt of Title Commitment.
</TABLE>
<PAGE>
Exhibit V
to the Credit Agreement
- --------------------------------------------------------------------------------
REPUBLIC ENGINEERED STEELS, INC.,
as Issuer,
and
-------------------,
as Guarantor
[ ],
as Trustee,
and
The Chase Manhattan Bank,
as Collateral Agent
--------------------------
INDENTURE
Dated as of [ ], [ ]
--------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
ss.310 (a)(1) ........................................... 7.10
(a)(2) ........................................... 7.10
(a)(3) ........................................... 7.12
(a)(4) ........................................... N.A.
(b) .............................................. 7.8; 7.10; 12.2
(c) .............................................. N.A.
ss.311 (a) .............................................. 7.11
(b) .............................................. 7.11
(c) .............................................. N.A.
ss.312 (a) .............................................. 2.5
(b) .............................................. 12.3
(c) .............................................. 12.3
ss.313 (a) .............................................. 7.6
(b)(1) ........................................... 7.6
(b)(2) ........................................... 7.6
(c) .............................................. 7.6; 12.2
(d) .............................................. 7.6
ss.314 (a) .............................................. 4.7; 12.2
(b) .............................................. 10.2
(c)(1) ........................................... 12.4
(c)(2) ........................................... 12.4
(c)(3) ........................................... N.A.
(d) .............................................. 10.6
(e) .............................................. 12.5
(f) .............................................. N.A.
ss.315 (a) .............................................. 7.1(b)
(b) .............................................. 7.5; 12.2
(c) .............................................. 7.1(a)
(d) .............................................. 7.1(c)
(e) .............................................. 6.11
ss.316 (a) (last sentence) .............................. 2.9
(a)(1)(A) ........................................ 6.5
(a)(1)(B) ........................................ 6.4
(a)(2) ........................................... N.A.
(b) .............................................. 6.7
ss.317 (a)(1) ........................................... 6.8
(a)(2) ........................................... 6.9
(b) .............................................. 2.4
ss.318 (a) .............................................. 12.1
- ---------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.1. Definitions.............................................................................1
SECTION 1.2. Incorporation by Reference of Trust Indenture Act......................................22
SECTION 1.3. Rules of Construction..................................................................23
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating........................................................................23
SECTION 2.2. Execution and Authentication...........................................................24
SECTION 2.3. Registrar and Paying Agent.............................................................25
SECTION 2.4. Paying Agent To Hold Money in Trust....................................................25
SECTION 2.5. Securityholder Lists...................................................................26
SECTION 2.6. Transfer and Exchange..................................................................26
SECTION 2.7. Replacement Securities.................................................................26
SECTION 2.8. Outstanding Securities.................................................................27
SECTION 2.9. Treasury Securities....................................................................27
SECTION 2.10. Temporary Securities...................................................................27
SECTION 2.11. Cancellation...........................................................................28
SECTION 2.12. Defaulted Interest.....................................................................28
SECTION 2.13. CUSIP Number...........................................................................28
SECTION 2.14. Deposit of Moneys......................................................................28
SECTION 2.15. Book-Entry Provisions for Global Securities............................................29
SECTION 2.16. Special Transfer Provisions............................................................30
ARTICLE III
REDEMPTION
SECTION 3.1. Notices to Trustee.....................................................................33
SECTION 3.2. Selection of Securities To Be Redeemed.................................................33
SECTION 3.3. Notice of Redemption...................................................................34
SECTION 3.4. Effect of Notice of Redemption.........................................................34
SECTION 3.5. Deposit of Redemption Price............................................................35
SECTION 3.6. Securities Redeemed in Part............................................................35
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</TABLE>
<PAGE>
ARTICLE IV
COVENANTS
<TABLE>
<S> <C> <C>
SECTION 4.1. Payment of Securities..................................................................35
SECTION 4.2. Maintenance of Office or Agency........................................................35
SECTION 4.3. Corporate Existence....................................................................36
SECTION 4.4. Payment of Taxes and Other Claims......................................................36
SECTION 4.5. Maintenance of Properties; Insurance; Books and Records; Compliance with Law...........37
SECTION 4.6. Compliance Certificates................................................................37
SECTION 4.7. Reports................................................................................38
SECTION 4.8. Further Assurance to the Trustee or Collateral Agent...................................38
SECTION 4.9. Limitation on Additional Indebtedness..................................................38
SECTION 4.10. Limitation on Sale-Leaseback Transactions..............................................40
SECTION 4.11. Limitation on Liens....................................................................41
SECTION 4.12. Limitation on Restricted Payments......................................................42
SECTION 4.13. Disposition of Proceeds of Asset Sales.................................................44
SECTION 4.14. Limitation on Transactions with Affiliates.............................................47
SECTION 4.15. Change of Control......................................................................48
SECTION 4.16. Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries..........50
SECTION 4.17. Limitation on Issuance of Preferred Stock by Subsidiaries..............................51
SECTION 4.18. Limitation on Guarantees of Certain Indebtedness.......................................51
SECTION 4.19. Impairment of Security Interest........................................................51
SECTION 4.20. Conflicting Agreements.................................................................52
SECTION 4.21. Waiver of Stay, Extension or Usury Laws................................................52
SECTION 4.22. Limitation on Investments, Loans and Advances..........................................52
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. When Company May Merge, Etc............................................................53
SECTION 5.2. Successor Entity Substituted...........................................................54
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1. Events of Default......................................................................54
SECTION 6.2. Acceleration...........................................................................57
SECTION 6.3. Other Remedies.........................................................................57
SECTION 6.4. Waiver of Past Default.................................................................58
SECTION 6.5. Control by Majority....................................................................58
-ii-
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 6.6. Limitation on Suits....................................................................58
SECTION 6.7. Rights of Holders To Receive Payment...................................................59
SECTION 6.8. Collection Suit by Trustee.............................................................59
SECTION 6.9. Trustee May File Proofs of Claim.......................................................59
SECTION 6.10. Priorities.............................................................................60
SECTION 6.11. Undertaking for Costs..................................................................60
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee......................................................................60
SECTION 7.2. Rights of Trustee......................................................................62
SECTION 7.3. Individual Rights of Trustee...........................................................63
SECTION 7.4. Trustee's Disclaimer...................................................................63
SECTION 7.5. Notice of Defaults.....................................................................63
SECTION 7.6. Reports by Trustee to Holders..........................................................63
SECTION 7.7. Compensation and Indemnity.............................................................64
SECTION 7.8. Replacement of Trustee.................................................................65
SECTION 7.9. Successor Trustee by Merger, Etc.......................................................66
SECTION 7.10. Eligibility; Disqualification..........................................................66
SECTION 7.11. Preferential Collection of Claims Against Company......................................66
SECTION 7.12. Co-Trustee.............................................................................66
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Termination of Company's Obligations...................................................67
SECTION 8.2. Legal Defeasance and Covenant Defeasance...............................................68
SECTION 8.3. Application of Trust Money.............................................................72
SECTION 8.4. Repayment to Company or the Guarantors.................................................72
SECTION 8.5. Reinstatement..........................................................................72
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Without Consent of Holders.............................................................73
SECTION 9.2. With Consent of Holders................................................................73
SECTION 9.3. Compliance with Trust Indenture Act....................................................75
SECTION 9.4. Revocation and Effect of Consents......................................................75
SECTION 9.5. Notation on or Exchange of Securities..................................................75
SECTION 9.6. Trustee and Collateral Agent To Sign Amendments, Etc...................................75
-iii-
</TABLE>
<PAGE>
ARTICLE X
GUARANTEE
<TABLE>
<S> <C> <C>
SECTION 10.1. Unconditional Guarantee................................................................76
SECTION 10.2. Severability...........................................................................77
SECTION 10.3. Release of a Guarantor.................................................................77
SECTION 10.4. Limitation of Guarantor's Liability....................................................77
SECTION 10.5. Guarantors May Consolidate, etc., on Certain Terms.....................................78
SECTION 10.6. Contribution...........................................................................78
SECTION 10.7. Waiver of Subrogation..................................................................79
SECTION 10.8. Execution of Guarantee.................................................................79
SECTION 10.9. Waiver of Stay, Extension or Usury Laws................................................80
ARTICLE XI
SECURITY DOCUMENTS
SECTION 11.1. Collateral and Security Documents......................................................80
SECTION 11.2. Recording, Etc.........................................................................81
SECTION 11.3. Certain Dispositions of Collateral.....................................................82
SECTION 11.4. Release of Collateral..................................................................84
SECTION 11.5. Eminent Domain and Other Governmental Takings..........................................87
SECTION 11.6. Trust Indenture Act Requirements.......................................................89
SECTION 11.7. Suits To Protect the Collateral........................................................89
SECTION 11.8. Purchaser Protected....................................................................90
SECTION 11.9. Powers Exercisable by Receiver or Collateral Agent.....................................90
SECTION 11.10. Disposition of Obligations Received....................................................90
SECTION 11.11. Determinations Relating to Collateral..................................................90
SECTION 11.12. Renewal and Refunding..................................................................91
SECTION 11.13. Release upon Termination of the Company's Obligations..................................91
SECTION 11.14. Collateral Agent's Duties in Respect of Collateral.....................................91
SECTION 11.15. Collateral Agent.......................................................................91
ARTICLE XII
APPLICATION OF TRUST MONEYS
SECTION 12.1. "Trust Moneys" Defined.................................................................93
SECTION 12.2. Retirement of Securities...............................................................94
SECTION 12.3. Withdrawals of Insurance Proceeds and Condemnation Awards..............................95
SECTION 12.4. Withdrawal of Trust Moneys for Reinvestment............................................99
SECTION 12.5. Powers Exercisable Notwithstanding Event of Default...................................100
SECTION 12.6. Powers Exercisable by Trustee or Receiver.............................................101
SECTION 12.7. Disposition of Securities Retired.....................................................101
-iv-
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 12.8. Investment of Trust Moneys............................................................101
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Trust Indenture Act Controls..........................................................102
SECTION 13.2. Notices...............................................................................102
SECTION 13.3. Communications by Holders with Other Holders..........................................103
SECTION 13.4. Certificate and Opinion of Counsel as to Conditions Precedent.........................103
SECTION 13.5. Statements Required in Certificate and Opinion of Counsel.............................103
SECTION 13.6. Rules by Trustee, Paying Agent, Registrar, Collateral Agent...........................104
SECTION 13.7. Legal Holidays........................................................................104
SECTION 13.8. Governing Law.........................................................................104
SECTION 13.9. No Recourse Against Others............................................................104
SECTION 13.10. Successors............................................................................104
SECTION 13.11. Duplicate Originals...................................................................104
SECTION 13.12. Severability..........................................................................104
SECTION 13.13. Table of Contents, Headings, Etc......................................................105
SIGNATURES..................................................................................................107
-v-
</TABLE>
<PAGE>
EXHIBIT A-1 - Form of Series A Security with Guarantee
EXHIBIT A-2 - Form of Series B Security with Guarantee
EXHIBIT B - Form of Legend for Book-Entry Securities
EXHIBIT C - Form of Certificate To Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors
EXHIBIT D - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S
EXHIBIT E - Form of Mortgage
EXHIBIT F - Form of Security Agreement
Schedule A - List of Owned Real Properties
Schedule B - Mortgaged Real Property
-vi-
<PAGE>
INDENTURE dated as of [ ], [ ], among REPUBLIC ENGINEERED
STEELS, INC., a Delaware corporation, as Issuer (the "Company"), [list each
domestic subsidiary of Company which is not a Non-Recourse Subsidiary], as
Guarantors (the "Guarantors"), [ ], a New York banking
corporation, as Trustee (the "Trustee"), and The Chase Manhattan Bank, in its
capacity as Collateral Agent.
The Company and the Guarantors have duly authorized the execution and
delivery of this Indenture to provide for the issuance of the (i) 15.5% First
Mortgage Notes due 2006, Series A and (ii) 15.5% First Mortgage Notes dues 2006,
Series B to be issued in exchange for the 15.5% First Mortgage Notes due 2006,
Series A (the "Securities," such term to include the Initial Securities, the
Private Exchange Securities, if any, and the Unrestricted Securities, if any,
treated as a single class of securities under this Indenture) pursuant to the
Registration Rights Agreement to be issued as provided for in this Indenture.
The parties hereto agree as follows for the benefit of each other and for
the equal and ratable benefit of the Holders of the Securities:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acquired Indebtedness" means (i) Indebtedness of a Person existing at the
time such Person becomes a Subsidiary of the Company or assumed in connection
with an Asset Acquisition by such Person, excluding Indebtedness incurred in
connection with, or in anticipation of, such Person becoming a Subsidiary of the
Company or such acquisition, and (ii) Indebtedness secured by a Lien encumbering
any asset acquired by such Person.
"Adjusted Net Assets" has the meaning provided in Section 10.6.
"Affiliate" as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to cause the direction of the management or policies of
that Person, whether through the ownership of voting securities or by contract
or otherwise.
"Affiliate Transaction" has the meaning provided in Section 4.14.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Appraiser" means a Person who in the course of its business, appraises
property and, where Real Property is involved, who is a member in good standing
of the American Institute of Real
<PAGE>
-2-
Estate Appraisers, recognized and licensed to do business in the jurisdiction
where the applicable Real Property is situated, and who may be employed by the
Company.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise), or purchase or
acquisition of Capital Stock, by the Company or any of its Subsidiaries in any
other Person, in either case pursuant to which such Person shall become a
Subsidiary of the Company or any of its Subsidiaries or shall be merged with or
into the Company or any of its Subsidiaries or (ii) any acquisition by the
Company or any of its Subsidiaries of the assets of any Person which constitute
substantially all of an operating unit or business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
or other disposition to any Person other than the Company or a Wholly-Owned
Subsidiary of the Company, in one transaction or a series of related
transactions, of (i) any Capital Stock of any Subsidiary of the Company (other
than directors' qualifying shares or investments by foreign nationals required
by applicable law), or (ii) any other property or asset of the Company or any
Subsidiary of the Company, in each case, other than inventory or receivables and
other than any isolated transaction which does not exceed $250,000 individually
or $2,500,000 in the aggregate for all such transactions. For the purposes of
this definition, the term Asset Sale shall not include (a) any disposition of
properties and assets of the Company or any Subsidiary that is governed under
and complies with the requirements set forth in Article V or any sale by the
Company of its Capital Stock; (b) a disposition of Cash Equivalents or
Investment Grade Securities or obsolete or worn out equipment in the ordinary
course of business; (c) any dividend or distribution that is permitted to be
made, and is made, under Section 4.12; (d) any financing transaction with
respect to property built or acquired by the Company or any Subsidiary after the
Issue Date including, without limitation, sale-leasebacks and asset securities;
and (e) transfers of accounts receivable, or participations therein, in
connection with the Revolving Credit Facility.
"Asset Sale Offer" has the meaning provided in Section 4.13.
"Asset Sale Payment Date" means, with respect to any Available Amount from
an Asset Sale, the earliest of (x) the 270th day following receipt of such
Available Amount if no written commitments to apply such Available Amount to a
use other than an Asset Sale Offer have been made or (y) the 360th day following
receipt of such Available Amount or (z) the Business Day following the date on
which an Asset Sale Offer shall expire.
"Available Amount" has the meaning provided in Section 4.13.
"Baltimore Property" means any Property of the Company and its Subsidiaries
located at 3501 East Biddle Street, Baltimore, Maryland 21213 or used primarily
in connection with the Company's business and operations at such location.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar federal or
state law for the relief of debtors.
<PAGE>
-3-
"Bank Security Agreement" means that certain security and pledge agreement,
dated as of November 28, 1989 and amended on December 21, 1993 and April 25,
1997, between the Company and BankBoston N.A., as agent, as amended,
supplemented or otherwise modified from time to time, including any security
agreement executed in connection with a refinancing of the Revolving Credit
Facility permitted hereunder to the extent the Lien granted pursuant to such
security agreement is permitted hereunder.
"Blackstone" means Blackstone Capital Partners Merchant II Banking Fund
L.P. and its Affiliates.
"Board of Directors" means the Board of Directors of the Company or any
committee of such Board of Directors authorized to act for it hereunder.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person,
to have been duly adopted by the board of directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day except a Saturday, a Sunday or any day on
which banking institutions in New York, New York are required or authorized by
law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock, whether
outstanding on the Issue Date or issued after the Issue Date, and any and all
rights, warrants or options exchangeable for or convertible into such capital
stock.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
property (whether real, personal or mixed) that is required to be classified and
accounted for as a capital lease obligation under GAAP, and, for the purposes of
this Indenture, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means, at any time (i) any evidence of Indebtedness with
a maturity of 180 days or less issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or acceptances with a
maturity of 180 days or less of any financial institution that is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500,000,000; (iii) commercial paper with a maturity of
180 days or less issued by a corporation (except an Affiliate of the Company)
organized under the laws of any state of the United States or the District of
Columbia and rated at least A-1 by Standard & Poor's Corporation or at least P-1
by Moody's Investors Service, Inc.; (iv) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one
<PAGE>
-4-
year from the date of acquisition; provided, however, that the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers and Others, as
adopted by the Comptroller of the Currency; (v) investment funds investing 95%
of their assets in securities of the types described in clauses (i)-(iv) above;
and (vi) 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 the occurrence of one or more of the following
events: (i) any Person or group (within the meaning of Rule 13d-5 of the
Exchange Act as in effect on the date hereof), other than the Permitted Holders
or any combination of Permitted Holders, shall own beneficially, directly or
indirectly, in the aggregate shares representing more than 25% of the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock of
the Company at a time when the Permitted Holders or any combination of Permitted
Holders shall fail to own beneficially, directly or indirectly, shares
representing at least a majority of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company; (ii) the
Permitted Holders or any combination of Permitted Holders shall fail to own
beneficially, directly or indirectly, in the aggregate Capital Stock
representing at least 51% of the aggregate ordinary voting power represented by
the issued and outstanding Capital Stock of Holdings; provided, however, that
Permitted Holders may own less than 51% provided that (a) a majority of the
seats (excluding vacant seats) on the Board of Directors of the Company shall at
any time after the Initial Closing Date have been occupied by Persons who were
either (a) nominated by any one or more Permitted Holders or by a majority of
the Board of Directors of the Company, respectively, or (b) appointed by
directors so nominated and (b) no other Person shall own beneficially, directly
or indirectly, in the aggregate shares representing more than the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock of
the Company than the Permitted Holders or (iii) a majority of the seats
(excluding vacant seats) on the Board of Directors of Holdings or the Company
shall at any time after the Initial Closing Date have been occupied by Persons
who were neither (a) nominated by any one or more Permitted Holders or by a
majority of the Board of Directors of Holdings or the Company, respectively, nor
(b) appointed by directors so nominated.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section 4.15.
"Closing Date Mortgaged Real Property" has the meaning provided in the
Credit Agreement.
"Closing Date Security Documents" has the meaning provided in the Credit
Agreement.
"Closing Date Collateral" has the meaning provided in the Credit Agreement.
<PAGE>
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"Collateral" means, collectively, all of the property and assets
(including, without limitation, Trust Moneys) that are from time to time subject
to the Lien created by this Indenture, the Security Agreements and the Mortgages
and any other Property made subject to a Lien in favor of the Collateral Agent
(for the benefit of the Secured Parties) pursuant to the Security Documents,
including, without limitation, the Closing Date Collateral and the Satisfaction
Date Collateral; provided, however, that "Collateral" shall not include the
Baltimore Property or the Harrison Property.
"Collateral Agent" means The Chase Manhattan Bank, in its capacity as
collateral agent for the Secured Parties under the Security Documents or any
successor Collateral Agent appointed pursuant to Section 11.15.
"Collateral Proceeds" has the meaning provided in Section 4.13.
"Collective Bargaining Agreement" has the meaning provided in the Credit
Agreement.
"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 such date, and includes, without
limitation, all series and classes of such common stock.
"Company" 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 the successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice-Chairman, its Chief Executive Officer, its President or a Vice President,
and by its Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer, and delivered to the Trustee.
"Consolidated Cash Flow Available for Fixed Charges" means, with respect to
the Company for any period, (a) the sum of, without duplication, the amounts for
such period, taken as a single accounting period, of (i) Consolidated Net
Income, (ii) Consolidated Non-cash Charges, (iii) Consolidated Interest Expense,
(iv) Consolidated Income Tax Expense, (v) any fees, expenses or charges related
to any issuance of Capital Stock, permitted Investments, the acquisition of
recapitalization of Indebtedness permitted to be incurred hereby (in each case,
whether or not successful) and fees, expenses or charges related to the Merger
and the Transactions (including fees to Blackstone and Veritas) to the extent
reducing Consolidated Net Income for such period, (vi) the amount of any
nonrecurring charges (including any one-time costs incurred in connection with
acquisitions after the Closing Date) to the extent reducing Consolidated Net
Income for such period, (vii) [cash and](1) non-cash OPEB expense determined in
accordance with GAAP to the extent reducing Consolidated Net Income for such
period and (viii) the amount of annual management, monitoring, consulting and
advi-
- --------------
(1) Subject to discussion
<PAGE>
-6-
sory fees and related expenses paid to Blackstone and Veritas and their
Affiliates consistent with past customary practices of Blackstone and Veritas
with respect to portfolio companies less (b) any non-cash items increasing
Consolidated Net Income for such period.
"Consolidated Financial Statements" means the consolidated and combined
financial statements of the Company.
"Consolidated Fixed Charge Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of Consolidated Cash Flow Available
for Fixed Charges for the four quarter period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination (the
"Calculation Date") for which Consolidated Financial Statements are available
(the "Four Quarter Period") to (ii) Consolidated Fixed Charges for such Four
Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated Cash Flow Available for Fixed
Charges" and "Consolidated Fixed Charges" shall be calculated after giving
effect on a pro forma basis for the period of such calculation to, without
duplication, (a) the incurrence of any Indebtedness by the Company or any of its
Subsidiaries (and the application of the net proceeds thereof) during the period
commencing on the first day of the Four Quarter Period to and including the
Calculation Date (the "Reference Period"), including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such calculation
(and the application of the net proceeds thereof), as if such incurrence (and
application) occurred on the first date of the Reference Period, (b) an
adjustment to eliminate or include, as the case may be, the Consolidated Cash
Flow Available for Fixed Charges and Consolidated Fixed Charges directly or
indirectly attributable to assets which are the subject of any Asset Sale or
Asset Acquisition (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of the Company or one of
its Subsidiaries (including any Person who becomes a Subsidiary of the Company
as a result of the Asset Acquisition) incurring, assuming or otherwise being
liable for Acquired Indebtedness) occurring during the Reference Period, as if
such Asset Sale or Asset Acquisition occurred on the first day of the Reference
Period, (c) the retirement of Indebtedness during the Reference Period which
cannot thereafter be reborrowed occurring as if retired on the first day of the
Reference Period, (d) an adjustment to eliminate any net after-tax extraordinary
gains or losses and (e) an adjustment to eliminate any charges arising out of
the Transactions. For purposes of calculating "Consolidated Fixed Charges" for
this "Consolidated Fixed Charge Coverage Ratio", (a) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Calculation Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Calculation Date, (b) if interest on any
Indebtedness actually incurred on the Calculation Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Calculation Date will be deemed to have been in effect during the
Reference Period and (c) notwithstanding clauses (a) and (b) of this sentence,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to Interest Rate Protection
Obligations for the twelve month period following the Calculation Date, shall be
deemed to have accrued at the rate per annum resulting after giving effect to
the operation of such agreements to the extent then applicable. If the Company
or any of its Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, this definition shall give effect to the incurrence of such
guaranteed Indebtedness as if such Person had directly incurred or otherwise
assumed such guar-
<PAGE>
-7-
anteed Indebtedness. Notwithstanding the foregoing, for the
purposes of making the computation referred to above, interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period. For purposes of this definition, whenever pro
forma effect is to be given to a transaction, the pro forma calculations shall
be made in good faith by a responsible financial or accounting Officer of the
Company. In addition, for purposes of this definition, whenever pro forma effect
is to be given to an Asset Acquisition or Investment, pro forma calculations
(including, without limitation, with respect to cost savings and synergies)
shall be determined in accordance with Regulation S-X under the Securities Act
and the interpretations thereof by the SEC; provided that such computation shall
be adjusted from time to time following the Asset Acquisition to eliminate cost
savings and synergies that have either been realized (and therefore are
reflected in actual results) or cannot reasonably be expected to be realized
(whether based upon information and results obtained following the applicable
Asset Acquisition or Investment or otherwise) by the Company and its
Subsidiaries. In no event shall the Consolidated Fixed Charge Coverage Ratio
reflect any anticipated, but unrealized, cost savings resulting from the Merger
or the Collective Bargaining Agreement (whether or not determined in accordance
with Regulation S-X under the Securities Act and the interpretations thereof by
the SEC).
"Consolidated Fixed Charges" means, with respect to the Company for any
period, the sum of, without duplication, the amounts for such period of (a) the
Consolidated Interest Expense of the Company and (b) the aggregate amount of
dividends and other distributions paid or accrued during such period in respect
of Disqualified Capital Stock of the Company and its Subsidiaries on a
consolidated basis.
"Consolidated Income Tax Expense" means, with respect to the Company for
any period, the provision for Federal, state, local and foreign income taxes of
the Company and its Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the Company for any
period, without duplication, the sum of (i) the interest expense (whether cash
or non-cash) of the Company and its Subsidiaries for such period as determined
on a consolidated basis in accordance with GAAP to the extent deducted in
calculating Consolidated Net Income, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Rate Protection
Obligations relating to interest (including any amortization of discounts), (c)
the interest portion of any deferred payment obligation, (d) all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (e) all capitalized interest and all accrued
interest but excluding non-cash amortization of deferred financing fees and
other issuance costs, and (f) all scheduled payments of interest paid to
Holdings and referred to in Section 4.12(b)(v), and (ii) the interest component
of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and its Subsidiaries during such period as determined on
a consolidated basis in accordance with GAAP to the extent deducted in
calculating Consolidated Net Income.
"Consolidated Net Income" means, with respect to the Company for any
period, the consolidated net income (or loss) of the Company and its
Subsidiaries for such period as determined in accordance with GAAP, adjusted, to
the extent included in calculating such net income, by excluding, without
duplication, (a) all net after-tax extraordinary gains or losses (including any
net after-
<PAGE>
-8-
tax income (loss) from the Baltimore Property or the Harrison Property
and any net after-tax gains or losses on disposal of discontinued operations),
(b) the portion of net income (but not losses) of the Company and its
Subsidiaries allocable to minority interests in unconsolidated Persons to the
extent that cash dividends or distributions have not actually been received by
the Company or one of its Subsidiaries, (c) net income (or loss) of any Person
combined with the Company or one of its Subsidiaries on a "pooling of interests"
basis attributable to any period prior to the date of combination, (d) any gain
or loss realized upon the termination of any employee pension benefit plan, on
an after-tax basis, (e) gains or losses in respect of any Asset Sales by the
Company or one of its Subsidiaries, (f) the cumulative non-cash effect of any
change in any accounting principle, (g) the net income of any Non-Recourse
Subsidiary, except, for purposes of Section 4.12, to the extent that cash
dividends or distributions have been actually received by the Company or one of
its Subsidiaries, (h) the non-cash effect of compensation expense related to the
contribution of shares held by any qualified employee stock ownership trust
formed for employees of the Company and its Subsidiaries and (i) the net income
of any Subsidiary of the Company to the extent that the declaration of dividends
or similar distributions by that Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, law, rule or
governmental regulation applicable to that Subsidiary or its stockholder(s).
"Consolidated Non-cash Charges" means the aggregate depreciation,
amortization and other non-cash expenses of the Company and its Subsidiaries
(including any non-cash charges related to any employee stock ownership plan)
reducing Consolidated Net Income of the Company and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP (excluding
any such charges constituting an extraordinary item or loss or any such charge
which required an accrual of or a reserve for cash charges for any future
period).
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
office at the date of the execution of this Indenture is located at [ ],
Attention: [ ].
"Credit Agreement" means the Credit Agreement dated as of November 6, 1998,
among the Company, the Guarantors named therein, the Lenders named therein, The
Chase Manhattan Bank, DLJ Bridge Finance Inc. and BankBoston, N.A., as agents,
and The Chase Manhattan Bank, as Collateral Agent, together with the related
documents thereto (including, without limitation, any guarantee agreements,
promissory notes and collateral documents), in each case as such agreements may
be amended, supplemented or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid or extended from time to
time (whether with the original agents and lenders or other agents and lenders
or otherwise, and whether provided under the original Credit Agreement or other
credit agreements or otherwise).
"Credit Agreement Indebtedness" means any and all amounts, whether
outstanding on the Issue Date or thereafter incurred, payable under or in
respect of the Credit Agreement and any related notes, collateral documents,
letters of credit and guarantees, including principal, premium (if any),
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any Subsidiary of
the Company whether or not a claim for
<PAGE>
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post-filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, guarantees and all other amounts payable thereunder
or in respect thereof.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect against
fluctuations in currency values.
"Custodian" has the meaning provided in Section 6.1.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Disinterested Director" means, with respect to any transaction or series
of transactions, a member of the Board of Directors of the Company other than a
director who has any material direct or indirect financial interest in or with
respect to such transaction or series of transactions.
"Disqualified Capital Stock" means, with respect to any Person, any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
maturity date of the Securities.
"Environmental Laws" means the common law and all (a) federal, state, local
and foreign laws, regulations, codes or orders, and (b) decrees, judgments or
injunctions to which the Company or a predecessor in interest of the Mortgaged
Real Property is a named party, issued, promulgated, approved or entered
thereunder, in each case, relating to pollution or protection of public or
employee health or the environment, including, without limitation, those
relating to handling, use, storage, treatment, disposal, removal, emission,
discharge or release of 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.
"Event of Default" has the meaning provided in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" means the 15.5% First Mortgage Notes due 2006, Series
B, to be issued in exchange for the Initial Securities pursuant to the
Registration Rights Agreement.
"Exchange Offer" shall have the meaning specified in the Registration
Rights Agreement.
"Excluded Contributions" means the net cash proceeds received by the
Company after the Issue Date from (a) contributions to common equity capital and
(b) the sale (other than to a Sub-
<PAGE>
-10-
sidiary or to any Holdings, Company or Subsidiary management equity plan or
stock option plan or any other management or employee benefit plan or agreement)
of Capital Stock (other than Disqualified Capital Stock) of the Company, in each
case designated (i) to be used for Investments within 180 days of receipt and
(ii) as Excluded Contributions pursuant to an Officers' Certificate, the cash
proceeds of which are excluded from the calculation set forth in Section 4.12.
"Fair Market Value" or "fair value" means, with respect to any asset or
property, the price which could be negotiated in an arms' length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under undue pressure or compulsion to complete the transaction. Fair
Market Value shall be determined by the Board of Directors acting in good faith
and shall be evidenced by a Board Resolution delivered to the Trustee except (x)
any determination of Fair Market Value made with respect to any parcel of Real
Property constituting a part of, or proposed to be made a part of, the
Collateral shall be made by an Appraiser and also be delivered to the Collateral
Agent and (y) as otherwise indicated in this Indenture.
"Financial Advisor" means an accounting, appraisal, investment banking firm
or consultant of nationally recognized standing that is, in the good faith
determination of the Company, qualified to perform the task for which it has
been engaged.
"First Mortgage Notes" means the Company's 9-7/8% First Mortgage Notes Due
2001.
"First Mortgage Notes Indenture" means the indenture dated as of December
15, 1993 between the Company and the First Mortgage Notes Trustee, as amended
and supplemented or otherwise modified from time to time.
"First Mortgage Notes Trustee" means Bankers Trust Company, as trustee
under the First Mortgage Notes Indenture, or its successor thereunder.
"Funding Guarantor" has the meaning provided in Section 11.07.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are applicable as of the Issue Date.
"Global Securities" means one or more Regulation S Global Securities and
144A Global Securities.
"Governmental Authority" means any government or political subdivision of
the United States or any other country or any agency, authority, board, bureau,
central bank, commission, department or instrumentality thereof or therein,
including, without limitation, any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic, or any entity exercising executive,
<PAGE>
-11-
legislative, judicial, regulatory or administrative functions of or pertaining
to such government or political subdivision.
"Guarantee" means the guarantee of the Guarantors set forth in Article X
and any additional guarantee of the Securities executed by any Subsidiary of the
Company.
"Guarantors" means (i) each of the Company's domestic Subsidiaries existing
on the Issue Date (other than The Oberlin Insurance Company and Non-Recourse
Subsidiaries), (ii) each guarantor under the Credit Agreement, (iii) each of the
Company's Subsidiaries that has pledged any Collateral and (iv) each of the
Company's Subsidiaries that in the future executes a supplemental indenture in
which such Subsidiary agrees to be bound by the terms of this Indenture as a
Guarantor whether pursuant to the provisions set forth under Section 4.18 or
otherwise.
"Harrison Property" means any Property of the Company and its Subsidiaries
located at 2201 Harrison Avenue, S.W., Canton, Ohio 44706 or used primarily in
connection with the Company's business and operations at such location.
"Hazardous Materials" means pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes, including, without
limitation, petroleum, including crude oil or any petroleum product or any
fraction thereof, and asbestos and asbestos-containing materials.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books.
"Holdings" means RES Holding Corporation.
"incur" means, with respect to any Indebtedness, to directly or indirectly,
create, incur, assume, issue, guarantee or otherwise become liable for or with
respect to such Indebtedness, and the terms "incurred," "incurrence" and
"incurring" having meanings correlative to the foregoing.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities of such Person for borrowed money or for the deferred purchase
price of property or services, excluding any trade accounts payables and other
accrued current liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letter of credit, bankers' acceptance or other
similar credit transaction, (b) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (c) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even if the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), but excluding trade
accounts payable arising in the ordinary course of business, (d) all Capitalized
Lease Obligations of such Person, (e) all Indebtedness referred to in the
preceding clauses of other Persons and all dividends of other Persons, the
payment of which is secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness (the
<PAGE>
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amount of such obligation being deemed to be the lesser of the value of such
property or asset or the amount of the obligation so secured), (f) all
guarantees of Indebtedness referred to in this definition by such Person, (g)
all Disqualified Capital Stock of such Person valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued dividends,
(h) all Interest Rate Protection Obligations of such Person and (i) any
amendment, supplement, modification, deferral, renewal, extension or refunding
of any liability of the types referred to in clauses (a) through (h) above. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined in good faith by the
Board of Directors of the Company. For purposes of Section 4.9, in determining
the principal amount of any Indebtedness (a) to be incurred by the Company or
one of its Subsidiaries or which is outstanding at any date, (x) the principal
amount of any Indebtedness which provides that an amount less than the principal
amount thereof shall be due upon any declaration of acceleration thereof shall
be the accreted value thereof at the date of determination and (y) effect shall
be given to the impact of any Currency Agreements with respect to such
Indebtedness and (b) outstanding at any time under any Currency Agreement of the
Company or any of its Subsidiary shall be the net payment obligation under such
Currency Agreement at such time. When any Person becomes a Subsidiary of the
Company, there shall be deemed to have been an incurrence by such Subsidiary of
all Indebtedness for which it is liable at the time it becomes a Subsidiary of
the Company. If the Company or any of its Subsidiaries, directly or indirectly,
guarantees Indebtedness of a third Person, there shall be deemed to be an
incurrence of such guaranteed Indebtedness as if the Company or such Subsidiary
had directly incurred or otherwise assumed such guaranteed Indebtedness.
"Indenture" means this Indenture as amended or supplemented from time to
time pursuant to the terms hereof.
"Independent" when used with respect to any specified Person means such a
Person who (a) is in fact independent, (b) does not have any direct financial
interest or any material indirect financial interest in the Company or in any
Affiliate of the Company and (c) is not an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions
for the Company. Whenever it is provided in this Indenture that any Independent
Person's opinion or certificate shall be furnished to the Trustee, such Person
shall be appointed by the Company and such opinion or certificate shall state
that the signer has read this definition and that the signer is Independent
within the meaning thereof.
"Initial Closing Date" means the Closing Date, as defined under the Credit
Agreement.
"Initial Purchasers" means [ ].
"Initial Securities" means the 15.5% First Mortgage Notes due 2006, Series
A, of the Company.
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"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Intellectual Property" has the meaning provided in the Credit Agreement.
"Intercreditor Agreement" means the agreement substantially in the form of
Exhibit XIV to the Credit Agreement between the Collateral Agent and the agent
under the Revolving Credit Facility, as the same may be amended, supplemented or
otherwise modified from time to time.
"interest," when used with respect to any Security, means the amount of all
interest accruing on such Security, including all interest accruing subsequent
to the occurrence of any events specified in Sections 6.1(a)(vii) and (viii) or
which would have accrued but for any such event.
"Interest Payment Date," when used with respect to any Security, means the
stated maturity of an installment of interest specified in such Security.
"Interest Rate," when used with respect to any Security, means the rate per
annum specified in such Security as the rate of interest accruing on the
principal amount of such Security.
"Interest Rate Protection Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, (i) any direct or indirect
loan, advance (other than advances to customers and employees for moving,
entertainment, travel expenses and commissions, drawing accounts and similar
expenditures in the ordinary course of business), extension of credit (other
than trade credit) or capital contribution to any Person (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or (ii) any purchase or acquisition
by such Person of any Capital Stock, bonds, notes, debentures or other
securities or evidences of Indebtedness issued by, any other Person.
"Investments" shall not include accounts receivable and extensions of credit by
any Person in the ordinary course of business. In addition to the foregoing, any
foreign exchange contract, currency swap or similar agreement shall constitute
an Investment hereunder.
"Investment Grade Securities" means (i) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents), (ii) debt securities or
debt instruments with a rating of BBB- or higher by Standard & Poor's Ratings
Group or Baa3 or higher by Moody's Investors Service, Inc. or the equivalent of
such rating by such rating organization, or, if no rating of Standard & Poor's
Ratings Group or Moody's Investors Service, Inc. then exists, the equivalent of
such rating by any other nationally recognized securities rating agency, but
excluding any debt securities or instruments constituting loans or advances
among the Company and its Subsidiaries, and (iii) investments in any fund that
invests ex-
<PAGE>
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clusively in investments of the type described in clauses (i) and (ii) which
fund may also hold immaterial amounts of cash pending investment and/or
distribution.
"Issue Date" means [ ], [ ], the date of original issuance of the
Securities.
"Legal Holiday" means any day other than a Business Day.
"Lien" means any mortgage, lien (statutory or other), pledge, security
interest, hypothecation, assignment for security or other security agreement of
any kind or nature whatsoever. For purposes of this Indenture, a Person 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.
"Lenders" shall have the meaning ascribed thereto under the Credit
Agreement.
"Loans" shall have the meaning ascribed thereto under the Credit Agreement.
"Maturity Date," when used with respect to the Securities, means the date
specified in such Security as the fixed date on which the principal of such
Security is due and payable.
"Mortgage" means an agreement, including, without limitation, a fee or
leasehold mortgage, deed of trust or other document acceptable to the Collateral
Agent creating and evidencing a Lien on Mortgaged Real Property, which shall be
substantially in the form of Exhibit E hereto, including such additional
provisions or other deviations from such Exhibit as shall be necessary to
conform such Mortgage to applicable local law or the terms of this Indenture, as
the case may be, as the same may be amended, supplemented or otherwise modified
from time to time.
"Mortgaged Real Property" means each Real Property of the Company and its
Subsidiaries, including, without limitation, those set forth on Schedule B,
which shall, at the times contemplated herein (other than the Closing Date
Mortgaged Real Property, which shall be subject to a Mortgage as of the Initial
Closing Date), be subject to a Mortgage.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents, including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents net of (i) brokerage commissions and other reasonable fees and
expenses (including fees and expenses of counsel, accountants and investment
bankers) related to such Asset Sale; (ii) provisions for all taxes payable as a
result of such Asset Sale; (iii) amounts required to be applied to the repayment
of principal, premium (if any) and interest on Indebtedness required (other than
required by Section 4.13(b)(i)) to be paid as a result of such transaction to
the extent secured by a Lien on such Property that is permitted hereunder or
under the applicable Security Document and to the extent the operative agreement
relating to such Indebtedness requires or otherwise permits such a repayment;
and (iv) appropriate amounts to be provided by the Company or any of its
Subsidiaries, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by the Company or
any of its Subsidiaries, as the case may be, after such Asset Sale, including,
without limitation, pension and other
<PAGE>
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post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any representations, warranties or indemnification
obligations associated with such Asset Sale.
"Net Proceeds" means (a) in the case of any sale of Capital Stock by the
Company, the aggregate net cash proceeds received by the Company, after payment
of expenses, commissions and the like incurred in connection therewith, (b) in
the case of any exchange, exercise, conversion or surrender of outstanding
securities of any kind for or into shares of Capital Stock of the Company which
is not Disqualified Capital Stock, the net book value of such outstanding
securities on the date of such exchange, exercise, conversion or surrender (plus
any additional amount required to be paid by the holders to the Company upon
such exchange, exercise, conversion or surrender, less any and all payments made
to such holders, e.g., on account of fractional shares, and less all expenses
incurred by the Company in connection therewith), and (c) in the case of the
issuance of any Indebtedness by the Company, the aggregate net cash proceeds
received by the Company, after payment of expenses, commissions and the like
incurred in connection therewith.
"Non-Collateral Proceeds" has the meaning specified in Section 4.13.
"Non-Recourse Indebtedness" means Indebtedness as to which (i) neither the
Company nor any of its Subsidiaries (but in no event including the relevant
Non-Recourse Subsidiary) (1) provides credit support (including any undertaking,
agreement or instrument which would constitute Indebtedness), (2) is directly or
indirectly liable or (3) constitutes the lender and (ii) no default with respect
to such Indebtedness (including any rights which the holders thereof may have to
take enforcement action against the relevant Non-Recourse Subsidiary or its
assets) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or its Subsidiaries to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Non-Recourse Subsidiary" means a Subsidiary of the Company (i) none of
whose properties or assets were owned by the Company or any of its Subsidiaries
prior to the Issue Date other than assets comprising an Investment permitted
under Section 4.22, (ii) whose properties and assets, to the extent they secure
Indebtedness, secure only Non-Recourse Indebtedness, except in the case of the
Credit Agreement and (iii) which has no Indebtedness other than Non-Recourse
Indebtedness, except in the case of the Credit Agreement.
"Non-U.S. Person" has the meaning assigned to such term in Regulation S.
"Offering Memorandum" means the Offering Memorandum dated [ ],
[ ] pursuant to which the Securities were offered, and any supplement
thereto.
"Officer" means the President, the Chief Executive Officer, any Vice
President, any General Manager, the General Counsel, the Chief Financial
Officer, the Secretary, the Associate General Counsel, the Treasurer, or the
Controller of the Company, as the case may be.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or Assistant Secretary of the Company, as the
case may be; provided, however,
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that any Officers' Certificate delivered pursuant to Section 4.6 of this
Indenture shall be signed by either the principal executive officer, principal
financial officer or principal accounting officer of the Company.
"144A Global Security" means a permanent global note in registered form
representing the aggregate principal amount of Securities sold in reliance on
Rule 144A under the Securities Act.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee, which may include counsel to the Company.
"Paying Agent" has the meaning provided in Section 2.3.
"Permanent Regulation S Global Security" means a permanent global security
in registered form representing the aggregate principal amount of Securities
sold in reliance on Regulation S under the Securities Act.
"Permitted Holders" means (i) Blackstone Capital Partners II Merchant
Banking Fund L.P., a Delaware limited partnership, Blackstone Offshore Capital
Partners II L.P., a Cayman Islands exempted limited partnership, and Blackstone
Family Investment Partnership II L.P., a Delaware limited partnership, (ii) any
Affiliate of the foregoing and (iii) each general partner of any of the
foregoing who is a partner or employee of The Blackstone Group L.P.; provided,
however, that to the extent a Change of Control occurs that results in a Change
of Control Offer being made and consummated in accordance with Section 4.15, the
Person or group deemed to have acquired control which triggered such Change of
Control shall thenceforth, together with its Affiliates, be deemed to constitute
additional Permitted Holders.
"Permitted Investments" means (i) obligations of the U.S. government due
within one year; (ii) certificates of deposit or Eurodollar deposits due within
one year with a commercial bank having capital funds of at least $500,000,000 or
more; (iii) commercial paper having a rating of at least A-1 by Standard &
Poor's Corporation or at least P-1 by Moody's Investors Service, Inc.; and (iv)
debt of any state of the United States or political subdivision that is rated A
or better and due within one year.
"Permitted Liens" means, with respect to any Person, any Lien arising by
reason of (a) Liens for taxes, assessments or other governmental charges or
levies not yet delinquent, or which are for less than $500,000 in the aggregate,
or which are being validly contested in good faith by appropriate proceedings or
for property taxes on property that the Company or any of its Subsidiaries has
determined to abandon if the sole recourse for such tax, assessment, charge,
levy or claim is to such property; (b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, laborers', employees' or suppliers' or other like
Liens on property of the Company or any of its Subsidiaries arising in the
ordinary course of business and securing obligations that are not due and
payable or that are being contested in good faith by negotiations or appropriate
proceedings and in respect of which, if applicable, the Company or the relevant
Subsidiary shall have set aside on its books reserves in accordance with GAAP;
(c) pledges and deposits made in the ordinary course of business by the Company
<PAGE>
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or any of its Subsidiaries in compliance with the Federal Employers Liability
Act or any other workmen's compensation, unemployment insurance and other social
security laws or regulations and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements in respect of such
obligations; (d) deposits by the Company or any of its Subsidiaries to secure
the performance of tenders, bids, contracts (other than for Indebtedness),
leases (other than Capitalized Lease Obligations), statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business, including those incurred to secure
health, safety and environmental obligations in the ordinary course of business;
(e) zoning restrictions, easements, trackage rights, leases (other than
Capitalized Lease Obligations), licenses, special assessments, rights-of-way,
restrictions on use of Real Property and other similar encumbrances incurred by
the Company or any of its Subsidiaries in the ordinary course of business which,
individually and in the aggregate, are not substantial in amount and do not
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of the Company or any of its
Subsidiaries; (f) Liens consisting of interests of lessors under capital or
operating leases permitted by Section 4.9; (g) Liens securing judgments, decrees
or orders against the Company or any of its Subsidiaries, so long as such Lien
is being contested in good faith and is adequately bonded, any appropriate legal
proceedings which may have been duly initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired; (h) any leases
or subleases to other Persons of properties or assets owned or leased by the
Company or any of its Subsidiaries; (i) any Lien arising by operation of law
pursuant to Section 107(1) of CERCLA, 42 U.S.C. ss. 9607(1), or pursuant to
analogous state law, for costs or damages which are not yet due (by virtue of a
written demand for payment by a government authority) or which are being
contested in good faith by appropriate proceedings, or on property that the
Company or any of its Subsidiaries has determined to abandon if the sole
recourse for such costs or damages is to such property; provided, that the
liability of the Company and its Subsidiaries with respect to the matter giving
rise to all such Liens shall not, in the reasonable estimate of the Company (in
light of all attendant circumstances, including the likelihood of contribution
by third parties), exceed $2,000,000; (j) Liens that are contractual rights of
setoff (i) relating to the establishment by the Company or any of its
Subsidiaries of depository relations with banks not given in connection with the
issuance of Indebtedness or (ii) pertaining to pooled deposit and/or sweep
accounts of the Company and/or any of its Subsidiaries to permit satisfaction of
overdraft or similar obligations incurred in the ordinary course of business of
the Company and its Subsidiaries; (k) Liens securing obligations in respect of
trade-related letters of credit permitted under Section 4.9 and covering the
goods (or the documents of title in respect of such goods) financed by such
letters of credit; (l) the sale of accounts receivable in connection with
collection in the ordinary course of business; (m) construction Liens arising in
the ordinary course of business, including Liens for work performed for which
payment has not been made, securing obligations that are not due and payable or
are being contested in good faith by appropriate proceedings and in respect of
which, if applicable, the Company or the relevant Subsidiary shall have set
aside on its books reserves in accordance with GAAP; (n) Liens on assets of the
Company and its Subsidiaries not constituting Collateral securing approximately
$8,300,000 of severance payments required to be funded into a "rabbi trust" upon
a change in control of the Company under the Credit Agreement; (o) Liens
securing Currency Agreements, Interest Rate Protection Obligations and commodity
hedging agreements and (p) Liens arising in connection with the memorandum of
understanding between the Company and the Pension Benefit Guaranty Corporation
dated November 2, 1998.
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"Permitted Related Acquisition" has the meaning provided in Section 4.13.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
interest, participations or other equivalents (however designated) of such
Person's preferred or preference stock whether now outstanding, or issued after
the date of this Indenture, and including, without limitation, all classes and
series of preferred or preference stock of such Person.
"Prior Liens" means Liens which, pursuant to the provisions of any Security
Document, are or may be superior to the Lien of or otherwise permitted by such
Security Document, which, in the case of Prior Liens to be scheduled in the
Security Documents to be delivered on any Satisfaction Date, as shall be
reasonably acceptable to the Collateral Agent.
"principal" of a debt security means the principal amount of the security
plus, when appropriate, the premium, if any, on the security.
"Private Exchange Securities" shall have the meaning specified in the
Registration Rights Agreement.
"Private Placement Legend" shall mean a legend substantially in the form of
the first paragraph of the legend initially set forth in the Securities in the
form set forth on Exhibit A-1.
"Prohibited Investments" has the meaning provided in Section 4.22.
"Property" means any right, title or interest in or to
property or assets of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible and including ownership interests of any Person.
"Public Equity Offering" means a public offering by the Company of shares
of its Common Stock through one or more underwriters, which offering is
registered with the SEC.
"Real Property" means all interests in land, building improvements and
appurtenant fixtures, easements and other property and rights incidental to the
ownership, lease or operation thereof, in each case owned or leased (as lessee)
by the Company or its Subsidiaries, including the Mortgaged Real Property.
"Redemption Date" means, with respect to any Security, the Maturity Date of
such Security or the date on which such Security is to be redeemed by the
Company pursuant to the terms of the Securities.
"Registrar" has the meaning provided in Section 2.3.
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"Registration Rights Agreement" means the Registration Rights Agreement
dated as of [ ], [ ] by and among the Company, the Guarantors and the Initial
Purchasers, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S under the Securities Act.
"Release Notice" has the meaning provided in Section 11.4.
"Required Filing Dates" has the meaning provided in Section 4.7.
"Requisite Obligees" means, as of the applicable date of determination
thereof, Secured Parties holding (or representing) in the aggregate more than
50% of the sum of the outstanding principal amounts of (x) all Loans and (y) all
Securities.
"Resale Restriction Termination Date" means the date which is two years
after the later of the Issue Date and the last date on which the Company or any
of its Affiliates held any beneficial interest in a Security being acquired or a
predecessor to such Securities.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any Vice President,
Assistant Vice President, Assistant Secretary or any officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution on Capital Stock of the
Company or any Subsidiary of the Company or any payment made to the direct or
indirect holders (in their capacities as such) of Capital Stock of the Company
or any Subsidiary of the Company (other than (x) dividends or distributions
payable solely in Capital Stock (other than Disqualified Capital Stock) or in
options, warrants or other rights to purchase Capital Stock (other than
Disqualified Capital Stock) and (y) in the case of Subsidiaries of the Company,
dividends or distributions payable to the Company or to a Wholly-Owned
Subsidiary of the Company or made on a pro rata basis to all stockholders of
such Subsidiary), (ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any of its
Subsidiaries, (iii) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment, of any Indebtedness which is subordinated in right of payment to the
Securities (other than the payment, purchase, defeasance, repurchase, redemption
or other acquisition or retirement for value of any such Indebtedness in
anticipation of satisfying a sinking fund obligation, principal installment or
final maturity in any case due within
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one year of the date of such payment, purchase, defeasance, repurchase,
redemption or other acquisition or retirement for value) or (iv) the making of
any Prohibited Investment or guarantee of any Investment in any Person other
than as permitted pursuant to clauses (i)-(vi) of Section 4.22.
"Restricted Security" means a Security that constitutes a "restricted
security" within the meaning of Rule 144(a)(3) under the Securities Act;
provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Security
constitutes a Restricted Security.
"Revolving Credit Facility" means the credit agreement between the Company,
the lenders listed therein and BankBoston, as agent, providing for working
capital and other financing, as the same may at any time be amended, amended and
restated, supplemented or otherwise modified, including any refinancing,
refunding, replacement or extension thereof and whether by the same or any other
lender or group of lenders.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Subsidiary of the Company of any
property, which property has been or is to be sold or transferred by the Company
or such Subsidiary to such Person in contemplation of such leasing.
"Satisfaction Date" means any date upon which the Company and its
Subsidiaries repay or otherwise satisfy in full the Company's and its
Subsidiaries' obligations (other than obligations which by the express terms of
the applicable agreement survive repayment in full of the applicable underlying
obligations, including, without limitation, indemnification obligations) under
(i) the First Mortgage Notes, the First Mortgage Notes Indenture and the other
documents, instruments and agreements executed in connection therewith and/or
(ii) to the extent applicable under Section 11.1, the Revolving Credit Facility
in effect on the date hereof and the other documents, instruments and agreements
executed in connection therewith, if, on such date, the obligations thereunder
have been repaid in full and the commitments thereunder to lend are terminated.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means the Collateral Agent, the Lenders, the Agents under
the Credit Agreement, the Trustee and the Holders of the Securities; provided,
however, that with respect to the Closing Date Security Documents and the
Closing Date Collateral, such term shall include the holders of the First
Mortgage Notes and the First Mortgage Notes Trustee.
"Securities" means the 15% First Mortgage Notes Due 2006 issued,
authenticated and delivered under this Indenture, as amended or supplemented
from time to time pursuant to the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means an agreement which will be substantially in the
form of Exhibit F hereto, including such additional provisions or other
deviations from such Exhibit as shall
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be necessary to conform such Security Agreement to applicable local law or the
terms of this Indenture, as the case may be, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.
"Security Documents" means any Security Agreement, the Mortgages, the
Intercreditor Agreement and all Uniform Commercial Code financing statements
evidencing the Security Interests and any other document or instrument utilized
to pledge as collateral for the Obligations (as defined in the Credit Agreement)
and the Securities any Property, including, without limitation, any and all
documents and instruments executed and delivered pursuant to the provisions of
Section 11.1 and 11.2, including, without limitation, the Closing Date Security
Documents.
"Security Interests" means the Lien on the Collateral created by the
Security Documents in favor of the Collateral Agent for the benefit of the
Secured Parties.
"Subsidiary" means (i) a corporation a majority of whose Capital Stock with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by the Company, by a Subsidiary of the Company or
by the Company and a Subsidiary of the Company or (ii) any other Person (other
than a corporation) in which the Company, a Subsidiary of the Company or the
Company and a Subsidiary of the Company, directly or indirectly, at the date of
determination thereof, has at least a majority ownership interest.
Notwithstanding the foregoing, a Non-Recourse Subsidiary of the Company shall
not be deemed a Subsidiary of the Company under this Indenture, other than for
purposes of the definition of Non-Recourse Subsidiary, unless the Company shall
have designated a Non-Recourse Subsidiary as a "Subsidiary" by written notice to
the Trustee under this Indenture; provided, however, that the Company shall not
be permitted to designate any Non-Recourse Subsidiary as a Subsidiary unless,
after giving pro forma effect to such designation, the Consolidated Fixed Charge
Coverage Ratio of the Company shall be at least 2.25:1. A designation of a
Non-Recourse Subsidiary as a Subsidiary may not thereafter be rescinded.
"Survey" means a survey of any Mortgaged Real Property (and all
improvements thereon): (i) prepared by a surveyor or engineer licensed to
perform surveys in the state where such Mortgaged Real 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 Mortgaged Real
Property, in which event such survey shall be dated (or redated) after the
completion of such construction or if such construction shall not have been
completed as of such date of delivery, not earlier than 20 days prior to such
date of delivery) or dated otherwise if acceptable to the Collateral Agent,
(iii) certified by the surveyor (in a manner reasonably acceptable to the
Collateral Agent) to the Agents, the Collateral Agent, the Trustee and the Title
Company and (iv) sufficient to cause the Title Company to issue the survey
endorsements to the title insurance commitment and policy required hereunder
relating to the Mortgaged Real Property described in such Survey.
"Temporary Regulation S Global Security" means a temporary global security
in registered form representing the aggregate principal amount of Securities
sold in reliance on Regulation S under the Securities Act. No interest shall be
paid in respect of Securities in the form of the
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Temporary Regulation S Global Security until such time as such Securities are
exchanged for interests in the Permanent Regulation S Global Security.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Title Company" means Chicago Title Insurance Company or such other title
insurance or abstract company as shall be designated by the Company and
reasonably acceptable to the Collateral Agent.
"Transactions" has the meaning provided in the Credit Agreement.
"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, and shall in addition include any Person designated or
constituted as a co-trustee or separate trustee pursuant to Section 7.12 for the
limited purposes of such designation or constitution.
"Trust Moneys" has the meaning provided in Section 12.1.
"Unrestricted Securities" means one or more Securities that do not and are
not required to bear the Private Placement Legend in the form set forth in
Exhibit A-1, including, without limitation, the Exchange Securities.
"U.S. Government Obligations" has the meaning provided in Section 8.1.
"Veritas" means The Veritas Capital Fund, L.P. and its Affiliates.
"Wholly-Owned Subsidiary" means any Subsidiary of the Company 99% of the
(other than shares of Capital Stock representing any director's qualifying
shares or investments by foreign nationals mandated by applicable law) of the
total voting power of Capital Stock entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
hereof is at the time owned by the Company, by a Wholly-Owned Subsidiary of the
Company or by the Company and a Wholly-Owned Subsidiary of the Company.
SECTION 1.2. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
shall be deemed incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
(a) "Commission" means the SEC;
(b) "indenture securities" means the Securities;
(c) "indenture security holder" means a Securityholder;
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(d) "indenture to be qualified" means this Indenture;
(e) "indenture trustee" or "institutional trustee" means the Trustee; and
(f) "obligor" on the Indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings so assigned to them therein.
SECTION 1.3. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "or" is not exclusive;
(c) words in the singular include the plural, and words in the plural
include the singular;
(d) "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;
(e) unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP as in effect from time to time, applied on a basis
consistent with the most recent audited consolidated financial statements of the
Company; and
(f) "including" means including, without limitation, unless the context
otherwise requires.
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating.
The Initial Securities, the notation thereon relating to the Guarantees and
the Trustee's certificates of authentication with respect thereto shall be
substantially in the form set forth in Exhibit A-1 annexed hereto. The
Securities other than Initial Securities, the notation thereon relating to the
Guarantees and the Trustee's certificates of authentication with respect thereto
shall be substantially in the form set forth in Exhibit A-2 annexed hereto. The
Securities may have notations, legends or endorsements required by law, rule,
the rules of any stock exchange on which the Securities are listed,
<PAGE>
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usage or agreement to which the Company is subject (provided that any such
notation, legend or endorsement is in a form reasonably acceptable to the
Company). Each Security shall be dated the date of issuance and shall show the
date of its authentication. The terms and provisions contained in the Securities
and the Guarantees set forth in Exhibit A-1 and Exhibit A-2 shall constitute,
and are expressly made, a part of this Indenture.
Securities offered and sold in reliance on Rule 144A and Securities offered
and sold in reliance on Regulation S shall be issued initially in the form of
one or more Global Securities, substantially in the form set forth in Exhibit
A-1, deposited with the Trustee, as custodian for the Depository, duly executed
by the Company and authenticated by the Trustee as hereinafter provided and
shall bear the legend set forth in Exhibit B. The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository,
as hereinafter provided.
Securities issued in exchange for interests in a Global Security pursuant
to Section 2.15 hereof may be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in Exhibit A-1
(the "Physical Securities").
All Securities offered and sold in reliance on Regulation S shall remain in
the form of a Global Security until the consummation of the Exchange Offer
pursuant to the Registration Rights Agreement; provided, however, that all of
the time periods specified in the Registration Rights Agreement to be complied
with by the Company have been so complied with.
SECTION 2.2. Execution and Authentication.
Two Officers shall execute the Securities on behalf of the Company by
either manual or facsimile signature. The Company's seal shall be impressed,
affixed, imprinted or reproduced on the Securities. The Guarantors shall execute
the Guarantee in the manner set forth in Section 11.09.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security or at any time thereafter,
the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. Such signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue in an
aggregate principal amount not to exceed $[ ], upon receipt of an Officers'
Certificate signed by two Officers. The Officers' Certificate shall specify the
amount of Securities to be authenticated, the date on which the Securities are
to be authenticated and the aggregate principal amount of Securities outstanding
on the date of authentication and certify that all conditions precedent to the
issuance of the Securities contained herein and in the Security Documents have
been complied with. The aggregate principal amount of Securities outstanding at
any time may not exceed $[ ] except as provided in Section 2.7.
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The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall have the same
rights as the Trustee in any dealings hereunder with the Company or with any of
the Company's Affiliates.
SECTION 2.3. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Securities may be presented for registration of transfer or for exchange
(the "Registrar"), an office or agency (which shall be located in the Borough of
Manhattan, The City of New York, State of New York) where Securities may be
presented for payment (the "Paying Agent") and an office or agency where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Registrar shall keep a register of the Securities
and of their transfer and exchange. 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. Neither the Company nor any Affiliate
thereof may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which shall incorporate the provisions of the
TIA. The agreement shall implement the provisions of this Indenture that relate
to such Agent. 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, or
fails to give the foregoing notice, the Trustee shall act as such and shall be
entitled to appropriate compensation in accordance with Section 7.7.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the
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 notify the Trustee of any default by the
Company (or any other obligor on the Securities) in making any such payment.
Money held in trust by the Paying Agent need not be segregated except as
required by law and in no event shall the Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require the 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 Event of Default specified in Section 6.1(a)(i) and (ii), upon written
request to the Paying Agent, require such Paying Agent to pay forthwith all
money so held by it to the Trustee and to account for any funds disbursed. Upon
making such payment and accounting to the satisfaction of the Trustee, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
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SECTION 2.5. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the 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 the Securityholders.
SECTION 2.6. Transfer and Exchange.
The Securities shall be issued in registered form and shall be transferable
only upon the surrender of a Security for registration of transfer. When
Securities are presented to the Registrar or a co-registrar with a request from
the Holder of such Securities 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;
provided, that every Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed 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 his attorneys duly authorized in writing.
To permit registrations of transfers and exchanges, the Company shall issue and
execute and the Trustee shall authenticate new Securities evidencing such
transfer or exchange at the Registrar's request. No service charge shall be made
to the Securityholder for any registration of transfer or exchange. The Company
may require from the Securityholder payment of a sum sufficient to cover any
transfer taxes or other governmental charge that may be imposed in relation to a
transfer or exchange, but this provision shall not apply to any exchange
pursuant to Section 2.10, 3.6, 4.13, 4.15 or 9.5 (in which events the Company
will be responsible for the payment of such taxes). The Trustee shall not be
required to exchange or register a transfer of any Security for a period of 15
days immediately preceding the first mailing of notice of redemption of
Securities to be redeemed or of any Security selected, called or being called
for redemption except, in the case of any Security where public notice has been
given that such Security is to be redeemed in part, the portion thereof not to
be redeemed. Prior to the due presentation of transfer of any Security, the
Company, the Trustee, or the Registrar may deem and treat the person in whose
name a Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest on such Security,
except as provided in the face of such Security, and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee or Registrar shall be affected by notice to the contrary.
All Securities issued on any transfer or exchange pursuant to the terms of
this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
SECTION 2.7. Replacement Securities.
If a mutilated Security is surrendered to the Registrar or the Trustee or
if the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Holder of such Security furnishes to the Company and
to the Trustee evidence reasonably acceptable to them of the ownership
<PAGE>
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and the destruction, loss or theft of such Security and the requirements of
Section 8-405 of the Uniform Commercial Code are met. If required by the Trustee
or the Company, an indemnity bond shall be posted, sufficient in the judgment of
both to protect the Company, the Trustee or any Paying Agent from any loss that
any of them may suffer if such Security is replaced. The Company may charge such
Holder for the Company's expenses in replacing such Security and the Trustee may
charge the Company for the Trustee's expenses in replacing such Security. Every
replacement Security shall constitute an additional obligation of the Company.
SECTION 2.8. Outstanding Securities.
The Securities outstanding at any time are all Securities that have been
authenticated by the Trustee except for (a) those cancelled by it, (b) those
delivered to it for cancellation, (c) to the extent set forth in Sections 8.1
and 8.2, on or after the date on which the conditions set forth in Sections 8.1
and 8.2 have been satisfied, those Securities theretofore authenticated and
delivered by the Trustee hereunder and (d) those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because the
Company, the Guarantors or any one of their respective Affiliates holds the
Security.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser in whose hands such Security
is a legal, valid and binding obligation of the Company.
If the Paying Agent holds, in its capacity as such, on any Maturity Date or
on any optional redemption date, money sufficient to pay all accrued interest
and principal with respect to such Securities (or portions thereof) payable on
that date and is not prohibited from paying such money to the Holders thereof
pursuant to the terms of this Indenture, then on and after that date such
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.9. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any declaration of acceleration or notice of
default or direction, waiver or consent or any amendment, modification or other
change to this Indenture, Securities owned by the Company, the Guarantors or any
of their respective Affiliates shall be disregarded as though they were not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent or any
amendment, modification or other change to this Indenture, only Securities that
a Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded.
SECTION 2.10. Temporary Securities.
Until definitive Securities are prepared and ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities upon
receipt of a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of temporary
Securities to be authenticated and the date on which the temporary Securities
are to be
<PAGE>
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authenticated. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities. Until such exchange, temporary Securities
shall be entitled to the same rights, benefits and privileges as definitive
Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall (subject to
the record-retention requirements of the Exchange Act) dispose of cancelled
Securities unless the Company directs the Trustee to return such Securities to
the Company, and, if so disposed of, shall deliver a certificate as to the
disposal thereof to the Company. The Company may not reissue or resell, or issue
new Securities to replace, Securities that the Company or the Guarantors have
redeemed or paid, or that have been delivered to the Trustee for cancellation,
subject to Section 2.15(d).
SECTION 2.12. Defaulted Interest.
If the Company defaults on a payment of interest on the Securities, it
shall pay the defaulted interest, plus (to the extent permitted by law) any
interest payable on the defaulted interest, in accordance with the terms hereof,
to the Persons who are Securityholders on a subsequent special record date,
which date shall be at least five Business Days prior to the payment date. The
Company shall fix such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such special record date,
the Company shall mail to the Trustee and each Securityholder of such series a
notice that states the special record date, the payment date and the amount of
defaulted interest, and interest payable on such defaulted interest, if any, to
be paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number, and if so,
such CUSIP number shall be included in notices of redemption or exchange as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company will
promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.14. Deposit of Moneys.
On each Interest Payment Date and Maturity Date, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date or Maturity
Date, as the case may be, in a timely manner which permits the Trustee to remit
payment to the Holders on such Interest Payment Date or Maturity Date, as the
case may be.
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SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.
Members of, or participants in, the Depository ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depository, or the Trustee as its custodian, or under the Global
Security, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global Security
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note.
(b) Transfers of Global Securities shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Securities may be transferred or
exchanged for Physical Securities in accordance with the rules and procedures of
the Depository and this Indenture. In addition, Physical Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in Global Securities if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for any Global Security, or that
it will cease to be a "Clearing Agency" under the Exchange Act, and in either
case a successor Depository is not appointed by the Company within 90 days of
such notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue Physical
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and principal amount of authorized
denominations.
(d) In connection with the transfer of Global Securities as an entirety to
beneficial owners pursuant to paragraph (b), the Global Securities shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount at maturity of
Physical Securities of like tenor of authorized denominations.
(e) Any Physical Note constituting a Restricted Note delivered in exchange
for an interest in a Global Security pursuant to subparagraph (b), (c) or (d) of
this Section 2.15 shall, except as otherwise provided by Section 2.16 hereof,
bear the Private Placement Legend.
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(f) The Holder of any Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
SECTION 2.16. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors. The following
additional provisions shall apply with respect to the registration of any
proposed transfer of a Security to any Institutional Accredited Investor which
is not a QIB:
(i) the Registrar shall register the transfer of any Security, whether
or not such Security bears the Private Placement Legend, if (x) the
requested transfer is after the Resale Restriction Termination Date or (y)
the proposed transferee has delivered to the Registrar a certificate
substantially in the form of Exhibit C hereto and any legal opinions and
certifications required thereby;
(ii) if the proposed transferor is an Agent Member seeking to transfer
an interest in a Global Security, upon receipt by the Registrar of (x)
written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, together with any required
legal opinions and certifications, the Registrar shall register the
transfer and reflect on its books and records the date and a decrease in
the principal amount of the Global Security from which such interests are
to be transferred in an amount equal to the principal amount of the
Securities to be transferred and the Company shall execute and upon a
Company Order, the Trustee shall authenticate Physical Securities in a
principal amount equal to the principal amount of the Global Security to be
transferred.
(b) Transfers to Non-U.S. Persons. The following additional provisions
shall apply with respect to the registration of any proposed transfer of an
Initial Note to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Initial Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the Resale Restriction Termination Date or (y)
the proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit D hereto;
(ii) if the proposed transferee is an Agent Member and the Securities
to be transferred consist of Physical Securities which after transfer are
to be evidenced by an interest in the Regulation S Global Security upon
receipt by the Registrar of (x) written instructions given in accordance
with the Depository's and the Registrar's procedures and (y) the
appropriate certificate, if any, required by clause (y) of paragraph (i)
above, together with any required legal opinions and certifications, the
Registrar shall register the transfer and reflect on its books and records
the date and an increase in the principal amount of the Regulation S Global
Security in an amount equal to the principal amount of Physical Securities
to be transferred, and the Trustee shall cancel the Physical Securities so
transferred;
<PAGE>
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(iii) if the proposed transferor is an Agent Member seeking to
transfer an interest in a Global Security, upon receipt by the Registrar of
(x) written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any,
required by clause (y) of paragraph (i) above, together with any required
legal opinions and certifications, the Registrar shall register the
transfer and reflect on its books and records the date and (A) a decrease
in the principal amount of the Global Security from which such interests
are to be transferred in an amount equal to the principal amount of the
Securities to be transferred and (B) an increase in the principal amount of
the Regulation S Global Security in an amount equal to the principal amount
of the Global Security to be transferred; and
(iv) until the 41st day after the Issue Date (the "Restricted
Period"), an owner of a beneficial interest in the Temporary Regulation S
Global Security may not transfer such interest to a transferee that is a
U.S. person or for the account or benefit of a U.S. person within the
meaning of Rule 902(o) of the Securities Act. During the Restricted Period,
all beneficial interests in the Temporary Regulation S Global Security
shall be transferred only through Cedel or Euroclear, either directly if
the transferor and transferee are participants in such systems, or
indirectly through organizations that are participants, in accordance with
(x) the written instructions given in accordance with the Depository's,
Euroclear or Cedel's and the Registrar's procedures and (y) if the proposed
transferor has delivered to the Registrar a certificate substantially in
the form of Exhibit D hereto; and
(v) upon the expiration of the Restricted Period, beneficial ownership
interests in the Temporary Regulation S Global Security may be exchanged
for interests in the Permanent Regulation S Global Security upon
certification to the Registrar that such interest are owned either by
non-U.S. persons or U.S. persons who purchased such interests pursuant to
an exemption from, or transfer not subject to, the registration
requirements of the Securities Act. Upon the expiration of the Restricted
Period, the Company shall prepare and execute the Permanent Regulation S
Global Security in accordance with the terms of this Indenture and deliver
it to the Trustee for authentication. The Trustee shall retain the
Permanent Regulation S Global Security as custodian for the Depository. Any
transfers of beneficial ownership interests in the Temporary Regulation S
Global Security made in reliance on Regulation S shall thenceforth be
recorded by the Trustee by making an appropriate increase in the principal
amount of the Permanent Regulation S Global Security and a corresponding
decrease in the principal amount of the Temporary Regulation S Global
Security. At such time as the principal amount of the Temporary Regulation
S Global Security has been reduced to zero, the Trustee shall cancel the
Temporary Regulation S Global Security and deliver it to the Company.
(c) Transfers to QIBs. The following provisions shall apply with respect to
the registration of any proposed transfer of an Initial Note to a QIB (excluding
Non-U.S. Persons):
(i) the Registrar shall register the transfer of any Initial Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the Resale Restriction Termination Date or (y)
such transfer is being made by a proposed transferor who has checked the
box provided for on the form of Note stating, or has otherwise advised the
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Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to which
it exercises sole investment discretion and that it and any such account is
a QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that it is aware
that the transferor is relying upon its foregoing representations in order
to claim the exemption from registration provided by Rule 144A;
(ii) if the proposed transferee is an Agent Member and the Securities
to be transferred consist of Physical Securities which after transfer are
to be evidenced by an interest in the 144A Global Security, upon receipt by
the Registrar of written instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall register
the transfer and reflect on its book and records the date and an increase
in the principal amount of the 144A Global Security in an amount equal to
the principal amount of Physical Securities to be transferred, and the
Trustee shall cancel the Physical Note so transferred; and
(iii) if the proposed transferor is an Agent Member seeking to
transfer an interest in a Global Security, upon receipt by the Registrar of
written instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall register the transfer and
reflect on its books and records the date and (A) a decrease in the
principal amount of the Global Security from which interests are to be
transferred in an amount equal to the principal amount of the Securities to
be transferred and (B) an increase in the principal amount of the 144A
Global Security in an amount equal to the principal amount of the Global
Security to be transferred.
(d) Private Placement Legend. Upon the registration of transfer, exchange
or replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i) the circumstances
contemplated by paragraph (a)(i)(x) of this Section 2.16 exist, (ii) there is
delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act or (iii) such Note has been sold pursuant to an
effective registration statement under the Securities Act.
(e) Other Transfers. If a Holder proposes to transfer a Note constituting a
Restricted Note pursuant to any exemption from the registration requirements of
the Securities Act other than as provided for by Section 2.16(a), (b) and (c)
hereof, the Registrar shall only register such transfer or exchange if such
transferor delivers an Opinion of Counsel satisfactory to the Company and the
Registrar that such transfer is in compliance with the Securities Act and the
terms of this Indenture; provided, however, that the Company may, based upon the
opinion of its counsel, instruct the Registrar
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by a Company Order not to register such transfer in any case where the proposed
transferee is not a QIB, Non-U.S. Person or Institutional Accredited Investor.
(f) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.15 hereof or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable prior written notice to the Registrar.
ARTICLE III
REDEMPTION
SECTION 3.1. Notices to Trustee.
If the Company elects to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall do so by notifying the Trustee and the Paying Agent in
writing of the Redemption Date and the principal amount of Securities to be
redeemed as soon as reasonably practicable.
Each notice provided for in this Section 3.1 shall be accompanied by an
Officers' Certificate stating that such redemption will comply with the
conditions contained herein and in the Securities.
SECTION 3.2. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed in compliance with the requirements of the
principal national securities exchange, if any, on which the Securities being
redeemed are listed or, if the Securities are not listed on a national
securities exchange, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate. The Trustee shall make the selection
from the Securities outstanding and not previously called for redemption. The
Trustee shall promptly notify the Company in writing of such Securities selected
for redemption and, in the case of Securities selected for partial redemption,
the principal amount to be redeemed. The Trustee may select for redemption
portions of the principal amount of Securities that have denominations larger
than $1,000. Securities and portions thereof the Trustee selects shall be in
amounts of $1,000 or integral multiples of $1,000. No Securities that have
denominations of $1,000 or less shall be selected by the Trustee for partial
redemption. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
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SECTION 3.3. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause the mailing of a notice of redemption by first-class
mail to each Holder of Securities to be redeemed and the Trustee and any Paying
Agent.
The notice shall identify the Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the redemption price and the amount of accrued and unpaid
interest, if any, to be paid;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price and accrued and unpaid
interest, if any;
(e) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the Holders
of such Securities of such series is to receive payment of the redemption
price upon surrender to the Paying Agent of the Securities redeemed;
(f) if any Security is to be redeemed in part, the portion of the
principal amount (equal to $1,000 or any integral multiple thereof) of such
Security to be redeemed and that, on or after the Redemption Date, upon
surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued
without charge to the Securityholder;
(g) if less than all of the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities estimated to be
outstanding after such partial redemption; and
(h) the CUSIP number, if any, pursuant to Section 2.13 and, at the
option of the Company or the Trustee, the disclaimer permitted by Section
2.13.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the redemption price. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price plus accrued interest to the Redemption Date, but interest installments
whose maturity is on or prior to such Redemption Date will be payable
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on the relevant Interest Payment Dates to the Holders of record at the close of
business on the relevant record dates referred to in the Securities. Failure to
give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
SECTION 3.5. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit with the Paying
Agent in immediately available funds money sufficient to pay the redemption
price of and accrued interest on all Securities or portions thereof to be
redeemed on that date. The Paying Agent shall return to the Company any of such
money not required for such purpose.
If any Security surrendered for redemption in the manner provided in the
Securities shall not be so paid on the Redemption Date due to the failure of the
Company to deposit sufficient funds with the Paying Agent, interest will
continue to accrue from the Redemption Date until such payment is made on the
unpaid principal and, to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the date and in the manner provided in the
Securities.
SECTION 3.6. Securities Redeemed in Part.
Upon surrender to the Paying Agent of a Security that is redeemed in part,
the Company shall execute and the Trustee shall authenticate for the Holder a
new Security equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities.
The Company shall pay the principal of and interest on the Securities on
the dates and in the manner provided in the Securities and this Indenture.
An installment of principal or interest shall be considered paid on the
date due if the Trustee or the Paying Agent holds by 12:00 Noon on such date
immediately available funds designated for and sufficient to pay such
installment.
The Company shall pay interest on overdue principal and (to the extent
permitted by law) on overdue installments of interest at the rate specified
therefor in the Securities.
SECTION 4.2. 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 will give prompt written notice to the
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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 13.2.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of the
Trustee as an agency of the Company in accordance with Section 2.3.
SECTION 4.3. Corporate Existence.
Subject to Article V, the Company shall do or cause to be done, at its own
cost and expense, all things necessary to and will cause each of its
Subsidiaries to, preserve and keep in full force and effect the corporate or
partnership existence and rights (charter and statutory), licenses and/or
franchises of the Company and each of its Subsidiaries; provided, however, that
subject to Article X and the terms of any Security Document, the Company or any
of its Subsidiaries shall not be required to preserve any such rights, licenses
or franchises if the Board of Directors of the Company shall reasonably
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company or such Subsidiary and the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.4. 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, (a) all taxes, assessments and
governmental charges levied or imposed upon its or its Subsidiaries' income,
profits or property and (b) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a Lien upon its property; provided,
however, that, subject to the terms of the applicable 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 negotiations or
proceedings and for which disputed amounts adequate reserves (in the good faith
judgment of the Board of Directors of the Company) have been made or where the
failure to so pay would not have a material adverse affect upon the Company and
its Subsidiaries, taken as a whole.
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SECTION 4.5. Maintenance of Properties; Insurance; Books and Records;
Compliance with Law.
(a) Subject to, and in compliance with, the provisions of Sections 11.3 and
11.4 and to the provisions of each applicable Security Document, the Company
shall, and shall cause each of its Subsidiaries to, at all times cause all
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order (reasonable wear and tear
excepted) and supplied with all necessary equipment, and shall cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereto.
(b) The Company and each of its Subsidiaries shall maintain insurance
subject to the provisions of each applicable Security Document in such amounts
and covering such risks as are usually and customarily carried with respect to
similar facilities according to their respective locations.
(c) The Company shall and shall cause each of its Subsidiaries to keep
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Company
and each Subsidiary of the Company, in accordance with GAAP.
(d) The Company shall and shall cause each of its Subsidiaries to comply
with all statutes, laws, ordinances, or government rules and regulations to
which it is subject, non-compliance with which would materially adversely affect
the business, prospects, earnings, properties, assets or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole.
SECTION 4.6. Compliance Certificates.
(a) The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year, Officers' Certificates of the Company stating (i) that a
review of the activities of the Company during the preceding fiscal year has
been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and (ii) that, to the best knowledge of each
Officer signing such certificate, the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which such Officers may
have knowledge, their status and what action the Company is taking or proposes
to take with respect thereto).
(b) So long as (and to the extent) not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
annual financial statements delivered pursuant to Section 4.7 shall be
accompanied by a written statement of the Company's independent public
accountants that in making the examination necessary for certification of such
annual financial statements nothing has come to their attention that would lead
them to believe that the Company has violated any provisions of this Indenture
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
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(c) The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Event
of Default, an Officers' Certificate specifying such Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.7. Reports.
So long as any 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, to the extent permitted, 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 of each Required Filing Date (i)
transmit by mail to all Holders, as their names and addresses appear in the
register of Securities maintained by the Registrar, without cost to such Holders
and (ii) 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.
SECTION 4.8. Further Assurance to the Trustee or Collateral Agent.
The Company shall, upon request of the Trustee or the Collateral Agent,
execute and deliver such further instruments and do such further acts as may
reasonably be necessary or proper to carry out more effectively the provisions
of this Indenture and any Security Document.
SECTION 4.9. Limitation on Additional Indebtedness.
The Company shall not, and shall not permit any Subsidiary to, create,
incur, assume or issue, directly or indirectly, guarantee or in any manner
become, directly or indirectly, liable for or with respect to the payment of any
Indebtedness (including any Acquired Indebtedness) except for (each of which
shall be given independent effect):
(i) Indebtedness under the Securities, the Guarantees, this Indenture
and Indebtedness under the Credit Agreement;
(ii) Indebtedness of the Company and any Guarantor outstanding from
time to time pursuant to the Revolving Credit Facility in an amount not to
exceed the lesser of (x) $150,000,000 and (y) the aggregate of 85% of the
net book value of the Company's accounts receivable and 60% of the net book
value of the Company's inventory, in each case calculated in accordance
with GAAP (minus, in each case, any Indebtedness under the Revolving Credit
Facility repaid with the Net Cash Proceeds of an Asset Sale);
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(iii) Indebtedness of the Company and its Subsidiaries outstanding on
the Initial Closing Date;
(iv) Indebtedness of the Company or any Guarantor, or Acquired
Indebtedness of any Subsidiary of the Company, if, immediately after giving
pro forma effect to the incurrence thereof, the Consolidated Fixed Charge
Coverage Ratio of the Company would be greater than or equal to 2.25:1;
(v) Indebtedness of the Company and any Guarantor not to exceed $20.0
million in aggregate principal amount at any one time outstanding, the
proceeds of which are applied solely to expenditures made for the
acquisition, lease, construction or improvement of assets, in each case
which are useful in the type of business of the Company conducted on the
Issue Date, and all replacements, renewals, refinancings and extensions of
such indebtedness;
(vi) Indebtedness of the Company to a Subsidiary or of a Subsidiary to
the Company or another Subsidiary;
(vii) (a) Indebtedness of the Company or a Guarantor to the extent the
proceeds thereof are used solely to refinance (whether by amendment,
renewal, extension or refunding) Indebtedness of the Company or any of its
Subsidiaries and (b) Indebtedness of any Subsidiary of the Company (other
than a Guarantor) to the extent the proceeds thereof are used solely to
refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of a Subsidiary of the Company (other than a Guarantor), in
each such event, incurred under clause (i), (iii) or (iv) above; provided
that (i) the principal amount of Indebtedness incurred pursuant to this
definition (or, if such Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the accreted value of such
Indebtedness) shall not exceed the sum of the principal amount of
Indebtedness so refinanced (less any discount from principal amount due
upon payment pursuant to the terms of such Indebtedness), plus the amount
of any premium required to be paid in connection with such refinancing
pursuant to the terms of such Indebtedness or the amount of any premium
reasonably determined by the Board of Directors of the Company as necessary
to accomplish such refinancing by means of a tender offer or privately
negotiated purchase, plus the amount of reasonable expenses in connection
therewith, (ii) in the case of Indebtedness incurred pursuant to this
definition by the Company or any Guarantor, such Indebtedness has no
scheduled principal payment prior to the final maturity of the Indebtedness
being refinanced and (iii) if the Indebtedness to be refinanced is
Subordinated Indebtedness, the Indebtedness to be incurred pursuant to this
definition shall also be Subordinated Indebtedness;
(viii) Interest Rate Protection Obligations of the Company and its
Subsidiaries relating to Indebtedness of the Company or one of its
Subsidiaries; provided that (x) any Indebtedness to which any such Interest
Rate Protection Obligations relate is otherwise permitted to be incurred
under this covenant and (y) the notional principal amount of any such
Interest Rate Protection Obligations does not exceed the principal amount
of the Indebtedness to which such Interest Rate Protection Obligations
relate;
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(ix) the Company and its Subsidiaries may Incur and remain liable with
respect to Indebtedness owed to (including obligations in respect of
letters of credit for the benefit of any Person providing worker's
compensation, health, disability or other employee benefits or property,
casualty or liability insurance to the Company or any of its Subsidiaries,
pursuant to reimbursement or indemnification obligations to such Person;
(x) Indebtedness arising from agreements of the Company or a
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred or assumed in connection with
the disposition of any business, assets or a Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Subsidiary for the purpose of financing
such acquisition;
(xi) Indebtedness arising from Currency Agreements with respect to
Indebtedness or obligations of the Company or any Subsidiary entered into
to hedge actual currency exposure and not for the purpose of speculation or
commodity hedging agreements entered into to hedge actual commodity price
exposure and not for the purpose of speculation;
(xii) obligations in respect of performance bonds, bid bonds, appeal
bonds, surety bonds and similar obligations and trade-related letters of
credit, in each case provided in the ordinary course of business, including
those Incurred to secure health, safety and environmental obligations in
the ordinary course of business, and any extension, renewal or refinancing
thereof to the extent not provided to secure the repayment of other
Indebtedness and to the extent that the amount of refinancing Indebtedness
is not greater than the amount of Indebtedness being refinanced; and
(xiii) in addition to the items referred to in clauses (i)-(xii)
above, Indebtedness in an aggregate principal amount not to exceed $15.0
million at any one time outstanding.
For purposes of determining compliance with this covenant in the event that
an item of Indebtedness meets the criteria of more than one of the categories of
permitted Indebtedness described in clauses (i) through (xii) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses. Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant.
SECTION 4.10. Limitation on Sale-Leaseback Transactions.
The Company will not enter into, renew or extend or permit any Subsidiary
of the Company to enter into, renew or extend any Sale-Leaseback Transaction
except a Sale-Leaseback Transaction involving only the sale or transfer of
assets acquired after the Issue Date and not constituting Collateral, provided
that (a) after giving effect to the Indebtedness, if any, incurred in such
Sale-Leaseback Transaction on a pro forma basis, the Company is in compliance
with Section 4.9 and (b) the Net Proceeds of such Sale-Leaseback Transaction are
at least equal to the Fair Market Value
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of such property (determined by the Company's Board of Directors in Section
4.13), and the Company or such Subsidiary shall apply the Net Cash Proceeds of
such sale as provided herein.
SECTION 4.11. Limitation on Liens.
As of the Issue Date and the occurrence of each Satisfaction Date, the
Company shall not, nor shall it cause or permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or permit or suffer to exist any
Lien upon or with respect to (i) any Property constituting Collateral as of such
date in accordance with the provisions of Section 11.1 except for any Lien of,
or permitted by, the Security Documents encumbering such Property and Prior
Liens applicable thereto and (ii) any Property not constituting Collateral as of
such date except for Permitted Liens and the following Liens:
(a) Liens created by or to secure the Securities and the Credit
Agreement Indebtedness;
(b) Permitted Liens on property and assets not constituting collateral
for the First Mortgage Notes or the Revolving Credit Facility on the
Initial Closing Date;
(c) Liens to secure the payment of all or a part of the purchase price
of assets or property (other than assets or property constituting or which
will constitute Collateral) acquired after the Issue Date, provided that
(i) the aggregate principal amount of Indebtedness secured by such Liens
shall not exceed the Fair Market Value (or, if less, the cost) of the
assets or property so acquired; (ii) the Indebtedness secured by such Liens
shall have otherwise been permitted to be incurred under this Indenture,
and (iii) such Liens shall not encumber any other assets or property of the
Company (other than additions, improvements and accessions thereto and
replacements thereof) and shall attach to such assets or property within 60
days of the acquisition of such assets or property;
(d) Liens on the assets or property of a Subsidiary of the Company
existing at the time such Subsidiary became a Subsidiary of the Company and
not incurred as a result (or in connection with or in anticipation of) such
Subsidiary becoming a Subsidiary of the Company, provided such Liens do not
extend to or cover any property or assets of the Company or any of its
Subsidiaries (other than the property or assets so acquired and additions,
improvements and accessions thereto and replacements thereof);
(e) Liens on the property and assets of the Company and its
Subsidiaries in existence as of the Issue Date (other than the property and
assets securing Indebtedness under the Revolving Credit Facility) securing
Indebtedness under the First Mortgage Notes;
(f) subject to Section 11.1, Liens on the inventory, accounts
receivable, other current assets and intangibles of the Company and the
capital stock of the Company's Subsidiaries existing on the Issue Date, in
each case securing Indebtedness under the Revolving Credit Facility; and
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(g) Liens securing Indebtedness which is incurred to refinance
Indebtedness which has been secured by a Lien permitted under this
Indenture and is permitted to be refinanced under this Indenture, provided
that such Liens do not extend to or cover any property or assets of the
Company or any of its Subsidiaries not securing the Indebtedness so
refinanced.
SECTION 4.12. Limitation on Restricted Payments.
(a) Subject to Section 4.12(b), the Company shall not make, and shall not
permit any of its Subsidiaries to, directly or indirectly, make, any Restricted
Payment, unless:
(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
aggregate of all Restricted Payments declared or made after the Issue Date
does not exceed the sum of, without duplication, (a) 50% of the Company's
Consolidated Net Income (or in the event such Consolidated Net Income shall
be a deficit, minus 100% of such deficit) from the Issue Date; (b) 100% of
the aggregate Net Proceeds received by the Company, from a capital
contribution from Holdings (other than Excluded Contributions) or the issue
or sale, after the Issue Date, of Capital Stock (other than Disqualified
Capital Stock) of the Company (other than Excluded Contributions) or any
Indebtedness or other securities of the Company convertible into or
exercisable for Capital Stock (other than Disqualified Capital Stock) of
the Company which has been so converted or exercised, as the case may be
and (c) the amount equal to the net reduction in Investments in any Person
(other than a Subsidiary) resulting from (1) payments of dividends,
repayments of the principal of loans or advances to the Company or any of
its Subsidiaries from such Person, (2) the sale or liquidation for cash or
Cash Equivalents of such Investment or (3) the redesignation of
Non-Recourse Subsidiaries as Subsidiaries, in each case not to exceed the
amount of Investments originally made by the Company or any of its
Subsidiaries in such Person, provided, in the case of each subclause of
this clause (c), such amount was included in the calculation of the amount
of Restricted Payments made under this clause (ii); and
(iii) at the time of such Restricted Payment, the Consolidated Fixed
Charge Coverage Ratio of the Company is at least equal to 2.25:1.
For purposes of determining the amount expended for Restricted Payments, cash
distributed shall be valued at the face amount thereof and property other than
cash shall be valued at its Fair Market Value.
(b) The provisions of Section 4.12(a) shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would
comply with the provisions of this Indenture;
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(ii) the repurchase, retirement or other acquisition of any shares of
Capital Stock of the Company or subordinated Indebtedness by conversion
into, or by an exchange for, shares of Capital Stock of the Company that
are not Disqualified Capital Stock or out of the Net Proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Company)
of Capital Stock (other than Disqualified Capital Stock) of the Company;
(iii) the redemption, repurchase, retirement or other acquisition of
subordinated Indebtedness of the Company in exchange for, by conversion
into, or out of the Net Proceeds of a substantially concurrent sale of,
subordinated Indebtedness of the Company (other than to a Subsidiary of the
Company) that is contractually subordinated in right of payment to the
Securities and that is permitted to be incurred under Section 4.9;
(iv) the purchase or redemption of shares of the Company's Capital
Stock (including related stock appreciation rights or similar securities)
held by present or former officers or employees of the Company or any of
its Subsidiaries or by any employee pension benefit plan upon such Person's
death, disability, retirement or termination of employment or under the
terms of any such employee pension benefit plan or any other agreement
under which such Capital Stock or related rights were issued; provided that
the aggregate amount of such purchases or redemptions that may be made
under this paragraph (iv) shall not exceed $5,000,000 in the aggregate
during the term of this Indenture;
(v) (x) so long as no Default or Event of Default has occurred and is
continuing, distributions to Holdings to allow Holdings to pay its
operating and administrative expenses (including fees permitted by Section
4.14) and to make any scheduled payments of interest after July 15, 1999
under the credit agreement dated as of September 8, 1998 among Holdings,
the lenders named therein, Chase, as administrative agent, and DLJ Capital
Funding, Inc., as documentation agent; provided that at the time of such
distribution the Company's Consolidated Fixed Charge Coverage Ratio is at
least equal to 2.50:1 and (y) the Company may make distributions to
Holdings in amounts equal to amounts required for Holdings to pay taxes to
the extent Holdings is liable for such taxes and such taxes are
attributable to the operations of the Company and its Subsidiaries;
provided, however, that the Company shall not make any such tax
distributions in excess of its and its Subsidiaries stand alone tax
liability in respect of such taxes;
(vi) the declaration and payment of dividends or distributions to
holders of any class or series of Disqualified Capital Stock of the Company
or any of its Subsidiaries issued or incurred in accordance with Section
4.9;
(vii) Investments having an aggregate Fair Market Value, taken
together with all other Investments made pursuant to this clause (vii) that
are at that time outstanding, not to exceed $10.0 million at the time of
such Investment (with the Fair Market Value of each Investment being
measured at the time made and without giving effect to subsequent changes
in value); and
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(viii) Investments that are made with Excluded Contributions applied
within 180 days of receipt by the Company.
In determining the amount of Restricted Payments permissible under clause
(ii) of Section 4.12(a), the amounts expended pursuant to clauses (i), (iv),
(v), (vi) and (vii) above shall be included as Restricted Payments.
SECTION 4.13. Disposition of Proceeds of Asset Sales.
(a) The Company shall not, and shall not permit any of its Subsidiaries to,
make any Asset Sale unless (i) such Asset Sale is for Fair Market Value, (ii)
the proceeds therefrom consist of at least 80% cash and/or Cash Equivalents
(with Indebtedness of the Company or its Subsidiaries assumed by the purchaser
being counted as cash for such purposes if the Company and its Subsidiaries are
released from any liability therefor), (iii) if such Asset Sale involves
Collateral it shall be made in compliance with Article XI, and (iv) the Company
shall commit to apply the Net Cash Proceeds of such Asset Sale within 270 days
of receipt thereof, and shall apply such Net Cash Proceeds within 360 days of
receipt thereof, as follows:
(1) first, to the extent such Net Cash Proceeds are received from an
Asset Sale not involving the sale, transfer or disposition of Collateral
("Non-Collateral Proceeds"), first, to repay any Indebtedness secured by
the assets involved in such Asset Sale and second, to repay Indebtedness
outstanding under the Revolving Credit Facility or repurchase First
Mortgage Notes, until each such Indebtedness has been repaid or otherwise
satisfied in full, and
(2) second, with respect to any Non-Collateral Proceeds remaining
after application pursuant to the preceding paragraph (1) and any Net Cash
Proceeds received from an Asset Sale involving Collateral ("Collateral
Proceeds" and, together with such remaining Non-Collateral Proceeds, the
"Available Amount"), the Company shall (i) make an offer to purchase (the
"Asset Sale Offer"), in accordance with this Section 4.13, from all holders
of the Securities and offer to repay, in accordance with the Credit
Agreement, to all Lenders, and (ii) to the extent the Available Amount
includes Collateral Proceeds received from an Asset Sale involving Closing
Date Collateral (the "Closing Date Collateral Proceeds"), deposit with the
First Mortgage Notes Trustee for the benefit of the holders of the First
Mortgage Notes, up to a maximum principal amount (expressed as a multiple
of $1,000) of Securities, Loans and First Mortgage Notes, if applicable,
respectively (collectively, the "Pari Passu Debt") equal to the Available
Amount at a purchase price equal to 100% of the principal thereof plus
accrued and unpaid interest thereon, if any, to the date of purchase,
provided, however, that the Company will not be required to apply pursuant
to this paragraph (2) Net Cash Proceeds received from any Asset Sale if,
and only to the extent that, such Net Cash Proceeds are committed in
writing to be applied to acquire or construct property or assets in lines
of business related to the Company's and its Subsidiaries' business at such
time (a "Permitted Related Acquisition") (provided that the Net Cash
Proceeds from any Asset Sale by the Company must be invested in property or
assets of the Company and not of a Subsidiary) within 270 days of such
Asset Sale and are so applied within 360 days of such Asset Sale and, if
the Net Cash Proceeds so invested were Collateral Proceeds, the property
and assets so acquired or
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constructed are made subject to the Lien of this Indenture and the
applicable Security Documents pursuant to Article XI to secure all
obligations under the Credit Agreement (and, to the extent such Collateral
Proceeds constitute Closing Date Collateral Proceeds, under the First
Mortgage Notes) on an equal and ratable basis; provided, further, that the
Company may defer the Asset Sale Offer until there is an aggregate
unutilized Available Amount equal to or in excess of $2,500,000 resulting
from one or more Asset Sales (at which time, the entire unutilized
Available Amount, and not just the amount in excess of $2,500,000, shall be
applied as required pursuant to this paragraph).
(b) The Company shall provide the Trustee and the Collateral Agent with
notice of the Asset Sale Offer at least 30 days before any notice of any Asset
Sale Offer is mailed to Holders of the Securities and the Lenders (unless
shorter notice is acceptable to the Trustee and the Collateral Agent). Notice of
an Asset Sale Offer shall be mailed by the Company to all Holders of Securities
and the Lenders not less than 30 days nor more than 60 days before the Asset
Sale Payment Date at their last registered address with a copy to the Trustee
and the Paying Agent. The Asset Sale Offer shall remain open from the time of
mailing for at least 20 Business Days and until at least 5:00 p.m., New York
City time, on the Business Day next preceding the Asset Sale Payment Date. The
notice, which shall govern the terms of the Asset Sale Offer, shall include such
disclosures as are required by law and shall state:
(i) that the Asset Sale Offer is being made pursuant to this Section
4.13;
(ii) the purchase price (including the amount of accrued and unpaid
interest, if any) for each Security and promissory note representing Loans
(a "promissory note") and the Asset Sale Payment Date;
(iii) that any Security not tendered and any promissory note not
repaid or, in either case accepted for payment will continue to accrue
interest in accordance with the terms thereof;
(iv) that, unless the Company defaults on making the payment, any
Security or promissory note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Asset Sale Payment Date;
(v) that Holders electing to have Securities and promissory notes
purchased pursuant to an Asset Sale Offer will be required to surrender
their Securities and promissory notes to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City time, on the
Business Day next preceding the Asset Sale 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 and Lenders will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Business Day next preceding the Asset Sale Payment Date,
a tested telex, facsimile transmission or letter setting forth the name of
the Holder or Lender, the aggregate principal amount of Securities
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or promissory notes the Holder delivered for purchase, the Security
certificate number (if any) and a statement that such Holder is withdrawing
his election to have such Securities purchased;
(vii) that if Pari Passu Debt in an aggregate principal amount in
excess of the Available Amount are tendered pursuant to the Asset Sale
Offer, the Company shall purchase Securities, repay Loans and deposit funds
with the First Mortgage Notes Trustee, if applicable, on a pro rata basis
among the Securities tendered, Loans to be repaid and deposits with the
First Mortgage Notes Trustee to be made (if any) (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 aggregate 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 or before the Asset Sale Payment Date, the Company shall (i) accept for
payment, deposit or repayment, as applicable, on a pro rata basis among the Pari
Passu Debt (subject to adjustment as contemplated by clause (vii) above),
Securities, Loans, deposits with the First Mortgage Notes Trustee, if
applicable, or portions thereof tendered or to be so deposited or repaid
pursuant to the Asset Sale Offer, (ii) cause the Collateral Agent to liquidate
the necessary amount of Permitted Investments and to deposit the same, on a pro
rata basis, with (x) the Paying Agent on the Asset Sale Payment Date money, in
immediately available funds, in an amount sufficient to pay the purchase price
of all Securities or portions thereof so tendered and accepted, (y) the Agents
under the Credit Agreement on the Asset Sale Payment Date money, in immediately
available funds, in an amount sufficient to pay the purchase price of all Loans
or portions thereof to be repaid in connection with such Asset Sale and (z) the
First Mortgage Notes Trustee, if applicable, on the Asset Sale Payment Date
money, in an amount equal to such Trustee's pro rata share of such Asset Sale,
and (iii) deliver to the Collateral Agent, the Paying Agent, the Agents under
the Credit Agreement and the First Mortgage Notes Trustee, if applicable, an
Officers' Certificate setting forth the Pari Passu Debt or portions thereof
repaid or deposited or tendered to and accepted for payment, as applicable, 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 Holder thereof. To the extent an Asset Sale
Offer is not fully subscribed by the Holders, the Company shall apply any
unutilized portion of the Available Amount to repayment of Obligations under the
Credit Agreement by promptly delivering such amount to the Agents under the
Credit Agreement; provided, however, that to the extent such Available Amount
constitutes Closing Date Collateral Proceeds, such utilized portion shall be
distributed between such Agents and the First Mortgage Notes Trustee on a pro
rata basis. Notwithstanding anything herein to the contrary, in no event shall
the Trustee or the Collateral Agent be liable for any loss incurred as a result
of the liquidation of any Permitted Investments absent its gross negligence or
willful misconduct.
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The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act, and any other securities laws or
regulations in connection with the repurchase of Securities pursuant to an Asset
Sale Offer. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.13, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.13 by virtue
thereof.
SECTION 4.14. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit, cause or suffer any of its
Subsidiaries to, conduct any business or enter into any transaction or series of
transactions with or for the benefit of any of their respective Affiliates (each
an "Affiliate Transaction"), unless (a) such transaction or series of related
transactions is on terms that are no less favorable to the Company or such
Subsidiary, as the case may be, than those which could have been obtained in a
comparable transaction at such time with an unrelated Person, and (b) with
respect to a transaction or series of related transactions involving aggregate
payments or Fair Market Value equal to or greater than $2.5 million, the Company
shall have delivered an Officers' Certificate to the Trustee certifying that
such transaction or series of related transactions complies with the preceding
clause (a) and that such transaction or series of related transactions has been
approved by a majority of the Board of Directors of the Company (including a
majority of Disinterested Directors); provided that, in lieu of complying with
clause (b), the Company may obtain a written opinion from an Independent
Financial Advisor qualified to pass upon the required matters stating that the
terms of such transaction or series of transactions are fair to the Company or
such Subsidiary, as the case may be, from a financial point of view; provided
that this covenant will not restrict the Company or its Subsidiaries from (i)
making Restricted Payments (other than Investments) permitted under Section
4.12, (ii) (a) any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors of the Company, (b) loans or advances to employees of the Company or
any of its Subsidiaries in accordance with Section 4.22, (c) transactions among
the Company and Wholly-Owned Subsidiaries of the Company and transactions among
Wholly-Owned Subsidiaries of the Company otherwise permitted by this Indenture,
(d) the payment of fees and indemnities to directors, officers and employees of
the Company and the Subsidiaries of the Company in the ordinary course of
business, (e) transactions pursuant to agreements in existence on the Issue Date
or any amendment thereto (so long as any such amendment is not disadvantageous
to the holders of the Securities in any material respect), (f) any employment
agreements entered into by the Company or any of the Subsidiaries of the Company
in the ordinary course of business, (g) any sale of Capital Stock (other than
Disqualified Capital Stock) of the Company, (h) the payment of annual
management, consulting, monitoring and advisory fees and related expenses to
Blackstone, Veritas and their Affiliates not to exceed $1.0 million in the
aggregate; (i) payments by the Company or any of its Subsidiaries to Blackstone,
Veritas and their Affiliates made for any financial advisory, underwriting or
placement services or in respect of other investment banking activities
consistent with past customary practice of Blackstone and Veritas, respectively,
with respect to their portfolio companies, including, without limitation, in
connection with acquisitions or divestitures, which payments are approved by a
majority of the Board of Directors of the Company in good faith; and (j)
transactions with customers, clients, suppliers, or purchasers or sellers of
goods or services, in each case in the ordinary course of business and otherwise
in compliance with the terms of this Indenture which are fair to the Company or
its Subsidiaries, in the reasonable determination of the Board of Directors of
the Company or the senior management
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thereof, or are on terms not materially less favorable than might reasonably
have been obtained at such time from an unaffiliated party; and (k) [Bar Tech
joint marketing plan.](2)
SECTION 4.15. Change of Control.
In the event of a Change of Control (the date of such occurrence, the
"Change of Control Date"), the Company shall notify the Holders of Securities
and the Lenders in writing of such occurrence and shall make an offer to
purchase or repay (the "Change of Control Offer") on a Business Day (the "Change
of Control Payment Date") not later than 60 days following the Change of Control
Date, all Securities and Loans, respectively, then outstanding at a purchase
price equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the Change of Control Payment Date.
Notice of a Change of Control Offer shall be mailed by the Company to the
Securityholders and the Lenders not less than 30 days nor more than 60 days
before the Change of Control Payment Date. The Change of Control Offer shall
remain open from the time of mailing for at least 20 Business Days and until
5:00 p.m., New York City time, on the Business Day preceding the Change of
Control Payment Date. The notice, which shall govern the terms of the Change of
Control Offer, shall include such disclosures as are required by law and shall
state:
(a) that a Change of Control Offer is being made pursuant to this
Section 4.15 and that all Securities and promissory notes representing
Loans ("promissory notes") will be accepted for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Security and promissory note and the Change of Control
Payment Date;
(c) that any Security not tendered for payment and any promissory note
not repaid will continue to accrue interest in accordance with the terms
thereof;
(d) that, unless the Company defaults on making the payment, any
Security or promissory note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Payment Date;
(e) that Holders electing to have Securities and promissory notes
purchased pursuant to a Change of Control Offer will be required to
surrender their Securities and promissory notes to the Paying Agent at the
address specified in the notice prior to 5:00 p.m., New York City time, on
the Business Day preceding the Change of Control Payment Date and must
- -------------------
(2) The joint marketing plans shall be more fully described in this provision
upon execution of this Indenture.
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complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(f) that Holders of Securities and Lenders will be entitled to
withdraw their election if the Paying Agent receives, not later than 5:00
p.m., New York City time, on the Business Day preceding the Change of
Control Payment Date, a tested telex, facsimile transmission or letter
setting forth the name of the Holder or Lender, the principal amount of
Securities or promissory notes, respectively, delivered for purchase, the
Security certificate number (if any) and a statement that such Holder is
withdrawing his election to have such Securities or promissory notes
purchased;
(g) that Holders and Lenders whose Securities or promissory notes are
purchased or promissory notes only in part will be issued Securities or
promissory notes, respectively, equal in principal amount to the
unpurchased portion of the Securities or promissory notes surrendered;
(h) the instructions that Holders and Lenders must follow in order to
tender their Securities or promissory notes; and
(i) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with respect to pro
forma historical financial information after giving effect to such Change
of Control, if appropriate information regarding the Persons acquiring
control and such Persons' business plans going forward).
On the Change of Control Payment Date, the Company shall (i) accept for
payment Securities, promissory notes or portions thereof tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent money sufficient
to pay the purchase price of all Securities, promissory notes or portions
thereof so tendered and accepted and (iii) deliver to the Trustee the Securities
and promissory notes so accepted together with an Officers' Certificate setting
forth the Securities, promissory notes or portions thereof tendered to and
accepted for payment by the Company. The Paying Agent shall promptly mail or
deliver to the Holders of Securities so accepted and Lenders 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 or promissory note equal in
principal amount to any unpurchased portion of the Security or promissory note
surrendered. Any Securities or promissory notes not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof.
Notwithstanding the foregoing, the Company may assign to any Person (the
"Assignee") its rights pursuant to the foregoing paragraph as they may relate to
all or any portion of the Securities tendered in a Change of Control Offer. To
the extent of any such assignment, the Company's obligations under Section 4.15
to purchase Notes shall be discharged if the Assignee shall (i) purchase such
Securities or portions thereof validly tendered and not properly withdrawn
pursuant to the Change of Control Offer as to which the assignment is made and
(ii) deposit with the Paying Agent money sufficient to pay the purchase price of
all Securities or portions thereof so tendered in connection with the
assignment, whereupon the Assignee shall be entitled to have delivered to it or
to its nominee the Securities so purchased. Upon completion of any Change of
Control Offer in connec-
<PAGE>
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tion with which an assignment is made, the Company shall deliver to the Trustee
an Officers' Certificate setting forth all of the Securities or portions thereof
tendered and accepted for payment pursuant to the Change of Control Offer. The
Paying Agent shall promptly mail or deliver to the Holders of Securities
purchased by the Company or the Assignee 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. No assignment made pursuant to this
paragraph shall relieve the Company of its obligations under the foregoing
paragraph in the event that the Assignee shall fail to deposit with the Paying
Agent money sufficient to pay the purchase price in respect of Securities or
portions thereof as to which an assignment has been made pursuant to this
paragraph. Nothing herein shall imply or create any liability by the Assignee to
any Holder should the Assignee fail to make such deposit and purchase the
assigned Securities nor shall any Assignee have any liability in respect of the
Change of Control Offer.
The delivery to the Trustee of Securities accepted for payment pursuant to
a Change of Control Offer may be for the purpose of transfer of registration or
exchange or for the purpose of cancellation, as directed by the Company.
Any Securities acquired by the Assignee pursuant to an assignment by the
Company or acquired by the Company and held for the account of the Company shall
take the form of certificated securities and shall bear substantially the
Private Placement Legend.
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act, and any other securities laws or
regulations in connection with the repurchase of Securities pursuant to a Change
of Control Offer. 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.
SECTION 4.16. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective or
enter into any agreement with any Person that would cause, any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of the
Company to (a) pay dividends, in cash or otherwise, or make any other
distributions on its Capital Stock or any other interest or participation in, or
measured by, its profits owned by, or pay any Indebtedness owed to, the Company
or a Subsidiary of the Company, (b) make any loans or advances to the Company or
any Subsidiary of the Company or (c) transfer any of its properties or assets to
the Company or to any Subsidiary of the Company, except, in each case, for such
encumbrances or restrictions existing under or contemplated by or by reason of
(i) the Securities, this Indenture, the Credit Agreement and the Security
Documents, (ii) any restrictions existing under or contemplated by agreements in
effect on the Initial Closing Date, (iii) with respect to a Subsidiary of the
Company that is not a Subsidiary of the Company on the Initial Closing Date, in
existence at the time such Person becomes a Subsidiary of the Company (but not
created in contemplation of such Person becoming a Subsidiary), (iv) applicable
law or any applicable rule, regulation or order, (v)
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Liens permitted under Section 4.11, (vi) secured Indebtedness
otherwise permitted to be incurred pursuant to the covenants described under
Section 4.9, (vii) restrictions on cash or other deposits imposed by customers
under contracts entered into in the ordinary course of business, (viii)
customary provisions contained in leases and other agreements entered into in
the ordinary course of business, or (ix) any restrictions existing under any
agreement that refinances or replaces an agreement containing a restriction
permitted by clauses (i), (ii) and (iii) above, provided that the terms and
conditions of any such restrictions under this clause (ix) are not materially
less favorable to the Holders than those under or pursuant to the agreement
being replaced or the agreement evidencing the Indebtedness refinanced.
SECTION 4.17. Limitation on Issuance of Preferred Stock by Subsidiaries.
The Company shall not cause or permit any Subsidiary of the Company,
directly or indirectly, to issue shares of such Subsidiary's Preferred Stock or
warrants, rights or options to acquire shares of such Subsidiary's Preferred
Stock, except to the Company or a Wholly-Owned Subsidiary of the Company.
SECTION 4.18. Limitation on Guarantees of Certain Indebtedness.
The Company will not permit any of its Subsidiaries, directly or
indirectly, to (a) incur, guarantee or secure through the granting of Liens the
payment of the Credit Agreement Indebtedness or any Refinancings thereof, or (b)
pledge any intercompany notes representing obligations of any of its
Subsidiaries to secure the payment of the Credit Agreement Indebtedness or any
Refinancings thereof, in each case unless such Subsidiary, the Company, the
Trustee and the Collateral Agent execute and deliver a supplemental indenture
evidencing such Subsidiary's Guarantee, such Guarantee to be a senior secured
obligation of such Subsidiary that is pari passu and secured equally and ratably
with the Credit Agreement Indebtedness. Neither the Company nor any such
Guarantor shall be required to make a notation on the Securities or the
Guarantees to reflect any such subsequent Guarantee. Nothing in this covenant
shall be construed to permit any Subsidiary of the Company to incur Indebtedness
otherwise prohibited by Section 4.9. Thereafter, such Subsidiary shall be a
Guarantor for all purposes of this Indenture.
SECTION 4.19. Impairment of Security Interest.
The Company shall not, and shall not permit any of its Subsidiaries to,
take or knowingly or negligently omit to take any action which action or
omission might or would have the result of impairing the security interest in
favor of the Collateral Agent, on behalf of the Secured Parties, with respect to
any Property then constituting Collateral, and the Company shall not grant to
any Person (other than the Collateral Agent on behalf of the Secured Parties)
any interest whatsoever in such Collateral other than Liens permitted by this
Indenture or the Security Documents.
<PAGE>
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SECTION 4.20. Conflicting Agreements.
The Company shall not, and shall not permit any of its Subsidiaries to,
enter into any agreement or instrument that by its terms expressly (i) prohibits
the Company from making any payments on or in respect of the Securities in
accordance with the terms thereof and of this Indenture, as in effect from time
to time, or (ii) requires that the proceeds received from the sale of any
Collateral be applied to repay, redeem or otherwise retire any Indebtedness of
any Person other than the Indebtedness represented by (x) the Securities and the
Credit Agreement Indebtedness or (y) the First Mortgage Notes or the Revolving
Credit Facility, each as in effect as of the Initial Closing Date, and except as
expressly permitted by this Indenture or the Security Documents.
SECTION 4.21. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent permitted by law) that it will not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or that may affect the covenants
or the performance of this Indenture; and (to the extent permitted by law) the
Company hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee or the Collateral Agent, but will suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 4.22. Limitation on Investments, Loans and Advances.
The Company shall not make and shall not permit any of its Subsidiaries to
make any Investment in any Person, except: (i) Investments represented by
accounts receivable created or acquired in the ordinary course of business; (ii)
advances to employees in the ordinary course of business; (iii) Permitted
Investments; (iv) Investments made pursuant to Section 4.12; (v) Investments in
any Wholly-Owned Subsidiary (including any person that pursuant to such
Investment becomes a Wholly-Owned Subsidiary) and any Person that is merged or
consolidated with or into or transfers or conveys all or substantially all of
its assets to the Company or any Wholly-Owned Subsidiary at the time such
Investment is made; (vi) Investments in deposits with respect to leases or
utilities provided to third parties in the ordinary course of business; (vii)
Investments in the Securities and the First Mortgage Notes; (viii)
Investments in Interest Rate Protection Obligations Currency Agreements and
commodity hedging agreements permitted by clause (viii) or (xi) of the covenant
"Limitation on Additional Indebtedness"; (ix) loans or advances to officers or
employees of the Company and its Subsidiaries in the ordinary course of business
for bona fide business purposes (including travel and moving expenses) not in
excess of $1,000,000 in the aggregate at any one time outstanding; (x)
Investments in evidences of Indebtedness, securities or other property received
from another Person by the Company or any of its Subsidiaries in connection with
any bankruptcy proceeding or by reason of a composition or readjustment of debt
or a reorganization of such person or as a result of foreclosure, perfection or
enforcement of any Lien in exchange for evidences of Indebtedness, securities or
other property of such Person held by the Company or any of its Subsidiaries, or
for other liabilities or obligations of such other Person to the Company or any
of its Subsidiaries that were created in accordance with the terms of this
Indenture; (xi) Investments consisting
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of the licensing or contribution of intellectual property pursuant to joint
marketing arrangements with other Persons; (xii) Investments consisting of
purchases and acquisitions of inventory, supplies, materials and equipment or
licenses or leases of intellectual property, in any case, in the ordinary course
of business; (xiii) any Investment in securities or other assets not
constituting cash or Cash Equivalents and received in connection with an Asset
Sale made pursuant to the provisions of Section 4.13 or any other disposition of
assets not constituting an Asset Sale; (xiv) any Investment existing on the
Issue Date; (xv) Currency Agreements or commodity agreements permitted under
clause (xi) of Section 4.9; (xvi) Investments to the extent the payment for
which by the Company or any Subsidiary consists of Capital Stock of the Company
(other than Disqualified Capital Stock); provided, however, that such Capital
Stock will not increase the amount available for Restricted Payments under
clause (a)(ii) of Section 4.12 and (xvii) Investments permitted by Section 4.12.
Investments other than those permitted by the foregoing provisions are referred
to herein as "Prohibited Investments."
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. When Company May Merge, Etc.
The Company shall not consolidate with or merge with or into or sell,
assign, convey, lease or transfer all or substantially all of its properties and
assets as an entirety to any Person in a single transaction or through a series
of related transactions unless:
(a) the Company shall be the continuing Person, or the resulting,
surviving or transferee Person (the "surviving entity") shall be a
corporation organized and existing under the laws of the United States, any
State thereof or the District of Columbia;
(b) the surviving entity shall expressly assume, by a supplemental
indenture executed and delivered to the Trustee and the Collateral Agent,
in form and substance reasonably satisfactory to the Trustee and the
Collateral Agent, all of the obligations of the Company under the
Securities, this Indenture and the Security Documents;
(c) immediately after giving effect to such transaction, or series of
transactions (including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction or series of transactions), no Default or Event of Default
shall have occurred and be continuing;
(d) immediately after giving effect to such transaction or series of
transactions, the Company or the surviving entity could incur $1.00 of
additional Indebtedness pursuant to Section 4.9(iv);
(e) each Guarantor (other than a Guarantor whose Guarantee is to be
released in accordance with the terms of this Indenture), unless it is the
other party to the transaction, shall have by supplemental indenture
confirmed that after consummation of such transaction its
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Guarantee shall apply, as such Guarantee applied on the date it was granted
under this Indenture to the obligations of the Company under this Indenture
and the Securities, to the obligations of the Company or such Person, as
the case may be, under this Indenture and the Securities;
(f) the Company or the surviving entity shall have delivered to the
Trustee an Officer's Certificate stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction or series of transactions, such
supplemental indenture complies with this Section 5.1, and that all
conditions precedent in this Indenture relating to the transaction or
series of transactions have been satisfied; and
(g) neither the Company nor any Subsidiary would thereupon become
obligated with respect to any Indebtedness, nor any of their respective
property subject to any Lien, unless the Company or such Subsidiary could
incur such Indebtedness or create such Lien under this Indenture and the
Security Documents.
Notwithstanding the foregoing, (a) any Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company or to
another Subsidiary without complying with clause (d) above and (b) the Company
may merge with an Affiliate with no material assets or liabilities incorporated
solely for the purpose of reincorporating the Company in another State of the
United States so long as the amount of Indebtedness of the Company and its
Subsidiaries is not increased thereby.
SECTION 5.2. Successor Entity Substituted.
Upon any consolidation, merger or any transfer of all or substantially all
of the assets of the Company in accordance with Section 5.1, the surviving
entity formed by such consolidation or into which the Company is merged or to
which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of and shall assume all obligations of, the
Company under this Indenture and the Security Documents with the same effect as
if such surviving entity had been named as the Company herein.
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.
(a) An "Event of Default" occurs if:
(i) the Company defaults in the payment of any interest on the
Securities when it becomes due and such Default continues for a period of
30 days; or
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(ii) the Company defaults in the payment of the principal of the
Securities when due; or
(iii) the Company defaults in the performance, or breach, of any
covenant in this Indenture (other than defaults specified in clause (i) or
(ii) above), and such default or breach continues for a period of 30 days
after written notice to the Company by the Trustee or to the Company and
the Trustee by the holders of at least 25% in aggregate principal amount of
the outstanding Securities; or
(iv) the Company defaults in the performance of or compliance with, or
breach of, any term, covenant, condition, or provision of the Security
Documents, which default or breach shall continue unremedied for 30 days
after written notice to the Company by the Trustee or the Collateral Agent
or to the Company, the Trustee and the Collateral Agent by holders of at
least 25% in aggregate principal amount of the outstanding Securities
unless the remedy or cure of such default requires work to be performed,
acts to be done or conditions to be removed which cannot, by their nature,
reasonably be performed, done or removed within such 30-day period, or if
such remedy or cure is prevented by causes outside of the control or
responsibility of the Company, in which case no "Event of Default" shall be
deemed to exist so long as the Company shall have commenced cure within
such 30-day period and shall diligently prosecute the same to completion;
or
(v) the Company or any Subsidiary fails (a) to make any payment within
five days after the date when due with respect to any other Indebtedness
under one or more classes of Indebtedness in an aggregate principal amount
of $10,000,000 or more; or (b) to perform any term, covenant, condition, or
provision of one or more classes or issues of Indebtedness in an aggregate
principal amount of $10,000,000 or more, which failure, in the case of
clause (b), results in an acceleration of the maturity thereof and such
Indebtedness is not satisfied; or
(vi) one or more judgments, orders or decrees for the payment of money
in excess of $10,000,000, either individually or in an aggregate amount,
shall be entered against the Company or any of its Subsidiaries or any of
their respective properties and shall not be discharged and there shall
have been a period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of pending appeal or
otherwise, shall not be in effect; or
(vii) the Company 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,
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(D) makes a general assignment for the benefit of its creditors
or
(E) shall generally not pay its debts when such debts become due
or shall admit in writing its inability to pay its debts generally; or
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
proceeding,
(B) appoints a Custodian of the Company for all or substantially
all of its properties, or
(C) orders the liquidation of the Company,
and in each case the order or decree remains unstayed and in effect for 60
days; provided, however, 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; or
(ix) any of the Guarantees of the Guarantors ceases to be in full
force and effect (except in circumstances permitted by this Indenture) or
any of such Guarantees is declared to be null and void and unenforceable or
any of such Guarantees is found to be invalid or any such Guarantor denies
its liability under its Guarantee (other than by reason of release of a
Guarantor in accordance with the terms of this Indenture); or
(x) any of the Security Documents shall cease to be in full force and
effect in any material respect or shall cease to give the Collateral Agent
in any material respect the Liens, rights, powers and privileges purported
to be created thereby in favor of the Collateral Agent for the benefit of
the Secured Parties; or
(xi) the Agent under the Revolving Credit Facility or the First
Mortgage Notes Trustee fails to release its respective interest the
collateral securing the Revolving Credit Facility or First Mortgage Notes,
as applicable, in a manner reasonably satisfactory to the Collateral Agent
as of any Satisfaction Date;
(xii) the Company or any Guarantor fails to grant to the Collateral
Agent (for the benefit of the Secured Parties) a first priority Lien on and
security interest in (subject only to applicable Prior Liens) any
Collateral (other than inventory, accounts receivable and other
intangibles) on the applicable Satisfaction Date as contemplated by the
terms of this Indenture.
(b) For purposes of this Section 6.1, the term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official
charged with maintaining possession or control over property for one or more
creditors.
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(c) Subject to the provisions of Sections 7.1 and 7.2, the Trustee shall
not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to a Responsible Officer at the Corporate Trust
Office of the Trustee by the Company or any other Person.
SECTION 6.2. Acceleration.
If an Event of Default (other than an Event of Default specified in Section
6.1(a)(vii) or (viii) with respect to the Company) occurs and is continuing, the
Holders of at least 25% in aggregate principal amount of the outstanding
Securities may, by written notice to the Trustee and the Collateral Agent, and
the Trustee upon the request of the Holders of not less than 25% in aggregate
principal amount of the outstanding Securities, shall upon written notice to the
Collateral Agent declare the principal of, premium, if any, and accrued interest
on all the Securities to be due and payable immediately. Upon any such
declaration such principal shall become due and payable immediately. If an Event
of Default specified in Section 6.1(a)(vii) or (viii) occurs with respect to the
Company and is continuing, then the principal of, premium, if any, and accrued
interest on all the Securities shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee, the
Collateral Agent or any Holder. The Holders of a majority in aggregate principal
amount of outstanding Securities may, by notice to the Trustee and the
Collateral Agent, rescind such declaration of acceleration if all existing
Events of Default have been cured or waived, other than the non-payment of
principal of, premium, if any, and accrued interest on the Securities that has
become due solely as a result of such acceleration and if the rescission of
acceleration would not conflict with any judgment or decree. No such rescission
shall affect any subsequent default or impair any right consequent thereto.
SECTION 6.3. 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, subject to the terms of this
Indenture, the Security Documents.
All rights of action and claims under this Indenture or the Securities may
be enforced by the Trustee even if the Trustee does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Each Holder, by accepting a Security, acknowledges that the exercise of
remedies by the Collateral Agent with respect to the Collateral is subject to
the terms and conditions of this Indenture and the Security Documents and the
proceeds received upon realization of this Indenture and the Collateral shall be
applied by the Collateral Agent in accordance with the Security Documents and
the Trustee shall thereafter apply any proceeds received by it in accordance
with Section 6.11.
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By acceptance of the benefits of this Indenture and the Security Documents
each Holder and the Trustee confirms that the Collateral Agent is authorized to
execute and deliver and perform its obligations under the Intercreditor
Agreement and the remedies set forth herein shall be subject to the terms of
such Intercreditor Agreement.
SECTION 6.4. Waiver of Past Default.
Subject to Sections 6.7 and 9.2, the Holders of, in the aggregate, at least
a majority in principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its consequences,
except a Default specified in Section 6.1(a)(i) or (ii) or in respect of any
provision hereof which cannot be modified or amended without the consent of the
Holder so affected pursuant to Section 9.2. When a Default or Event of Default
is so waived, it shall be deemed cured and shall cease.
SECTION 6.5. Control by Majority.
Subject to Section 11.15, the Holders of at least 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; provided, however, that the Trustee may
refuse to follow any direction that (i) conflicts with law or this Indenture or
any Security Document, (ii) the Trustee determines may be unduly prejudicial to
the rights of another Securityholder, or (iii) may involve the Trustee in
personal liability unless the Trustee has indemnification satisfactory to it in
its sole discretion against any loss or expense caused by its following such
direction; and provided, further, that the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with such direction.
SECTION 6.6. Limitation on Suits.
Subject to Section 11.15, Securityholder may not pursue any remedy with
respect to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the outstanding
Securities make a written request to the Trustee to pursue a remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the outstanding Securities do not give the Trustee a direction
inconsistent with the request.
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The foregoing limitations shall not apply to a suit instituted by a Holder
for the enforcement of the payment of principal of, premium, if any, or accrued
interest on such Security on or after the respective due dates set forth in such
Security.
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 6.7. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of, premium, if any, and interest on a
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, is absolute and unconditional and shall not be impaired or affected
without the consent of such Holder except to the extent that the institution or
prosecution of such suit or the 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 or as otherwise
set forth in Section 11.15.
SECTION 6.8. Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a)(i) or (ii) occurs and is
continuing, the Trustee and/or the Collateral Agent 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, premium, if any,
and accrued interest remaining unpaid, together with interest overdue on
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the
Interest Rate and in 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 and/or the Collateral Agent,
their respective agents and counsel.
SECTION 6.9. Trustee May File Proofs of Claim.
The Trustee and/or the Collateral Agent shall be entitled and empowered to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and/or the Collateral Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee and/or the Collateral Agent, its or their respective
agents and counsel) and the Securityholders allowed in any judicial proceedings
relative to the Company, the Subsidiaries of 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/or the Collateral Agent and, in the event
that the Trustee and/or the Collateral Agent shall consent to the making of such
payments directly to the Securityholders, to pay to the Trustee and/or the
Collateral Agent any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and/or the Collateral Agent, its or
their respective agents and counsel,
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and any other amounts due the Trustee under Section 7.7. Nothing herein
contained shall be deemed to authorize the Trustee and/or the Collateral Agent
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article VI or as a
result of a distribution by the Collateral Agent pursuant to any of the Security
Documents, it shall pay out such money in the following order:
First: to the Trustee for all amounts due under Section 7.7;
Second: to Holders for interest accrued on the Securities, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for interest;
Third: to Holders for principal amounts owing under the Securities,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal; and
Fourth: to the Company or the Guarantors.
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
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.7, or a suit by Holders of more than 10% in aggregate principal amount of the
outstanding Securities.
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee.
(a) If an Event of Default 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
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degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default actually known to
the Trustee:
(i) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no others and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine whether
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:
(i) This paragraph does not limit the effect of paragraph (b) of this
Section 7.1.
(ii) The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.2, 6.4 or 6.5.
(d) No provision of this Indenture shall require the Trustee or the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or under
the Security Documents or exercise any of its rights or powers hereunder or
under the Security Documents if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) 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 7.1.
(f) Neither the Trustee nor the Collateral Agent shall be liable for
interest on any money received by it except as the Trustee or the Collateral
Agent may agree in writing with the Company. Except as otherwise provided for in
Section 7.1(g) below, money held in trust by the Trustee or the Collateral Agent
need not be segregated from other funds except to the extent required by law.
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(g) Notwithstanding anything herein to the contrary, all Net Cash Proceeds
delivered to the Trustee or the Collateral Agent, as applicable, shall be
invested on behalf of the Company in one or more Permitted Investments pursuant
to the written directions of the Company delivered to the Trustee or the
Collateral Agent, as applicable. Such written directions shall specify the
Permitted Investment into which the Net Cash Proceeds shall be invested and the
maturity of such Permitted Investments, all subject to the requirements of this
Indenture.
(h) Notwithstanding anything herein or in the Security Documents to the
contrary, the Trustee may refuse to perform any duty or exercise any right or
power arising hereunder or under the Security Documents unless it is provided
adequate funds to enable it to do so and it receives indemnity satisfactory to
it in its sole discretion against any loss, liability, fee or expense.
SECTION 7.2. Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee shall
not be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent or
attorney.
(b) Before the Trustee acts or refrains from acting with respect to
any matter contemplated by this Indenture, it may require an Officers'
Certificate or an Opinion of Counsel, which shall conform to the provisions
of Section 13.5. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent (other than
the negligence or willful misconduct of an agent who is an employee of the
Trustee) appointed with due care.
(d) 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.
(e) 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.
(f) Subject to Section 9.2 and Section 11.15 hereof, the Trustee may
(but shall not be obligated to), without the consent of the Holders, give
any consent, waiver or approval re-
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quired from the Requisite Obligees hereunder or under any of the Security
Documents or by the terms hereof with respect to the Collateral, but shall
not without the consent of the Holders of 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 any of
the Security Documents, in each case which will have an adverse effect on
the interests of any Holder.
(g) Subject to clauses (a) - (d), inclusive, of Section 7.1 hereof,
the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any
Holder pursuant to this Indenture, unless such Holder shall have offered to
the Trustee and/or the Collateral Agent security or indemnity reasonably
satisfactory to the Trustee and/or the Collateral Agent against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction.
SECTION 7.3. Individual Rights of Trustee.
The Trustee in its individual capacity or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company and its
Subsidiaries 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 7.12.
SECTION 7.4. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture, the Securities or the Security
Documents or the Collateral covered thereby, or of any insurance thereon, and it
shall not be accountable for the Company's use of the proceeds from the issuance
of the Securities, and it shall not be responsible for any statement of the
Company in this Indenture, the Security Documents 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.
SECTION 7.5. Notice of Defaults.
If a Default or an Event of Default with respect to the Securities occurs
and is continuing and is known to a Responsible Officer, the Trustee shall mail
to each Securityholder, the Agents under the Credit Agreement and the Collateral
Agent notice of the Default or Event of Default within 45 days after the
occurrence thereof. 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 to such parties if a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interest of
Securityholders.
SECTION 7.6. Reports by Trustee to Holders.
To the extent required by TIA ss. 313(a), within 60 days after May 15 of
each year commencing with 1994 and for as long as there are Securities
outstanding hereunder, the Trustee shall
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mail to each Securityholder the Company's brief report dated as of such date
that complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss.
313(b) and TIA ss. 313(c) and (d). A copy of such report at the time of its
mailing to Securityholders shall be filed with the SEC, if required, and each
stock exchange, if any, on which the Securities are listed.
The Company shall promptly notify the Trustee if the Securities become
listed on any stock exchange, and the Trustee shall comply with TIA ss. 313(d).
SECTION 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee, the Paying Agent, the Registrar and
the Collateral Agent from time to time reasonable compensation for their
respective services rendered hereunder. The Trustee's, the Paying Agent's, the
Registrar's and the Collateral Agent's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee, the Paying Agent, the Registrar and the Collateral Agent
upon request for all reasonable out-of-pocket disbursements, expenses and
advances (including reasonable fees and expenses of counsel) incurred or made by
each of them in addition to the compensation for their respective services. Such
expenses shall include the reasonable compensation, out-of-pocket disbursements
and expenses of the Trustee's, the Paying Agent's, the Registrar's and the
Collateral Agent's agents.
The Company shall indemnify the Trustee, the Paying Agent, the Registrar
and the Collateral Agent for, and hold each of them harmless against, any claim,
demand, expense (including but not limited to attorneys' fees and expenses),
loss or liability incurred by each of them arising out of or in connection with
the administration of this Indenture or the Security Documents, as applicable
and their respective duties hereunder or thereunder including, without
limitation, any claim, demand, expense (including but not limited to reasonable
attorneys' fees and expenses), loss or liability incurred by each of them based
on or arising under applicable Environmental Laws, including, without
limitation, those enacted hereafter. Each of the Trustee, the Paying Agent, the
Registrar and the Collateral Agent shall notify the Company promptly of any
claim asserted against it for which it may seek indemnity. However, failure by
the Trustee, the Paying Agent, the Registrar and the Collateral Agent to so
notify the Company shall not relieve the Company of its obligations hereunder
except to the extent the Company is materially adversely affected by such
failure. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee, the Paying Agent, the Registrar and
the Collateral Agent through the Trustee's, the Paying Agent's, the Registrar's
or the Collateral Agent's, as the case may be, own willful misconduct,
negligence or bad faith.
To secure the Company's payment obligations in this Section 7.7, each of
the Trustee, the Paying Agent, the Registrar and the Collateral Agent shall have
a lien prior to the Securities on all money or property held or collected by it,
in its capacity as Trustee, Paying Agent, Registrar and the Collateral Agent, as
the case may be, except money or property held in trust to pay principal of or
interest on particular Securities.
When any of the Trustee, the Paying Agent, the Registrar or the Collateral
Agent incurs expenses or renders services after an Event of Default specified in
Section 6.1(a)(vii) or (viii)
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occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in writing,
such resignation to be effective upon the appointment of a successor Trustee.
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, which consent shall not be
unreasonably withheld. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting or fails to act in
accordance with its obligations hereunder within a reasonable period of
time following a request by the Company.
If the Trustee resigns or is removed or if a vacancy exists in the office
of the 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 the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to the lien provided in Section 7.7), the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 25% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee. The retiring Trustee shall have no liability for any act
or omissions by any successor Trustee.
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SECTION 7.9. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
national banking association, the resulting, surviving or transferee corporation
or national banking association without any further act shall be the successor
Trustee provided such corporation shall be otherwise qualified and eligible
under this Article VII.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1) and (2). The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA ss. 310(b); provided,
however, that there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding if
the requirements for such exclusion set forth in TIA ss. 310(b)(1) are met. The
provisions of TIA ss. 310 shall apply to the Company, as obligor of the
Securities.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein. The
provisions of TIA ss. 311 shall apply to the Company as obligor on the
Securities.
SECTION 7.12. Co-Trustee.(3)
(a) If at any time or times it shall be necessary or prudent in order to
conform to any law of any jurisdiction in which any of the Collateral shall be
located, or the Trustee shall be advised by counsel satisfactory to it, that it
is necessary or prudent in the interest of the Holders, or 25% of the Holders of
the outstanding Securities shall in writing so request the Trustee and the
Company, or the Trustee shall deem it desirable for its own protection in the
performance of its duties hereunder, the Trustee and the Company shall execute
and deliver all instruments and agreements necessary or proper to constitute
another bank or trust company, or one or more Persons approved by the Trustee
and the Company, either to act as co-trustee or co-trustees (each a
"co-trustee") of all or any of the Collateral, jointly with the Trustee, or to
act as separate trustee or trustees of any such property. If the Company shall
not have joined in the execution of such instruments and agreements within 10
days after it receives a written request from the Trustee to do so, or if a
notice of acceleration is in effect,
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(3) Counsel to Trustee to determine prior to execution of this Indenture
whether Section 7.12 is required given separate identity of Trustee and
Collateral Agent.
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the Trustee may act under the foregoing provisions of this Section without the
concurrence of the Company. The Company hereby appoints the Trustee as its agent
and attorney to act for it under the foregoing provisions of this Section in
either of such contingencies.
(b) Every separate trustee and every co-trustee, other than any successor
Trustee appointed pursuant to Section 7.8, shall, to the extent permitted by
law, be appointed and act and be such, subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee hereunder shall be conferred or imposed and exercised or
performed by the Trustee and such separate trustee or separate trustees or
co-trustee or co-trustees, jointly, as shall be provided in the instrument
appointing such separate trustee or separate trustees or co-trustee or
co-trustees, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations shall be exercised and performed by
such separate trustee or separate trustees or co-trustee or co-trustees;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Company and the Trustee, at any time by an instrument in
writing executed by them jointly, may accept the resignation of or remove
any such separate trustee or co-trustee and, in that case by an instrument
in writing executed by them jointly, may appoint a successor to such
separate trustee or co-trustee, as the case may be, anything contained
herein to the contrary notwithstanding. If the Company shall not have
joined in the execution of any such instrument within 10 days after it
receives a written request from the Trustee to do so, or if a notice of
acceleration is in effect, the Trustee shall have the power to accept the
resignation of or remove any such separate trustee or co-trustee and to
appoint a successor without the concurrence of the Company, the Company
hereby appointing the Trustee its agent and attorney to act for it in such
connection in such contingency. If the Trustee shall have appointed a
separate trustee or separate trustees or co-trustee or co-trustees as above
provided, the Trustee may at any time, by an instrument in writing, accept
the resignation of or remove any such separate trustee or co-trustee and
the successor to any such separate trustee or co-trustee shall be appointed
by the Company and the Trustee, or by the trustee alone pursuant to this
Section.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Termination of Company's Obligations.
The Company may terminate its obligations under the Securities and this
Indenture and the Guarantors' obligations under the Guarantees, except those
obligations referred to in the pe-
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nultimate paragraph of this Section 8.1, if all Securities previously
authenticated and delivered (other than destroyed, lost or stolen Securities
which have been replaced or paid) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:
(a) pursuant to Article III, the Company shall have given irrevocable
notice of redemption to the Trustee and made arrangements satisfactory to
the Trustee for the giving of a notice of redemption to each Holder of the
redemption of all of the Securities;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, money or direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of America
for the payment of which guarantee or obligation the full faith and credit
of the United States is pledged ("U.S. Government Obligations") maturing as
to principal, premium, if any, and interest in such amounts and at such
times as are sufficient without consideration of any reinvestment of such
interest, to pay principal of, premium, if any, and interest on the
outstanding Securities to maturity or redemption, as the case may be,
provided that the Trustee shall have been irrevocably instructed to apply
such money or the proceeds of such U.S. Government Obligations to the
payment of said principal, premium, if any, and interest with respect to
the Securities; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligation under
the Securities and this Indenture and the Guarantors' obligations under the
Guarantees, have been complied with.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.5, 2.6, 2.7, 2.8, 4.1, 4.2, 7.7, 7.8, 8.2, 8.4 and 8.5 shall
survive until the Securities are no longer outstanding. After the
Securities are no longer outstanding, the Company's obligations in Sections
7.7, 8.4 and 8.5 shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's and the
Guarantors' obligations under the Securities, the Guarantees and this
Indenture except for those surviving obligations specified above.
SECTION 8.2. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either paragraph (b) or paragraph (c)
below be applied to the outstanding Securities upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company and the Guarantors shall be deemed
to have been released and discharged from its obligations with respect to the
outstanding Securities and Guarantees on the date the conditions set forth below
are satisfied (hereinafter, "legal defeasance"). For this purpose, such legal
de-
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feasance means that the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of paragraph (e)
below and the other Sections of and matters under this Indenture referred to in
(i) and (ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
paragraph (d) below and as more fully set forth in such paragraph, payments in
respect of the principal of, premium, if any, and interest on such Securities
when such payments are due, (ii) the Company's obligations with respect to such
Securities under Sections 2.6, 2.7 and 4.2, and, with respect to the Trustee,
under Section 7.7, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and (iv) this Section 8.2. In addition, for this purpose,
such legal defeasance means that the Guarantor shall be deemed to have
discharged and satisfied its obligations under the Guarantees (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same). Subject to compliance with this Section 8.2, the Company may exercise
its option under this paragraph (b) notwithstanding the prior exercise of its
option under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company and the Guarantors shall be
released and discharged from their obligations under any covenant contained in
Article V and in Sections 4.5 through 4.22, 6.1(v) and 6.1(vi) with respect to
the outstanding Securities on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"), and the Securities shall
thereafter be deemed to be not "outstanding" for the purpose of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the outstanding Securities, the Company
and each Guarantor may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.1, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Section 8.2 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A)
money in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal of, premium, if any, and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination
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thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which shall be applied
by the Trustee (or other qualifying trustee) to pay and discharge principal
of, premium, if any, and interest on the outstanding Securities on the
Maturity Date or the applicable Redemption Date, as the case may be, of
such principal or installment of principal, premium, if any, or interest
in accordance with the terms of this Indenture and of such Securities;
provided, however, that the Trustee (or other qualifying trustee) shall
have received an irrevocable written order from the Company instructing
the Trustee (or other qualifying trustee) to apply such money or the
proceeds of such U.S. Government Obligations to said payments with respect
to the Securities;
(ii) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Securities shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 6.1(a)(vii) and (viii) are
concerned, at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(iii) such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default or Event of Default
under, this Indenture or any other material agreement or instrument to
which the Company is a party or by which it is bound;
(iv) in the case of an election under paragraph (b) above, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date of this Indenture, there has
been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the
Holders of the outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such legal defeasance
and will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such legal
defeasance had not occurred;
(v) in the case of an election under paragraph (c) above, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the outstanding Securities will not recognize income,
gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(vi) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that, (x) the trust funds will
not be subject to any rights of any other holders of Indebtedness of the
Company, and (y) after the 91st day following the deposit (or such longer
period as may be provided in an applicable state Bankruptcy Law), the trust
funds will not be subject to the effect of any applicable Bankruptcy Law;
provided, however, that if a court were to rule under any such law in any
case or proceeding that the trust funds remained property of the Company,
no opinion needs to be given as to the effect of such laws
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on the trust funds except the following: (A) assuming such trust funds
remained in the Trustee's possession prior to such court ruling to the
extent not paid to Holders of Securities, the Trustee will hold, for the
benefit of the Holders of Securities, a valid and enforceable security
interest in such trust funds that is not avoidable in bankruptcy or
otherwise, subject only to principles of equitable subordination, (B) the
Trustee on behalf of the Holders of Securities will be entitled to receive
adequate protection of its interests in such trust funds if such trust
funds are used, and (C) property, rights in property or other interests
granted to the Trustee or the Holders of Securities in exchange for or with
respect to any of such funds will not be subject to any prior rights of any
other Person, subject only to Sections 363 and 364 of Title 11 of the U.S.
Bankruptcy Code (or any section of any other Bankruptcy Law having the same
effect), but still subject to the foregoing clause (B); and
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (A) all conditions
precedent provided for relating to either the legal defeasance under
paragraph (b) above or the covenant defeasance under paragraph (c) above,
as the case may be, have been complied with and (B) if any other
Indebtedness of the Company shall then be outstanding or committed, such
legal defeasance or covenant defeasance will not violate the provisions of
the agreements or instruments evidencing such Indebtedness.
(e) All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this paragraph (e), the "Trustee") pursuant to paragraph (d)
above in respect of the outstanding Securities shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
this Indenture, to the payment, either directly or through any Paying Agent as
the Trustee may determine, to the Holders of such Securities of all sums due and
to become due thereon in respect of principal, premium, if any, and interest,
but such money need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to paragraph (d) above or the principal, premium, if any, and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Section 8.2 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request, in
writing, by the Company any money or U.S. Government Obligations held by it as
provided in paragraph (d) above which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent legal defeasance
or covenant defeasance.
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SECTION 8.3. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Sections 8.1 and 8.2, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any, and
interest on the Securities.
SECTION 8.4. Repayment to Company or the Guarantors.
Subject to Sections 7.7, 8.1 and 8.2, the Trustee shall promptly pay to the
Company, or if deposited with the Trustee by any Guarantor, to such Guarantor,
upon receipt by the Trustee of an Officers' Certificate, any excess money,
determined in accordance with Sections 8.2(d)(i) and (e), held by it at any
time. The Trustee and the Paying Agent shall pay to the Company, or if deposited
with the Trustee by any Guarantor, to such Guarantor, upon receipt by the
Trustee or the Paying Agent, as the case may be, of an Officers' Certificate,
any money held by it for the payment of principal, premium, if any, or interest
that remains unclaimed for two years; provided, however, that the Trustee and
the Paying Agent before being required to make any payment may, but need not, at
the expense of the Company cause to be published once in a newspaper of general
circulation in The City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein, which shall be at least 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company or a Guarantor. After payment to the Company or a Guarantor, as the
case may be, Securityholders entitled to money must look solely to the Company
for payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee or Paying Agent with
respect to such money shall thereupon cease.
SECTION 8.5. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
and only then the Company's and each Guarantor's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had been made pursuant to this Indenture until such time as the Trustee
is permitted to apply all such money or U.S. Government Obligations in
accordance with this Indenture; provided, however, that if the Company or any
Guarantor, as the case may be, makes any payment of interest on, premium, if
any, or principal of any Securities because of the reinstatement of their
obligations, the Company or any Guarantor, as the case may be, shall be
subrogated to the rights of the holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Without Consent of Holders.
Without limiting the provisions of Section 11.15, the Company and the
Guarantors, when authorized by a Board Resolution, and the Trustee may amend,
waive or supplement this Indenture, the Securities or Guarantees or any Security
Document without notice to or consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency, provided that such
amendment or supplement does not adversely affect the rights of any Holder;
(b) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(c) to comply with any requirements of the SEC under the TIA;
(d) to evidence the succession in accordance with Article V or X
hereof of another Person to the Company or a Guarantor, as the case may be,
and the assumption by any such successor of the covenants of the Company or
a Guarantor herein and in the Securities;
(e) to mortgage, pledge or grant a security interest in favor of the
Collateral Agent as additional security for the payment and performance of
its obligations under this Indenture, in any property or assets, including
any which are required to be mortgaged, pledged or hypothecated, or in
which a security interest is required to be granted, to the Collateral
Agent pursuant to any Security Document or otherwise;
(f) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the Securities
and to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trust
hereunder by more than one Trustee, pursuant to the requirements of Section
7.12;
(g) to make any change that does not adversely affect the rights of
any Holder; or
(h) to add or release any Guarantor strictly in accordance with
another provision of this Indenture or under the Security Documents
expressly providing for such addition or release.
SECTION 9.2. With Consent of Holders.
Subject to Section 6.7, the provisions of this Section 9.2 and Section
11.15, (i) the Company, the Guarantors and the Trustee may amend or supplement
this Indenture without notice to any other holders of Securities, the Securities
or the Guarantees with the written consent of the Holders of at least a majority
in aggregate principal amount of the Securities then outstanding and (ii) the
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Company and the Collateral Agent may amend or supplement any Security Document
with the written consent of the Requisite Obligees without notice to any other
Secured Parties. Subject to Section 6.7 and the provisions of this Section 9.2,
the Holders of, in the aggregate, at least a majority in aggregate principal
amount of the outstanding Securities affected may waive compliance by the
Company and the Guarantors with any provision of this Indenture or the
Securities without notice to any other Securityholder. However, without the
consent of each Securityholder affected, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.4, may not:
(a) reduce the percentage of the principal amount of Securities the
Holders of which must consent to an amendment, supplement or waiver or
consent to take any action under this Indenture, the Securities or the
Security Documents (or, to the extent applicable, alter the definition of
"Requisite Obligees");
(b) reduce the rate of, change the method of calculation of, or extend
the time for, payment of interest on any Security;
(c) reduce the principal amount outstanding of or extend the fixed
maturity of any Security or alter the redemption provisions with respect
thereto;
(d) waive a default in the payment of the principal of, interest on,
or redemption payment or an offer to purchase required hereunder with
respect to, any Security;
(e) make any Security payable in currency other than that stated in
the Security;
(f) adversely affect the ranking or security of the Securities;
(g) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities; or
(h) modify this Section 9.2 or Section 6.4.
(i) release any Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of
this Indenture.
It shall not be necessary for the consent of the Holders under this Section
9.2 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 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 amendment, supplement or waiver.
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SECTION 9.3. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture, the Security Documents
or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. 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, 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 the notice of revocation before the date the
amendment, supplement or waiver becomes effective. Notwithstanding the above,
nothing in this paragraph shall impair the right of any Securityholder under ss.
316(b) of the TIA.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the second
and third sentences of the immediately preceding paragraph, those Persons who
were Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. Such consent shall be effective
only for actions taken within 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in any of clauses (a)
through (i) of Section 9.2; if it makes such a change, the amendment, supplement
or waiver shall bind every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.5. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee shall (in accordance with the specific written direction of the Company)
request the Holder of the Security to deliver it to the Trustee. The Trustee
shall (in accordance with the specific written direction of the Company) 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 9.6. Trustee and Collateral Agent To Sign Amendments, Etc.
The Trustee and Collateral Agent shall sign any amendment, supplement or
waiver authorized pursuant to this Article IX if the amendment, supplement or
waiver does not adversely affect the rights, duties or immunities of the Trustee
or Collateral Agent, as applicable. If it does, the
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Trustee or Collateral Agent, as applicable, may, but need not, sign it. In
signing any amendment, supplement or waiver, the Trustee and Collateral Agent
shall be entitled to receive, if requested, an indemnity satisfactory to it in
its sole discretion and 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 IX is authorized or
permitted by this Indenture. The Company or a Guarantor may not sign an
amendment until its respective Board of Directors approves it.
ARTICLE X
GUARANTEE
SECTION 10.1. Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally, guarantees,
to each Holder of a Security authenticated and delivered by the Trustee and to
the Trustee and its 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 or the Trustee hereunder or thereunder 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 10.4. Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence of
any action to enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, 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 in this Guarantee.
If any Holder 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 Holder, 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 VI for the purposes 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 VI, such obligations (whether or
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not due and payable) shall forthwith become due and payable by each Guarantor
for the purpose of this Guarantee.
SECTION 10.2. 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 10.3. Release of a Guarantor.
Upon (i) the release by the lenders under the Bank Credit Agreement,
related documents and future refinancings thereof of all guarantees of a
Guarantor and all Liens on the property or assets of said Guarantor relating to
such Indebtedness or (ii) the sale or disposition (whether by merger, stock
purchase, asset sale or otherwise) of a Guarantor (or all or substantially all
its assets) to an entity which is not a Subsidiary of the Company and which sale
or disposition is otherwise in compliance with the terms of this Indenture, such
Guarantor shall be deemed released from all obligations under this Article X
without any further action required on the part of the Trustee or any Holder;
provided, however, that any such termination shall occur only to the extent that
all obligations of such Guarantor under the Bank Credit Agreement and all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, such Indebtedness of the Company or the Guarantor shall
also terminate upon such release, sale or transfer.
The Trustee shall execute an appropriate instrument delivered by the
Company evidencing such release upon receipt of a request by the Company
accompanied by an Officers' Certificate and Opinion of Counsel certifying as to
the compliance with this Section 10.3. Any Guarantor not so released remains
liable for the full amount of principal of and interest on the Securities as
provided in this Article X.
SECTION 10.4. 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 10.6, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
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SECTION 10.5. 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,
in the case of a Subsidiary Guarantor, another Subsidiary Guarantor that is a
wholly-owned Subsidiary of the Company or shall prevent any sale of assets or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety, to the Company or another Subsidiary Guarantor that is a wholly-owned
Subsidiary of the Company. Upon any such consolidation, merger, sale or
conveyance, the Guarantee given by such Guarantor shall no longer have any force
or effect.
(b) Except as set forth in Article IV and Article V hereof, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Guarantor with or into a corporation or
corporations other than the Company or another Guarantor (whether or not
affiliated with the Guarantor) or shall prevent any sale of assets or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety,
to a corporation or corporations other than the Company or another Guarantor
(whether or not affiliated with the Guarantor); provided, however, that, subject
to Sections 10.3 and 10.5(a), (i) immediately after such transaction and giving
effect thereto, such transaction does not (a) violate any covenants set forth
herein or (b) result in a Default or Event of Default under this Indenture that
is continuing, (ii) upon any such consolidation, merger, sale or conveyance, the
Guarantee of such Guarantor set forth in this Article X, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by such Guarantor, shall be expressly assumed (in
the event that the Guarantor is not the surviving corporation in the merger), by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the corporation formed by such consolidation, or
into which the Guarantor shall have merged, or by the corporation that shall
have acquired such property, (iii) in the event that such Guarantor is not the
surviving corporation in the merger, such surviving corporation shall be a
corporation organized and existing under the laws of the United States or any
State thereof or the District of Columbia and (iv) immediately after giving
effect to such transaction (on a pro forma basis, including any Indebtedness
incurred or anticipated to be incurred in connection with such transaction and
including adjustments that are (i) directly attributable to such transaction and
(ii) factually supportable), the Company is able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.9. In the case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by supplemental indenture
executed and delivered to the Trustee and satisfactory in form to the Trustee of
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor corporation shall
succeed to and be substituted for the Guarantor with the same effect as if it
had been named herein as a Guarantor.
SECTION 10.6. 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 Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding
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Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations with respect to the Guarantee.
"Adjusted Net Assets" of such Guarantor at any date shall mean the lesser of the
amount by which (x) the fair value of the property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under the
Guarantee, of such Guarantor at such date and (y) the present fair saleable
value of the assets of such Guarantor at such date exceeds the amount that will
be required to pay the probable liability of such Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date and after giving effect to any collection from any Subsidiary of
such Guarantor in respect of the obligations of such Subsidiary under the
Guarantee), excluding debt in respect of the Guarantee of such Guarantor, as
they become absolute and matured.
SECTION 10.7. Waiver of Subrogation.
Until all Obligations are paid in full 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 Guarantees and this Indenture,
including, without limitation, any right of subrogation, reimbursement,
exoneration, indemnification, and any right to participate in any claim or
remedy of any Holder of Securities against the Company, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence and the Securities shall not have been paid in full, such amount shall
have been deemed to have been paid to such Guarantor for the benefit of, and
held in trust for the benefit of, the Holders of the Securities, and shall
forthwith be paid to the Trustee for the benefit of such Holders to be credited
and applied upon the Securities, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
10.7 is knowingly made in contemplation of such benefits.
SECTION 10.8. Execution of Guarantee.
To evidence their guarantee to the Holders set forth in this Article X, the
Guarantors hereby agree to execute the Guarantees in substantially the form
included in Exhibit A-1 and Exhibit A-2, which shall be endorsed on each
Security ordered to be authenticated and delivered by the Trustee. Each
Guarantor hereby agrees that its Guarantee set forth in this Article X shall
remain in full force and effect notwithstanding any failure to endorse on each
Note a notation of such Guarantee. Each such Guarantee shall be signed on behalf
of each Guarantor by two Officers, or an Officer and an Assistant Secretary or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to such Guarantee 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 signatures upon the
Guarantees may be by manual or facsimile signature of such officers and may be
imprinted or otherwise reproduced on the
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Guarantees, and in case any such officer who shall have signed the Guarantees
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 Guarantees had not ceased to
be such officer of the Guarantor.
SECTION 10.9. Waiver of Stay, Extension or Usury Laws.
Each Guarantor covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive each such Guarantor from performing its
Guarantee as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) each such Guarantor
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE XI
SECURITY DOCUMENTS
SECTION 11.1. Collateral and Security Documents.
(a) The Company will, and will cause each of its Subsidiaries to, on each
Satisfaction Date that occurs after the Issue Date, cause all of their
respective Properties (other than inventory, accounts receivable and related
intangibles, documents and proceeds thereof, the Baltimore Property and the
Harrison Property) which were subject to a Lien securing the obligations of the
Company and its Subsidiaries under the First Mortgage Notes, the First Mortgage
Notes Indenture and/or the Revolving Credit Facility (but, in the case of the
Revolving Credit Facility, the Company shall only be required to comply with the
requirements of this Section 11.1 and the related provisions herein only to the
extent the Company, through the utilization of reasonable efforts, is able to
cause the Capital Stock of Subsidiaries, Intellectual Property of the Company
and the intangibles, documents and proceeds that do not relate to inventory and
accounts receivable to be free and clear of the Lien of the Bank Security
Agreement), as the case may be, to be released from any and all such Liens in a
manner satisfactory to the Collateral Agent. On each such Satisfaction Date, the
Company will, and will cause each Guarantor to, at the Company's sole cost and
expense, (i) execute, acknowledge and deliver any and all Security Documents
necessary or appropriate in the reasonable opinion of the Collateral Agent to
create in favor of the Collateral Agent for the benefit of the Secured Parties a
valid, perfected first priority Lien on such Properties (subject only to Prior
Liens), (ii) take any and all action and deliver any and all documentation
reasonably required with request to the applicable Collateral on such
Satisfaction Date pursuant to Section 11.2 and (iii) register, file or record,
in the appropriate governmental office, any documents or instruments in addition
to, supplemental to or confirmatory of the Security Documents or otherwise
deemed by the Collateral Agent necessary or desirable to create a valid, per-
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fected Lien (subject only to Prior Liens) on such Properties in favor of the
Collateral Agent (for the benefit of the Secured Parties).
The Company will, and will cause each Guarantor to, deliver or cause to be
delivered to the Collateral Agent from time to time such other documentation,
consents, authorizations, approvals and orders in form and substance
satisfactory to the Collateral Agent as it shall reasonably deem necessary to
perfect or maintain the Liens on the Collateral covered by the Security
Documents.
(b) Upon the acquisition or creation of a domestic Subsidiary by the
Company after the Issue Date, the Company shall promptly cause such Subsidiary
to execute a Guarantee, whereby such Subsidiary shall become a Guarantor for all
purposes of this Indenture.
SECTION 11.2. Recording, Etc.
(a) The Company will take or cause to be taken all action required or
desirable to maintain, preserve and protect the Security Interests in the
Collateral granted by the Security Documents, including, but not limited to,
causing all financing statements, Mortgages, other instruments of further
assurance, including, without limitation, continuation statements covering
security interests in personal property, and all mortgages securing purchase
money obligations delivered to the Collateral Agent or to the trustee, mortgagee
or other holder of a Permitted Lien under Section 11.4 to be promptly recorded,
registered and filed, and at all times to be kept recorded, registered and
filed, and will execute and file such financing statements and cause to be
issued and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve and protect the rights of the
Collateral Agent and the Secured Parties to all property comprising the
Collateral.
The Company will from time to time promptly pay and discharge all mortgage
and financing and continuation statement recording and/or filing fees, charges
and taxes relating to this Indenture and the Security Documents, any amendments
thereto and any other instruments of further assurance. Without limiting the
generality of the foregoing covenant, in the event at any time the Collateral
Agent shall determine that additional mortgage recording, transfer or similar
taxes are required to be paid to perfect or continue any Lien on any Real
Property in an amount at least equal to the Fair Market Value from time to time
of such Real Property, the Company shall pay such taxes promptly upon demand by
the Collateral Agent. Notwithstanding the foregoing, the Collateral Agent shall
not have any duty or obligation to ascertain whether any such taxes are required
to be paid at any time, and the determination referred to in the preceding
sentence shall only be made by the Collateral Agent upon receipt of written
notice that such taxes are due and owing.
(b) The Company shall furnish to the Trustee and the Collateral Agent:
(i) to the extent a Satisfaction Date occurs after the Issue Date, on
such Satisfaction Date, Opinion(s) of Counsel either (a) substantially to
the effect that, in the opinion of such Counsel, this Indenture and the
grant of a Security Interest in the Collateral intended to be made by each
Security Document and all other instruments of further assurance or
assignment have been properly recorded, registered and filed to the extent
necessary to perfect the
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Security Interests created by each such Security Document and reciting the
details of such action, and stating that as to the Security Interests
created pursuant to each such Security Document, such recordings,
registerings and filings are the only recordings, registerings and filings
necessary to give notice thereof and that no re-recordings, re-registerings
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;
(ii) to the extent a Satisfaction Date occurs after the Issue Date, on
such Satisfaction Date, with respect to each Mortgage, a policy of title
insurance (or a commitment to issue such a policy) which may be issued
pursuant to an endorsement to any existing policy or commitment insuring
(or committing to insure) the Lien of such Mortgage as a valid first
mortgage Lien on the real property and fixtures described therein,
subordinate only to those Liens specified in the Mortgage as "Prior Liens,"
in an amount not less than the Fair Market Value of such real property and
fixtures, which policy (or commitment) shall (a) be issued by the Title
Company, (b) have been supplemented by the following endorsements, to the
extent available at commercially reasonable rates: contiguity, first loss,
last dollar, usury, doing business and so-called comprehensive coverage
over covenants and restrictions and (c) contain only such exceptions to
title as shall be Prior Liens; and
(iii) within 30 days after [September 30] in each year beginning with
[September 30], 1999, an Opinion of Counsel, dated as of such date, either
(a) to the effect that, with respect to all Security Interests the
perfection of which is governed by the Uniform Commercial Code and with
respect to all Real Property subject to a Mortgage, in the opinion of such
counsel, such action has been taken with respect to the recordings,
registerings, filings, re-recordings, re-registerings and refilings of all
financing statements, continuation statements or other instruments of
further assurance as is necessary to maintain the Security Interests of
each of the Security Documents and reciting with respect to such Security
Interests the details of such action or referencing to prior Opinions of
Counsel in which such details are given, and stating that all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the rights of the Collateral
Agent and the Secured Parties under each of the Security Documents with
respect to the Security Interests, or (b) to the effect that, in the
opinion of such Counsel, no such action is necessary to maintain such
Security Interests.
SECTION 11.3. Certain Dispositions of Collateral.
(a) Notwithstanding the provisions of Sections 4.19 and 11.4, so long as no
Event of Default shall have occurred and be continuing, the Company or any
Guarantor may, without any requirement of release or consent by the Trustee or
the Collateral Agent:
(i) sell or otherwise dispose of any machinery, equipment, furniture,
apparatus, tools or implements, materials or supplies or other similar
property subject to the Lien of the Security Documents, which may have
become worn out or obsolete, not exceeding in value in
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any one calendar year the lesser of $100,000 or one percent of the
principal amount of the Securities at the time outstanding;
(ii) grant rights-of-way and easements over or in respect of any Real
Property; provided, however, that such grant will not, in the reasonable
opinion of the Board of Directors of the Company, impair the usefulness of
such property in the conduct of the Company's business, as applicable, and
will not be prejudicial to the interests of the Holders;
(iii) alter, repair, replace, change the location or position of and
add to its plants, structures, machinery, systems, equipment, fixtures and
appurtenances; provided, however, that no change in the location of any
such Collateral subject to the Lien of any of the Security Documents shall
be made which (1) removes such property into a jurisdiction in which any
instrument required by law to preserve the Lien of any of the Security
Documents on such property, including all necessary financing statements
and continuation statements, has not been recorded, registered or filed in
the manner required by law to preserve the Lien of any of the Security
Documents on such property, (2) does not comply with the terms of this
Indenture and the Security Documents or (3) otherwise impairs the Lien of
the Security Documents; or
(iv) demolish, dismantle, tear down or scrap any Collateral, or
abandon any thereof other than land or interests in land (other than
leases), if in the good faith opinion of the Board of Directors of the
Company (as evidenced by a Board Resolution if it involves Collateral
having a Fair Market Value in excess of the lesser of $100,000 or 1% of the
aggregate principal amount of the outstanding Securities), such demolition,
dismantling, tearing down, scrapping or abandonment is in the best
interests of the Company and the Fair Market Value and utility of the
Collateral as an entirety, and the security for the Securities, will not
thereby be impaired.
(b) In the event that the Company or a Guarantor has sold, exchanged, or
otherwise disposed of or proposes to sell, exchange or otherwise dispose of any
portion of the Collateral which under the provisions of this Section 11.3 may be
sold, exchanged or otherwise disposed of by the Company or a Guarantor without
any release or consent of the Collateral Agent, and the Company requests the
Collateral Agent to furnish a written disclaimer, release or quitclaim of any
interest in such property under any of the Security Documents, the Collateral
Agent shall promptly execute such an instrument upon delivery to the Collateral
Agent of (i) an Officers' Certificate by the Company reciting the sale, exchange
or other disposition made or proposed to be made and describing in reasonable
detail the property affected thereby, and stating that such property is property
which by the provisions of this Section 11.3 may be sold, exchanged or otherwise
disposed of or dealt with by the Company or a Guarantor without any release or
consent of the Collateral Agent and (ii) an Opinion of Counsel stating that the
sale, exchange or other disposition made or proposed to be made was duly taken
by the Company or a Guarantor in conformity with a designated subsection of
Section 11.3(a) and that the execution of such written disclaimer, release or
quitclaim is appropriate under this Section 11.3.
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Any disposition of Collateral made in strict compliance with the provisions
of this Section 11.3 shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
SECTION 11.4. Release of Collateral.
In addition to its rights under Section 11.3, and subject to the terms of
the Credit Agreement, the Company or a Guarantor shall have the right, at any
time and from time to time, to sell, exchange or otherwise dispose of any of the
Collateral (other than Trust Moneys, which are subject to release from the Lien
of the Security Documents as provided under Article XII), upon compliance with
the requirements and conditions of this Section 11.4, and the Collateral Agent
shall promptly release the same from the Lien of any of the Security Documents
upon receipt by the Collateral Agent (other than in the case of Section 11.4(d)
below) of a Release Notice requesting such release and describing the property
to be so released, together with delivery of the following, among other matters:
(a) If the property to be released has a book value of at least
$1,000,000, a Board Resolution of the Company requesting such release and
authorizing an application to the Collateral Agent therefor.
(b) An Officers' Certificate of the Company dated not more than 30
days prior to the date of the application for such release, in each case
stating in substance as follows:
(i) that, in the opinion of the signers, the security afforded by
the Security Documents will not be impaired by such release in
contravention of the provisions of this Indenture, and that (A) the
Collateral to be released is not Net Cash Proceeds from an Asset Sale
and is not being replaced by comparable property, has a book value of
less than $250,000, and is not necessary for the efficient operation
of the Company's and its Subsidiaries' remaining property or in the
conduct of the business of the Company and its Subsidiaries as
conducted immediately prior thereto, or (B) the Collateral to be
released is Trust Moneys representing Net Cash Proceeds from an Asset
Sale that (x) were subject to an Asset Sale Offer and an offer to
repay Loans under the Credit Agreement and not used to purchase or
repay Pari Passu Debt hereunder and under the Credit Agreement because
it was not fully subscribed by the Holders and Lenders or (y) are
being applied to acquire or construct property or assets in accordance
with Section 4.13 or (C) the Collateral to be released is being
released in connection with an Asset Sale of such Collateral and the
net proceeds (as defined in Section 11.4(d) below) from such Asset
Sale are being delivered to the Collateral Agent (if required by
Section 4.13) in accordance with the provisions of Section 11.4(d)
below;
(ii) except in the case of a release referred to in Section
11.4(b)(i)(B)(x), that the Company or the relevant Guarantor, as the
case may be, has either disposed of or will dispose of the Collateral
so to be released in compliance with all applicable terms of this
Indenture and for a consideration representing, in the opinion of the
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signers, its fair value, which consideration may, subject to any other
provision of this Indenture, consist of any one or more of the
following: (A) cash or Cash Equivalents, (B) obligations secured by a
purchase money Lien upon the property so to be released and (C) any
other property or assets that, upon acquisition thereof by the Company
or the relevant Guarantor, would be subject to the Lien of the
Security Documents and subject to no other Lien, all of such
consideration to be briefly described in the certificate;
(iii) that no Event of Default has occurred and is continuing;
(iv) the fair value, in the opinion of the signers, of the
property to be released at the date of such application for release;
provided that it shall not be necessary under this clause (iv) to
state the fair value of any property whose fair value is certified in
a certificate of an Independent Appraiser or Independent Financial
Advisor under Section 11.4(c); and
(v) that all conditions precedent herein provided for relating to
the release of the Collateral in question have been complied with.
(c) If (i) the fair value of the property to be released and of all
other property released from the Lien of the Security Documents since the
commencement of the then current calendar year is 10% or more of the
aggregate principal amount of the Securities outstanding on the date of the
application and (ii) the fair value of the Collateral to be so released is
at least $100,000 and at least 1% of the aggregate principal amount of the
Securities outstanding on the date of the application, a certificate of an
Independent Appraiser, or if such property consists of securities, a
certificate of an Independent Financial Advisor stating:
(1) the then fair value, in the opinion of the signer, of the
property to be released; and
(2) that such release, in the opinion of the signer, will not
impair the security interests under any of the Security Documents in
contravention of their terms.
(d) The net proceeds from any Asset Sale involving Collateral
(excluding any Net Cash Proceeds from any Asset Sale which are not
required, or cannot be required through the passage of time or otherwise,
to be used to purchase Securities under Section 4.13) are paid over to the
Collateral Agent; and, if any property other than cash, Cash Equivalents or
obligations is included in such net proceeds, such instruments of
conveyance, assignment and transfer, if any, as may be necessary, in the
Opinion of Counsel, to subject to the Lien of the Security Documents all
the right, title and interest of the Company in and to such property.
For the purposes of this Section 11.4(d), "net proceeds" means any cash,
Cash Equivalents, obligations or other property received on the sale, transfer,
exchange or other disposition of Collateral to be released, less (i) brokerage
commissions and other reasonable
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fees and expenses related to such transaction and (ii) any provision for any
Federal, state or local taxes payable as a result of such sale, transfer,
exchange or other disposition.
(e) One or more Opinions of Counsel which, when considered
collectively, shall be substantially to the effect (i) that any obligation
included in the consideration for any property so to be released and to be
received by the Collateral Agent pursuant to Section 11.4(d) is a valid and
binding obligation enforceable in accordance with its terms, subject to
such customary exceptions regarding equitable principles, creditors' rights
generally and bankruptcy as shall be reasonably acceptable to the
Collateral Agent in its sole judgment, and is effectively pledged under the
Security Documents, (ii) that any Lien granted by a purchaser to secure a
purchase money obligation is a fully perfected Lien and such instrument
granting such Lien is enforceable in accordance with its terms, (iii)
either (x) that such instruments of conveyance, assignment and transfer as
have been or are then delivered to the Collateral Agent are sufficient to
subject to the Lien of the Security Documents all the right, title and
interest of the Company or the relevant Guarantor in and to any property,
other than cash, Cash Equivalents and obligations, that is included in the
consideration for the Collateral so to be released and is to be received by
the Collateral Agent pursuant to Section 11.4(d), or (y) that no
instruments of conveyance, assignment or transfer are necessary for such
purpose, (iv) that the Company or the relevant Guarantor has corporate
power to own all property included in the consideration for such release,
and (v) that all conditions precedent herein and under any of the Security
Documents relating to the release of such Collateral have been complied
with.
(f) If the Collateral to be released is only a portion of a discrete
parcel of Real Property, evidence that a title company shall have committed
to issue an endorsement to the title insurance policy relating to the
affected Mortgaged Real Property confirming that after such release, the
Lien of the applicable Mortgage continues unimpaired as a first priority
perfected Lien upon the remaining Mortgaged Real Property subject only to
those Liens permitted by the applicable Mortgage.
(g) If the Collateral to be released is Mortgaged Real Property having
a fair value in excess of $250,000, the Company shall have delivered to the
Collateral Agent a Survey depicting the Real Property to be released.
In connection with any release, the Company or the relevant Guarantor shall
(i) execute, deliver and record or file and obtain such instruments as the
Collateral Agent may reasonably require, including, without limitation,
amendments to the Security Documents and (ii) deliver to the Collateral Agent
such evidence of the satisfaction of the applicable provisions of this Indenture
and the Security Documents as the Collateral Agent may reasonably require.
The Company or the relevant Guarantor shall exercise its rights under this
Section 11.4 by delivery to the Collateral Agent of a notice (each, a "Release
Notice"), which shall (i) refer to this Section 11.4, (ii) contain all the
resolutions, certificates, opinions, title insurance endorsements, Surveys and
such other documents and statements as are required pursuant to this Section
11.4 (including, without limitation, the Officers' Certificate required pursuant
to Section 11.4(b)), (iii) describe with particularity the items of property
proposed to be covered by the release and (iv) be ac-
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companied 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 and in form for execution by the
Collateral Agent. Upon such compliance, the Company or the relevant
Guarantor shall direct the Trustee and the Collateral Agent in writing to
execute, acknowledge (if applicable) and deliver to the Company or the
relevant Guarantor such counterpart within 10 Business Days after receipt
by the Trustee and the Collateral Agent of a Release Notice and the
satisfaction of the requirements of this Section 11.4.
Notwithstanding the foregoing provisions of this Section 11.4, subject to
the Credit Agreement, the Company may obtain a release of Available Amounts
required to purchase Securities pursuant to an Asset Sale Offer on an Asset Sale
Payment Date by directing the Collateral Agent in writing to cause to be applied
such Available Amounts to such purchase in accordance with Section 4.13 and
Article XI.
Subject to the Credit Agreement, in case an Event of Default shall have
occurred and be continuing, the Company or the relevant Guarantor, while in
possession of the Collateral (other than cash, Cash Equivalents, securities and
other personal property held by, or required to be deposited or pledged with,
the Collateral Agent hereunder or under any Security Document or with the
trustee, mortgagee or other holder of a Prior Lien permitted by the Security
Documents), may do any of the things enumerated in this Section 11.4 only if the
Collateral Agent, in its discretion, or the Requisite Obligees, shall consent to
such action, in which event any certificate filed under this Section 11.4 shall
omit the statement to the effect that no Event of Default has occurred and is
continuing. This paragraph shall not apply, however, during the continuance of
an Event of Default of the type specified in Section 6.1(a)(i) or (ii).
All cash or Cash Equivalents received by the Collateral Agent pursuant to
this Section 11.4 shall be held by the Collateral Agent for the benefit of the
Secured Parties, as Trust Moneys subject to application as provided in this
Section 11.4 (in the case of any Net Cash Proceeds from Asset Sales involving
Collateral) or in Article XI. All purchase money and other obligations received
by the Collateral Agent pursuant to this Section 11.4 shall be held by the
Collateral Agent for the benefit of the Secured Parties, as Collateral.
Any releases of Collateral made in strict compliance with the provisions of
this Section 11.4 shall be deemed not to impair the Security Interests created
by the Security Documents in favor of the Collateral Agent for the benefit of
the Secured Parties, in contravention of the provisions of this Indenture.
SECTION 11.5. Eminent Domain and Other Governmental Takings.
Subject to the Credit Agreement, should any of the Collateral be taken by
eminent domain or be 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 or any part of the Collateral, the Trustee and the Collateral Agent
shall release the property so taken or purchased, but only upon receipt by the
Trustee and the Collateral Agent of the following:
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(a) an Officers' Certificate stating that 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 that all conditions precedent
herein provided for relating to such release have been complied with;
(b) 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
XI and the Credit Agreement; provided, however, that, in lieu of all or any
part of such award or proceeds, the Company shall have the right to deliver
to the Trustee and the Collateral Agent a certificate of the trustee,
mortgagee or other holder of a Prior Lien on all or any part of the
property to be released, stating that such award or proceeds, or a
specified portion thereof, has been deposited with such trustee, mortgagee
or other holder pursuant to the requirements of such Prior Lien, in which
case the balance of the award, if any, shall be delivered to the Trustee
and the Collateral Agent; and
(c) an Opinion of Counsel substantially to the effect:
(1) that such property has been taken by eminent domain, or has
been sold pursuant to the exercise of a right vested in the United
States of America or a state, municipality or other governmental
authority to purchase, or to designate a purchaser or order a sale of,
such property;
(2) in the case of any taking by eminent domain, that the award
for the property so taken has become final or that the Board of
Directors of the Company has determined that an appeal from such award
is not advisable in the interests of the Company or the Secured
Parties;
(3) in the case of any such sale, that the amount of the proceeds
of the property so sold is not less than the amount to which the
Company or the relevant Guarantor is legally entitled under the terms
of such right to purchase or designate a purchaser, or under the order
or orders directing such sale, as the case may be;
(4) in case, pursuant to Section 11.5(b), the award for such
property or the proceeds of such sale, or a specified portion thereof,
shall be certified to have been deposited with the trustee, mortgagee
or other holder of a Prior Lien, that the property to be released, or
a specified portion thereof, is or immediately before such taking or
purchase was subject to such Prior Lien, and that such deposit is
required by such Prior Lien; and
(5) that the instrument or the instruments and the award or
proceeds of such sale which have been or are therewith delivered to
and deposited with the Collateral Agent conform to the requirements of
this Indenture and any of the applicable Security Documents and that,
upon the basis of such application, the Collateral
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Agent is permitted by the terms hereof and of the Security Documents
to execute and deliver the release requested, and that all conditions
precedent herein provided for relating to such release have been
complied with.
In any proceedings for the taking or purchase or sale of any part of the
Collateral, by eminent domain or by virtue of any such right to purchase or
designate a purchaser or to order a sale, the Collateral Agent may be
represented by counsel who may be counsel for the Company.
All cash or Cash Equivalents received by the Trustee pursuant to this
Section 11.5 shall be held by the Collateral Agent as Trust Moneys under Article
XII subject to application as therein provided and as provided in the Credit
Agreement and the Security Documents. All purchase money and other obligations
received by the Collateral Agent pursuant to this Section 11.5 shall be held by
the Collateral Agent as Collateral subject to application as provided in Section
11.11 and as provided in the Credit Agreement and the Security Documents.
SECTION 11.6. Trust Indenture Act Requirements.
The release of any Collateral, whether pursuant to Article XI or XII, from
the Lien of any of the Security Documents or the release of, in whole or in
part, the Liens created by any of the Security Documents, will not be deemed to
impair the Security Interests in contravention of the provisions hereof if and
to the extent the Collateral or Liens are released pursuant to the applicable
Security Documents and pursuant to the terms hereof. The Trustee and each of the
Holders acknowledge that a release of Collateral or Liens strictly in accordance
with the terms of the Security Documents and the terms hereof will not be deemed
for any purpose to be an impairment of the Security Interests in contravention
of the terms of this Indenture. To the extent applicable, without limitation,
the Company and each obligor on the Securities shall cause TIA ss. 314(d)
relating to the release of property or securities from the Liens hereof and of
the Security Documents to be complied with. Any certificate or opinion required
by TIA ss. 314(d) may be made by an officer of the Company, except in cases in
which TIA ss. 314(d) requires that such certificate of opinion be made by an
independent person.
SECTION 11.7. Suits To Protect the Collateral.
Subject to the provisions of the Security Documents, 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 acts which
may be unlawful or in violation of any 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 Secured
Parties in the Collateral (including 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 Interests or be prejudicial to the
interests of the Secured Parties).
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SECTION 11.8. 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 permitted by this Article XI to be sold be under obligation to ascertain
or inquire into the authority of the Company to make any such sale or other
transfer.
SECTION 11.9. Powers Exercisable by Receiver or Collateral Agent.
In case the Collateral shall be in the possession of a receiver or trustee,
lawfully appointed, the powers conferred in this Article XI upon the Company
with respect to the release, sale or other disposition of such property may be
exercised by such receiver or trustee, and an instrument signed by such receiver
or trustee shall be deemed the equivalent of any similar instrument of the
Company or of any officer or officers thereof required by the provisions of this
Article XI.
SECTION 11.10. Disposition of Obligations Received.
All purchase money or other obligations received by the Collateral Agent
under this Article XI shall be held by the Collateral Agent, as a part of the
Collateral. Upon payment in cash or Cash Equivalents by or on behalf of the
Company or the obligor thereof to the Collateral Agent of the entire unpaid
principal amount of any such obligation, to the extent not constituting Net Cash
Proceeds from an Asset Sale which may possibly be required, through the passage
of time or otherwise, to be used to purchase or repay, as applicable, Pari Passu
Debt pursuant to Section 4.13, the Collateral Agent shall promptly release and
transfer such obligation and any mortgage securing the same upon receipt of any
documentation that the Collateral Agent may reasonably require. Any cash or Cash
Equivalents received by the Collateral Agent in respect of the principal of any
such obligations shall be held by the Collateral Agent as Trust Moneys under
Article XII subject to application as therein provided. Unless and until the
Securities are accelerated, pursuant to Section 6.2, all interest and other
income on any such obligations, when received by the Collateral Agent, shall be
paid to the Company from time to time in accordance with Section 12.7. If the
Securities have been accelerated pursuant to Section 6.2, any such interest or
other income not theretofore paid, when collected by the Collateral Agent, shall
be applied by the Collateral Agent, as the case may be, in accordance with
Section 6.11.
SECTION 11.11. Determinations Relating to Collateral.
In the event (i) the Collateral Agent shall receive any written request
from the Company under any Security Document for consent or approval with
respect to any matter or thing relating to any Collateral or the Company's or
any Guarantor's obligations with respect thereto or (ii) there shall be due to
or from the Collateral Agent under the provisions of any Security Document any
performance or the delivery of any instrument or (iii) the Trustee or the
Collateral Agent shall become aware of any nonperformance by the Company or any
Guarantor of any covenant or any breach of any
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representation or warranty of the Company or any Guarantor set forth in any
Security Document, then, in each such event, the Collateral Agent shall be
entitled to hire experts, consultants, agents and attorneys to advise the
Collateral Agent on the manner in which the Collateral Agent should respond to
such request or render any requested performance or response to such
nonperformance or breach (the expenses of which shall be reimbursed to the
Collateral Agent pursuant to Section 7.7). The Trustee and 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 Requisite
Obligees.
SECTION 11.12. Renewal and Refunding.
Nothing in this Article XI shall prevent (a) the renewal or extension,
without impairment of the Security Interests, at the same or at a lower or
higher rate of interest, of any of the obligations or Indebtedness of any
corporation included in the Collateral or (b) the issue in substitution for any
such obligations or Indebtedness of other obligations or Indebtedness of such
corporation for equivalent amounts and of substantially equal or superior rank
as to security, if any; provided, however, that every such obligation or
Indebtedness as so renewed or extended shall continue to be subject to the Lien
of the Security Documents and every substituted obligation of Indebtedness and
the evidence thereof shall be deposited and pledged with the Collateral Agent.
SECTION 11.13. Release upon Termination of the Company's Obligations.
In the event that the Company delivers an Officers' Certificate certifying
that the provisions of Sections 8.1, 8.2 or 8.3 have been complied with and all
obligations under the Credit Agreement have been satisfied in full, the
Collateral Agent shall (i) execute and deliver such releases, termination
statements and other instruments as the Company may reasonably request
evidencing the termination of the Security Interests created by the Security
Documents and (ii) not be deemed to hold the Security Interests for the benefit
of the Secured Parties.
SECTION 11.14. Collateral Agent's Duties in Respect of Collateral.
The Collateral Agent, acting in its capacity as collateral agent or
mortgagee under each of the Security Documents, shall have only such duties with
respect to the Collateral as are set forth in the Security Documents.
SECTION 11.15. Collateral Agent
By acceptance of the benefits of this Indenture and the Security Documents
each Holder and the Trustee, as applicable, (i) consents to the appointment of
The Chase Manhattan Bank as the Collateral Agent hereunder and under the
Security Documents and grants the Collateral Agent all rights and powers
necessary for the Collateral Agent to perform its obligations hereunder and
under the Security Documents, (ii) confirms that the Collateral Agent shall have
the authority to act as the exclusive agent of such Holders and the Trustee, as
applicable, to make claims under and otherwise act in all respects as the
beneficiary of and for enforcement of any remedies under or with respect to any
Security Document and the giving or withholding of any consent or approval
relating to any Collateral or the Security Documents or any obligations with
respect thereto or otherwise take any
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action on behalf of the such Holders and the Trustee pursuant to and in
accordance with this Indenture or the Security Documents, (iii) acknowledges
that the transactions contemplated by this Indenture will by their nature
require the execution and delivery of certain amendments, modifications and
supplements to this Indenture and the Security Documents, and each Holder and
the Trustee hereby agrees that the Collateral Agent is authorized, to execute,
deliver, file and record any such amendment, modification or supplement
necessary or desirable for any purpose not inconsistent with the terms of this
Indenture or the Security Documents or to cure any ambiguity or to correct or
supplement any provision contained herein or in any of the Security Documents
which may be defective or inconsistent with any other provision contained herein
or in any Security Document, or to make such other provisions in regard to
matters or questions arising under this Indenture or in any Security Document
which shall not be inconsistent with the provisions of this Indenture or any
Security Document and which shall not adversely affect the interests of the
Holders or the Trustee, and (iv) agrees that such Holders or the Trustee, as
applicable, shall not given any approval or consent relating to or bring any
suit, action or proceeding to enforce any term or provision of the Security
Documents or to enforce any of its rights in respect of the Collateral, except
through the Collateral Agent in accordance with this Indenture and the Security
Documents.
The Collateral Agent shall make such demands and give such notices under
the Security Documents, and to take such action to enforce the Collateral
Documents and to foreclose upon, collect, dispose of or release the Collateral
or any portion thereof, in each case as may be directed by Requisite Obligees.
The Collateral Agent shall consent to amendments, modifications or waivers to
any of the Security Documents as directed in accordance with the provisions of
Section 6.9 of the Indenture.
The Collateral Agent may at any time request directions from the Requisite
Obligees with respect to the Security Documents as to any course of action or
other matter relating hereto or to such Security Documents. Directions given by
the Requisite Obligees to the Collateral Agent shall be binding on all Secured
Parties for all purposes (provided such directions do not conflict with the
express terms of this Indenture or any Security Document). As to any matters not
expressly provided for by this Indenture, the Collateral Agent shall in all
cases be fully protected in acting, or in refraining from acting, in accordance
with instructions signed by the Requisite Obligees, and any action taken or
failure to act pursuant thereto, shall be binding on all of the Secured Parties.
The Collateral Agent shall not be required to take any action that is in its
opinion contrary to law or to the terms of this Indenture or any of the Security
Documents, or which would in its opinion subject it or any of its officers,
employees or directors to liability.
Any and all amounts actually received (i) by the Collateral Agent in
connection with the enforcement of the Security Documents, (ii) in accordance
with the Indenture or (iii) by the Collateral Agent as agent for the Secured
Parties in connection with a distribution in a bankruptcy, insolvency or similar
proceeding, including, without limitation, the proceeds of any collection, sale
or other disposition of the Collateral or any portion thereof shall be applied
promptly by the Collateral Agent as provided for in the respective Security
Documents. Until such amounts are so applied, the Collateral Agent shall hold
such amounts in its custody in accordance with its regular procedures for
handling deposited funds.
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Each Holder and the Trustee shall, upon request of the Collateral Agent,
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or appropriate to carry out more effectively the provisions
of this Section 11.5 and the other provisions of this Indenture and the Security
Documents relating to the intercreditor arrangements among the Secured Parties.
The Collateral Agent may at any time, by giving written notice to the
Company and the Secured Parties, resign and be discharged of the
responsibilities hereby created, such resignation to become effective upon (i)
the appointment of a successor Collateral Agent by the Requisite Obligees and
(ii) the acceptance of such appointment by such successor Collateral Agent.
ARTICLE XII
APPLICATION OF TRUST MONEYS
SECTION 12.1. "Trust Moneys" Defined.
All cash or Cash Equivalents received by the Collateral Agent in accordance
with the terms of this Indenture and the Security Documents:
(a) upon the release of property from the Lien of any of the Security
Documents, including, without limitation, all moneys received in respect of
the principal of all purchase money, governmental and other obligations; or
(b) as compensation for, or proceeds of the sale of, all or any part
of the Collateral taken by eminent domain or purchased by, or sold pursuant
to an order of, a governmental authority or otherwise disposed of; or
(c) as proceeds of insurance (including, without limitation, title
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); or
(d) pursuant to the Mortgages; or
(e) 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 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
(f) for application under this Article XII as elsewhere provided in
this Indenture, the Credit Agreement or any Security Document, or whose
disposition is not elsewhere otherwise specifically provided for herein or
in any Security Document;
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(all such moneys being herein sometimes called "Trust Moneys"; provided,
however, that Trust Moneys shall not include any property deposited with the
Trustee pursuant to Section 4.15 or Articles III or VIII or delivered to or
received by the Trustee pursuant to Section 6.10 hereof), shall be held by the
Collateral Agent for the benefit of the Secured Parties as a part of the
Collateral and, upon any entry upon or sale or other disposition of the
Collateral or any part thereof pursuant to any of the Security Documents, said
Trust Moneys shall be applied by the Collateral Agent in accordance with the
Security Documents and the Trustee shall thereafter apply the proceeds received
by it in accordance with Section 6.10; but, prior to any such entry, sale or
other disposition, all or any part of the Trust Moneys may be withdrawn, and
shall be released, paid or applied by the Collateral Agent, from time to time as
provided in Sections 12.2 through 12.6, inclusive.
SECTION 12.2. Retirement of Securities.
Subject to pari passu application to the Credit Agreement Indebtedness, the
Collateral Agent shall apply Trust Moneys from time to time to the payment of
the principal of any Securities, on any Maturity Date or to the redemption
thereof or the purchase thereof upon tender or in the open market or at private
sale or upon any exchange or in any one or more of such ways, including, without
limitation, pursuant to an offer to purchase under Section 4.13, or a Change of
Control Offer under Section 4.15 (but never applied to any amount in excess of
the principal amount of a Security), as the Company shall request in writing,
upon receipt by the Collateral Agent of the following:
(a) Board Resolutions of the Company directing the application
pursuant to this Section 12.2 and the Credit Agreement of a specified
amount of Trust Moneys and, in case any such moneys are to be applied to
payment, designating the Securities so to be paid and, in case any such
moneys are to be applied to the purchase of Securities, prescribing the
method of purchase, the price or prices to be paid and the maximum
principal amount of Securities to be purchased and any other provisions of
this Indenture governing such purchase;
(b) cash in the maximum amount of the accrued interest and premium, if
any, required to be paid in connection with any such purchase, which cash
shall be held by the Collateral Agent in trust for such purpose;
(c) an Officers' Certificate, dated not more than five Business Days
prior to the date of the relevant application stating
(i) that no Default or Event of Default exists unless such
Default or Event of Default would be cured thereby;
(ii) that all conditions precedent and covenants herein provided
for relating to such application of Trust Moneys have been complied
with;
(iii) that the Lenders under the Credit Agreement will not be
prejudiced thereby; and
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(d) an Opinion of Counsel stating that the documents and the cash or
Cash Equivalents, if any, which have been or are therewith delivered to and
deposited with the Collateral Agent conform to the requirements of this
Indenture and that all conditions precedent herein provided for relating to
such application of Trust Moneys have been complied with.
Upon compliance with the foregoing provisions of this Section, the
Collateral Agent shall apply Trust Moneys as directed and specified by such
Board Resolution, up to, but not exceeding, the principal amount of the
Securities so paid or purchased, using the cash deposited pursuant to paragraph
(b) of this Section 12.2, to the extent necessary, to pay any accrued interest
required in connection with such purchase.
A Board Resolution expressed to be irrevocable directing the application of
Trust Moneys under this Section 12.2 to the payment of the principal of
particular Securities shall for all purposes of this Indenture be deemed the
equivalent of the deposit of money with the Collateral Agent in trust for such
purpose. Such Trust Moneys and any cash deposited with the Collateral Agent
pursuant to paragraph (b) of this Section 12.2 for the payment of accrued
interest shall not, after compliance with the foregoing provisions of this
Section, be deemed to be part of the Collateral or Trust Moneys.
SECTION 12.3. Withdrawals of Insurance Proceeds and Condemnation Awards.
To the extent that any Trust Moneys consist of either (a) the proceeds of
insurance upon any part of the Collateral or (b) any award for or the proceeds
of any of the Collateral being 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 any part of the Collateral, such
Trust Moneys may be withdrawn by the Company and shall be paid by the Collateral
Agent upon a request by the Company by the proper officer or officers of the
Company to reimburse the Company or a Guarantor for expenditures made, or to pay
costs incurred, by the Company or a Guarantor to repair, rebuild or replace the
property destroyed, damaged or taken, upon receipt by the Collateral Agent 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 and (if required by the TIA) signed also in the case of
the following clauses (i), (iv) and (vi), by an Appraiser or Financial
Advisor, setting forth:
(i) that expenditures have been made, or costs incurred, by the
Company or a Guarantor in a specified amount for the purpose of making
certain repairs, rebuildings and replacements of the Collateral, which
shall be briefly described, and stating the fair value thereof to the
Company or a Guarantor at the date of the acquisition thereof by the
Company or a Guarantor, except that it shall not be necessary under
this clause (i) to state the fair value of any such repairs,
rebuildings or replacements that are separately described pursuant to
clause (vi) of this paragraph (a) and
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whose fair value is stated in the Independent Appraiser's or
Independent Financial Advisor's certificate under paragraph (b)
of this Section 12.3;
(ii) that no part of such expenditures in any previous or then pending
application, has been or is being made the basis for the withdrawal of any
Trust Moneys pursuant to this Section 12.3;
(iii) that no part of such expenditures or costs has been paid out of
either the proceeds of insurance upon any part of the Collateral not
required to be paid to the Collateral Agent under the relevant Mortgage or
any award for or the proceeds from any of the Collateral being taken not
required to be paid to the Collateral Agent under Section 12.5, as the case
may be;
(iv) that there is no outstanding Indebtedness, other than costs for
which payment is being requested, known to the Company, after due inquiry,
for the purchase price or construction of such repairs, rebuildings or
replacements, or for labor, wages, materials or supplies in connection with
the making thereof, which, if unpaid, might become the basis of a vendor's,
mechanics', laborers' materialmen's, statutory or other similar Lien upon
any of such repairs, rebuildings or replacement, which Lien might, in the
opinion of the signers of such certificate, materially impair the security
afforded by such repairs, rebuildings or replacement;
(v) that the property to be repaired, rebuilt or replaced is necessary
or desirable in the conduct of the Company's business;
(vi) whether any part of such repairs, rebuildings or replacements
within six months before the date of acquisition thereof by the Company or
a Guarantor, has been used or operated by others than the Company or a
Guarantor in a business similar to that in which such property has been or
is to be used or operated by the Company or a Guarantor, and whether the
fair value to the Company or a Guarantor, at the date of such acquisition,
of such part of such repairs, rebuildings or replacement is at least
$100,000 and 1% of the aggregate principal amount of the outstanding
Securities; and, if all of such facts are present, such part of said
repairs, rebuildings or replacements shall be separately described, and it
shall be stated that an Independent Appraiser's or Independent Financial
Advisor's certificate as to the fair value to the Company or a Guarantor of
such separately described repairs, rebuildings or replacements will be
furnished under paragraph (b) of this Section 12.3;
(vii) that no Default or Event of Default shall have occurred and be
continuing;
(viii) that all conditions precedent herein provided for relating to
such withdrawal and payment have been complied with; and
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(ix) that such withdrawal and payment does not violate the terms of
the Credit Agreement.
(b) In case any part of such repairs, rebuildings or replacements is
separately described pursuant to the foregoing clause (vi) of paragraph (a) of
this Section 12.3, a certificate of an Independent Appraiser or Independent
Financial Advisor (if required by the TIA) stating the fair value to the Company
or a Guarantor, in such Independent Appraiser's or Independent Financial
Advisor's opinion, of such separately described repairs, rebuildings or
replacements at the date of the acquisition thereof by the Company or a
Guarantor.
(c) (i) In case any part of such repairs, rebuildings or replacements
constitutes Real Property:
(1) with respect to any such repairs, rebuildings or replacements that
are not encompassed within or are not erected upon Mortgaged Real Property,
an instrument or instruments in recordable form sufficient for the Lien of
this Indenture and any Mortgage to cover such repairs, rebuildings or
replacements which, if such repairs, rebuildings or replacements include
leasehold or easement interests, shall include normal and customary
provisions with respect thereto and evidence of the filing of all such
documents as may be necessary to perfect such Liens;
(2) a policy of title insurance (or a commitment to issue title
insurance) insuring that the Lien of this Indenture and any Mortgage
constitutes a direct and valid and perfected first priority mortgage Lien
(subject only to Prior Liens) on such repairs, rebuildings or replacements
in an aggregate amount equal to the fair value of such repairs, rebuildings
or replacements, together with such endorsements and other opinions as are
contemplated by Section 11.2(b)(ii), or with respect to any such repairs,
rebuildings or replacements that are encompassed within or are erected upon
Mortgaged Real Property an endorsement to the title insurance policy issued
pursuant to Section 11.2(b)(ii) regarding the affected Mortgaged Real
Property confirming that such repairs, rebuildings or replacements are
encumbered by the first priority Lien (subject only to Prior Liens) of the
applicable Mortgage;
(3) in the event such repairs, rebuildings or replacements have a fair
value in excess of $250,000, a Survey with respect thereto; and
(4) evidence of payment or a closing statement indicating payments to
be made by the Company or a Guarantor 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
such repairs, rebuildings or replacements to the Lien of any applicable
Security Document to perfect such Lien; and
(ii) in case any part of such repairs, rebuildings or replacements
constitutes personal property interests:
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(1) an instrument in recordable form sufficient for the Lien of the
Security Agreement to cover such repairs, rebuildings or replacements; and
(2) evidence of payment or a closing statement indicating payments to
be made by the Company or a Guarantor of all filing fees, recording
charges, transfer taxes and other costs and expenses, including reasonable
legal fees and disbursements of counsel for the Trustee (and any local
counsel), that may be incurred to validly and effectively subject such
repairs, rebuildings or replacements to the Lien of any Security Document.
(d) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are therewith delivered to
the Trustee and the Collateral Agent conform to the requirements of this
Indenture or any other applicable Security Document, and that, upon the
basis of such request of the Company and the accompanying documents
specified in this Section 12.3, 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 12.3;
(ii) that the Company has acquired title to said repairs, rebuildings
and replacements at least the equivalent to its title to the property
destroyed, damaged or taken, and that the same and every part thereof are
free and clear of all Liens prior to the Lien of any of the Security
Documents, except Prior Liens which the property so destroyed, damaged or
taken shall have been subject at the time of such destruction, damage or
taking; and
(iii) that all of the Company's or the relevant Guarantor's right,
title and interest in and to said repairs, rebuildings or replacements, or
combination thereof, are then subject to the Lien of any of the Security
Documents.
Upon compliance with the foregoing provisions of this Section 12.3, 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 paragraph
(a) of this Section 12.3, or the fair value to the Company or the relevant
Guarantor of such repairs, rebuildings and replacements stated in such Officers'
Certificate (and in such Independent Appraiser's or Independent Financial
Advisor's certificate, if required by paragraph (b) of this Section 12.3),
whichever is less; provided, however, that notwithstanding the above, so long as
no Default or Event of Default shall have occurred and be continuing, in the
event that any insurance proceeds or award for such property or proceeds of such
sale does not exceed the lesser of $100,000 or 1% of the principal amount of the
outstanding Securities, and, in the good faith estimate of the Company, such
destruction or damage resulting in such insurance proceeds or such taking or
sale resulting in such award does not detrimentally affect the value or use of
the applicable Collateral in any material respect, upon delivery to the
Collateral Agent of an Officers' Certificate of the Company to such effect, the
Collateral Agent shall release to the Company or the relevant Guarantor such
<PAGE>
-99-
insurance proceeds or award for such property or proceeds of such sale, free of
the Lien hereof and of the applicable Security Documents; the Company shall take
all steps necessary to notify the condemning authority of such assignment.
SECTION 12.4. Withdrawal of Trust Moneys for Reinvestment.
To the extent that any Trust Moneys consist of Net Cash Proceeds received
by the Collateral Agent pursuant to Section 4.13 and the Company or the relevant
Guarantor intends to reinvest such Net Cash Proceeds in a manner that would
constitute a Permitted Related Acquisition, such Trust Moneys may be withdrawn
by the Company or the relevant Guarantor, subject to the Credit Agreement, and
shall be paid by the Collateral Agent upon a written request by the Company by
the proper officer or officers of the Company to reimburse the Company or the
relevant Guarantor for expenditures made or to pay costs incurred by the Company
or the relevant Guarantor in connection with such Permitted Related Acquisition,
upon receipt by the Collateral Agent of the following:
(a) An Officer's Certificate, dated not more than 30 days prior to the
date of the application for the withdrawal and payment of such Trust
Moneys, stating in substance as follows:
(i) that the Trust Moneys to be released constitute Net Cash
Proceeds from an Asset Sale;
(ii) setting forth with particularity the investment to be made
with such Trust Moneys;
(iii) that the release of the Trust Moneys complies with all
applicable terms of this Indenture;
(iv) that there is no Event of Default (both before and after
giving effect to the Permitted Related Acquisition);
(v) that all conditions precedent herein provided for relating to
the release of the Trust Moneys in question have been provided; and
(vi) that such withdrawal and payment does not violate the Credit
Agreement.
(b) If the Permitted Related Investment to be made is an investment in
Real Property, the Company shall also deliver to the Collateral Agent:
(i) an instrument or instruments in recordable form sufficient
for the Lien of any Mortgage to cover such Real Property which, if the
Real Property is a leasehold or easement interest, shall include
normal and customary provisions with respect thereto and evidence of
the filing of all such financing statements and other instruments as
may be necessary to perfect such Liens;
<PAGE>
-100-
(ii) a policy of title insurance (or a commitment to issue title
insurance) insuring that the Lien of this Indenture and any Mortgage
constitutes a direct and valid and perfected first priority mortgage
Lien (subject only to Prior Liens) on such Real Property in an
aggregate amount equal to the fair value of the Real Property,
together with an Officers' Certificate stating that any specific
exceptions to such title insurance are Prior Liens, together with such
endorsements and other opinions as are contemplated by Section
12.2(b)(ii);
(iii) in the event such Real Property has a fair value in excess
of $250,000, a Survey with respect thereto; and
(iv) evidence of payment or a closing statement indicating
payments to be made by the Company or the relevant Guarantor of all
title premiums, recording charges, transfer taxes and other costs and
expenses, including reasonable legal fees and disbursements of one
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 to perfect such Lien; and
(c) If the Permitted Related Investment is a personal property
interest, the Company shall deliver to the Collateral Agent:
(i) an instrument in recordable form, if necessary, sufficient
for the Lien of any applicable Security Document to cover such
personal property interest; and
(ii) evidence of payment or a closing statement indicating
payments to be made by the Company or the relevant Guarantor of all
filing fees, recording charges, transfer taxes and other costs and
expenses, including reasonable legal fees and disbursements of one
counsel for the Collateral Agent (and any local counsel), that may be
incurred to validly and effectively subject the Permitted Related
Investment to the Lien of any Security Document.
(d) An Opinion of Counsel stating that the documents that have been or
are therewith delivered to the Collateral Agent conform to the requirements
of this Indenture and that all conditions precedent herein relating to such
application of Trust Moneys have been complied with.
SECTION 12.5. Powers Exercisable Notwithstanding Event of Default.
In case an Event of Default shall have occurred and shall be continuing,
the Company, while in possession of the Collateral (other than cash, Cash
Equivalents, securities and other personal property held by, or required to be
deposited or pledged with, the Collateral Agent hereunder or under the Security
Documents or with the trustee, mortgagee or other holder of a Prior Lien), may
do any of the things enumerated in Sections 12.2, 12.3 and 12.4 if the Requisite
Obligees shall consent to such action, in which event any certificate filed
under any of such Sections shall omit the statement to the effect that no Event
of Default has occurred and is continuing. This Section 12.5
<PAGE>
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shall not apply, however, during the continuance of an Event of Default of the
type specified in Section 6.1(a)(i) or (ii).
SECTION 12.6. Powers Exercisable by Trustee or Receiver.
In case the Collateral (other than any cash, Cash Equivalents, securities
and other personal property held by, or required to be deposited or pledged
with, the Collateral Agent hereunder or under the Security Documents or with the
trustee, mortgagee or other holder of a Prior Lien) shall be in the possession
of a receiver or trustee lawfully appointed, the powers hereinbefore in this
Article XII conferred upon the Company or the relevant Guarantor with respect to
the withdrawal or application of Trust Moneys may be exercised by such receiver
or trustee, in which case a certificate signed by such receiver or trustee shall
be deemed the equivalent of any Officers' Certificate required by this Article
XII. If the Collateral Agent shall be in possession of any of the Collateral
hereunder or under any of the Security Documents, such powers may be exercised
by the Collateral Agent, in its discretion.
SECTION 12.7. Disposition of Securities Retired.
All Securities received by the Trustee and for whose purchase Trust Moneys
are applied under this Article XII, if not otherwise cancelled, shall be
promptly delivered to the Trustee for cancellation and destruction unless the
Trustee shall be otherwise directed in writing by the Company. Upon destruction
of any Securities, the Trustee shall issue a certificate of destruction to the
Company.
SECTION 12.8. Investment of Trust Moneys.
All or any part of any Trust Moneys held by the Collateral Agent hereunder
(except such as may be held for the account of any particular Securities) shall
from time to time be invested or reinvested by 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) which may be
received by the Collateral Agent shall be forthwith paid to the Company. Such
Cash Equivalents shall be held by the Collateral Agent as a part of the
Collateral, subject to the same provisions hereof as the cash used by it to
purchase such Cash Equivalents.
Neither the Trustee nor the Collateral Agent shall be liable or responsible
for any loss resulting from such investments or sales except only for its own
grossly negligent action, its own grossly negligent failure to act or its own
willful misconduct in complying with this Section 12.8.
<PAGE>
-102-
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. 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 13.2. Notices.
Any notice or communication shall be sufficiently given if in writing and
delivered in Person or mailed by first-class mail addressed as follows:
(a) if to the Company or the Guarantors:
REPUBLIC ENGINEERED STEELS, INC.
410 Oberlin Road SW
Massillon, OH 44647
Attention: General Counsel
(b) if to the Trustee:
[ ]
[ ]
[ ]
Re: Republic Engineered Steels, Inc.
Attention: [ ]
(c) if to the Collateral Agent:
[ ]
[ ]
[ ]
Each of the Company, the Guarantors, the Trustee and the Collateral Agent
by notice to the other may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication mailed to a Securityholder, including any
notice delivered in connection with TIA ss. 310(b), TIA ss. 313(c),
TIA ss. 314(a) and TIA ss. 315(b), shall be mailed to him, first-class postage
prepaid, at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to him if so mailed within the time prescribed.
<PAGE>
-103-
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.
Except for a notice to the Trustee or the Collateral Agent, which is deemed
given only when received, if a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors the Trustee, the Registrar, the
Collateral Agent and any other Person shall have the protection of TIA ss.
312(c).
SECTION 13.4. Certificate and Opinion of Counsel as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee or the
Collateral Agent to take any action under this Indenture, the Company shall
furnish to the Trustee or the Collateral Agent, as applicable, at the request of
the Trustee or the Collateral Agent, as applicable, (a) an Officers' Certificate
in form and substance satisfactory to the Trustee stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (b) an Opinion of
Counsel in form and substance satisfactory to the Trustee or the Collateral
Agent, as applicable, stating that, in the opinion of counsel, all such
conditions have been complied with and (c) where applicable, a certificate or
opinion by an independent certified public accountant satisfactory to the
Trustee or the Collateral Agent, as applicable, that complies with TIA ss.
314(c).
SECTION 13.5. Statements Required in Certificate and Opinion of Counsel.
Each certificate and Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate has read such
covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate are based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
<PAGE>
-104-
SECTION 13.6. Rules by Trustee, Paying Agent, Registrar, Collateral Agent.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Securityholders. The Paying
Agent, Collateral Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.7. Legal Holidays.
If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 13.8. Governing Law.
The internal laws of the State of New York shall govern this Indenture, the
Securities and the Guarantee.
SECTION 13.9. No Recourse Against Others.
A trustee, director, officer, employee, stockholder or beneficiary, as
such, of the Company or the Guarantors shall not have any liability for any
obligations of the Company or the Guarantors under the Securities or this
Indenture or the Guarantees or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting a
Security waives and releases all such liability.
SECTION 13.10. Successors.
All agreements of the Company and the Guarantors in this Indenture and the
Securities and the Guarantees shall bind their respective successors. All
agreements of the Trustee and the Collateral Agent in this Indenture shall bind
its successor.
SECTION 13.11. Duplicate 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 13.12. Severability.
In case any provision in this Indenture or in the Securities or the
Guarantees 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>
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SECTION 13.13. Table of Contents, Headings, Etc.
The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, and are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
<PAGE>
-106-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
REPUBLIC ENGINEERED STEELS, INC.
as Issuer
By: _____________________________
Title:
[ ],
as Guarantor
By: _____________________________
Title:
[ ],
as Trustee
By: _____________________________
Title:
[ ],
as Collateral Agent
By: _____________________________
Title:
<PAGE>
EXHIBIT A-1
[FORM OF SECURITY]
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN
AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S, (2) AGREES THAT IT WILL NOT
PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS
PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF THIS SECURITY) OR THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF
THIS SECURITY OR (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE
LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS UNDER THE
SECURITIES ACT, IN OFFSHORE TRANSACTIONS IN COMPLIANCE WITH THE REQUIREMENTS OF
RULE 904 OF REGULATION S, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2),(3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
A-1-1
<PAGE>
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY,
THE TRUSTEE, THE TRANSFER AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-1-2
<PAGE>
REPUBLIC ENGINEERED STEELS, INC.
No. $
15.5% FIRST MORTGAGE NOTE DUE 2006
REPUBLIC ENGINEERED STEELS, INC. promises to pay or registered
assigns the principal sum of Dollars on [ ], 2006.
Interest Payment Dates: June 15, December 15, and at maturity
Record Dates: June 1, December 1 and 15 days prior to maturity
REPUBLIC ENGINEERED STEELS, INC.
By: __________________________________
By: __________________________________
Dated:
Certificate of Authentication
This is one of the 15.5% First Mortgage Notes Due 2006 referred to in the
within-mentioned Indenture.
[ ],
as Trustee
By: __________________________________
Authorized Signatory
A-1-3
<PAGE>
(REVERSE OF SECURITY)
REPUBLIC ENGINEERED STEELS, INC.
15.5% FIRST MORTGAGE NOTE DUE 2006, SERIES A
1. Interest. REPUBLIC ENGINEERED STEELS, INC., a Delaware corporation (the
"Company"), promises to pay, until the principal hereof is paid or made
available for payment, interest on the principal amount set forth on the reverse
side hereof at a rate of 15.5% per annum (the "Initial Interest Rate"). Interest
on this Security 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 the
date of issuance through but excluding the date on which interest is paid.
Interest shall be payable in arrears on each June 15, each December 15, and at
the stated maturity, commencing June 15, 1999. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Company shall pay interest
on overdue principal and on overdue interest (to the full extent permitted by
law) at a rate of 15.5% per annum.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by this
Security plus 2% per annum and on overdue installments of interest (without
regard to any applicable grace periods) to the extent lawful.
2. Registration Rights. Pursuant to the Registration Rights Agreement by
and among the Company and the Initial Purchasers, the Company will be obligated
to consummate an exchange offer pursuant to which the Holder of this Security
shall have the right to exchange this Security for 15.5% First Mortgage Notes
Due 2006, Series B, of the Company (herein called the "Exchange Securities"),
which have been registered under the Securities Act, in like principal amount
and having identical terms as the Securities (except for this paragraph and
terms related to transfer restrictions no longer applicable by virtue of such
registration). The Holders of Securities shall be entitled to receive certain
additional interest payments in the event such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.
3. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders at the
close of business on the June 1 or December 1 next preceding the interest
payment date and on the 15th day next preceding the date of maturity. Holders
must surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
Interest may be paid by wire transfer or check mailed to the person entitled
thereto as shown on the Registrar for the Securities.
4. Paying Agent and Registrar. Initially, [ ] (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice. Neither the Company nor any of its
Subsidiaries may act as Paying Agent, Registrar or co-Registrar.
A-1-4
<PAGE>
5. Indenture and Guarantees. The Company has issued the Securities under an
Indenture dated as of [ ], [ ] (the "Indenture") between the
Company, the Trustee and the Collateral Agent. This Security is one of an issue
of 15.5% First Mortgage Notes Due 2006 of the Company issued, or to be issued,
under the Indenture. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb), as amended from time
to time ("TIA"). The Securities are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of them. Capitalized and
certain other terms used herein and not otherwise defined have the meanings set
forth in the Indenture. The Securities are [secured] obligations of the Company
limited in aggregate principal amount to $[ ]. Payment on each
Security is guaranteed on a senior [secured] basis by the Guarantors pursuant to
Article Ten of the Indenture. The Indenture limits, among other things, the
incurrence of Indebtedness by the Company and its Subsidiaries; the creation of
Liens by the Company and its Subsidiaries; purchases, redemptions, and other
acquisitions or retirements of Capital Stock of the Company and its
Subsidiaries; transactions by the Company and its Subsidiaries with their
respective Affiliates; and the ability of the Company or any of its Subsidiaries
to merge with or into another entity. The limitations are subject to a number of
important qualifications and exceptions. The Company must report to the Trustee
annually on compliance with the limitations contained in the Indenture.
6. Redemption.
(a) Optional Redemption. The Company, at its option, may redeem all or any
of the Securities, in whole or in part, (i) at any time a Security is held by an
original Holder (the "Bridge Lender") at a redemption price equal to 100% of the
principal amount thereof plus accrued and unpaid interest to the Redemption Date
and (ii) at any time a Security is held by any person other than the Bridge
Lender after to the fourth anniversary of the [Conversion Date] at the
redemption prices (expressed in percentages of principal amount) set forth below
plus accrued and unpaid interest to the Redemption Date, if redeemed during the
12-month period beginning [November 6] of the years indicated below:
Year Percentage
---- ----------
2003.......................................... 107.750%
2004.......................................... 105.167%
2005.......................................... 102.584%
2006 and thereafter........................... 100.000%
(b) Mandatory Redemption. The Company shall be required to redeem the
Securities and repay Loans on a pro rata basis, at a redemption price equal to
100% of the principal amount thereof plus accrued and unpaid interest to the
Redemption Date or repayment date, as applicable, from the Net Proceeds of a
Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. On and after the Redemption
Date, unless the Company defaults in making the
A-1-5
<PAGE>
redemption payment, interest ceases to accrue on the Securities or portions
thereof called for redemption.
8. Notice of Transfer to Issuer. Notice of transfer by a Bridge Lender of
the Securities will be made at least 10 days before such transfer.
9. Offers To Purchase. Sections 4.13 and 4.15 of the Indenture provide that
after an Asset Sale or upon the occurrence of a Change of Control, and subject
to further limitations contained therein, the Company shall make an offer to
purchase certain amounts of Securities in accordance with the procedures set
forth in the Indenture.
10. 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 shall be
due and payable, whether at maturity, by acceleration or otherwise, according to
the terms of the Securities and the Indenture, the Company has granted and,
subject to the terms of the Indenture, will grant Liens on the Collateral to the
Collateral Agent for the benefit of the Secured Parties pursuant to the
Indenture and the Security Documents. The Securities will be secured by Liens on
the Collateral that are subject only to certain permitted encumbrances, which
shall include, among other things, an equal and ratable Lien to secure Loans.
Each Holder, 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 respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any 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.
11. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. A Holder 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 to it any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
transfer or exchange any Securities or portion of a Security selected for
redemption, or transfer or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
12. Persons Deemed Owners. The registered Holder of a Security may be
treated as the owner of it for all purposes.
13. Unclaimed Money. If money for the payment of principal, premium, if
any, or interest remains unclaimed for two years, the Trustee or Paying Agent
will pay the money back to the Company at its request. After that, Holders
entitled to the money must look to the Company for payment as general creditors
unless an "abandoned property" law designates another Person.
A-1-6
<PAGE>
14. Amendment, Supplement, Waiver. The Company, the Guarantors, the Trustee
(if a party thereto) and the Collateral Agent (if a party thereto) may, without
the consent of the Holders of any outstanding Securities, amend, waive or
supplement the Indenture, the Security Documents or the Securities for certain
specified purposes, including, among other things, curing ambiguities, defects
or inconsistencies, maintaining the qualification of the Indenture under the
TIA, making any change that does not adversely affect the rights of any Holder
or mortgaging, pledging or granting a security interest in favor of the
Collateral Agent as additional security for the payment and performance of the
obligations under the Indenture, in any property or assets, including any which
is required to be mortgaged, pledged or hypothecated, or in which a security
interest is required to be granted, to the Collateral Agent pursuant to any
Security Document or otherwise. Other amendments and modifications of the
Indenture, the Securities or the Security Documents may be made by the Company,
the Trustee and the Collateral Agent with the consent of the Holders of not less
than a majority of the aggregate principal amount of the outstanding Securities
or the Requisite Obligees, as the case may be, subject to certain exceptions
requiring the consent of the Holders of the particular Securities to be
affected.
15. Successor Corporation. When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture and the
transaction complies with the terms of Article V of the Indenture, the
predecessor corporation will be released from those obligations.
16. Defaults and Remedies. Events of Default are set forth in the
Indenture. Subject to certain limitations in the Indenture, if an Event of
Default (other than an Event of Default specified in Section 6.1(a)(vii) or
(viii) of the Indenture (with respect to the Company)) occurs and is continuing,
then the Holders of not less than 25% in aggregate principal amount of the
outstanding Securities may, and the Trustee upon the request of the Holders of
not less than 25% in aggregate principal amount of the outstanding Securities
shall, declare the principal of, premium, if any, and interest on all of the
Securities to be due and payable immediately. If an Event of Default specified
in Section 6.1(a)(vii) or (viii) of the Indenture (with respect to the Company)
occurs and is continuing, the principal of, premium, if any, and interest on all
of the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
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, the Guarantees, the Security Documents or the
Securities. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the then outstanding Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders notice
of any continuing default (except a default in payment of principal, premium, if
any, or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to the
Trustee.
17. Trustee Dealings with Company. Subject to certain limitations imposed
by the TIA 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.
18. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company or a Guarantor shall not have any liability
for any obligations of the Company
A-1-7
<PAGE>
or a Guarantor under the Securities or the Indenture or the Guarantees or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder 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.
19. Discharge. The Company's and each Guarantor's obligations pursuant to
the Indenture and the Guarantees will be discharged, except for obligations
pursuant to certain sections thereof, subject to the terms of the Indenture,
upon the payment of all the Securities or upon the irrevocable deposit with the
Trustee of money or U.S. Government Obligations sufficient to pay when due
principal of, premium, if any, and interest on the Securities to maturity or
redemption, as the case may be.
20. Authentication. This Security shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Security.
21. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= 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).
22. CUSIP. Pursuant to the recommendations 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 Holders. 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 upon written request and without
charge a copy of the Indenture. Requests may be made to:
Republic Engineered Steels, Inc.
410 Oberlin Road, S.W.
Massillon, Ohio 44647
Attention: General Counsel
A-1-8
<PAGE>
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
SENIOR GUARANTEE
[ ] and [ ] (the "Guarantors"), have unconditionally
guaranteed on a senior basis (the "Guarantees") (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
Ten of the Indenture and (ii) in 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.
No past, present or future stockholder, officer, director, employee or
incorporator, as such, of any Guarantor shall have any liability under the
Guarantee of such Guarantor by reason of such person's status as stockholder,
officer, director, employee or incorporator. Each holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Guarantees.
A-1-9
<PAGE>
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
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
A-1-10
<PAGE>
EXHIBIT A-2
-----------
[FORM OF SECURITY]
REPUBLIC ENGINEERED STEELS, INC.
No. $
15.5% FIRST MORTGAGE NOTE DUE 2006
REPUBLIC ENGINEERED STEELS, INC. promises to pay or registered assigns the
principal sum of Dollars on [ ], 2006.
Interest Payment Dates: June 15, December 15, and at maturity
Record Dates: June 1, December 1 and 15 days prior to maturity
REPUBLIC ENGINEERED STEELS, INC.
By: ______________________________
By: ______________________________
Dated:
Certificate of Authentication
This is one of the 15.5% First Mortgage Notes Due 2006 referred to in the
within-mentioned Indenture.
[ ],
as Trustee
By: ______________________________
Authorized Signatory
A-2-1
<PAGE>
(REVERSE OF SECURITY)
REPUBLIC ENGINEERED STEELS, INC.
15.5% FIRST MORTGAGE NOTE DUE 2006, SERIES B
1. Interest. REPUBLIC ENGINEERED STEELS, INC., a Delaware corporation (the
"Company"), promises to pay, until the principal hereof is paid or made
available for payment, interest on the principal amount set forth on the reverse
side hereof at a rate of 15.5% per annum (the "Initial Interest Rate"). Interest
on this Security 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 the
date of issuance through but excluding the date on which interest is paid.
Interest shall be payable in arrears on each June 15, each December 15, and at
the stated maturity, commencing June 15, 1999. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Company shall pay interest
on overdue principal and on overdue interest (to the full extent permitted by
law) at a rate of [ ]% per annum.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by this
Security plus 2% per annum and on overdue installments of interest (without
regard to any applicable grace periods) to the extent lawful.
2. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders at the
close of business on the June 1 or December 1 next preceding the interest
payment date and on the 15th day next preceding the date of maturity. Holders
must surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
Interest may be paid by wire transfer or check mailed to the person entitled
thereto as shown on the Registrar for the Securities.
3. Paying Agent and Registrar. Initially, [ ] (the "Trustee") will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice. Neither the Company nor any of its Subsidiaries
may act as Paying Agent, Registrar or co-Registrar.
4. Indenture and Guarantees. The Company has issued the Securities under an
Indenture dated as of [ ], [ ] (the "Indenture") between the Company, the
Trustee and the Collateral Agent. This Security is one of an issue of 15.5%
First Mortgage Notes Due 2006 of the Company issued, or to be issued, under the
Indenture. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code ss.ss. 77aaa-77bbbb), as amended from time to time ("TIA"). The
Securities are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. Capitalized and certain other
terms used herein and not otherwise defined have the meanings set forth in the
Indenture. The Securities are [secured] obligations of the Company limited in
aggregate principal amount to $[ ]. Payment on each Security is guaranteed on a
senior [secured] basis by the Guarantors pursuant to Article Ten of the
Indenture. The Indenture limits, among other things, the incur-
A-2-2
<PAGE>
rence of Indebtedness by the Company and its Subsidiaries; the creation of Liens
by the Company and its Subsidiaries; purchases, redemptions, and other
acquisitions or retirements of Capital Stock of the Company and its
Subsidiaries; transactions by the Company and its Subsidiaries with their
respective Affiliates; and the ability of the Company or any of its Subsidiaries
to merge with or into another entity. The limitations are subject to a number of
important qualifications and exceptions. The Company must report to the Trustee
annually on compliance with the limitations contained in the Indenture.
5. Redemption.
(a) Optional Redemption. The Company, at its option, may redeem all or any
of the Securities, in whole or in part, (i) at any time a Security is held by an
original Holder (the "Bridge Lender") at a redemption price equal to 100% of the
principal amount thereof plus accrued and unpaid interest to the Redemption Date
and (ii) at any time a Security is held by any person other than the Bridge
Lender after to the fourth anniversary of the [Conversion Date] at the
redemption prices (expressed in percentages of principal amount) set forth below
plus accrued and unpaid interest to the Redemption Date, if redeemed during the
12-month period beginning [ ] of the years indicated below:
Year Percentage
---- ----------
2003......................................... 107.750%
2004......................................... 105.167%
2005......................................... 102.584%
2006 and thereafter.......................... 100.000%
(b) Mandatory Redemption. The Company shall be required to redeem the
Securities and repay Loans on a pro rata basis, at a redemption price equal to
100% of the principal amount thereof plus accrued and unpaid interest to the
Redemption Date or repayment date, as applicable, from the Net Proceeds of a
Public Equity Offering.
6. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. On and after the Redemption
Date, unless the Company defaults in making the redemption payment, interest
ceases to accrue on the Securities or portions thereof called for redemption.
7. Notice of Transfer to Issuer. Notice of transfer by a Bridge Lender of
the Securities will be made at least 10 days before such transfer.
8. Offers To Purchase. Sections 4.13 and 4.15 of the Indenture provide that
after an Asset Sale or upon the occurrence of a Change of Control, and subject
to further limitations contained therein, the Company shall make an offer to
purchase certain amounts of Securities in accordance with the procedures set
forth in the Indenture.
A-2-3
<PAGE>
9. 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 shall be
due and payable, whether at maturity, by acceleration or otherwise, according to
the terms of the Securities and the Indenture, the Company has granted and,
subject to the terms of the Indenture, will grant Liens on the Collateral to the
Collateral Agent for the benefit of the Secured Parties pursuant to the
Indenture and the Security Documents. The Securities will be secured by Liens on
the Collateral that are subject only to certain permitted encumbrances, which
shall include, among other things, an equal and ratable Lien to secure Loans.
Each Holder, 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 respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any 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.
10. 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 to it any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
transfer or exchange any Securities or portion of a Security selected for
redemption, or transfer or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
11. Persons Deemed Owners. The registered Holder of a Security may be
treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal, premium, if
any, or interest remains unclaimed for two years, the Trustee or Paying Agent
will pay the money back to the Company at its request. After that, Holders
entitled to the money must look to the Company for payment as general creditors
unless an "abandoned property" law designates another Person.
13. Amendment, Supplement, Waiver. The Company, the Guarantors, the Trustee
(if a party thereto) and the Collateral Agent (if a party thereto) may, without
the consent of the Holders of any outstanding Securities, amend, waive or
supplement the Indenture, the Security Documents or the Securities for certain
specified purposes, including, among other things, curing ambiguities, defects
or inconsistencies, maintaining the qualification of the Indenture under the
TIA, making any change that does not adversely affect the rights of any Holder
or mortgaging, pledging or granting a security interest in favor of the
Collateral Agent as additional security for the payment and performance of the
obligations under the Indenture, in any property or assets, including any which
is required to be mortgaged, pledged or hypothecated, or in which a security
interest is required to be granted, to the Collateral Agent pursuant to any
Security Document or otherwise. Other amendments and modifications of the
Indenture, the Securities or the Security Documents may be made by the Company,
the Trustee and the Collateral Agent with the consent of the Holders of not less
than a ma-
A-2-4
<PAGE>
jority of the aggregate principal amount of the outstanding Securities
or the Requisite Obligees, as the case may be, subject to certain exceptions
requiring the consent of the Holders of the particular Securities to be
affected.
14. Successor Corporation. When a successor corporation assumes all the
obligations of its predecessor under the Securities and the Indenture and the
transaction complies with the terms of Article V of the Indenture, the
predecessor corporation will be released from those obligations.
15. Defaults and Remedies. Events of Default are set forth in the
Indenture. Subject to certain limitations in the Indenture, if an Event of
Default (other than an Event of Default specified in Section 6.1(a)(vii) or
(viii) of the Indenture (with respect to the Company)) occurs and is continuing,
then the Holders of not less than 25% in aggregate principal amount of the
outstanding Securities may, and the Trustee upon the request of the Holders of
not less than 25% in aggregate principal amount of the outstanding Securities
shall, declare the principal of, premium, if any, and interest on all of the
Securities to be due and payable immediately. If an Event of Default specified
in Section 6.1(a)(vii) or (viii) of the Indenture (with respect to the Company)
occurs and is continuing, the principal of, premium, if any, and interest on all
of the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
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, the Guarantee, the Security Documents or the Securities.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Securities may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any
continuing default (except a default in payment of principal, premium, if any,
or interest) if it determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
16. Trustee Dealings with Company. Subject to certain limitations imposed
by the TIA 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.
17. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company or a Guarantor shall not have any liability
for any obligations of the Company or a Guarantor under the Securities or the
Indenture or the Guarantee or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder 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.
18. Discharge. The Company's and each Guarantor's obligations pursuant to
the Indenture and the Guarantees will be discharged, except for obligations
pursuant to certain sections thereof, subject to the terms of the Indenture,
upon the payment of all the Securities or upon the irrevocable deposit with the
Trustee of money or U.S. Government Obligations sufficient to pay when due
principal of, premium, if any, and interest on the Securities to maturity or
redemption, as the case may be.
A-2-5
<PAGE>
19. Authentication. This Security shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Security.
20. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= 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).
21. CUSIP. Pursuant to the recommendations 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 Holders. 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 upon written request and without
charge a copy of the Indenture. Requests may be made to:
Republic Engineered Steels, Inc.
410 Oberlin Road, S.W.
Massillon, Ohio 44647
Attention: General Counsel
A-2-6
<PAGE>
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
SENIOR GUARANTEE
[ ] and [ ] (the "Guarantors"), have unconditionally guaranteed on a senior
basis (the "Guarantees") (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 Ten of the
Indenture and (ii) in 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.
No past, present or future stockholder, officer, director, employee or
incorporator, as such, of any Guarantor shall have any liability under the
Guarantee of such Guarantor by reason of such person's status as stockholder,
officer, director, employee or incorporator. Each holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Guarantees.
A-2-7
<PAGE>
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
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
A-2-8
<PAGE>
EXHIBIT B
---------
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Note) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY
OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF
THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1
<PAGE>
EXHIBIT C
---------
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
Republic Engineered Steels, Inc.
410 Oberlin Road S.W.
Massillon, Ohio 44647
Ladies and Gentlemen:
In connection with our proposed purchase of $ aggregate principal amount of
the 15.5% First Mortgage Notes due 2006 (the "Securities") of Republic
Engineered Steels, Inc. (the "Company"), we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and, unless
so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account
for which we are purchasing Securities to offer, sell or otherwise transfer
such Securities prior to (x) the date which is two years (or such shorter
period of time as permitted by Rule 144 under the Securities Act) after the
later of the date of original issue of the Securities being acquired or any
predecessor to such Securities or the last date on which the Company or any
affiliate of the Company was the owner of the Securities being acquired or
any predecessor of such Securities or (y) such later date, if any, as may
be required by any subsequent change in applicable law (the "Resale
Restriction Termination Date") only (a) to the Company or a subsidiary
thereof, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) so long as the Securities are
eligible for resale pursuant to Rule 144A under the Securities Act, to a
person we reasonably believe is a "qualified institutional buyer" under
Rule 144A (a "QIB") that purchases for its own account or for the account
of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside
the United States to "foreign purchasers" (as defined below) in offshore
transactions meeting the requirements of Rule 904 of Regulation S under the
Securities Act, (e) to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act (an "Accredited Investor") that is purchasing for its own
account or for the account of such an institutional "accredited investor"
in each case in a minimum principal amount of the Securities of $250,000,
for investment purposes and not with a view to or for offer or sale in
connection with any distribution in violation of the Securities Act or (f)
pursuant to any other available exemption from the registration
requirements of the Securities Act, in each case in accordance with
applicable securities laws of any state of the United States or any other
applicable jurisdiction, subject, in each of the foregoing cases, to any
requirement of law that the disposition of our property or the property of
such investor account or accounts be at all
C-1
<PAGE>
times within our or their control and to compliance with any applicable
state securities laws. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause
(e) above prior to the Resale Restriction Termination Date, the transferor
shall deliver a letter from the transferee substantially in the form of
this letter to the Trustee, which shall provide, among other things, that
the transferee is an Accredited Investor within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act and that it is
acquiring such Securities for investment purposes and not for distribution
in violation of the Securities Act. Each purchaser acknowledges that the
Company, the Trustee and the Transfer Agent and Registrar reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (d), (e) or (f) above
to require the delivery of an opinion of counsel, certification and/or
other information satisfactory to the Company and the Trustee.
2. We are an Accredited Investor or a QIB purchasing Securities for
our own account or for the account of one or more Accredited Investors, and
we are acquiring the Securities for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution in violation
of the Securities Act or the securities laws of any state of the United
States and we have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its investment in
the Securities for an indefinite period.
3. We are acquiring the Securities purchased by us for our own account
or for one or more accounts as to each of which we exercise sole investment
discretion and we and any such account are (a) a QIB, aware that the sale
is being made in reliance on Rule 144A under the Securities Act, (b) an
Accredited Investor, or (c) a person other than a U.S. person ("foreign
purchasers"), which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for
foreign beneficial owners (other than an estate or trust) in offshore
transactions meeting the requirements of Rules 903 and 904 of Regulation S
under the Securities Act.
4. We have received a copy of the Offering Memorandum and acknowledge
that we have had access to such financial and other information, and have
been afforded the opportunity to ask such questions of representatives of
the Company and receive answers thereto, as we deem necessary in order to
verify the information contained in the Offering Memorandum.
5. We are not purchasing the Securities for or on behalf of, and will
not transfer the Securities to, any pension or welfare plan (as defined in
Section 3 of ERISA, except as may be permitted under ERISA and as described
under "Notice to Investors" in the Offering Memorandum.
6. In the event that we purchase any Securities, we will acquire
Securities having an outstanding principal amount of at least $250,000 for
our own account and $250,000 for each account for which we are acting.
C-2
<PAGE>
We understand that the Trustee and the Transfer Agent will not be required
to accept for registration of transfer any Securities acquired by us, except
upon presentation of evidence satisfactory to the Company and the Trustee that
the foregoing restrictions on transfer have been complied with. We further
understand that the Securities purchased by us will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of the first paragraph of this letter. We further agree to provide
to any person acquiring any of the Securities from us a notice advising such
person that transfers of such Securities are restricted as stated herein and
that certificates representing such Securities will bear a legend to that
effect.
We represent that you, the Company, the Trustee and others are entitled to
rely upon the truth and accuracy of our acknowledgements, representations and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our acknowledgements, representations or agreements herein cease to be
accurate and complete. You are also irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
We represent to you that we have full power to make the foregoing
acknowledgements, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United States" and "U.S.
person" have the respective meanings given to them in Regulation S under the
Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
Very truly yours,
(Name of Purchaser)
By: _______________________________________
Date: _______________________________________
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name: ________________________________
C-3
<PAGE>
Address: ________________________________
C-4
<PAGE>
EXHIBIT D
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_____________________, ____
[Trustee]
Attention: Corporate Trust Department
Re: Republic Engineered Steels, Inc.
(the "Company") 15.5% First Mortgage
Notes Due 2006 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate principal amount of
the Securities, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities;
(6) if the circumstances set forth in Rule 904(c) under the Securities
Act are applicable, we have complied with the additional conditions
therein, including (if applicable) sending a confirmation or other notice
stating that the Securities may be offered and sold
D-1
<PAGE>
during the restricted period specified in Rule 903(c)(2) or (3), as
applicable, in accordance with the provisions of Regulation S; pursuant to
registration of the Securities under the Securities Act; or pursuant to an
available exemption from the registration requirements under the Securities
Act; and
(7) if the sale is made during a restricted period and the provisions
of Rule 903(c)(3) are applicable thereto, we confirm that such sale has
been made in accordance with such provisions.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________________________
Authorized Signature
D-2
<PAGE>
EXHIBIT VI TO THE
CREDIT AGREEMENT
REGISTRATION RIGHTS AGREEMENT
Dated as of [ ], [ ]
by and among
REPUBLIC ENGINEERED STEELS, INC.
and
THE GUARANTORS
named herein
and
THE HOLDERS
named herein
------------------------------
$[208,460,000]
SENIOR SECURED NOTES DUE 2008
<PAGE>
TABLE OF CONTENTS
Page
----
1. Definitions......................................................2
2. Exchange Offer Registration......................................5
3. Shelf Registration...............................................6
4. Liquidated Damages...............................................7
5. Underwritten Registrations.......................................8
6. Registration Procedures..........................................8
7. Registration Expenses...........................................14
8. Indemnification.................................................14
9. Rule 144 and 144A...............................................17
10. Miscellaneous...................................................17
(a) No Inconsistent Agreements.............................17
(b) Adjustments Affecting Registrable Securities...........17
(c) Amendments and Waivers.................................17
(d) Notices................................................18
(e) Successors and Assigns.................................19
(f) Counterparts...........................................19
(g) Headings...............................................19
(h) Governing Law..........................................19
(i) Severability...........................................19
(j) Joint and Several Obligations..........................19
(k) Securities Held by the Issuers or Their Affiliates.....19
-1-
<PAGE>
-2-
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of [ ], [ ], by and among Republic Engineered Steels, Inc., a Delaware
corporation (the "Company"), [list each domestic subsidiary of the Company] (the
"Guarantors") and the Holders (as defined below) whose signatures appear on the
execution pages of this Agreement (collectively with any other Holders who
become parties to this Agreement, the "Holders"). The Company and the Guarantors
are hereinafter collectively referred to as the "Issuers".
This Agreement is entered into in connection with the Credit Agreement (as
defined below) among the Company, the Guarantors named therein, the Lenders
named therein and The Chase Manhattan Bank, DLJ Bridge Finance, Inc. and
BankBoston, N.A., as Agents providing for the making of the loans thereunder in
connection with the transactions contemplated thereby. Pursuant to the terms of
the Credit Agreement, the Lenders may require the Issuers to exchange the loans
made thereunder for long-term notes (the "Notes") as described in the Credit
Agreement. In order to induce the Lenders to enter into the Credit Agreement,
the Issuers have agreed to provide the registration rights set forth in this
Agreement for the benefit of the Holders and their direct and indirect
transferees and assigns.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Advice: See the last paragraph of Section 6.
Agreement: See the first introductory paragraph to this Agreement.
Business Day: Any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of New York, New York or is a day on which banking
institutions therein located are authorized or required by law or other
governmental action to close.
Company: See the first introductory paragraph to this Agreement.
Conversion Date: As defined in the Credit Agreement.
Credit Agreement: The Credit Agreement, dated as of November 6, 1998, by
and among the Company, the Guarantors named therein, the Lenders named therein
and The Chase Manhattan Bank, DLJ Bridge Finance, Inc. and BankBoston, N.A., as
agents.
DTC: See Section 6(i).
Event Date: See Section 4(c).
<PAGE>
-3-
Exchange Effectiveness Date: 150 days after the Conversion Date.
Exchange Effectiveness Period: See Section 2.
Exchange Filing Date: 60 days after the Conversion Date.
Exchange Offer Registration: See Section 2.
Exchange Offer Consummation Date: 180 days after the Conversion Date.
Exchange Notes: See Section 3.
Exchange Registration Statement: See Section 2.
Guarantors: See the first introductory paragraph to this Agreement.
Holders: See the first introductory paragraph to this Agreement.
Indemnified Person: See Section 8(c).
Indemnifying Person: See Section 8(c).
Indenture: The Indenture to be entered into by and among the Company, the
Guarantors and an indenture trustee, pursuant to which the Notes will be issued,
as amended or supplemented from time to time in accordance with the terms
thereof.
Inspectors: See Section 6(p).
Issuers: See the first introductory paragraph to this Agreement.
Liquidated Damages: See Section 4(a).
Losses: See Section 8.
NASD: See Section 6(n).
Notes: The $[208,460,000] aggregate principal amount of notes of the
Company being issued pursuant to the Indenture as required by the Credit
Agreement.
Participant: See Section 8(a).
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securi-
<PAGE>
-4-
ties covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
Registration Expenses: See Section 8(a).
Registrable Securities: The Notes upon original issuance thereof and at all
times subsequent thereto, until in the case of any such Note (i) a Registration
Statement covering such Note has been declared effective and such Note has been
disposed of in accordance with such effective Registration Statement, (ii) it is
sold in compliance with Rule 144 or may be sold pursuant to Rule 144(k), (iii)
it shall have been otherwise transferred and a new certificate for any such Note
not bearing a legend restricting further transfer shall have been delivered by
the Company, or (iv) it ceases to be outstanding.
Registration Statement: Any registration statement of the Issuers filed or
required to be filed with the SEC pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule (other than Rule 144A) or regulation
hereafter adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be amended
from time to time, or any similar rule (other than Rule 144) or regulation
hereafter adopted by the SEC.
Rule 415: Rule 415 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933 as amended, and the rules and
regulations of the SEC promulgated thereunder.
Shelf Effectiveness Date: 120 days after the Shelf Filing Date.
Shelf Filing Date: 60 days after the obligation to file a Shelf
Registration Statement arises.
Shelf Notice: See Section 3(a).
Shelf Registration: See Section 3(b).
Shelf Termination Date: See Section 3(b).
Subsequent Shelf Registration: See Section 3(c).
<PAGE>
-5-
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture.
underwritten registration or underwritten offering: A registration in which
securities of any of the Issuers are sold to an underwriter for reoffering to
the public.
Withdrawal Election: See Section 4(b).
2. Exchange Offer Registration
The Issuers shall file with the SEC no later than the Exchange Filing Date,
an offer to exchange (the "Exchange Offer Registration") for any and all of the
Registrable Securities covered by such Exchange Offer Registration a like
aggregate principal amount of debt securities of the Company, guaranteed by the
Guarantors, which are identical in all material respects to the Notes (the
"Exchange Notes") (and which are entitled to the benefits of the Indenture or a
trust indenture which is identical in all material respects to the Indenture
(other than such changes to the Indenture or any such identical trust indenture
as are necessary to comply with any requirements of the SEC to effect or
maintain the qualification thereof under the TIA) and which, in either case, has
been qualified under the TIA), except that the Exchange Notes shall have been
registered pursuant to an effective Registration Statement under the Securities
Act and shall contain no restrictive legend thereon. The Exchange Offer
Registration shall be registered under the Securities Act on the appropriate
form (the "Exchange Registration Statement") and shall comply with all
applicable tender offer rules and regulations under the Exchange Act.
Each of the Issuers agrees to use its reasonable best efforts to (x) cause
the Exchange Registration Statement to be declared effective under the
Securities Act on or before the Exchange Effectiveness Date; (y) keep the
Exchange Offer Registration open for at least 20 business days (or longer if
required by applicable law) after the date that notice of the Exchange Offer
Registration is mailed to Holders of Registrable Securities (the "Exchange
Effectiveness Period"); and (z) consummate the Exchange Offer Registration on or
prior to the Exchange Offer Consummation Date. If after such Exchange
Registration Statement is initially declared effective by the SEC, the Exchange
Offer Registration or the issuance of the Exchange Notes thereunder is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Exchange Registration
Statement shall be deemed not to have become effective for purposes of this
Agreement. Each Holder of Registrable Securities who participates in the
Exchange Offer Registration will be required to represent in writing that any
Exchange Notes received by it will be acquired in the ordinary course of its
business, that at the time of the consummation of the Exchange Offer
Registration such Holder of Registrable Securities will have no arrangement or
understanding with any Person to participate in the distribution of the Exchange
Notes, and that such Holder of Registrable Securities is not an affiliate of any
of the Issuers within the meaning of the Securities Act.
In connection with the Exchange Offer Registration, the Issuers shall:
<PAGE>
-6-
(1) mail to each Holder a copy of the Prospectus forming part of the
Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer
Registration with an address in the Borough of Manhattan, The City of New York;
(3) permit Holders of Notes to withdraw tendered Notes at any time prior to
the close of business, New York time, on the last Business Day on which the
Exchange Offer Registration shall remain open; and
(4) otherwise comply in all material respects with all applicable laws.
As soon as practicable after the close of the Exchange Offer Registration,
the Issuers shall:
(1) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Exchange Offer Registration;
(2) deliver to the Trustee for cancellation all Notes so accepted for
exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each holder
of Notes, Exchange Notes, equal in principal amount to the Notes of such holder
so accepted for exchange.
The Exchange Notes may be issued under (i) the Indenture or (ii) an
indenture identical in all material respects to the Indenture, which in either
event will provide that the holders of the Notes and the Exchange Notes will
vote and consent together on all matters as one class and that neither the
Exchange Notes nor the Notes will have the right to vote or consent as a
separate class on any matter.
3. Shelf Registration
(a) Shelf Registration. If (i) because of any change in law or applicable
interpretations thereof by the Commission's staff, the Company is not permitted
to effect the Exchange Offer Registration as contemplated by Section 2 hereof,
or (ii) any Registrable Securities validly tendered pursuant to the Exchange
Offer Registration are not exchanged for Exchange Notes by the Exchange Offer
Consummation Date, or (iii) any applicable law or interpretations do not permit
any Holder to participate in the Exchange Offer Registration, or (iv) any Holder
that participates in the Exchange Offer Registration does not receive freely
transferable Exchange Notes in exchange for tendered Registrable Securities, the
Issuers agree to file with the SEC, a Registration Statement for an offering to
be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Securities (the "Shelf Registration"). The Shelf Registration shall
be on Form S-1 or another appropriate form permitting registration of such
Registrable Securities for resale by Holders in the manner or manners designated
by them (including, without limitation, one or more underwritten offerings). The
Issuers shall not permit any securities other than the Registrable Securities to
be included in the Shelf
<PAGE>
-7-
Registration or any Subsequent Shelf Registration. The Issuers shall use their
reasonable best efforts to cause the Shelf Registration to be declared effective
under the Securities Act on or prior to the Shelf Effectiveness Date and to keep
such Shelf Registration continuously effective under the Securities Act until
the date which is two years from the Conversion Date (subject to extension
pursuant to the last paragraph of Section 6 and pursuant to Section 10) (the
"Shelf Termination Date"), or such shorter period ending when all Registrable
Securities covered by such Shelf Registration have been sold in the manner set
forth and as contemplated in such Shelf Registration.
(b) Subsequent Shelf Registrations. If a Shelf Registration or any
Subsequent Shelf Registration ceases to be effective for any reason at any time
prior to the Shelf Termination Date (other than because of the sale of all
Registrable Securities covered by such Shelf Registration in the manner set
forth and as contemplated in such Shelf Registration) the Issuers shall use
their reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 45 days of
such cessation of effectiveness amend such Shelf Registration in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration Statement
pursuant to Rule 415 covering all of the Registrable Securities which were
covered by such Shelf Registration that have not been sold in the manner set
forth and as contemplated in such Shelf Registration (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Issuers shall
use their reasonable best efforts to cause such Subsequent Shelf Registration to
be declared effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective until the Shelf Termination Date.
As used herein the term "Shelf Registration" means the Shelf Registrations and
any Subsequent Shelf Registrations.
(c) Supplements and Amendments. The Issuers shall promptly supplement and
amend a Shelf Registration if required by the rules, regulations or instructions
applicable to the registration form used for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by the Holders of a
majority in aggregate principal amount of the Registrable Securities covered by
such Registration Statement or by any underwriter of such Registrable
Securities.
4. Liquidated Damages
(a) The Issuers agree that the Holders of Registrable Securities will
suffer damages if the Issuers fail to fulfill their obligations to Holders of
Registrable Securities under Section 2 and/or 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, if
(i) the Exchange Registration Statement is not filed with the Commission on or
prior to the Exchange Filing Date or the Shelf Registration is not filed on or
prior to Shelf Filing Date, (ii) the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, is not declared effective
by the Exchange Effectiveness Date or the Shelf Effectiveness Date, as the case
may be, (iii) the Exchange Offer Registration is not consummated on or prior to
the Exchange Offer Consummation Date (other than in the event the Company files
a Shelf Registration Statement), or (iv) the Shelf Registration Statement is
filed and declared effective by the Shelf Effectiveness Date but shall
thereafter cease to be effective (at any time that the Company is obligated to
maintain the effectiveness thereof) without being succeeded within 45 days by an
additional Registration Statement filed and declared effective (each such event
referred to in clauses (i) through
<PAGE>
-8-
(iv), a "Registration Default"), the Company will be obligated to pay liquidated
damages to each Holder of Registrable Securities affected by such Registration
Default, during the period of one or more such Registration Defaults, at a rate
of $.192 per full or partial week per $1,000 amount of Notes until (i) the
applicable Registration Statement is filed, (ii) the Exchange Registration
Statement is declared effective and the Exchange Offer is consummated, (iii) the
Shelf Registration Statement is declared effective or (iv) the Shelf
Registration Statement again becomes effective, as the cause may be. Following
the cure of all Registration Defaults, the accrual of liquidated damages will
cease.
(b) Notwithstanding the foregoing provisions of Section 3(b), the Company
may issue a notice that the Shelf Registration Statement is unusable pending the
announcement of a material corporate transaction or development and may issue
any notice suspending use of the Shelf Registration Statement required under
applicable securities laws to be issued and, in the event that the aggregate
number of days in any consecutive twelve-month period for which all such notices
are issued and effective does not exceed 30 days in the aggregate, then
liquidated damages shall cease to accrue during such period in which such
notices are issued and effective.
(c) The Issuers shall notify the Trustee within one Business Day after each
and every date on which an event occurs in respect of which Liquidated Damages
is required to be paid (an "Event Date"). Any amounts of Liquidated Damages due
pursuant to Section 4(a) will be payable in cash semi-annually on each interest
payment date for the Registrable Securities (to the Holders of record entitled
to such interest payment), commencing with the first such date occurring after
any such Liquidated Damages commence to accrue. The amount of Liquidated Damages
will be determined on the basis of a 360-day year comprised of twelve 30-day
months.
5. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount of the Registrable
Securities included in such offering and reasonably acceptable to the Issuers.
6. Registration Procedures
In connection with the filing of any Registration Statement, the Issuers
shall as expeditiously as possible:
(a) Before filing any Registration Statement or Prospectus or any
amendments or supplements thereto (not including documents that would be
incorporated or deemed to be incorporated therein by reference), the Issuers
shall afford the Holders covered by such Registration Statement, their counsel
and the managing underwriters, if any, an opportunity to review, promptly,
copies of all such documents proposed to be filed; provided, however, that the
Issuers shall not be required to afford such persons an opportunity to review a
copy of (i) any such document that has not been materially changed from a copy
of such document that such person was previously afforded an opportunity to
review and (ii) any amendments or supplements to a Registration Statement or
Pro-
<PAGE>
-9-
spectus which are made solely as a result of any filing by the Issuers of
reports required to be filed pursuant to the Exchange Act.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the time periods prescribed
hereby; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to it with respect to
the disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Notify the selling Holders of Registrable Securities, their counsel and
the managing underwriters, if any, promptly (but in any event within two
business days after becoming aware thereof), and confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective (including in such
notice a written statement that any holder may, upon request, obtain, without
charge, one conformed copy of such Registration Statement or post-effective
amendment including financial statements and schedules but excluding documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of such
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) of the receipt by the Issuers of any notification with respect to the
suspension of the qualification or exemption from qualification of such
Registration Statement or any of the Registrable Securities for offer or sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose, (iv) of the happening of any event, the existence of any condition or
any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of such Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and (v) of the Issuers' reasonable determination that a post-effective amendment
to such Registration Statement would be appropriate.
(d) Use its best efforts to prevent the issuance of any order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of a Prospectus or suspending the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, and, if any such order is issued, to obtain the withdrawal of any
such order at the earliest possible moment.
(e) If requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Registrable Securities being sold
in connection with an un-
<PAGE>
-10-
derwritten offering, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters, if any,
or such Holders reasonably request to be included therein, (ii) make all
required filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Issuers received notification of the matters to
be incorporated in such prospectus supplement or post-effective amendment, and
(iii) supplement or make amendments to such Registration Statement.
(f) Furnish to each selling Holder of Registrable Securities who so
requests and to counsel and each managing underwriter, if any, without charge,
one conformed copy of the Registration Statement and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) Deliver to each selling Holder of Registrable Securities, their counsel
and the underwriters, if any, without charge, as many copies of each Prospectus
(including each form of preliminary prospectus) and each amendment or supplement
thereto and any documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this Section 6, each
Issuer hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders of Registrable Securities and
the underwriters or agents, if any, in connection with the offering and sale of
the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto until such time as the Issuers have notified the Holders to
discontinue the use of such Prospectus.
(h) Prior to any public offering of Registrable Securities, to register or
qualify, and to cooperate with the selling Holders of Registrable Securities,
the underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any selling Holder, or the managing underwriters reasonably request in writing;
provided that where Registrable Securities are offered other than through an
underwritten offering, the Issuers agree to cause their counsel to perform Blue
Sky investigations and file registrations and qualifications required to be
filed pursuant to this Section 6(h); keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other
acts or things reasonably necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided, however, that no Issuer shall be required to
(A) qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or (C) become
subject to taxation in any such jurisdiction where it is not then so subject.
(i) Cooperate with the selling Holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company ("DTC"); and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing under-
<PAGE>
-11-
writers, if any, or selling holders of Registrable Securities may reasonably
request at least two business days prior to any sale of Registrable Securities.
(j) Upon the occurrence of any event contemplated by paragraph 6(c)(v) or
6(c)(vi), as promptly as practicable prepare and file with the SEC, at the joint
and several expense of each of the Issuers, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(k) Use its best efforts to cause the Registrable Securities covered by a
Shelf Registration Statement to be rated with the appropriate rating agencies,
if so requested by the Holders of a majority in aggregate principal amount of
Registrable Securities covered by such Registration Statement or the managing
underwriters, if any.
(l) Prior to the effective date of any Registration Statement relating to
the Registrable Securities, (i) provide the Trustee with printed certificates
for the Registrable Securities covered by such Registration Statement in a form
eligible for deposit with DTC and (ii) provide a CUSIP number(s) for the
Registrable Securities.
(m) Cooperate with each selling Holder of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
(n) In the event a Shelf Registration is filed, and if requested by Holders
of a majority in aggregate principal amount of Registrable Securities covered by
such Registration Statement, enter into an underwriting agreement in form, scope
and substance as is customary in underwritten offerings and take all such other
actions as are reasonably requested by the managing underwriters in order to
expedite or facilitate the registration or the disposition of such Registrable
Securities, and in such connection, (i) make such representations and warranties
to the underwriters, with respect to the business of the Issuers and their
respective subsidiaries, and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings of securities similar to the
Registrable Security, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Issuers and updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriters, addressed to the
underwriters covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
underwriters; (iii) obtain "cold comfort" letters and updates thereof in form
and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the Issuers
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Issuers or business acquired by the
<PAGE>
-12-
Issuers for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each of the
underwriters such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings of securities similar to the Registrable Securities; and
(iv) if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set forth
in Section 8 (or such other less favorable provisions and procedures acceptable
to Holders of a majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement and the managing underwriters or agents)
with respect to all parties to be indemnified pursuant to said Section. The
above shall be done at each closing under such underwriting agreement, or as and
to the extent required thereunder.
(o) Make available for inspection by a representative of the selling
Holders of Registrable Securities, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney or accountant or
other agent retained by any such representative of such selling Holders or
underwriter (collectively, the "Inspectors"), at the offices where normally
kept, during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Issuers and their
subsidiaries, and cause the officers, directors and employees of the Issuers and
their subsidiaries to supply all information, in each case reasonably requested
by any such Inspector in connection with such Registration Statement; provided,
however, that any information that is designated in writing by the Issuers, in
good faith, as confidential at the time of delivery of such information, shall
be kept confidential by such Inspector unless (i) disclosure of such information
is required by court or administrative order, (ii) other than under the
circumstances contemplated by, and for the time period permitted by, Section 10,
disclosure of such information, in the opinion of counsel to such Inspector, is
necessary to avoid or correct a misstatement or omission of a material fact in
the Registration Statement, Prospectus or any supplement or post-effective
amendment thereto or disclosure is otherwise required by law, or (iii) such
information becomes generally available to the public other than as a result of
a disclosure or failure to safeguard by such Inspector. Each selling Holder of
such Registrable Securities will be required to agree that information obtained
by it as a result of such inspections shall be deemed confidential and shall not
be used by it as the basis for any market transactions in the securities of the
Issuers unless and until such is made generally available to the public. Each
selling Holder of such Registrable Securities will be required to further agree
that it will, upon learning that disclosure of any such information is sought in
a court or administrative tribunal of competent jurisdiction, give notice to the
Issuers and allow the Issuers to undertake appropriate action to prevent
disclosure of the information deemed confidential at its expense and will use
reasonable efforts to cooperate with the Issuers in attempting to prevent such
disclosure.
(p) Provide an indenture trustee for the Registrable Securities, and cause
the Indenture to be qualified under the TIA not later than the effective date of
the first Registration Statement relating to the Registrable Securities; and in
connection therewith, cooperate with the trustee under any such indenture and
the selling holders of the Registrable Securities, to effect such changes to
such indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its best efforts to
cause such trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the SEC to
enable such indenture to be so qualified in a timely manner.
<PAGE>
-13-
(q) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earnings statements satisfying the
provisions of Section 10(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(r) If an Exchange Offer Registration is to be consummated, upon delivery
of the Registrable Securities by such selling Holders to the Issuers (or to such
other Person as directed by the Issuers) in exchange for the Exchange Notes, the
Issuers shall mark, or caused to be marked, on such Registrable Securities that
such Registrable Securities are being cancelled in exchange for the Exchange
Notes; in no event shall such Registrable Securities be marked as paid or
otherwise satisfied.
(s) Use its best efforts to take all other steps reasonably necessary to
effect the registration of the Registrable Securities covered by a Registration
Statement contemplated hereby.
The Issuers may require each selling Holder of Registrable Securities as to
which any registration is being effected to furnish to the Issuers such
information regarding such seller and the distribution of such Registrable
Securities as the Issuers may, from time to time, reasonably request in writing
and to otherwise cooperate in the preparation of the Registration Statement. The
Issuers may exclude from such registration the Registrable Securities of any
seller who unreasonably fails to furnish such information within a reasonable
time after receiving such request. If the identity of a seller of Registrable
Securities is to be disclosed in a registration statement, such selling holder
shall be permitted to include all information regarding such seller as it shall
reasonably request. At any time during the effectiveness of any Registration
Statement with respect to the Registrable Securities, any selling Holder becomes
aware of any change materially affecting the accuracy of the information
contained in the Registration Statement or related Prospectus, such Holder will
notify the Issuers of such change.
Each Holder, upon receipt of any notice from the Issuers of the happening
of any event of the kind described in Section 6(c), will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement or Prospectus, until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(c), or until it is
advised in writing (the "Advice") by the Issuers that the use of the applicable
Prospectus may be resumed. In the event the Issuers shall give any such notice,
the Shelf Termination Date and the Exchange Effectiveness Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement shall have
received the copies of the supplemented or amended Prospectus contemplated by
Section 6(c) or the Advice.
<PAGE>
-14-
7. Registration Expenses
(a) All fees and expenses, other than underwriting discounts and
commissions and transfer taxes, incident to the performance of or compliance
with this Agreement by the Issuers shall be borne by the Issuers, jointly and
severally, whether or not a Registration Statement is filed or becomes
effective, including, without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings required to be
made with the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel in connection
with Blue Sky qualifications of the Registrable Securities or Exchange Notes and
determination of the eligibility of the Registrable Securities or Exchange Notes
for investment under the laws of such jurisdictions (x) where the Holders of
Registrable Securities are located, in the case of the Exchange Notes, or (y) as
provided in Section 6(h), in the case of Registrable Securities)), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities or Exchange Notes in a form eligible for deposit with DTC
and of printing prospectuses if the printing of prospectuses is requested by the
managing underwriters, if any, or, in respect of Registrable Securities, by the
Holders of a majority in aggregate principal amount of the Registrable
Securities included in the Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of one counsel for the
Issuers and reasonable fees and disbursements of counsel for the sellers of
Registrable Securities (subject to the provisions of Section 7(b)), (v) fees and
disbursements of all independent certified public accountants referred to in
Section 6(o)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) the fees and expenses of any "qualified independent underwriter" or other
independent appraiser participating in an offering pursuant to Rule 2720 of the
Conduct Rules of the NASD, (vii) rating agency fees, (viii) fees and expenses of
all other Persons retained by the Issuers, (ix) internal expenses of the Issuers
(including, without limitation, all salaries and expenses of officers and
employees of the Issuers performing legal or accounting duties) and, (xi) the
expense of any annual audit (collectively, "Registration Expenses").
(b) In connection with any Registration Statement hereunder or any
amendment thereto, the Issuers shall reimburse the Holders of the Registrable
Securities being registered in such registration for the reasonable fees and
disbursements of not more than one counsel chosen by the Holders of a majority
in aggregate principal amount of the Registrable Securities to be included in
such Registration Statement and other reasonable out-of-pocket expenses of the
Holders of Registrable Securities incurred in connection with the registration
of the Registrable Securities.
8. Indemnification
(a) The Issuers, jointly and severally, agree to indemnify and hold
harmless each Holder of Registrable Securities covered by a Registration
Statement, the officers and directors of each such person, and each person, if
any, who controls any such person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Participant"), from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the reasonable legal fees and other expenses actually
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue statement or
alleged untrue
<PAGE>
-15-
statement of a material fact contained in such Registration Statement or any
related Prospectus (as amended or supplemented if the Issuers shall have
furnished any amendments or supplements thereto) or any related preliminary
prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Participant furnished to the Issuers in writing
by such Participant expressly for use therein; provided that the Issuers will
not be liable to any Participant with respect to any such untrue statement or
omission in any preliminary prospectus that is corrected in the related
Prospectus (or any amendment or supplement thereto) if the person asserting any
such loss, claim, damage or liability purchased Registrable Securities or
Exchange Notes which are the subject thereof from such Participant in reliance
upon such preliminary prospectus but was not sent or given a copy of the related
Prospectus (as amended or supplemented) at or prior to the written confirmation
of the sale of such Registrable Securities or Exchange Notes, as the case may
be, to such person, unless such failure to deliver such Prospectus (as amended
or supplemented) was a result of noncompliance by the Issuers with Section 6 of
this Agreement.
(b) Each Participant will be required to agree, severally and not jointly,
to indemnify and hold harmless the Issuers, their respective directors and
officers and each person who controls the Issuers within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Issuers to each Participant, but only (i) with
reference to information relating to such Participant furnished to the Issuers
in writing by or on behalf of such Participant expressly for use in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary prospectus or (ii) with respect to any untrue statement or
representation made by such Participant in writing to the Issuers. The liability
of any Participant under this paragraph shall in no event exceed the proceeds
received by such Participant from sales of Registrable Securities or Exchange
Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise (unless and only to the extent that such failure
directly results in an actual loss or compromise of any material rights or
defenses by the Indemnifying Person). In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in
<PAGE>
-16-
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Person
shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed at least quarterly. Any such separate
firm for the Participants and such control persons of Participants shall be
designated in writing by Participants who sold a majority in interest of
Registrable Securities sold by all such Participants in the related registration
and any such separate firm for the Issuers, their directors, officers and such
control persons of the Issuers shall be designated in writing by the Issuers.
The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Person
shall, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in the first and second paragraphs
of this Section 8 is unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Person or Persons on the one hand and the Indemnified
Person or Persons on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof). The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers on the one hand or by the
Participants or such other Indemnified Person, as the case may be, on the other,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission and any other equitable
considerations appropriate under the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, in no event shall a
Participant be required to contribute any amount in excess of the
<PAGE>
-17-
amount by which proceeds received by such Participant from sales of Registrable
Securities or Exchange Notes, as the case may be, exceeds the amount of any
damages that such Participant has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
10(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section 8
will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
9. Rule 144 and 144A
The Company covenants that it will file the reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder in a timely manner and, if at any time the Company
is not required to file such reports, the Company will, upon the request of any
Holder of Registrable Securities, make publicly available annual reports and
such information, documents and other reports of the type specified in Sections
13 and 15(d) of the Exchange Act. The Company further covenant that, for so long
as any Registrable Securities remain outstanding, to make available to any
Holder or beneficial owner of Registrable Securities in connection with any sale
thereof and any prospective purchaser of such Registrable Securities from such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Registrable Securities pursuant to
Rule 144A.
10. Miscellaneous
(a) No Inconsistent Agreements. No Issuer has entered, as of the date
hereof, and no Issuer shall enter, after the date of this Agreement, into any
agreement with respect to any of its securities that is inconsistent with the
rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. No Issuer has entered and no
Issuer will enter into any agreement with respect to any of its securities which
will grant to any person piggy-back rights with respect to a Registration
Statement.
(b) Adjustments Affecting Registrable Securities. None of the Issuers
shall, directly or indirectly, take any action with respect to the Registrable
Securities as a class that would adversely affect the ability of the Holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Issuers have obtained the written consent of Holders of at least a
majority of the then outstanding aggregate principal amount of Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not di-
<PAGE>
-18-
rectly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Securities may be given by Holders of at least a majority
in aggregate principal amount of the Registrable Securities being sold by such
Holders pursuant to such Registration Statement; provided that the provisions of
this sentence may not be amended, modified or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications (including without
limitation any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
(i) if to a Holder of the Registrable Securities, at the most current
address given by such Holder to the Company in accordance with the
provisions of this Section 12(d), with a copy in like manner to the Holders
as follows:
The Chase Manhattan Bank
DLJ Bridge Finance, Inc.
BankBoston, N.A.
c/o The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Facsimile No.: (212) 270-[ ]
Attention: [ ]
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No.: (212) 269-5420
Attention: Jonathan Schaffzin, Esq.
(ii) if to the Issuers as follows:
Republic Engineered Steels, Inc.
410 Oberlin Road, S.W.
Massillon, Ohio 44647
Facsimile No.: (330) 837-6204
Attention: [ ]
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York [ ]
Facsimile No.: (212) 455-2502
<PAGE>
-19-
Attention: [ ]
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the person giving the same to the trustee under the
Indenture at the address specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without limitation and without the need for an express assignment,
subsequent Holders of Registrable Securities.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(j) Joint and Several Obligations. Each of the obligations of the Issuers
under this Agreement shall be joint and several obligations of each of them.
(k) Securities Held by the Issuers or Their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Issuers or
their affiliates (as such term is defined in Rule 405 under the
<PAGE>
-20-
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
<PAGE>
-21-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
REPUBLIC ENGINEERED STEELS, INC.
By: __________________________________
Name:
Title:
THE GUARANTORS:
[ ]
By: __________________________________
Name:
Title:
[ ]
HOLDERS of NOTES:
THE CHASE MANHATTAN BANK,
on behalf of the Holders
of Notes
By: __________________________________
Name:
Title:
DLJ BRIDGE FINANCE, INC.
on behalf of the Holders
of Notes
By: __________________________________
Name:
Title:
<PAGE>
-22-
BANKBOSTON, N.A.,
on behalf of the Holders
of Notes
By: __________________________________
Name:
Title:
<PAGE>
ASSIGNMENT AGREEMENT
November 6, 1998
CHASE SECURITIES INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BANKBOSTON ROBERTSON STEPHENS INC.
c/o Chase Securities Inc.
270 Park Avenue
New York, New York 10017
Gentlemen:
This will confirm the understanding and agreement among Chase
Securities Inc. ("CSI"), Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ") and BankBoston Robertson Stephens Inc. ("BankBoston") (collectively, the
"Purchasers") and Republic Engineered Steels, Inc., a Delaware corporation (the
"Company"), with respect to the agreement by the Purchasers to purchase, in
certain circumstances, such principal amount of 9 7/8% First Mortgage Notes Due
2001 (the "Mortgage Notes") of the Company as the Lenders may elect (an
"Election") under the terms of the Credit Agreement referred to below pursuant
to an assignment by the Company of its right to purchase Mortgage Notes in
connection with the Company's tender offer to purchase any and all of the
$200,000,000 principal amount of Mortgage Notes for cash at a price of 101% of
the principal amount thereof, together with accrued and unpaid interest thereon,
upon the terms and subject to the conditions set forth in the Notice of Change
of Control and Offer to Purchase dated October 6, 1998 (the "Offer to
Purchase"), as the same was amended and supplemented on October 29, 1998 and the
same may be hereafter amended, supplemented or modified from time to time in
accordance with the terms hereof (the "Tender Offer"). Capitalized terms used
herein but not defined herein shall have the meanings ascribed to such terms in
the Credit Agreement dated as of November 6, 1998 among the Company, the
Guarantors named therein, the Lenders named therein, The Chase Manhattan Bank,
DLJ Bridge Finance, Inc. and BankBoston, N.A., as Agents (the "Credit
Agreement").
The Company and the Purchasers each hereby agrees as follows:
<PAGE>
-2-
1. Purchase Under Assignment.
(a) Upon the basis of the representations, warranties and agreements of
the Company contained herein and in the Credit Agreement subject to all of the
terms and conditions of this Agreement and the Credit Agreement, each of the
Purchasers agrees, severally and not jointly, that, following the Election, it
shall purchase, and the Company shall assign to the Purchasers on such basis, up
to each Purchaser's Proportionate Share (as defined below) of such aggregate
principal amount of Mortgage Notes as may be purchased, in light of the
Election, at a purchase price of $1,010 per $1,000 principal amount of Mortgage
Notes, plus all accrued interest on the Mortgage Notes since June 15, 1998 to
the payment date under the Tender Offer (the "Purchase Price") pursuant to the
Tender Offer; provided that the aggregate Purchase Price paid by a Purchaser
shall not exceed its Proportionate Share of the sum of (x) $202,000,000 and (y)
accrued and unpaid interest on the Mortgage Notes since June 15, 1998 to the
payment date under the Tender Offer. To the extent the Lenders make such
Election, the Company shall, prior to the acceptance for payment Mortgage Notes
validly tendered and not properly withdrawn pursuant to the Tender Offer, hereby
assign (the "Assignment") all or a portion (as specified by the Election) of its
right to purchase Mortgage Notes validly tendered and not properly withdrawn
pursuant to the Tender Offer on the Expiration Date to the Purchasers, and the
Purchasers shall make the required payment of the Purchase Price to the Paying
Agent (as defined in the Offer to Purchase), in accordance with the terms of
this Agreement and the Indenture. Mortgage Notes purchased hereunder by the
Purchasers are referred to herein as the "Purchased Notes." "Proportionate
Share" means, with respect to CSI, 60%; with respect to DLJ, 32%; and with
respect to BankBoston, 8%.
(b) Delivery of and payment for the Mortgage Notes to be purchased by a
Purchaser under Section 1(a) shall be made on the initial Borrowing Date (as
specified in the Credit Agreement) (the "Closing Date"). Delivery of such
Mortgage Notes shall be made to a Purchaser against payment by such Purchaser of
the purchase price therefor by wire transfer in immediately available funds
wired to the Paying Agent in accordance with the written instructions of the
Company delivered as soon as practicable prior to the Closing Date, which
written instructions shall specify the aggregate Purchase Price. Delivery of
such Mortgage Notes in definitive form shall be made at such location in New
York, New York as each Purchaser shall reasonably designate on the Closing Date
and shall be registered in such names and in such denominations as such
Purchaser
<PAGE>
-3-
may request on or in advance of the Closing Date subject to the terms of the
Existing Notes Indenture governing such Mortgage Notes (referred to herein as
the "Indenture"). The Company agrees to use its reasonable best efforts to have
such Mortgage Notes available for inspection and checking by each Purchaser in
New York, New York, not later than 1:00 P.M. on the Business Day prior to the
Closing Date. The Mortgage Notes shall have attached thereto the restrictive
legend required under the terms of the Indenture.
(c) The obligations of each Purchaser under this Agreement shall be
subject to the accuracy of the representations and warranties of the Company
contained herein as of the date hereof and as of the Closing Date as if made on
and as of such date, to the accuracy of the statements of the Company's officers
made pursuant to the provisions hereof, to the performance by the Company of its
covenants and agreements hereunder and to the conditions set forth in Section
3.1A of the Credit Agreement applicable to the Initial Loans to be made on the
Closing Date.
(d) Each Purchaser represents and warrants that this Agreement has been
duly authorized, executed and delivered by such Purchaser and is enforceable
against such Purchaser in accordance with its terms, except as enforceability
hereof may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
2. Fees. [INTENTIONALLY OMITTED]
3. Certain Payments.
(a) By the Purchasers. [INTENTIONALLY OMITTED]
(b) By the Company. (i) [INTENTIONALLY OMITTED]
<PAGE>
-4-
(ii) In the event that the Purchased Notes are redeemed, defeased,
purchased, accelerated or otherwise retired (in any such case, "Retired") by the
Company in a manner such that the gross proceeds per $1,000 principal amount of
Purchased Notes (exclusive of accrued interest on such Purchased Notes) (the
"Per Note Proceeds") is less than the Purchase Price (exclusive of the amount of
accrued interest included therein), the Company agrees to promptly pay to each
Purchaser in cash at such time, by wire transfer of immediately available funds,
an amount (the "Premium Make-Whole Payment") equal to the product of (A) the
aggregate principal amount of Purchased Notes acquired by such Purchaser on the
Closing Date and so Retired, whether or not then owned by such Purchaser,
divided by $1,000 and (B) (1) if the Per Note Proceeds are greater than $1,000,
the difference between the Purchase Price (exclusive of the amount of accrued
interest included therein) and the Per Note Proceeds or (2) if the Per Note
Proceeds are $1,000 or less, $10.00.
4. Nature of Obligations. All amounts owing by the Company under
Section 3(b) and under the Purchased Notes and the Indenture are cumulative. The
Company's obligations hereunder are intended to be the "Obligations" referred to
in the Credit Agreement and, as such, shall be secured by the Collateral and
guaranteed by the Guarantors. In the event of an acceleration of the Mortgage
Notes, all amounts owing under Section 3(b)(i) shall continue to accrue and be
payable and shall be of the character of interest and any amounts owing under
Section 3(b)(ii) shall be deemed to be ipso facto due and payable, without the
necessity of acceleration, demand or presentment.
5. Put Right.
(a) Subject to all of the terms and conditions of this Section 5, the
Company hereby grants to the Purchasers the right and option (but not the
obligation) (the "Put Right"), at any time following an Event of Default and
(only to the extent there are any Loans outstanding) an acceleration of the
Loans, to cause the Company to purchase all or a portion of the Purchased Notes
held by the Purchasers at a purchase price per $1,000 principal amount of
Purchased Notes equal to the sum of (x) $1,010 and (y) the amount of all accrued
and unpaid interest on the Purchased Notes; provided that if the Company does
not pay the purchase price for the Purchased Notes subject to such Put Notice
by the fifth business day following
<PAGE>
-5-
delivery of such Put Notice, then the Purchaser will be free to sell such
Purchased Notes. The Put Right may be exercised only by delivery of a written
notice to the Company (a "Put Notice") upon any acceleration under the Credit
Agreement or, if no Loans are outstanding under the Credit Agreement, upon the
demand of Purchasers holding Purchased Notes representing 25% of the aggregate
principal amount of Purchased Notes.
(b) Immediately upon any exercise of the Put Right, (i) the Put Price
shall be immediately due and payable and the Company shall be required to
deliver payment to the Purchasers of the purchase price for the Purchased Notes
in immediately available funds, by wire transfer to an account designated in
writing by the Purchasers and (ii) the Purchasers shall sell, transfer, and
assign the Purchased Notes being purchased by the Company free and clear of any
adverse claims or encumbrances arising through it, duly endorsed or together
with a standard bond power duly endorsed in blank (or otherwise through the
facilities of a Book-Entry Transfer Facility).
6. Exchange Right. [INTENTIONALLY OMITTED]
7. Legended Securities; Rule 144 and Rule 144A. The Purchased Notes
shall bear the legend relating to restrictions under the Securities Act of 1933
(the "Securities Act") required by the supplemental indenture dated November 4,
1998 to the Indenture. The Company shall use its reasonable best efforts to file
the reports required to be filed by it under the Indenture under the Securities
Exchange Act of 1934 (the "Exchange Act") in a timely manner and, if at any time
the Company is not required to file such reports, it will, upon the written
request of any holder of Purchased Notes, make publicly
<PAGE>
-6-
available other information so long as necessary to permit sales of such
holder's securities pursuant to Rules 144 and 144A. The Company covenants that
it will take such further action as any holder of Purchased Notes may reasonably
request, all to the extent required from time to time to enable such holder to
sell Purchased Notes without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including, without
limitation, the requirements of Rule 144A(d)(4)). Upon the written request of
any holder of Purchased Notes, the Company shall deliver to such holder a
written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities pursuant to the Securities
Act or the Exchange Act.
8. Representations and Warranties of the Company. All of the
representations and warranties set forth in the Credit Agreement as of the
Closing Date are incorporated herein by reference for the benefit of the
Purchasers. The Company further represents and warrants to each of the
Purchasers that as of the date hereof and at the Closing Date:
(a) The Company has the corporate power and authority to take, and has
taken, all necessary corporate action to authorize (i) the Tender Offer
(including the financing therefor described in the Offering Materials (as
defined below)), (ii) the purchase by the Company of Mortgage Notes
pursuant to the Tender Offer and (iii) the execution, delivery and
performance of this Agreement, and this Agreement has been duly executed
and delivered on behalf of the Company and is a legal, valid and binding
obligation of the Company, enforceable against it in accordance with its
terms, except to the extent that such enforceability may be affected by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and by general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing and except as the enforceability of indemnification
and contribution provisions may be limited by public policy considerations.
(b) In connection with the Tender Offer and the Alternate Tender Offer,
the Company has complied, and will continue to comply, in all material
respects with the applicable sections of the Exchange Act. The Offering
Materials do not contain and will not contain any untrue in-
<PAGE>
-7-
formation or untrue statement of a material fact, and do not omit and will
not omit to state any information or a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading.
(c) The Tender Offer (including any financing therefor as described in
the Offering Materials), the purchase by the Company of Notes pursuant to
the Tender Offer, and the execution, delivery and performance of this
Agreement by the Company comply and will continue to comply in all material
respects with all applicable requirements of Federal, state and local law,
including, without limitation, any applicable regulations of the Commission
and Other Agencies, and all applicable judgments, orders or decrees; and no
consent, authorization, approval, order, exemption, registration,
qualification or other action of, or filing with or notice to ("Consents"),
the Commission or any Other Agency is required in connection with the
execution, delivery and performance of this Agreement by the Company, the
making or consummation by the Company of the Tender Offer or the
consummation of the other transactions contemplated by this Agreement
assuming compliance by the Purchasers with the terms thereof and except for
such Consents as may be required under state securities or "blue sky" laws
and except for such Consents as may be required to perform any registration
requirements under the Securities Act.
(d) The Tender Offer (including any financing therefor as described in
the Offering Materials), the purchase of Mortgage Notes by the Company
pursuant to the Tender Offer, and the execution, delivery and performance
of this Agreement by the Company do not and will not conflict with or
result in a breach of any of the terms or provisions of or constitute a
default (with or without due notice and or lapse of time) under, (i) the
certificate of incorporation or by-laws (or similar organizational
documents) of the Company or any of its subsidiaries, (ii) any loan or
credit agreement, indenture, mortgage, note or other loan or credit
agreement, indenture, mortgage, note or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which any of
them or any of their respective properties or assets is or may be bound
except, in each case, for such conflicts, breaches and defaults as would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
<PAGE>
-8-
(e) The Company will make, as required by applicable law or regulation,
any and all necessary amendments or supplements to the Offering Materials,
and the Company will file, as required by applicable law or regulation,
any and all necessary amendments or supplements to any documents filed
with the Commission or other Tribunals relating to the Tender Offer, and
will promptly furnish to each of you as many true and complete copies as
each of you may request of each such amendment and supplement upon the
filing thereof.
(f) No stop order, restraining order or denial of an application for
approval has been issued and no proceedings, litigation or investigation
have been initiated or, to the Company's knowledge, threatened before the
Commission or any other Tribunals with respect to the making or
consummation of the Tender Offer (including the obtaining or use of funds
to purchase Mortgage Notes) or the execution, delivery and performance of
this Agreement or the consummation of the other transactions contemplated
by this Agreement or with respect to the ownership of Notes by the Company
or any of its subsidiaries or affiliates.
(g) No form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) was used by the
Company, or any of its representatives in connection with the assignment of
Mortgage Notes pursuant to this Agreement, including, but not limited to,
articles, notices or other communication published in any newspaper,
magazine or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(h) The Offering Memorandum, as supplemented or amended at any time (as
defined in Section 9(e)), as of its date, will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
<PAGE>
-9-
9. Certain Covenants of the Company. The Company covenants with each of
the Purchasers to comply with all covenants contained in the Indenture and the
Credit Agreement and, in addition, as follows:
(a) If, during the Tender Offer and for such period of time thereafter
as Offering Materials are either (i) being used or (ii) required by law to
be delivered in connection therewith, any event occurs as a result of which
it shall be necessary to amend or supplement any Offering Materials in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading in any material respect, the Company
shall, promptly upon becoming aware of any such event, advise each
Purchaser of such event and, as promptly as practicable under the
circumstances, prepare and furnish copies to each Purchaser of such
amendments or supplements to any such Offering Materials, so that the
statements in such Offering Materials, as so amended or supplemented, will
not, in light of the circumstances under which they were made, be
misleading in any material respect. As used herein, "Offering Materials"
shall mean the Offer to Purchase, together with all attachments thereto,
and all such other related offering materials, as such materials may be
amended, modified or supplemented from time to time.
(b) The Company shall comply in all material respects with the
applicable provisions of the Securities Act and the rules and regulations
of the Commission promulgated thereunder, the Exchange Act and the rules
and regulations of the Commission promulgated thereunder, and the TIA, in
connection with the Offering Materials, the Tender Offer and the
transactions contemplated thereby, provided that this covenant shall not
obligate the Company to register any securities other than as contemplated
by Section 10 hereof.
(c) All Purchased Notes acquired by the Company after the Closing Date
(excluding any Mortgage Notes acquired by the Company pursuant to the
Tender Offer) shall be retired and shall not be available for reissuance or
resale, notwithstanding any provision in the Indenture to the contrary.
(d) The Company agrees not to amend or modify the terms of the Tender
Offer (including, without limitation, the tender offer consideration) in
any material respect
<PAGE>
-10-
without the consent of each Purchaser which consent will not be
unreasonably withheld or delayed.
(e) The Company agrees, at its sole expense, to use its reasonable best
efforts to prepare by November 15, 1998 an offering memorandum containing
such disclosure as may be required by the Securities Act and other
applicable laws and such other disclosure and is appropriate for such a
document, under the circumstances, to allow the Purchasers to sell the
Purchased Notes pursuant to Rule 144A of, or any other available exemption
under, the Securities Act relating to the Purchased Notes (the "Offering
Memorandum"). The Company agrees to update the Offering Memorandum as
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to advise the
Purchasers promptly of the happening of any event which makes any statement
of a material fact made in the Offering Memorandum untrue or which requires
the making of any additions to or changes in the Offering Memorandum (as
amended or supplemented from time to time) in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. In the event an Offering Memorandum is not available on or
after November 30, 1998, the Company shall be liable to the Purchasers for
Liquidated damages at a rate of $.20 per full or partial week per $1,000
principal amount of Purchased Notes held by the Purchasers up to a maximum
of $.20 per week or partial week per $1,000 principal amount due to the
harm suffered by the Purchasers, which cannot be ascertained with
precision. Such damages shall cease to accrue at such time as the Company
makes available an Offering Memorandum for use by the Purchasers. All of
the procedures set forth in subparagraphs (a), (c), (g), (h), (j), (m), (p)
and (q) of Section 11 hereof (other than to the extent applicable strictly
to a public offering) shall apply to this subparagraph (e) with only the
Purchasers being considered to be Holders for this purpose.
10. Demand Registration. (a) At any time after the date hereof, the
Administrative Agent, on behalf of the Purchasers originally party hereto, may
make a written request to the Company for a shelf registration under the
Securities Act with respect to all of the Purchased Notes held by such Purchaser
or any other Person. The Company agrees to file with the Commission no later
than the latest of (x) the Securities Demand Date or (y) 60 days after such
request (the "Shelf Filing Date"), a Registration Statement for an offering to
be made
<PAGE>
-11-
on a continuous basis pursuant to Rule 415 covering all of the Purchased
Notes (the "Shelf Registration"). The Shelf Registration shall be on Form S-1 or
another appropriate form permitting registration of such Purchased Notes for
resale by holders of Purchased Notes ("Holders") in the manner or manners
designated by them (including, without limitation, one or more underwritten
offerings). The Company shall not permit any securities other than the Purchased
Notes to be included in the Shelf Registration. The Company shall use its
reasonable best efforts to cause the Shelf Registration to be declared effective
under the Securities Act on or prior to the 150th day after such request (the
"Shelf Effectiveness Date") and to keep such Shelf Registration continuously
effective under the Securities Act until the date which is two years from the
Closing Date (the "Shelf Termination Date"), or such shorter period ending when
all Purchased Notes covered by such Shelf Registration have been sold in the
manner set forth and as contemplated in such Shelf Registration. If a Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time prior to the Shelf Termination Date (other than because of
the sale of all Purchased Notes covered by such Shelf Registration in the manner
set forth and as contemplated in such Shelf Registration) the Company shall use
its reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 45 days of
such cessation of effectiveness amend such Shelf Registration in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof. The Company shall promptly supplement and amend a Shelf
Registration if required by the rules, regulations or instructions applicable to
the registration form used for such Shelf Registration, if required by the
Securities Act, or if reasonably requested by the Holders of a majority in
aggregate principal amount of the Purchased Notes covered by such Registration
Statement or by any underwriter of such Purchased Notes.
(b) The Company agrees not to effect any sale or distribution of any
debt securities in customary high yield or mezzanine public or private markets
prior to the Conversion Date (except for the purpose of funding a Redemption and
refinancing the Loans), for so long as any Purchased Notes are outstanding,
without the consent of the Required Lenders.
(c) The Company agrees that the Holders will suffer damages if the
Company fail to fulfill their obligations to holders of Purchased Notes under
this Section 10 hereof and that it would not be feasible to ascertain the extent
of such
<PAGE>
-12-
damages with precision. Accordingly, the Company agrees to pay liquidated
damages to the Holders ("Liquidated Damages") under the circumstances and to the
extent set forth below:
(i) if the Shelf Registration has not been filed on or prior to the
Shelf Filing Date, then commencing on the day after such Shelf Filing Date,
Liquidated Damages shall be accrued on the Purchased Notes over and above the
accrued interest at a rate of $.20 per full or partial week per $1,000 principal
amount of Purchased Notes;
(ii) if such Shelf Registration has been filed but has not been
declared effective on or prior to such Shelf Effectiveness Date, then commencing
on the day after such Shelf Effectiveness Date Liquidated Damages shall be
accrued on the Purchased Notes over and above the accrued interest at a rate of
$.20 per full or partial week per $1,000 principal amount of Purchased Notes;
and
(iii) if a Shelf Registration has been declared effective and such
Shelf Registration ceases to be effective at any time prior to the Shelf
Termination Date, then Liquidated Damages shall be accrued on the Purchased
Notes affected thereby over and above the accrued interest at a rate of $.20 per
full or partial week per $1,000 principal amount of Purchased Notes;
provided, however, that in no event shall the amount of Liquidated Damages
exceed $.20 per full or partial week per $1,000 principal amount of Purchased
Notes; and provided, further, however, that (1) upon the filing of a Shelf
Registration (in the case of (i) above) or (2) upon the effectiveness of a Shelf
Registration (in the case of (ii) above), Liquidated Damages on the Purchased
Notes as a result of such clause, as the case may be, shall cease to accrue.
Notwithstanding the foregoing provisions of Section 10(c), the Company
may issue a notice that the Shelf Registration Statement is unusable pending the
announcement of a material corporate transaction or development and may issue
any notice suspending use of the Shelf Registration Statement required under
applicable securities laws to be issued and, in the event that the aggregate
number of days in any consecutive
<PAGE>
-13-
twelve-month period for which all such notices are issued and effective does not
exceed 30 days in the aggregate, then Liquidated Damages shall cease to accrue
during such period in which such notices are issued and effective.
11. Registration Procedures. In connection with the filing of any
registration statement for a Shelf Registration (a "Registration Statement"),
the Company shall as expeditiously as possible:
(a) Prepare and file with the Commission prior to the Shelf Filing
Date, a Registration Statement, and use every reasonable effort to cause
each such Registration Statement to become effective and remain effective
as provided herein; provided, however, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto (not
including documents that would be incorporated or deemed to be incorporated
therein by reference), the Company shall afford the Inspectors (as
defined), if any, an opportunity to review, promptly, copies of all such
documents proposed to be filed; provided, however, that the Company shall
not be required to afford such persons an opportunity to review a copy of
(i) any such document that has not been materially changed from a copy of
such document that such person was previously afforded an opportunity to
review and (ii) any amendments or supplements to a Registration Statement
or Prospectus which are made solely as a result of any filing by the
Company of reports required to be filed pursuant to the Exchange Act.
(b) Prepare and file with the Commission such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for
the time periods prescribed hereby; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of the Securities
Act, the Exchange Act and the rules and regulations of the Commission
promulgated thereunder applicable to it with respect to the disposition of
all securities covered by such Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) Notify the selling Holders, their counsel and the managing
underwriters, if any, promptly (but in any
<PAGE>
-14-
event within two business days after becoming aware thereof), and confirm
such notice in writing, (i) when a Prospectus or any Prospectus supplement
or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has
become effective (including in such notice a written statement that any
holder may, upon request, obtain, without charge, one conformed copy of
such Registration Statement or post-effective amendment including financial
statements and schedules but excluding documents incorporated or deemed to
be incorporated by reference and exhibits), (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of such
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) if at any time when a prospectus is required by the
Securities Act to be delivered in connection with sales of the Purchased
Notes covered by such Registration Statement the representations and
warranties of the Company contained in any agreement (including any
underwriting agreement) contemplated by subparagraph (o) below cease to be
true and correct, (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of such Registration Statement or any of the Purchased Notes
for offer or sale in any jurisdiction, or the initiation or threatening of
any proceeding for such purpose, (v) of the happening of any event, the
existence of any condition or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes
in such Registration Statement, Prospectus or documents so that, in the
case of such Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and (vi) of the Company's reasonable determination that a
post-effective amendment to such Registration Statement would be
appropriate.
<PAGE>
-15-
(d) Use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Purchased
Notes for sale in any jurisdiction, and, if any such order is issued, to
obtain the withdrawal of any such order at the earliest possible moment.
(e) If requested by the managing underwriters, if any, or the Holders
of a majority in aggregate principal amount of the Purchased Notes being
sold in connection with an underwritten offering, (i) promptly incorporate
in a prospectus supplement or post-effective amendment such information as
the managing underwriters, if any, or such Holders reasonably request to be
included therein, (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after
the Company received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment, and (iii) supplement or
make amendments to such Registration Statement.
(f) Furnish to each selling Holder who so requests and to counsel and
each managing underwriter, if any, without charge, one conformed copy of
the Registration Statement and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all
documents incorporated or deemed to be incorporated therein by reference
and all exhibits.
(g) Deliver to each selling Holder, their counsel and the underwriters,
if any, without charge, as many copies of each Prospectus (including each
form of preliminary prospectus) and each amendment or supplement thereto
and any documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this Section, the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling holders of Purchased Notes and
the underwriters or agents, if any, in connection with the offering and
sale of the Purchased Notes covered by such Prospectus and any amendment or
supplement thereto until such time as the Company have notified the holders
to discontinue the use of such Prospectus.
(h) Prior to any public offering of Purchased Notes, to register or
qualify, and to cooperate with the selling
<PAGE>
-16-
Holders, the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Purchased Notes for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the
United States as any selling Holder, or the managing underwriters
reasonably request in writing; provided that where Purchased Notes are
offered other than through an underwritten offering, the Company agree to
cause their counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this
subparagraph (h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Purchased Notes covered by the applicable Registration
Statement; provided, however, that the Company shall not be required to (A)
qualify generally to do business in any jurisdiction where it is not then
so qualified, (B) take any action that would subject it to general service
of process in any such jurisdiction where it is not then so subject or (C)
become subject to taxation in any such jurisdiction where it is not then so
subject.
(i) Cooperate with the selling Holders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Purchased Notes to be sold, which certificates shall not bear
any restrictive legends and shall be in a form eligible for deposit with
The Depository Trust Company ("DTC"); and enable such Purchased Notes to be
in such denominations and registered in such names as the managing
underwriters, if any, or selling Holders of Purchased Notes may reasonably
request at least two business days prior to any sale of Purchased Notes.
(j) Upon the occurrence of any event contemplated by subparagraph
(c)(v) or (vi), as promptly as practicable prepare and file with the
Commission, at the expense of the Company, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Purchased Notes being sold
thereunder, such Prospectus will not contain an untrue statement of a
<PAGE>
-17-
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(k) Cooperate with each selling Holder covered by any Registration
Statement and each underwriter, if any, participating in the disposition of
such Purchased Notes and their respective counsel in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(l) If requested by holders of a majority in aggregate principal amount
of Purchased Notes covered by such Registration Statement, enter into an
underwriting agreement in form, scope and substance as is customary in
underwritten offerings and take all such other actions as are reasonably
requested by the managing underwriters in order to expedite or facilitate
the registration or the disposition of such Purchased Notes, and in such
connection, (i) make such representations and warranties to the
underwriters, with respect to the business of the Company and its
subsidiaries, and the Registration Statement, Prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in
each case, in form, substance and scope as are customarily made by an
issuer to underwriters in underwritten offerings of securities similar to
the Registrable Security, and confirm the same if and when requested; (ii)
obtain opinions of counsel to the Company and updates thereof in form,
scope and substance reasonably satisfactory to the managing underwriters,
addressed to the underwriters covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as may
be reasonably requested by underwriters; (iii) obtain "cold comfort"
letters and updates thereof in form and substance reasonably satisfactory
to the managing underwriter or underwriters from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or business
acquired by the Company for which financial statements and financial data
are, or are required to be, included in the Registration Statement),
addressed to each of the underwriters such letters to be in customary form
and covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings of securities similar to
the Purchased Notes; and (iv) if an underwriting agreement is en-
<PAGE>
-18-
tered into, the same shall contain indemnification provisions and
procedures no less favorable generally than those set forth in Section 13
(or such other less favorable provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Purchased Notes
covered by such Registration Statement and the managing underwriters or
agents) with respect to all parties to be indemnified pursuant to said
Section. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.
(m) Make available for inspection by a representative of the selling
Holders, any underwriter participating in any such disposition of Purchased
Notes, if any, and any attorney or accountant or other agent retained by
any such representative of such selling Holders or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Company and their
subsidiaries, and cause the officers, directors and employees of the
Company and their subsidiaries to supply all information, in each case
reasonably requested by any such Inspector in connection with such
Registration Statement; provided, however, that any information that is
designated in writing by the Company, in good faith, as confidential at the
time of delivery of such information, shall be kept confidential by such
Inspector unless (i) disclosure of such information is required by court or
administrative order, (ii) disclosure of such information is otherwise
required by law, (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by
such Inspector. Each selling Holder will be required to agree that
information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such is made
generally available to the public. Each selling Holder will be required to
further agree that it will, upon learning that disclosure of any such
information is sought in a court or administrative tribunal of competent
jurisdiction, give notice to the Company and allow the Company to undertake
appropriate action to prevent disclosure of the information deemed
confidential at its expense and will use reasonable efforts to cooperate
with the Company in attempting to prevent such disclosure.
<PAGE>
-19-
(n) Comply with all applicable rules and regulations of the Commission
and make generally available to its securityholders earnings statements
satisfying the provisions of Section 10(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Purchased Notes are
sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.
(o) Use its reasonable best efforts to take all other steps reasonably
necessary to effect the registration of the Purchased Notes covered by a
Registration Statement contemplated hereby.
(p) The Company may require each selling Holder as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such Purchased Notes as the
Company may, from time to time, reasonably request in writing and to
otherwise cooperate in the preparation of the Registration Statement. The
Company may exclude from such registration the Purchased Notes of any
seller who unreasonably fails to furnish such information within a
reasonable time after receiving such request. If the identity of a seller
of Purchased Notes is to be disclosed in a registration statement, such
selling holder shall be permitted to include all information regarding such
seller as it shall reasonably request. At any time during the effectiveness
of any Registration Statement with respect to the Purchased Notes, any
selling Holder becomes aware of any change materially affecting the
accuracy of the information contained in the Registration Statement or
related Prospectus, such Holder will notify the Company of such change.
(q) Each Holder, upon receipt of any notice from the Company of the
happening of any event of the kind described in subparagraph (c), will
forthwith discontinue disposition of such Purchased Notes covered by such
Registration Statement or Prospectus, until such Holder's receipt of the
copies of the supplemented or amended Pro-
<PAGE>
-20-
spectus contemplated by subparagraph (c), or until it is advised in writing
(the "Advice") by the Company that the use of the applicable Prospectus may
be resumed. In the event the Company shall give any such notice, the Shelf
Termination Date shall be extended by the number of days during such
periods from and including the date of the giving of such notice to and
including the date when each seller of Purchased Notes covered by such
Registration Statement shall have received the copies of the supplemented
or amended Prospectus contemplated by Section 6(c) or the Advice.
12. Registration Expenses. All fees and expenses, other than
underwriting discounts and commissions and transfer taxes, incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company, jointly and severally, whether or not a Registration Statement
is filed or becomes effective, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Purchased Notes), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Purchased Notes in a form eligible for
deposit with DTC and of printing prospectuses if the printing of prospectuses is
requested by the managing underwriters, if any, or by the Holders of a majority
in aggregate principal amount of the Purchased Notes included in the
Registration Statement), (iii) reasonable fees and disbursements of one counsel
for the Company and reasonable fees and disbursements of counsel for the sellers
of Purchased Notes, (iv) fees and disbursements of all independent certified
public accountants referred to herein (including, without limitation, the
expenses of any special audit and "cold comfort" letters required by or incident
to such performance), (v) the fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Rule 2720 of the Conduct Rules of the NASD, (vi) rating agency fees,
(vii) fees and expenses of all other Persons retained by the Company, (viii)
internal expenses of the Company (including, without limitation, all salaries
and expenses of officers and employees of the Company performing legal or
accounting duties) and (ix) the expense of any annual audit (collectively,
"Registration Expenses").
<PAGE>
-21-
In connection with any Registration Statement hereunder or any
amendment thereto, the Company shall reimburse the holders of the Purchased
Notes being registered in such registration for the reasonable fees and
disbursements of not more than one counsel chosen by the Holders of a majority
in aggregate principal amount of the Purchased Notes to be included in such
Registration Statement and other reasonable out-of-pocket expenses of the
holders of Purchased Notes incurred in connection with the registration of the
Purchased Notes.
13. Indemnification and Contribution.
(a) (i) The Company agrees to hold harmless and indemnify the
Purchasers and any affiliated company and each officer, director, partner,
employee, affiliate or agent of the Purchasers or any of such affiliated
companies and any entity or person controlling (within the meaning of Section
20(a) of the Exchange Act) the Purchasers (collectively, the "Participants"),
from and against any and all Losses whatsoever (including, but not limited to,
any and all expenses incurred in investigating, preparing or defending against
any litigation or proceeding, commenced or threatened, or any claims whatsoever
whether or not resulting in any liability) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Tender Offer Materials, in the Offering Memorandum, in any Registration
Statement or prospectus filed pursuant to Section 10 hereof or in any other
material used by the Company, or authorized by the Company for use, in
connection with the Tender Offer or the transactions contemplated thereby, or
arising out of or based upon the omission or alleged omission to state in any
such document a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (other than statements or omissions made in reliance upon
information furnished by the Purchasers to the Company expressly for use
therein).
(ii) By its acceptance of the rights under Section 10 hereof, each
Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company, their respective directors and officers and each person who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to each Holder, but only (i) with reference to information relating to
such Holder furnished to the Company in writing by or on behalf of such Holder
expressly for use in any Registration Statement or prospectus filed pursuant to
Section 10 hereof, any amendment or supplement
<PAGE>
-22-
thereto, or any preliminary prospectus or (ii) with respect to any untrue
statement or representation made by such Holder in writing to the Company. The
liability of any Holder under this paragraph shall in no event exceed the
proceeds received by such Holder from sales of Mortgage Notes giving rise to
such obligations.
(b) The Company and the Holders agree that if any indemnification
sought by any indemnified person pursuant to Section 13(a) is unavailable for
any reason or insufficient to hold such indemnified person harmless, then the
Company and the Purchasers shall contribute to the Losses for which such
indemnification is held unavailable or insufficient in such proportion as is
appropriate to reflect the relative benefits received (or anticipated to be
received) by the Company, on the one hand, and the Holders, on the other hand,
in connection with the transactions contemplated by this Agreement or, if such
allocation is not permitted by applicable law, not only such relative benefits
but also the relative faults of the Company, on the one hand, and the Holders,
on the other hand, as well as any other equitable considerations, subject to the
limitation that in any event the aggregate contribution by the Holders to all
Losses with respect to which contribution is available hereunder shall not
exceed the proceeds received by such Holder from sales of Mortgage Notes giving
rise to such obligations. It is hereby agreed that the relative benefits of the
Company, on the one hand, and the Purchasers, on the other hand, with respect to
the Tender Offer and the transactions contemplated thereby shall be deemed to be
in the same proportion as (i) the total value paid or proposed to be paid to
holders of Notes pursuant to the Tender Offer (whether or not the Tender Offer
or such transactions are consummated) bears to (ii) the fees actually received
by the Purchasers from the Company in connection with its purchase hereunder.
(c) The foregoing rights to indemnity and contribution shall be in
addition to any other right which indemnified persons may have against an
indemnifying person at common law, under the Credit Agreement, the Dealer
Manager Agreement or otherwise. If any litigation or proceeding is brought
against any indemnified person in respect of which indemnification may be sought
against an indemnifying person pursuant to Section 13(a), such indemnified
person shall promptly notify such indemnifying person in writing of the
commencement of such litigation or proceeding, but the failure so to notify such
indemnifying person shall relieve such indemnifying person from any liability
which it may have hereunder only if, and to the extent that, such failure
results in the forfeiture by such in-
<PAGE>
-23-
demnifying person of substantial rights and defenses, and will not in any event
relieve such indemnifying person from any other obligation or liability that it
may have to any indemnified person other than under this Agreement. In case any
such litigation or proceeding shall be brought against any indemnified person
and such indemnified person shall notify an indemnifying person in writing of
the commencement of such litigation or proceeding, such indemnifying person
shall be entitled to participate in such litigation or proceeding, and, after
written notice from such indemnifying person to such indemnified person, to
assume the defense of such litigation or proceeding with counsel of its choice
at its expense. Notwithstanding the election of an indemnifying person to assume
the defense of such litigation or proceeding, such indemnified person shall have
the right to employ separate counsel and to participate in the defense of such
litigation or proceeding, and such indemnifying person shall bear the reasonable
fees, costs and expenses of such separate counsel and shall pay such fees, costs
and expenses at least quarterly (provided that with respect to any single
litigation or proceeding or with respect to several litigations or proceedings
involving substantially similar legal claims, such indemnifying person shall not
be required to bear the fees, costs and expenses of more than one counsel for
all indemnified persons except where such indemnified person requires local
counsel, in which case such indemnifying person shall also be required to bear
the fees, costs and expenses of such local counsel) if (i) in the reasonable
judgment of such indemnified person the use of counsel chosen by the Company to
represent such indemnified person would present such counsel with a conflict of
interest, (ii) the defendants in, or targets of, any such litigation or
proceeding include both an Indemnified Person and the Company, and such
indemnified person shall have reasonably concluded that there may be legal
defenses available to it or to other Indemnified Persons which are different
from or additional to those available to the Company (in which case the Company
shall not have the right to direct the defense of such action on behalf of the
Indemnified Person), (iii) such indemnifying person shall not have employed
counsel satisfactory to such indemnified person, in the exercise of the
indemnified person's reasonable judgment, to represent such indemnified person
within a reasonable time after notice of the institution of such litigation or
proceeding or (iv) such indemnifying person shall authorize in writing such
indemnified person to employ separate counsel at the expense of such
indemnifying person. In any action or proceeding the defense of which an
indemnifying person assumes, the indemnified person shall have the right to
participate in such litigation and retain its own counsel at such indemnified
person's
<PAGE>
-24-
own expense. The Company and each of you agree to notify the other promptly of
the assertion of any claim against it, any of its officers or directors or any
entity or person who controls it within the meaning of Section 20(a) of the
Exchange Act in connection with the transactions contemplated by this Agreement.
The foregoing indemnification commitments shall apply whether or not the
indemnified person is a formal party to such litigation or proceeding.
(d) The Company agrees to reimburse each Indemnified Person at least
quarterly for all expenses (including reasonable fees and disbursements of
counsel if authorized pursuant to the preceding paragraph (c)) incurred by such
Indemnified Person in connection with investigating, preparing for, defending or
providing evidence (including appearing as a witness) with respect to any
action, claim, investigation, inquiry, arbitration or other proceeding referred
to in this Section whether or not in connection with pending or threatened
litigation in which any Indemnified Person is a party.
(e) Each indemnifying person agrees that it will not, without the
indemnified person's prior written consent (which consent shall not be
unreasonably withheld or delayed), settle, compromise or consent to the entry of
any judgment in any pending or threatened claim, action or proceeding in respect
of which indemnification may be sought hereunder unless such settlement,
compromise or consent includes an unconditional release of each indemnified
person from all liability arising out of such claim, action or proceeding. No
indemnified person seeking indemnification under this Agreement shall, without
such indemnifying person's prior written consent (which consent shall not be
unreasonably withheld or delayed), settle, compromise or consent to the entry of
any judgment in any pending or threatened claim, action or proceeding in respect
of which indemnification may be sought hereunder.
(f) In addition to the foregoing indemnity, the Company agrees that the
indemnity set forth in Section 10.4 of the Credit Agreement will apply to the
Purchasers to the same extent and in the same manner in respect of the
transactions contemplated hereby as would be the case if such Purchaser were a
Lender under the Credit Agreement.
14. Purchasers' Representation and Warranties. Each Purchaser
represents and warrants to, and agrees with, the Company:
<PAGE>
-25-
(a) Such Purchaser is a QIB with such knowledge and experience in
financial and business matters as is necessary in order to evaluate the merits
and risks of an investment in the Mortgage Notes.
(b) Such Purchaser (i) is not acquiring the Mortgage Notes with a view
to any distribution thereof or with any present intention of offering or selling
any of the Mortgage Notes in a transaction that would violate the Securities Act
or the securities laws of any state of the United States or any other applicable
jurisdiction and (ii) will be reoffering and reselling the Mortgage Notes only
to (A) QIBs in reliance on the exemption from the registration requirements of
the Securities Act provided by Rule 144A, (B) to non-U.S. Persons in offshore
transactions in compliance upon Regulation S under the Securities Act and (C) to
"accredited investors" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that are institutional investors acquiring the Mortgage
Notes for their own account or for the account of such an institutional
accredited investor, in each case in a minimum principal amount of $250,000, for
investment purposes and not with a view to or for offer or resale in connection
with any distribution in violation of the Securities Act (such persons described
in clauses (A), (B) and (C) being hereafter referred to as "Eligible
Purchasers").
(c) Such Purchaser agrees that no form of general solicitation or
general advertising (within the meaning of Regulation D under the Securities
Act) has been or will be used by such Purchaser or any of its representatives in
connection with the offer and sale of the Mortgage Notes pursuant hereto,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(d) From and after the date hereof, such Purchaser agrees that such
Purchaser will solicit offers to buy the Mortgage Notes only from, and will
offer to sell the Mortgage Notes only to, Eligible Purchasers only for so long
as they remain legended securities. Such Purchaser further agrees that it will
offer to sell the Mortgage Notes only to, and will solicit offers to buy the
Mortgage Notes only from Eligible Purchasers to whom a notice has been given
that states that such Eligible Purchaser agrees by its purchase and acceptance
of Mortgage Notes that (A) such Eligible Purchaser will offer, sell or otherwise
transfer such security, prior to the date (the "resale
<PAGE>
-26-
restriction termination date") which is two years after the later of the date of
original assignment to the Purchasers and the last date on which the Company or
any affiliate of the Company was the owner of this security (or any predecessor
of such security), only (a) to the Company, (b) pursuant to a registration
statement that has been declared effective under the Securities Act, (c) for so
long as the Mortgage Notes are eligible for resale pursuant to Rule 144A, to a
person it reasonably believes is a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) in offshore transactions to
non-U.S. persons in compliance with Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is an institutional investor
acquiring the security for its own account or for the account of such an
institutional accredited investor, in each case in a minimum principal amount of
the securities of $250,000, for investment purposes and not with a view to or
for offer or sale in connection with any distribution in violation of the
Securities Act and has delivered a representation letter in satisfactory form to
the Company or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject to clauses (d), (e) or
(f) to require the delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them and (B) they will deliver to each
person to whom such Mortgage Notes or an interest therein is transferred a
notice substantially to the effect of the foregoing.
(e) Such Purchaser and its affiliates or any person acting on its
behalf have not engaged or will not engage in any directed selling efforts
within the meaning of Regulation S with respect to the Mortgage Notes.
15. Termination. This Agreement shall be terminated if the Credit
Agreement shall have been terminated or the Tender Offer shall have been
consummated without an Election having been made.
16. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and shall be mailed or delivered (a) to the
Company, as set forth in the Credit Agreement; (b) to the Purchasers, as set
forth in the Credit Agreement; and (c) to Holders, at their addresses as
reflected in any securities register. Any notice given hereunder
<PAGE>
-27-
may be made by telecopier or telephone, but if so made shall be subsequently
confirmed in writing.
17. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company and its officers and
the Purchasers set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Purchasers or any of its officers, directors,
employees and agents or any controlling person referred to in Section 10, and
(ii) consummation of the Tender Offer or any of the other Transactions. The
respective agreements, covenants, indemnities and other statements set forth in
Section 8 shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement.
18. Applicable Law. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
20. Successors and Assigns. This Agreement shall inure to the benefit
of and shall be binding upon the Purchasers, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that the
indemnities and provisions contained in Sections 11, 12 and 13 shall also be for
the benefit of any other Person referred to therein. Notwithstanding anything
herein to the contrary, the Purchasers will be free to sell Purchased Notes,
subject to applicable Securities Act restrictions. The Purchasers may assign
their rights under any of Sections 6 (subject to the limitations set forth
herein), 11 and 12 to a Permitted Assignee. Any assignment of rights under
Sections 11, 12 and 13 (to the extent relating to Sections 11 and 12) shall be
automatic and coincident to the transfer of any Purchased Notes provided that
<PAGE>
-28-
a Holder's rights under Section 13 shall be limited in all cases to matters
arising out of or based upon a Registration Statement or prospectus filed
pursuant to Section 10. A "Permitted Assignee" shall mean a Person to whom
Purchased Notes are being sold in compliance with applicable securities law
restrictions and, in the case of Section 6, is also a Lender under the Credit
Agreement.
<PAGE>
-29-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
Purchasers and the Company in accordance with its terms.
Very truly yours,
REPUBLIC ENGINEERED STEELS, INC.
By: /s/ David Blitzer
--------------------------------
Name: David Blitzer
Title: Secretary
Confirmed and accepted as of
the date first above written:
CHASE SECURITIES INC.
By: /s/ Jeffrey Blumin
--------------------------------
Name: Jeffrey Blumin
Title: Vice President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Cameron Fleming
--------------------------------
Name: Cameron Fleming
Title: Vice President
BANKBOSTON ROBERTSON STEPHENS INC.
By: /s/ Theodore J. Davies
--------------------------------
Name: Theodore J. Davies
Title: Director
