UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. )
_______________________
MK RAIL CORPORATION
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
55303T102
(CUSIP Number)
_______________________
STEPHEN M. DOWICZ
885 THIRD AVENUE
NEW YORK, NY 10022
TEL. NO.: (212) 371-3047
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
_______________________
SEPTEMBER 14, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement
[ X ].
Page 1 of 16 Pages
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 2 of 16 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DK Acquisition Partners, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7 SOLE VOTING POWER
NUMBER OF
SHARES --
BENEFICIALLY OWNED
BY EACH REPORTING 8 SHARED VOTING POWER
PERSON
WITH 466,175
9 SOLE DISPOSITIVE POWER
--
10 SHARED DISPOSITIVE POWER
466,175
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
466,175
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 3 of 16 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MH Davidson & Co.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7 SOLE VOTING POWER
NUMBER OF
SHARES --
BENEFICIALLY OWNED
BY EACH REPORTING 8 SHARED VOTING POWER
PERSON
WITH 466,175
9 SOLE DISPOSITIVE POWER
--
10 SHARED DISPOSITIVE POWER
466,175
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
466,175
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON
PN
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 4 of 16 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Marvin H. Davidson
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 SOLE VOTING POWER
NUMBER OF
SHARES --
BENEFICIALLY OWNED
BY EACH REPORTING 8 SHARED VOTING POWER
PERSON
WITH 466,175
9 SOLE DISPOSITIVE POWER
--
10 SHARED DISPOSITIVE POWER
466,175
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
466,175
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ X ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON
IN
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 5 of 16 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Thomas L. Kempner
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 SOLE VOTING POWER
NUMBER OF
SHARES --
BENEFICIALLY OWNED
BY EACH REPORTING 8 SHARED VOTING POWER
PERSON
WITH 466,175
9 SOLE DISPOSITIVE POWER
--
10 SHARED DISPOSITIVE POWER
466,175
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
466,175
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ X ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON
IN
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 6 of 16 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stephen M. Dowicz
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 SOLE VOTING POWER
NUMBER OF
SHARES --
BENEFICIALLY OWNED
BY EACH REPORTING 8 SHARED VOTING POWER
PERSON
WITH 466,175
9 SOLE DISPOSITIVE POWER
--
10 SHARED DISPOSITIVE POWER
466,175
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
466,175
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON
IN
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 7 of 16 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Scott E. Davidson
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 SOLE VOTING POWER
NUMBER OF
SHARES --
BENEFICIALLY OWNED
BY EACH REPORTING 8 SHARED VOTING POWER
PERSON
WITH 466,175
9 SOLE DISPOSITIVE POWER
--
10 SHARED DISPOSITIVE POWER
466,175
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
466,175
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON
IN
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 8 of 16 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael J. Leffell
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 SOLE VOTING POWER
NUMBER OF
SHARES --
BENEFICIALLY OWNED
BY EACH REPORTING 8 SHARED VOTING POWER
PERSON
WITH 466,175
9 SOLE DISPOSITIVE POWER
--
10 SHARED DISPOSITIVE POWER
466,175
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
466,175
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.6%
14 TYPE OF REPORTING PERSON
IN
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 9 of 16 Pages
ITEM 1. SECURITY AND ISSUER.
This Schedule relates to shares of Common Stock, par value $.01
per share (the "Common Stock"), of MK Rail Corporation, a Delaware
corporation (the "Company"). The principal executive offices of the
Company are located at 1200 Reedsdale Street, Pittsburgh, PA 15233.
ITEM 2. IDENTITY AND BACKGROUND.
The names and addresses of the persons filing this Schedule are
as follows:
DK Acquisition Partners, L.P. ("DKAP"), a New York limited
partnership, whose address is 885 Third Avenue, New York, New
York, 10022, and which is engaged in buying and selling
securities for investment purposes;
M.H. Davidson & Co., a New York limited partnership, the general
partner of DKAP, whose address is 885 Third Avenue, New York, New
York, 10022, and which is engaged in buying and selling
securities for investment purposes;
Marvin H. Davidson, Thomas L. Kempner, Jr., Stephen M. Dowicz,
Scott E. Davidson and Michael J. Leffell, general partners of
M.H. Davidson & Co. Information in response to Items (a) through
(c) and (f) with respect to Messrs. Marvin H. Davidson, Kempner,
Dowicz, Scott E. Davidson and Leffell is set forth in Appendix I,
attached hereto and incorporated by reference herein.
The above named persons are sometimes referred to as the
"Reporting Parties."
None of the Reporting Parties has, during the last five years,
been (i) convicted in a criminal proceeding or (ii) a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
as a result of which such person was subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 10 of 16 Pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to an order of the United States Bankruptcy Court for
the District of Delaware, dated August 26, 1996, the First Amended Plan
of Reorganization of Morrison Knudsen Corporation ("MKC") under Chapter
11 of the Bankruptcy Code (the "Plan") was confirmed. Under the Plan,
DKAP has become entitled to receive 466,175 shares of the Company Common
Stock. Under the Plan, shareholders of MKC became entitled to
participate in a rights offering pursuant to which such holders received,
inter alia, the right to acquire Common Stock of the Company during a
specified period ending on September 24, 1996.
The Plan required creditors of MKC, including DKAP, to be bound
by the terms of a Stockholders Agreement (described below). Accordingly,
DKAP may be deemed to be a party to such Stockholders Agreement with
certain other stockholders (the "Stockholders") pursuant to which the
shares of Common Stock of the Company owned by DKAP and the Stockholders
exceeds 5% of the amount of Common Stock of the Company outstanding and
must be voted for certain nominees for election to the Company's board of
directors and certain transfer restrictions apply to DKAP and the
Stockholders. DKAP and the Stockholders may be deemed to constitute a
group for purposes of Section 13(d)(3) of the Exchange Act. The
Reporting Parties disclaim beneficial ownership of the shares of Common
Stock of the Company held by the Stockholders and disclaim that they
constitute a group with the Stockholders for purposes of Section 13(d)(3)
of the Exchange Act.
ITEM 4. PURPOSE OF THE TRANSACTION.
The Reporting Parties became entitled to the 466,175 shares of
the Company Common Stock in the manner described in Item 3 above.
The Reporting Parties have no intention, plan or proposal with
respect to:
(a) The acquisition by any person of additional securities of
the issuer, or the disposition of securities of the issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the issuer or any
of its subsidiaries;
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 11 of 16 Pages
(c) A sale or transfer of a material amount of assets of the
issuer or any of its subsidiaries;
(d) Any change in the present Board of Directors or management
of the issuer, including any plans or proposals to change
the number or term of directors or to fill any existing
vacancies on the Board;
(e) Any material change in the present capitalization or
dividend policy of the issuer;
(f) Any other material change in the issuer's business or
corporate structure, including but not limited to, if the
issuer is a registered closed-end investment company, any
plans or proposals to make any changes in its investment
policy for which a vote is required by Section 13 of the
Investment Company Act of 1940;
(g) Changes in the issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the issuer by any person;
(h) Causing a class of securities of the issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system
of a registered national securities association;
(i) A class of equity securities of the issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above.
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 12 of 16 Pages
Each of the Reporting Parties, however, may, at any time and from
time to time, and reserves the right to, acquire additional securities of
the Company, dispose of any such securities of the Company or formulate
other plans or proposals regarding the Company or its securities, to the
extent deemed advisable by such Reporting Party in light of its general
investment policies, market conditions or other factors.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Following confirmation of the Plan on September 14, 1996,
the Reporting Parties became entitled to receive 466,175 shares of Common
Stock of the Company, which amount will constitute less than 5% of the
shares of Common Stock of the Company estimated to be outstanding as of
September 14, 1996.
Pursuant to a Shareholders Agreement, dated as of June 20, 1986
between the Company and MKC (the Stockholders Agreement"), no holder who
receives shares of Common Stock pursuant to the Plan may transfer any
shares of Common Stock to any person except under certain circumstances.
The restrictions on transfers under the Stockholders Agreement will not
apply to any subsequent transferee so long as the transfer was permitted
under the Stockholders Agreement.
Pursuant to the Stockholders Agreement, certain persons,
including DKAP, have agreed not to (a) solicit proxies, (b) initiate any
stockholder proposal for a tender offer, change of control or attempt to
convene a stockholders meeting or (c) otherwise seek to influence or
control the management or policies of the Company. The above
restrictions expire on the second anniversary of the distribution of the
Common Stock of the Company under the Plan (subject to certain alternate
termination provisions).
The Stockholders Agreement also provides certain holders,
including DKAP, with demand registration rights and piggyback
registration rights. Pursuant to the Stockholders Agreement, certain
holders may demand that the Company file a registration statement under
the Securities Act of 1933, as amended (the "Securities Act") for the
resale of the Common Stock received by such holders in accordance with
the Plan or, if the Company has filed a registration statement pursuant
to the Securities Act, such holders may include shares of Common Stock
received in accordance with the Plan on the Company's registration
statement.
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 13 of 16 Pages
(b) The Reporting Parties have shared power to vote or direct
the vote and dispose or direct the disposition of 466,175 shares of
Common Stock of the company.
(c) During the past 60 days, the Reporting Parties have not
effected any transactions in the securities of the Company, except as
described in Item 3 above.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Except as described in Item 5 above, the Reporting Parties do not
have any contract, arrangement, understanding or relationship with any
other person with respect to any security of the Company. In addition,
the Reporting Parties expressly disclaim that they are a member of a
group as a result of the imposition of the Plan and the Stockholders
Agreement.
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 14 of 16 Pages
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT NO. DESCRIPTION
1. First Amended Plan of Reorganization of Morrison
Knudsen Corporation, as confirmed by the United
States Bankruptcy Court for the District of
Delaware, dated August 24, 1996.
2. Stockholders Agreement, dated as of June 20, 1986,
between MK Rail Corporation and Morrison Knudsen
Corporation.
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 15 of 16 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
September 30, 1996
DK ACQUISITION PARTNERS, L.P.
By MH Davidson & Co., its
general partner
By: /s/ THOMAS L. KEMPNER
Thomas L. Kempner, Jr.
General Partner
MH Davidson & CO.
By: /s/ THOMAS L. KEMPNER
Thomas L. Kempner, Jr.
General Partner
/s/ MARVIN H. DAVIDSON
Marvin H. Davidson
/s/ THOMAS L. KEMPNER, JR.
Thomas L. Kempner, Jr.
/s/ STEPHEN M. DOWICZ
Stephen M. Dowicz
/s/ SCOTT E. DAVIDSON
Scott E. Davidson
/s/ MICHAEL J. LEFFELL
Michael J. Leffell
<PAGE>
SCHEDULE 13D
CUSIP NO. 55303T102 Page 16 of 16 Pages
APPENDIX I
MH Davidson & Co.
NAME AND POSITION Present Principal Occupation
AND BUSINESS ADDRESS
Marvin H. Davidson Investment Advisor
General Partner 885 Third Avenue
New York, NY 10022
Stephen M. Dowicz Investment Advisor
General Partner 885 Third Avenue
New York, NY 10022
Thomas L. Kempner, Jr. Investment Advisor
General Partner 885 Third Avenue
New York, NY 10022
Scott E. Davidson Investment Advisor
General Partner 885 Third Avenue
New York, NY 10022
Michael J. Leffell Investment Advisor
General Partner 885 Third Avenue
New York, NY 10022
All of the above named individuals are citizens of the United
States.
EXHIBIT 1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
)
MORRISON KNUDSEN CORPORATION, ) Case No. 96-1006 (PJW)
a Delaware corporation, )
) Chapter 11
Debtor. )
FIRST AMENDED PLAN OF REORGANIZATION
OF
MORRISON KNUDSEN CORPORATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Davit S. Kurtz
Jeffrey W. Linstrom
Kathleen M. Boege
JONES, DAY, REAVIS & POGUE
77 West Wacker Drive
Chicago, Illinois 60601-1692
(312) 782-3939
Robert Dean Avery
JONES, DAY, REAVIS & POGUE
555 West Fifth Street, Suite 4600
Los Angeles, California 90013-1025
(213) 489-3939
ATTORNEYS FOR
MORRISON KNUDSEN CORPORATION
Laura Davis Jones
YOUNG, CONAWAY, STARGATT & TAYLOR
Rodney Square North, Eleventh Floor
P.O. Box 391
Wilmington, Delaware 19899-0391
(302) 571-6600
CO-COUNSEL FOR
MORRISON KNUDSEN CORPORATION
TABLE OF CONTENTS
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW . . . . . . . . . . . . . I-1
A. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . I-1
1. "Administrative Claim" . . . . . . . . . . . . . . . . . . I-1
2. "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . I-1
3. "Allowed Claim" or "Allowed Unsecured Claim" . . . . . . . I-1
4. "Allowed . . . Claim" . . . . . . . . . . . . . . . . . . I-2
5. "Allowed Interest" . . . . . . . . . . . . . . . . . . . . I-2
6. "Amerail" . . . . . . . . . . . . . . . . . . . . . . . . I-2
7. "Amerail Environmental Security Agreement" . . . . . . . . I-2
8. "Ballots" . . . . . . . . . . . . . . . . . . . . . . . . I-2
9. "Bankruptcy Code" . . . . . . . . . . . . . . . . . . . . I-2
10. "Bankruptcy Court" . . . . . . . . . . . . . . . . . . . . I-2
11. "Bankruptcy Rules" . . . . . . . . . . . . . . . . . . . I-2
12. "Bar Date" . . . . . . . . . . . . . . . . . . . . . . . . I-2
13. "Beneficial Holder" . . . . . . . . . . . . . . . . . . . I-2
14. "Boise Landlord" . . . . . . . . . . . . . . . . . . . . . I-2
15. "Boise Landlord Cash Distribution" . . . . . . . . . . . . I-2
16. "Boise Landlord Claims" . . . . . . . . . . . . . . . . . I-2
17. "Boise Landlord Class MK-6 Rights Exercise Proceeds . . . I-3
18. "Boise Landlord Combined Company Common Stock" . . . . . . I-3
19. "Boise Landlord New MK Common Stock" . . . . . . . . . . . I-3
20. "Boise Leases" . . . . . . . . . . . . . . . . . . . . . . I-3
21. "Bonding Company" . . . . . . . . . . . . . . . . . . . . I-3
22. "Bonding Company Cash Distribution . . . . . . . . . . . . I-3
23. "Bonding Company Class MK-3 Rights Exercise Proceeds" . . I-3
24. "Bonding Company Class MK-6 Rights Exercise Proceeds" . . I-3
25. "Bonding Company Combined Company Common Stock" . . . . . I-3
26. "Bonding Company MK Rail Note Proceeds" . . . . . . . . . I-3
27. "Bonding Company MK Rail Stock" . . . . . . . . . . . . . I-3
28. "Bonding Company New MK Common Stock" . . . . . . . . . . I-3
29. "Bridge Loan" . . . . . . . . . . . . . . . . . . . . . . I-4
30. "Bridge Loan Agent" . . . . . . . . . . . . . . . . . . . I-4
31. "Bridge Loan Agreement" . . . . . . . . . . . . . . . . . I-4
32. "Bridge Loan Claims" . . . . . . . . . . . . . . . . . . . I-4
33. "Bridge Loan Documents" . . . . . . . . . . . . . . . . . I-4
34. "Bridge Loan Lenders" . . . . . . . . . . . . . . . . . . I-4
35. "Business Day" . . . . . . . . . . . . . . . . . . . . . . I-4
36. "Capital Stock" . . . . . . . . . . . . . . . . . . . . . I-4
37. "Cash" . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
38. "Cash Distribution" . . . . . . . . . . . . . . . . . . . I-4
39. "Chapter 11 Case" . . . . . . . . . . . . . . . . . . . . I-4
40. "Claim" . . . . . . . . . . . . . . . . . . . . . . . . . I-4
41. "Class" . . . . . . . . . . . . . . . . . . . . . . . . . I-4
42. "Class 3 Funded Debt Distribution" . . . . . . . . . . . . I-4
43. "Class 3 Metra Lender Distribution" . . . . . . . . . . . I-4
44. "Class 3 Transit Bonding Distribution" . . . . . . . . . . I-4
45. "Class MK-3 Rights Exercise Proceeds" . . . . . . . . . . I-5
46. "Class MK-6 Rights Exercise Proceeds" . . . . . . . . . . I-5
47. "Combined Company" . . . . . . . . . . . . . . . . . . . . I-5
48. "Combined Company Bylaws" . . . . . . . . . . . . . . . . I-5
49. "Combined Company Certificate of Incorporation" . . . . . I-5
50. "Combined Company Common Stock" . . . . . . . . . . . . . I-5
51. "Combined Company Registration Rights Agreement" . . . . . I-5
52. "Combined Company Rights" . . . . . . . . . . . . . . . . I-5
53. "Combined Company Rights Aggregate Consideration" . . . . I-6
54. "Combined Company Rights Aggregate Percentage" . . . . . . I-6
55. "Combined Company Rights Exercise Period" . . . . . . . . I-6
56. "Combined Company Rights Exercise Price" . . . . . . . . . I-6
57. "Combined Company Rights Exercise Proceeds" . . . . . . . I-6
58. "Combined Company Rights Expiration Date" . . . . . . . . I-6
59. "Combined Company Securities" . . . . . . . . . . . . . . I-7
60. "Combined Company Series A Preferred Stock" . . . . . . . I-7
61. "Combined Company Warrant Agreement" . . . . . . . . . . . I-7
62. "Combined Company Warrants" . . . . . . . . . . . . . . . I-7
63. "Common Stock Exchange" . . . . . . . . . . . . . . . . . I-7
64. "Confirmation" . . . . . . . . . . . . . . . . . . . . . . I-7
65. "Confirmation Date" . . . . . . . . . . . . . . . . . . . I-7
66. "Confirmation Order" . . . . . . . . . . . . . . . . . . . I-7
67. "Creditor Distribution Exhibit" . . . . . . . . . . . . . I-7
68. "Debtor" . . . . . . . . . . . . . . . . . . . . . . . . . I-7
69. "Delaware General Corporation Law" . . . . . . . . . . . . I-7
70. "Derivative Actions" . . . . . . . . . . . . . . . . . . . I-7
71. "Derivative Actions Settlements" . . . . . . . . . . . . . I-7
72. "DIP Financing Facility" . . . . . . . . . . . . . . . . . I-7
73. "Disbursing Agent" . . . . . . . . . . . . . . . . . . . . I-8
74. "Disclosure Statement" . . . . . . . . . . . . . . . . . . I-8
75. "Disputed Claim" . . . . . . . . . . . . . . . . . . . . . I-8
76. "Disputed Interest" . . . . . . . . . . . . . . . . . . . I-8
77. "Distribution Agreement" . . . . . . . . . . . . . . . . . I-8
78. "Distribution Record Date" . . . . . . . . . . . . . . . . I-8
79. "Double Derivative Action" . . . . . . . . . . . . . . . . I-8
80. "Effective Date" . . . . . . . . . . . . . . . . . . . . . I-8
81. "Effective Time" . . . . . . . . . . . . . . . . . . . . . I-8
82. "Estate" . . . . . . . . . . . . . . . . . . . . . . . . . I-8
83. "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . I-8
84. "Exercise Notice" . . . . . . . . . . . . . . . . . . . . I-8
85. "Existing Guaranties" . . . . . . . . . . . . . . . . . . I-8
86. "Existing Guaranty Claims" . . . . . . . . . . . . . . . . I-8
87. "Existing Indebtedness Agent" . . . . . . . . . . . . . . I-9
88. "Existing LC Claims" . . . . . . . . . . . . . . . . . . . I-9
89. "Existing Lender Agreements" . . . . . . . . . . . . . . . I-9
90. "Existing Letters of Credit" . . . . . . . . . . . . . . . I-9
91. "Existing Loan Documents" . . . . . . . . . . . . . . . . I-9
92. "Existing Loans" . . . . . . . . . . . . . . . . . . . . . I-9
93. "File," "Filed" or "Filing" . . . . . . . . . . . . . . . I-9
94. "Final Order" . . . . . . . . . . . . . . . . . . . . . . I-9
95. "Funded Debt Cash Distribution" . . . . . . . . . . . . . I-9
96. "Funded Debt Claims" . . . . . . . . . . . . . . . . . . . I-9
97. "Funded Debt Class MK-3 Rights Exercise Proceeds" . . . . I-9
98. "Funded Debt Class MK-6 Rights Exercise Proceeds" . . . . I-9
99. "Funded Debt Combined Company Common Stock" . . . . . . . I-9
100. "Funded Debt Lenders" . . . . . . . . . . . . . . . . . I-10
101. "Funded Debt MK Rail Note Proceeds" . . . . . . . . . . I-10
102. "Funded Debt MK Rail Stock" . . . . . . . . . . . . . . I-10
103. "Funded Debt New MK Common Stock" . . . . . . . . . . . I-10
104. "Funded Debt Pro Rata Share" . . . . . . . . . . . . . . I-10
105. "Holder" . . . . . . . . . . . . . . . . . . . . . . . . I-10
106. "Impaired . . ." . . . . . . . . . . . . . . . . . . . I-10
107. "Indemnification Agreement" . . . . . . . . . . . . . . I-10
108. "Initial Equity Recovery" . . . . . . . . . . . . . . . I-10
109. "Initial Residual Equity Distribution" . . . . . . . . . I-10
110. "Intercreditor Agreement" . . . . . . . . . . . . . . . I-11
111. "Interest" . . . . . . . . . . . . . . . . . . . . . . . I-11
112. "Lender Cash Distribution" . . . . . . . . . . . . . . . I-11
113. "Lender Class MK-3 Rights Exercise Proceeds" . . . . . . I-11
114. "Lender Class MK-6 Rights Exercise Proceeds" . . . . . . I-11
115. "Lender Combined Company Common Stock" . . . . . . . . . I-11
116. "Lender MK Rail Note Proceeds" . . . . . . . . . . . . . I-11
117. "Lender MK Rail Stock" . . . . . . . . . . . . . . . . . I-11
118. "Lender New MK Common Stock" . . . . . . . . . . . . . . I-11
119. "Lender Steering Committee" . . . . . . . . . . . . . . I-11
120. "Lenders" . . . . . . . . . . . . . . . . . . . . . . . I-11
121. "Liquidating Trust" . . . . . . . . . . . . . . . . . . I-11
122. "Liquidating Trust Agreement" . . . . . . . . . . . . . I-12
123. "Liquidating Trust Cash Distribution . . . . . . . . . . I-12
124. "Liquidating Trust Class MK-3 Rights
Exercise Proceeds" . . . . . . . . . . . . . . . . . . I-12
125. "Liquidating Trust Class MK-6 Rights
Exercise Proceeds" . . . . . . . . . . . . . . . . . . I-12
126. "Liquidating Trust Combined Company Common Stock" . . . I-12
127. "Liquidating Trust MK Rail Note Proceeds" . . . . . . . I-12
128. "Liquidating Trust MK Rail Stock" . . . . . . . . . . . I-12
129. "Liquidating Trust New MK Common Stock" . . . . . . . . I-12
130. "Liquidating Trustee" . . . . . . . . . . . . . . . . . I-13
131. "Master Ballots" . . . . . . . . . . . . . . . . . . . . I-13
132. "Merger" . . . . . . . . . . . . . . . . . . . . . . . . I-13
133. "Merger Agreement" . . . . . . . . . . . . . . . . . . . I-13
134. "Metra Agent" . . . . . . . . . . . . . . . . . . . . . I-13
135. "Metra Ceiling Amount" . . . . . . . . . . . . . . . . . I-13
136. "Metra Credit Agreement" . . . . . . . . . . . . . . . . I-13
137. "Metra Floor Amount" . . . . . . . . . . . . . . . . . . I-13
138. "Metra Guaranty" . . . . . . . . . . . . . . . . . . . . I-13
139. "Metra Lender Cash Distribution" . . . . . . . . . . . . I-13
140. "Metra Lender Claims" . . . . . . . . . . . . . . . . . I-13
141. "Metra Lender Class MK-3 Rights Exercise Proceeds" . . . I-13
142. "Metra Lender Class MK-6 Rights Exercise Proceeds" . . . I-13
143. "Metra Lender Combined Company Common Stock" . . . . . . I-13
144. "Metra Lender MK Rail Note Proceeds" . . . . . . . . . . I-13
145. "Metra Lender MK Rail Stock" . . . . . . . . . . . . . . I-14
146. "Metra Lender New MK Common Stock" . . . . . . . . . . . I-14
147. "Metra Lender Pro Rata Share" . . . . . . . . . . . . . I-14
148. "Metra Lenders" . . . . . . . . . . . . . . . . . . . . I-14
149. "MK" . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
150. "MK Rail" . . . . . . . . . . . . . . . . . . . . . . . I-14
151. "MK Rail Note" . . . . . . . . . . . . . . . . . . . . . I-14
152. "MK Rail Note Cancellation Agreement" . . . . . . . . . I-14
153. "MK Rail Note Proceeds" . . . . . . . . . . . . . . . . I-14
154. "MK Rail Rights" . . . . . . . . . . . . . . . . . . . . I-14
155. "MK Rail Rights Plan" . . . . . . . . . . . . . . . . . I-14
156. "MK Rail Securities Class Action Plaintiffs" . . . . . . I-14
157. "MK Rail Securities Class Actions" . . . . . . . . . . . I-14
158. "MK Rail Stock" . . . . . . . . . . . . . . . . . . . . I-15
159. "MK Rail Stockholders Agreement" . . . . . . . . . . . . I-15
160. "MK Securities Class Action Plaintiffs" . . . . . . . . I-15
161. "MK Securities Class Actions" . . . . . . . . . . . . . I-15
162. "MKO" . . . . . . . . . . . . . . . . . . . . . . . . . I-15
163. "National Steel Guaranty" . . . . . . . . . . . . . . . I-15
164. "National Steel Guaranty Claim" . . . . . . . . . . . . I-15
165. "New Bonds Agreement" . . . . . . . . . . . . . . . . . I-15
166. "New Bonds Security Agreement" . . . . . . . . . . . . . I-15
167. "New Credit Facility" . . . . . . . . . . . . . . . . . I-15
168. "New Credit Facility Agreement" . . . . . . . . . . . . I-15
169. "New Credit Facility Documents" . . . . . . . . . . . . I-15
170. "New Guaranty" . . . . . . . . . . . . . . . . . . . . . I-15
171. "New Lease" . . . . . . . . . . . . . . . . . . . . . . I-15
172. "New Letter of Credit Reimbursement Agreement" . . . . . I-16
173. "New MK Amended Certificate of Incorporation" . . . . . I-16
174. "New MK Bylaws" . . . . . . . . . . . . . . . . . . . . I-16
175. "New MK Common Stock" . . . . . . . . . . . . . . . . . I-16
176. "New MK Compensation Plans" . . . . . . . . . . . . . . I-16
177. "New MK Non-Employee Director Plan" . . . . . . . . . . I-16
178. "New MK Registration Rights Agreement" . . . . . . . . . I-16
179. "New MK Securities" . . . . . . . . . . . . . . . . . . I-16
180. "New MK Series A Preferred Stock" . . . . . . . . . . . I-16
181. "New MK Stock Compensation Plan" . . . . . . . . . . . . I-16
182. "New MK Warrant Agreement" . . . . . . . . . . . . . . . I-16
183. "New MK Warrant Exercise Price Formula" . . . . . . . . I-16
184. "New MK Warrants" . . . . . . . . . . . . . . . . . . . I-17
185. "Nondebtor Subsidiaries" . . . . . . . . . . . . . . . . I-17
186. "Old Common Stock" . . . . . . . . . . . . . . . . . . . I-17
187. "Old Stock Options" . . . . . . . . . . . . . . . . . . I-17
188. "Old Warrants" . . . . . . . . . . . . . . . . . . . . . I-17
189. "Ordinary Course Professionals' Order" . . . . . . . . . I-17
190. "Other Secured Claims" . . . . . . . . . . . . . . . . . I-17
191. "Override Agreement" . . . . . . . . . . . . . . . . . . I-17
192. "Override Loan Documents" . . . . . . . . . . . . . . . I-17
193. "Petition Date" . . . . . . . . . . . . . . . . . . . . I-17
194. "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . I-17
195. "Plan Participants" . . . . . . . . . . . . . . . . . . I-18
196. "Priority Claim" . . . . . . . . . . . . . . . . . . . . I-18
197. "Priority Tax Claim" . . . . . . . . . . . . . . . . . . I-18
198. "Pro Rata" . . . . . . . . . . . . . . . . . . . . . . . I-18
199. "Professional" . . . . . . . . . . . . . . . . . . . . . I-18
200. "Reinstated" or "Reinstatement" . . . . . . . . . . . . I-18
201. "Reorganization Investment Yield" . . . . . . . . . . . I-18
202. "Reorganized Debtor" . . . . . . . . . . . . . . . . . . I-18
203. "Residual Equity Recovery Exhibit" . . . . . . . . . . . I-18
204. "Restructuring" . . . . . . . . . . . . . . . . . . . . I-19
205. "Rights" . . . . . . . . . . . . . . . . . . . . . . . . I-19
206. "Rights Agreement" . . . . . . . . . . . . . . . . . . . I-19
207. "Schedules" . . . . . . . . . . . . . . . . . . . . . . I-19
208. "Secured Claim" . . . . . . . . . . . . . . . . . . . . I-19
209. "Secured Funded Debt Claims" . . . . . . . . . . . . . . I-19
210. "Secured Metra Lender Claims" . . . . . . . . . . . . . I-19
211. "Secured Transit Bonding Claims" . . . . . . . . . . . . I-19
212. "Securities Act" . . . . . . . . . . . . . . . . . . . . I-19
213. "Securities Plaintiffs" . . . . . . . . . . . . . . . . I-19
214. "Shareholder Litigation Settlements" . . . . . . . . . . I-19
215. "Stipulation of Amount and Nature of Claim" . . . . . . I-19
216. "Subsequent Equity Recovery" . . . . . . . . . . . . . . I-19
217. "Subsequent Residual Equity Distribution" . . . . . . . I-19
218. "Subsidiaries" . . . . . . . . . . . . . . . . . . . . . I-20
219. "Third-Party Disbursing Agent" . . . . . . . . . . . . . I-20
220. "Touchstone Actions" . . . . . . . . . . . . . . . . . . I-20
221. "Touchstone Cash Distribution" . . . . . . . . . . . . . I-20
222. "Touchstone Claims" . . . . . . . . . . . . . . . . . . I-20
223. "Touchstone Class MK-6 Rights Exercise Proceeds" . . . . I-20
224. "Touchstone Combined Company Common Stock" . . . . . . . I-20
225. "Touchstone New MK Common Stock" . . . . . . . . . . . . I-20
226. "Touchstone Settlement Agreement" . . . . . . . . . . . I-20
227. "Trade Claim" . . . . . . . . . . . . . . . . . . . . . I-20
228. "Transit Asset Purchase Agreement" . . . . . . . . . . . I-20
229. "Transit Bonding Claims" . . . . . . . . . . . . . . . . I-20
230. "Transit Bonding Companies" . . . . . . . . . . . . . . I-21
231. "Transit Bonds" . . . . . . . . . . . . . . . . . . . . I-21
232. "Transit Reimbursement Agreement" . . . . . . . . . . . I-21
233. "Transit Release" . . . . . . . . . . . . . . . . . . . I-21
234. "Transit Security Agreement" . . . . . . . . . . . . . . I-21
235. "Unimpaired Claim" . . . . . . . . . . . . . . . . . . . I-21
236. "Unofficial Equity Committee" . . . . . . . . . . . . . I-21
237. "Unsecured Claim" . . . . . . . . . . . . . . . . . . . I-21
238. "Unsecured Funded Debt Claims" . . . . . . . . . . . . . I-21
239. "Unsecured Metra Lender Claims" . . . . . . . . . . . . I-21
240. "Unsecured Transit Bonding Claims" . . . . . . . . . . . I-21
241. "Voting Instructions" . . . . . . . . . . . . . . . . . I-21
242. "Voting Record Date" . . . . . . . . . . . . . . . . . . I-21
243. "Washington" . . . . . . . . . . . . . . . . . . . . . . I-22
B. Rules of Interpretation, Computation of Time and
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . I-22
1. Rules of Interpretation . . . . . . . . . . . . . . . . I-22
2. Computation of Time . . . . . . . . . . . . . . . . . . I-22
3. Governing law . . . . . . . . . . . . . . . . . . . . . I-22
ARTICLE II. ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS . . . . . I-23
A. Administrative Claims . . . . . . . . . . . . . . . . . . . . I-23
1. In General . . . . . . . . . . . . . . . . . . . . . . . I-23
2. Professionals . . . . . . . . . . . . . . . . . . . . . I-23
B. Priority Tax Claims . . . . . . . . . . . . . . . . . . . . . I-23
ARTICLE III. CLASSIFICATION AND TREATMENT OF
CLASSIFIED CLAIMS AND INTERESTS . . . . . . . . . . . . I-24
A. Summary of Claims and Interests . . . . . . . . . . . . . . . I-24
B. Classification and Treatment of Claims Against and
Interests in MK . . . . . . . . . . . . . . . . . . . . . . . I-24
1. Class MK-1 Priority Claims . . . . . . . . . . . . . . . I-24
2. Class MK-2 -- Bridge Loan Claims . . . . . . . . . . . . I-25
3. Class MK-3 -- Secured Funded Debt Claims,
Secured Metra Lender Claims
and Secured Transit Bonding Claims . . . . . . . . . . . I-25
4. Class MK-4 -- Existing LC Claims and
Existing Guaranty Claims . . . . . . . . . . . . . . . . I-26
5. Class MK-5 -- Other Secured Claims . . . . . . . . . . . I-26
6. Class MK-6 -- Unsecured Funded Debt Claims,
Unsecured Metra Lender Claims, Unsecured
Transit Bonding Claims, Boise Landlord
Claims and Touchstone Claims . . . . . . . . . . . . . I-27
7. Class MK-7 -- Unsecured Claims . . . . . . . . . . . . . I-29
8. Class MK-8 -- Interests of Holders of
Old Common Stock and
Securities Plaintiffs . . . . . . . . . . . . . . . . . I-29
9. Class MK-9 -- Interests of Holders of
Old Stock Options and Old Warrants . . . . . . . . . . . I-30
C. Special Provisions Regarding Unimpaired Claims . . . . . . . I-30
D. Accrual of Postpetition Interest; Payment of
Postpetition Fees and Expenses . . . . . . . . . . . . . . . I-30
ARTICLE IV. ACCEPTANCE OR REJECTION OF THE PLAN . . . . . . . . . . I-31
A. Voting Classes . . . . . . . . . . . . . . . . . . . . . . . I-31
B. Acceptance by Impaired Classes . . . . . . . . . . . . . . . I-31
C. Presumed Acceptance of Plan . . . . . . . . . . . . . . . . . I-31
D. Deemed Non-Acceptance of Plan . . . . . . . . . . . . . . . . I-31
E. Non-Consensual Confirmation . . . . . . . . . . . . . . . . . I-31
ARTICLE V. MEANS FOR IMPLEMENTATION OF THE PLAN . . . . . . . . . . I-31
A. Continued Corporate Existence, Vesting of Assets in the
Reorganized Debtor and
Preservation of Rights of Action . . . . . . . . . . . . . . I-31
1. Continued Corporate Existence and Vesting of Assets . . I-31
2. Preservation of Rights of Action . . . . . . . . . . . . I-32
B. The Restructuring Transactions . . . . . . . . . . . . . . . I-32
1. The Merger . . . . . . . . . . . . . . . . . . . . . . . I-32
(a) Consummation of the Merger . . . . . . . . . . . . I-32
(b) Cancellation of Capital Stock and
Existing Loan Documents;
Surrender of Securities and Other Documentation . . I-32
(c) Effect of the Merger on Transfer of Securities . . I-33
(d) The Reorganized Debtor's Obligations
Under the Plan . . . . . . . . . . . . . . . . . . I-33
2. New Letter of Credit Reimbursement Agreement and
New Guaranties . . . . . . . . . . . . . . . . . . . . I-33
3. Issuance of Securities and Related Documentation . . . . I-33
4. Establishment of Liquidating Trust . . . . . . . . . . . I-34
5. Establishment of New Credit Facility . . . . . . . . . . I-34
6. Procedures for Exercise of Combined Company Rights . . . I-34
C. Corporate Governance, Directors and Officers, Employment-
Related Agreements and
Compensation Programs . . . . . . . . . . . . . . . . . . . . I-36
1. Certificate of Incorporation and Bylaws . . . . . . . . I-36
(a) Combined Company/Reorganized MK . . . . . . . . . . I-36
2. Directors and Officers . . . . . . . . . . . . . . . . I-37
(a) The Combined Company/Reorganized MK . . . . . . . . I-37
3. Employment, Retirement, Indemnification and Other
Agreements and Incentive Compensation Programs;
Retiree Health and Welfare Benefits . . . . . . . . . . I-37
4. Corporate Action . . . . . . . . . . . . . . . . . . . . I-38
D. Sources of Cash for Plan Distributions . . . . . . . . . . . I-38
E. Releases and Related Matters . . . . . . . . . . . . . . . . I-38
1. Releases by the Debtor . . . . . . . . . . . . . . . . . I-38
2. Releases by Holders of Claims or Interests . . . . . . . I-39
3. Injunction Related to Releases . . . . . . . . . . . . . I-40
F. Release of Liens . . . . . . . . . . . . . . . . . . . . . . I-40
G. Effectuating Documents; Further Transactions;
Exemption from Certain Transfer Taxes . . . . . . . . . . . . I-40
H. Approval of Shareholder Litigation Settlements . . . . . . . I-41
I. MK Rail Note Cancellation Agreement . . . . . . . . . . . . . I-41
ARTICLE VI. TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES . . . . . . . . . . . . . . . . . . I-41
A. Executory Contracts and Unexpired Leases to Be Assumed . . . I-41
1. Assumptions Generally . . . . . . . . . . . . . . . . . I-41
2. Cure of Defaults . . . . . . . . . . . . . . . . . . . . I-41
B. Executory Contracts and Unexpired Leases to Be Rejected;
Bar Date for Rejection Damages . . . . . . . . . . . . . . . I-42
1. Rejection Generally . . . . . . . . . . . . . . . . . . I-42
2. Bar Date for Rejection Damages . . . . . . . . . . . . . I-42
C. Special Executory Contract and Unexpired Lease Matters . . . I-42
1. Existing Employment, Retirement and
Other Agreements and Incentive
Compensation Programs . . . . . . . . . . . . . . . . . I-42
2. Indemnification Obligations . . . . . . . . . . . . . . I-42
D. Executory Contracts and Unexpired Leases Entered Into
and Other Obligations
Incurred After the Petition Date . . . . . . . . . . . . . . I-42
ARTICLE VII. PROVISIONS GOVERNING DISTRIBUTIONS . . . . . . . . . . . I-43
A. Distributions for Claims and Interests Allowed
as of the Effective Date . . . . . . . . . . . . . . . . . . I-43
B. Distributions by Disbursing Agents . . . . . . . . . . . . . I-43
1. Disbursing Agents . . . . . . . . . . . . . . . . . . . I-43
C. Delivery of Distributions and Undeliverable or
Unclaimed Distributions . . . . . . . . . . . . . . . . . . . I-43
1. Delivery of Distributions in General . . . . . . . . . . I-43
2. Undeliverable Distributions . . . . . . . . . . . . . . I-44
(a) Holding and Investment of Undeliverable
Distributions . . . . . . . . . . . . . . . . . . . I-44
(b) After Distributions Become Deliverable . . . . . . I-44
(c) Failure to Claim Undeliverable Distributions . . . I-44
D. Distribution Record Date . . . . . . . . . . . . . . . . . . I-45
E. Means of Cash Payments . . . . . . . . . . . . . . . . . . . I-45
F. Timing and Calculation of Amounts to Be Distributed . . . . . I-45
1. In General . . . . . . . . . . . . . . . . . . . . . . . I-45
2. Distributions of Stock . . . . . . . . . . . . . . . . . I-45
3. Distributions of Warrants . . . . . . . . . . . . . . . I-46
4. Distributions of Rights . . . . . . . . . . . . . . . . I-46
5. Compliance with Tax Regulations . . . . . . . . . . . . I-46
G. Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . I-47
H. Surrender of Cancelled Debt Instruments or Securities . . . . I-47
1. Existing Loan Documents and Capital Stock Certificates . I-47
2. Lost, Stolen, Mutilated or Destroyed Existing Loan
Documents or Capital Stock Certificates . . . . . . . . I-47
3. Failure to Surrender Canceled Existing Loan Documents
or Capital Stock Certificates . . . . . . . . . . . . . I-48
I. Restrictions Related to MK Rail Stock . . . . . . . . . . . . I-48
J. Pledge by Holder of Boise Landlord Claims of
Entitlement to Receive Distributions . . . . . . . . . . . . I-48
ARTICLE VIII. PROCEDURES FOR RESOLVING DISPUTED CLAIMS AND
DISPUTED INTERESTS . . . . . . . . . . . . . . . . . . I-48
A. Prosecution of Objections to Claims and Interests . . . . . . I-48
B. Treatment of Disputed Claims or Interests . . . . . . . . . . I-48
1. No Payments on Account of Disputed Claims or Interests . I-48
2. Resolution or Estimation of Claims . . . . . . . . . . . I-49
C. Distributions on Account of Disputed Claims or
Interests Once They Are Allowed . . . . . . . . . . . . . . . I-49
ARTICLE IX. CONDITIONS PRECEDENT TO CONFIRMATION AND
CONSUMMATION OF THE PLAN . . . . . . . . . . . . . . . . I-49
A. Conditions to Confirmation . . . . . . . . . . . . . . . . . I-49
B. Conditions to Effective Date . . . . . . . . . . . . . . . . I-49
C. Waiver of Conditions . . . . . . . . . . . . . . . . . . . . I-50
D. Effect of Nonoccurrence of Conditions to Effective Date . . . I-50
ARTICLE X. CRAMDOWN . . . . . . . . . . . . . . . . . . . . . . . . I-51
ARTICLE XI. DISCHARGE OF CLAIMS, TERMINATION OF
INTERESTS, INJUNCTIONS AND SUBORDINATION RIGHTS . . . . I-51
A. Discharge of Claims and Termination of Interests . . . . . . I-51
B. Injunctions . . . . . . . . . . . . . . . . . . . . . . . . . I-51
1. Injunction Related to Discharged Claims and
Terminated Interests . . . . . . . . . . . . . . . . . . I-51
2. Released Claims . . . . . . . . . . . . . . . . . . . . I-52
3. Consent of Injunction . . . . . . . . . . . . . . . . . I-52
4. Regulatory or Enforcement Actions . . . . . . . . . . . I-52
C. Termination of Subordination Rights and
Settlement of Related Claims and Controversies . . . . . . . I-52
D. Limitation of Liability in Connection with the Plan,
Disclosure Statement and Related Document and
Related Indemnity . . . . . . . . . . . . . . . . . . . . . . I-53
ARTICLE XII. RETENTION OF JURISDICTION . . . . . . . . . . . . . . . I-53
ARTICLE XIII. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . I-54
A. Payment of Statutory Fees . . . . . . . . . . . . . . . . . . I-54
B. Modification of the Plan . . . . . . . . . . . . . . . . . . I-55
C. Revocation of the Plan . . . . . . . . . . . . . . . . . . . I-55
D. Severability of Plan Provisions . . . . . . . . . . . . . . . I-55
E. Successors and Assigns . . . . . . . . . . . . . . . . . . . I-55
F. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . I-55
G. Service of Documents on the Debtor or Reorganized Debtor . . I-55
H. Regulatory or Enforcement Action . . . . . . . . . . . . . . I-56
TABLE OF EXHIBITS
EXHIBIT NAME
- - ------- ----
A Merger Agreement (without exhibits)
B Combined Company Bylaws*
C Combined Company Certificate of Incorporation*
D (Intentionally Omitted)
E List of Lenders
F List of Existing Lender Agreements
G List of Existing Guaranties
H List of Existing Letter of Credit
I Combined Company Registration Rights Agreement
J Combined Company Warrant Agreement
K Exclusive Schedule of Executory Contracts and
Unexpired Leases to Be Rejected
L Summaries of New MK Compensation Plans
M List of New MK Employment, Retirement, Indemnification and
Other Agreements and Incentive Compensation Programs
That Will Remain in Effect as of the Effective Date
N New MK Bylaws*
O New MK Amended Certificate of Incorporation*
P New MK Registration Rights Agreement*
Q New MK Warrant Agreement*
R-1 Creditor Distribution Exhibit--Merger Agreement Consummated
R-2 Creditor Distribution Exhibit--Merger Agreement Terminated
S Residual Equity Recovery Exhibit
T MK Rail Stockholders Agreement*
U Non-Exclusive List of Retained Claims, Rights and Causes of Action
V Liquidating Trust Agreement
W MK Rail Note Cancellation Agreement*
_____________________
* To be provided upon request.
INTRODUCTION
Morrison Knudsen Corporation, a Delaware corporation ("MK" or the
"Debtor"), proposes the following first amended plan of reorganization (the
"Plan") for the satisfaction of the Debtor's outstanding creditor claims and
equity interests. Reference is made to the Debtor's second amended
disclosure statement, distributed contemporaneously with the Plan (the
"Disclosure Statement"), for a discussion of the Debtor's history,
businesses, properties, results of operations and projections for future
operations, and for a summary and analysis of the Plan and certain related
matters, including the Merger, which is a central feature of the Plan. All
Holders of Claims against and Interests in the Debtor entitled to vote on the
Plan are encouraged to read the Plan and the Disclosure Statement in their
entirety before voting to accept or reject the Plan. Subject to certain
restrictions and requirements set forth in the Plan and the Merger Agreement,
the Debtor reserves the right to alter, amend, modify, revoke or withdraw the
Plan prior to its consummation.
Unless the Merger Agreement is terminated as provided therein, the
Merger shall be consummated in accordance with the terms of the Merger
Agreement and the Plan will become effective simultaneously with such
consummation. If the Merger Agreement is terminated as provided therein, the
Plan will nonetheless become effective in accordance with its terms, which
provide for alternative treatment of various matters in that event.
ARTICLE I.
DEFINED TERMS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW
A. DEFINED TERMS
As used in the Plan, capitalized terms and phrases have the meanings set
forth below. Any term used in the Plan that is not defined herein, but that
is used in the Bankruptcy Code or the Bankruptcy Rules, shall have the
meaning assigned to that term in the Bankruptcy Code or the Bankruptcy Rules.
1. "ADMINISTRATIVE CLAIM" means a Claim for costs and expenses of
administration allowed under section 503(b), 507(b) or 1114(e)(2) of the
Bankruptcy Code, including: (a) the actual and necessary costs and expenses
incurred after the Petition Date of preserving the Estate and operating the
businesses of the Debtor (such as wages, salaries or commissions for services
and payments for goods or other services); (b) compensation for legal,
financial advisory, accounting and other services and reimbursement of
expenses awarded or allowed under section 330(a) or 331 of the Bankruptcy
Code; (c) all fees and charges assessed against the Estate under chapter 123
of title 28, United States Code, 28 U.S.C. Section Section 1911-1930; and (d)
any such Claim held by an Affiliate arising on or after the Petition Date.
2. "AFFILIATE" means MK or any corporation, limited liability company
or partnership in which MK directly or indirectly owns 50% or more of the
equity interest of such entity, excluding MK Rail.
3. "ALLOWED CLAIM" or "ALLOWED UNSECURED CLAIM" means (subject to the
provisions of Section III.E below):
(a) a Claim that has been listed by the Debtor in its Schedules
as other than disputed, contingent or unliquidated and (i) is not otherwise
a Disputed Claim or (ii) as to which the Debtor has not delivered to the
Holder of the Claim a Stipulation of Amount and Nature of Claim;
(b) a Claim that is allowed: (i) in any Stipulation of Amount and
Nature of Claim executed prior to the Confirmation Date and approved by the
Bankruptcy Court; (ii) in any Stipulation of Amount and Nature of
Claim executed on or after the Confirmation Date (except with respect to the
Metra Lender Claims); (iii) in any contract, instrument, indenture or other
agreement or document entered into in connection with the Plan; (iv) in a
Final Order; or (v) pursuant to the terms of the Plan;
(c) a Claim relating to a rejected executory contract or unexpired
lease that satisfies either (a) or (b) above, but in either case only if a
proof of Claim has been Filed by the Bar Date or has otherwise been deemed
timely Filed under applicable law; or
(d) a Claim (other than a Claim relating to a rejected executory
contract or unexpired lease) not satisfying either clause (a) or (b) above,
but that is not a Disputed Claim.
4. "ALLOWED . . . CLAIM" means an Allowed Claim in the particular
Class(es) or categories described.
5. "ALLOWED INTEREST" means an Interest: (a) that is registered as of
the Distribution Record Date in a stock register that is maintained by or on
behalf of the Debtor and (b) either (i) is not a Disputed Interest or (ii)
has been allowed by a Final Order.
6. "AMERAIL" means American Passenger Rail Car Company L.L.C. and its
successors and assigns.
7. "AMERAIL ENVIRONMENTAL SECURITY AGREEMENT" means that certain
Pledge and Security Agreement (Environmental Obligations) dated as of October
10, 1995 by MK, MKO and certain of the Subsidiaries in favor of Amerail.
8. "BALLOTS" means the ballots accompanying the Disclosure Statement
upon which Holders of Impaired Claims or Impaired Interests entitled to vote
on the Plan shall indicate their acceptance or rejection of the Plan in
accordance with the Voting Instructions.
9. "BANKRUPTCY CODE" means title 11 of the United States Code, as now
in effect or hereafter amended.
10. "BANKRUPTCY COURT" means the United States District Court having
jurisdiction over the Chapter 11 Case and, to the extent of any reference
made pursuant to 28 U.S.C. Section 157, the bankruptcy unit of the District
Court.
11. "BANKRUPTCY RULES" means, collectively, the Federal Rules of
Bankruptcy Procedure and the general and local rules of the Bankruptcy Court,
as now in effect or hereafter amended.
12. "BAR DATE" means the bar date for Filing proofs of Claim with
respect to executory contracts and unexpired leases that are rejected
pursuant to the Plan or otherwise pursuant to section 365 of the Bankruptcy
Code.
13. "BENEFICIAL HOLDER" means the entity holding the beneficial
interest in a Claim or Interest.
14. "BOISE LANDLORD" means MK Plaza Trust, a Delaware business trust.
15. "BOISE LANDLORD CASH DISTRIBUTION" means the amount of the Cash
Distribution to be distributed, subject to the exercise of the Combined
Company Rights, on or as soon as practicable after the Effective Date, unless
the Merger Agreement is terminated, to the Holder of an Allowed Boise
Landlord Claim in accordance with Part A of the Creditor Distribution
Exhibit.
16. "BOISE LANDLORD CLAIMS" means the rejection damage Claims of the
Boise Landlord against MK with respect to the rejection of the Boise Leases.
17. "BOISE LANDLORD CLASS MK-6 RIGHTS EXERCISE PROCEEDS" means the
amount of the Class MK-6 Rights Exercise Proceeds to be distributed on or as
soon as practicable after the Effective Date to Holder of Allowed Boise
Landlord Claims in accordance with Part A of the Creditor Distribution
Exhibit.
18. "BOISE LANDLORD COMBINED COMPANY COMMON STOCK" means the aggregate
number of shares of Combined Company Common Stock to be distributed, subject
to the exercise of the Combined Company Rights, on or as soon as practicable
after the Effective Date, unless the Merger Agreement is terminated, to the
Holder of an Allowed Boise Landlord Claim in accordance with Part A of the
Creditor Distribution Exhibit.
19. "BOISE LANDLORD NEW MK COMMON STOCK" means the aggregate number of
shares of New MK Common Stock to be distributed on or as soon as practicable
after the Effective Date, if the Merger Agreement is terminated, to the
Holder of an Allowed Boise Landlord Claim in accordance with Part A of the
Creditor Distribution Exhibit.
20. "BOISE LEASES" means those certain Amended and Restated Leases
dated as of January 9, 1990, as amended from time to time prior to the
Petition Date.
21. "BONDING COMPANY" means Fidelity and Deposit Company of Maryland.
22. "BONDING COMPANY CASH DISTRIBUTION" means the amount of the Cash
Distribution to be distributed, subject to the exercise of the Combined
Company Rights, on or as soon as practicable after the Effective Date, unless
the Merger Agreement is terminated, to Holders of Allowed Unsecured Transit
Bonding Claims in accordance with Part B of the Creditor Distribution
Exhibit.
23. "BONDING COMPANY CLASS MK-3 RIGHTS EXERCISE PROCEEDS" means the
amount of the Class MK-3 Rights Exercise Proceeds to be distributed on or as
soon as practicable after the Effective Date to Holders of Allowed Secured
Transit Bonding Claims in accordance with Part B of the Creditor Distribution
Exhibit.
24. "BONDING COMPANY CLASS MK-6 RIGHTS EXERCISE PROCEEDS" means the
amount of the Class MK-6 Rights Exercise Proceeds to be distributed on or as
soon as practicable after the Effective Date to Holders of Allowed Unsecured
Transit Bonding Claims in accordance with Part B of the Creditor Distribution
Exhibit.
25. "BONDING COMPANY COMBINED COMPANY COMMON STOCK" means the aggregate
number of shares of Combined Company Common Stock to be distributed, subject
to the exercise of the Combined Company Rights, on or as soon as practicable
after the Effective Date, unless the Merger Agreement is terminated, to
Holders of Allowed Unsecured Transit Bonding Claims in accordance with Part
B of the Creditor Distribution Exhibit.
26. "BONDING COMPANY MK RAIL NOTE PROCEEDS" means the aggregate amount
of MK Rail Note Proceeds to be distributed, subject to the exercise of the
Combined Company Rights, on or as soon as practicable after the Effective
Date to Holders of Allowed Secured Transit Bonding Claims in accordance with
Part B of the Creditor Distribution Exhibit.
27. "BONDING COMPANY MK RAIL STOCK" means the aggregate number of
shares of MK Rail Stock to be distributed, subject to the exercise of the
Combined Company Rights, on or as soon as practicable after the Effective
Date to Holders of Allowed Secured Transit Bonding Claims in accordance with
Part B of the Creditor Distribution Exhibit.
28. "BONDING COMPANY NEW MK COMMON STOCK" means the aggregate number
of shares of New MK Common Stock to be distributed on or as soon as
practicable after the Effective Date, if the Merger Agreement is terminated,
to Holders of Allowed Unsecured Transit Bonding Claims in accordance with
Part B of the Creditor Distribution Exhibit.
29. "BRIDGE LOAN" means, collectively, any loans made to MK and MKO
under the Bridge Loan Agreement.
30. "BRIDGE LOAN AGENT" means Mellon Bank, N.A. in its capacity as
administrative agent and collateral agent with respect to the Bridge Loan
Agreement.
31. "BRIDGE LOAN AGREEMENT" means that certain Amended and Restated
Credit Agreement dated as of July 31, 1995, as amended, among MK and MKO as
borrowers, the Bridge Loan Lenders and the Bridge Loan Agent.
32. "BRIDGE LOAN CLAIMS" means the Claims of the Bridge Loan Lenders
arising under the Bridge Loan Documents.
33. "BRIDGE LOAN DOCUMENTS" means the Bridge Loan Agreement and all
"Loan Documents," as defined in the Bridge Loan Agreement.
34. "BRIDGE LOAN LENDERS" means, collectively: (a) Mellon Bank, N.A.;
Merrill Lynch, Pierce, Fenner & Smith Incorporated; Swiss Bank Corporation,
Cayman Islands Branch; Nomura Holding America, Inc.; Internationale
Nederlanden (U.S.) Capital Corp; Bear, Stearns & Co., Inc. and Banque
Nationale De Paris and their successors and assigns and (b) Bank of America
National Trust & Savings Association, Bank of America Illinois and Key Bank
of Idaho, solely in their capacity as the deposit banks.
35. "BUSINESS DAY" means any day, other than a Saturday, Sunday or
"legal holiday" (as defined in Bankruptcy Rule 9006(a)).
36. "CAPITAL STOCK" means, collectively, the Old Common Stock, the Old
Stock Options and the Old Warrants.
37. "CASH" means cash and cash equivalents.
38. "CASH DISTRIBUTION" means the $13,300,000 to be distributed, unless
the Merger Agreement is terminated, on or as soon as practicable after the
Effective Date.
39. "CHAPTER 11 CASE" means the case commenced by the Debtor under
chapter 11 of the Bankruptcy Code.
40. "CLAIM" means a claim (as defined in section 101(5) of the
Bankruptcy Code) against the Debtor.
41. "CLASS" means a class of Claims or Interests, as described in
Article III below.
42. "CLASS 3 FUNDED DEBT DISTRIBUTION" means the value, determined in
accordance with the Residual Equity Recovery Exhibit, of the property to be
distributed to the Funded Debt Lenders pursuant to Section III.B.3 hereof;
provided, however, that if the Merger Agreement is terminated, the value of
such property shall be determined by an order of the Bankruptcy Court.
43. "CLASS 3 METRA LENDER DISTRIBUTION" means the value, determined in
accordance with the Residual Equity Recovery Exhibit, of the property to be
distributed to the Metra Lenders pursuant to Section III.B.3 hereof;
provided, however, that if the Merger Agreement is terminated, the value of
such property shall be determined by an order of the Bankruptcy Court.
44. "CLASS 3 TRANSIT BONDING DISTRIBUTION" means the value, determined
in accordance with the Residual Equity Recovery Exhibit, of the property to
be distributed to the Bonding Company pursuant to Section III.B.3 hereof;
provided, however, that if the Merger Agreement is terminated, the value of
such property shall be determined by an order of the Bankruptcy Court.
45. "CLASS MK-3 RIGHTS EXERCISE PROCEEDS" means the Combined Company
Rights Exercise Proceeds to be allocated to Class MK-3, calculated in
accordance with the following formula:
Class MK-3 Rights Exercise Proceeds = (MK Rail Stock Exercise Proceeds + MK
Rail Note Exercise Proceeds)
where
(i) MK Rail Stock Exercise Proceeds = (.85) (MK Rail Stock Price)
(Rights MK Rail Stock);
(ii) "MK Rail Stock Price" means the weighted (i.e., taking into account
the volume of trading on each trading day during the period) average closing
price for shares of MK Rail Stock on the Nasdaq National Market System during
the period of 20 consecutive trading days ending on the 20th trading day
following the Confirmation Date;
(iii) "Rights MK Rail Stock" means the total number of shares of MK
Rail Stock to be distributed to or for the benefit of holders of Combined
Company Rights pursuant to the exercise of Combined Company Rights; and
(iv) "MK Rail Note Exercise Proceeds" means the aggregate amount of MK
Rail Note Proceeds distributed to or for the benefit of holders of Combined
Company Rights pursuant to the exercise of Combined Company Rights.
46. "CLASS MK-6 RIGHTS EXERCISE PROCEEDS" means the Combined Company
Rights Exercise Proceeds to be allocated to Class MK-6, calculated in
accordance with the following formula:
Class MK-6 Rights Exercise Proceeds = Combined Company Rights Exercise
Proceeds--Class MK-3 Rights Exercise
Proceeds
47. "COMBINED COMPANY" means the Delaware corporation which is the
surviving corporation of the Merger, and which shall bear the corporate name
"Morrison Knudsen Corporation."
48. "COMBINED COMPANY BYLAWS" means the Bylaws of the Combined Company,
which shall be substantially in the form set forth in Exhibit B.
49. "COMBINED COMPANY CERTIFICATE OF INCORPORATION" means the
Certificate of Incorporation of the Combined Company, which shall be
substantially in the form set forth in Exhibit C.
50. "COMBINED COMPANY COMMON STOCK" means the shares of common stock
of the Combined Company, authorized pursuant to the Combined Company
Certificate of Incorporation, to be issued and distributed (unless the Merger
Agreement is terminated) in accordance with the provisions hereof, which
shares shall constitute 45% of the total number of shares of such common
stock issued and outstanding immediately after the Effective Time.
51. "COMBINED COMPANY REGISTRATION RIGHTS AGREEMENT" means that certain
agreement to be entered into on the Effective Date, unless the Merger
Agreement is terminated, by the Combined Company and the recipients of
Combined Company Common Stock, which shall be in substantially the form set
forth in Exhibit I.
52. "COMBINED COMPANY RIGHTS" means uncertificated, nontransferable
rights, exercisable in the aggregate to purchase the Combined Company Rights
Aggregate Consideration, which rights shall, unless the Merger Agreement is
terminated, be issued to Holders of Allowed Class MK-8 Interests pursuant to
Section III.B.8 of the Plan and be exercisable in accordance with the
provisions of Section VII.B.6 of the Plan. Each Combined Company Right
shall be identical in all respects to every other Combined Company Right.
53. "COMBINED COMPANY RIGHTS AGGREGATE CONSIDERATION" means,
collectively, the Combined Company Rights Aggregate Percentage of (a) the MK
Rail Stock, MK Rail Note Proceeds, Cash Distribution, Combined Company Common
Stock (excluding in each case any portion of the foregoing distributed to the
Liquidating Trust in accordance with the Creditor Distribution Exhibit) and
(b) the rights and benefits under the Liquidating Trust Agreement, that in
the absence of the exercise of any Combined Company Rights, are distributable
to or are otherwise to inure to the benefit of Holders of Allowed Class MK-3
and MK-6 Claims in accordance with Sections III.B.3 and III.B.6 of the Plan,
representing and including a succession, to the extent of the Combined
Company Rights Aggregate Percentage, to the rights, privileges, obligations
and restrictions of each of the (a) Funded Debt Lenders, (b) Metra Lenders,
(c) Bonding Company, (d) Holders of Touchstone Claims, and (e) Boise Landlord
under the Plan (but only, insofar as the Boise Landlord is concerned, as such
rights, privileges and obligations pertain to distributions to be made to
the Boise Landlord pursuant to the Plan and not otherwise) and the Exhibits
hereto.
54. "COMBINED COMPANY RIGHTS AGGREGATE PERCENTAGE" means a percentage
determined pursuant to the following formula:
( Total Minimum Creditor Claims )
(.50) ( )
( Total Maximum Creditor Claims )
where
(i) Total Minimum Creditor Claims = Allowed Funded Debt Claims +
Allowed Transit Bonding Claims + Allowed Boise Landlord Claims + Allowed
Touchstone Claims + Metra Floor Amount; and
(ii) Total Maximum Creditor Claims = Allowed Funded Debt Claims +
Allowed Transit Bonding Claims + Allowed Boise Landlord Claims + Allowed
Touchstone Claims + Metra Ceiling Amount (determined as of the Confirmation
Date).
55. "COMBINED COMPANY RIGHTS EXERCISE PERIOD" means the period
commencing on the Effective Date and concluding on the Combined Company
Rights Expiration Date.
56. "COMBINED COMPANY RIGHTS EXERCISE PRICE" means an amount in Cash
per Combined Company Right determined pursuant to the following formula:
(Combined Company Rights Aggregate Percentage)(Total Maximum Creditor Claims)
- - -----------------------------------------------------------------------------
Number of Combined Company Rights Issued Under the Plan
57. "COMBINED COMPANY RIGHTS EXERCISE PROCEEDS" means the aggregate
Cash proceeds generated by the exercise of the Combined Company Rights
pursuant to Section V.B.6 of the Plan.
58. "COMBINED COMPANY RIGHTS EXPIRATION DATE" means the 5:00 p.m.
Eastern Time on the later of (i) the 23rd trading day following the
Confirmation Due and (ii) the fifth Business Day following the Effective
Date. For purposes of the foregoing, the term "trading day" means any day
on which both the New York Stock Exchange and the Nasdaq National Market are
open for the transaction of business.
59. "COMBINED COMPANY SECURITIES" means, collectively, the (a) Combined
Company Common Stock, (b) Combined Company Series A Preferred Stock, (c)
Combined Company Warrants, and (d) Combined Company Rights.
60. "COMBINED COMPANY SERIES A PREFERRED STOCK" means the 18,000 shares
of Series A Preferred Stock of the Combined Company authorized pursuant to
the Combined Company Certificate of Incorporation. to be issued and
distributed unless the Merger Agreement is terminated), subject to the
provisions of Section V.B.4 (pursuant to which the number of shares may be
increased to $1,800,000 in certain circumstances), to the Liquidating Trust,
which shares shall constitute 100% of the total number of shares of such
preferred stock issued and outstanding immediately after the Effective Time,
or the proceeds associated therewith.
61. "COMBINED COMPANY WARRANT AGREEMENT" means the Combined Company
Warrant Agreement in substantially the form set forth in Exhibit J.
62. "COMBINED COMPANY WARRANTS" means the 2,765,000 warrants, each to
purchase one share of Combined Company Common Stock, to be issued by the
Combined Company pursuant to the Combined Company Warrant Agreement unless
the Merger Agreement is terminated, which warrants shall be issued to Holders
of Allowed Class MK-8 Interests pursuant to Section III.B.8 of the Plan, and
which warrants each shall (a) have an exercise price of $12.00 per share and
(b) expire on the date occurring six years and six months after the Effective
Time.
63. "COMMON STOCK EXCHANGE" means the exchange of Old Common Stock for
Combined Company Warrants, or, if the Merger Agreement is terminated, the
exchange of Old Common Stock for New MK Warrants.
64. "CONFIRMATION" means the entry of the Confirmation Order.
65. "CONFIRMATION DATE" means the date on which the Bankruptcy Court
enters the Confirmation Order on its docket, within the meaning of Bankruptcy
Rules 5003 and 9021.
66. "CONFIRMATION ORDER" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
67. "CREDITOR DISTRIBUTION EXHIBIT" means the Creditor Distribution
Exhibit which shall be substantially in the form set forth in Exhibit R- I;
provided, however, that if the Merger Agreement is terminated, "Creditor
Distribution Exhibit" shall mean the Creditor Distribution Exhibit which
shall be substantially in the form of Exhibit R-2.
68. "DEBTOR" means MK.
69. "DELAWARE GENERAL CORPORATION LAW" means title 8 of the Delaware
Code, as now in effect or hereafter amended.
70. "DERIVATIVE ACTIONS" means the Derivative Actions as defined in the
Disclosure Statement.
71. "DERIVATIVE ACTIONS SETTLEMENTS" means the settlements of the
Derivative Actions and the Double Derivative Action described in the
Disclosure Settlement.
72. "DIP FINANCING FACILITY" means the postpetition credit facility
extended to the Debtor under section 364 of the Bankruptcy Code and any
replacement facility therefor.
73. "DISBURSING AGENT" means the Combined Company (or, if the Merger
Agreement is terminated, Reorganized MK), in its capacity as Disbursing Agent
pursuant to Section VII.B below, or any Third-Party Disbursing Agent.
74. "DISCLOSURE STATEMENT" means the Second Amended Disclosure
Statement dated July 25, 1996, as amended modified or supplemented (and all
exhibits or schedules annexed thereto or referenced therein), which relates
to the Plan, and which has been prepared and distributed in accordance with
sections 1125 and 1126(b) of the Bankruptcy Code and Bankruptcy Rule 3018.
75. "DISPUTED CLAIM" means any Claim as to which the Debtor has
interposed a timely objection or request for estimation in accordance with
the Bankruptcy Code and the Bankruptcy Rules, or any Claim otherwise disputed
by the Debtor in accordance with applicable law, which objection, request for
estimation or dispute has not been withdrawn or determined by a Final Order.
76. "DISPUTED INTEREST" means any Interest as to which the Debtor has
interposed a timely objection or request for estimation in accordance with
the Bankruptcy Code and the Bankruptcy Rules or any Interest otherwise
disputed by the Debtor in accordance with applicable law, which objection,
request for estimation or dispute has not been withdrawn or determined by a
Final Order.
77. "DISTRIBUTION AGREEMENT" means that certain Distribution Agreement
dated as of October 10, 1995, as amended, among MK, MKO and the Subsidiaries,
the Bonding Company, and the Existing Indebtedness Agent.
78. "DISTRIBUTION RECORD DATE" means, collectively, (a) with respect
to identification of the Holders of Allowed Class MK-8 Interests entitled to
receive distributions under the Plan, the Confirmation Date and (b) with
respect to identification of Holders of Claims entitled to receive
distributions under the Plan, the Business Day immediately preceding the
Effective Date.
79. "DOUBLE DERIVATIVE ACTION" means the action arising out of the
Double Derivative Claims, as defined in the Disclosure Statement.
80. "EFFECTIVE DATE" means a Business Day, as determined by MK, that
is as soon as reasonably practicable but that is at least 11 days after the
Confirmation Date and on which: (a) no stay of the Confirmation Order is in
effect and (b) all conditions to the Effective Date set forth in Section IX.B
below have been satisfied or waived (if available) pursuant to Section IX.C
below. Unless the Merger Agreement is terminated, the Effective Date will
be deemed to commence simultaneously with the Effective Time.
81. "EFFECTIVE TIME" means the time at which the Merger is consummated
and becomes effective pursuant to the terms of the Merger Agreement and
applicable law.
82. "ESTATE" means, collectively, the estate created for the Debtor in
its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.
83. "EXCHANGE ACT" means the Exchange Act of 1934, as amended.
84. "EXERCISE NOTICE" has the meaning specified in Section V.B.6.e
hereof.
85. "EXISTING GUARANTIES" means the guaranties of the Guaranty Lender
listed in Exhibit G hereto.
86. "EXISTING GUARANTY CLAIMS" means the contingent Claims of the
Holders of Existing Guaranties (in such capacity, "Guaranty Lenders") arising
under the Existing Guaranties and the Existing Loan Documents.
87. "EXISTING INDEBTEDNESS AGENT" means Mellon Bank, N.A. in its
capacity as administrative agent and collateral agent with respect to the
Override Agreement.
88. "EXISTING LC CLAIMS" means the Claims of Holders of undrawn
Existing Letters of Credit (in such capacity, "LC Lenders") arising under
Existing Letters of Credit and the Existing Loan Documents.
89. "EXISTING LENDER AGREEMENTS" means, collectively, the original
credit agreements, Existing Guaranties, Existing Letters of Credit,
reimbursement agreements and other documents executed and/or agreements
entered into by the Debtor, as modified by the Override Loan Documents,
including, but not limited to, those agreements listed in Exhibit F hereto.
90. "EXISTING LETTERS OF CREDIT" means the letters of credit issued by
the LC Lenders listed in Exhibit H hereto.
91. "EXISTING LOAN DOCUMENTS" means the Override Loan Documents, the
Existing Lender Agreements and all documents executed by the Debtor and the
Nondebtor Subsidiaries in connection therewith, including, but not limited
to, the Existing Guaranties and the Existing Letters of Credit, as amended
from time to time prior to the Petition Date.
92. "EXISTING LOANS" means, collectively, as of the Effective Date (a)
"Existing Loans" as defined in the Override Agreement, (b) any other
liquidated Claims of the LC Lenders under Existing Letters of Credit that
have been drawn and (c) any other liquidated Claims of the Guaranty Lenders
under the Existing Guaranties.
93. "FILE," "FILED" OR "FILING" means file, filed or filing with the
Bankruptcy Court in the Chapter 11 Case.
94. "FINAL ORDER" means an order or judgment of the Bankruptcy Court,
or other court of competent jurisdiction, as entered on the docket in the
Chapter 11 Case, which has not been reversed, stayed, modified or amended,
and as to which the time to appeal or seek certiorari has expired, and no
appeal or petition for certiorari has been timely taken, or as to which any
appeal that has been or may be taken or any petition for certiorari that has
been or may be filed has been dismissed or resolved by the highest court to
which the order or judgment was appealed or from which certiorari was sought.
95. "FUNDED DEBT CASH DISTRIBUTION" means the aggregate amount of the
Lender Cash Distribution to be distributed on or as soon as is practicable
after the Effective Date, unless the Merger Agreement is terminated, to
Holders of Allowed Unsecured Funded Debt Claims in accordance with Part C of
the Creditor Distribution Exhibit.
96. "FUNDED DEBT CLAIMS" means, collectively, all Secured Funded Debt
Claims and Unsecured Funded Debt Claims.
97. "FUNDED DEBT CLASS MK-3 RIGHTS EXERCISE PROCEEDS" means the
aggregate amount of Class MK-3 Rights Exercise Proceeds to be distributed on
or as soon as practicable after the Effective Date to Holders of Allowed
Secured Funded Debt Claims in accordance with Part C of the Creditor
Distribution Exhibit.
98. "FUNDED DEBT CLASS MK-6 RIGHTS EXERCISE PROCEEDS" means the
aggregate amount of the Class MK-6 Rights Exercise Proceeds to be distributed
on or as soon as practicable after the Effective Date to Holders of Allowed
Unsecured Funded Debt Claims in accordance with Part C of the Creditor
Distribution Exhibit.
99. "FUNDED DEBT COMBINED COMPANY COMMON STOCK" means the aggregate
number of shares of Lender Combined Company Common Stock to be distributed,
subject to the exercise of the Combined Company Rights, on or as soon as
practicable after the Effective Date, unless the Merger Agreement is
terminated, to Holders of Allowed Unsecured Funded Debt Claims in accordance
with Part C of the Creditor Distribution Exhibit.
100. "FUNDED DEBT LENDERS" means the Lenders with respect to the
Existing Loans and their successor and assigns.
101. "FUNDED DEBT MK RAIL NOTE PROCEEDS" means the aggregate amount of
Lender MK Rail Note Proceeds to be distributed, subject to the exercise of
the Combined Company Rights, on or as soon as practicable after the Effective
Date to Holders of Allowed Secured Funded Debt Claims in accordance with Part
C of the Creditor Distribution Exhibit.
102. "FUNDED DEBT MK RAIL STOCK" means the aggregate number of shares
of Lender MK Rail Stock to be distributed, subject to the exercise of the
Combined Company Rights, on or as soon as practicable after the Effective
Date to Holders of Allowed Secured Funded Debt Claims in accordance with Part
C of the Creditor Distribution Exhibit.
103. "FUNDED DEBT NEW MK COMMON STOCK" means the aggregate number of
shares of Lender New MK Common Stock to be distributed on or as soon as
practicable after the Effective Date, if the Merger Agreement is terminated,
to Holders of Allowed Unsecured Funded Debt Claims in accordance with Part
C of the Creditor Distribution Exhibit.
104. "FUNDED DEBT PRO RATA SHARE" means proportionately so that with
respect to an Allowed Funded Debt Claim, the ratio of (i)(a) the number of
shares of Combined Company Common Stock or MK Rail Stock or the amount of the
Cash Distribution or MK Rail Note Proceeds or Combined Company Rights
Exercise Proceeds to be distributed on account of a particular Allowed Funded
Debt Claim to (b) the amount of such Allowed Funded Debt Claim, is the same
as the ratio of (ii)(a) the number of shares of Combined Company Common Stock
or MK Rail Stock or the amount of the Cash Distribution or MK Rail Note
Proceeds or Combined Company Rights Exercise Proceeds to be distributed on
account of all Allowed Funded Debt Claims to (b) the amount of all Allowed
Funded Debt Claims; provided, however, that if the Merger Agreement is
terminated, "Funded Debt Pro Rata Share" means proportionately so that with
respect to an Allowed Funded Debt Claim, the ratio of (i)(a) the number of
shares of New MK Common Stock or MK Rail Stock or the amount of MK Rail Note
Proceeds to be distributed on account of a particular Allowed Funded Debt
Claim to (b) the amount of such Allowed Funded Debt Claim, is the same as the
ratio of (ii)(a) the number of shares of New MK Common Stock or MK Rail Stock
or the amount of MK Rail Note Proceeds to be distributed on account of all
Allowed Funded Debt Claims to (b) the amount of all Allowed Funded Debt
Claims.
105. "HOLDER" means an entity holding an Interest or Claim, and with
respect to a vote on the Plan means the Beneficial Holder as of the
applicable Voting Record Date or any authorized signatory who has completed
and executed a Ballot or on whose behalf a Master Ballot has been completed
and executed in accordance with the Voting Instructions.
106. "IMPAIRED . . ." means, when used with reference to a Claim or
Interest, a Claim or Interest that is impaired within the meaning of section
1124 of the Bankruptcy Code.
107. "INDEMNIFICATION AGREEMENT" means that certain Indemnification
Agreement dated as of October 10, 1995 by and among MK, MKO, certain of the
Subsidiaries and the Bonding Company.
108. "INITIAL EQUITY RECOVERY" means Initial Equity Recovery as defined
in the Residual Equity Recovery Exhibit.
109. "INITIAL RESIDUAL EQUITY DISTRIBUTION" means (unless the Merger
Agreement is terminated), in the event of an Initial Equity Recovery, the
number of shares of Combined Company Common Stock to be distributed on or as
soon as is practicable after the Effective Date to Holders of Allowed Class
MK-8 Interests, as calculated in accordance with the Residual Equity
Recovery Exhibit.
110. "INTERCREDITOR AGREEMENT" means that certain Intercreditor
Agreement dated as of October 10, 1995 among the Bridge Loan Agent, the
Existing Indebtedness Agent, the Bonding Company and Amerail.
111. "INTEREST" means, collectively, (a) the rights of Holders of
Capital Stock, including redemption rights, dividend rights and liquidation
preferences, (b) the Rights and (c) the rights of the Securities Plaintiffs
under the Shareholder Litigation Settlements.
112. "LENDER CASH DISTRIBUTION" means the aggregate amount of the Cash
Distribution to be allocated, unless the Merger Agreement is terminated,
subject to the exercise of the Combined Company Rights, to Holders of the
Unsecured Funded Debt Claims and the Unsecured Metra Lender Claims in
accordance with Part B of the Creditor Distribution Exhibit.
113. "LENDER CLASS MK-3 RIGHTS EXERCISE PROCEEDS" means the aggregate
amount of Class MK-3 Rights Exercise Proceeds to be allocated to Holders of
the Secured Funded Debt Claims and the Secured Metra Lender Claims in
accordance with Part B of the Creditor Distribution Exhibit.
114. "LENDER CLASS MK-6 RIGHTS EXERCISE PROCEEDS" means the aggregate
amount of Class MK-6 Rights Exercise Proceeds to be allocated to Holders of
the Unsecured Funded Debt Claims and the Unsecured Metra Lender Claims in
accordance with Part B of the Creditor Distribution Exhibit.
115. "LENDER COMBINED COMPANY COMMON STOCK" means the aggregate number
of shares of Combined Company Common Stock to be allocated, subject to the
exercise of the Combined Company Rights, unless the Merger Agreement is
terminated, to Holders of the Unsecured Funded Debt Claims and the Unsecured
Metra Lender Claims in accordance with Part B of the Creditor Distribution
Exhibit.
116. "LENDER MK RAIL NOTE PROCEEDS" means the aggregate amount of MK
Rail Note Proceeds to be allocated, subject to the exercise of the Combined
Company Rights, to Holders of the Secured Funded Debt Claims and the Secured
Metra Lender Claims in accordance with Part B of the Creditor Distribution
Exhibit.
117. "LENDER MK RAIL STOCK" means the aggregate number of shares of MK
Rail Stock to be allocated, subject to the exercise of the Combined Company
Rights, to Holders of the Secured Funded Debt Claims and the Secured Metra
Lender Claims in accordance with Part B of the Creditor Distribution Exhibit.
118. "LENDER NEW MK COMMON STOCK" means the aggregate number of shares
of New MK Common Stock to be allocated, if the Merger Agreement is
terminated, to Holders of the Unsecured Funded Debt Claims and the Unsecured
Metra Lender Claims in accordance with Part B of the Creditor Distribution
Exhibit.
119. "LENDER STEERING COMMITTEE" means the unofficial lender steering
committee consisting of Credit Lyonnais, CS First Boston, Mellon Bank, N.A.,
Swiss Bank Corporation (Cayman Islands and London Branches) and Union Bank
of Switzerland, and such other Lenders, if any, as may become members
thereof, but only so long as such Lenders remain members thereof.
120. "LENDERS" means, collectively, the Existing Indebtedness Agent and
the other banks, financial institutions and entities listed on Exhibit E and
their successors and assigns, but shall not include any Lender(s) in their
capacity as Bridge Loan Lender(s).
121. "LIQUIDATING TRUST" means, subject to the provisions of Section
V.B.4, that certain trust created pursuant to the Liquidating Trust
Agreement, into which (a) the Liquidating Trust MK Rail Stock, (b) the
Liquidating Trust MK Rail Note Proceeds (and, if the MK Rail Note has not
been cancelled pursuant to the MK Rail Note Cancellation Agreement, the MK
Rail Note), (c) the Liquidating Trust Cash Distribution, (d) the Liquidating
Trust Combined Company Common Stock, (e) the Combined Company Series A
Preferred Stock, (f) the Liquidating Trust Class MK-3 Rights Exercise
Proceeds, and (g) the Liquidating Trust Class MK-6 Rights Exercise Proceeds,
or the proceeds of each thereof, shall be conveyed; provided, however, that
if the Merger Agreement is terminated, (a) the Liquidating Trust MK Rail
Stock, (b) the Liquidating Trust MK Rail Note Proceeds (and, if the MK Rail
Note has not been cancelled pursuant to the MK Rail Note Cancellation
Agreement, the MK Rail Note), (c) the Liquidating Trust New MK Common Stock,
and (d) the New MK Series A Preferred Stock, or the proceeds of each
thereof, shall be conveyed to the Liquidating Trust.
122. "LIQUIDATING TRUST AGREEMENT" means that certain Liquidating Trust
Agreement to be entered into, subject to the provisions of Section V.B.4, to
govern the Liquidating Trust, which shall be substantially in the form set
forth in Exhibit V.
123. "LIQUIDATING TRUST CASH DISTRIBUTION" means, subject to the
provisions of Section V.B.4, (i) the Liquidating Trust Part A Cash
Distribution, as determined in accordance with Part A of the Creditor
Distribution Exhibit, (ii) the Liquidating Trust Part B Cash Distribution,
as determined in accordance with Part B of the Creditor Distribution Exhibit,
and (iii) that portion of the Lender Cash Distribution to be allocated to the
Liquidating Trust under Part C of the Creditor Distribution Exhibit.
124. "LIQUIDATING TRUST CLASS MK-3 RIGHTS EXERCISE PROCEEDS" means,
subject to the provisions of Section V.B.4, (i) the Liquidating Trust Part
B Class MK-3 Rights Exercise Proceeds, as determined in accordance with Part
B of the Creditor Distribution Exhibit and (ii) that portion of the Lender
Class MK-3 Rights Exercise Proceeds to be allocated to the Liquidating Trust
under Part C of the Creditor Distribution Exhibit.
125. "LIQUIDATING TRUST CLASS MK-6 RIGHTS EXERCISE PROCEEDS" means,
subject to the provisions of Section V.B.4, (i) the Liquidating Trust Part
A Class MK-6 Rights Exercise Proceeds, as determined in accordance with Part
A of the Creditor Distribution Exhibit and (ii) that portion of the Lender
Class MK-6 Rights Exercise Proceeds to be allocated to the Liquidating Trust
under Part C of the Creditor Distribution Exhibit.
126. "LIQUIDATING TRUST COMBINED COMPANY COMMON STOCK" means, subject
to the provisions of Section V.B.4, (i) the Liquidating Trust Part A Combined
Company Common Stock, as determined in accordance with Part A of the Creditor
Distribution Exhibit, (ii) the Liquidating Trust Part B Combined Company
Common Stock, as determined in accordance with Part B of the Creditor
Distribution Exhibit, and (iii) that portion of the Lender Combined Company
Common Stock to be allocated to the Liquidating Trust under Part C of the
Creditor Distribution Exhibit.
127. "LIQUIDATING TRUST MK RAIL NOTE PROCEEDS" means, subject to the
provisions of Section V.B.4, (i) the Liquidating Trust MK Rail Note Proceeds,
as determined in accordance with Part B of the Creditor Distribution Exhibit,
and (ii) that portion of the Lender MK Rail Note Proceeds to be allocated to
the Liquidating Trust under Part C of the Creditor Distribution Exhibit.
128. "LIQUIDATING TRUST MK RAIL STOCK" means, subject to the provisions
of Section V.B.4, (i) the Liquidating Trust MK Rail Stock, as determined in
accordance with Part B of the Creditor Distribution Exhibit, and (ii) that
portion of the Lender MK Rail Stock to be allocated to the Liquidating Trust
under Part C of the Creditor Distribution Exhibit.
129. "LIQUIDATING TRUST NEW MK COMMON STOCK" means, subject to the
provisions of Section V.B.4, (i) the Liquidating Trust Part A New MK Common
Stock, as determined in accordance with Part A of the Creditor Distribution
Exhibit, (ii) the Liquidating Trust Part B New MK Common Stock, as determined
in accordance with Part B of the Creditor Distribution Exhibit, and (iii)
that portion of the Lender New MK Common Stock to be allocated to the
Liquidating Trust under Part C of the Creditor Distribution Exhibit.
130. "LIQUIDATING TRUSTEE" means, subject to the provisions of Section
V.B.4, the Liquidating Trustee with respect to the Liquidating Trust.
131. "MASTER BALLOTS" means the master ballots accompanying the
Disclosure Statement upon which the acceptance or rejection of the Plan by
Holders of Impaired Interests shall be indicated in accordance with the
Voting Instructions.
132. "MERGER" means the merger of Washington and MK pursuant to Section
V.B.1 of the Plan and the Merger Agreement.
133. "MERGER AGREEMENT" means the agreement and plan of merger in
substantially the form of Exhibit A, pursuant to which the Merger will be
effected.
134. "METRA AGENT" means the Agent as defined in the Metra Credit
Agreement.
135. "METRA CEILING AMOUNT" means the "Available Amount" plus the
"Revolving Availability Amount" plus any outstanding "L/C Loans" (as such
terms are defined in the Metra Credit Agreement) plus any accrued and unpaid
interest, fees and other charges guaranteed under the Metra Guaranty, all
determined as of the Effective Date unless otherwise specified.
136. "METRA CREDIT AGREEMENT" means the "Metra Credit Agreement" as
defined in the Override Agreement.
137. "METRA FLOOR AMOUNT" means $65,000,000.
138. "METRA GUARANTY" means the Guaranty dated as of October 10, 1995,
among MK, MKO and Bank of America National Trust and Savings Association as
agent for itself and the other Metra Lenders.
139. "METRA LENDER CASH DISTRIBUTION" means the aggregate Cash
Distribution to be distributed on or as soon as practicable after the
Effective Date, unless the Merger Agreement is terminated, to Holders of
Allowed Unsecured Metra Lender Claims in accordance with Part C of the
Creditor Distribution Exhibit.
140. "METRA LENDER CLAIMS" means, collectively, all Secured Metra Lender
Claims and Unsecured Metra Lender Claims.
141. "METRA LENDER CLASS MK-3 RIGHTS EXERCISE PROCEEDS" means the
aggregate amount of Class MK-3 Rights Exercise Proceeds to be distributed on
or as soon as is practicable after the Effective Date to Holders of Allowed
Secured Metra Lender Claims in accordance with Part C of the Creditor
Distribution Exhibit.
142. "METRA LENDER CLASS MK-6 RIGHTS EXERCISE PROCEEDS" means the
aggregate amount of the Class MK-6 Rights Exercise Proceeds to be distributed
on or as soon as is practicable after the Effective Date to Holders of
Allowed Unsecured Metra Lender Claims in accordance with Part C of the
Creditor Distribution Exhibit.
143. "METRA LENDER COMBINED COMPANY COMMON STOCK" means the aggregate
number of shares of Lender Combined Company Common Stock to be distributed,
subject to the exercise of the Combined Company Rights, on or as soon as
practicable after the Effective Date, unless the Merger Agreement is
terminated, to Holders of Allowed Unsecured Metra Lender Claims in accordance
with Part C of the Creditor Distribution Exhibit.
144. "METRA LENDER MK RAIL NOTE PROCEEDS" means the aggregate amount of
Lender MK Rail Note Proceeds to be distributed, subject to the exercise of
the Combined Company Rights, on or as soon as practicable after the Effective
Date to Holders of Allowed Secured Metra Lender Claims in accordance with
Part C of the Creditor Distribution Exhibit.
145. "METRA LENDER MK RAIL STOCK" means the aggregate number of shares
of Lender MK Rail Stock to be distributed on or as soon as practicable after
the Effective Date to Holders of Allowed Secured Metra Lender Claims in
accordance with Part C of the Creditor Distribution Exhibit.
146. "METRA LENDER NEW MK COMMON STOCK" means the aggregate number of
shares of Lender New MK Common Stock to be distributed on or as soon as
practicable after the Effective Date, if the Merger Agreement is terminated,
to Holders of Allowed Unsecured Metra Lender Claims in accordance with Part
C of the Creditor Distribution Exhibit.
147. "METRA LENDER PRO RATA SHARE" means proportionately so that with
respect to an Allowed Metra Lender Claim, the ratio of (i)(a) the number of
shares of Combined Company Common Stock or MK Rail Stock or the amount of the
Cash Distribution or MK Rail Note Proceeds or Combined Company Rights
Exercise Proceeds to be distributed on account of a particular Allowed Metra
Lender Claim to (b) the amount of the Allowed Metra Lender Claim, is the same
as the ratio of (ii)(a) the number of shares of Combined Company Common Stock
or MK Rail Stock or the amount of the Cash Distribution or MK Rail Note
Proceeds or Combined Company Rights Exercise Proceeds to be distributed on
account of all Allowed Metra Lender Claims to (b) the amount of all such
Allowed Metra Lender Claims; provided, however, that if the Merger Agreement
is terminated, "Metra Lender Pro Rata Share" means proportionately so that
with respect to an Allowed Metra Lender Claim, the ratio of (i)(a) the number
of shares of New MK Common Stock or MK Rail Stock or MK Rail Note Proceeds
to be distributed on account of a particular Allowed Metra Lender Claim to
(b) the amount of the Allowed Metra Lender Claim, is the same as the ratio
of (ii)(a) the number of shares of New MK Common Stock or MK Rail Stock or
MK Rail Note Proceeds to be distributed on account of all Allowed Metra
Lender Claims to (b) the amount of all Allowed Metra Lender Claims.
148. "METRA LENDERS" means the Lenders that are banks under the Metra
Credit Agreement solely in their capacity as banks under the Metra Credit
Agreement and their successor and assigns.
149. "MK" means Morrison Knudsen Corporation, a Delaware corporation.
150. "MK RAIL" means MK Rail Corporation, a Delaware corporation.
151. "MK RAIL NOTE" means that certain note made by MK Rail and dated
as of June 26, 1995, in the original principal amount of $52,200,000.
152. "MK RAIL NOTE CANCELLATION AGREEMENT" means the Note Cancellation
and Restructuring Agreement, in substantially the form of Exhibit W.
153. "MK RAIL NOTE PROCEEDS" means the net Cash amount, if any, received
by MKO pursuant to the MK Rail Note Cancellation Agreement.
154. "MK RAIL RIGHTS" means the rights issued pursuant to the MK Rail
Rights Plan.
155. "MK RAIL RIGHTS PLAN" means that certain MK Rail Rights Plan dated
as of January 19, 1996, as amended from time to time prior to the Petition
Date.
156. "MK RAIL SECURITIES CLASS ACTION PLAINTIFFS" means, collectively,
the class plaintiffs in the MK Rail Securities Class Actions.
157. "MK RAIL SECURITIES CLASS ACTIONS" means, collectively, the cases
of Susser, et al. v. Agee, et al., No. CIV 940477SLMB and Newman, et al. v.
------------------------------ -----------------
Agee, et al., No. CIV 940478SEJL, consolidated in the United States District
- - ------------
Court, District of Idaho.
158. "MK RAIL STOCK" means the common stock of MK Rail owned by MKO.
159. "MK RAIL STOCKHOLDERS AGREEMENT" means the stockholders agreement
in substantially the form of Exhibit T.
160. "MK SECURITIES CLASS ACTION PLAINTIFFS" means, collectively, the
class plaintiffs in the MK Securities Class Actions.
161. "MK SECURITIES CLASS ACTIONS" means, collectively, the cases
consolidated as In re Morrison Knudsen Securities Litigation, No. 9403345EJL,
--------------------------------------------
United States District Court, District of Idaho.
162. "MKO" means Morrison Knudsen Corporation, an Ohio corporation.
163. "NATIONAL STEEL GUARANTY" means that certain Guaranty dated as of
November 1, 1992, by MK in favor of Morgan Trust Guaranty Trust Company of
New York, as Trustee, for the benefit of the holders from time to time of the
City of San Diego Port Facilities Refunding Revenue Bonds, Series 1992
(National Steel and Shipbuilding Company Project).
164. "NATIONAL STEEL GUARANTY CLAIM" means the contingent claim of the
holder of the National Steel Guaranty arising under the National Steel
Guaranty.
165. "NEW BONDS AGREEMENT" means that certain agreement dated as of
October 10, 1995 among the Bonding Company, the Debtor, MKO and certain other
Affiliates of the Debtor that are parties thereto, as amended from time to
time prior to the Petition Date.
166. "NEW BONDS SECURITY AGREEMENT" means that certain Pledge and
Security Agreement (New Bonds) dated as of October 10, 1995 by the Debtor,
MKO and certain of the Subsidiaries in favor of the Bonding Company as
amended from time to time prior to the Petition Date.
167. "NEW CREDIT FACILITY" means the lending facility to be provided,
if the Merger Agreement is terminated, to the Reorganized Debtor as of the
Effective Date, pursuant to the terms and conditions of the New Credit
Facility Agreement.
168. "NEW CREDIT FACILITY AGREEMENT" means the agreement to be entered
into as of the Effective Date, if the Merger Agreement is terminated, by and
among the Reorganized Debtor and the lender(s) that are signatories thereto,
pursuant to which such lender(s) will provide the Reorganized Debtor with the
New Credit Facility.
169. "NEW CREDIT FACILITY DOCUMENTS" means the New Credit Facility
Agreement and all documents executed in connection therewith.
170. "NEW GUARANTY" means a new or amended and restated guaranty to be
entered into among the Reorganized Debtor and holders of Existing Guaranties,
which shall provide, inter alia, that (i) the guaranty shall be a collection
guaranty and not a payment guaranty and (ii) the guarantor shall have no
obligation to cash collateralize any of its liability thereunder.
171. "NEW LEASE" means the new lease, the term of which shall commence
on the Effective Date, between the Boise Landlord, as landlord, and
Reorganized MKO and the Combined Company (or, if the Merger Agreement is
terminated, Reorganized MK), as tenants, as approved by the Bankruptcy Court
and referenced in the Confirmation Order.
172. "NEW LETTER OF CREDIT REIMBURSEMENT AGREEMENT" means a new or
amended and restated letter of credit reimbursement agreement to be entered
into among the Reorganized Debtor and issuers of Existing Letters of Credit,
which shall provide, inter alia, that the Reorganized Debtor shall have no
obligation to cash collateralize its reimbursement obligations thereunder,
unless and only to the extent that, the subject letter of credit is drawn.
173. "NEW MK AMENDED CERTIFICATE OF INCORPORATION" means the Certificate
of Incorporation of Reorganized MK, which shall be in substantially the form
set forth in Exhibit O.
174. "NEW MK BYLAWS" means the Bylaws of Reorganized MK, which shall be
substantially in the form set forth in Exhibit N.
175. "NEW MK COMMON STOCK" means the 10,000,000 shares of common stock
of Reorganized MK authorized pursuant to the New MK Amended Certificate of
Incorporation to be issued and distributed (if the Merger Agreement is
terminated) in accordance with the provisions hereof, which shares shall
constitute 100% of the total number of shares of such common stock issued and
outstanding immediately after the Effective Time.
176. "NEW MK COMPENSATION PLANS" means, if the Merger Agreement is
terminated, collectively, the employment, retirement, indemnification and
other agreements, and the welfare benefits and other incentive plans to be
entered into or implemented by Reorganized MK as of the Effective Date,
summaries of which are set forth in Exhibit L.
177. "NEW MK NON-EMPLOYEE DIRECTOR PLAN" means the New MK Non-Employee
Director Plan as defined in the Disclosure Statement.
178. "NEW MK REGISTRATION RIGHTS AGREEMENT" means that certain agreement
to be entered into on the Effective Date, if the Merger Agreement is
terminated, by Reorganized MK and the Holders of Allowed Class MK-6 Claims,
which shall be in substantially the form set forth in Exhibit P.
179. "NEW MK SECURITIES" means, collectively, the: (a) New MK Common
Stock, (b) New MK Series A Preferred Stock, and (c) New MK Warrants.
180. "NEW MK SERIES A PREFERRED STOCK" means, if the Merger Agreement
is terminated, the 18,000 shares of Series A Preferred Stock of Reorganized
MK authorized pursuant to the New MK Amended Certificate of Incorporation to
be issued and distributed (if the Merger Agreement is terminated), subject
to the provisions of Section V.B.4 (pursuant to which event the number of
shares may be increased to 18,000,000 in certain circumstances), to the
Liquidating Trust, which shares shall constitute 100% of the total number of
shares of such preferred stock issued and outstanding immediately after the
Effective Time, or the proceeds associated therewith.
181. "NEW MK STOCK COMPENSATION PLAN" means the New MK Stock
Compensation Plan as defined in the Disclosure Statement.
182. "NEW MK WARRANT AGREEMENT" means the New MK Warrant Agreement in
substantially the form set forth in Exhibit Q.
183. "NEW MK WARRANT EXERCISE PRICE FORMULA" means the following
formula:
(1.1)((Total Lender Claims) -
((Aggregate Lender Plan Value - Value of Lender New MK Common Stock)))
- - ------------------------------------------------------------------------
Total Number of Shares of Lender New MK Common Stock;
where
(i) Total Lender Claims = Aggregate amount of all Funded Debt Claims
+ the Metra Ceiling Amount determined as of October 1, 1996 and not as of the
Effective Date;
(ii) Aggregate Lender Plan Value = the aggregate value attributed by an
order of the Bankruptcy Court to the Lender New MK Common Stock, Lender MK
Rail Stock and the interests of the Funded Debt Lenders and the Metra Lenders
in the Liquidating Trust plus the amount of the Lender MK Rail Note Proceeds,
if any, distributed to the Lenders; and
(iii) Value of Lender New MK Common Stock = the value of the Lender
New MK Common Stock determined by the Bankruptcy Court in connection with the
determination of Aggregate Lender Plan Value.
184. "NEW MK WARRANTS" means the warrants, each to purchase one share
of New MK Common Stock, to be issued by Reorganized MK pursuant to the New
MK Warrant Agreement if the Merger Agreement is terminated, which warrants
shall be issued to Holders of Allowed Class MK-8 Interests pursuant to
Section III.B.8 of the Plan, and which warrants each shall (a) have an
exercise price to be determined in accordance with the New MK Warrant
Exercise Price Formula, and (b) expire on October 1, 2001.
185. "NONDEBTOR SUBSIDIARIES" means, collectively, MKO and the
Subsidiaries.
186. "OLD COMMON STOCK" means the common stock issued by MK and
outstanding immediately prior to the Effective Date.
187. "OLD STOCK OPTIONS" means the options, outstanding immediately
prior to the Petition Date, to purchase Old Common Stock.
188. "OLD WARRANTS" means the warrants, outstanding immediately prior
to the Petition Date, to purchase Old Common Stock.
189. "ORDINARY COURSE PROFESSIONALS' ORDER" means an order entered by
the Bankruptcy Court authorizing the Debtor to retain, employ and pay certain
professionals, as specified in the order, which are not involved in the
administration of the Chapter 11 Case, in the ordinary course of the Debtor's
businesses, without further order of the Bankruptcy Court.
190. "OTHER SECURED CLAIMS" means, collectively, all Secured Claims
against the Debtor held by any entity, other than the Bridge Loan Claims, the
Secured Funded Debt Claims, the Secured Metra Lender Claims, the Existing
Guaranty Claims, the Existing LC Claims and the Secured Transit Bonding
Claims.
191. "OVERRIDE AGREEMENT" means that certain Amended and Restated
Override Agreement dated as of October 10, 1995, by and among MK, MKO, the
Lenders which are signatories thereto and their respective successors and
assigns, and the Existing Indebtedness Agent, as amended from time to time
prior to the Petition Date.
192. "OVERRIDE LOAN DOCUMENTS" means, collectively, the "Loan Documents"
as defined in the Override Agreement.
193. "PETITION DATE" means June 25, 1996.
194. "PLAN" means this chapter 11 plan of reorganization for the Debtor
and all Exhibits annexed hereto or referenced herein, as the same may be
amended, modified or supplemented.
195. "PLAN PARTICIPANTS" means, collectively, the: (a) Debtor; (b)
Reorganized Debtor; (c)
Washington (unless the Merger Agreement is terminated); (d) MKO; and (e) the
respective directors, officers, employees and Professionals, acting in such
capacity, of any of the foregoing entities.
196. "PRIORITY CLAIM" means a Claim that is entitled to priority in
payment pursuant to section 507(a) of the Bankruptcy Code and that is not an
Administrative Claim or a Priority Tax Claim.
197. "PRIORITY TAX CLAIM" means a Claim of a governmental unit that is
entitled to priority in payment pursuant to section 507(a)(8) of the
Bankruptcy Code.
198. "PRO RATA" means:
(a) when used with reference to distributions of Combined Company
Warrants or, if applicable, Initial Residual Equity Distribution or
Subsequent Residual Equity Distribution (or, if the Merger Agreement is
terminated, the New MK Warrants) pursuant to Article III below,
proportionally so that with respect to an Allowed Class MK-8 Interest, the
ratio of (i)(a) the number of warrants or, if applicable, the amount of the
Initial Residual Equity Distribution or Subsequent Residual Equity
Distribution distributed on account of a particular Allowed Class MK-8
Interest to (b) the amount of the Allowed Class MK-8 Interest, is the same
as the ratio of (ii)(a) the number of warrants or, if applicable, the amount
of the Initial Residual Equity Distribution or Subsequent Residual Equity
Distribution distributed on account of all Allowed Class MK-8 Interests to
(b) the amount of all Allowed Class MK-8 Interests; and
(b) when used with reference to distributions of the
Reorganization Investment Yield, the ratio, as of the date upon which the
distribution of the Reorganization Investment Yield is made, of (i)(a) the
portion of the Reorganization Investment Yield to be distributed to the
Holder of an Allowed Claim (or to a successor in interest by virtue of the
exercise of the Combined Company Rights) pursuant to Section VII.C of the
Plan to (b) the aggregate amount of the Reorganization Investment Yield is
the same as the ratio of (ii)(a) the Allowed Amount of such Claim to (b) the
sum of the aggregate amount of the Claims which are Disputed and the
aggregate amount of Claims on account of which distributions are
undeliverable.
199. "PROFESSIONAL" means any professional employed in the Chapter 11
Case pursuant to section 327 or 1103 of the Bankruptcy Code and the
professionals seeking compensation or reimbursement of expenses in connection
with the Chapter 11 Case pursuant to section 503(b)(4) of the Bankruptcy
Code.
200. "REINSTATED" or "REINSTATEMENT" means rendering a Claim unimpaired
pursuant to section 1124 of the Bankruptcy Code.
201. "REORGANIZATION INVESTMENT YIELD" means the net yield earned by the
Disbursing Agent from the investment of Cash held pending distribution
pursuant to the Plan (including dividends and other distributions on
undeliverable Combined Company Common Stock, or, if the Merger Agreement is
terminated, New MK Common Stock), which investment shall be in a manner
consistent with the Debtor's investment and deposit guidelines.
202. "REORGANIZED DEBTOR" means the Debtor on and after the Effective
Date, including any successor thereto, by merger, consolidation or otherwise.
Unless the Merger Agreement is terminated, the term "Reorganized Debtor"
shall specifically include, without limitation, the Combined Company.
203. "RESIDUAL EQUITY RECOVERY EXHIBIT" means the Residual Equity
Recovery Exhibit which shall be substantially in the form of Exhibit S.
204. "RESTRUCTURING" means, collectively, the transactions and transfers
described below in Section V.B.
205. "RIGHTS" means the rights issued pursuant to the Rights Agreement.
206. "RIGHTS AGREEMENT" means that certain Morrison Knudsen Rights
Agreement dated as of June 12, 1986, as amended from time to time prior to
the Petition Date.
207. "SCHEDULES" means, collectively, the: (a) schedules of assets and
liabilities and the statements of financial affairs, if any, Filed by the
Debtor in the Chapter 11 Case, pursuant to section 521 of the Bankruptcy
Code, the Bankruptcy Rules and the Official Bankruptcy Forms; and (b)
schedule of unliquidated, disputed or contingent Claims, as required by any
Local Rule of the Bankruptcy Court, as such requirements may be modified by
any order of the Bankruptcy Court.
208. "SECURED CLAIM" means a Claim that is secured by a lien on property
in which the Estate has an interest or that is subject to setoff under
section 553 of the Bankruptcy Code, to the extent of the value of the Claim
Holder's interest in the Estate's interest in such property or to the extent
of the amount subject to setoff, as applicable, as determined pursuant to
section 506(a) of the Bankruptcy Code.
209. "SECURED FUNDED DEBT CLAIMS" means all Claims of the Funded Debt
Lenders arising under the Existing Loan Documents and consisting of Existing
Loans and any accrued and unpaid interest with respect thereto, in an
aggregate amount equal to the Class 3 Funded Debt Distribution.
210. "SECURED METRA LENDER CLAIMS" means all Claims of the Metra Lenders
arising under the Metra Guaranty and the Override Loan Documents, in an
aggregate amount equal to the Class 3 Metra Lender Distribution.
211. "SECURED TRANSIT BONDING CLAIMS" means, collectively, all Claims
of the Bonding Company, on its own behalf or on behalf of the other Transit
Bonding Companies, rising under the Transit Reimbursement Agreement, the
Transit Release, the Transit Bonds, the Transit Security Agreement and/or the
Distribution Agreement, and any and all documents executed in connection
therewith, excluding the New Bonds Agreement, in an aggregate amount equal
to the Class 3 Transit Bonding Distribution.
212. "SECURITIES ACT" means the Securities Act of 1933, 15 U.S.C.
Section Section 77a-77aa, as now in effect or hereafter amended.
213. "SECURITIES PLAINTIFFS" means, collectively, the MK Securities
Class Action Plaintiffs and the MK Rail Securities Class Action Plaintiffs.
214. "SHAREHOLDER LITIGATION SETTLEMENTS" means, collectively, the
settlements of the MK Securities Class Actions, the MK Rail Securities Class
Actions, the Derivative Actions and the Double Derivative Actions.
215. "STIPULATION OF AMOUNT AND NATURE OF CLAIM" means a stipulation or
other document that the Debtor has sent or may send to a Holder of a Claim
that states the Debtor's position regarding the amount or nature of the
Holder's Claim and requests such Holder's agreement with the Debtor's
position.
216. "SUBSEQUENT EQUITY RECOVERY" means the Subsequent Equity Recovery
as defined in the Residual Equity Recovery Exhibit.
217. "SUBSEQUENT RESIDUAL EQUITY DISTRIBUTION" means (unless the Merger
Agreement is terminated), in the event of a Subsequent Equity Recovery, the
amount of the proceeds from the Combined Company Series A Preferred Stock to
be distributed by the Liquidating Trustee to the Disbursing Agent and/or the
number of shares of Combined Company Common Stock to be distributed by the
Liquidating Trustee to the Disbursing Agent, in each case for distribution
to Holders of Allowed Class MK-8 Interests, both calculated in accordance
with the Residual Equity Recovery Exhibit.
218. "SUBSIDIARIES" means, collectively, American Piping & Boiler Co.,
Atascosa Mining Co., Centennial Engineering, Inc., CF Systems Corporation,
Chemical Demilitarization of Anniston Company, MK Projects Company, MK
Capital Company, MK-Ferguson Engineering Company, MK-Ferguson of Idaho
Company, MK-Ferguson of Oak Ridge Company, MK Infrastructure Corporation, MK
Train Control, Inc., Morrison-Knudsen Company, Inc., Morrison-Knudsen
Corporation of Viet Nam, Morrison-Knudsen Engineers, Inc., Morrison-Knudsen
International Company, Inc., Morrison-Knudsen Services, Inc., National
Projects, Inc., Navasota Mining Company, Inc., and Yampa Mining Co.
219. "THIRD-PARTY DISBURSING AGENT" means any entity designated by the
Debtor or the Reorganized Debtor (other than the Combined Company or, if the
Merger Agreement is terminated, Reorganized MK) to act as a Disbursing Agent
pursuant to Section VII.B below.
220. "TOUCHSTONE ACTIONS" means the Touchstone Actions as defined in the
Disclosure Statement.
221. "TOUCHSTONE CASH DISTRIBUTION" means the amount of the Cash
Distribution to be distributed, subject to the exercise of the Combined
Company Rights, on or as soon as practicable after the Effective Date, unless
the Merger Agreement is terminated, to Holders of Touchstone Claims in
accordance with Part A of the Creditor Distribution Exhibit.
222. "TOUCHSTONE CLAIMS" means any and all Claims of the plaintiffs in
the Touchstone Actions arising under the Touchstone Settlement Agreement or
in the Touchstone Actions.
223. "TOUCHSTONE CLASS MK-6 RIGHTS EXERCISE PROCEEDS" means the amount
of the Class MK-6 Rights Exercise Proceeds to be distributed on or as soon
as practicable after the Effective Date to Holders of Allowed Touchstone
Claims in accordance with Part A of the Creditor Distribution Exhibit.
224. "TOUCHSTONE COMBINED COMPANY COMMON STOCK" means the aggregate
number of shares of Combined Company Common Stock to be distributed, subject
to the exercise of the Combined Company Rights, on or as soon as practicable
after the Effective Date, unless the Merger Agreement is terminated, to
Holders of Touchstone Claims in accordance with Part A of the Creditor
Distribution Exhibit.
225. "TOUCHSTONE NEW MK COMMON STOCK" means the aggregate number of
shares of New MK Common Stock to be distributed on or as soon as practicable
after the Effective Date, if the Merger Agreement is terminated, to Holders
of Touchstone Claims in accordance with Part A of the Creditor Distribution
Exhibit.
226. "TOUCHSTONE SETTLEMENT AGREEMENT" means that certain Settlement
Agreement dated as of January 12, 1996 among the parties to the Touchstone
Actions.
227. "TRADE CLAIM" means any Unsecured Claim against the Debtor arising
from or with respect to the sale of goods or services to the Debtor, prior
to the Petition Date, in the ordinary course of the Debtor's business,
including any Claim of an employee that is not a Priority Claim.
228. "TRANSIT ASSET PURCHASE AGREEMENT" means that certain Asset
Purchase Agreement dated as of October 10, 1995, by and among the Debtor, MKO
and Amerail.
229. "TRANSIT BONDING CLAIMS" means, collectively, all Secured Transit
Bonding Claims and Unsecured Transit Bonding Claims.
230. "TRANSIT BONDING COMPANIES" means, collectively, the Bonding
Company, Colonial American Casualty and Surety Company, North American
Reinsurance Corporation, Prudential Reinsurance Corporation, American
Re-insurance Company, Universal Underwriters Insurance Company, Skandia
America Reinsurance Corporation, The Reinsurance Corporation of New York,
Safeco Insurance Company of America and United States Fidelity and Guaranty
Company.
231. "TRANSIT BONDS" means the "Transit Bonds" as defined in the Transit
Release.
232. "TRANSIT REIMBURSEMENT AGREEMENT" means that certain Reimbursement
Agreement dated as of October 10, 1995, by and among MK, MKO, the
Subsidiaries and the Bonding Companies, as amended from time to time prior
to the Petition Date.
233. "TRANSIT RELEASE" means that certain Release dated as of October
10, 1995 by the Transit Bonding Companies identified as signatories thereto
in favor of MK, MKO and the Subsidiaries listed therein.
234. "TRANSIT SECURITY AGREEMENT" means that certain Pledge and Security
Agreement (Reimbursement Agreement Obligations) dated as of October 10, 1995
by MK, MKO and certain of the Subsidiaries, in favor of the Bonding Company.
235. "UNIMPAIRED CLAIM" means a Claim that is not impaired within the
meaning of section 1124 of the Bankruptcy Code.
236. "UNOFFICIAL EQUITY COMMITTEE" means the unofficial equity committee
consisting of Trendex Capital Management, Cypress Management, L.P., Heartland
Capital Corp., Richard Steiner and, solely in its capacity as co-lead counsel
to the Securities Plaintiffs, Much Shelist Freed Denenberg & Ament, P.C.
237. "UNSECURED CLAIM" means any Claim which is not an Administrative
Claim, Priority Claim, Priority Tax Claim, Secured Claim, Unsecured Funded
Debt Claim, Unsecured Metra Lender Claim, Unsecured Transit Bonding Claim,
Boise Landlord Claim or Touchstone Claim.
238. "UNSECURED FUNDED DEBT CLAIMS" means the Allowed Funded Debt Claims
arising under the Existing Loan Documents and consisting of Existing Loans
and any accrued and unpaid interest with respect thereto outstanding after
giving effect to the distributions made under the Plan on account of the
Secured Funded Debt Claims.
239. "UNSECURED METRA LENDER CLAIMS" means the Allowed Metra Lender
Claims arising under the Metra Guaranty and the Override Loan Documents
outstanding after giving effect to the distributions made under the Plan on
account of the Secured Metra Lender Claims.
240. "UNSECURED TRANSIT BONDING CLAIMS" means, collectively, the Allowed
Claims of the Bonding Company, on its own behalf or on behalf of the other
Transit Bonding Companies, arising under the Transit Reimbursement Agreement,
the Transit Release, the Transit Bonds, the Transit Security Agreement and/or
the Distribution Agreement, and any and all documents executed in connection
therewith, excluding the New Bonds Agreement, outstanding after giving effect
to the distributions made under the Plan on account of the Secured Transit
Bonding Claims.
241. "VOTING INSTRUCTIONS" means the instructions for voting on the Plan
contained in the section of the Disclosure Statement entitled "Voting and
Confirmation of the Plan--Voting Procedures and Requirements" and
accompanying the Ballots and the Master Ballots.
242. "VOTING RECORD DATE" means, collectively, (i) with respect to
identification of Holders of Impaired Claims (other than Touchstone Claims)
entitled to vote on the Plan, June 10, 1996 and (ii) with respect to
identification of the Holders of Allowed Class MK-8 Interests and Touchstone
Claims entitled to vote on the Plan, July 25, 1996.
243. "WASHINGTON" means Washington Construction Group, Inc., a Delaware
corporation.
B. RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW
1. RULES OF INTERPRETATION
For purposes of the Plan: (a) whenever from the context it is
appropriate, each term, whether stated in the singular or the plural, shall
include both the singular and the plural; (b) any reference in the Plan to
a contract, instrument, release, indenture or other agreement or document
being in a particular form or on particular terms and conditions means that
such document shall be substantially in such form or substantially on such
terms and conditions; (c) any reference in the Plan to an existing document
or Exhibit Filed or to be Filed means such document or Exhibit, as it may
have been or may be amended, modified or supplemented; (d) if the Plan's
description of the terms of an Exhibit is inconsistent with the terms of the
Exhibit, the terms of the Exhibit shall control; (e) unless otherwise
specified, all references in the Plan to Articles, Sections, Clauses and
Exhibit are references to Articles, Sections, Clauses and Exhibits of or to
the Plan; (f) the words "herein" and "hereto" refer to the Plan in its
entirety rather than to a particular portion of the Plan; (g) captions and
headings to Articles and Sections are inserted for convenience of reference
only and are not intended to be a part of or to affect the interpretation of
the Plan; (h) all references to the termination of the Merger Agreement are
references to the termination thereof in accordance with the terms thereof;
and (i) the rules of construction set forth in section 102 of the Bankruptcy
Code shall apply, to the extent such rules are not inconsistent with any
other provision in this Section I.B.1.
2. COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply.
3. GOVERNING LAW
Except to the extent that the Bankruptcy Code or Bankruptcy Rules are
applicable, and subject to the provisions of any contract, instrument,
release, indenture or other agreement or document entered into in connection
with the Plan, the rights and obligations arising under the Plan shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, without giving effect to the principles of conflicts of
law thereof.
ARTICLE II.
ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS
In accordance with section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims, as described below in Article
II, have not been classified.
A. ADMINISTRATIVE CLAIMS
1. IN GENERAL
Subject to the provisions of Section II.A.2 below with respect to
Professionals and certain other entities, on the Effective Date, each Holder
of an Allowed Administrative Claim shall receive Cash equal to the amount of
such Allowed Administrative Claim, unless such Holder and the Debtor or
Reorganized Debtor agree to other terms or a Final Order of the Bankruptcy
Court provides for other terms; provided, however, that Allowed
Administrative Claims representing obligations incurred in the ordinary
course of business or otherwise assumed by the Debtor pursuant to the Plan
(including Administrative Claims of governmental units for taxes) shall be
assumed on the Effective Date and paid, performed or settled by the
Reorganized Debtor when due in accordance with the terms and conditions of
the particular agreements governing such obligations.
2. PROFESSIONALS
Professionals or other entities requesting compensation or reimbursement
of expenses pursuant to section 327, 328, 330, 331, 503(b) or 1103 of the
Bankruptcy Code for services rendered before the Effective Date (including
compensation requested pursuant to section 503(b)(4) of the Bankruptcy Code
by any Professional or other entity for making a substantial contribution in
the Chapter 11 Case) shall File and serve on the Reorganized Debtor and
counsel for the Reorganized Debtor an application for final allowance of
compensation and reimbursement of expenses no later than 30 days after the
Effective Date, unless such Filing and service deadline are extended by the
Bankruptcy Court; provided, however, that any Professional who may receive
compensation or reimbursement of expenses pursuant to the Ordinary Course
Professionals' Order without having Filed an application for compensation or
reimbursement of expenses may continue to receive compensation and
reimbursement of expenses for services rendered before the Effective Date
without further Bankruptcy Court review or approval pursuant to the Ordinary
Course Professionals' Order. Objections to applications of Professionals or
other entities for compensation or reimbursement of expenses must be Filed
and served on the Reorganized Debtor, counsel for the Reorganized Debtor and
the requesting Professional or other entity no later than 30 days after the
date on which the applicable application for compensation or reimbursement
was Filed.
B. PRIORITY TAX CLAIMS
On the Effective Date, each Holder of an Allowed Priority Tax Claim due
and payable on or prior to the Effective Date shall receive Cash equal to the
amount of such Allowed Priority Tax Claim, unless such Holder and the Debtor
or Reorganized Debtor agree to other terms, or a Final Order of the
Bankruptcy Court provides for other terms. The amount of any Priority Tax
Claim that is not an Allowed Claim or that is not otherwise due and payable
on or prior to the Effective Date, and the rights of the Holder of such
Claim, if any, to payment in respect thereof shall (1) survive the Effective
Date and consummation of the Plan and be determined in the manner in which
the amount of such Claim and the rights of the Holder of such Claim would
have been resolved or adjudicated if the Chapter 11 Case had not been
commenced and (2) not be discharged pursuant to section 1141 of the
Bankruptcy Code. In accordance with section 1124 of the Bankruptcy Code, the
Plan shall leave unaltered the legal, equitable and contractual rights of
each Holder of an Allowed Priority Tax Claim.
ARTICLE III.
CLASSIFICATION AND TREATMENT OF
CLASSIFIED CLAIMS AND INTERESTS
All Claims and Interests, except Administrative Claims and Priority Tax
Claims, are placed in the Classes described below.
A Claim or Interest is classified in a particular Class only to the
extent that the Claim or Interest qualifies within the description of that
Class and is classified in other Classes only to the extent that any
remainder of the Claim or Interest qualifies within the description of such
other Classes A Claim or Interest is also classified in a particular Class
only to the extent that such Claim or Interest is an Allowed Claim or Allowed
Interest in that Class and has not been paid, released or otherwise satisfied
prior to the Effective Date.
A. SUMMARY OF CLAIMS AND INTERESTS
Class Status
Class MK-1 -- Priority Claims Unimpaired -- not entitled to vote
Class MK-2 -- Bridge Loan Claims Unimpaired -- not entitled to vote
Class MK-3 -- Secured Funded Debt Impaired -- entitled to vote
Claims, Secured Metra Lender Claims
and Secured Transit Bonding Claims
Class MK-4 -- Existing LC Claims and Impaired -- entitled to vote
Existing Guaranty Claims
Class MK-5 -- Other Secured Claims Unimpaired -- not entitled to vote
Class MK-6 -- Unsecured Funded Debt Impaired -- entitled to vote
Claims, Unsecured Metra Lender Claims,
Unsecured Transit Bonding Claims, Boise
Landlord Claims and Touchstone Claims
Class MK-7 -- Unsecured Claims Unimpaired -- not entitled to vote
Class MK-8 -- Interests of Holders of Impaired -- entitled to vote
Old Common Stock and Securities
Plaintiffs
Class MK-9 -- Interests of Holders of Impaired -- deemed to have
Old Stock Options and Old Warrants rejected the Plan
B. CLASSIFICATION AND TREATMENT OF CLAIMS AGAINST AND INTERESTS IN MK
1. CLASS MK-1 PRIORITY CLAIMS
(a) Classification: Class MK-1 consists of all Priority Claims
against MK.
(b) Treatment: On the Effective Date, each Holder of an Allowed
Class MK-1 Claim shall receive Cash equal to the amount of such Claim, unless
the Holder of such Claim and the Combined Company (or, if the Merger Agreement
is terminated, Reorganized MK) agree to a different treatment. Any Allowed
Class MK-1 Claim not due and owing on the Effective Date will be paid in
full in Cash by the Combined Company (or, if the Merger Agreement is
terminated, Reorganized MK) when such Claim becomes due and owing.
(c) Voting: Class MK-1 is unimpaired, and the Holders of Claims
in Class MK-1 are not entitled to vote to accept or reject the Plan.
2. CLASS MK-2 -- BRIDGE LOAN CLAIMS
(a) Classification: Class MK-2 consists of all Bridge Loan Claims
against MK.
(b) Treatment: All Allowed Class MK-2 Claims have been paid in
full in cash in accordance with an order of the Bankruptcy Court pursuant to
borrowings under the DIP Financing Facility. On the Effective Date, to the
extent not previously paid, each Holder of an Allowed Class MK-2 Claim shall
receive Cash equal to the amount of such Claim, unless the Holder of such a
Claim and the Combined Company (or, if the Merger Agreement is terminated,
Reorganized MK) agree to a different treatment.
(c) Voting: Class MK-2 is unimpaired and the Holders of Claims
in Class MK-2 are not entitled to vote to accept or reject the Plan.
3. CLASS MK-3 -- SECURED FUNDED DEBT CLAIMS, SECURED METRA LENDER
CLAIMS AND SECURED TRANSIT BONDING CLAIMS
(a) Classification: Class MK-3 consists of all Secured Funded Debt
Claims, Secured Metra Lender Claims and Secured Transit Bonding Claims
against MK.
(b) Treatment: Subject to the provisions of Section V.B.4, the
Liquidating Trust MK Rail Stock, the Liquidating Trust MK Rail Note Proceeds
and the Liquidating Trust Class MK-3 Rights Exercise Proceeds shall be
distributed to the Liquidating Trust (and, if the MK Rail Note has not been
cancelled pursuant to the MK Rail Note Cancellation Agreement, the MK Rail
Note shall also be distributed to the Liquidating Trust). Following such
distributions to the Liquidating Trust, and (unless the Merger Agreement is
terminated) subject to (i) the exercise of the Combined Company Rights and
(ii) the provisions of Section III.B.8 in the event of an Initial Equity
Recovery or a Subsequent Equity Recovery, Allowed Class MK-3 Claims shall be
accorded the following treatment:
(i) Secured Funded Debt Claims. On the Effective Date, the
--------------------------
Existing Loan Documents shall be automatically terminated without any further
action by any party and shall no longer be of any force or effect. Each
Holder of an Allowed Class MK-3 Claim consisting of a Secured Funded Debt
Claim, in full and final satisfaction of such Allowed Claim, (A) shall
receive, on or as soon as practicable after the Effective Date, its Funded
Debt Pro Rata Share of (i) the Funded Debt MK Rail Stock, (ii) the Funded
Debt MK Rail Note Proceeds, and (iii) the Funded Debt Class MK-3 Rights
Exercise Proceeds and (B) shall have the rights and benefits accorded a
Holder of a Secured Funded Debt Claim under the Liquidating Trust Agreement.
(ii) Secured Metra Lender Claims. On the Effective Date, the
--------------------------- Existing Loan Documents
shall be automatically terminated without any further action by any party
and shall no longer be of any force or effect. Each Holder of an Allowed
Class MK-3 Claim consisting of a secured Metra Lender Claim, in full and
final satisfaction of such Allowed Claim, (A) shall receive, on or as soon
as practicable after the Effective Date, its Metra Lender Pro Rata Share of
(i) the Metra Lender MK Rail Stock, (ii) the Metra Lender MK Rail Note
Proceeds, and (iii) the Metra Lender Class MK-3 Rights Exercise Proceeds and
(B) shall have the rights and benefits accorded a Holder of a Secured
Metra Lender Claim under the Liquidating Trust Agreement.
(iii) Secured Transit Bonding Claims. On the Effective
------------------------------
Date, the Transit Reimbursement Agreement and the Transit Security Agreement
shall be automatically terminated without any further action by any party and
shall no longer be of any force or effect. The Bonding Company shall
receive, on or as soon as practicable after the Effective Date, in full and
final satisfaction of all Allowed Class MK-3 Claims consisting of Secured
Transit Bonding Claims, the Bonding Company MK Rail Stock, the Bonding
Company MK Rail Note Proceeds and the Bonding Company Class MK-3 Rights
Exercise Proceeds and shall have the rights and benefits accorded a Holder
of a Secured Transit Bonding Claim under the Liquidating Trust Agreement.
(c) Voting: Class MK-3 is impaired and the Holders of Allowed
Class MK-3 Claims are entitled to vote to accept or reject the Plan.
4. CLASS MK-4 -- EXISTING LC CLAIMS AND EXISTING GUARANTY CLAIMS
(a) Classification: Class MK-4 consists of all Existing LC Claims
and Existing Guaranty Claims against MK.
(b) Treatment: On or before the Effective Date, the reimbursement
agreements with respect to the Existing Letters of Credit shall be
automatically terminated without any further action by any party and shall
no longer be of any force or effect and each Holder of an Allowed Class MK
Claim consisting of an Existing LC Claim shall enter into a New Letter of
Credit Reimbursement Agreement with the Reorganized Debtor in full and final
satisfaction of such Allowed Claim. Each such Existing LC Claim shall be
entitled to be paid in full in Cash in accordance with the terms of the New
Letter of Credit Reimbursement Agreement. On or before the Effective Date,
the Existing Guaranties shall be automatically terminated without any further
action by any party and shall no longer be of any force or effect and each
Holder of an Allowed Class MK-4 Claim consisting of an Existing Guaranty
Claim shall enter into a New Guaranty with the Reorganized Debtor in full and
final satisfaction of such Allowed Claim. Each such Allowed Claim shall be
entitled to be paid in full in Cash in accordance with the terms of the new
Guaranty.
(c) Voting: Class MK-4 is impaired and the Holders of Allowed
Class MK-4 Claims are entitled to vote to accept or reject the Plan.
5. CLASS MK-5 -- OTHER SECURED CLAIMS
(a) Classification: Class MK-5 consists of all Other Secured
Claims against MK, including the Secured Claims of Amerail under the Amerail
Environmental Security Agreement.
(b) Treatment: On the Effective Date, at the option of MK or the
Combined Company (or, if the Merger Agreement is terminated, Reorganized MK),
each Allowed Class MK-5 Claim shall be treated pursuant to either clause (i)
or (ii) below:
(i) MK or the Combined Company (or, if the Merger Agreement
is terminated, Reorganized MK) may transfer the property securing such Claim
to the Holder of the Claim, in full satisfaction of the Claim; or
(ii) such Claim may be Reinstated as follows: (A) any
default, other than a default of a kind specified in section
365(b)(2) of the Bankruptcy Code, shall be cured; (B) the maturity of
the Claim shall be reinstated as the maturity existed before any default;
(C) the Holder of the Claim shall be compensated for any damages incurred as
a result of any reasonable reliance by the Holder on any contractual
provision that entitled the Holder to demand or receive accelerated payment
of the Claim; and (D) the other legal, equitable or contractual rights to
which the Claim entitles the Holder shall not otherwise be altered. The
Other Secured Claims against MK of Amerail under the Amerail
Environmental Security Agreement shall be treated pursuant to this
subclause (ii).
(c) Voting: Class MK-5 is unimpaired and the Holders of Claims in
Class MK-5 are not entitled to vote to accept or reject the Plan.
6. CLASS MK-6 -- UNSECURED FUNDED DEBT CLAIMS, UNSECURED METRA LENDER
CLAIMS, UNSECURED TRANSIT BONDING CLAIMS, BOISE LANDLORD CLAIMS AND
TOUCHSTONE CLAIMS
(a) Classification: Class MK-6 consists of all Unsecured Funded
Debt Claims, Unsecured Metra Lender Claims, Unsecured Transit Bonding Claims,
Boise Landlord Claims and Touchstone Claims against MK.
(b) Treatment: Subject to the provisions of Sections III.B.6(c)
and V.B.4, the Combined Company Series A Preferred Stock, the Liquidating
Trust Cash Distribution, the Liquidating Trust Combined Company Common Stock
and the Liquidating Trust Class MK-6 Rights Exercise Proceeds shall be
distributed to the Liquidating Trust. Following such distribution to the
Liquidating Trust, and (unless the Merger Agreement is terminated) subject
to (i) the exercise of the Combined Company Rights and (ii) the provisions
of Section III.B.8 in the event of an Initial Equity Recovery or a Subsequent
Equity Recovery, Allowed Class MK-6 Claims shall be treated as follows:
(i) Unsecured Funded Debt Claims. On the Effective Date, the
----------------------------
Existing Loan Documents shall be automatically terminated without any further
action by any party and shall no longer be of any force or effect. Each
Holder of an Allowed Class MK-6 Claim consisting of an Unsecured Funded Debt
Claim, in full and final satisfaction of such Allowed Claim, (A) shall
receive, on or as soon as practicable after the Effective Date, its Funded
Debt Pro Rata Share of (i) the Funded Debt Combined Company Common Stock,
(ii) the Funded Debt Cash Distribution, and (iii) the Funded Debt Class MK-6
Rights Exercise Proceeds and (B) shall have the rights and benefits accorded
a Holder of an Unsecured Funded Debt Claim under the Liquidating, Trust
Agreement.
(ii) Unsecured Metra Lender Claims. On the Effective Date,
-----------------------------
the Existing Loan Documents shall be automatically terminated without any
further action by any party and shall no longer be of any force or effect.
Each Holder of an Allowed Class MK-6 Claim consisting of an Unsecured Metra
Lender Claim, in full and final satisfaction of such Allowed Claim, (A) shall
receive, on or as soon as practicable after the Effective Date, its Metra
Lender Pro Rata Share of (i) the Metra Lender Combined Company Common Stock,
(ii) the Metra Lender Cash Distribution, and (iii) the Metra Lender Class 6
Rights Exercise Proceeds and (B) shall have the rights and benefits accorded
a Holder of an Unsecured Metra Lender Claim under the Liquidating Trust
Agreement.
(iii) Unsecured Transit Bonding Claims. On the Effective
-------------------------------- Date, the Transit
Reimbursement Agreement and the Transit Security Agreement shall be
automatically terminated without any further action by any party and shall
no longer be of any force or effect. The Bonding Company (A) shall receive,
on or as soon as practicable after the Effective Date, in full and final
satisfaction of all Allowed Class MK-6 Claims consisting of Unsecured
Transit Bonding Claims, the Bonding Company Combined Company Common Stock,
the Bonding Company Cash Distribution and the Bonding Company Class 6 Rights
Exercise Proceeds and (B) shall have the rights and benefits accorded a
Holder of an Unsecured Transit Bonding Claim under the Liquidating Trust
Agreement.
(iv) Boise Landlord Claims. On or as soon as is practicable
---------------------
after the Effective Date, the Holder of an Allowed Boise Landlord Claim (A)
shall receive, in full and final satisfaction of such Allowed Claim, the
Boise Landlord Combined Company Common Stock, the Boise Landlord Cash
Distribution and the Boise Landlord Class 6 Rights Exercise Proceeds and (B)
shall have the rights and benefits accorded a Holder of a Boise Landlord
Claim under the Liquidating Trust Agreement.
(v) Touchstone Claims. On or as soon as is practicable after
-----------------
the Effective Date, the Holders of the Allowed Touchstone Claims (A) shall
receive, in full and final satisfaction of such Allowed Claims, the
Touchstone Combined Company Common Stock, the Touchstone Cash Distribution
and the Touchstone Class 6 Rights Exercise Proceeds and (B) shall have the
rights and benefits accorded the Holders of the Touchstone Claims under the
Liquidating Trust Agreement.
(c) Alternative Treatment: If the Merger Agreement is terminated,
the New MK Series A Preferred Stock and the Liquidating Trust New MK Common
Stock shall be distributed to the Liquidating Trust. Following such
distribution, Allowed Class MK-6 Claims shall be treated as follows:
(i) Unsecured Funded Debt Claims. On the Effective Date, the
----------------------------
Existing Loan Documents shall be automatically terminated without any further
action by any party and shall no longer be of any force or effect. Each
Holder of an Allowed Class MK-6 Claim consisting of an Unsecured Funded Debt
Claim, in full and final satisfaction of such Allowed Claim, (A) shall
receive, on or as soon as practicable after the Effective Date, its Funded
Debt Pro Rata Share of the Funded Debt New MK Common Stock and (B) shall have
the rights and benefits accorded a Holder of an Unsecured Funded Debt Claim
under the Liquidating Trust Agreement.
(ii) Unsecured Metra Lender Claims. On the Effective Date,
-----------------------------
the Existing Loan Documents shall be automatically terminated without any
further action by any party and shall no longer be of any force or effect.
Each Holder of an Allowed Class MK-6 Claim consisting of an Unsecured Metra
Lender Claim, in full and final satisfaction of such Allowed Claim, (A) shall
receive, on or as soon as practicable after the Effective Date, its Metra
Lender Pro Rata Share of the Metra Lender New MK Common Stock and (B) shall
have the rights and benefits accorded a Holder of an Unsecured Metra Lender
Claim under the Liquidating Trust Agreement.
(iii) Unsecured Transit Bonding Claims. On the Effective
--------------------------------
Date, the Transit Reimbursement Agreement and the Transit Security Agreement
shall be automatically terminated without any further action by any party and
shall no longer be of any force or effect. The Bonding Company (A) shall
receive, on or as soon as practicable after the Effective Date, in full and
final satisfaction of all Allowed Class MK-6 Claims consisting of Unsecured
Transit Bonding Claims, the Bonding Company New MK Common Stock and (B) shall
have the rights and benefits accorded a Holder of an Unsecured Transit
Bonding Claim under the Liquidating Trust Agreement.
(iv) Boise Landlord Claims. On or as soon as is practicable
---------------------
after the Effective Date, the Holder of an Allowed Boise Landlord Claim (A)
shall receive, in full and final satisfaction of such Allowed Claim, the
Boise Landlord New MK Common Stock and (B) shall have the rights and benefits
accorded a Holder of a Boise Landlord Claim under the Liquidating Trust
Agreement.
(v) Touchstone Claims. On or as soon as is practicable after
-----------------
the Effective Date, the holders of the Allowed Touchstone Claims (A) shall
receive, in full and final satisfaction of such Allowed Claims, the
Touchstone New MK Common Stock and (B) shall have the rights and benefits
accorded the Holders of the Touchstone Claims under the Liquidating Trust
Agreement.
(d) Voting: Class MK-6 is impaired and the Holders of Allowed
Class MK-6 Claims are entitled to vote to accept or reject the Plan.
7. CLASS MK-7 -- UNSECURED CLAIMS
(a) Classification: Class MK-7 consists of all Unsecured Claims
against MK.
(b) Treatment: On the Effective Date, subject to the treatment
set forth below for Trade Claims, at the option of MK or the Combined
Company (or, if the Merger Agreement is terminated, Reorganized MK), each
Allowed Class MK-7 Claim shall be treated pursuant to clause (i), (ii) or
(iii) below:
(i) the Claim shall be Reinstated by providing the Holder
thereof with Cash equal to the amount of such Claim, in accordance with the
contractual terms governing such Claim;
(ii) the Claim may be Reinstated other than as provided in
clause (i) above; or
(iii) the Holder of such Claim may receive payment
pursuant to any other terms agreed to by the Holder and MK or the Combined
Company (or, if the Merger Agreement is terminated, Reorganized MK).
With respect to matured and liquidated Allowed Trade Claims, MK shall
pay Allowed Trade Claims in full in Cash equal to the amount of each such
Trade Claim in the ordinary course of business.
The National Steel Guaranty Claim shall be Reinstated in accordance with
the contractual terms of the National Steel Guaranty.
(c) Voting: Class MK-7 is unimpaired and the Holders of Claims
in Class MK-7 are not entitled to vote to accept or reject the Plan.
8. CLASS MK-8 -- INTERESTS OF HOLDERS OF OLD COMMON STOCK AND
SECURITIES PLAINTIFFS
(a) Classification: Class MK-8 consists of the Interests of (i)
Holders of Old Common Stock and (ii) the Securities Plaintiffs.
(b) Treatment: Subject to the provisions hereof providing for
additional distributions in the event of an Initial Equity Recovery or a
Subsequent Equity Recovery, on or as soon as is practicable after the
Effective Date, each Holder of an Allowed Class MK-8 Interest shall receive,
in full and final satisfaction of such Interest, (A) its Pro Rata Share of
Combined Company Warrants (or, if the Merger Agreement is terminated, New MK
Warrants) and (B) unless the Merger Agreement is terminated, a number, equal
to the number of shares of Old Common Stock held by such Holder as of the
applicable Distribution Due, of Combined Company Rights. Any Combined
Company Rights distributed pursuant to this Section III.B.8 may be exercised
in accordance with the provisions of Section VII.B.6 of the Plan.
In addition to the distribution of Combined Company Warrants and
Combined Company Rights, unless the Merger Agreement is terminated, (i) in
the event of an Initial Equity Recovery, each Holder of an Allowed Class
MK-8 Interest shall receive its Pro Rata Share of the Initial Residual
Equity Distribution and (ii) in the event of a Subsequent Equity
Recovery, each Holder of an Allowed Class MK-8 Interest shall receive its
Pro Rata Share of the Subsequent Residual Equity Distribution. For purposes
of this clause (b), (A) the MK Securities Class Action Plaintiffs shall be
deemed to hold 2,976,923 shares of Old Common Stock and (B) the MK Rail
Securities Class Action Plaintiffs shall be deemed to hold 869,231
shares of Old Common Stock.
(c) Voting: Class MK-8 is impaired and the Holders of Allowed
Class MK-8 Interests are entitled to vote to accept or reject the Plan.
9. CLASS MK-9 -- INTERESTS OF HOLDERS OF OLD STOCK OPTIONS AND OLD
WARRANTS
(a) Classification: Class MK-9 consists of the Interests of the
Holders of Old Stock Options and Old Warrants.
(b) Treatment: The Holders of Class MK-9 Interests shall not
receive or retain any property under the Plan on account of such Interests.
(c) Voting: Class MK-9 is impaired and because no distribution
of property will be made to Holders of Class MK-9 Interests, nor will such
Holders retain any property, Class MK-9 is deemed not to have accepted the
Plan.
C. SPECIAL PROVISIONS REGARDING UNIMPAIRED CLAIMS
Except as otherwise provided in the Plan, nothing shall affect the
Debtor's or the Reorganized Debtor's rights and legal and equitable defenses
in respect of any Unimpaired Claims, including but not limited to all rights
in respect of legal and equitable defenses to setoffs or recoupments against
Unimpaired Claims.
D. ACCRUAL OF POSTPETITION INTEREST; PAYMENT OF POSTPETITION FEES AND
EXPENSES
Subject to entry of an order by the Bankruptcy Court, interest on and
fees and expenses with respect to the Other Secured Claims and the Funded
Debt Claims and the fees and expenses of the Existing Indebtedness Agent and
the Lender Steering Committee shall be paid during the Chapter 11 Case as
they come due under the terms of the Override Agreement at the applicable
non-default contractual rate. Additionally, the reasonable fees and expenses
of counsel to, and the members of, the Unofficial Equity Committee shall be
paid promptly by the Debtor or Reorganized Debtor; provided, however, that
if the amount of counsel's fees and expenses payable hereunder is not agreed
to, then only the undisputed amount, if any, of such fees and expenses shall
be paid and counsel's sole recourse with respect to the balance sought will
be to request payment of the same pursuant to section 503(b) of the
Bankruptcy Code; and provided further, that the aggregate fees and expenses
payable to the members of the Unofficial Equity Committee shall not exceed
$100,000. To the extent not previously paid when due or otherwise provided
for under the Plan, such undisputed interest, fees and expenses, together
with any unpaid professional fees due the Holders of Other Secured Claims,
shall be paid in Cash on the Effective Date, together with any additional
amounts required to be paid in respect of Unimpaired Claims pursuant to
Section 1124. Except as otherwise provided above or in the Plan, no Holder
of an Allowed Unsecured Claim shall be entitled to the accrual of
postpetition interest or the payment by the Debtor or Reorganized Debtor of
postpetition interest on account of such Claim for any purpose; provided,
however, that interest, fees and other charges shall continue to accrue under
the Metra Credit Agreement and the Metra Guaranty to the Effective Date for
purposes of determining the Metra Ceiling Amount.
ARTICLE IV.
ACCEPTANCE OR REJECTION OF THE PLAN
A. VOTING CLASSES
Each Holder of an Allowed Class MK-3, MK-4 or MK-6 Claim or an Allowed
Class MK-8 Interest shall be entitled to vote to accept or reject the Plan.
B. ACCEPTANCE BY IMPAIRED CLASSES
An Impaired Class of Claims shall have accepted the Plan if (i) the
Holders (other than any Holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims
actually voting in such Class have voted to accept the Plan and (ii) the
Holders (other than any Holder designated under section 1126(e) of the
Bankruptcy Code) of more than one-half in number of the Allowed Claims
actually voting in such Class have voted to accept the Plan. An Impaired
Class of Interests shall have accepted the Plan if the Holders (other than
any Holder designated under section 1126(e) of the Bankruptcy Code) of at
least two-thirds in amount of the Allowed Interests actually voting in such
Class have voted to accept the Plan.
C. PRESUMED ACCEPTANCE OF PLAN
Classes MK-1, MK-2, MK-5 and MK-7 are unimpaired under the Plan and,
therefore, conclusively are presumed to have accepted the Plan pursuant to
section 1126(f) the Bankruptcy Code.
D. DEEMED NON-ACCEPTANCE OF PLAN
Holders of Class MK-9 Interests shall not receive or retain any property
under the Plan on account of their Interests, and therefore, Class MK-9 is
deemed not to have accepted the Plan pursuant to section 1126(g) of the
Bankruptcy Code.
E. NON-CONSENSUAL CONFIRMATION
The Debtor will seek Confirmation of the Plan under section 1129(b) of
the Bankruptcy Code in view of the deemed non-acceptance by Class MK-9. In
the event that any Impaired Class of Claims or Interests does not accept the
Plan in accordance with section 1126 of the Bankruptcy Code, the Debtor
hereby requests that the Bankruptcy Court confirm the Plan in accordance with
section 1129(b) of the Bankruptcy Code. Subject to the Merger Agreement, the
Debtor reserves the right to modify the Plan to the extent, if any, that
Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires
modification.
ARTICLE V.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. CONTINUED CORPORATE EXISTENCE, VESTING OF ASSETS IN THE REORGANIZED
DEBTOR AND PRESERVATION OF RIGHTS OF ACTION
1. CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS
On the Effective Date, MK will merge into Washington pursuant to the
Merger Agreement, unless the Merger Agreement is terminated. The
Reorganized Debtor will continue to exist after the Effective Date as a
separate corporate entity, with all of the powers of a corporation under the
Delaware General Corporation Law and without prejudice to any right to alter
or terminate their existence (whether by merger or otherwise). Except as
otherwise provided in the Plan, on and after the Effective Date, all
property of the Estate of the Debtor, including all claims, rights and
causes of action (other than those released pursuant to Section V.E below),
and any property acquired by the Debtor or Reorganized Debtor under or in
connection with the Plan, shall vest in the Reorganized Debtor free and
clear of all Claims, liens, charges, other encumbrances and Interests. On
and after the Effective Date, the Reorganized Debtor may operate its
businesses and may use, acquire and dispose of property and compromise or
settle any Claims or Interests without supervision or approval by the
Bankruptcy Court and free of any restrictions of the Bankruptcy Code or
Bankruptcy Rules, other than restrictions expressly imposed by the Plan or
the Confirmation Order. Without limiting the foregoing, the Reorganized
Debtor may pay the charges that it incurs on or after the Effective Date for
Professionals' fees, disbursements, expenses or related support services
without application to the Bankruptcy Court, except for compensation or
reimbursement of expenses for any services rendered after the Effective Date
in connection with any applications for compensation or reimbursement
pending on the Effective Date or Filed and served after the Effective Date
pursuant to Section II.A.2 above.
2. PRESERVATION OF RIGHTS OF ACTION
Except as provided in Section V.E below, or in any contract, instrument,
release, indenture or other agreement entered into in connection with the
Plan, in accordance with section 1123(b) of the Bankruptcy Code, the
Reorganized Debtor shall retain and may enforce any claims, rights and causes
of action that the Debtor or its Estate may hold against any entity,
including but not limited to the claims, rights and causes of action set
forth in Exhibit U. Failure to list a claim, right or cause of action on
Exhibit U shall not constitute a waiver or release by the Debtor of such
claim, right or cause of action. The Reorganized Debtor or its successors
may pursue such retained claims, rights or causes of action, as appropriate,
in accordance with the best interests of the Reorganized Debtor.
B. THE RESTRUCTURING TRANSACTIONS
1. THE MERGER
(a) CONSUMMATION OF THE MERGER
Simultaneously with the commencement of the Effective Date, unless the
Merger Agreement is terminated, MK shall take all such actions, including
without limitation all actions set forth in Articles 2 and 3 of the Merger
Agreement, as may be necessary or appropriate to effect the Merger on the
terms and subject to the conditions set forth in the Merger Agreement.
Without limiting the generality of the foregoing sentence, promptly upon the
satisfaction or waiver (pursuant to Section IX.C) of each of the conditions
set forth in Section IX.B, MK will cause the Merger Agreement or a
certificate of merger conforming to the applicable provisions of the Delaware
General Corporation Law to be filed with the Secretary of State of Delaware
pursuant to applicable provisions of the Delaware General Corporation Law and
will take or cause to be taken all other actions, including making
appropriate filings or recordings, that may be required by the Delaware
General Corporation Law or then-applicable law in connection with the Merger.
(b) CANCELLATION OF CAPITAL STOCK AND EXISTING LOAN DOCUMENTS;
SURRENDER OF SECURITIES AND OTHER DOCUMENTATION
On the Effective Date, the Capital Stock (whether issued and
outstanding or held in the treasury of MK immediately prior to the Effective
Date), the Rights, the Existing Loan Documents, the Transit Reimbursement
Agreement and the Transit Security Agreement shall be deemed to be
cancelled, extinguished, retired and of no further force and effect, in all
events without any further action on the part of the Debtor, the Reorganized
Debtor, the holders of Capital Stock or any other entity. The Holders of
such canceled securities and other documentation shall have no rights
arising from or relating to such securities or other documentation, or the
cancellation thereof, except the rights provided pursuant to the Plan;
provided, however, that no distribution under the Plan shall be made to or
on behalf of any Holder of any Allowed Claim or Allowed Interest evidenced
by such canceled securities or other documentation unless or until such
securities or documentation are received by the Disbursing Agent pursuant to
Section VII.H below. On the Effective Date, the Rights Agreement shall be
deemed to be cancelled, retired and of no further force and effect, without
any further action on the part of the Debtor or the Reorganized Debtor.
(c) EFFECT OF THE MERGER ON TRANSFER OF SECURITIES
Unless the Merger Agreement is terminated, the shares of Combined
Company Common Stock shall be distributed to Holders of Allowed Class MK-6
Claims and to the Liquidating Trust (and, if applicable, to the Holders of
Allowed Class MK-8 Interests), and the Combined Company Warrants and the
Combined Company Rights shall be distributed to Holders of Allowed Class MK-8
Interests, pursuant to the Plan to the same effect as if (i) immediately
prior to the Merger on the Effective Date, newly issued shares of common
stock of Reorganized MK had been distributed to Holders of Allowed Class MK-6
Claims and to the Liquidating Trust (and, if applicable, to the Holders of
Allowed Class MK-8 Interests) and the formerly outstanding shares of Old
Common Stock had been converted into warrants to purchase shares of common
stock of Reorganized MK, and (ii) immediately thereafter, pursuant to the
Merger, the newly issued shares of common stock of Reorganized MK were
converted into Combined Company Common Stock and the warrants to purchase
shares of common stock of Reorganized MK were converted into Combined Company
Warrants.
(d) THE REORGANIZED DEBTOR'S OBLIGATIONS UNDER THE PLAN
From and after the Effective Date, the Reorganized Debtor will perform
the obligations of the Debtor under the Plan.
2. NEW LETTER OF CREDIT REIMBURSEMENT AGREEMENT AND NEW GUARANTIES
On the Effective Date, the Reorganized Debtor shall enter into New
Letter of Credit Reimbursement Agreements with issuers of Existing Letters
of Credit and New Guaranties with holders of Existing Guaranties.
3. ISSUANCE OF SECURITIES AND RELATED DOCUMENTATION
On the Effective Date:
(a) The Combined Company shall issue the shares of Combined
Company Common Stock to be distributed pursuant to the Plan (or, if the
Merger Agreement is terminated, Reorganized MK shall issue the shares of New
MK Common Stock to be distributed pursuant to the Plan).
(b) The Combined Company shall issue the Combined Company Series
A Preferred Stock to be distributed pursuant to the Plan (or, if the Merger
Agreement is terminated, Reorganized MK shall issue the shares of New MK
Series A Preferred Stock to be distributed pursuant to the Plan).
(c) The Combined Company shall issue, pursuant to the Combined
Company Warrant Agreement, the Combined Company Warrants to be distributed
pursuant to the Plan (or, if the Merger Agreement is terminated, Reorganized
MK shall issue, pursuant to the New MK Warrant Agreement, the New MK Warrants
to be distributed to the Plan).
(d) The Combined Company shall issue the Combined Company Rights
to be distributed pursuant to the Plan (unless the Merger Agreement is
terminated).
(e) The transferees of the Combined Company Common Stock (or, if
the Merger Agreement is terminated, the New MK Common Stock) shall be deemed
to have entered into the Combined Company Registration Rights Agreement (or,
if the Merger Agreement is terminated, the New MK Registration Rights
Agreement) without further action on the part of the Debtor, Reorganized
Debtor or any other entity.
4. ESTABLISHMENT OF LIQUIDATING TRUST
On or as soon as practicable after the Combined Company Rights
Expiration Date, the Liquidating Trust shall be established pursuant to the
Liquidating Trust Agreement and the Plan. Unless the Merger Agreement is
terminated, and subject to the exercise of the Combined Company Rights, (a)
the Liquidating Trust MK Rail Stock, (b) the Liquidating Trust MK Rail Note
Proceeds (and, if the MK Rail Note has not been cancelled in accordance with
the MK Rail Note Cancellation Agreement, the MK Rail Note), (c) the
Liquidating Trust Cash Distribution, (d) the Liquidating Trust Combined
Company Common Stock, (e) the Combined Company Series A Preferred Stock, (f)
the Liquidating Trust Class MK-3 Rights Exercise Proceeds, and (g) the
Liquidating Trust Class MK-6 Rights Exercise Proceeds, or the proceeds of
each thereof, shall be conveyed to the Liquidating Trust. If the Merger
Agreement is terminated, (a) the Liquidating Trust MK Rail Stock, (b) the
Liquidating Trust MK Rail Note Proceeds (and, if the MK Rail Note has not
been cancelled in accordance with the MK Rail Note Cancellation Agreement,
the MK Rail Note), (c) the Liquidating Trust New MK Common Stock, and (d) the
New MK Series A Preferred Stock, or the proceeds of each thereof, shall be
conveyed to the Liquidating Trust.
If, prior to the Combined Company Rights Expiration Date (or, if the
Merger Agreement is terminated, the Effective Date), (a) the Metra Final
Accounting Date, as defined in the Liquidating Trust Agreement, has occurred,
(b) the MK Rail Note has been cancelled in accordance with the terms of the
MK Rail Note Cancellation Agreement, and (c) the Debtor determines, in
accordance with the Residual Equity Recovery Exhibit, that no Subsequent
Equity Recovery will occur, then (a) the Liquidating Trust shall not be
established, (b) the Combined Company Series A Preferred Stock (or, if the
Merger Agreement is terminated, the New MK Series A Preferred Stock) shall
be distributed, subject (unless the Merger Agreement is terminated) to the
exercise of the Combined Company Rights, to Holders of Allowed Class MK-6
Claims in accordance with the provisions of the Creditor Distribution Exhibit
that are applicable solely in the event that the Liquidating Trust is not
established, and (c) all provisions of the Plan, including all exhibits
hereto, relating to the Liquidating Trust shall be of no force or effect, and
the property to be otherwise distributed to the Liquidating Trust shall be
distributed, subject (unless the Merger Agreement is terminated) to the
exercise of the Combined Company Rights, to Holders of Allowed Class MK-3 or
MK-6 Claims, as the case may be, in accordance with the Creditor Distribution
Exhibit.
5. ESTABLISHMENT OF NEW CREDIT FACILITY
On the Effective Date, if the Merger Agreement is terminated, the
Reorganized Debtor shall establish the New Credit Facility by entering into
the New Credit Facility Documents.
6. PROCEDURES FOR EXERCISE OF COMBINED COMPANY RIGHTS
(a) Each Combined Company Right may be exercised by the holder thereof
at any time during the Combined Company Rights Exercise Period to purchase
a portion of the Combined Company Rights Aggregate Consideration equal to the
quotient that results from dividing (i) one by (ii) the number of Combined
Company Rights issued under the Plan (the exercise of any Combined Company
Rights in such manner being referred to as a "Primary Exercise"). Although
a holder of Combined Company Rights may exercise all or any portion of such
holder's Combined Company Rights pursuant to a Primary Exercise, all such
Combined Company Rights that are to be exercised by such holder pursuant to
a Primary Exercise shall be exercised concurrently. Any holder of Combined
Company Rights that seeks to exercise all of such holder's Combined Company
Rights pursuant to a Primary Exercise may also seek to exercise a notional
number of additional Combined Company Rights not to exceed the difference
that results from subtracting (i) the number of Combined Company Rights
sought to be exercised by such holder pursuant to a Primary Exercise from
(ii) the number of Combined Company Rights issued under the Plan (the
exercise of any Combined Company Rights in such manner being referred to as
an "Oversubscription Exercise"). Any exercise of Combined Company Rights
pursuant to a Primary Exercise or an Oversubscription Exercise will be
irrevocable. Any exercise of Combined Company Rights pursuant to an
Oversubscription Exercise will be subject to prorationing as described in
clause (d) below in the event that the total number of Combined Company
Rights sought to be exercised pursuant to Primary Exercises and
Oversubscription Exercises exceeds the number of Combined Company Rights
issued under the Plan.
(b) In order for any Primary Exercise (and any related Oversubscription
Exercise) of Combined Company Rights to be valid and effective, the holder
of Combined Company Rights seeking to effect such Primary Exercise must have
been the Holder of the Allowed Class MK-8 Interests in respect of which the
Combined Company Rights subject to such Primary Exercise were issued pursuant
to Section III.B.8 of the Plan and must deliver to the Disbursing Agent prior
to the Combined Company Rights Expiration Date a properly completed and duly
executed Exercise Notice which (i) indicates the number of Combined Company
Rights sought to be exercised pursuant to a Primary Exercise and the number,
if any, of Combined Company Rights sought to be exercised pursuant to an
Oversubscription Exercise and (ii) is accompanied by a certified check or
bank draft drawn upon a United States bank or wire transfer in an amount
equal to the sum of (a) the product of the Combined Company Rights Exercise
Price and the number of Combined Company Rights sought to be exercised
pursuant to a Primary Exercise and (b) the product of the Combined Company
Rights Exercise Price and the number, if any, of Combined Company Rights
sought to be exercised pursuant to an Oversubscription Exercise. The
foregoing items will not be deemed to have been timely delivered to the
Disbursing Agent (and thus the attempted exercise of Combined Company Rights
pursuant to a Primary Exercise and/or an Oversubscription Exercise will not
be valid or effective) unless they are actually received by the Disbursing
Agent at the address specified therefor in the instructions (the "Exercise
Instructions") accompanying the form of Exercise Notice to be provided
pursuant to clause (e) below prior to the Combined Rights Expiration Date and
are completed and executed in conformity with the Exercise Instructions.
(c) As promptly as practicable following the Combined Company Rights
Expiration Date, the Disbursing Agent will mail to each holder of Combined
Company Rights that has sought to exercise Combined Company Rights in a
Primary Exercise and/or an Oversubscription Exercise a written statement
specifying the number of Combined Company Rights that were validly and
effectively exercised by such holder (after giving effect, if applicable, to
prorationing pursuant to clause (d) below of Combined Company Rights sought
to be exercised by such holder pursuant to an Oversubscription Exercise) and
the quantity or magnitude of each form of consideration included in the
portion of the Combined Company Rights Aggregate Consideration purchased upon
such exercise of such Combined Company Rights, together with (i) a check in
the amount of the sum of the portion of the Cash Distribution so purchased,
the portion of the MK Rail Note Proceeds so purchased and, if applicable, the
amount being refunded (without interest) in respect of the Combined Company
Rights Exercise Price relating to any Combined Company Rights that were not
validly and effectively exercised by such holder as a result of untimeliness,
noncompliance with the requirements specified herein or in the Exercise
Instructions, prorationing pursuant to clause (d) below or otherwise and (ii)
stock certificates representing the shares of each class of stock so
purchased. No fractional shares of stock will be delivered upon the exercise
of any Combined Company Right. When any exercise of Combined Company Rights
would otherwise result in the purchase of a number of shares of any class of
stock that is not a whole number, the actual number of shares of stock of
such class that will be purchased upon such exercise shall be rounded to the
next higher or lower number as follows: (a) fractions of 1/2 or greater will
be rounded to the next higher whole number and (b) fractions of less than 1/2
will be rounded to the next lower whole number.
(d) In the event that the total number of Combined Company Rights
sought to be exercised pursuant to Primary Exercises and Oversubscription
Exercises exceeds the number of Combined Company Rights issued under the
Plan, (i) all Combined Company Rights that shall have otherwise been validly
and effectively exercised pursuant to Primary Exercises shall be deemed to
have been validly and effectively exercised and (ii) the number of Combined
Company Rights that shall be deemed to have been validly and effectively
exercised by any holder of Combined Company Rights pursuant to an
Oversubscription Exercise (assuming that all other requirements for valid and
effective exercise shall have been satisfied) shall be determined by (a)
multiplying the aggregate number of Combined Company Rights that were not
validly and effectively exercised pursuant to Primary Exercises by a
fraction, the numerator of which will be the number of Combined Company
Rights issued under the Plan to such holder and the denominator of which
shall be the number of Combined Company Rights issued under the Plan to
all holders of Combined Company Rights who shall have exercised Combined
Company Rights pursuant to Oversubscription Exercises and (b) eliminating any
resulting fractions. If the prorationing pursuant to the immediately
preceding sentence would otherwise result in any holder being deemed to have
validly and effectively exercised a greater number of Combined Company Rights
than such holder sought to exercise pursuant to its Oversubscription
Exercise, then such holder will be deemed to have validly and effectively
exercised only that number of Combined Company Rights which such holder
sought to exercise pursuant to its Oversubscription Exercise and any
remaining Combined Company Rights not otherwise deemed to have been validly
and effectively exercised will be deemed to have been validly and effectively
exercised by other holders of Combined Company Rights that have made
Oversubscription Exercises on the basis set forth in the immediately
preceding sentence. This proration process will be repeated as necessary
until all Combined Company Rights shall have been deemed to have been validly
and effectively exercised by such holders.
(e) In order to facilitate the exercise of Combined Company Rights, the
Disbursing Agent will mail on or as promptly as is practicable after the
applicable Distribution Record Date to each Holder of Allowed Class MK-8
Interests as of the applicable Distribution Record Date a form of the
Exercise Notice (an "Exercise Notice") together with the Exercise
Instructions (which will include instructions for the proper completion and
due execution of the Exercise Notice and timely delivery thereof, together
with payment of the applicable exercise price for Combined Company Rights
sought to be exercised, to the Disbursing Agent and may specify other
requirements relating to the valid and effective exercise of Combined Company
Rights). All determinations as to proper completion, due execution,
timeliness, eligibility, prorationing and other matters affecting the
validity or effectiveness of any attempted exercise of any Combined Company
Rights shall be made by the Disbursing Agent, whose determination shall be
final and binding. The Disbursing Agent in its sole discretion may waive any
defect or irregularity, or permit a defect or irregularity to be corrected
within such time as it may determine or reject the purported exercise of any
Combined Company Right subject to any such defect or irregularity.
Deliveries required to be received by the Disbursing Agent in connection with
a purported exercise of Combined Company Rights will not be deemed to have
been so received or accepted until actual receipt thereof by the Disbursing
Agent shall have occurred and any defects or irregularities shall have been
waived or cured within such time as the Disbursing Agent may determine in its
sole discretion. Neither the Debtor nor the Disbursing Agent will have any
obligation to give notice to any holder of a Combined Company Right of any
defect or irregularity in connection with any purported exercise thereof or
incur any liability as a result of any failure to give any such notice.
C. CORPORATE GOVERNANCE, DIRECTORS AND OFFICERS, EMPLOYMENT-RELATED
AGREEMENTS AND COMPENSATION PROGRAMS
1. CERTIFICATE OF INCORPORATION AND BYLAWS
(a) COMBINED COMPANY/REORGANIZED MK
As of the Effective Date, the Combined Company Certificate of
Incorporation and the Combined Company Bylaws shall be substantially in the
forms of Exhibits C and B, respectively, to the Plan. The Combined Company
Certificate of Incorporation shall, among other things: (i) prohibit the
issuance of nonvoting equity securities, to the extent required by section
1123(a) of the Bankruptcy Code; and (ii) authorize the issuance of Combined
Company Common Stock, Combined Company Series A Preferred Stock and Combined
Company Warrants in amounts not less than the amounts necessary to permit
the distributions thereof required or contemplated by the Plan. After the
Effective Time, the Combined Company may amend and restate the Combined
Company Certificate of Incorporation or Combined Company Bylaws as permitted
by applicable law. If the Merger Agreement is terminated, as of the
Effective Date, the New MK Amended Certificate of Incorporation and the New
MK Bylaws shall be substantially in the forms of Exhibits O and N,
respectively, to the Plan. The New MK Amended Certificate of Incorporation
shall, among other things: (i) prohibit the issuance of nonvoting equity
securities, to the extent required by section 1123(a) of the Bankruptcy
Code; and (ii) authorize the issuance of New MK Common Stock, New MK Series
A Preferred Stock and New MK Warrants in amounts not less than the amounts
necessary to permit the distributions thereof required or contemplated by
the Plan. After the Effective Date, Reorganized MK may amend and restate
the New MK Amended Certificate of Incorporation or New MK Bylaws as
permitted by applicable law.
2. DIRECTORS AND OFFICERS
(a) THE COMBINED COMPANY/REORGANIZED MK
Unless the Merger Agreement is terminated, subject to any requirement
of Bankruptcy Court approval pursuant to section 1129(a)(5) of the Bankruptcy
Code, the initial directors of the Combined Company will consist of Terry W.
Payne, Dorn Parkinson and Dennis R. Washington, whose terms shall expire at
the 1999 meeting of stockholders, Leonard R. Judd (whose term expires at the
1998 meeting of stockholders) and David H. Batchelder (whose term expires at
the 1997 meeting of stockholders), Robert S. Miller and Robert A. Tinstman
(whose terms expire at the 1997 meeting of stockholders) and John D.C. Roach
and William C. Langley (whose terms expire at the 1998 meeting of
stockholders), who were designated by the Lender Steering Committee and must
be approved by Washington. Unless the Merger Agreement is terminated,
subject to any requirement of Bankruptcy Court approval pursuant to section
1129(a)(5) of the Bankruptcy Code, the initial officers of the Combined
Company will be named prior to Confirmation. All directors of the Combined
Company shall serve until their successors are duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Combined Company Certificate of Incorporation and Combined Company
Bylaws. Each officer of the Combined Company will serve from and after the
Effective Time until his or her successor is duly appointed and qualified or
until their earlier death, resignation or removal in accordance with the
terms of the Combined Company Certificate of Incorporation and Combined
Company Bylaws. If the Merger Agreement is terminated, subject to any
requirement of Bankruptcy Court approval pursuant to section 1129(a)(5) of
the Bankruptcy Code: (i) the officers of Reorganized MK shall be the officers
of MK immediately prior to the Effective Date and (ii) the board of directors
of Reorganized MK shall consist of the Chairman and Chief Executive Officer
of Reorganized MK and other directors to be named prior to Confirmation by
Reorganized MK in consultation with the Lender Steering Committee. Each
director and officer of Reorganized MK will serve from the Effective Date
until a successor is duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the terms of the New
MK Amended Certificate of Incorporation and New MK Bylaws.
3. EMPLOYMENT, RETIREMENT, INDEMNIFICATION AND OTHER AGREEMENTS AND
INCENTIVE COMPENSATION PROGRAMS; RETIREE HEALTH AND WELFARE BENEFITS
(a) As of the Effective Date, the Reorganized Debtor shall have the
authority to (i) enter into employment, retirement, indemnification and other
agreements with its active directors, officers and employees and (ii)
implement retirement income plans, welfare benefit plans and other incentive
plans in which directors, officers and other active employees of the
Reorganized Debtor may be eligible to participate. Such agreements and plans
may include equity, bonus and other incentive plans. The terms of the New
MK Compensation Plans, to be entered into or implemented by Reorganized MK
if the Merger Agreement is terminated, are set forth in Exhibit L. A list
of the Debtor's and (unless the Merger Agreement is terminated) Washington's
existing employment, retirement, indemnification and other agreements and
incentive compensation plans and programs that are to remain in effect as of
and after the Effective Date is set forth in Exhibit M to the Plan. The
Disclosure Statement contains information as to the compensation to be paid
to insiders who are the subject of such agreements, plans or programs.
(b) If the Merger Agreement is terminated, approval of the Plan by the
Classes of Impaired Claims against MK shall, as of the Effective Date, be
deemed to constitute the requisite shareholder approval of each of the New
MK Stock Compensation Plan and the New MK Non-Employee Director Plan for
purposes of compliance with Rule 16b-3 under the Exchange Act, and the
Reorganized Debtor shall have the authority to implement both the New MK
Stock Compensation Plan and the New MK Non-Employee Director Plan as of the
Effective Date. The Disclosure Statement contains information regarding both
the New MK Stock Compensation Plan and the New MK Non-Employee Director Plan.
The terms of each such plan, as well as the text of each such plan, are set
forth in Exhibit L to the Plan.
(c) From and after the Effective Date, pursuant to section 1129(a)(13)
of the Bankruptcy Code, the Reorganized Debtor shall continue to pay all
retiree benefits (as defined in section 1114(a) of the Bankruptcy Code), at
the level established pursuant to subsection (e)(1)(B) or (g) of section 1114
of the Bankruptcy Code, at any time prior to Confirmation, in accordance with
the contract or program giving rise to such benefits.
4. CORPORATE ACTION
The adoption of new or amended and restated certificates or articles of
incorporation and bylaws or regulations or similar constituent documents for
the Reorganized Debtor; the initial selection of directors and officers for
the Reorganized Debtor; the distribution of Cash pursuant to the Plan; the
issuance and distribution of Combined Company Securities (or, if the Merger
Agreement is terminated, New MK Securities) pursuant to the Plan; the grant
of mortgages, deeds of trust, liens and other security interests; the
adoption, execution, delivery and implementation of all contracts, leases,
instruments, releases, indentures and other agreements or documents related
to any of the foregoing; the adoption, execution and implementation of
employment, retirement and indemnification agreements, incentive compensation
programs, retirement income plans, welfare benefit plans and other employee
plans and related agreements; and the other matters provided for under the
Plan involving the corporate structure of the Debtor or Reorganized Debtor
or corporate action to be taken by or required of the Debtor or Reorganized
Debtor, including without limitation all action to be taken under the Merger
Agreement, will occur and be effective as provided herein, and will be
authorized and approved in all respects and for all purposes without any
requirement of further action by stockholders or directors of any of the
Debtor or the Reorganized Debtor.
D. SOURCES OF CASH FOR PLAN DISTRIBUTIONS
Except as otherwise provided in the Plan, the Merger Agreement or the
Confirmation Order, all Cash necessary for the Reorganized Debtor to make
payments pursuant to the Plan shall be obtained from the Reorganized Debtor's
cash balances, the Combined Company Rights Exercise Proceeds and the
operations of the Debtor or Reorganized Debtor (and, if the Merger Agreement
is terminated, the New Credit Facility).
E. RELEASES AND RELATED MATTERS
1. RELEASES BY THE DEBTOR
(a) As of the Effective Date, the Debtor and the Reorganized
Debtor will be deemed to have released and waived all causes of action of the
Debtor arising under section 510, 544, 547, 548, 549 or 550 of the Bankruptcy
Code.
(b) As of the Effective Date, for good and valuable
consideration, the adequacy of which is hereby confirmed, the Debtor and the
Reorganized Debtor will be deemed to forever release, waive and discharge
all claims, obligations, suits, judgments, damages, demands, debts, rights,
causes of action and liabilities whatsoever in connection with or related to
the Debtor, the Chapter 11 Case or the Plan (other than the rights of the
Debtor or the Reorganized Debtor to enforce the Plan and the contracts,
instruments, releases, indentures and other agreements or documents
delivered thereunder), whether liquidated or unliquidated, fixed or
contingent, matured or unmatured, known or unknown, foreseen or unforeseen,
then existing or thereafter arising, in law, equity or otherwise that are
based in whole or in part on any act, omission, transaction, event or other
occurrence taking place on or prior to the Effective Date in any way
relating to the Debtor, Washington (unless the Merger Agreement is
terminated), the parties released pursuant to this Section V.E.1, the
Chapter 11 Case or the Plan, and that may be asserted by or on behalf of the
Debtor or its Estate against (i) the Debtor's current and former officers,
directors and shareholders, (ii) Washington's current officers, directors
and shareholders (unless the Merger Agreement is terminated), (iii) the
respective current and former agents, employees, consultants, advisors,
attorneys, accountants and other representatives of the Debtor and
Washington (including the respective current and former members and
professionals of the foregoing) acting in such capacity, (iv) the Bridge
Loan Lenders, the Bridge Loan Agent, the Funded Debt Lenders, the Existing
Indebtedness Agent, the Metra Lenders, the Metra Agent, the Transit Bonding
Companies (excluding any claims of the Debtor or the Reorganized Debtor
under the Indemnification Agreement), the Lender Steering Committee and
their respective predecessors in interest and the Boise Landlord with
respect to the transactions relating to their respective Claims, (v) the
Unofficial Equity Committee with respect to the transactions relating to the
Interests of its members and the Interests of other Holders of Class MK-8
Interests, and (vi) the respective current and former agents, advisors,
attorneys and representatives of the Bridge Loan Lenders, the Bridge Loan
Agent, the Funded Debt Lenders, the Existing Indebtedness Agent, the Metra
Lenders, the Metra Agent, the Lender Steering Committee, the Transit Bonding
Companies and the Unofficial Equity Committee (including the respective
current and former members and professionals of the foregoing and their
respective predecessors in interest) acting in such capacity; provided,
however, that the Debtor shall not release the persons identified in
subclauses (i) and (ii) of this Section V.E.l.b from any claims with respect
to (a) any loan, advance or similar payment by the Debtor to such person or
(b) any contractual obligation owed by such person to the Debtor.
Notwithstanding this Section V.E.1, if and to the extent that the Bankruptcy
Court concludes that the Plan cannot be confirmed with any portion of the
releases set forth in the Plan, then the Plan may be confirmed with that
portion excised so as to give effect as much as possible to the foregoing
releases without precluding confirmation of the Plan.
2. RELEASES BY HOLDERS OF CLAIMS OR INTERESTS
(a) Holders of Claims. As of the Effective Date, in consideration
-----------------
for the obligations of the Debtor and the Reorganized Debtor under the Plan
and the Cash, securities, contracts, instruments, releases and other
agreements or documents to be delivered in connection with the Plan, each
holder of a Claim that is Impaired under the Plan will be deemed to forever
release, waive and discharge all claims, demands, debts, rights, causes of
action and liabilities (other than the right to enforce the Debtor's or the
Reorganized Debtor's obligations under the Plan and the contracts,
instruments, releases and other agreements and documents delivered
thereunder), whether liquidated or unliquidated, fixed or contingent, matured
or unmatured, known or unknown, foreseen or unforeseen, then existing or
thereafter arising, that are based in whole or in part on any act, omission
or other occurrence taking place on or prior to the Effective Date in any way
relating to their Claims against the Debtor, the Chapter 11 Case or the Plan
against (i) the Debtor, (ii) the current and former officers and directors
of the Debtor (excluding certain former officers of the Debtor that are
current or former officers of Amerail, solely in their capacity as officers
of Amerail with respect to their activities in connection with Amerail) or
(iii) its agents, advisors, attorneys and representatives (including the
current and former officers, directors, employees, shareholders and
professionals of the foregoing), acting in such capacity.
(b) Holders of Interests. As of the Effective Date, to the
--------------------
fullest extent permissible under applicable law, in consideration for the
obligations of the Debtor and the Reorganized Debtor under the Plan, the
Combined Company Rights and the Combined Company Warrants (or, if the Merger
Agreement is terminated, the New MK Warrants), any Initial Residual Equity
Distribution or Subsequent Residual Equity Distribution, contracts,
instruments, releases or other agreements or documents to be delivered in
connection with the Plan, each entity that has held, holds or may hold an
Interest will be deemed to forever release, waive and discharge all claims,
demands, debts, rights, causes of action and liabilities (other than the
right to enforce the Debtor's or the Reorganized Debtor's obligations under
the Plan and the contracts, instruments, releases and other agreements and
documents delivered thereunder), whether liquidated or unliquidated, fixed
or contingent, matured or unmatured, known or unknown, foreseen or
unforeseen, then existing or thereafter arising, that are based in whole or
in part on any act, omission or other occurrence taking place on or prior to
the Effective Date in any way relating to their Interests in the Debtor, the
Chapter 11 Case or the Plan against: (i) the Debtor, (ii) the current or
former officers and directors of the Debtor or (iii) its agents, advisors,
attorneys and representatives (including the current and former directors,
officers, employees, shareholders and professionals of the foregoing), acting
in such capacity.
(c) Release of Lender Steering Committee and Unofficial Equity
----------------------------------------------------------
Committee. As of the Effective Date, to the fullest extent permissible
under --------- applicable law, in consideration for the contracts,
instruments, releases or other agreements or documents to be delivered in
connection with the Plan, each entity that has held, holds or may hold a
Claim which is Impaired or an Interest will be deemed to forever release,
waive and discharge all claims, demands, debts, rights, causes of action and
liabilities, whether liquidated or unliquidated, fixed or contingent,
matured or unmatured, known or unknown, foreseen or unforeseen, then
existing or thereafter arising, that are based in whole or in part on any
act, omission or other occurrence taking place on or prior to the Effective
Date in any way relating to their Claims against or Interests in the Debtor,
the Chapter 11 Case or the Plan against the Lender Steering Committee and
the Unofficial Equity Committee, or their respective advisors, attorneys and
representatives, acting in such capacity.
(d) Federal Regulatory Agencies. Nothing in this Plan will
---------------------------
restrict any federal government regulatory agency from pursuing any
regulatory or police enforcement action against the Debtor, the Reorganized
Debtor, their current or former officers, directors or employees, and their
respective agents, advisors, attorneys and representatives acting in any
capacity, other than any action or proceeding of any type to recover monetary
claims, damages or penalties against the Debtor for an act or omission
occurring prior to Confirmation.
3. INJUNCTION RELATED TO RELEASES
As further provided in Section XI.B, the Confirmation Order will enjoin
the prosecution, whether directly, derivatively or otherwise, of any claim,
demand, debt, right, cause of action, liability or interest released,
discharged or terminated pursuant to the Plan. Nothing in this Plan will
restrict any federal government regulatory agency from pursuing any
regulatory or police enforcement action against the Debtor, the Reorganized
Debtor, their current or former officers, directors or employees, and their
respective agents, advisors, attorneys and representatives acting in any
capacity, other than any action or proceeding of any type to recover monetary
claims, damages or penalties against the Debtor for an act or omission
occurring prior to Confirmation.
F. RELEASE OF LIENS
Except as otherwise provided in the Plan with respect to Other Secured
Claims or in any contract, instrument, indenture or other agreement or
document created in connection with the Plan, on the Effective Date, all
mortgages, deeds of trust, liens or other security interests against the
property of the Estate shall be released, and all the right, title and
interest of any holder of such mortgages, deeds of trust, liens or other
security interests shall revert to the Reorganized Debtor and its successors
and assigns. The foregoing release shall not apply to liens or security
interests arising under the New Bonds Security Agreement or the Amerail
Environmental Security Agreement.
G. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS; EXEMPTION FROM CERTAIN
TRANSFER TAXES
The Chairman of the Board, Chief Executive Officer, any Executive Vice
President or Vice President and the Chief Legal Officer of the Debtor or
Reorganized Debtor shall be authorized to execute, deliver, file or record
such contracts, instruments, releases, indentures and other agreements or
documents and to take such actions as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan. The
Secretary or any Assistant Secretary of the Debtor or Reorganized Debtor
shall be authorized to certify or attest to any of the foregoing actions.
Pursuant to section 1146(c) of the Bankruptcy Code: (1) the issuance,
distribution, transfer or exchange of the Combined Company Securities (or,
if the Merger Agreement is terminated, the New MK Securities) or MK Rail
Stock; (2) the creation, modification, consolidation or recording of any
mortgage, deed of trust or other security interest, the securing of
additional indebtedness by such means or by other means (whether (a) in
connection with the issuance and distribution of the Combined Company
Securities (or, if the Merger Agreement is terminated, the New MK
Securities) or MK Rail Stock or (b) otherwise in furtherance of, or in
connection with, the Plan or the Confirmation Order); (3) the making,
assignment or recording of any lease or sublease; or (4) the making,
delivery or recording of any deed or other instrument of transfer under, in
furtherance of, or in connection with, the Plan, including any merger
agreements or agreements of consolidations, deeds, bills of sale, assignment
or other instruments of transfer executed in connection with the Plan, the
Confirmation Order or any transaction contemplated in Section V.B above, or
any transactions arising out of, contemplated by or in any way related to
the foregoing, shall not be subject to any document recording tax, stamp
tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act,
real estate transfer tax, mortgage recording tax or other similar tax or
governmental assessment, and the appropriate state or local governmental
officials or agents shall be, and hereby are, directed to forgo the
collection of any such tax or governmental assessment and to accept for
filing and recordation any of the foregoing instruments or other documents
without the payment of any such tax or governmental assessment.
H. APPROVAL OF SHAREHOLDER LITIGATION SETTLEMENTS
Unless separately approved through previously issued orders of the
Bankruptcy Court, the entry of the Confirmation Order shall be deemed to
constitute approval of the Shareholder Litigation Settlements, within the
meaning of the applicable stipulations of settlement and orders.
I. MK RAIL NOTE CANCELLATION AGREEMENT
Unless terminated by its terms prior to the Effective Date, and whether
or not it was previously approved by Final Order, the MK Rail Note
Cancellation Agreement and the MK Rail Stockholders Agreement and the
transactions contemplated thereby shall be binding on the Debtor, MKO and MK
Rail in accordance with their terms, and shall be deemed incorporated by
reference herein and shall constitute an integral part of this Plan. Except
as provided in Section V.E.1.a hereof, nothing in the Plan shall affect the
respective claims of MK Rail and of the Debtor against one another, other
than with respect to the MK Rail Note as set forth in the MK Rail Note
Cancellation Agreement.
ARTICLE VI.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED
1. ASSUMPTIONS GENERALLY
Except as otherwise provided in the Plan, including Section VI.B below,
or in any contract, instrument, release, indenture or other agreement or
document entered into in connection with the Plan, on the Effective Date,
pursuant to section 365 of the Bankruptcy Code, the Debtor shall assume each
executory contract and unexpired lease entered into by the Debtor prior to
the Petition Date that has not previously: (a) expired or terminated pursuant
to its own terms or (b) been assumed or rejected pursuant to section 365 of
the Bankruptcy Code. The Confirmation Order shall constitute an order of the
Bankruptcy Court approving the assumptions described in this Section VI.A.1
pursuant to section 365 of the Bankruptcy Code, as of the Effective Date.
Without limiting the generality of the foregoing, the execution, delivery and
performance by the Debtor of the Lease dated as of May 22, 1996 between the
Boise Landlord, as lessor, and the Debtor and MKO, as tenant, as amended by
the First Amendment dated as of July 1, 1996 (collectively, the "New Lease")
and the provisions of the Settlement Agreement (as defined in the New Lease)
are authorized, directed and confirmed. Consummation of the Plan and the
occurrence of the Effective Date shall conclusively be deemed to be approval
of such Settlement Agreement by the Bankruptcy Court for all purposes of the
Plan.
2. CURE OF DEFAULTS
Any monetary amounts by which each executory contract and unexpired
lease to be assumed pursuant to the Plan is in default shall be satisfied,
pursuant to section 365(b)(1) of the Bankruptcy Code, at the option of the
Debtor or Reorganized Debtor: (a) by payment of the default amount in Cash
on the Effective Date or (b) on such other terms as are agreed to by the
parties to such executory contract or unexpired lease. If there is a
dispute regarding: (i) the amount of any cure payments; (ii) the ability of
the Reorganized Debtor to provide "adequate assurance of future performance"
(within the meaning of section 365 of the Bankruptcy Code) under the
contract or lease to be assumed; or (iii) any other matter pertaining to
assumption, the cure payments required by section 365(b)(1) of the
Bankruptcy Code shall be made following the entry of a Final Order resolving
the dispute and approving the assumption.
B. EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE REJECTED; BAR DATE FOR
REJECTION DAMAGES
1. REJECTION GENERALLY
Except as otherwise provided in the Plan or in any contract, instrument,
release, indenture or other agreement or document entered into in connection
with the Plan, on the Effective Date, pursuant to section 365 of the
Bankruptcy Code, the Debtor shall reject each of the executory contracts and
unexpired leases listed on Exhibit K to the Plan; provided, however, that the
Debtor reserves the right, at any time prior to the Effective Date, to amend
Exhibit K to delete any executory contract or unexpired lease listed therein,
thus providing for its assumption pursuant to Section VI.A.1 above. Each
contract and lease listed on Exhibit K shall be rejected only to the extent
that any such contract or lease constitutes an executory contract or
unexpired lease. Listing a contract or lease on Exhibit K shall not
constitute an admission by the Debtor or Reorganized Debtor that such
contract or lease is an executory contract or unexpired lease or that the
Debtor or Reorganized Debtor has any liability thereunder. The Confirmation
Order shall constitute an order of the Bankruptcy Court approving such
rejections, pursuant to section 365 of the Bankruptcy Code, as of the
Effective Date.
2. BAR DATE FOR REJECTION DAMAGES
If the rejection of an executory contract or unexpired lease pursuant
to Section VI.B.1 above gives rise to a Claim by the other party or parties
to such contract or lease, such Claim shall be forever barred and shall not
be enforceable against the Debtor, Reorganized Debtor its successors or
property unless (a) a Stipulation of Amount and Nature of Claim has been
entered into with respect to the rejection of such executory contract or
unexpired lease or (b) a proof of Claim is Filed and served on the
Reorganized Debtor and counsel for the Reorganized Debtor within 30 days
after the Effective Date or such earlier date as established by the
Bankruptcy Court.
C. SPECIAL EXECUTORY CONTRACT AND UNEXPIRED LEASE MATTERS
1. EXISTING EMPLOYMENT, RETIREMENT AND OTHER AGREEMENTS AND INCENTIVE
COMPENSATION PROGRAMS
The employment, retirement and other agreements and incentive
compensation programs that are listed on Exhibit M to the Plan are treated
as executory contracts under the Plan and, on the Effective Date, shall be
assumed pursuant to sections 365 and 1123 of the Bankruptcy Code.
2. INDEMNIFICATION OBLIGATIONS
To the extent any indemnification obligation of the Debtor existing as
of the Petition Date to any current or former officer or director constitutes
an executory contract, the Debtor shall be deemed to have assumed such
executory contract as of the Effective Date pursuant to section 365 of the
Bankruptcy Code.
D. EXECUTORY CONTRACTS AND UNEXPIRED LEASES ENTERED INTO AND OTHER
OBLIGATIONS INCURRED AFTER THE PETITION DATE
Executory contracts and unexpired leases entered into and other
obligations incurred after the Petition Date by the Debtor shall be performed
by the Debtor or Reorganized Debtor in the ordinary course of its business.
Accordingly, such executory contracts, unexpired leases and other obligations
shall survive and remain unaffected by entry of the Confirmation Order.
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. DISTRIBUTIONS FOR CLAIMS AND INTERESTS ALLOWED AS OF THE EFFECTIVE DATE
Except as otherwise provided in this Article VII, or as may be ordered
by the Bankruptcy Court, distributions to be made on account of Claims or
Interests that are Allowed as of the Effective Date shall be made on the
Effective Date. Distributions to be made on account of Allowed Class MK-3
and MK-6 Claims and Class MK-8 Interests shall not be made until as promptly
as practicable after the occurrence of the Combined Company Rights Expiration
Date. Distributions shall be deemed made on the Effective Date if made on
the Effective Date or as promptly thereafter as practicable, but in any event
no later than 20 days after the Effective Date or such later date when the
applicable conditions of Sections VI.A.2 (regarding cure payments for
executory contracts and unexpired leases being assumed); VII.C.2 (regarding
undeliverable distributions); VI.F.4.b (regarding arrangements for the
satisfaction ant payment of tax obligations relating to distributions of Cash
or securities pursuant to the Plan); or V.D and VII.H (regarding surrender
of canceled debt instruments and securities) are satisfied. Securities to
be issued shall be deemed issued as of the Effective Date regardless of the
date on which they are actually distributed. Distributions on account of
Claims or Interests that are Allowed after the Effective Date shall be made
pursuant to Sections VII.F and VIII.C below. Notwithstanding the date on
which any distribution of securities is actually made to a Holder of a Claim
or Interest that is an Allowed Claim or Allowed Interest on the Effective
Date, as of the date of the distribution such Holder shall be deemed to have
the rights of a Holder of such securities distributed as of the Effective
Date.
B. DISTRIBUTIONS BY DISBURSING AGENTS
1. DISBURSING AGENTS
The Combined Company (or, if the Merger Agreement is terminated,
Reorganized MK) (either in its capacity as Disbursing Agent), or such
Third-Party Disbursing Agents as either may employ in its sole discretion,
shall make all distributions of Cash, Combined Company Securities (or, if the
Merger Agreement is terminated, New MK Securities), MK Rail Note Proceeds,
MK Rail Stock and Combined Company Rights Exercise Proceeds required to be
distributed under the applicable provisions of the Plan. Additionally, if
the MK Rail Note has not been cancelled in accordance with the MK Rail Note
Cancellation Agreement, the Disbursing Agent shall deliver the MK Rail Note
to the Liquidating Trust. Any Disbursing Agent may employ or contract with
other entities to assist in or make the distributions required by the Plan.
Each Disbursing Agent shall serve without bond, and each Third Party
Disbursing Agent shall receive, without further Bankruptcy Court approval,
reasonable compensation for distribution services rendered pursuant to the
Plan and reimbursement of reasonable out-of-pocket expenses incurred in
connection with such services from the Combined Company (or, if the Merger
Agreement is terminated, Reorganized MK) on terms acceptable to the
applicable reorganized entity.
C. DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS
1. DELIVERY OF DISTRIBUTIONS IN GENERAL
Except with respect to distributions to the Liquidating Trust,
distributions to Holders of Allowed Claims (other than the Metra Lender
Claims) or Allowed Interests (other than the Interests of the Securities
Plaintiffs) shall be made at the addresses set forth in the Schedules or
other records of the Debtor or Reorganized Debtor at the time of the
distribution. Distributions to Holders of Allowed Metra Lender Claims shall
be made to the Metra Agent. Distributions to the MK Securities Class Action
Plaintiffs shall be made to their designated representative. Distributions
to the MK Rail Securities Class Action Plaintiffs shall be made to their
designated representative. Distributions of certain securities, a portion of
the Cash Distribution and Combined Company Rights Exercise Proceeds (each as
determined in accordance with the Creditor Distribution Exhibit) ant the MK
Rail Note, if the MK Rail Note has not been cancelled in accordance with the
MK Rail Note Cancellation Agreement, shall be delivered to the Liquidating
Trust for the benefit of the Holders of certain Allowed Claims, to be
distributed by the Liquidating Trustee in accordance with the Liquidating
Trust Agreement.
2. UNDELIVERABLE DISTRIBUTIONS
(a) HOLDING AND INVESTMENT OF UNDELIVERABLE DISTRIBUTIONS
i. If the distribution to any Holder of an Allowed Claim or
Allowed Interest is returned to a Disbursing Agent as undeliverable, no
further distributions shall be made to such Holder unless and until the
applicable Disbursing Agent is notified in writing of such Holder as
then-current address. Undeliverable distributions shall remain in the
possession of the applicable Disbursing Agent pursuant to this Section
VII.C.2.a.i until such time as a distribution becomes deliverable.
Undeliverable Cash shall be held in trust in segregated bank accounts in the
name of the applicable Disbursing Agent for the benefit of the potential
claimants of such funds, and shall be accounted for separately. Any
Disbursing Agent holding undeliverable Cash shall invest such Cash in a
manner consistent with the Debtor's investment and deposit guidelines.
Undeliverable Combined Company Securities (or, if the Merger Agreement is
terminated, New MK Securities), or MK Rail Stock shall be held in trust for
the benefit of the potential claimants of such securities by the applicable
Disbursing Agent in principal amounts or number of shares sufficient to fund
the unclaimed amounts of such securities and shall be accounted for
separately.
ii. Pending the distribution of any undeliverable Combined
Company Common Stock (or, if the Merger Agreement is terminated, New MK
Common Stock) or MK Rail Stock, pursuant to the Plan, the Disbursing Agent
shall cause the Combined Company Common Stock (or, if the Merger Agreement
is terminated, New MK Common Stock) or MK Rail Stock held by it in its
capacity as Disbursing Agent to be: (A) represented in person or by proxy at
each meeting of the stockholders of the Combined Company (or, if the Merger
Agreement is terminated, Reorganized MK) or MK Rail, as applicable; and (B)
voted with respect to any matter of the Combined Company (or, if the Merger
Agreement is terminated, Reorganized MK) or MK Rail, as applicable,
proportionally with the votes cast by the other stockholders of the Combined
Company (or, if the Merger Agreement is terminated, Reorganized MK) or MK
Rail, as applicable.
(b) AFTER DISTRIBUTIONS BECOME DELIVERABLE
Within 15 days after the end of each calendar month following the
calendar month in which the Effective Date occurs, the applicable Disbursing
Agent will make all distributions that become deliverable to holders of
Allowed Claims or Allowed Interests during the preceding calendar month.
Each such distribution will include, to the extent applicable: (i) dividends
or other distributions, if any, that shall have theretofore been paid to the
Disbursing Agent in respect of any Combined Company Common Stock (or, if the
Merger Agreement is terminated, New MK Common Stock) and Combined Company
Series A Preferred Stock (or, if the Merger Agreement is terminated, New MK
Series A Preferred Stock) included in such distribution and (ii) a Pro Rata
share of the Reorganization Investment Yield from the investment of any
undeliverable cash (including dividends or other distributions on
undeliverable Combined Company Common Stock, from the date that such
distribution would have first been due had it then been deliverable to the
date that such distribution becomes deliverable).
(c) FAILURE TO CLAIM UNDELIVERABLE DISTRIBUTIONS
Any Holder of an Allowed Claim or Allowed Interest that does not assert
a claim pursuant to the Plan for an undeliverable distribution within one
year after the Effective Date (or in the case of a Subsequent Equity
Recovery, within one year after the applicable distribution date) shall have
its claim for such undeliverable distribution discharged and shall be
forever barred from asserting any such claim for an undeliverable
distribution against the Reorganized Debtor or its property. In such cases:
(i) any Cash or MK Rail Stock held for distribution on account of such
claims for undeliverable distributions shall be property of the Combined
Company (or, if the Merger Agreement is terminated, Reorganized MK) free of
any restrictions thereon; (ii) any Combined Company Common Stock (or, if the
Merger Agreement is terminated, New MK Common Stock) held for issuance on
account of such claims for undeliverable distributions shall either be
canceled or held as treasury shares as the Combined Company (or, if the
Merger Agreement is terminated, Reorganized MK) may determine is
appropriate; and (iii) any Combined Company Warrants (or, if the Merger
Agreement is terminated, New MK Warrants) and Combined Company Rights
(unless the Merger Agreement is terminated) held for issuance on account of
such claims for undeliverable distributions shall be canceled. To the
extent that such undeliverable Cash, MK Rail Stock or Combined Company
Securities (or, if the Merger Agreement is terminated, New MK Securities)
are held by a Third-Party Disbursing Agent, the Third-Party Disbursing Agent
shall return such Cash or the securities or other instruments evidencing
such MK Rail Stock or Combined Company Securities (or, if the Merger
Agreement is terminated, New MK Securities) to the Combined Company (or, if
the Merger Agreement is terminated, Reorganized MK). Nothing contained in
the Plan shall require the Debtor, Reorganized Debtor or any Disbursing
Agent to attempt to locate any holder of an Allowed Claim or Allowed Interest.
D. DISTRIBUTION RECORD DATE
As of the close of business on the Confirmation Date, the transfer
registers for the Old Common Stock maintained by the Debtor, or its agent,
shall be closed. The Disbursing Agents and their respective agents shall
have no obligation to recognize the transfer of any Old Common Stock
occurring after the Confirmation Date or the transfer of any Claim occurring
after the close of business on the Business Day immediately preceding the
Effective Date, and shall be entitled for all purposes herein to recognize
and deal only with those Holders of record as of the close of business on the
Distribution Record Date.
E. MEANS OF CASH PAYMENTS
Cash payments made pursuant to the Plan shall be in U.S. dollars by
checks drawn on a domestic bank selected by the Disbursing Agent, or by wire
transfer from a domestic bank, at the option of the Disbursing Agent. Cash
payments of $1,000,000.00 or more to be made pursuant to the Plan will, to
the extent requested in writing no later than five days after the
Confirmation Date, be made by wire transfer from a domestic bank. Cash
payments to foreign creditors may be made, at the option of the Disbursing
Agent, in such funds and by such means as are necessary or customary in a
particular foreign jurisdiction.
F. TIMING AND CALCULATION OF AMOUNTS TO BE DISTRIBUTED
1. IN GENERAL
On the Effective Date, to the extent that the Plan provides for
distributions on account of Allowed Claims or Allowed Interests in the
applicable Class, each Holder of an Allowed Claim or Allowed Interest shall
receive the full amount of the distributions that the Plan provides for
Allowed Claims or Allowed Interests in the applicable Class. Beginning on
the date that is 15 days after the end of the calendar month following the
calendar month in which the Effective Date occurs and 15 days after the end
of each calendar month thereafter distributions shall also be made, pursuant
to Sections VII.C and VIII.C below, respectively, to (a) Holders of Claims
or Interests to whom a distribution has become deliverable during the
preceding calendar month and (b) to Holders of Disputed Claims or Disputed
Interests in any such Class whose Claims or Interests were Allowed during the
preceding calendar month. Such monthly distributions shall also be in the
full amount that the Plan provides for Allowed Claims or Allowed Interests
in the applicable Class.
2. DISTRIBUTIONS OF STOCK
Notwithstanding any other provision of the Plan, only whole numbers of
shares of Combined Company Common Stock (or, if Merger Agreement is
terminated, New MK Common Stock), MK Rail Stock and (if the Liquidating
Trust is not established) Combined Company Series A Preferred Stock (or, if
the Merger Agreement is terminated, the New MK Series A Preferred Stock)
shall be issued or transferred, as the case may be, pursuant to the Plan.
When any distribution on account of an Allowed Claim pursuant to the Plan
would otherwise result in the issuance or transfer of a number of shares of
Combined Company Common Stock (or, if Merger Agreement is terminated, New MK
Common Stock), MK Rail Stock or (if the Liquidating Trust is not
established) Combined Company Series A Preferred Stock (or, if the Merger
Agreement is terminated, the New MK Series A Preferred Stock) that is not a
whole number, the actual distribution of shares of such stock shall be
rounded to the next higher or lower whole number as follows: (a) fractions
of 1/2 or greater shall be rounded to the next higher whole number and (b)
fractions of less than 1/2 shall be rounded to the next lower whole number.
The total number of shares of Combined Company Common Stock (or, if Merger
Agreement is terminated, New MK Common Stock), MK Rail Stock and (if the
Liquidating Trust is not established) Combined Company Series A Preferred
Stock (or, if the Merger Agreement is terminated, the New MK Series A
Preferred Stock) to be distributed to a Class of Claims shall be adjusted as
necessary to account for the rounding provided for in this Section VII.F.2.
No consideration shall be provided in lieu of fractional shares that are
rounded down.
3. DISTRIBUTIONS OF WARRANTS
Notwithstanding any other provision of the Plan, only whole numbers of
Combined Company Warrants (or, if the Merger Agreement is terminated, New MK
Warrants) shall be issued pursuant to the Plan. When any distribution on
account of an Allowed Class MK-8 Interest pursuant to the Plan would
otherwise result in the issuance of a number of Combined Company Warrants
(or, if the Merger Agreement is terminated, New MK Warrants) that is not a
whole number, the actual distribution of such Combined Company Warrants (or,
if the Merger Agreement is terminated, New MK Warrants) shall be rounded to
the next higher or lower whole number as follows (a) fractions of 1/2 or
greater shall be rounded to the next higher whole number and (b) fractions
of less than 1/2 shall be rounded to the next lower whole number. The total
number of Combined Company Warrants (or, if the Merger Agreement is
terminated, New MK Warrants) to be distributed to a Holder of an Allowed
Class MK-8 Interest shall be adjusted as necessary to account for the
rounding provided for in this Section VII.F.3. No consideration shall be
provided in lieu of fractional warrants that are rounded down.
4. DISTRIBUTIONS OF RIGHTS
On the Effective Date, the Rights shall be distributed to Holders of
Allowed Class MK-8 Interests in accordance with Sections III.B.8 and V.B.6.
5. COMPLIANCE WITH TAX REGULATIONS
(a) In connection with the Plan, to the extent applicable, the
Disbursing Agent shall comply with all tax withholding and reporting
requirements imposed on it by any governmental unit, and all distributions
pursuant to the Plan shall be subject to such withholding and reporting
requirements. The Disbursing Agent shall be authorized to take any and all
actions that may be necessary or appropriate to comply with such withholding
and reporting requirements.
(b) Notwithstanding any other provision of the Plan: (i) each
Holder of an Allowed Claim or Interest that is to receive a distribution of
Cash, MK Rail Stock or Combined Company Securities (or, if the Merger
Agreement is terminated, New MK Securities) pursuant to the Plan (including
pursuant to the exercise of Combined Company Rights) shall have sole and
exclusive responsibility for the satisfaction and payment of any tax
obligations imposed by any governmental unit, including income, withholding
and other tax obligations, on account of such distribution; and (ii) no
distribution shall be made to or on behalf of such Holder pursuant to the
Plan (or to any successor in interest thereto) unless and until such Holder
(or such successor in interest, if any) has made arrangements satisfactory
to the Disbursing Agent for the payment and satisfaction of such tax
obligations. Any Cash, MK Rail Stock or Combined Company Securities (or, if
the Merger Agreement is terminated, New MK Securities) to be distributed
pursuant to the Plan shall, pending the implementation of such arrangements,
be treated as an undeliverable distribution pursuant to Section VII.C.2
above.
G. SETOFFS
Except with respect to claims of a Debtor or Reorganized Debtor released
pursuant to the Plan or any contract, instrument, release, indenture, or
other agreement or document created in connection with the Plan, the Debtor
or Reorganized Debtor may, pursuant to section 553 of the Bankruptcy Code or
applicable nonbankruptcy law, set off against any Allowed Claim (other than
a Funded Debt Claim, a Metra Lender Claim, a Transit Bonding, Claim or a
Boise Landlord Claim) and the distributions to be made pursuant to the Plan
on account of such Claim (before any distribution is made on account of such
Claim), the claims, rights and causes of action of any nature that the Debtor
or Reorganized Debtor may hold against the Holder of such Allowed Claim;
provided, however, that neither the failure to effect such a setoff nor the
allowance of any Claim hereunder shall constitute a waiver or release by the
Debtor or Reorganized Debtor of any such claims, rights and causes of action
that the Debtor or Reorganized Debtor may possess against such Holder.
H. SURRENDER OF CANCELLED DEBT INSTRUMENTS OR SECURITIES
As a condition precedent to receiving any distribution pursuant to the
Plan on account of an Allowed Claim or Allowed Interest evidenced by the
instruments, securities or other documentation cancelled pursuant to Section
V.B.1 above, other than distribution of the Combined Company Rights-
to-Holders of Allowed Class MK-8 Interests, the Holder of such Claim or
Interest shall tender the applicable instruments, securities or other
documentation evidencing such Claim or Interest to the Disbursing Agent
pursuant to a letter of transmittal furnished by the Disbursing Agent. Any
Cash, MK Rail Stock or Combined Company Securities (or, if the Merger
Agreement is terminated, New MK Securities) to be distributed pursuant to the
Plan on account of any such Claim or Interest shall, pending such surrender,
be treated as an undeliverable distribution pursuant to Section VII.C.2
above. For purposes of this Section VII.H, references to delivery of
Existing Loan Documents shall be deemed to refer only to copies of documents
evidencing that such creditor is a Holder of such Funded Debt Claim which may
be accomplished through a Stipulation of Amount and of Nature of Claim.
1. EXISTING LOAN DOCUMENTS AND CAPITAL STOCK CERTIFICATES
Except as provided in Section VII.H.2 below for lost, stolen, mutilated
or destroyed Existing Loan Documents or Capital Stock certificates, each
Holder of an Allowed Claim or Allowed Interest evidenced by an Existing Loan
Document or Capital Stock certificate shall tender such Existing Loan
Document or Capital Stock certificate to the Disbursing Agent in accordance
with written instructions to be provided in a letter of transmittal to such
Holders by the Disbursing Agent as promptly as practicable following the
Effective Date. Such letter of transmittal shall specify that delivery of
such Existing Loan Documents or Capital Stock certificates will be effected,
and risk of loss and title thereto will pass, only upon the proper delivery
of such Existing Loan Documents or Capital Stock certificates with the letter
of transmittal in accordance with such instructions. Such letter of
transmittal shall also include, among other provisions, customary provisions
with respect to the authority of the holder of the applicable Existing Loan
Document or Capital Stock certificate to act and the authenticity of any
signatures required on the letter of transmittal. All surrendered Existing
Loan Documents and Capital Stock certificates shall be marked as canceled and
delivered to the Combined Company (or, if the Merger Agreement is terminated
Reorganized MK).
2. LOST, STOLEN, MUTILATED OR DESTROYED EXISTING LOAN DOCUMENTS OR
CAPITAL STOCK CERTIFICATES
In addition to any requirements under the applicable certificate or
articles of incorporation or bylaws of the Debtor, any Holder of a Claim or
an Interest evidenced by an Existing Loan Document or a Capital Stock
certificate that has been lost, stolen, mutilated or destroyed shall, in
lieu of surrendering such Existing Loan Document or Capital Stock
certificate, deliver to the Disbursing Agent: (a) evidence satisfactory to
the Disbursing Agent of the loss, theft, mutilation or destruction; and (b)
such security or indemnity as may be required by the Disbursing Agent to
hold the Disbursing Agent harmless from any damages, liabilities or costs
incurred in treating such individual as a Holder of an Existing Loan
Document or a Capital Stock certificate. Upon compliance with this Section
VII.H.2 by a Holder of a Claim or an Interest evidenced by an Existing Loan
Document or Capital Stock certificate, such Holder shall, for all purposes
under the Plan, be deemed to have surrendered an Existing Loan Document or a
Capital Stock certificate, as applicable.
3. FAILURE TO SURRENDER CANCELED EXISTING LOAN DOCUMENTS OR CAPITAL
STOCK CERTIFICATES
Any Holder of an Existing Loan Document or Capital Stock certificate
that fails to surrender or be deemed to have surrendered such Existing Loan
Document or Capital Stock certificate within one year after the Effective
Date shall have its claim for a distribution pursuant to the Plan on account
of such Existing Loan Document or Capital Stock certificate discharged and
shall be forever barred from asserting any such claim against the Reorganized
Debtor or its property. In such cases, any Cash, MK Rail Stock or Combined
Company Securities (or, if the Merger Agreement is terminated, New MK
Securities) held for distribution on account of such Claim shall be disposed
of pursuant to the provisions set forth in Section VII.C.2 above.
I. RESTRICTIONS RELATED TO MK RAIL STOCK
Each recipient of MK Rail Stock under the Plan shall be deemed to be
bound by the MK Rail Stockholder Agreement, whether or not such recipient
executed such agreement and shall not be permitted to transfer such MK Rail
Stock except pursuant to the terms of the MK Rail Stockholders Agreement.
J. PLEDGE BY HOLDER OF BOISE LANDLORD CLAIMS OF ENTITLEMENT TO RECEIVE
DISTRIBUTIONS
Upon written notice from the Holder of the Boise Landlord Claims, such
Holder may pledge and assign all or any portion of its right to receive
distributions of Combined Company Common Stock (or, if the Merger Agreement
is terminated, New MK Common Stock) and (unless the Merger Agreement is
terminated) Boise Landlord Cash Distribution in respect of the Boise Landlord
Claims and its rights as a beneficiary of the Liquidating Trust, such notice
to be irrevocable unless such revocation shall be joined in by the pledgee
or assignee. Any such pledge or assignment shall be binding upon the Debtor
and shall be effective for all our purposes of this Plan.
ARTICLE VIII.
PROCEDURES FOR RESOLVING DISPUTED CLAIMS AND
DISPUTED INTERESTS
A. PROSECUTION OF OBJECTIONS TO CLAIMS AND INTERESTS
After the Confirmation Date, only the Debtor and Reorganized Debtor
shall have the authority to File objections, settle, compromise, withdraw or
litigate to judgment objections to Claims and Interests. Except with respect
to the Metra Lender Claims, from and after the Confirmation Date, the Debtor
and Reorganized Debtor may settle or compromise any Disputed Claim or
Disputed Interest without approval of the Bankruptcy Court.
B. TREATMENT OF DISPUTED CLAIMS OR INTERESTS
1. NO PAYMENTS ON ACCOUNT OF DISPUTED CLAIMS OR INTERESTS
Notwithstanding any other provisions of the Plan, no payments or
distributions shall be made on account of a Disputed Claim or a Disputed
Interest until such Claim or Interest becomes an Allowed Claim or Allowed
Interest. Prior to the Petition Date, the Debtor delivered Stipulations of
Amount and Nature of Claim to the Holders of the Funded Debt Claims, the
Boise Landlord Claims and the Transit Bonding Claims. Such Claims shall be
treated as Allowed Claims as of the Petition Due in the amounts set forth in
such Stipulations of Amount and nature of Claim and shall not be treated as
Disputed Claims.
2. RESOLUTION OR ESTIMATION OF CLAIMS
The Debtor or the Reorganized Debtor may, at any time, request that the
Bankruptcy Court estimate any contingent or unliquidated Claim pursuant to
section 502(c) of the Bankruptcy Code, irrespective of whether the Debtor or
Reorganized Debtor has previously objected to such Claim or whether the
Bankruptcy Court has ruled on any such objection. The Bankruptcy Court will
retain jurisdiction to estimate any contingent or unliquidated Claim at any
time during litigation concerning any objection to the Claim, including
during the pendency of any appeal relating to any such objection. If the
Bankruptcy Court estimates any contingent or unliquidated Claim, that
estimated amount will constitute either the Allowed Amount of such Claim or
a maximum limitation on such Claim, as determined by the Bankruptcy Court.
If the estimated amount constitutes a maximum limitation on such Claim, the
Debtor or Reorganized Debtor may elect to pursue any supplemental proceedings
to object to any ultimate payment on account of such Claim. All of these
Claims objection, estimation and resolution procedures are cumulative and not
necessarily exclusive of one another. In addition to seeking estimation of
Claims as provided in this Section VIII.B.2, the Debtor or Reorganized Debtor
may resolve or adjudicate any Disputed Claim in the manner in which the
amount of such Claim and the rights of the Holder of such Claim would have
been resolved or adjudicated if the Chapter 11 Case had not been commenced.
Claims may be subsequently compromised, settled, withdrawn or resolved by the
Debtor or Reorganized Debtor pursuant to Section VIII.A above.
C. DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS OR INTERESTS ONCE THEY ARE
ALLOWED
Within 15 days after the end of each calendar month following the
calendar month in which the Effective Date occurs, the applicable Disbursing
Agent shall make all distributions on account of any Disputed Claim or
Disputed Interest that has become an Allowed Claim or Allowed Interest during
the preceding calendar month. Such distributions shall be made pursuant to
the provisions of the Plan governing the applicable Class. Holders of
Disputed Claims or Disputed Interests that are ultimately allowed shall also
be entitled to receive, on the basis of the amount ultimately allowed: (1)
matured and payable interest, if any, at the rate provided for the Class to
which such Claim belongs; (2) any dividends or other payments made on account
of Combined Company Common Stock (or, if the Merger Agreement is terminated,
New MK Common Stock) held pending distribution; and (3) a Pro Rata share of
the Reorganization Investment Yield from the investment of any Cash held
pending distribution from the date such amounts would have been due had such
Claim or Interest then been allowed to the end of the calendar month when
such Claim or Interest was allowed.
ARTICLE IX.
CONDITIONS PRECEDENT TO CONFIRMATION AND
CONSUMMATION OF THE PLAN
A. CONDITIONS TO CONFIRMATION
The Confirmation Order shall be in form and substance satisfactory to
the Debtor and (unless the Merger Agreement is terminated) Washington, and
the Confirmation Order shall expressly authorize and direct the Debtor and
Reorganized Debtor to perform those actions specified in Sections III.B.3,
B.4, B.6 and B.8, V.C, C.E, V.F, V.G, VII.F and XI.D of the Plan.
B. CONDITIONS TO EFFECTIVE DATE
The Plan shall not be consummated and the Effective Date shall not occur
unless and until each of the following conditions has been satisfied or duly
waived (if available) pursuant to Section IX.C below:
1. The Confirmation Order shall authorize and direct the Debtor
and Reorganized Debtor to take all actions necessary or appropriate to enter
into, implement and consummate the contracts, instruments, releases, leases,
indentures and other agreements or documents created in connection with the
Plan or the Restructuring, including those actions contemplated by the
provisions of the Plan set forth in Section IX.A above. The Confirmation
Order shall not be subject to a presently effective stay pending appeal.
2. All borrowings under the DIP Financing Facility have been paid
in full in Cash and all commitments terminated thereunder.
3. If the Merger Agreement has been terminated, the lenders under
the New Credit Facility shall be obligated to fund the New Credit Facility
on terms acceptable to the Debtor.
4. Final Orders have been entered approving the Derivative Action
Settlements.
5. The conditions to effectiveness of the New Lease have been
satisfied.
6. MK Rail shall have redeemed the MK Rail Rights or the Debtor
shall be satisfied, by reason of an amendment to the MK Rail Rights Plan, a
judicial determination or otherwise, that the MK Rail Rights are inapplicable
to the transactions contemplated by the Plan.
7. Either MK Rail shall have completed the repurchase of the
entire MK Rail Note or the MK Rail Note Cancellation Agreement shall have
been terminated in accordance with its terms.
C. WAIVER OF CONDITIONS
The conditions to Confirmation and the Effective Date, other than the
condition set forth above in Section IX.B.I, B.2 and B.7, may be waived in
whole or in part by the Debtor and (unless the Merger Agreement is
terminated), Washington at any time, without notice, an order of the
Bankruptcy Court or any further action other than proceeding to Confirmation
and consummation of the Plan. The failure to satisfy or waive any condition
may be asserted by the Debtor and (unless the Merger Agreement is terminated)
Washington regardless of the circumstances giving rise to the failure of such
condition to be satisfied (including any action or inaction by the Debtor or
Washington). The failure of the Debtor and (unless the Merger Agreement is
terminated) Washington to exercise any of the foregoing rights shall not be
deemed a waiver of any other rights and each such right shall be deemed an
ongoing right that may be asserted at any time.
D. EFFECT OF NONOCCURRENCE OF CONDITIONS TO EFFECTIVE DATE
Each of the conditions to consummation and the Effective Date must be
satisfied or duly waived, as provided above, within 30 days after the
Confirmation Date unless the Debtor extends this time for a period not
exceeding 90 days. If each condition to the Effective Date has not been
satisfied or duly waived pursuant to Section IX.C above, within 90 days after
the Confirmation Date, then upon motion by any party in interest made before
the time that each of such conditions has been satisfied or duly waived and
upon notice to such parties in interest as the Bankruptcy Court may direct,
the Confirmation Order shall be vacated by the Bankruptcy Court; provided,
however, that, notwithstanding the filing of such motion, the Confirmation
Order may not be vacated if each of the conditions to the Effective Date is
either satisfied or duly waived before the Bankruptcy Court enters an order
granting such motion. If the Confirmation Order is vacated pursuant to this
Section IX.D, the Plan shall be deemed null and void in all respects,
including the discharge of Claims and termination of Interests pursuant to
section 1141 of the Bankruptcy Code and the assumptions or rejections of
executory contracts and unexpired leases pursuant to Sections VI.A and VI.B
above, and nothing contained in the Plan shall (1) constitute a waiver or
release of any Claims by or against, or any Interests in, the Debtor or (2)
prejudice in any manner the rights of the Debtor.
ARTICLE X.
CRAMDOWN
The Debtor hereby requests Confirmation of the Plan under section
1129(b) of the Bankruptcy Code if any Impaired Class does not accept the Plan
in accordance with section 1126 of the Bankruptcy Code. Subject to the
Merger Agreement, the Debtor reserves the right to modify the Plan to the
extent, if any, that Confirmation pursuant to section 1129(b) of the
Bankruptcy Code requires modification.
ARTICLE XI.
DISCHARGE OF CLAIMS, TERMINATION OF
INTERESTS, INJUNCTIONS AND SUBORDINATION RIGHTS
A. DISCHARGE OF CLAIMS AND TERMINATION OF INTERESTS
1. Except as provided in the Plan or the Confirmation Order, the
rights afforded under the Plan and the treatment of Claims and Interests
under the Plan shall be in exchange for and in complete satisfaction,
discharge and release of all Claims and termination of all Interests,
including any interest accrued on Claims from the Petition Date. Except as
provided in the Plan or the Confirmation Order, Confirmation shall: (a)
discharge the Debtor from all Claims or other debts that arose before the
Confirmation Date and all debts of the kind specified in section 502(g),
502(h) or 502(i) of the Bankruptcy Code, whether or not (i) a proof of Claim
based on such debt is Filed or deemed Filed pursuant to section 501 of the
Bankruptcy Code, (ii) a Claim based on such debt is Allowed pursuant to
section 502 of the Bankruptcy Code or (iii) the Holder of a Claim based on
such debt has accepted the Plan; and (b) terminate all Interests and other
rights of equity security holders in the Debtor.
2. As of the Confirmation Date, except as provided in the Plan or the
Confirmation Order, all entities shall be precluded from asserting against
the Debtor, Reorganized Debtor, Plan Participants, their successors or their
property, any other or further claims, debts, rights, causes of action,
liabilities or equity interests relating to the Debtor based upon any act,
omission transaction or other activity of any nature that occurred prior to
the Confirmation Date. In accordance with the foregoing, except as provided
in the Plan or the Confirmation Order, the Confirmation Order shall be a
judicial determination of discharge of all such Claims and other debts and
liabilities against the Debtor and termination of all such Interests and
other rights of equity security holders in the Debtor, pursuant to sections
524 and 1141 of the Bankruptcy Code, and such discharge shall void any
judgment obtained against the Debtor at any time, to the extent that such
judgment relates to a discharged Claim or terminated Interest.
3. Nothing in this Plan will restrict any federal government
regulatory agency from pursuing any regulatory or police enforcement action
against the Debtor, the Reorganized Debtor, their current or former officers,
directors or employees, and their respective agents, advisors, attorneys and
representatives acting in any capacity, other than any action or proceeding
of any type to recover monetary claims, damages or penalties against the
Debtor for an act or omission occurring prior to Confirmation.
B. INJUNCTIONS
1. INJUNCTION RELATED TO DISCHARGED CLAIMS AND TERMINATED INTERESTS
Except as provided in the Plan or the Confirmation Order, as of the
Confirmation Date, all entities that have held, currently hold or may hold a
Claim or other debt or liability that is discharged or an Interest or other
right of an equity security holder that is terminated pursuant to the terms
of the Plan are permanently enjoined from taking any of the following
actions as against the Debtor, Reorganized Debtor or its property on account
of any such discharged Claims, debts or liabilities or terminated Interests
or rights: (a) commencing or continuing, in any manner or in any place, any
action or other proceeding; (b) enforcing, attaching, collecting or
recovering in any manner any judgment, award, deem or order; (c) creating,
perfecting or enforcing any lien or encumbrance; (d) asserting a setoff,
right of subrogation or recoupment of any kind against any debt, liability
or obligation due to the Debtor or Reorganized Debtor, and (e) commencing or
continuing, in any manner or in any place, any action that does not comply
with or is inconsistent with the provisions of the Plan.
2. RELEASED CLAIMS
As of the Effective Date, all entities that have held, currently hold
or may hold a claim, demand, debt, right, cause of action or liability that
is released pursuant to Section V.E are permanently enjoined from taking any
of the following actions on account of such released claims, demands, debts,
rights, causes of action or liabilities: (a) commencing or continuing in any
manner any action or other proceeding; (b) enforcing, attaching, collecting
or recovering in any manner any judgment, award, decree or order, (c)
creating, perfecting or enforcing any lien or encumbrance; (d) asserting a
setoff, right of subrogation or recoupment of any kind against any debt,
liability or obligation due to any released entity; and (e) commencing or
continuing any action, in any manner, in any place that does not comply with
or is inconsistent with the provisions of the Plan.
3. CONSENT OF INJUNCTION
By accepting distributions pursuant to the Plan, each holder of an
Allowed Claim or Allowed Interest receiving distributions pursuant to the
Plan will be deemed to have specifically consented to the injunctions set
forth in this Section XI.B.
4. REGULATORY OR ENFORCEMENT ACTIONS
Nothing in this Plan will restrict any federal government regulatory
agency from pursuing any regulatory or police enforcement action against the
Debtor, the Reorganized Debtor, their current or former officers, directors
or employees, and their respective agents, advisors, attorneys and
representatives acting in any capacity, other than any action or proceeding
of any type to recover monetary claims, damages or penalties against the
Debtor for an act or omission occurring prior to Confirmation.
C. TERMINATION OF SUBORDINATION RIGHTS AND SETTLEMENT OF RELATED CLAIMS AND
CONTROVERSIES
1. The classification and manner of satisfying all Claims and
Interests under the Plan take into consideration all contractual, legal and
equitable subordination rights, whether arising under general principles of
equitable subordination, section 510(c) of the Bankruptcy Code or otherwise,
that a Holder of a Claim or Interest may have against other Claim or Interest
Holders with respect to any distribution made pursuant to the Plan. On the
Confirmation Date, all contractual, legal or equitable subordination rights
that a Holder of a Claim or Interest may have with respect to any
distribution to be made pursuant to the Plan (other than pursuant to the
Metra Credit Agreement as to the Metra Lenders) shall be discharged and
terminated, and all actions related to the enforcement of such subordination
rights shall be permanently enjoined. Accordingly, distributions pursuant
to the Plan to Holders of Allowed Claims and Allowed Interests shall not be
subject to payment to a beneficiary of such terminated subordination rights,
or to levy, garnishment, attachment or other legal process by any beneficiary
of such terminated subordination rights.
2. Pursuant to Bankruptcy Rule 9019 and in consideration for the
distributions and other benefits provided under the Plan, the provisions of
this Section XI.C shall constitute a good faith compromise and settlement of
all claims or controversies relating to the termination of all contractual,
legal and equitable subordination rights that a Holder of a Claim or an
Interest may have with respect to any Allowed Claim or Allowed Interest, or
any distribution to be made on account of an Allowed Claim or Allowed
Interest. The entry of the Confirmation Order shall constitute the
Bankruptcy Court's approval of the compromise or settlement of all such
claims or controversies and the Bankruptcy Court's finding that such
compromise or settlement is in the best interests of the Debtor, Reorganized
Debtor and its property and Claim and Interest Holders, and is fair,
equitable and reasonable.
D. LIMITATION OF LIABILITY IN CONNECTION WITH THE PLAN, DISCLOSURE
STATEMENT AND RELATED DOCUMENT AND RELATED INDEMNITY
1. The Plan Participants, the Lender Steering Committee and the
Unofficial Equity Committee and their professionals shall neither have nor
incur any liability to any entity, including, specifically any Holder of a
Claim or Interest, for any act taken or omitted to be taken in connection
with or related to the formulation, preparation, dissemination,
implementation, Confirmation or consummation of the Plan, the Disclosure
Statement, the Confirmation Order or any contract, instrument, release or
other agreement or document created or entered into, or any other act taken
or omitted to be taken in connection with the Plan, the Disclosure Statement
or the Confirmation Order, including solicitation of acceptances of the Plan.
2. The Combined Company (or, if the Merger Agreement is terminated,
Reorganized MK) shall indemnify each Plan Participant, hold each Plan
Participant harmless from, and reimburse each Plan Participant for, any and
all losses, costs, expenses (including attorneys' fees and expenses),
liabilities and damages sustained by a Plan Participant arising from any
liability described in this Section XI.D.
ARTICLE XII.
RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order and the occurrence
of the Effective Date, the Bankruptcy Court shall retain such jurisdiction
over the Chapter 11 Case after the Effective Date to the fullest extent
permitted by applicable law, including, without limitation, jurisdiction to:
1. Allow, disallow, determine, liquidate, classify, estimate or
establish the priority or secured or unsecured status of any Claim or
Interest, including the resolution of any request for payment of any
Administrative Claim, the resolution of any objections to the allowance or
priority of Claims or Interests and the resolution of any dispute as to the
treatment necessary to Reinstate a Claim pursuant to the Plan;
2. Grant or deny any applications for allowance of compensation
or reimbursement of expenses authorized pursuant to the Bankruptcy Code or
the Plan for periods ending on or before the Effective Date;
3. Resolve any matters related to the assumption or rejection of
any executory contract or unexpired lease to which the Debtor is a party or
with respect to which the Debtor may be liable, and to hear, determine and,
if necessary, liquidate any Claims arising therefrom;
4. Ensure that distributions to Holders of Allowed Claims or
Allowed Interests are accomplished pursuant to the provisions of the Plan;
5. Decide or resolve any motions, adversary proceedings, contested
or litigated matters and any other matters and grant or deny any applications
involving the Debtor or Reorganized Debtor that may be pending on the
Effective Date;
6. Enter such orders as may be necessary or appropriate to
implement or consummate the provisions of the Plan and all contracts,
instruments, releases, indentures and other agreements or documents created
in connection with the Plan, the Disclosure Statement or the Confirmation
Order, except as provided in Section XII.7 below;
7. Resolve any cases, controversies, suits or disputes that may
arise in connection with the consummation, interpretation or enforcement of
the Plan or the Confirmation Order, including the release and injunction
provisions set forth in and contemplated by the Plan and the Confirmation
Order, or any entity's rights arising under or obligations incurred in
connection with the Plan or the Confirmation Order; provided, however, that
such retention of jurisdiction shall not apply to any cases, controversies,
suits or disputes that may arise in connection with the Combined Company's
(or, if the Merger Agreement is terminated, Reorganized MK's) or any other
entity's rights or obligations as (a) the issuer or a holder, respectively,
of the Combined Company Securities (or, if the Merger Agreement is
terminated, the New MK Securities); (b) a party to any agreements governing,
instruments evidencing or documents relating to the Combined Company
Securities (or, if the Merger Agreement is terminated, the New MK
Securities); (c) if the Merger Agreement is terminated, a party to any
agreements or guaranties in connection with the New Credit Facility or (d)
a party to any agreements governing or documents relating to the New Lease;
8. Subject to any restrictions on modifications provided in the
Merger Agreement or any contract, instrument, release, indenture or other
agreement or document created in connection with the Plan, modify the Plan
before or after the Effective Date pursuant to section 1127 of the Bankruptcy
Code or modify the Disclosure Statement, the Confirmation Order or any
contract, instrument, release, indenture or other agreement or document
created in connection with the Plan, the Disclosure Statement or the
Confirmation Order; or remedy any defect or omission or reconcile any
inconsistency in any Bankruptcy Court order, the Plan, the Disclosure
Statement, the Confirmation Order or any contract, instrument, release,
indenture or other agreement or document created in connection with the Plan,
the Disclosure Statement or the Confirmation Order, in such manner as may be
necessary or appropriate to consummate the Plan, to the extent authorized be
the Bankruptcy Code;
9. Issue injunctions, enter and implement other orders or take
such other actions as may be necessary or appropriate to restrain
interference by any entity with consummation implementation or enforcement
of the Plan or the Confirmation Order;
10. Enter and implement such orders as are necessary or
appropriate if the Confirmation Order is for any reason modified, stayed,
reversed, revoked or vacated;
11. Determine any other matters that may arise in connection with
or relating to the Plan, the Disclosure Statement, the Confirmation Order or
any contract, instrument, release, indenture or other agreement or document
created in connection with the Plan, the Disclosure Statement or the
Confirmation Order, except as otherwise provided in the Plan; and
12. Enter an order concluding the Chapter 11 Case.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
A. PAYMENT OF STATUTORY FEES
All fees payable pursuant to section 1930 of title 28 of the United
States Code, as determined by the Bankruptcy Court at the Plan Confirmation
hearing pursuant to section 1128 of the Bankruptcy Code, shall be paid on or
before the Effective Date.
B. MODIFICATION OF THE PLAN
Subject to the Merger Agreement, the restrictions on modifications set
forth in section 1127 of the Bankruptcy Code and any applicable notice
requirements, the Debtor reserves the right to alter, amend or modify the
Plan before its substantial consummation.
C. REVOCATION OF THE PLAN
Subject to the Merger Agreement, the Debtor reserves the right to revoke
or withdraw the Plan prior to the Confirmation Date. If the Debtor revokes
or withdraws the Plan, or if Confirmation does not occur, then the Plan shall
be null and void in all respects, and nothing contained in the Plan shall (1)
constitute a waiver or release of any Claims by or against, or any Interests
in, the Debtor; or (2) prejudice in any manner the rights of the Debtor.
D. SEVERABILITY OF PLAN PROVISIONS
If, prior to Confirmation, any term or provision of the Plan is held by
the Bankruptcy Court to be invalid void or unenforceable,the Bankruptcy
Court, at the request of the Debtor, shall have the power to alter and
interpret such term or provision to make it valid or enforceable to the
maximum extent practicable, consistent with the original purpose of the term
or provision held to be invalid, void or unenforceable, and such term or
provision shall then be applicable as altered or interpreted.
Notwithstanding any such holding, alteration or interpretation, the remainder
of the terms and provisions of the Plan will remain in full force and effect
and will in no way be affected, impaired or invalidated by such holding,
alteration or interpretation. The Confirmation Order shall constitute a
judicial determination and shall provide that each term and provision of the
Plan, as it may have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its terms.
E. SUCCESSORS AND ASSIGNS
The right, benefits and obligations of any entity named or referred to
in the Plan shall be binding on, and shall inure to the benefit of, any heir,
executor, administrator, successor or assign of such entity.
F. EXHIBITS
Because certain of the Exhibits referred to in the Plan are extremely
voluminous, these Exhibits are not being served with copies of the Plan and
the Disclosure Statement. The table of contents for the Plan indicates which
Exhibits are attached to the Plan as distributed and which are available only
upon request from the Debtor.
G. SERVICE OF DOCUMENTS ON THE DEBTOR OR REORGANIZED DEBTOR
Any pleading, notice or other document required by the Plan or
Confirmation Order to be served on or delivered to the, Debtor or the
Reorganized Debtor shall be sent by first class U.S. mail postage prepaid,
to:
MORRISON KNUDSEN CORPORATION
Morrison Knudsen Plaza
720 Park Boulevard
Boise, Idaho 83712
Attention: Chief Legal Officer
with copies to:
JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Attention: David S. Kurtz, Esq.
and (unless the Merger Agreement is terminated):
LATHAM & WATKINS
First Interstate World Center
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
Attention: Robert Klyman
H. REGULATORY OR ENFORCEMENT ACTION
Nothing in this Plan will restrict any federal government regulatory
agency from pursuing any regulatory or police enforcement action against the
Debtor, the Reorganized Debtor, their current or former officers, directors
or employees, and their respective agents, advisors, attorneys and
representatives acting in any capacity, other than any action or proceeding
of any type to recover monetary claims, damages or penalties against the
Debtor for an act or omission occurring prior to Confirmation.
Wilmington, Delaware
July 25, 1996
Respectfully submitted,
MORRISON KNUDSEN CORPORATION,
a Delaware corporation
By:
-------------------------------
Denis M. Slavich
Executive Vice President and
Chief Financial Officer
COUNSEL:
David S. Kurtz
Jeffrey W. Linstrom
Kathleen M. Boege
JONES, DAY, REAVIS & POGUE
77 West Wacker Drive
Chicago, Illinois 60601-1692
(312) 782-3939
Robert Dean Avery
JONES, DAY, REAVIS & POGUE
555 West Fifth Street, Suite 4600
Los Angeles, California 90013-1025
(213) 489-3939
ATTORNEYS FOR
MORRISON KNUDSEN CORPORATION
Laura Davis Jones
YOUNG, CONAWAY, STARGATT & TAYLOR
Rodney Square North, Eleventh Floor
P.O. Box 391
Wilmington Delaware 19899-0391
(302) 571-6600
CO-COUNSEL FOR
MORRISON KNUDSEN CORPORATION
EXHIBIT 2
STOCKHOLDERS AGREEMENT
DATED AS OF JUNE 20, 1996
BETWEEN
MK RAIL CORPORATION
AND
MORRISON KNUDSEN CORPORATION
STOCKHOLDERS AGREEMENT
----------------------
Stockholders Agreement (this "Agreement") dated as of June 20, 1996
between MK Rail Corporation, a Delaware corporation (the "Company"), and
Morrison Knudsen Corporation, an Ohio corporation ("MKO").
RECITALS
--------
WHEREAS, in connection with the reorganization of Morrison Knudsen
Corporation, a Delaware corporation ("MK"), certain creditors of MK and MKO
will acquire restricted shares Common Stock held by MKO, and the Company has
agreed to provide certain rights to such future holders to cause the shares
so acquired to be registered pursuant to the Securities Act; and
WHEREAS, the Company, at the request of MK and MKO, has, by
execution of a Second Amendment to Rights Agreement (the "Rights Plan
Amendments") of even date herewith, made certain amendments to the Rights
Agreement between MK Rail and Chemical Mellon Shareholder Services, L.L.C.
dated as of January 19, 1996, as amended (the "Rights Plan"), in order to
facilitate the obtaining by MK and MKO of the acceptances required to confirm
a plan of reorganization that MK contemplated filing with the Bankruptcy
Court pursuant to which, amount other things, the restricted shares of Common
Stock are to be transferred to creditors of MK; and
WHEREAS, the parties hereto desire to set forth the rights of such
future holders and the Company's obligations to cause the registration of the
Registrable Securities pursuant to the Securities Act; and
WHEREAS, the Company, MKO and such future holders have agreed upon
certain matters relating to the governance of the Company and to the Rights
Plan Amendment.
NOW, THEREFORE, in consideration of good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
Section 1. Definitions and Usage. As used in this Agreement:
---------------------
1.1. Definitions.
-----------
Affiliate. "Affiliate" means Affiliate as defined in Rule 12b-2
---------
promulgated by the Commission under the Exchange Act.
Agent. "Agent" means the principal placement agent on an agented
-----
placement of Registrable Securities.
Bankruptcy Court. "Bankruptcy Court" shall mean the United States
----------------
Bankruptcy Court for the District of Delaware, in which court the Plan has
been filed.
Certificate Amendment. "Certificate Amendment" shall have the
---------------------
meaning set forth in Section 9.5.
-----------
Commission. "Commission" shall mean the United States Securities
----------
and Exchange Commission.
Common Stock. "Common Stock" shall mean (i) the common stock, par
------------
value $.01 per share, of the Company, and (ii) shares of capital stock of the
Company issued by the Company in respect of or in exchange for shares of such
common stock in connection with any stock dividend or distribution, stock
split-up, recapitalization, recombination or exchange by the Company
generally of shares of such common stock.
Continuously Effective. "Continuously Effective," with respect to
----------------------
a specified registration statement, shall mean that it shall not cease to be
effective and available for Transfers of Registrable Securities thereunder
for longer than either (i) any ten consecutive business days, or (ii) an
aggregate of fifteen business days during the period specified in the
relevant provision of this Agreement.
Demand Registration Request. "Demand Registration Request" shall
---------------------------
have the meaning set forth in Section 2.1(i).
--------------
Demand Registration Request. "Demand Registration Request" shall
---------------------------
have the meaning set forth in Section 2.1(i).
--------------
Distribution Date. "Distribution Date" shall mean the date MK Rail
-----------------
Common Stock owned by MKO on the date hereof has been distributed to
creditors of MKO in any case under Title 11 of the United States Bankruptcy
Code or through a foreclosure against MKO.
Election Request. "Election Request" shall have the meaning set
----------------
forth in Section 9.6.
-----------
Exchange Act. "Exchange Act" shall mean the Securities Exchange
------------
Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
Holders. "Holders" shall mean MKO and the Transferees of the
-------
Common Stock held by MKO or their Transferees in accordance with Section 8.
---------
Majority Selling Holders. "Majority Selling Holders" means those
------------------------
Selling Holders whose Registrable Securities included in a registration
represent a majority of the Registrable Securities of all Selling Holders
included therein.
Market Value. "Market Value" of Registrable Securities as of a
------------
given date shall mean the average closing price for such securities over the
ten (10) business days immediately preceding said date as quoted on the
NASDAQ National Market System or such other securities exchange on which said
securities are listed.
Note Cancellation Agreement. "Note Cancellation Agreement" shall
---------------------------
refer to the Note Cancellation and Restructuring Agreement of even date
herewith by and among the Company, MKO and MK.
Outside Director. "Outside Director" shall mean a director of the
----------------
Company who (i) is not and has not been employed by MK, MKC or the Company
or their respective subsidiaries in an executive capacity within the five
years immediately prior to the annual meeting at which the nominees of the
board of directors will be voted upon; (ii) is not (and is not affiliated
with a company or a firm that is) a significant advisor or consultant to the
Company or its subsidiaries; (iii) is not affiliated with a significant
customer or supplier of the Company or its subsidiaries; (iv) does not have
significant personal services contract(s) with the Company or its
subsidiaries; (v) is not affiliated with a tax-exempt entity that receives
significant contributions from the Company or its subsidiaries; and (vi) is
not a spouse, parent, sibling or child or any person described by (i) through
(v) of this definition.
Person. "Person" shall mean any individual, corporation,
------
partnership, joint venture, association, joint-stock company, limited
company, trust, unincorporated organization or government or other agency or
political subdivision thereof.
Piggyback Registration Statement. "Piggyback Registration
--------------------------------
Statement" shall have the meaning set forth in Section 3.
---------
Plan. "Plan" shall mean the plan of reorganization with respect
----
to MK, which plan of reorganization shall contain substantially the terms
set forth in Exhibit C to the Note Cancellation Agreement and which plan of
reorganization shall not contain any terms or provisions that are
inconsistent with the Note Cancellation Agreement, this Agreement or the
terms set forth in such Exhibit C.
Register, Registered and Registration. "Register," "registered"
-------------------------------------
and "registration" shall refer to a registration effected by preparing and
filing a registration statement or similar document in compliance with the
Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document.
Registrable Securities. "Registrable Securities" shall mean,
----------------------
subject to Section 8: (i) the Shares owned by the Holders on any date of
---------
determination, (ii) any shares of Common Stock or other securities issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect
to, or in exchange by the Company generally for, or in replacement by the
Company generally of, such Shares; and (iii) any securities issued in
exchange for Shares in any merger or reorganization of the Company; provided,
--------
however, that Registrable Securities shall not include any securities which
- - -------
have theretofore been registered and sold to the public in a bona fide public
offering pursuant to the Securities Act or which have been sold to the public
pursuant to Rule 144 or any similar rule promulgated by the Commission
pursuant to the Securities Act.
Registrable Securities then outstanding. "Registrable Securities
---------------------------------------
then outstanding" shall mean, with respect to a specified determination date,
the Registrable Securities owed by all Holders on such date.
Registration Expenses. "Registration Expenses" shall have the
---------------------
meaning set forth in Section 6.1.
-----------
Securities Act. "Securities Act" shall mean the Securities Act of
--------------
1933, as amended, and the rules and regulations promulgated thereunder.
Selling Holders. "Selling Holders" shall mean, with respect to a
---------------
specified registration pursuant to this Agreement, Holders whose Registrable
Securities are included in such registration.
Shares. "Shares" shall mean the shares of Common Stock acquired
------
by certain creditors of MK in connection with the reorganization of MK.
Shelf Registration Statement. "Shelf Registration Statement" shall
----------------------------
have the meaning set forth in Section 2.2.
-----------
Standstill Termination Date. "Standstill Termination Date" shall
---------------------------
have the meaning set forth in Section 9.2.
-----------
Stockholders Meeting. "Stockholders Meeting" shall have the
--------------------
meaning set forth in Section 9.7.
-----------
Substantial Stockholder. "Substantial Stockholder" shall mean any
-----------------------
Person beneficially owning 5% or more of the outstanding Common Stock.
Transfer. "Transfer" shall mean and include the act of selling,
--------
giving, transferring, creating a trust (voting or otherwise), assigning or
otherwise disposing of (other than pledging, hypothecating or otherwise
transferring as security) (and correlative words shall have correlative
meanings); provided, however, that any transfer or other disposition upon
-------- -------
foreclosure or other exercise of remedies of a secured creditor after an
event of default under or with respect to a pledge, hypothecation or other
transfer as security shall constitute a "Transfer." "Transferee" shall mean
any Person who acquires Common Stock pursuant to a Transfer.
Underwriters' Representative. "Underwriters' Representative" shall
----------------------------
mean the managing underwriter, or, in the case of a co-managed underwriting,
the lead manager.
Violation. "Violation" shall have the meaning set forth in Section
---------
7.1.
1.2. Usage.
-----
(i) References to a Person are also references to its assigns and
successors in interest (by any means whatever, including merger,
consolidation or sale of all or substantially all the assets of such Person
or otherwise, as the case may be).
(ii) References to Registrable Securities "owned" by a Holder shall
include Registrable Securities beneficially owned by such Person but which
are held of record in the name of a nominee, trustee, custodian, or other
agent, but shall exclude shares of Common Stock held by a Holder (other than
the liquidating trust contemplated by the Plan) in a fiduciary capacity for
customers of such Person.
(iii) References to a document are to it as amended, waived and
otherwise modified form time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified form time to
time (and references to any provision thereof shall include references to any
successor provision).
(iv) References to Sections or to Schedules or Exhibits are to
sections hereof or schedules or exhibits hereto, unless other context
otherwise requires.
(v) The definitions set forth herein are equally applicable not
to the singular and plural forms and the feminine, masculine and neuter forms
of the terms defined.
(vi) The term "including" and correlative terms shall be deemed to
be followed by "without limitation" whether or not followed by such words or
words of like import.
(vii) The term "hereof" and similar terms refer to this Agreement
as a whole.
(viii) The "date of" any notice or request given pursuant to this
Agreement shall be determined in accordance with Section 12.2.
------------
Section 2. Demand and Shelf Registration Statements.
----------------------------------------
2.1. (i) At any time during the period commencing on the date of
the first filing by the Company of its Annual Report on Form 10-K that
follows the effective date of the Plan and ending on the fifth anniversary
thereof, one or more Holders of Registrable Securities may at their option
make a written request (a "Demand Registration Request") to the Company (the
"Demanding Holder") requesting that the Company file with the Commission a
registration statement on an appropriate form under the Securities Act (a
"Demand Registration Statement") to register (subject to Section 2.6) all or
-----------
such number of such Demanding Holder's Registrable Securities as the
Demanding Holder shall request in writing; provided, however, that no request
-------- -------
may be made pursuant to this Section 2.1 if (A) within twelve months prior
-----------
to the date of such request a Demand Registration Statement pursuant to this
Section 2.1 shall have ben declared effective by the Commission or (B) the
- - -----------
Registrable Securities that the Demanding Holders request be included in the
Demand Registration Statement do not have a Market Value as of the date the
request is given to the Company of at least $5,000,000. Notwithstanding the
foregoing, in no event shall a Demand Registration Request be effective
unless and until the Registrable Securities that the Demanding Holders
request be included in the Demand Registration and that other Holders request
be included in the Demand Registration pursuant to Section 2.1(iii) hereof
have an aggregate Market Value determined as of the day the last such request
is received of at least $20,000,000. After an effective Demand Registration
Request is made, the Company shall file with the Commission the Demand
Registration Statement. Any Demand Registration Statement shall relate to
an underwritten offering (whether on a "firm," "best efforts" or "all
reasonable efforts" basis or otherwise) or an agented offering. Any Demand
Registration Request made pursuant to this Section 2.1 shall be addressed to
-----------
the attention of the Secretary of the Company and shall specify the number
of Registrable Securities to be registered, the intended methods of
disposition thereof and that the request is for a Demand Registration
Statement pursuant to this Section 2.1.
-----------
(ii) The Company shall be entitled to postpone for up to 120 days
the filing of any Demand Registration Statement otherwise required to be
prepared and filed pursuant to this Section 2.1 if (A) the Board of Directors
-----------
of the company determines, in its good faith reasonable judgment, that such
registration and the Transfer of Registrable Securities contemplated thereby
would materially interfere with, or require the premature disclosure of, any
financing, acquisition or reorganization involving the Company or any of its
subsidiaries or would otherwise require the premature disclosure of any other
material nonpublic information as to which the Company has a bona fide
business purpose for maintaining its confidentiality and (B) the Company
promptly gives the Demanding Holders notice of such determination (which
notice need not disclose the fact, event or information); provided, however,
-------- -------
that the Company shall not have, within the twelve months prior to the date
of the postponement, postponed pursuant to this Section 2.1(ii) the filing
---------------
of any other Demand Registration Statement that was subsequently abandoned
because the Demand Registration Request relating thereto was withdrawn.
(iii) Whenever the Company receives a demand pursuant to Section
-------
2.1(i) to effect the registration of any Registrable Securities, the Company
- - ------
shall promptly give written notice of such proposed registration to all
Holders. Any such Holder may, within thirty days after receipt of such
notice, request in writing that all of such Holder's Registrable Securities,
or any portion thereof designated by such Holder, be included in the
registration.
2.2. As soon as practicable after the later of (i) the entry by
the Bankruptcy Court of the order approving the assumption of this Agreement
and the transactions contemplated hereby and (ii) July 1, 1996, the Company
shall file with the Commission a registration statement on Form S-3 in
accordance with the Securities Act for an offering on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement"). The Company shall use its reasonable best effort to have the
Shelf Registration Statement declared effective on the effective date of the
Plan. Subject to compliance with the provisions of Section 5, the Holders
---------
shall be entitled to have all or a portion of such Holders' Registrable
Securities included in Shelf Registration Statement.
2.3. The Company shall be obligated to effect no more than four
Demand Registration Statements pursuant to this Agreement. For purposes of
the preceding sentence, a Demand Registration Statement shall not be deemed
to have been effected (i) unless a registration statement with respect
thereto has become effective, (ii) if after such registration statement has
become effective, such registration or the related offer, sale or
distribution of Registrable Securities thereunder is interfered with by any
stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason not attributable to any of
the Selling Holders and such interference is not thereafter eliminated, or
(iii) if the conditions to closing specified in any underwriting agreement
containing usual and customary terms entered into in connection with such
registration are not satisfied or waived, other than by reason of failure on
the part of any of the Selling Holders. The Company's obligation to effect
a given Demand Registration pursuant to Section 2.1 shall be deemed to have
-----------
been satisfied upon the earlier of (x) the date as of which all the
Receivable Securities included therein shall have been disposed of pursuant
to the Demand Registration Statement, and (y) the date as of which such
Demand Registration Statement shall have been Continuously Effective for a
period of 90 days.
2.4. Whenever the Company receives request for a Demand
Registration Statement pursuant to Section 2.1, the Company shall have the
-----------
right to register in any such Demand Registration Statement and to include
in any related offering shares of authorized by unissued Common Stock. The
Company may exercise the foregoing option to include additional shares by
written notice delivered to each of the Selling Holders within 30 days
following the Company's receipt of the request for a Demand Registration
Statement pursuant to Section 2.1(i).
--------------
2.5. In any Demand Registration Statement, the managing or lead
underwriter or underwriters (of an underwritten offering) or the lead agent
(for an agented offering) shall be a nationally recognized firm
selected by the Majority Selling Holders with the approval of the Company,
which approval shall not be unreasonably withheld.
2.6. Whenever the Company effects a Demand Registration Statement
pursuant to Section 2.1, if the Underwriters' Representative or Agent advises
-----------
the Company and each Selling Holder in writing that, in its opinion, the
amount of securities requested to be included in such offering (whether by
the Company or the Selling Holders) exceeds the amount which can be sold in
such offering within a price range acceptable to the Majority Selling
Holders, the securities to be included in such offering and the related
registration shall be reduced in the following order to an amount which can
be sold within such price range: first, the amount of securities, if any,
that the Company has requested be included in the offering and registration
shall be reduced until no such securities are included therein; and second,
the amount of Registrable Securities that the Selling Holders have requested
be included in the offering and registration shall be reduced on a pro rata
basis among all Selling Holders based on the relative number of securities
each has requested be included in such offering.
2.7. Notwithstanding anything in this Agreement to the contrary,
neither MK nor MKO shall have the right to dispose of any Registrable
Securities pursuant to any registration statement effected pursuant to
Section 2 or 3.
- - --------- -
Section 3. Piggyback Registration Statements.
---------------------------------
3.1. If at any time the Company proposes to register (including
for this purpose a registration effected by the Company for stockholders of
the Company other than the Holders) equity securities or securities
convertible or exchangeable into equity securities under the Securities Act
in connection with a public offering solely for cash (other than by a
registration on Form S-4 or S-8 or any successor or similar forms or filed
in connection with an exchange offer or any offering of securities solely to
the Company's existing stockholders or otherwise pursuant to a dividend
reinvestment plan or a dividend reinvestment and stock purchase plan, and
other than pursuant to Section 2), the Company shall promptly give each
Holder of Registrable Securities written notice of such registration (a
"Piggyback Registration Statement"). Upon the written request of each Holder
given within fifteen days following the date of such notice, the Company
shall cause to be included in such registration statement and use its
reasonable best efforts to be registered under the Securities act all the
Registrable Securities that each such Holder shall have requested to be
registered; provided, however, that such right of inclusion shall not apply
-------- -------
to any registration statement covering an underwritten offering of
convertible or exchangeable securities or equity securities other than Common
Stock if the Underwriters' Representative or Agent shall advise the Company
in writing (with a copy to each Selling Holder) that in its opinion, the kind
of Registrable Securities requested to be included in the Piggyback
Registration Statement would adversely affect the offering of the convertible
or exchangeable securities or equity securities or the timing thereof. The
Company shall have the absolute right at any time to withdraw or cease to
prepare or file any registration statement for any offering referred to in
this Section 3 without any obligation or liability to any Holder.
---------
3.2. If the Underwriters' Representative or Agent shall advise the
Company in writing (with a copy to each Selling Holder) that, in its opinion,
the amount of securities requested to be included in such offering (whether
by the Company, the Selling Holders or other selling stockholders) exceeds
the amount which can be sold in such offering within a price range acceptable
to the Company, the securities to be included in such offering and the
related registration shall be reduced in the following order to amount which
can be sold within such price range: first the amount of securities to be
included in the offering and registration by any selling stockholder other
than the Selling Holders shall be reduced until no such securities are
included therein; second, the amount of Registrable Securities that the
Selling Holders have requested be included in the offering and registration
shall be reduced on a pro rata basis among all Selling Holders based on the
relative number of securities each has requested be included in such
offering; and third, the amount of securities to be included in the offering
and registration by the Company shall be reduced.
3.3. During the term of this Agreement, each Holder shall be
entitled to have its Registrable Securities included in an unlimited number
of Piggyback Registration Statements pursuant to this Section 3.
---------
3.4. If the Company has previously filed a registration statement
---
with respect to Registerable Securities pursuant to Section 2.1 or pursuant
-----------
to this Section 3, and if such previous registration statement has not been
---------
withdrawn or abandoned, the Company will not file or cause to be effected any
other registration of any of its equity securities or securities convertible
or exchangeable into or exercisable for its equity securities under the
Securities Act (except on Form S-8 or any successor form),whether on its own
behalf or at the request of any holder or holders of such securities, until
a period of 180 days has elapsed from the effective date of such a previous
registration statement.
Section 4. Registration Procedures. Whenever required under
-----------------------
Section 2 or Section 3 to effect the registration of any Registrable
- - --------- ---------
Securities, the Company shall, as expeditiously as practicable:
4.1. Prepare and file with the Commission a registration statement
with respect to such Registrable Securities, subject to Subject 2.2, and use
-----------
the Company's reasonable best efforts to cause such registration statement
to become effective, in each instance giving due regard to the need to
prepare current financial statements, conduct due diligence and complete
other actions that are reasonably necessary to effect a registered public
offering; provided, however, that before filing a registration statement or
-------- -------
prospectus or any amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the registration
statement and prior to effectiveness thereof, the Company shall use its
reasonable efforts to furnish to one firm of legal counsel for the Selling
Holders (selected by the Majority Selling Holders) copies of all such
documents in the form substantially as proposed to be filed with the
Commission at least five business days prior to filing for review and comment
by such counsel.
4.2. (i) Use the Company's reasonable best efforts to keep the
relevant registration statement Continuously Effective (x) if a Demand
Registration Statement, for up to 90 days or until such earlier date as of
which all the Registrable Securities under the Demand Registration Statement
shall have been disposed of in the manner described in the Demand
Registration Statement, and (y) if a Shelf Registration Statement, subject
to the immediately following sentence, for three years. As soon as
reasonably practicable after the occurrence of any fact or event that makes
untrue any statement of a material fact made in the Shelf Registration
Statement or that requires the making of any additions to or changes in the
Shelf Registration Statement in order to make the statements therein, in
light of the circumstances in which they were made, not misleading, the
Company shall prepare and file a supplement or amendment to the Shelf
Registration Statement or related prospectus, or a document incorporated
therein by reference, so that such Shelf Registration Statement and related
prospectus shall not contain any such untrue statement of a material fact or
any such omission of a material fact; provided, however, that if the Board
-------- -------
of Directors of the company determines, in its good faith reasonable
judgment, that the Transfer of Registrable Securities pursuant to the Shelf
Registration Statement would materially interfere with, or require the
premature disclosure of, any financing, acquisition or reorganization
involving the Company or any of its subsidiaries or otherwise would require
premature disclosure of any other material nonpublic information as to which
the Company has a bona fide business purpose for maintaining its
confidentiality, then for so long as such circumstances or such business
purpose continues to exist (provided that the number of days of any such
--------
suspension may not exceed an aggregate of 120 days in any calendar year), the
Company shall not be required to prepare or file any such supplement,
amendment or document.
(ii) Each Holder agrees by acquisition of a Registrable Security
that, upon receipt of any notice from the Company of the existence of any
fact or event of the kind described in Section 2.1(ii) or 4.2(i) (which
--------------- ------
notice need not disclose the fact, event or information), such Holder will
forthwith discontinue the disposition of any Registrable Securities pursuant
to the Shelf Registration Statement until such Holder's receipt of the copies
of a supplemented or amended prospectus as contemplated by Section 4.2(i),
--------------
or until it is advised in writing by the Company that the use of the
prospectus related to the Shelf Registration Statement may be resumed, and,
has received copies of any additional or supplemental filings that are
incorporated by reference in such prospectus. If so directed by the Company,
each Holder will deliver to the Company all copies, other than permanent file
copies then in such Holder's possession, of the prospectus covering such
Registrable Securities that was current at the time of receipt of such
notice.
(iii) Notwithstanding the foregoing, if, in the case of a Demand
Registration Statement, the filing of a registration statement is postponed
as permitted by Section 2.1(ii), or, in the case of a Shelf Registration
---------------
Statement, the preparation and filing of a supplement, amendment or
incorporated document is postponed as permitted by Section 4.2(i) or Section
--------------
4.2(ii), the five-year period for filing a Demand Registration Statement or
the three-year period of effectiveness of the Shelf Registration Statement,
as the case may be, shall be extended by the aggregate number of days of such
postponement.
4.3. Subject to Section 4.2(i), prepare and file the Commission
--------------
such amendments,supplements or incorporated documents to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement. If the registration statement is for an underwritten
offering, the Company shall amend the registration statement or supplement
the prospectus whenever required by the terms of the underwriting agreement
entered into pursuant to Section 4.6. In the event that any Registrable
-----------
Securities included in a registration statement subject to, or required by,
this Agreement remain unsold at the end of the period during which the
Company is obligated to use its reasonable best efforts to maintain the
effectiveness of such registration statement, the Company may file a post-
effective amendment to the registration statement for the purpose of removing
such securities from registered status.
4.4. Furnish to each Selling Holder of Registrable Securities
copies of the registration statement, any pre-effective or post-effective
amendment thereto, the prospectus, including each preliminary prospectus and
any amendments or supplements thereto, in each case in conformity with the
requirements of the Securities Act.
4.5. Use the Company's reasonable best efforts (i) to register and
qualify the securities covered by such registration statement under the
securities or Blue Sky laws of such states or jurisdictions as shall be
reasonably requested by the Underwriters' Representative or Agent (as
applicable, or if inapplicable, the Majority Selling Holders), and (ii) to
obtain the withdrawal of any order suspending the effectiveness of a
registration statement, or the lifting of any suspension of the qualification
(or exemption from qualification) of the offer and transfer of any of the
Registrable Securities in any jurisdiction, at the earliest practicable
moment; provided, however, that the Company shall not be required in
-------- -------
connection therewith or as a condition thereto to qualify to do business,
subject itself to taxation or to file a general consent to service of process
in any states or jurisdictions where it is not now so subject.
4.6. In the event of Demand Registration Statement, enter into and
perform the Company's obligations under an underwriting or agency agreement
(including indemnification and contribution obligations of underwriters or
agents), in usual and customary form, with the managing underwriter or
underwriters of or agents for such offering. The Company shall also
cooperate with the majority Selling Holders and the Underwriters'
Representative or Agent for such offering in the marketing of the Registrable
Securities, including making reasonably available the Company's officers,
accountants, counsel, premises, books and records for such purpose.
4.7. Promptly notify each Selling Holder of any stop order issued
or threatened to be issued by the Commission in connection therewith (and
take all reasonable actions required to prevent the entry of such stop order
or to remove it if entered).
4.8. Make generally available to the Company's security holders
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 90 days following the end of the 12-month period
beginning with the first month of the Company's first fiscal quarter
commencing after the effective date of each registration statement filed
pursuant to this Agreement.
4.9. Make reasonably available for inspection by any Selling
Holder, any underwriter participating in such offering and the
representatives of such Selling Holder and Underwriter (but not more than
one firm of legal counsel to such Selling Holders), all financial and other
information as shall be reasonably requested by them, and provide the
Selling Holder, any underwriter participating in such offering and the
representatives of such Selling Holder and Underwriter the opportunity to
discuss the business affairs of the Company with its principal executives
and independent public accountants who have certified the audited financial
statements included in such registration statement, in each case to the
extent necessary to enable them to exercise their due diligence
responsibility under the Securities Act; provided, however, that information
-------- -------
that the Company determines, in good faith, to be confidential and which the
Company advises such Person in writing, is confidential shall not be
disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Company.
4.10. In the event of a Demand Registration Statement, use the
Company's reasonable best efforts to obtain a "comfort letter" from its
independent public accountants and legal opinions of counsel to the Company
addressed to the Selling Holders, in customary form and covering such matters
of the type customarily covered by such letters and in a form that shall be
reasonably satisfactory to the Majority Selling Holders. The Company shall
furnish to each Selling Holder a signed counterpart of any such comfort
letter or legal opinion. Delivery of any comfort letter shall be subject to
the recipient furnishing such written representations or acknowledgments as
are customarily provided by selling stockholders who receive such comfort
letters under SAS No. 72. Nothing in the immediately preceding sentence
shall be deemed to require a Selling Holder to make representations and
warranties if the Selling Holder is willing to receive a letter in the form
to be provided to selling stockholders not making representations and
warranties under SAS No. 76.
4.11. Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement.
4.12. Use all reasonable efforts to cause the Registrable
Securities covered by such registration statement, if the Common Stock is
then listed on a securities exchange or included for quotation in a
recognized trading market, to continue to be so listed or included for a
reasonable period of time after the offering.
Section 5. Holders' Obligations.
--------------------
5.1. It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement with respect to the
Registrable Securities of any Selling Holder of Registrable Securities that
such Selling Holder shall:
(i) furnish to the Company such information regarding such Selling
Holder and its affiliates, the number of Registrable Securities owned and
proposed to be sold by it, the intended method of disposition of such
securities and any other information as shall be required to effect the
registration of such Selling Holder's Registrable Securities, and cooperate
with the Company in preparing such registration statement and in complying
with the requirements of the Securities Act;
(ii) agree to sell their Registrable Securities to the
underwriters at the same price and on substantially the same terms and
conditions as the Company or the other Persons on whose behalf the
registration statement was being filed have agreed to sell their securities,
and execute the underwriting agreement agreed to by the Company and the
Majority Selling Holders and customary custody arrangements, lock-up letters,
indemnities, questionnaires and other documents reasonably required by the
underwriters or agents and agreed to by the Majority Selling Holders.
5.2. In the event that a Demand Registration Statement or a
Piggyback Registration Statement becomes effective, if and to the extent
requested by the managing underwriter or lead agent for the offering relating
thereto, no Holder shall offer, sell or agree to sell or otherwise dispose
of or transfer any Registrable Securities or securities convertible into or
exchangeable or exercisable for any Registrable Securities (other than, in
the case of the Selling Holders under the Demand Registration Statement or
Piggyback Registration Statement, pursuant to such Demand Registration
Statement or Piggyback Registration Statement, as the case may be), or
exercise any right to register any such securities, during the period
commending ten days prior to the anticipated effective date of such
registration statement and ending 120 days from the effective date of such
registration statement. In order to enforce the foregoing agreement, the
Company shall be entitled to impose stop-transfer instructions with respect
to the Registrable Securities of each Holder until the end of such period.
Section 6. Expenses of Registration. Expenses in connection with
------------------------
registrations pursuant to this Agreement shall be allocated and paid as
follows:
6.1. With respect to the Shelf Registration Statement, MKO shall
bear and pay or shall reimburse the Company for, and with respect to each
Demand Registration Statement, the Company shall bear and pay, all of the
expenses incurred in connection with the registration and offering of
Registrable Securities with respect to such Shelf Registration Statement or
Demand Registration Statement, as the case may be, including, but not limited
to, all registration, filing and National Association of Securities Dealers,
Inc. fees, all fees and expenses of complying with securities or blue sky
laws, all word processing and duplicating expenses, messenger and delivery
expenses, the fees and disbursements of counsel for the Company, the fees and
disbursements of the Company's independent public accountants, including the
expenses of "cold comfort" letters required by or incident to such
performance and compliance, and all printing expenses (including the printing
of certificates evidencing the Registrable Securities and the printing of the
registration statement and any related prospectus, or any amendment or
supplement thereto) (collectively, the "Registration Expenses"); provided,
--------
however, that, the Selling Holders shall pay (i) underwriting discounts and
- - -------
commissions relating to the Registrable Securities sold by them pursuant to
any such registration statement and (ii) all fees and disbursements of
counsel and any other advisors to the Selling Holders. Notwithstanding the
foregoing, in no event shall the obligations of MKO under this Section 6.1
-----------
exceed $75,000 in the aggregate. In no event shall MKO be responsible for
the expenses of a Demand Registration Statement. To the extent MKO is not
required by this Section to pay or reimburse the Company for expenses
incurred in connection with a Shelf Registration Statement, those expenses
shall be borne and paid by the Company, except as expressly otherwise
provided in the first sentence of this Section.
6.2. The Company shall bear and pay all Registration Expenses
incurred in connection with any Piggyback Registration Statements pursuant
to Section 3, other than (i) underwriting discounts and commissions relating
---------
to Registrable Securities, (ii) the portion of any filing fees allocable to
the Registrable Securities included in such registration by the Holders and
(iii) the fees and disbursements of any counsel and other advisors to the
Selling Holders (each of which expenses in clauses (i) and (ii) shall be paid
on a pro rata basis by the Selling Holders of Registrable Securities included
in such Piggyback Registration Statement and which expenses in clause (iii)
shall be paid on a pro rata basis by the Selling Holders for which the
expenses are incurred).
Section 7. Indemnification; Contribution. If any Registrable
-----------------------------
Securities are included in a registration statement under this Agreement:
7.1. To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Selling Holder, its directors, officers,
shareholders, employees, investment advisors, agents and Affiliates, either
direct or indirect (and each such Affiliate's directors, officers,
shareholders, employees, investment advisors and agents) and each other
Person, if any, who controls such Selling Holder within the meaning of the
Securities Act against any and all losses, claims, damages, liabilities and
expenses, including attorneys' fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, to which any of the foregoing
Persons may become subject under the Securities Act, the Exchange Act or
other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein, or any amendments or supplements thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading (collectively, a
"Violation"); provided, however, that the indemnification required by this
-------- -------
Section 7.1 shall not apply to amounts paid in settlement of any such loss,
- - -----------
claim, damage, liability or expense if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such
loss, claim, damage, liability or expense to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished to the Company by the
indemnified party expressly for use in connection with such registration.
7.2. To the extent permitted by applicable law, each Selling
Holder shall indemnify and hold harmless the Company, its directors,
officers, shareholders, employees, investment advisors, agents and
Affiliates, either direct or indirect (and each such Affiliate's directors,
officers, shareholders, employees, investment advisors and agents) and each
other Person, if any, who controls the Company within the meaning of the
Securities act, any other Selling Holder and any controlling Person or any
such other Selling Holder against any and all losses, claims, damages,
liabilities and expenses, including attorneys' fees and disbursements and
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, to which any of the
foregoing Persons may otherwise become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Selling Holder expressly for use in connection with such
registration statement; provided, however, that (x) the indemnification
-------- -------
required by this Section 7.2 shall not apply to amounts paid in settlement
-----------
of any such loss, claim, damage, liability or expense if settlement is
effected without the consent of the relevant Selling Holder of Registrable
Securities, which consent shall not be unreasonably withheld, (y) in no event
shall the amount of any indemnity under this Section 7.2 and of the
-----------
contribution obligation of a Selling Holder under Section 7.4 exceed the net
-----------
proceeds from the applicable offering received by such Selling Holder, and
(z) the obligation to provide indemnification hereunder shall be several, and
not joint and several, among the indemnifying parties.
7.3. Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, suit, proceeding,
- - ---------
investigation or threat thereof made in writing for which such indemnified
party may make a claim under this Section 7, such indemnified party shall
---------
deliver to the indemnifying party a written notice of the commencement
thereof. The failure to deliver written notice to the indemnifying party
within a reasonable time following the commencement of any such action , if
and to the extent materially prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 7 but shall not relieve the indemnifying
---------
party of any liability that it may have to any indemnified party otherwise
than pursuant to this Section 7. Any fees and expenses incurred by the
---------
indemnified party (including any fees and expenses incurred in connection
with investigating or preparing to defend such action or proceeding) shall
be paid to the indemnified party, as incurred, within thirty days of written
notice thereof to the indemnifying party (regardless of whether it is
ultimately determined that an indemnified party is not entitled to
indemnification hereunder). Any such indemnified party shall have the right
to employ separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be the expenses of such indemnified party unless(i) the indemnifying
party shall have failed to promptly assume the defense of such action, claim
or proceeding or (ii) the named parties to any such action, claim or
proceeding (including any impleaded parties) include both such indemnified
party and the indemnifying party, and such indemnified party shall have been
advised by its counsel that there may be one or more legal defenses available
to it which are different from or in addition to those available to the
indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party
could not represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects
to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party; it being
understood, however, that the indemnifying party shall not, in connection
with any one such action, claim or proceeding or separate but substantially
similar or related actions, claims or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such
indemnified parties, unless the indemnified party shall have been advised by
its counsel that a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such action,
claim or proceeding such that the counsel could not represent the indemnified
party and any other of such indemnified parties, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels). No indemnifying party shall be liable to
an indemnified party for any settlement of any action, proceeding or claim
without the written consent of the indemnifying party, which consent shall
not be unreasonably withheld.
7.4. If the indemnification required by this Section 7 from the
---------
indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
in this Section 7:
---------
(i) The indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified parties in connection with
the actions which resulted in such loses, claims, damages, liabilities or
expense, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any Violation has
been committed by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such Violation.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 7.1 and Section 7.2,
----------- -----------
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7.4 were determined
-----------
by pro rata allocation or by any other method of allocation which does not
take into account the equitable considerations referred to in Section 7.4(i).
--------------
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
7.5. The obligations of the Company and the Selling Holders of
Registrable Securities under this Section 7 shall survive the completion of
---------
any offering of Registrable Securities pursuant to a registration statement
under this Agreement.
Section 8. Transfer of Common Stock. Notwithstanding anything in
------------------------
this Agreement to the contrary, no Holder may Transfer any shares of Common
Stock to any Person, except as set forth in the last paragraph of this
Section 8, unless prior to any such Transfer such Person has executed an
- - ---------
agreement (in the form of Exhibit A hereto) to be bound by the provisions of
---------
this Agreement. The Company shall place the following legend on any
certificate representing shares of Common Stock held by a Holder:
"This security is subject to certain restrictions on transfer
contained in a stockholders Agreement dated as of ____, 1996 between MK Rail
Corporation and Morrison Knudsen Corporation to which the holder of this
certificate is bound, a copy of which agreement is on file with the Secretary
of MK Rail Corporation."
In order to enforce the foregoing transfer restriction, without
limiting any other rights or remedies available to the Company, the Company
shall be entitled to impose stop-transfer instructions with respect to the
Registrable Securities of each Holder. The foregoing transfer restrictions
and legend shall be removed in connection with any sale of Common Stock to
the public pursuant to an effective registration statement or pursuant to
Rule 144 or any similar rule promulgated by the Commission under the
Securities Act, in each case so long as the specific identities of the
Transferees are not known to the Holders selling such shares prior to such
sale.
Section 9. Corporate Governance Agreement.
------------------------------
9.1. Until either the second anniversary of the Distribution Date
(or, if an effective Election Request, as defined in Section 9.6 hereof, is
-----------
made and the Stockholders Meeting, as defined in Section 9.7 hereof, is held
prior thereto, the date of the Stockholders Meeting), each Holder (i) shall
vote all of its shares of Registrable Securities and any other voting
securities of the Company over which such Holder exercises voting power (or
execute written consents in lieu of meetings) in favor of the election of
the Company's nominees for director and against the removal of any of the
Company's directors (other than a removal for cause) at any meeting of
stockholders or in any action by written consent and (ii) shall take all
other necessary or desirable actions within such Holder's control
(including, but not limited to, attendance at annual or special stockholder
meetings of the Company in person or by proxy for purposes of obtaining a
quorum) to elect such nominees and to vote against such removal of
any of the Company's directors; provided, however, that the total number
-------- -------
of directors on the Company's Board of Directors shall not be fewer than
seven and a majority of such directors shall at all times consist of Outside
Directors. Notwithstanding the foregoing, a Holder shall not be required to
vote any voting securities of the Company over which such Holder exercises
voting power that are not Registrable Securities (or execute written
consents in lieu of meetings with respect to such voting securities) as
otherwise required by this Section to the extent the voting securities are
held or controlled by the Holder as an agent, custodian, trustee or
executor, in all cases for or on behalf of parties that are not Holders of
Registrable Securities or their Affiliates or associates (as defined in the
rules promulgated under the Exchange Act), or are controlled by the Holder
as an investment advisor for an investment company registered under the
Investment Company Act of 1940, as amended, or as an investment advisor for
any other person or group; provided that in all cases, the arrangement
--------
whereby the Holder owns or controls the voting securities has not been
entered into for the purpose of circumventing this Section; and further
-------
provided, in the case of securities controlled by the Holder as an
- - --------
investment advisor for a person or group that is not an investment company
registered under the Investment Company Act, that no Holder or Holders has a
direct economic beneficial interest in the person or group for which the
Holder so acts as an investment advisor.
9.2. Without the prior written consent of the Company, until
either (i) ninety (90) days prior to the scheduled date of the Stockholders
Meeting (if an effective Election Request is made pursuant to Section 9.6
hereof) or (ii) the second anniversary of the Distribution Date (if no
effective Election Request is made) (in either case, the "Standstill
Termination Date"), no Holder may (i) solicit proxies (as such terms are
defined in Rule 14a-1 under the Exchange Act), whether or not such
solicitation is exempt under 14a-2 under the Exchange Act, with respect to
any matter from holders of any shares of common or preferred stock of the
Company, or any securities convertible into or exchangeable for or
exercisable (whether currently or upon the occurrence of any contingency) for
the purchase of any such capital stock, or make any communication exempted
from the definition of solicitation by Rule 14a-1(I)(2)(iv) under the
Exchange Act, or (ii) initiate, or induce or attempt to induce any other
Person or group (as defined in Section 13(d)(3) of the Exchange Act) to
initiate, any stockholder proposal or tender offer for securities of the
Company or any subsidiary thereof, any change of control of the Company or
any subsidiary thereof or the convening of a stockholders' meeting of the
Company or any subsidiary thereof; or (iii) otherwise seek or propose (or
request permission to propose) to influence or control the management or
policies of the Company or any subsidiary thereof. Nothing herein shall be
deemed to apply to a Holder to the extent the Holder is acting solely in its
capacity as an agent, custodian, trustee or executor holding securities that
are not Registrable Securities for persons that are not Holders or Affiliates
of Holders, provided that the Holder's actions are (a) at the direction of
--------
a person or persons that are not Holders that are the beneficial owners of
the securities so held by the Holder or (b) arise from the fiduciary duties
of the Holder acting in such capacity ascertained in good faith after
consulting with and based on advice of counsel as described in reasonable
detail in a written notice given the Company at least thirty (30) days prior
to taking such action; and further provided that in all cases the arrangement
--------------------
whereby the Holder holds the securities has not been entered into, and the
action by the Holder has not been taken, for the purpose of circumventing
this Section.
9.3. Notwithstanding anything herein to the contrary, the
provisions of Sections 9.1 and 9.2 hereof shall terminate at such time prior
------------ ---
to the second anniversary of the Distribution Date, if ever, that all of the
Registrable Securities held by all Holders constitutes less than 15% of the
outstanding Common Stock.
9.4. For so long as the provisions of Section 9.1 hereof are in
-----------
force and effect, the Company shall not amend the Rights Plan (i) to change
the percentage used in the definition of "Acquiring Person" therein so that
it is less than fifteen percent (15%) or (ii) in any other manner that would
deprive the Holders of the Registrable Securities of the intended benefits
of the Rights Plan Amendment.
9.5. At the first annual meeting of the stockholders of the
Company scheduled to occur at least seventy-five (75) days after the
effective date of this Agreement, the Board of Directors of the Company shall
propose to the stockholders of the Company, shall recommend approval of, and
shall solicit proxies voting to approve an amendment (the "Certificate
Amendment") to the Amended and Restated Certificate of Incorporation of the
Company, as amended, that, if adopted and approved by the requisite vote of
the stockholders of the Company, would amend the first sentence of Section
3 of the Seventh Article thereof in its entirety so it states as follows:
Subject to the rights, if any, of the holders of any series
of Preferred Stock to elect additional directors under circumstances
specified in a Preferred Stock Designation, newly created directorships
resulting from any increase in the number of Directors and any vacancies on
the Board resulting from death, resignation, disqualifications, removal or
other cause, will be filled solely by the affirmative vote of the majority
of the remaining Directors, then in office, even though less than a quorum
of the Board, or by a sole remaining Director; provided, however, that at the
sole option of the Board, effected by resolution of the Board of Directors,
one or more such vacancies or newly created directorships may be filled by
the stockholders at a meeting of the stockholders called by the Board of
Directors.
If the Certificate Amendment is effectively adopted and approved by the
stockholders of the Company, the Board of Directors shall make a conforming
amendment to the first sentence of By-Law 11 of the By-Laws of the Company.
9.6. The Holders shall have the right at their option to request
that the Company hold a meeting of the stockholders as provided herein by
delivery of a written request (the "Election Request") to the Secretary of
the Company at its principal executive offices not more than one hundred
twenty (120) nor less than ninety (90) days prior to the second anniversary
of the Distribution Date, which Election Request shall identify each of the
Holders making the Election Request and shall include the information they
would be required to give under By-Law 13 of the By-Laws of the Company as
in effect on the date hereof as if they were making nominations for positions
as directors at an annual meeting or the stockholders of the Company. An
Election Request shall be ineffective if it has not been executed by Holders
owning Registrable Securities constituting at least fifteen percent (15%) of
the outstanding Common Stock of the Company as of the ninetieth (90th) day
prior to the second anniversary of the Distribution Date and shall cease to
be effective if prior to the second anniversary of the Distribution Date the
Holders executing the Election Request cease to own registrable securities
constituting at least fifteen percent (15%) of the outstanding Common Stock
of the Company. If no effective Election Request is delivered to the
Secretary of the Company at the Company's principal executive offices not
more than on hundred twenty (120) nor less than ninety (90) days prior to
said second anniversary of the Distribution Date or if, prior to the second
anniversary of the Distribution Date, the Election Request ceases to be
effective, the Holders shall have no further rights under this Section.
9.7. Provided the Certificate Amendment has been adopted and
approved, upon receipt of an effective Election Request, unless and until it
becomes ineffective, the Board of Directors of the Company shall call a
meeting of the stockholders of the Company to beheld as closely as
practicable to the second anniversary of the Distribution Date (which meeting
may be the annual meeting of stockholders) (the "Stockholders Meeting"), at
which meeting the stockholders of the Company shall be entitled to vote to
fill vacancies and/or newly-created positions on the Board of Directors of
the Company, which vacancies and/or newly created positions, when filled,
will constitute a majority of the Company's Board of Directors.
9.8. Nothing in Section 9.6 or 9.7 hereof shall be deemed to
----------- ---
amend, modify or waive any provisions of the By-Laws of the Company,
including, without limitation, those regarding the manner in which
stockholders of the Company may make proposals or nominations at meetings of
such stockholders, all of which shall continue to be in full force and effect
with respect to the Stockholders Meeting, if it is held. The provisions
of By-Law 13 of the Company's By-Laws shall be in full force and effect with
respect to all nominations to fill vacancies at the Stockholders Meeting, if
it is held.
Section 10. Amendment, Modification and Waivers; Further
--------------------------------------------
Assurances.
- - ----------
10.1. This Agreement may be amended with the consent of the
Company, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company
shall have obtained the written consent of Holders owning Registrable
Securities possessing a majority in number of the Registrable Securities than
outstanding to such amendment, action or omission to act.
10.2. No waiver of any terms or conditions of this Agreement shall
operate as a waiver of any other breach of such terms and conditions or any
other term or condition, nor shall any failure to enforce any provision
hereof operate as a wavier of such provision or of any other provision
hereof. No written waiver hereunder, unless it by its own terms explicitly
provides to the contrary, shall be construed to effect a continuing waiver
of the provisions being waived and no such waiver in any instance shall
constitute a waiver in any other instance or for any other purpose or impair
the right of the party against whom such waiver is claimed in all other
instances or for all other purposes to require full compliance with such
provision.
10.3. Each of the parties hereto shall execute all such further
instruments and documents and take all such further action as any other party
hereto may reasonably require in order to effectuate the terms and purposes
of this Agreement.
Section 11. Assignment; Benefit. This Agreement and all of the
-------------------
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, permitted assigns, executors,
administrators or successors; provided, however, that except as specifically
-------- -------
provided herein with respect to certain matters, neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned or
delegated by the Company without the prior written consent of Holders owning
Registrable Securities possessing a majority in number of Registrable
Securities then outstanding on the date as of which such delegation or
assignment is to become effective. A Holder may Transfer its rights
hereunder to a successor in interest to the Registrable Securities owned by
such assignor only as permitted by Section 8.
---------
Section 12. Miscellaneous.
-------------
12.1. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
GIVING REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
12.2. Notices. All notices and requests given pursuant to this
-------
Agreement shall be in writing and shall be made by hand-delivery, first-class
mail (registered or certified, return receipt requested), confirmed facsimile
or overnight air courier guaranteeing next business day:
(a) If to MK Rail, to:
MK Rail Corporation
1200 Reedsdale Street
Pittsburgh, PA 15233
Attention: Chairman
With a copy to:
Michael A. Weiss, Esquire
Deopken Keevican & Weiss
37th Floor, USX Tower
600 Grant Street
Pittsburgh, PA 15219
(b) If to MKO or MKC, to:
Morrison Knudsen Corporation
720 Park Boulevard
Boise, Idaho
Attention: President
With a copy to:
Robert Dean Avery, Esq.
Jones, Day, Reavis & Pogue
Suite 4600
555 West Fifth Street
Los Angeles, CA 90013-1025
(c) and if to any other Holder, to:
the address set forth in the relevant
agreement in the form of Exhibit A
---------
whereby such party became bound by
the provisions of this Agreement.
Except as otherwise provided in this Agreement, the date of each such notice
and request shall be deemed to be, and the date on which each such notice and
request shall be deemed given shall be: at the time delivered, if personally
delivered or mailed; when receipt is acknowledged, if sent by facsimile; and
the next business day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next business day delivery.
12.3. Entire Agreement; Integration. This Agreement supersedes
-----------------------------
all prior agreements between or among any of the parties hereto with respect
to the subject matter contained herein, and this agreement embodies the
entire understanding among the parties relating to such subject matter.
12.4. Injunctive Relief. Each of the parties hereto acknowledges
-----------------
that in the event of a breach by any of them of any material provision of
this Agreement, the aggrieved party may be without an adequate remedy at law.
Each of the parties therefore agrees that in the event of such a breach
hereof the aggrieved party may elect to institute and prosecute proceedings
in any court of competent jurisdiction to enforce specific performance or to
enjoin the continuing breach hereof. By seeking or obtaining any such
relief, the aggrieved party shall not be precluded from seeking or obtaining
any other relief to which it may be entitled.
12.5. Section Headings. Section headings are for convenience of
----------------
reference only and shall not affect the meaning of any provision of this
Agreement.
12.6. Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be an original, and all of which shall
together constitute one and the same instrument. All signatures need not be
on the same counterpart.
12.7. Filing. A copy of this Agreement and of all amendments
------
thereto shall be filed at the principal executive office of the Company with
the Secretary of the Company.
12.8. Termination. This Agreement may be terminated at any time
-----------
by a written instrument signed by the parties hereto. Unless sooner
terminated in accordance with the immediately preceding sentence, the
parties' obligations under this Agreement (other than Section 7 hereof) shall
---------
terminate in their entirety on the fifth anniversary of the Distribution
Date.
12.9. Attorneys' Fees. In any action or proceeding brought to
---------------
enforce any provision of this Agreement, the successful party shall be
entitled to recover reasonable attorneys' fees (including any fees incurred
in any appeal) in addition to its costs and expenses and any other available
remedy.
12.10. No Third Party Beneficiaries. Nothing herein expressed or
----------------------------
implied is intended to confer upon any person, other than the parties hereto
or their respective permitted assigns, successors, heirs and legal
representative and other than parties entitled to indemnification under
Section 7 hereof, any rights, remedies, obligations or liabilities under or
- - ---------
by reason of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
MK RAIL CORPORATION
By:___________________________
John C. Pope, Chairman
MORRISON KNUDSEN CORPORATION
By:___________________________
Name:
Title:
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
MK RAIL CORPORATION
By:___________________________
John C. Pope, Chairman
MORRISON KNUDSEN CORPORATION
By:___________________________
Stephen G. Hanks
Executive Vice President,
Chief Legal Officer and
Secretary
EXHIBIT A
AGREEMENT TO BE BOUND
BY THE STOCKHOLDERS AGREEMENT
-----------------------------
The undersigned, being the proposed transferee of ____ shares of
the common stock, $.01 par vale per share (the "Common Stock"), of MK Rail
Corporation, a Delaware corporation (the "Company"), as a condition to the
receipt of such Common Stock, acknowledges that matters pertaining to the
registration, voting and transfer of such Common Stock, acknowledges that
matters pertaining to the registration, voting and transfer of such Common
Stock is governed by the Stockholders Agreement dated as of _______, 1996
(the "Agreement") initially among the Company and Morrison Knudsen
Corporation, an Ohio corporation, and the undersigned hereby (1) acknowledges
receipt of a copy of the Agreement, and (2) agrees to be bound as a Holder
by the terms of the Agreement, as the same has been or may be amended from
time to time.
Agreed to this __ day of __________, ______.
_________________________
______________________________*
______________________________*
*Include address for notices.
DRAFT - 7/24/96
AMENDMENT TO STOCKHOLDERS AGREEMENT
-----------------------------------
This Amendment to Stockholders Agreement (the "Amendment"), dated as of
July __, 1996, between MK Rail Corporation, a Delaware corporation ("MK
Rail"), and Morrison Knudsen Corporation, an Ohio corporation ("MKO").
WHEREAS, in connection with the reorganization of Morrison Knudsen
Corporation, a Delaware corporation ("MK"), in a case filed under Title 11
of the United States Bankruptcy Code, as amended (the "Bankruptcy Code"), MK
Rail and MKO executed and delivered a Stockholders Agreement (the
"Agreement") dated as of June 20, 1996; and
WHEREAS, the Agreement contains certain agreements regarding the
registration and voting of restricted shares of common stock of MK Rail held
by MKO which stock it was contemplated would be distributed to certain
creditors of MK and MKO; and
WHEREAS, as a result of negotiations between MK and equity holders of
MK, it is contemplated that MK's plan of reorganization will be amended so
that it provides for rights or options to be granted to equity holders of MK
which will permit them, subject to satisfaction of certain conditions, to
receive a portion of the restricted shares of common stock of MK Rail held
by MKO; and
WHEREAS, MK has made a motion (an "1145 Motion") requesting that the
Bankruptcy Court having jurisdiction over MK's bankruptcy proceeding issue
an order (an "1145 Order") providing that the offering, issuance, sale and
distribution by MKO of the common stock of MK Rail qualifies for the
exemption (the "1145 Exemption"), available under Section 1145(a) of the
Bankruptcy Code, from the registration requirements of the Securities Act of
1933, as amended; and
WHEREAS, the Securities and Exchange Commission has stated that it will
not object to the 1145 Motion; and
WHEREAS, the parties wish to amend the Agreement as set forth herein to
make certain changes thereto necessitated by the possibility that equity
holders of MK may acquire some restricted shares of Common Stock and that the
1145 Motion has been made;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The term "Rights Plan Amendments" is hereby amended and restated in
its entirety so it means the Second Amendment to Rights Agreement dated as
of June 20, 1996 and the Third Amendment to Rights Agreement of even date
herewith between MK Rail and Chase Mellon Shareholder Services, L.L.C.,
formerly known as Chemical Mellon Shareholders Services, L.L.C.
2. The following language is added at the end of the last sentence of
the definition of "Registrable Securities" in Section 1.1 of the Agreement:
or in "ordinary trading transaction" within the meaning of Section
1145(b)(1) of the United States Bankruptcy Code, as amended (the "Bankruptcy
Code").
3. The reference to "creditors of MK" in the definition of "Shares" in
Section 1.1 of the Agreement is hereby changed to a reference to "persons."
4. The first sentence of Section 8 of the Agreement is hereby amended
in its entirety to read as follows:
Notwithstanding anything in this Agreement to the contrary, no
Holder may Transfer any shares of Common Stock to any Person, except as set
forth in the last paragraph of this Section 8, unless prior to any
---------
such Transfer such Person has executed an agreement (in the form
of Exhibit A hereto) to be bound, or has otherwise been effectively bound
---------
pursuant to the Plan, by the provisions of this Agreement.
5. The last sentence of Section 8 of the Agreement is hereby amended,
restated and replaced in its entirety by the following sentences:
MKO may distribute shares of Common Stock to equity holders of MK
provided that (a) the 1145 Order has been issued and is in full force and
effect and is not the subject of a pending appeal at the time the Common
Stock is distributed and (b) each equity holder receiving such Common Stock
has executed an agreement (in the form of Exhibit A hereto) to be bound, or
---------
has otherwise been effectively bound pursuant to the Plan, by the provisions
of this Agreement. No distribution of Common Stock to equity holders or any
other party in a distribution that qualifies for the 1145 Exemption shall
excuse any party from or be deemed to constitute a release of the transfer
restrictions and legending requirements set forth in this Section 8, except
---------
as set forth in the last sentence of this paragraph, and all Common Stock so
distributed shall after such distribution be subject to said transfer
restrictions and legend requirements as well as all other terms and
conditions hereof. The foregoing transfer restrictions and legend shall be
removed in connection with any sale of Common Stock to the public pursuant
to an effective registration statement or pursuant to Rule 144 or any
similar rule promulgated by the Commission under the Securities Act, or in
"ordinary trading transactions" within the meaning of Section 1145(b)(1) of
the Bankruptcy Code, in each case so long as the specific identities of the
Transferees are not known to the Holders selling such shares prior to such
sale and so long as the Transferees are not assigned and do not receive any
rights under this Agreement. The Company may also put following legend on
certificates of stock held by Transferees of MKO and their Transferees that
are bound to the terms of this Agreement:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR ANY STATE SECURITIES LAWS. SUCH SHARES OF STOCK MAY NOT BE TRANSFERRED
EXCEPT (1) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, (2) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAW,
OR (3) IF THE STOCK HAS BEEN RECEIVED BY THE HOLDER HEREOF IN A DISTRIBUTION
THAT QUALIFIES FOR THE EXEMPTION, AVAILABLE UNDER SECTION 1145(A) OF THE
UNITED STATES BANKRUPTCY CODE, AS AMENDED (THE "BANKRUPTCY CODE"), TO THE
REGISTRATION REQUIREMENTS OF THE ACT, IN ORDINARY TRADING TRANSACTIONS WITHIN
THE MEANING OF SECTION 1145(b)(1) OF THE BANKRUPTCY CODE.
6. All terms and provisions of the Agreement, as amended hereby, shall
continue to be in full force and effect.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the day and year first set forth above.
MK RAIL CORPORATION
By:_________________________________
Title:_______________________________
MORRISON KNUDSEN CORPORATION
By:_________________________________
Title:_______________________________
