Exhibit 4.1
UNITED STATES STEEL CORPORATION
OFFICER'S CERTIFICATE
May 20, 2003
I, the undersigned officer of United States Steel Corporation (the
"Company"), do hereby certify that I am an Authorized Officer of the Company as
such term is defined in the Indenture (as defined herein). I am delivering this
certificate pursuant to the authority granted in the Board Resolutions of the
Company dated May 14, 2003, and Sections 201 and 301 of the Indenture dated as
of May 20, 2003, as heretofore amended and supplemented to the date hereof (as
heretofore amended and supplemented, the "Indenture"), between the Company and
The Bank of New York, as Trustee (the "Trustee"). Section 1(u)(ii) of this
Officer's Certificate sets forth definitions of capitalized terms used herein.
Terms used herein and not otherwise defined herein shall have the meanings
assigned to them in the Indenture. Based upon the foregoing, I hereby certify on
behalf of the Company as follows:
1. The terms and conditions of the Securities described in this Officer's
Certificate are as follows (the lettered subdivisions set forth in this
Paragraph 1 corresponding to the numbered subdivisions of Section 301 of the
Indenture):
(a) Title. The Securities of the series to be issued under the Indenture
shall be designated "9 3/4% Senior Notes due 2010" (the "2010 Notes").
(b) Amount. (i) The 2010 Notes shall be initially authenticated and
delivered in the aggregate principal amount of $450,000,000. Subject to
the provisions of Section 1(r)(ix), the Company may create and issue
Additional Notes. The Additional Notes will rank equally with the initial
2010 Notes and otherwise be similar in all respects so that the Additional
Notes shall be consolidated and form a single series with the initial 2010
Notes (together with the Additional Notes, the "Notes"). The Trustee shall
authenticate Additional Notes upon receipt of a Corporation Order and
Opinion of Counsel, both meeting the requirements of Section 303 of the
Indenture, specifying the amount of Additional Notes to be authenticated.
(ii) The initial 2010 Notes and any Additional Notes shall vote and
consent together on all matters as one class and none of the initial 2010
Notes or the Additional Notes shall have the right to vote or consent as a
separate class on any matter.
(c) Payment of Interest. Interest on the 2010 Notes shall be payable to
the Persons in whose names such Securities are registered at the close of
business on the Regular Record Date for such interest, except as otherwise
expressly provided in the form of such Securities attached hereto as
Exhibit A.
(d) Maturity. The 2010 Notes shall mature and the principal thereof shall
be due and payable together with all accrued and unpaid interest thereon
on May 15, 2010.
(e) Interest. Interest on the 2010 Notes shall be payable as follows,
except as otherwise expressly provided in the form of such Securities
attached hereto as Exhibit A:
(i) The Company shall pay accrued interest semi-annually on each May
15 and November 15 commencing November 15, 2003 or if any such day is not
a Business Day, on the next Business Day. The Company shall pay interest
on overdue principal at 1% per annum in excess of the rate borne by the
Notes to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
(ii) By at least 11:00 a.m. prevailing Eastern (U.S.) time on the
date on which any principal of or interest on any Note is due and payable,
the Company shall irrevocably deposit with the Trustee or the Paying Agent
money sufficient to pay such principal and/or interest. The Company will
pay interest (except defaulted interest) to the Persons who are registered
Holders of Notes at the close of business on May 1 or November 1 next
preceding the interest payment date (the "Regular Record Date") even if
Notes are cancelled, repurchased or redeemed after the record date and on
or before the interest payment date. Holders must surrender Notes to a
Paying Agent to collect principal payments. The Company will pay principal
and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts by wire transfer of
immediately available funds to the U.S. dollar accounts with a bank in the
United States specified by the Holder hereof or, if no such account is
specified, by mailing a check to the Holder's registered address.
(f) Payments; Security Registrar. If a Holder of 2010 Notes has given wire
transfer instructions to the Company and the Paying Agent prior to the
fifth day preceding the related Regular Record Date (or, in the case of
principal or premium, the fifth day preceding the date such principal or
premium is due), the Company shall pay all principal, interest and
premium, if any, on that Holder's 2010 Notes in accordance with such
instructions. The Company's office in Pittsburgh shall initially be the
place at which (i) the principal, interest and premium, if any, on the
2010 Notes shall be payable (other than payments made in accordance with
the first sentence of this paragraph (f)), (ii) registration of transfer
of the 2010 Notes may be effected, (iii) exchanges of the 2010 Notes may
be effected and (iv) notices and demands to or upon the Company in respect
of the 2010 Notes and the Indenture may be served; and the Company shall
be the Security Registrar for the 2010 Notes; provided, however, that the
Company reserves the right to change, by one or more Officer's
Certificates, any such place or the Security Registrar; provided, however,
that there shall be only a single Security Registrar for the 2010 Notes.
(g) Optional Redemption.
(i) Optional Redemption. Except as set forth in clause (ii) of this
Section 1(g), the 2010 Notes shall not be redeemable at the Company's
option prior to May 15, 2006. On and after May 15, 2007, the Company may
redeem all or a part of the 2010 Notes upon not less than 30 nor more than
60 days' notice, at the Redemption Prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest, if
any, on the 2010 Notes redeemed, to the applicable Redemption Date, if
redeemed during the twelve-month period beginning on May 15 of the years
indicated below:
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YEAR PERCENTAGE
- ---- ----------
2007 104.875%
2008 102.4375%
2009 and thereafter 100.000%
(ii) Equity Claw-back. Notwithstanding the foregoing, at any time
prior to May 15, 2006, the Company may on any one or more occasions redeem
up to 35% of the aggregate principal amount of the 2010 Notes at a
Redemption Price of 109.75% of the principal amount, plus accrued and
unpaid interest, if any, to the Redemption Date, with the net cash
proceeds of one or more Public Equity Offerings, provided that at least
65% of the aggregate principal amount of 2010 Notes remains outstanding
immediately after the occurrence of such redemption (excluding 2010 Notes
held by the Company and its Subsidiaries); and provided further, that any
such redemption shall occur within 60 days of the date of the closing of
such offering.
(iii) Notice of Redemption. Notices of redemption shall be mailed by
first class mail at least 30 but not more than 60 days before the
Redemption Date to each Holder of 2010 Notes to be redeemed at its
registered address, except that redemption notices may be mailed more than
60 days prior to a Redemption Date if the notice is issued in connection
with a defeasance of the 2010 Notes or a satisfaction and discharge of the
2010 Notes under the Indenture. Notices of redemption may not be
conditional.
(iv) Selection of 2010 Notes to be Redeemed. In accordance with
Section 1103 of the Indenture, the following method is provided for the
selection of 2010 Notes to be redeemed and these procedures shall be
followed by the Security Registrar in the event of a redemption of the
2010 Notes pursuant to the provisions of this Officer's Certificate. If
less than all of the 2010 Notes are to be redeemed at any time, the
Security Registrar shall select 2010 Notes for redemption as follows:
(A) if the 2010 Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the 2010 Notes are listed; or
(B) if the 2010 Notes are not listed on any national securities
exchange, on a pro rata basis, by lot or by such method as the Trustee
deems fair and appropriate.
No 2010 Notes of $1,000 principal amount or less can be redeemed in
part.
(h) Mandatory Redemption. The Company is not required to make any
mandatory redemption or sinking fund payments with respect to the 2010
Notes.
(i) Denominations. The 2010 Notes are issuable only in denominations of
$1,000 and integral multiples of $1,000 in excess thereof.
(j) Not applicable.
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(k) Not applicable.
(l) Not applicable.
(m) Not applicable.
(n) Not applicable.
(o) Defeasance.
(i) General.
(A) For purposes of the 2010 Notes, this Section 1(o) (and not
Section 1302 or 1303 of the Indenture) sets forth the method by which the
2010 Notes shall be defeasible.
(B) Subject to Section 1(o)(i)(C) and Section 1(o)(ii), the Company
at any time may terminate (i) all of its obligations under the Notes and
the Indenture ("legal defeasance option") or (ii) its obligations under
Sections 1(r)(ii) and 1(r)(iii) and Sections 1(r)(v) through (xvi) and the
operation of Sections 1(u)(i)(A)(3) and 1(u)(i)(A)(4), 1(q)(vi), 1(q)(vii)
(but only with respect to a Significant Subsidiary), 1(q)(viii) (but only
with respect to a Significant Subsidiary) and 1(q)(ix) ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Notes may
not be accelerated because of an Event of Default specified in Section
1(q)(iv), 1(q)(vi), 1(q)(vii) (but only with respect to a Significant
Subsidiary), 1(q)(viii) (but only with respect to a Significant
Subsidiary), 1(q)(ix), or because of the failure of the Company to comply
with Sections 1(u)(i)(A)(3) or 1(u)(i)(A)(4).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.
(C) Notwithstanding clauses (A) and (B) above, the Company's
obligations in Sections 1(o)(v), 1(o)(vi), 1(p)(iii), 1(r)(i), 1(r)(iv)
and 1(r)(xvii) of this Officer's Certificate and Sections 306, 606, 607,
702, 703, 1001 and 1002 of the Indenture shall survive until the Notes
have been paid in full. Thereafter, the Company's obligations in Sections
1(o)(v) and 1(o)(vi) of this Officer's Certificate and Section 607 of the
Indenture shall survive.
(ii) Conditions to Defeasance.
The Company may exercise the legal defeasance option or the covenant
defeasance option only if:
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(A) the Company irrevocably deposits or causes to be deposited in
trust with the Trustee money or U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide cash at such times and in such
amounts as will be sufficient to pay principal and interest when due on
all outstanding Notes (except Notes replaced pursuant to Section 306) to
maturity or redemption, as the case may be;
(B) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all outstanding Notes (except Notes replaced pursuant to Section 306)
to maturity or redemption, as the case may be;
(C) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 1(q)(vii) or 1(q)(viii) with
respect to the Company occurs which is continuing at the end of the
period;
(D) the deposit does not constitute a default under any other
material agreement binding on the Company;
(E) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(F) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Noteholders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
(G) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Noteholders will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant defeasance and will be subject to
federal income tax on the same amounts and in the same manner and at the
same times as would have been the case if such deposit and covenant
defeasance had not occurred; and
(H) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Notes as contemplated by this Section 1(o)
have been complied with.
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Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date
in accordance with Article Eleven of the Indenture.
(iii) Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Section 1(o). It shall apply the
deposited money and the money from U.S. Government Obligations either
directly or through the Paying Agent as the Trustee may determine and in
accordance with this Indenture to the payment of principal of and interest
on the Notes.
(iv) Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any
time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon written request any money
held by them for the payment of principal or interest that remains
unclaimed for one year after such principal and interest have become due
and payable, and, thereafter, Noteholders entitled to the money must look
to the Company for payment as general creditors.
(v) Indemnity for Government Obligations.
The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or the principal and interest received on such U.S.
Government Obligations other than any such tax, fee or other charge which
by law is for the account of the Holders of the defeased Notes; provided
that the Trustee shall be entitled to charge any such tax, fee or other
charge to such Holder's account.
(vi) Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Section 1(o) by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to this Section 1(o) until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with this Section 1(o); provided, however, that, (a) if the
Company has made any payment of interest on or principal of any Notes
following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such
payment from the money or U.S. Government Obligations held by the Trustee
or Paying Agent and (b) unless otherwise required by any legal proceeding
or any order or judgment of any court or governmental authority, the
Trustee or Paying Agent shall return all such money and U.S. Government
Obligations to the Company promptly after
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receiving a written request therefor at any time, if such reinstatement of
the Company's obligations has occurred and continues to be in effect.
(p) Book-entry; Delivery and Form.
(i) Form and Dating.
The 2010 Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto. The 2010 Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each 2010 Note shall be dated the date of its authentication. The
2010 Notes shall be in denominations of $1,000 and integral multiples
thereof.
The terms and provisions contained in the 2010 Notes shall
constitute, and are hereby expressly made, a part of this Officer's
Certificate, and the Company, by its execution and delivery of this
Officer's Certificate, expressly agrees to such terms and provisions and
to be bound thereby. However, to the extent any provision of any 2010 Note
conflicts with the express provisions of this Officer's Certificate or the
Indenture, the provisions of this Officer's Certificate or the Indenture,
as applicable, shall govern and be controlling.
2010 Notes issued in global form shall be substantially in the form
of Exhibit A attached hereto (including the Global Note Legend and the
"Schedule of Exchanges in the Global Note" attached thereto). 2010 Notes
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto).
Each Global Note shall represent such aggregate principal amount of the
outstanding 2010 Notes as shall be specified therein and each shall
provide that it shall represent the aggregate principal amount of
outstanding 2010 Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding 2010 Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the aggregate principal amount of
outstanding 2010 Notes represented thereby shall be made by the Trustee,
the Depositary or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by
Section 1(p)(iv) of this Officer's Certificate.
(ii) Authentication.
The Trustee or an Authenticating Agent shall authenticate by
delivery and execution of a Trustee's Certificate of Authentication in the
form set forth in Section 205 of the Indenture (A) the 2010 Notes for
original issue on the Issue Date in the aggregate principal amount of
$450,000,000 (the "Original Notes") and (B) additional 2010 Notes for
original issue from time to time after the Issue Date in such principal
amounts as may be set forth in a Corporation Order (such additional 2010
Notes, together with the Original Notes, the "Initial Notes").
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(iii) Security Registrar, Paying Agent and Depositary.
The Company will initially act as the Security Registrar and Paying
Agent for the 2010 Notes. Upon the occurrence of an Event of Default set
forth herein, the Trustee shall serve as Paying Agent for the 2010 Notes.
The Company shall maintain a Place of Payment for the 2010 Notes pursuant
to Section 1002 of the Indenture.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes. The Trustee has
been appointed by DTC to act as Note Custodian with respect to the Global
Notes.
(iv) Transfer and Exchange.
(A) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Notes shall be exchanged by the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as
Depositary for the Global Notes or that it is no longer a
clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the
Company within 90 days after the date of such notice from the
Depositary;
(2) the Company in its sole discretion notifies the Trustee in
writing that it elects to cause issuance of the 2010 Notes in
certificated form; or
(3) a default entitling the holders of the Notes to accelerate the
maturity thereof has occurred and is continuing.
Upon the occurrence of any of the preceding events in (1), (2) or
(3) above, Definitive Notes shall be issued in such names as the
Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections
306 and 309 of the Indenture. Every 2010 Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this section, Sections 304, 305 and 306
of the Indenture, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged
for another 2010 Note other than as provided in this Section
1(p)(iv)(A), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 1(p)(iv)(B) of this
Officer's Certificate.
(B) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Officer's Certificate and the Applicable Procedures. In
connection with all transfers and exchanges of beneficial
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interests, the transferor of such beneficial interest must deliver to the
Security Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount equal
to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such
increase or (B) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depositary to the Security
Registrar containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in (B)(1) above. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes contained
in this Indenture and the Notes or otherwise applicable under the
Securities Act, the Security Registrar shall adjust the principal amount
of the relevant Global Note(s) pursuant to Section 1(p)(iv)(F) hereof.
(C) Transfer and Exchange of Beneficial Interests for Definitive
Notes. If any holder of a beneficial interest in a Global Note proposes to
exchange such beneficial interest for a Definitive Note or to transfer
such beneficial interest to a Person who takes delivery thereof in the
form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 1(p)(iv)(B) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 1(p)(iv)(F) hereof, and the Company shall execute and
the Trustee shall upon receipt of an Authentication Order authenticate and
(at the expense of the Company) deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 1(p)(iv)(C) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Security Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall (at the expense of the Company) deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered.
(D) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 1(p)(iv)(D), the Security Registrar
shall register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present
or surrender to the Security Registrar the Definitive Notes duly endorsed
or accompanied by a written instruction of transfer in form satisfactory
to the Security Registrar duly executed by such Holder or by his attorney,
duly authorized in writing. In addition, the requesting Holder shall
provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 1(p)(iv)(D).
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(E) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this
Officer's Certificate.
(1) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE OFFICER'S
CERTIFICATE UNDER THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN
CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
ARTICLE III OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 1(p)(iv)(A) OF THE OFFICER'S
CERTIFICATE UNDER THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 309 OF THE INDENTURE
AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY OR ANY SUCCESSOR THERETO."
Additionally, for so long as DTC is the Depositary with respect to
any Global Note, each such Global Note shall also bear a legend in
substantially the following form:
"UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AS DEFINED IN THE OFFICER'S CERTIFICATE UNDER THE INDENTURE
GOVERNING THIS NOTE), TO THE COMPANY OR ANY SUCCESSOR THERETO OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN."
(F) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed,
repurchased or canceled in whole and not in part, each such Global Note
shall be returned to or retained and canceled by the Trustee in accordance
with Section 309 of the Indenture. At any time prior to such cancellation,
if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who shall take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of 2010 Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note,
by the Trustee, the Note Custodian or the Depositary at the direction of
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the Trustee, to reflect such reduction; and if the beneficial interest is
being exchanged for or transferred to a Person who shall take delivery
thereof in the form of a beneficial interest in another Global Note, such
other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note, by the Trustee, the Note Custodian or by the
Depositary at the direction of the Trustee, to reflect such increase.
(G) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, subject to
Section 1(p)(iv) of this Officer's Certificate, the Company shall execute
and, upon the Company's order, the Trustee or an Authenticating Agent
shall authenticate Global Notes and Definitive Notes at the Security
Registrar's request.
(2) All certifications, certificates and Opinions of Counsel
required to be submitted to the Security Registrar pursuant to this
Section 1(p)(iv) to effect a transfer or exchange may be submitted by
facsimile.
(3) The Trustee and the Security Registrar shall have no obligation
or duty to monitor, determine or inquire as to whether any Person is or is
not a Person described in Section 1(p)(iv) of this Officer's Certificate
or under applicable law (other than the Trust Indenture Act) with respect
to any transfer of any interest in any 2010 Note (including any transfers
between or among Participants or beneficial owners of interests in any
Global Note) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by the terms of, this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
(q) Events of Default. Each of the following events constitutes an "Event
of Default" and replaces the Events of Default set forth in the indenture:
(i) a default in any payment of interest on any 2010 Note when the
same becomes due and payable, and such default continues for a period of
30 days;
(ii) a default in the payment of principal of any 2010 Note when the
same becomes due and payable at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration of acceleration or
otherwise;
(iii) the failure by the Company to comply with its obligations
under Section 1(u)(i) herein;
(iv) the failure by the Company to comply with Section 1(r)(ii)
hereof, any of Sections 1(r)(vii) through 1(r)(xvi) (other than a failure
to repurchase Notes when required pursuant to Section 1(r)(viii) or
1(r)(xii), which failure shall constitute an Event of Default under
Section 1(q)(ii)) and such failure continues for 30 days after the notice
specified below;
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(v) the failure by the Company to comply with any of its agreements
in the 2010 Notes or the Indenture (other than those referred to in (i),
(i), (iii) or (iv) above) and such failure continues for 60 days after the
notice specified below;
(vi) the failure by the Company or any Significant Subsidiary of the
Company to pay any Indebtedness within any applicable grace period
provided in such Indebtedness after final maturity or the acceleration of
any such Indebtedness by the holders thereof because of a default if the
total amount of such Indebtedness unpaid or accelerated exceeds $50
million;
(vii) the Company or a Significant Subsidiary of the Company
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant Subsidiary
of the Company in an involuntary case
(B) appoints a Custodian of the Company or any Significant
Subsidiary of the Company or for any substantial part of its property of
the Company or any Significant Subsidiary; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary of the Company;
or any similar relief is granted under any foreign laws) and the order,
decree or relief remains unstayed and in effect for 90 days; or
(ix) any judgment or decree for the payment of money in excess of
$50 million is rendered against the Company or any Significant Subsidiary
of the Company, remains outstanding for a period of 60 days following such
judgment and is not discharged, waived or stayed within 10 days after
notice.
However, a default under clauses (iv) and (v) will not constitute an Event of
Default until the Trustee or the holders of 25% in principal amount of the
outstanding 2010 Notes notify the
12
Company of the default and the Company does not cure such default within the
time specified after receipt of such notice.
(r) Certain Covenants In addition to the covenants set forth in Sections
1001, 1002 and 1003 of the Indenture, but in lieu of Sections 1004 through
1010 of the Indenture, the Company is subject to the following covenants:
(i) Corporate Existence. Except as otherwise permitted by Sections
1(r)(viii) and 1(u)(i) hereof, the Company shall do or cause to be done,
at its own cost and expense, all things necessary to preserve and keep in
full force and effect its corporate existence and the corporate,
partnership or limited liability company existence of each of its
Significant Subsidiaries in accordance with the respective organizational
documents of each such Subsidiary and the material rights (charter and
statutory) and franchises of the Company and each such Subsidiary;
provided, however, that the Company shall not be required to preserve,
with respect to itself, any material right or franchise and, with respect
to any of its Significant Subsidiaries, any such existence, material right
or franchise, if the Board of Directors of the Company shall determine in
good faith (such determination to be evidenced by a board resolution),
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and the Subsidiaries, taken as a whole.
(ii) SEC Reports. The Company will file with the SEC such annual
reports and such information, documents and other reports as are specified
in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such information, documents and
other reports to be so filed and provided at the times specified for the
filings of such information, documents and reports under such Sections.
(iii) Compliance Certificate.
(A) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, an Officers' Certificate, one of the signers
of which is the chief executive, chief financial or chief accounting
officer, stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company and its Subsidiaries have kept, observed, performed and fulfilled
its obligations under this Indenture, and further stating, as to such
Officers signing such certificate, that to the best of his or her
knowledge the Company and its Subsidiaries have kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and are
not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events of Default of
which he or she may have knowledge and what action the Company and its
Subsidiaries are taking or propose to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest on the Notes are prohibited (or if such event has occurred, a
description of the event and what action each is taking or proposes to
take with respect thereto).
13
(B) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default or Event of Default an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.
(C) The Company shall comply with Section 314(a)(4) of the Trust
Indenture Act.
(iv) Stay, Extension and Usury Laws. The Company covenants that it
will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture. The Company hereby
expressly waives all benefit or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law has been
enacted.
(v) Payment of Taxes and Other Claims. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to
taxes) levied or imposed upon it or any of its Restricted Subsidiaries or
properties of it or any of its Restricted Subsidiaries and (ii) all lawful
claims for labor, materials and supplies that, if unpaid, might by law
become a Lien upon the property of it or any of its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity of which
is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the
extent required under GAAP, have been taken.
(vi) Maintenance of Properties and Insurance.
(A) The Company shall, and shall cause each of its Significant
Subsidiaries to, maintain its material properties in good working order
and condition (subject to ordinary wear and tear) and make or cause to be
made all necessary repairs, renewals, replacements, additions, betterments
and improvements thereto and actively conduct and carry on its business,
all as in the reasonable judgment of the Company is necessary so that the
business carried on by the Company and its Significant Subsidiaries may be
actively conducted; provided, however, that nothing in this Section
1(r)(vi) shall prevent the Company or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its properties, if
such discontinuance is, in the good faith judgment of the Company or the
Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect
to the Holders.
(B) The Company shall provide or cause to be provided, for itself
and each of its Significant Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good
faith judgment of the Company, are adequate and
14
appropriate for the conduct of the business of the Company and such
Subsidiaries in a prudent manner, with reputable insurers or with the
government of the United States of America, any state thereof or any
agency or instrumentality of such governments, in such amounts, with such
deductibles, and by such methods as shall be customary, in the good faith
judgment of the Company, for companies similarly situated in the industry.
(vii) Investment Grade Rating.
Following the first day:
(a) the Notes have an Investment Grade Rating from both of
the Rating Agencies, and
(b) no Default has occurred and is continuing under the
Indenture,
the Company and its Restricted Subsidiaries will not be subject to
Sections 1(r)(ix), (x), (xi), (xii), (xiii), (xiv) and clause (3) of
Section 1(u)(i)(A) (collectively, the "Suspended Covenants").
The Company will notify the Trustee by delivery of an Officer's
Certificate of the suspension of the Suspended Covenants. In the event
that the Company and its Restricted Subsidiaries are not subject to the
Suspended Covenants for any period of time as a result of the preceding
sentence, and subsequently one or both of the Rating Agencies withdraws
its rating or downgrades the rating assigned to the Notes below an
Investment Grade Rating, then the Company and the Restricted Subsidiaries
will thereafter again be subject to the Suspended Covenants, and
compliance with the Suspended Covenants with respect to Restricted
Payments made after the time of such withdrawal or downgrade will be
calculated in accordance with Section 1(r)(x) as though such section had
been in effect since the date the Notes were originally issued.
(viii) Change of Control.
Upon the occurrence of a Change of Control, each Holder shall have
the right to require that the Company repurchase such Holder's Notes at a
purchase price in cash equal to 101% of the principal amount thereof on
the date of purchase plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment
date).
Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder at its registered address with a copy to the
Trustee (the "Change of Control Offer") stating:
(a) that a Change of Control has occurred and that such Holder has
the right to require us to purchase such Holder's Notes at a
purchase price in cash equal to 101% of the principal amount
thereof on the date of purchase, plus accrued and unpaid
interest, if any, to the date of purchase (subject to the
right of Holders of record on the relevant record date to
receive interest on the relevant interest payment date);
15
(b) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma
historical income, cash flow and capitalization, in each case
after giving effect to such Change of Control);
(c) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(d) the instructions, as determined by the Company, consistent
with this Section 1(r)(viii), that a Holder must follow in
order to have its Notes purchased.
The Company shall not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in the Indenture applicable to a Change of Control
Offer made by us and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Notes as a result
of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this
Section 1(r)(viii), the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached
its obligations under this Section 1(r)(viii) by virtue of its compliance
with such securities laws or regulations.
(ix) Limitation on Indebtedness.
(A) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided,
however, that the Company shall be entitled to Incur Indebtedness if, on
the date of such Incurrence and after giving effect thereto on a pro forma
basis no Default has occurred and is continuing and, the Consolidated
Coverage Ratio exceeds 2.0 to 1.
(B) Notwithstanding the foregoing paragraph (A), the Company and the
Restricted Subsidiaries shall be entitled to Incur any or all of the
following Indebtedness:
(1) Indebtedness Incurred by the Company, any Financing Entity and
any Foreign Restricted Subsidiary pursuant to any Credit
Facilities, provided, however, that, immediately after giving
effect to any such Incurrence, the aggregate principal amount
of all Indebtedness Incurred under this clause (i) and then
outstanding does not exceed the greater of (A) $750 million
less the sum of all principal payments with respect to such
Indebtedness pursuant to Section 1(r)(xii)(B)(3)(a) and (B)
the sum of (x) 60% of the book value of the inventory of the
Company and its Restricted Subsidiaries and (y) 85% of the
book value of the accounts receivable of the Company and its
Restricted Subsidiaries;
16
(2) Indebtedness owed to and held by the Company or a Wholly Owned
Subsidiary; provided, however, that (A) any subsequent
issuance or transfer of any Capital Stock which results in any
such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of such Indebtedness
(other than to the Company or a Wholly Owned Subsidiary) shall
be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the obligor thereon and (B) if the Company is
the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of
all obligations with respect to the Notes;
(3) the Notes (other than any Additional Notes) and any other
Indebtedness of the Company or any Restricted Subsidiary
outstanding on the Issue Date;
(4) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Subsidiary
was acquired by the Company (other than Indebtedness Incurred
in connection with, or to provide all or any portion of the
funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to
which such Subsidiary became a Subsidiary or was acquired by
the Company); provided, however, that on the date of such
acquisition and after giving pro forma effect thereto, the
Company would have been able to Incur at least $1.00 of
additional Indebtedness pursuant to Section 1(r)(ix)(A);
(5) Industrial Revenue Bond Obligations, so long as the aggregate
principal amount of all Industrial Revenue Bond Obligations
(inclusive of any in respect of which the Company becomes
directly or indirectly liable pursuant to the Financial
Matters Agreement) does not exceed $600 million;
(6) Indebtedness to Marathon Incurred pursuant to the Financial
Matters Agreement in respect of Capital Lease Obligations, in
an aggregate principal amount not to exceed $92 million;
(7) Indebtedness to Marathon Incurred pursuant to the Financial
Matters Agreement in respect of Guarantees of Marathon in an
aggregate principal amount not to exceed $145 million;
(8) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 1(r)(ix)(A) or pursuant to clause (3), (4)
or (6) of this Section 1(r)(ix)(B) or this clause (8);
provided, however, that to the extent such Refinancing
Indebtedness directly or indirectly Refinances Indebtedness of
a Subsidiary Incurred pursuant to clause (4) of this Section
1(r)(ix)(B), such Refinancing Indebtedness shall be Incurred
only by such Subsidiary or by the Company;
17
(9) Hedging Obligations directly related to Indebtedness permitted
to be Incurred by the Company pursuant to the Indenture or to
mitigate currency or business risk;
(10) Obligations in respect of performance, bid and surety bonds
and completion guarantees provided by the Company or any
Restricted Subsidiary in the ordinary course of business;
(11) Indebtedness arising from overdraft conditions honored by a
bank or other financial institution in the ordinary course of
business; provided, however, that such Indebtedness is
extinguished within two Business Days of its Incurrence;
(12) Guarantees by the Company of obligations of any of its joint
ventures in an aggregate amount not to exceed $100 million;
(13) Subordinated Obligations not to exceed $200 million which (x)
are convertible into equity securities of the Company, (y)
have a Stated Maturity after the first anniversary of the
Stated Maturity of any series of Notes then outstanding and
(z) have an Average Life that is greater than the Average Life
of any series of Notes then outstanding;
(14) Attributable Debt related to Sale/Leaseback Transactions in an
amount not to exceed $150 million;
(15) Purchase Money Indebtedness and Capital Lease Obligations
Incurred to acquire property in the ordinary course of
business in an aggregate amount not to exceed $75 million for
the year ending July 27, 2003, $75 million for the year ending
July 27, 2004 and $50 million in each of the years thereafter;
and
(16) Indebtedness of the Company and its Restricted Subsidiaries in
an aggregate principal amount which, when taken together with
all other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the date of such Incurrence (other
than Indebtedness permitted by clauses (1) through (15) of
this Section 1(r)(ix)(B) above or Section 1(r)(ix)(A)) does
not exceed $150 million.
(C) Notwithstanding the foregoing, the Company shall not incur any
Indebtedness under Section 1(r)(ix)(B) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations of the
Company unless such Indebtedness shall be subordinated to the Notes to at
least the same extent as such Subordinated Obligations.
(D) For purposes of determining compliance with this Section
1(r)(ix), in the event that an item of Indebtedness meets the criteria of
more than one of the types of Indebtedness described above, the Company,
in its sole discretion, (1) shall classify such item of Indebtedness at
the time of Incurrence and will be entitled to either include the
18
amount and type of such Indebtedness in only one of the above clauses or
divide and classify such item of Indebtedness in more than one of the
types of Indebtedness described above and (2) will be entitled from time
to time to reclassify all or a portion of such item of Indebtedness
classified in one of the clauses in Section 1(r)(ix)(B) into another
clause in Section 1(r)(ix)(B) that it meets the criteria of.
(E) For purposes of determining compliance with any U.S. dollar
restriction on the Incurrence of Indebtedness where the Indebtedness
Incurred is denominated in a different currency, the amount of such
Indebtedness shall be the U.S. Dollar Equivalent determined on the date of
the Incurrence of such Indebtedness, provided, however, that if any such
Indebtedness denominated in a different currency is subject to a Currency
Agreement with respect to U.S. dollars covering all principal, premium, if
any, and interest payable on such Indebtedness, the amount of such
Indebtedness expressed in U.S. dollars shall be as provided in such
Currency Agreement. The principal amount of any Refinancing Indebtedness
Incurred in the same currency as the Indebtedness being Refinanced shall
be the U.S. Dollar Equivalent, as appropriate, of the Indebtedness
Refinanced, except to the extent that (i) such U.S. Dollar Equivalent was
determined based on a Currency Agreement, in which case the Refinancing
Indebtedness shall be determined in accordance with the preceding
sentence, and (ii) the principal amount of the Refinancing Indebtedness
exceeds the principal amount of the Indebtedness being Refinanced, in
which case the U.S. Dollar Equivalent of such excess shall be determined
on the date such Refinancing Indebtedness is Incurred.
(x) Limitation on Restricted Payments.
(A) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the
time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company is not entitled to Incur an additional $1.00 of
Indebtedness pursuant to Section 1(r)(ix)(A); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since July 27, 2001 (other than dividends
on common stock paid prior to the Issue Date) would exceed the
sum of (without duplication):
(a) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following
the fiscal quarter during which the July 27, 2001 occurs
to the end of the most recent fiscal quarter for which
financial results are publicly available prior to the
date of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100%
of such deficit); plus
19
(b) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock
(other than Disqualified Stock) subsequent to July 27,
2001 (other than an issuance or sale to a Subsidiary of
the Company and other than an issuance or sale to an
employee stock ownership plan or to a trust established
by the Company or any of its Subsidiaries for the
benefit of their employees) and 100% of any cash capital
contribution received by the Company from its
shareholders subsequent to July 27, 2001; plus
(c) the amount by which Indebtedness of the Company (other
than Subordinated Obligations) is reduced on the
Company's balance sheet upon the conversion or exchange
(other than by a Subsidiary of the Company) subsequent
to July 27, 2001 of any Indebtedness of the Company
convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company (less the amount
of any cash, or the fair value of any other property,
distributed by the Company upon such conversion or
exchange); plus
(d) an amount equal to the sum of (i) the net reduction in
the Investments (other than Permitted Investments) made
by the Company or any Restricted Subsidiary in any
Person resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds
realized on the sale of such Investment and proceeds
representing the return of capital (excluding dividends
and distributions), in each case received by the Company
or any Restricted Subsidiary, and (ii) to the extent
such Person is an Unrestricted Subsidiary, the portion
(proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets
of such Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, however, that the foregoing sum
shall not exceed, in the case of any such Person or
Unrestricted Subsidiary, the amount of Investments
(excluding Permitted Investments) previously made (and
treated as a Restricted Payment) by the Company or any
Restricted Subsidiary in such Person or Unrestricted
Subsidiary.
(B) The preceding provisions shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds of
the substantially concurrent sale of, or made by exchange for,
Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary of
the Company or an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the
benefit of their employees) or a substantially concurrent cash
capital contribution received by the Company from its
shareholders; provided, however, that (A) such Restricted
Payment shall
20
be excluded in the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such sale or such
cash capital contribution (to the extent so used for such
Restricted Payment) shall be excluded from the calculation of
amounts under clause (3)(b) of paragraph (A) above;
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated
Obligations made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Indebtedness which is
permitted to be Incurred under Section 1(r)(ix); provided,
however, that such purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value shall
be excluded in the calculation of the amount of Restricted
Payments;
(3) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would
have complied with this Section 1(r)(x); provided, however,
that at the time of payment of such dividend, no other Default
shall have occurred and be continuing (or result therefrom);
provided further, however, that such dividend shall be
included in the calculation of the amount of Restricted
Payments;
(4) so long as no Default has occurred and is continuing, the
repurchase or other acquisition of shares of Capital Stock of
the Company or any of its Subsidiaries from employees, former
employees, directors or former directors of the Company or any
of its Subsidiaries (or permitted transferees of such
employees, former employees, directors or former directors),
pursuant to the terms of the agreements (including employment
agreements) or plans (or amendments thereto) approved by the
Board of Directors under which such individuals purchase or
sell or are granted the option to purchase or sell, shares of
such Capital Stock; provided, however, that the aggregate
amount of such repurchases and other acquisitions (other than
any acquisition of shares of common stock of the Company that
are used as payment for the exercise price of outstanding
options) shall not exceed $5.0 million in any calendar year;
provided further, however, that such repurchases and other
acquisitions shall be excluded in the calculation of the
amount of Restricted Payments;
(5) so long as no Default has occurred and is continuing, the
declaration and payment of one or more dividends on the common
stock of the Company with respect to the period ending on
December 31, 2003 in an aggregate amount not to exceed $14.0
million; provided that such dividends shall be excluded in the
calculation of the amount of Restricted Payments;
(6) so long as no Default has occurred and is continuing, any
Restricted Payment which, together with all other Restricted
Payments made pursuant to this clause (6) on or after July 27,
2001, does not exceed $30 million; provided, however, that
such Restricted Payments shall be included in the calculation
of the amount of Restricted Payments; and
21
(7) so long as no Default has occurred and is continuing, the
declaration and payment of dividends on the Company's 7.00%
Series B Mandatory Convertible Preferred Shares pursuant to
their terms; provided that such dividends shall be excluded in
the calculation of the amount of Restricted Payments.
(xi) Limitation on Restrictions on Distributions from Restricted
Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions
on its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (ii) make any loans or advances to the
Company or (iii) transfer any of its property or assets to the Company,
except:
(A) with respect to clause (i), (ii) and (iii): (1) any encumbrance
or restriction pursuant to an agreement in effect at or entered into on
the Issue Date; (2) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in, or to provide all
or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by
the Company) and outstanding on such date; (3) any encumbrance or
restriction pursuant to an agreement effecting a Refinancing of
Indebtedness Incurred pursuant to an agreement referred to in clause (1)
or (2) of clause (A) of this Section 1(r)(xi) or this clause (3) or
contained in any amendment to an agreement referred to in clause (1) or
(2) of clause (A) of this Section 1(r)(xi) or this clause (3); provided,
however, that the encumbrances and restrictions with respect to such
Restricted Subsidiary contained in any such refinancing agreement or
amendment are no less favorable to the Noteholders than encumbrances and
restrictions with respect to such Restricted Subsidiary contained in such
predecessor agreements; and
(B) with respect to clause (iii) only: (1) any such encumbrance or
restriction consisting of customary nonassignment provisions in leases
governing leasehold interests to the extent such provisions restrict the
transfer of the lease or the property leased thereunder; (2) restrictions
contained in security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements or mortgages;
and (3) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all
or substantially all the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition.
(xii) Limitation on Sales of Assets and Subsidiary Stock.
(A) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, sell, transfer or otherwise dispose
of (collectively, a "disposition")
22
any Capital Stock of any Person that owns, directly or indirectly, all or
a significant portion of the Tubular Business, unless:
(1) the Company or such Restricted Subsidiary receives
consideration at the time of such disposition at least equal
to the fair market value (including as to the value of all
non-cash consideration), as determined in good faith by the
Board of Directors, of the Capital Stock subject to such
disposition;
(2) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash
or cash equivalents; and
(3) an amount equal to 75% of the Net Available Cash from such
disposition (after giving effect to the consummation of offers
to repurchase required under the 10 -3/4% Notes Indenture) is
applied by the Company (or such Restricted Subsidiary, as the
case may be) to make an offer to the holders of the Notes to
purchase Notes pursuant to and subject to the conditions
contained in the Indenture within 30 days from the later of
the date of such disposition (after giving effect to the
consummation of offers to repurchase required under the 10
-3/4% Notes Indenture) or the receipt of such Net Available
Cash; provided, however, that the Company or such Restricted
Subsidiary shall permanently retire such Notes.
Pending application of Net Available Cash pursuant to this paragraph
(A), such Net Available Cash shall be invested in Temporary Cash
Investments or applied to temporarily reduce indebtedness under Credit
Facilities.
(B) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any other Asset
Disposition unless:
(1) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least
equal to the fair market value (including as to the value of
all non cash consideration), as determined in good faith by
the Board of Directors of the Company of the shares and assets
subject to such Asset Disposition;
(2) with respect to Asset Dispositions other than Like-Kind
Exchanges or Excluded Real Property Sales, at least 75% of the
consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash
equivalents; and
(3) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such
Restricted Subsidiary, as the case may be): (a) first, to the
extent the Company elects (or is required by the terms of any
Indebtedness), to prepay, repay, redeem or purchase Senior
Indebtedness of the Company or Indebtedness (other than any
Disqualified Stock) of a Wholly Owned Subsidiary (in each case
other than Indebtedness owed to the Company or an Affiliate of
the Company) within one year from the later of the date of
such Asset Disposition or the
23
receipt of such Net Available Cash; (b) second, to the extent
of the balance of such Net Available Cash after application in
accordance with clause (a), to the extent the Company elects,
to acquire Additional Assets within one year from the later of
the date of such Asset Disposition or the receipt of such Net
Available Cash; and (c) third, to the extent of the balance of
such Net Available Cash after application in accordance with
clauses (a) and (b), to make an offer to the holders of the
Notes (and to holders of other Senior Indebtedness of the
Company designated by the Company) to purchase Notes (and such
other Senior Indebtedness of the Company) pursuant to and
subject to the conditions contained in the Indenture;
provided, however, that in connection with any prepayment, repayment or
purchase of Indebtedness pursuant to clause (a) or (c) above, the Company
or such Restricted Subsidiary shall permanently retire such Indebtedness
and shall cause the related loan commitment (if any) to be permanently
reduced in an amount equal to the principal amount so prepaid, repaid or
purchased.
Notwithstanding the foregoing provisions of Section 1(r)(xii)(B),
the Company and the Restricted Subsidiaries shall not be required to apply
any Net Available Cash in accordance with Section 1(r)(xii)(B) except to
the extent that the aggregate Net Available Cash from all Asset
Dispositions which are not applied in accordance with Section 1(r)(xii)(B)
exceeds $25 million. Pending application of Net Available Cash pursuant to
Section 1(r)(xii)(B), such Net Available Cash shall be invested in
Temporary Cash Investments or applied to temporarily reduce indebtedness
under Credit Facilities.
(C) For the purposes of Sections 1(r)(xii)(A) and (B), the following
are deemed to be cash or cash equivalents: (1) the assumption of Senior
Indebtedness of the Company, or Indebtedness of any Restricted Subsidiary,
and the release of the Company or such Restricted Subsidiary from all
liability on such Indebtedness in connection with such Asset Disposition
and (2) securities received by the Company or any Restricted Subsidiary
from the transferee that are promptly converted by the Company or such
Restricted Subsidiary into cash.
(D) In the event of an Asset Disposition that requires the purchase
of 2010 Notes (and other Senior Indebtedness) pursuant to Section
1(r)(xii)(A)(3) or 1(r)(xii)(B)(3)(c), the Company shall purchase 2010
Notes tendered pursuant to an offer by the Company for the 2010 Notes (and
such other Senior Indebtedness) at a purchase price of 100% of their
principal amount (or, in the event such other Senior Indebtedness was
issued with significant original issue discount, 100% of the accreted
value thereof), without premium, plus accrued but unpaid interest (or, in
respect of such other Senior Indebtedness, such lesser price, if any, as
may be provided for by the terms of such Senior Indebtedness) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in the Indenture. If the aggregate purchase
price of the securities tendered exceeds the Net Available Cash allotted
to their purchase, the Company shall select the securities to be purchased
on a pro rata basis but in round denominations, which in the case of the
2010 Notes will be denominations of $1,000 principal amount or integral
multiples thereof. The Company shall not be required to
24
make such an offer to purchase 2010 Notes (and other Senior Indebtedness)
pursuant to Section 1(r)(xii)(B) if the Net Available Cash available
therefor is less than $25 million (which lesser amount shall be carried
forward for purposes of determining whether such an offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition).
(E) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of 2010 Notes
pursuant to this Section 1(r)(xii). To the extent that the provisions of
any securities laws or regulations conflict with provisions of this
Section 1(r)(xii), the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its
obligations under this clause by virtue of its compliance with such
securities laws or regulations.
(xiii) Limitation on Affiliate Transactions.
(A) The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into, permit to exist, renew or extend any
transaction (including the purchase, sale, lease or exchange of any
property, employee compensation arrangements or the rendering of any
service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less favorable
to the Company or such Restricted Subsidiary than those that
could be obtained at the time of the Affiliate Transaction in
arm's-length dealings with a Person who is not an Affiliate;
(2) if such Affiliate Transaction involves an amount in excess of
$10 million, the terms of the Affiliate Transaction are set
forth in writing and a majority of the non-employee Directors
of the Company disinterested with respect to such Affiliate
Transactions have determined in good faith that the criteria
set forth in clause (1) are satisfied and have approved the
relevant Affiliate Transaction as evidenced by a Board
resolution; and
(3) if such Affiliate Transaction involves an amount in excess of
$25 million, the Board of Directors shall also have received a
written opinion from an Independent Qualified Party to the
effect that such Affiliate Transaction is fair, from a
financial standpoint, to the Company and its Restricted
Subsidiaries or not less favorable to the Company and its
Restricted Subsidiaries than could reasonably be expected to
be obtained at the time in an arm's-length transaction with a
Person who was not an Affiliate.
(B) The provisions of the preceding paragraph (A) shall not
prohibit:
(1) any Investment (other than a Permitted Investment) or other
Restricted Payment, in each case permitted to be made under
Section 1(r)(x);
25
(2) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors;
(3) loans or advances to employees in the ordinary course of
business in accordance with the past practices of the Company
or its Restricted Subsidiaries, but in any event not to exceed
$5.0 million in the aggregate outstanding at any one time;
(4) the payment of reasonable fees to Directors of the Company and
its Restricted Subsidiaries who are not employees of the
Company or its Restricted Subsidiaries;
(5) any transaction with a Restricted Subsidiary or joint venture
or similar entity which would constitute an Affiliate
Transaction solely because the Company or a Restricted
Subsidiary owns an equity interest in or otherwise controls
such Restricted Subsidiary, joint venture or similar entity;
(6) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company; and
(7) any transaction pursuant to any contract or agreement in
effect on the Issue Date, in each case as amended, modified or
replaced from time to time so long as the amended, modified or
new agreement, taken as a whole, is no less favorable to the
Company and its Restricted Subsidiaries than that in effect on
the Issue Date.
(xiv) Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries.
The Company (i) shall not, and shall not permit any Restricted
Subsidiary to, sell, transfer or otherwise dispose of any Capital Stock of
any other Restricted Subsidiary to any Person (other than the Company or a
Wholly Owned Subsidiary) and (ii) shall not permit any Restricted
Subsidiary to issue any of its Capital Stock (other than, if necessary,
shares of its Capital Stock constituting directors' or other legally
required qualifying shares) to any Person (other than to the Company or a
Wholly Owned Subsidiary); unless (a) Company complies with Section
1(r)(xii) with respect to any such sale, transfer or other disposition and
(b) immediately after giving effect to such issuance, sale, transfer or
other disposition, (x) such Restricted Subsidiary remains a Restricted
Subsidiary or (y) such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and any Investment in such Person remaining after
giving effect thereto is treated as a new Investment by the Company and
such Investment would be permitted to be made under Section 1(r)(x) if
made on the date of such issuance, sale, transfer or other disposition.
(xv) Limitation on Liens.
26
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, Incur or permit to exist any Lien
(the "Initial Lien") of any nature whatsoever on any of its properties
(including Capital Stock of a Restricted Subsidiary), whether owned at the
Issue Date or thereafter acquired, securing any Indebtedness, other than
Permitted Liens, without effectively providing that the Notes shall be
secured equally and ratably with (or prior to) the obligations so secured
for so long as such obligations are so secured.
Any Lien created for the benefit of the Holders of the Notes
pursuant to the preceding sentence shall provide by its terms that such
Lien shall be automatically and unconditionally released and discharged
upon the release and discharge of the Initial Lien.
(xvi) Limitation on Sale/Leaseback Transactions.
The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into, Guarantee or otherwise become liable with
respect to any Sale/Leaseback Transaction with respect to any property
unless: (i) the Company or such Restricted Subsidiary would be entitled to
(A) Incur Indebtedness in an amount equal to the Attributable Debt with
respect to such Sale/Leaseback Transaction under Section 1(r)(ix) and (B)
create a Lien on such property securing such Attributable Debt without
equally and ratably securing the Notes under Section 1(r)(xv); (ii) the
net proceeds received by the Company or any Restricted Subsidiary in
connection with such Sale/Leaseback Transaction are at least equal to the
fair value (as determined by the Board of Directors) of such property; and
(iii) the Company applies the proceeds of such transaction to the extent
required by Section 1(r)(xii).
(xvii) Further Instruments and Acts.
Upon reasonable request of the Trustee, the Company shall execute
and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose
of this Indenture.
(s) Not applicable.
(t) Not applicable.
(u) (i) Merger, Consolidation or Sale of Assets. For purposes of the 2010
Notes, the provisions of this Section 1(u)(i) shall supersede the
provisions of Article VIII of the Indenture and shall be controlling.
(A) The Company shall not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transactions,
directly or indirectly, all or substantially all its assets to, any
Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the
laws of the United States of America, any State thereof or the
District of Columbia and the
27
Successor Company (if not the Company) shall expressly assume,
by an indenture supplemental thereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the 2010 Notes and the
Indenture;
(2) immediately after giving pro forma effect to such transaction
(and treating any Indebtedness which becomes an obligation of
the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company
or such Subsidiary at the time of such transaction), no
Default shall have occurred and be continuing;
(3) immediately after giving pro forma effect to such transaction,
the Successor Company would be able to Incur an additional
$1.00 of Indebtedness pursuant to Section 1(r)(ix)(A);
(4) immediately after giving pro forma effect to such transaction,
the Successor Company shall have Consolidated Net Worth in an
amount that is not less than the Consolidated Net Worth of the
Company immediately prior to such transaction;
(5) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental
indenture (if any) comply with the Indenture; and
(6) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize
income, gain or loss for Federal income tax purposes as a
result of such transaction and will be subject to Federal
income tax on the same amounts, in the same manner and at the
same times as would have been the case if such transaction had
not occurred;
provided, however, that clauses (3) and (4) will not be applicable to (a)
a Restricted Subsidiary consolidating with, merging into or transferring
all or part of its properties and assets to the Company or (b) the Company
merging with an Affiliate of the Company solely for the purpose and with
the sole effect of reincorporating the Company in another jurisdiction.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power
of, the Company under the Indenture, and the Company, except in the case
of a lease, shall be released from the obligation to pay the principal of
and interest on the 2010 Notes.
(B) In addition, the Company shall not effect any consolidation,
merger, sale, assignment, transfer, conveyance or other disposition as is
contemplated in this Section 1(u), unless the Company also complies with
Sections 801 and 802 of the Indenture and the Person formed by or
surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, conveyance or other disposition
has been made, shall be deemed a Successor Corporation under the
Indenture.
28
(ii) Certain Definitions.
Set forth below are certain defined terms used in this
Officer's Certificate. Reference is made to the Indenture for the
definitions of any other capitalized terms used herein for which no
definition is provided herein. For purposes of the 2010 Notes, to the
extent the definitions contained in this Section 1(u)(ii) conflict with
definitions contained in the Indenture, the definitions contained in
this Section 1(u)(ii) shall supersede the definitions contained in the
Indenture and shall be controlling.
"Additional Assets" means:
(1) any property, plant or equipment used in a Related
Business;
(2) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or another
Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary
described in clause (2) or (3) above is primarily engaged in a
Related Business.
"Additional Notes" means 2010 Notes (other than the initial
2010 Notes) issued under the Indenture in accordance with Section 301
thereof that are designated to be part of the same series as the 2010
Notes.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct
or indirect common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of Sections 1(r)(x), (xii) and (xiii) only,
"Affiliate" shall also mean any beneficial owner of Capital Stock
representing 10% or more of the total voting power of the Voting Stock
(on a fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently exercisable) and
any Person who would be an Affiliate of any such beneficial owner
pursuant to the first sentence hereof.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules
and procedures of the Depositary that applies to such transfer or
exchange.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or
dispositions) by the Company or any Restricted Subsidiary, including
any disposition by means of a Like-Kind Exchange, an Excluded
29
Real Property Sale or a merger, consolidation or similar transaction
(each referred to for the purposes of this definition as a
"disposition"), of:
(1) any shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares
or shares required by applicable law to be held by a
Person other than the Company or a Restricted
Subsidiary);
(2) all or substantially all the assets of any division
or line of business of the Company or any Restricted
Subsidiary; or
(3) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business
of the Company or such Restricted Subsidiary.
Notwithstanding the foregoing, an "Asset Disposition" shall not
include:
(A) a disposition by a Restricted Subsidiary to
the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned
Subsidiary;
(B) for purposes of Section 1(r)(xii) only, (x)
a disposition that constitutes a Restricted
Payment under Section 1(r)(x) or a Permitted
Investment and (y) a disposition of all or
substantially all the assets of the Company
in accordance with Section 1(u)(i);
(C) a disposition of assets if Additional Assets
were acquired within one year prior to such
disposition for the purpose of replacing the
assets disposed of; and
(D) a disposition of assets with a fair market
value of less than $10,000,000.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted
at the interest rate borne by the Notes, compounded annually) of the
total obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been
extended); provided, however, that if such Sale/Leaseback Transaction
results in a Capital Lease Obligation, the amount of Indebtedness
represented thereby shall be determined in accordance with the
definition of "Capital Lease Obligation".
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing:
(1) the sum of the products of the numbers of years from
the date of determination to the dates of each
successive scheduled principal payment of or
redemption or similar payment with respect to such
Indebtedness multiplied by the amount of such payment
by
30
(2) the sum of all such payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of
such Board.
"Capital Lease Obligation" means an obligation that is
required to be classified and accounted for as a capital lease for
financial reporting purposes in accordance with GAAP, and the amount
of Indebtedness represented by such obligation shall be the
capitalized amount of such obligation determined in accordance with
GAAP; and the Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee
without payment of a penalty. For purposes of Section 1(r)(xv), a
Capital Lease Obligation will be deemed to be secured by a Lien on the
property being leased.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of
such Person, including, without limitation, membership interests in
limited liability companies and any Preferred Stock, but excluding any
debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the
following:
(1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that for
purposes of this clause (1) such person shall be
deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire,
whether such right is exercisable immediately or only
after the passage of time), directly or indirectly,
of more than 35% of the total voting power of the
Voting Stock of the Company;
(2) individuals who on the Issue Date constituted the
Board of Directors (together with any new directors
whose election by such Board of Directors or whose
nomination for election by the shareholders of the
company as approved by a vote of 66-2/3% of the
directors of the Company then still in office who
were either directors on the Issue Date or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a
majority of the Board of Directors then in office;
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4) the merger or consolidation of the Company with or
into another Person or the merger of another Person
with or into the Company, or the sale of all
31
or substantially all the assets of the Company
(determined on a consolidated basis) to another
Person, other than a merger or consolidation
transaction in which holders of securities that
represented 100% of the Voting Stock of the Company
immediately prior to such transaction (or other
securities into which such securities are converted
as part of such merger or consolidation transaction)
own directly or indirectly at least a majority of the
voting power of the Voting Stock of the surviving
Person in such merger or consolidation transaction
immediately after such transaction and in
substantially the same proportion as before the
transaction.
"Change of Control Offer" has the meaning assigned to it in
Section 1(r)(viii) of this Officer's Certificate.
"Company" means United States Steel Corporation, a Delaware
corporation, until a successor replaces it in accordance with the
applicable provisions of this Officer's Certificate, and thereafter
means such successor.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (x) the aggregate amount of EBITDA for the period of
the most recent four consecutive fiscal quarters for which financial
results are publicly available to (y) Consolidated Interest Expense for
such four fiscal quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such
period that remains outstanding or if the transaction
giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or
both, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving effect
on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of
such period;
(2) if the Company or any Restricted Subsidiary has
repaid, repurchased, defeased or otherwise discharged
any Indebtedness since the beginning of such period
or if any Indebtedness is to be repaid, repurchased,
defeased or otherwise discharged (in each case other
than Indebtedness Incurred under any revolving credit
facility unless such Indebtedness has been
permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio, EBITDA and
Consolidated Interest Expense for such period shall
be calculated on a pro forma basis as if such
discharge had occurred on the first day of such
period and as if the Company or such Restricted
Subsidiary has not earned the interest income
actually earned during such period in respect of cash
or Temporary Cash Investments used to repay,
repurchase, defease or otherwise discharge such
Indebtedness;
(3) if since the beginning of such period the Company or
any Restricted Subsidiary shall have made any Asset
Disposition, EBITDA for such
32
period shall be reduced by an amount equal to EBITDA
(if positive) directly attributable to the assets
which are the subject of such Asset Disposition for
such period, or increased by an amount equal to
EBITDA (if negative), directly attributable thereto
for such period and Consolidated Interest Expense for
such period shall be reduced by an amount equal to
the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or
any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the
Company and its continuing Restricted Subsidiaries in
connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense
for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the
extent the Company and its continuing Restricted
Subsidiaries are no longer liable for such
Indebtedness after such sale);
(4) if since the beginning of such period the Company or
any Restricted Subsidiary (by merger or otherwise)
shall have made an Investment in any Restricted
Subsidiary (or any person which becomes a Restricted
Subsidiary) or an acquisition of assets, including
any acquisition of assets occurring in connection
with a transaction requiring a calculation to be made
hereunder, which constitutes all or substantially all
of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period shall
be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first
day of such period; and
(5) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or
was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall
have made any Asset Disposition, any Investment or
acquisition of assets that would have required an
adjustment pursuant to clause (3) or (4) above if
made by the Company or a Restricted Subsidiary during
such period, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro
forma effect thereto as if such Asset Disposition,
Investment or acquisition occurred on the first day
of such period.
For purposes of this definition, whenever pro forma effect is
to be given to an acquisition of assets, the amount of income or
earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection
therewith, the pro forma calculations shall be determined in good faith
by a responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated as
if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest
Rate Agreement applicable to such Indebtedness if such Interest Rate
Agreement has a remaining term in excess of 12 months).
33
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries plus, to the extent not included in such total interest
expense, and to the extent incurred by the Company or its Restricted
Subsidiaries, without duplication:
(1) interest expense attributable to capital leases and
the interest expense attributable to leases
constituting part of a Sale/Leaseback Transaction;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expenses;
(5) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers'
acceptance financing;
(6) net payments pursuant to Hedging Obligations in
respect of Indebtedness;
(7) Preferred Stock dividends in respect of all Preferred
Stock held by Persons other than the Company or a
Wholly Owned Subsidiary (other than dividends payable
solely in Capital Stock (other than Disqualified
Stock) of the issuer of such Preferred Stock);
(8) interest incurred in connection with Investments in
discontinued operations;
(9) interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed
by (or secured by the assets of) the Company or any
Restricted Subsidiary; and
(10) the cash contributions to any employee stock
ownership plan or similar trust to the extent such
contributions are used by such plan or trust to pay
interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by
such plan or trust.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Restricted Subsidiaries determined in accordance
with GAAP; provided, however, that there shall not be included in such
Consolidated Net Income:
(1) any net income of any Person (other than the Company)
if such Person is not a Restricted Subsidiary, except
that:
(A) subject to the exclusion contained in clause
(4) below, the Company's equity in the net
income of any such Person for such period
shall be included in such Consolidated Net
Income up to the aggregate amount of cash
actually distributed by such Person during
such period to the Company or a Restricted
Subsidiary as a
34
dividend or other distribution (subject, in
the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the
limitations contained in clause (3) below);
and
(B) the Company's equity in a net loss of any
such Person for such period shall be
included in determining such Consolidated
Net Income;
(2) any net income (or loss) of any Person acquired by
the Company or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such
acquisition;
(3) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends
or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company,
except that:
(A) subject to the exclusion contained in clause
(4) below, the Company's equity in the net
income of any such Restricted Subsidiary for
such period shall be included in such
Consolidated Net Income up to the aggregate
amount of cash actually distributed by such
Restricted Subsidiary during such period to
the Company or another Restricted Subsidiary
as a dividend or other distribution
(subject, in the case of a dividend or other
distribution paid to another Restricted
Subsidiary, to the limitation contained in
this clause); and
(B) the Company's equity in a net loss of any
such Restricted Subsidiary for such period
shall be included in determining such
Consolidated Net Income;
(4) any gain (but not loss) realized upon the sale or
other disposition of any assets of the Company, its
consolidated Subsidiaries or any other Person
(including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed
of in the ordinary course of business and any gain
(but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(5) extraordinary gains or losses;
(6) the cumulative effect of a change in accounting
principles; and
(7) one-time benefit charges incurred in connection with
the Company's workforce reduction activities
announced in 2003 and charges incurred in connection
with any merger of the Company's pension plans in
2003, in each case, including, without limitation,
any curtailment or re-measurement charges triggered
by such activities.
35
Notwithstanding the foregoing, for the purposes of Section 1(r)(x)
only, there shall be excluded from Consolidated Net Income any
repurchases, repayments or redemptions of Investments, proceeds
realized on the sale of Investments or return of capital to the
Company or a Restricted Subsidiary to the extent such repurchases,
repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under such covenant pursuant to clause
(A)(3)(d) thereof.
"Consolidated Net Worth" means the total of the amounts shown
on the balance sheet of the Company and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the
end of the most recent fiscal quarter of the Company ending at least 45
days prior to the taking of any action for the purpose of which the
determination is being made, as the sum of:
(1) the par or stated value of all outstanding Capital
Stock of the Company plus
(2) paid-in capital or capital surplus relating to such
Capital Stock plus
(3) any retained earnings or earned surplus
less (A) any accumulated deficit and (B) any amounts attributable to
Disqualified Stock.
"Credit Facility" means any senior credit facility to be
entered into by and among one or more of the Company and certain of
its Foreign Restricted Subsidiaries and the lenders referred to
therein, together with the related documents thereto (including the
revolving loans thereunder, any guarantees and security documents), as
amended, extended, renewed, restated, supplemented or otherwise
modified (in whole or in part, and without limitation as to amount,
terms, conditions, covenants and other provisions) from time to time,
and any agreement (and related document) governing Indebtedness
incurred to Refinance, in whole or in part, the borrowings and
commitments then outstanding or permitted to be outstanding under such
Credit Facility or a successor Credit Facility, whether by the same or
any other lender or group of lenders.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement
designed to protect such Person against fluctuations in currency
values.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated 2010 Note registered
in the name of the Holder thereof and issued in accordance with
Section 1(p)(iv) of this Officer's Certificate, in the form of Exhibit
A hereto except that such 2010 Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in
the Global Note" attached thereto.
36
"Depositary" means, with respect to the 2010 Notes issuable
or issued in whole or in part in global form, the Person specified in
Section 1(p)(iii) of this Officer's Certificate as the Depositary with
respect to the 2010 Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to
the applicable provision of this Officer's Certificate or the
Indenture.
"Directors" means the persons who are members of the Board of
Directors of the Company.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option
of the holder) or upon the happening of any event:
(1) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the
holder for Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon
the occurrence of certain events or otherwise, in
whole or in part;
in each case on or prior to the first anniversary of the Stated
Maturity of any series of Notes then outstanding; provided, however,
that any Capital Stock that would not constitute Disqualified Stock but
for provisions thereof giving holders thereof the right to require such
Person to purchase or redeem such Capital Stock upon the occurrence of
an "asset sale" or "change of control" occurring prior to the first
anniversary of the Stated Maturity of any series of Notes then
outstanding shall not constitute Disqualified Stock if:
(1) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than
the terms applicable to the Notes and described under
Sections 1(r)(viii) and 1(r)(xii); and
(2) any such requirement only becomes operative after
compliance with such terms applicable to the Notes,
including the purchase of any Notes tendered pursuant
thereto.
The amount of any Disqualified Stock that does not have a
fixed redemption, repayment or repurchase price will be calculated in
accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were redeemed, repaid or repurchased on any date on
which the amount of such Disqualified Stock is to be determined
pursuant to the Indenture; provided, however, that if such
Disqualified Stock could not be required to be redeemed, repaid or
repurchased at the time of such determination, the redemption,
repayment or repurchase price will be the book value of such
Disqualified Stock as reflected in the most recent financial
statements of such Person.
37
"DTC" has the meaning assigned to it in Section 1(p)(iii) of
this Officer's Certificate.
"EBITDA" for any period means the sum of Consolidated Net
Income (but without giving effect to any gains or losses from Asset
Dispositions), minus (i) noncash net pension credits to the extent
included in calculating such Consolidated Net Income and (ii) the sum
of (x) payments made by the Company for pensions and other post
retirement benefits that are not reimbursed by plan assets and (y) any
funding by the Company to plan trusts and plus the following to the
extent deducted in calculating such Consolidated Net Income:
(1) all income tax expense of the Company and its
consolidated Restricted Subsidiaries;
(2) Consolidated Interest Expense;
(3) depreciation, depletion and amortization expense of
the Company and its consolidated Restricted
Subsidiaries (excluding amortization expense
attributable to a prepaid operating activity item
that was paid in cash in a prior period);
(4) all other non-cash charges of the Company and its
consolidated Restricted Subsidiaries (excluding any
such non-cash charge to the extent that it represents
an accrual of or reserve for cash expenditures in any
future period); and
(5) net periodic benefit cost recorded for pensions and
other postretirement benefits.
Notwithstanding the foregoing, the provision for taxes based
on the income or profits of, and the depreciation and amortization and
non-cash charges of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in
the same proportion) that the net income of such Restricted Subsidiary
was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination
to be dividended to the Company by such Restricted Subsidiary without
prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to
such Restricted Subsidiary or its stockholders.
"Event of Default" means an Event of Default as defined in
Section 1(q) herein.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Real Property Sales" means sales of real property
either: (a) in the ordinary course of the business of the Company or a
Restricted Subsidiary or (b) of real property that has not been used by
the Company or a Restricted Subsidiary in the production of steel or
steel products at any time within 90 days prior to the date of sale.
38
"Financial Matters Agreement" means the Financial Matters
Agreement dated December 31, 2001 between Marathon and the Company.
"Financing Entity" means any Wholly Owned Subsidiary formed
for the purpose of effecting a receivables or inventory financing
program so long as such entity has no obligations that are either
Guaranteed by, or recourse to, any other Restricted Subsidiary.
"Foreign Restricted Subsidiary" means any Restricted
Subsidiary of the Company that is organized in a jurisdiction outside
the United States of America.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of July 27, 2001, including
those set forth in (i) the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified
Public Accountants; (ii) statements and pronouncements of the
Financial Accounting Standards Board; (iii) such other statements by
such other entity as approved by a significant segment of the
accounting profession; and (iv) the rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma
financial statements) in periodic reports required to be filed
pursuant to Section 13 of the Exchange Act, including opinions and
pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC.
"Global Note Legend" means the legend set forth in Section
1(p)(iv)(E)(1) of this Officer's Certificate, which is required to be
placed on all Global Notes issued under this Officer's Certificate.
"Global Notes" means, individually and collectively, each of
the 2010 Notes or issuable in the global form of Exhibit A hereto
issued in accordance with Sections 1(p) of this Officer's Certificate.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any
Person and any obligation, direct or indirect, contingent or otherwise,
of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of
such Person (whether arising by virtue of partnership arrangements, or
by agreements to keep-well, to purchase assets, goods, securities or
services, to take-or-pay or to maintain financial statement conditions
or otherwise) but shall not include take-or-pay-arrangements or other
agreements to purchase goods or services that are not entered into for
the purpose of purchasing or paying such Indebtedness of such Person or
(ii) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding
meaning. The term "Guarantor" shall mean any Person Guaranteeing any
obligation.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency
Agreement.
39
"Holder" or "Noteholder" means the Person in whose name a Note
is registered on the Security Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a
Restricted Subsidiary (whether by merger, consolidation, acquisition
or otherwise) shall be deemed to be Incurred by such Person at the
time it becomes a Restricted Subsidiary. The term "Incurrence" when
used as a noun shall have a correlative meaning. Solely for purposes
of determining compliance with Section 1(r)(ix), amortization of debt
discount or the accretion of principal with respect to a non-interest
bearing or other discount security and (2) the payment of regularly
scheduled interest in the form of additional Indebtedness of the same
instrument or the payment of regularly scheduled dividends on Capital
Stock in the form of additional Capital Stock of the same clause and
with the same terms will not be deemed to be the Incurrence of
Indebtedness. For purposes of this definition, the Company (i) shall
be deemed to Incur any Indebtedness of other Persons of the type
referred to in clause (6) of the definition of "Indebtedness" at such
time it becomes responsible or liable, directly or indirectly, for its
payment pursuant to the terms of the Financial Matters Agreement and
(ii) shall not be deemed to Incur any Indebtedness for which it is
indemnified by Marathon pursuant to the terms of the Financial Matters
Agreement at the time that such Indebtedness is deemed to become
Indebtedness of the Company as a result of Marathon no longer having
an Investment Grade Rating from both Rating Agencies.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(1) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such
Person is responsible or liable, including, in each
case, any premium on such indebtedness to the extent
such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback
Transactions entered into by such Person;
(3) all Purchase Money Indebtedness of such Person;
(4) all obligations of such Person for the reimbursement
of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than
obligations with respect to letters of credit
securing obligations (other than obligations
described in clauses (1) through (3) above) entered
into in the ordinary course of business of such
Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such
drawing is reimbursed no later than the tenth
Business Day following payment on the letter of
credit);
40
(5) the amount of all obligations of such Person with
respect to the redemption, repayment or other
repurchase of any Disqualified Stock of such Person
or, with respect to any Preferred Stock of any
Subsidiary of such Person, the principal amount of
such Preferred Stock to be determined in accordance
with the Indenture (but excluding, in each case, any
accrued dividends);
(6) all obligations of the type referred to in clauses
(1) through (5) of other Persons and all dividends of
other Persons for the payment of which, in either
case, such Person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise,
including by means of any Guarantee or pursuant to
the terms of the Financial Matters Agreement;
(7) all obligations of the type referred to in clauses
(1) through (6) of other Persons secured by any Lien
on any property or asset of such Person (whether or
not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the
lesser of the value of such property or assets and
the amount of the obligation so secured;
(8) to the extent not otherwise included in this
definition, any financing of accounts receivable or
inventory of such Person; and
(9) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
Notwithstanding the foregoing, in connection with the purchase
by the Company or any Restricted Subsidiary of any business, the term
"Indebtedness" will exclude post-closing payment adjustments to which
the seller may become entitled to the extent such payment is determined
by a final closing balance sheet or such payment depends on the
performance of such business after the closing; provided, however,
that, at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed
and determined, the amount is paid within 30 days thereafter (or, in
the case of the acquisition of USSK, when due).
Notwithstanding the foregoing, the term "Indebtedness" will
exclude (x) any indebtedness for which Marathon indemnifies the Company
pursuant to the terms of the Financial Matters Agreement, so long as
such indebtedness (i) has not been Refinanced and (ii) Marathon has an
Investment Grade Rating from both of the Rating Agencies and (y)
Industrial Revenue Bond Obligations to the extent the Company (i) has
delivered to the holders of such obligations an irrevocable notice of
redemption or directed delivery of such a notice and (ii) has set aside
cash or U.S. Government Obligations, pursuant to a defeasance mechanism
or otherwise, sufficient to redeem such obligations.
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent
obligations at such date; provided, however, that in the case of
41
Indebtedness sold at a discount, the amount of such Indebtedness at any
time will be the accreted value thereof at such time.
"Indenture" means the Indenture dated as of May 20, 2003
between the Company and The Bank of New York, as trustee, as modified,
amended or supplemented at any time or from time to time by
supplemental indentures.
"Independent Qualified Party" means an investment banking
firm, accounting firm or appraisal firm of national standing; provided,
however, that such firm is not an Affiliate of the Company.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Industrial Revenue Bond Obligations" means an obligation to
a state or local government unit that secures the payment of bonds
issued by a state or local government unit or any obligation under the
Financial Matters Agreement relating to Industrial Revenue Bond
Obligations or any Indebtedness incurred to Refinance, in whole or in
part, such obligations.
"Interest Rate Agreement" means in respect of a Person any
interest rate swap agreement, interest rate cap agreement or other
financial agreement or arrangement designed to protect such Person
against fluctuations in interest rates.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course
of business that are recorded as accounts receivable on the balance
sheet of the lender) or other extension of credit (including by way of
Guarantee or similar arrangement) or capital contribution to (by means
of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. Except as otherwise
provided for herein, the amount of an Investment shall be its fair
value at the time the Investment is made and without giving effect to
subsequent changes in value.
For purposes of the definition of "Unrestricted Subsidiary",
the definition of "Restricted Payment" and Section 1(r)(x):
(1) "Investment" shall include the portion (proportionate
to the Company's equity interest in such Subsidiary)
of the fair market value of the net assets of any
Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company
shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary equal to
an amount (if positive) equal to (A) the Company's
"Investment" in such Subsidiary at the time of such
redesignation less (B) the portion (proportionate to
the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and
42
(2) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value
at the time of such transfer, in each case as
determined in good faith by the Board of Directors.
"Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent)
by S&P.
"Issue Date" means the first date on which any 2010 Notes are
issued, authenticated and delivered under the Indenture and this
Officer's Certificate.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional
sale or other title retention agreement or lease in the nature
thereof).
"Like-Kind Exchange" means (i) the disposition of property in
exchange for similar property or for cash proceeds where the proceeds
are deposited in a trust and employed to acquire similar property in a
transaction qualifying as a like-kind exchange pursuant to Section
1031 of the Internal Revenue Code of 1986 (or any successor provision)
or (ii) the acquisition of property from a Person with the proceeds of
the disposition of similar property in such a qualifying transaction.
"Marathon" means Marathon Oil Corporation.
"Net Available Cash" from an Asset Sale means cash payments
received therefrom (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment
receivable or otherwise and proceeds from the sale or other disposition
of any securities received as consideration, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations
relating to such properties or assets or received in any other noncash
form), in each case net of:
(1) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and
all Federal, state, provincial, foreign and local
taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Sale;
(2) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Sale, in
accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such
assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Sale, or by
applicable law, be repaid out of the proceeds from
such Asset Sale;
(3) all distributions and other payments required to be
made to minority interest holders in Restricted
Subsidiaries as a result of such Asset Sale; and
43
(4) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against
any liabilities associated with the property or other
assets disposed in such Asset Sale and retained by
the Company or any Restricted Subsidiary after such
Asset Sale.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other
fees actually incurred in connection with such issuance or sale and
net of taxes paid or payable as a result thereof.
"Note Custodian" means the Company, as custodian for the
Depositary with respect to the 2010 Notes in global form, or any
successor entity thereto.
"Obligations" means with respect to any indebtedness all
obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, and other amounts payable pursuant
to the documentation governing such Indebtedness.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person.
"Participant" means, with respect to DTC, a Person who has an
account with DTC.
"Paying Agent" means the Company or any Person authorized by
the Company to pay the principal of and/or any premium or interest on
any Notes on behalf of the Company.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in:
(1) Company, a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a
Restricted Subsidiary; provided, however, that the
primary business of such Restricted Subsidiary is a
Related Business;
(2) another Person if as a result of such Investment such
other Person is merged or consolidated with or into,
or transfers or conveys all or substantially all its
assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary
business is a Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary
course of business and payable or
44
dischargeable in accordance with customary trade
terms; provided, however, that such trade terms may
include such concessionary trade terms as the Company
or any such Restricted Subsidiary deems reasonable
under the circumstances;
(5) payroll, travel and similar advances to cover matters
that are expected at the time of such advances
ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of
business;
(6) loans or advances to employees made in the ordinary
course of business consistent with past practices of
the Company or such Restricted Subsidiary;
(7) stock, obligations or securities received in
settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment represents
the non-cash portion of the consideration received
for an Asset Disposition as permitted in clause (A)
or (B) of Section 1(r)(xii);
(9) any Person where such Investment was acquired by the
Company or any of its Restricted Subsidiaries (a) in
exchange for any other Investment or accounts
receivable held by the Company or any such Restricted
Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or
recapitalization of the issuer of such other
Investment or accounts receivable or (b) as a result
of a foreclosure by the Company or any of its
Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to
any secured Investment in default;
(10) so long as no Default has occurred and is continuing,
an Unrestricted Subsidiary the assets of which shall
primarily be located outside the United States of
America, which Investment is made on or prior to
December 31, 2003 and does not exceed $50 million;
provided that such Unrestricted Subsidiary shall be
treated as a Restricted Subsidiary as of the first
date the Board of Directors would be permitted to
designate it as such under the definition of
"Unrestricted Subsidiary"; and
(11) any loan made to a Person in connection with a
Like-Kind Exchange, provided such loan is repaid in
full within 180 days.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker's
compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than
for the payment of Indebtedness) or leases to which
such Person is a party, or deposits to secure public
or statutory obligations of such Person or deposits
of cash or
45
United States government bonds to secure surety or
appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import
duties or for the payment of rent, in each case
Incurred in the ordinary course of business;
(2) Liens imposed by law, such as carriers',
warehousemen's and mechanics' Liens, in each case for
sums not yet due or being contested in good faith by
appropriate proceedings or other Liens arising out of
judgments or awards against such Person with respect
to which such Person shall then be proceeding with an
appeal or other proceedings for review and Liens
arising solely by virtue of any statutory or common
law provision relating to banker's Liens, rights of
set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a creditor
depository institution; provided, however, that (A)
such deposit account is not a dedicated cash
collateral account and is not subject to restrictions
against access by the Company in excess of those set
forth by regulations promulgated by the Federal
Reserve Board and (B) such deposit account is not
intended by the Company or any Restricted Subsidiary
to provide collateral to DTC;
(3) Liens for property taxes not yet subject to penalties
for non-payment or which are being contested in good
faith by appropriate proceedings;
(4) Liens in favor of issuers of surety bonds or letters
of credit issued pursuant to the request of and for
the account of such Person in the ordinary course of
its business; provided, however, that such letters of
credit do not constitute Indebtedness;
(5) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others
for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the
use of real property or Liens incidental to the
conduct of the business of such Person or to the
ownership of its properties which were not Incurred
in connection with Indebtedness and which do not in
the aggregate materially adversely affect the value
of said properties or materially impair their use in
the operation of the business of such Person;
(6) Liens securing Indebtedness Incurred to finance the
construction, purchase or lease of, or repairs,
improvements or additions to, property, plant or
equipment of such Person; provided, however, that the
Lien may not extend to any other property owned by
such Person or any of its Restricted Subsidiaries at
the time the Lien is Incurred (other than assets and
property affixed or appurtenant thereto), and the
Indebtedness (other than any interest thereon)
secured by the Lien may not be Incurred more than 180
days after the later of the acquisition, completion
of construction, repair,
46
improvement, addition or commencement of full
operation of the property subject to the Lien;
(7) Liens existing on the Issue Date;
(8) Liens on property or shares of Capital Stock of
another Person at the time such other Person becomes
a Subsidiary of such Person; provided, however, that
the Liens may not extend to any other property owned
by such Person or any of its Restricted Subsidiaries
(other than assets and property affixed or
appurtenant thereto);
(9) Liens on the inventory or accounts receivable of the
Company or any Restricted Subsidiary securing
Indebtedness permitted under the provisions described
in Section 1(r)(ix)(B)(1);
(10) Liens securing industrial revenue or pollution
control bonds issued pursuant to agreements with the
Company, or prior to Separation, by USX Corporation
(now named Marathon Oil Corporation); provided,
however, that such Liens relate solely to the project
being financed and are removed within 90 days
following completion of the project being financed;
(11) Liens on property at the time such Person or any of
its Subsidiaries acquires the property, including any
acquisition by means of a merger or consolidation
with or into such Person or a Subsidiary of such
Person; provided, however, that the Liens may not
extend to any other property owned by such Person or
any of its Restricted Subsidiaries (other than assets
and property affixed or appurtenant thereto);
(12) Liens securing Indebtedness or other obligations of a
Subsidiary of such Person owing to such Person or a
wholly owned Subsidiary of such Person;
(13) Liens securing Hedging Obligations so long as such
Hedging Obligations relate to Indebtedness that is,
and is permitted to be under the Indenture, secured
by a Lien on the same property securing such Hedging
Obligations;
(14) Liens to secure any Refinancing (or successive
Refinancings) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the
foregoing clause (6), (8), (9) or (10); provided,
however, that:
(A) such new Lien shall be limited to all or
part of the same property and assets that
secured or, under the written agreements
pursuant to which the original Lien arose,
could secure the original Lien (plus
improvements and accessions to, such
property or proceeds or distributions
thereof); and
47
(B) the Indebtedness secured by such Lien at
such time is not increased to any amount
greater than the sum of (x) the outstanding
principal amount or, if greater, committed
amount of the Indebtedness described under
clause (6), (8), (9) or (10) at the time the
original Lien became a Permitted Lien and
(y) an amount necessary to pay any fees and
expenses, including premiums, related to
such refinancing, refunding, extension,
renewal or replacement; and
(15) Liens on assets subject to a Sale/Leaseback
Transaction securing Attributable Debt permitted to
be Incurred under Section 1(r)(ix).
Notwithstanding the foregoing, "Permitted Liens" will not
include any Lien described in clauses (6), (9) or (10) above to the
extent such Lien applies to any Additional Assets acquired directly or
indirectly from Net Available Cash pursuant to Section 1(r)(xii).
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency
or political subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends or
distributions, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class of such Person.
"Principal" of a Note means the principal of the Note plus the
premium, if any, payable on the Note which is due or overdue or is to
become due at the relevant time.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective
registration statement under the Securities Act.
"Purchase Money Indebtedness" means Indebtedness Incurred or
assumed as the deferred purchase price of property acquired by such
Person (excluding accounts payable arising in the ordinary course of
business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to
any such property).
"Rating Agencies" means Standard & Poor's Ratings Group, Inc.
("S&P") and Moody's Investors Service, Inc. ("Moody's"), or if S&P or
Moody's or both shall not make a rating on the 2010 Notes publicly
available, a nationally recognized statistical rating agency or
agencies, as the case may be, selected by the Company (as certified by
a resolution of the Board of Directors) which shall be substituted for
S&P or Moody's or both, as the case may be.
48
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or
retire, or to issue other Indebtedness in exchange or replacement for,
such indebtedness. "Refinanced" and "Refinancing" shall have
correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of the Company or any Restricted Subsidiary existing
on the Issue Date or Incurred in compliance with the Indenture,
including Indebtedness that Refinances Refinancing Indebtedness;
provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the
Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at
the time such Refinancing Indebtedness is Incurred
that is equal to or greater than the Average Life of
the Indebtedness being Refinanced; and
(3) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue
discount, an aggregate issue price) that is equal to
or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate
accreted value) then outstanding or committed (plus
fees and expenses, including any premium and
defeasance costs) under the Indebtedness being
Refinanced;
provided further, however, that Refinancing Indebtedness shall not
include (A) Indebtedness of a Subsidiary that Refinances Indebtedness
of the Company or (B) Indebtedness of the Company or a Restricted
Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.
"Regular Record Date" has the meaning assigned to it in
Section 1(e)(ii) of this Officer's Certificate.
"Related Business" means any business in which the Company was
engaged on the Issue Date and any business related, ancillary or
complementary to any business of the Company in which the Company was
engaged on the Issue Date.
"Representative" means with respect to a Person any trustee,
agent or representative (if any) for an issue of Senior Indebtedness of
such Person.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any
other distributions of any sort in respect of its
Capital Stock (including any payment in connection
with any merger or consolidation involving such
Person) or similar payment to the direct or indirect
holders of its Capital Stock (other than dividends or
distributions payable solely in its Capital Stock
(other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a
Restricted Subsidiary, and other than pro rata
dividends
49
or other distributions made by a Subsidiary that is
not a Wholly Owned Subsidiary to minority
stockholders (or owners of an equivalent interest in
the case of a Subsidiary that is an entity other than
a corporation));
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the
Company held by any Person or of any Capital Stock of
a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary),
including the exercise of any option to exchange any
Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled
sinking fund payment of any Subordinated Obligations
of such Person (other than the purchase, repurchase
or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking
fund obligation, principal installment or final
maturity, in each case due within one year of the
date of such purchase, repurchase or other
acquisition); or
(4) the making of any Investment (other than a Permitted
Investment) in any Person;
provided, however, that any purchase or other acquisition for value of
common stock of the Company with (x) funds provided by the participants
of the Company's dividend reinvestment plan or (y) cash dividends
permitted to be paid under Section 1(r)(x) pursuant to the Company's
dividend reinvestment plan shall not, in either case, be a "Restricted
Payment".
"Restricted Subsidiary" of a Person means any Subsidiary of
the Company that is not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property owned by the Company or a Restricted Subsidiary on the Issue
Date or thereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property
to a Person and the Company or a Restricted Subsidiary leases it from
such Person.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Registrar" has the meaning assigned to it in Section
1(p)(iii) of this Officer's Certificate.
"Senior Indebtedness" means with respect to any Person:
50
(1) Indebtedness of such Person, whether
outstanding on the Issue Date or thereafter
Incurred; and
(2) accrued and unpaid interest (including
interest accruing on or after the filing of
any petition in bankruptcy or for
reorganization relating to such Person
whether or not post-filing interest is
allowed in such proceeding) in respect of
(A) indebtedness of such Person for money
borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar
instruments for the payment of which such
Person is responsible or liable
unless, in the case of clauses (1) and (2), in the instrument creating
or evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligations are subordinate in right of payment
to the Notes or the Guarantee of such Person, as the case may be;
provided, however, that Senior Indebtedness shall not include:
(1) any obligation of such Person to any Subsidiary;
(2) any liability for Federal, state, local or other
taxes owed or owing by such Person;
(3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business
(including guarantees thereof or instruments
evidencing such liabilities);
(4) any Indebtedness of such Person (and any accrued and
unpaid interest in respect thereof) which is
subordinate or junior in any respect to any other
Indebtedness or other obligation of such Person; or
(5) that portion of any Indebtedness that at the time of
Incurrence is Incurred in violation of the Indenture.
"Separation" means the separation of the Company from USX
Corporation pursuant to an Agreement and Plan of Reorganization, which
was approved by the shareholders of Marathon on December 31, 2001.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such
Regulation is in effect on the date hereof.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final
payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision (but excluding any
provision providing for the repurchase of such security at the option
of the holder thereof upon the happening of any contingency unless
such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or
thereafter Incurred) that is
51
subordinate or junior in right of payment to the Notes or a Guaranty of
such Person, as the case may be, pursuant to a written agreement to
that effect.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership or other business entity of which
more than 50% of the total voting power of shares of Voting Stock is at
the time owned or controlled, directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such
Person; or
(3) one or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United
States of America or any agency thereof or
obligations guaranteed by the United States of
America or any agency thereof;
(2) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180
days of the date of acquisition thereof issued by a
bank or trust company which is organized under the
laws of the United States of America, any state
thereof or any foreign country recognized by the
United States of America, and which bank or trust
company has capital, surplus and undivided profits
aggregating in excess of $50.0 million (or the
foreign currency equivalent thereof) and has
outstanding debt which is rated "A"(or such similar
equivalent rating) or higher by at least one
nationally recognized statistical rating organization
(as defined in Rule 436 under the Securities Act) or
any money-market fund sponsored by a registered
broker dealer or mutual fund distributor;
(3) repurchase obligations with a term of not more than
30 days for underlying securities of the types
described in clause (1) above entered into with a
bank meeting the qualifications described in clause
(2) above;
(4) investments in commercial paper, maturing not more
than 90 days after the date of acquisition, issued by
a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of
the United States of America or any foreign country
recognized by the United States of America with a
rating at the time as of which any investment therein
is made of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P;
(5) investments in securities with maturities of six
months or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any
political subdivision
52
or taxing authority thereof, and rated at least "A"
by S&P or "A" by Moody's;
(6) overnight investments with banks rated "B" or better
by Fitch, Inc.;
(7) in the case of a Foreign Restricted Subsidiary,
investments of the type and maturity described in
clauses (1) through (6) above of foreign obligors,
which investments or obligors (or the parents of such
obligors) have ratings described in such clauses or
equivalent ratings from comparable foreign rating
agencies; and
(8) deposits in Slovak financial institutions that do not
at any time exceed $5 million in the aggregate.
"10 -3/4% Notes Indenture" means the Indenture between the
Company and the Trustee governing the Company's 10 -3/4% Senior Notes
due 2008.
"Tubular Business" means the assets and liabilities of the
Company or any of its Subsidiaries primarily related to its tubular
products business.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an
Unrestricted Subsidiary by the Board of Directors in the manner
provided below and (ii) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or holds any
Lien on any property of, the Company or any other Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such
Subsidiary has consolidated assets greater than $1,000, such
designation would be permitted under Section 1(r)(x). The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to
such designation (x) the Company could incur $1.00 of additional
Indebtedness pursuant to Section 1(r)(ix)(A) and (y) no Default shall
have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the board resolution giving effect to such
designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
"U.S." means the United States of America.
"U.S. Dollar Equivalent" means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for
determination thereof, the amount of U.S. dollars obtained by
converting such foreign currency involved in such computation into
U.S. dollars at the spot rate for the purchase of U.S. dollars with
the applicable foreign currency as published in The Wall Street
Journal in the "Exchange Rates" column under the heading "Currency
Trading" on the date two Business Days prior to such determination.
Except as described under Section 1(r)(ix), whenever it is necessary
53
to determine whether the Company has complied with any covenant in the
Indenture or a Default has occurred and an amount is expressed in a
currency other than U.S. dollars, such amount will be treated as the
U.S. Dollar Equivalent determined as of the date such amount is
initially determined in such currency.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations)
of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and
credit of the United States of America is pledged and which are not
callable at the issuer's option.
"USSK" means U.S. Steel Kosice, s.r.o., a company organized
under the laws of the Slovak Republic.
"Voting Power" as applied to the stock of any Person means the
total voting power represented by all outstanding Voting Stock of such
Person.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person
then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers, or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares)
is owned by the Company or one or more Wholly Owned Subsidiaries.
(iii) Outstanding 2010 Notes. 2010 Notes outstanding at any
time are all 2010 Notes authenticated by the Trustee except for those
canceled, those delivered for cancellation and those described in this
Section 1(u)(iii) as not outstanding. A 2010 Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds
the 2010 Note; provided, 2010 Notes held by the Company or its
Affiliates shall be disregarded for purposes of consents and waivers
granted hereunder. If a 2010 Note is replaced pursuant to Section 309
of the Indenture, it ceases to be outstanding unless the Trustee and
the Company receive proof satisfactory to them that the replaced 2010
Note is held by a bona fide purchaser. If the Paying Agent segregates
and holds in trust, in accordance with the Indenture, on a redemption
date or maturity date money sufficient to pay all principal and
interest payable on that date with respect to the 2010 Notes (or
portions thereof) to be redeemed or maturing, as the case may be, and
the Paying Agent is not prohibited from paying such money to the
Noteholders on that date pursuant to the terms of the Indenture, then
on and after that date such 2010 Notes (or portions thereof) cease to
be outstanding and interest on them ceases to accrue.
(iv) Amendments. In addition to the restrictions set forth in
Section 902 of the Indenture, no supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected
thereby, make any change in the ranking of priority of any 2010 Note
that would adversely affect the Holders.
54
(v) Revocation and effect of consents and waivers. A consent
to an amendment or a waiver by a Holder of a 2010 Note shall bind the
Holder and every subsequent Holder of that 2010 Note or portion of the
2010 Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent or waiver is not made on the 2010 Note.
After an amendment or waiver becomes effective, it shall bind every
Noteholder. The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Noteholders entitled to
give their consent or take any other action described above or required
or permitted to be taken pursuant to this Officer's Certificate. If a
record date is fixed, then notwithstanding the immediately preceding
paragraph, those Persons who were Noteholders at such record date (or
their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given
or to take any such action, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
(vi) Trustee to sign amendments. The Trustee shall sign any
amendment authorized pursuant to Article IX of the Indenture if the
amendment does not materially and adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may
but need not sign it. In signing such amendment the Trustee shall be
entitled to receive indemnity reasonably satisfactory to it and to
receive, and (subject to Section 601 of the Indenture) shall be fully
protected in relying upon, in addition to the documents required by
Section 102 of the Indenture, an Officers' Certificate and an Opinion
of Counsel stating that such amendment complies with the provisions of
Article IX of the Indenture; provided, however, that Holders who do not
consent, waive or agree to amend this Indenture in the time frame set
forth in such solicitation documents shall not be entitled to any
consideration offered for timely consent, waiver or amendment, even if
the consent, waiver or amendment is agreed to by sufficient Holders to
approve such consent, waiver or amendment to this Indenture.
(vii) Other terms and provisions. The 2010 Notes shall have
such other terms and provisions as are provided in the form thereof
attached hereto as Exhibit A, and shall be issued in substantially such
form.
2. The undersigned has read all of the covenants and conditions
contained in the Indenture, and the definitions in the Indenture relating
thereto, relating to the issuance of the 2010 Notes and in respect of compliance
with which this certificate is made.
The statements contained in this certificate are based upon the
familiarity of the undersigned with the Indenture, the documents accompanying
this certificate, and upon discussions by the undersigned with officers and
employees of the Company familiar with the matters set forth herein.
In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.
55
In the opinion of the undersigned, such conditions and covenants have
been complied with.
56
IN WITNESS WHEREOF, the undersigned has executed this Officer's
Certificate as of the date first written above.
By: _______________________
Name:
Title:
57
EXHIBIT A
FORM OF 2010 NOTES
[Insert the Global Note Legend, if applicable, pursuant to the provisions of
the Indenture and the Officer's Certificate]
UNITED STATES STEEL CORPORATION
No. ___ Principal Amount $________
CUSIP NO. _____________
___% Senior Notes due 2010
United States Steel Corporation, a Delaware corporation, promises to
pay to Cede & Co., or registered assigns, the principal sum of
________________________ Dollars on _____, 20__.
Interest Payment Dates: _____ and _____.
Record Dates: _____ and _____.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: UNITED STATES STEEL CORPORATION
By: ___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Notes
referred to in the Indenture.
THE BANK OF NEW YORK
as Trustee
By: __________________________
Authorized Signatory
A-1
(Reverse of Note)
___% Senior Notes due 2010
1. Interest
United States Steel Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above.
The Company shall pay accrued interest semi-annually on each
_____ and _____ commencing _____, 2003 or if any such day is not a Business Day
(as defined in the Indenture referred to below), on the next Business Day. The
Company shall pay interest on overdue principal at 1% per annum in excess of the
rate borne by the Notes to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 11:00 a.m. prevailing Eastern (U.S.) time on the
date on which any principal of or interest on any Note is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal and/or interest. The Company will pay interest
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on _____ or _____ next preceding the interest payment
date even if Notes are cancelled, repurchased or redeemed after the record date
and on or before the interest payment date. Holders must surrender Notes to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts by wire transfer of immediately
available funds to the U.S. dollar accounts with a bank in the United States
specified by the Holder hereof or, if no such account is specified, by mailing a
check to the Holder's registered address.
3. Paying Agent and Security Registrar
Initially, the Company will act as Paying Agent and Security
Registrar. The Company may appoint and change any Paying Agent, Security
Registrar or co-registrar without notice to any Noteholder. The Company or any
of its domestically incorporated Wholly Owned Subsidiaries may act as Paying
Agent.
4. Indenture
The Company issued the Notes under an Indenture dated as of
September ___, 2002 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, including by the Officer's Certificate, the
"Indenture"), between the Company and The Bank of New York, a New York banking
corporation ("the Trustee"). The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S.C. Sections 77aaa-77bbbb) as in effect
on the date of the Indenture (the "TIA"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The Notes
are subject to all such terms, and Noteholders are referred to the Indenture and
the TIA for a statement of those terms.
D-1
The Notes are senior unsecured obligations of the Company. The
Notes include the Initial Notes and any Additional Notes actually issued. The
Initial Notes and any Additional Notes actually issued are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the Incurrence of Indebtedness by the Company and its Restricted
Subsidiaries, the payment of dividends and other distributions on the Capital
Stock of Company and its Restricted Subsidiaries, the purchase or redemption of
Capital Stock of the Company and Capital Stock of its Restricted Subsidiaries,
the sale or transfer of assets and Capital Stock of Restricted Subsidiaries, the
issuance or sale of Capital Stock of Restricted Subsidiaries, transactions with
Affiliates, the incurrence of Liens and certain Sale/Leaseback Transactions. In
addition, the Indenture limits the ability of the Company and its Restricted
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
5. Optional Redemption
Except as set forth in the following paragraphs, the Notes
will not be redeemable at the option of the Company prior to the Stated
Maturity.
Before _____, 2006, the Company may at its option on one or
more occasions, upon not less than 30 nor more than 60 days' notice, redeem the
Notes in an aggregate principal amount not to exceed 35% of the aggregate
principal amount of the Notes originally issued at a redemption price (expressed
as a percentage of principal amount) of ___%, plus accrued and unpaid interest
to the redemption date, with the net cash proceeds from one or more Public
Equity Offerings; provided that
(i) at least 65% of such aggregate principal amount
originally issued of the Notes remains outstanding
immediately after the occurrence of each such
redemption (other than Notes held, directly or
indirectly, by the Company or its Affiliates); and
(ii) each such redemption occurs within 60 days after the
date of the related Public Equity Offering.
On and after ____________, 2007, the Company will be entitled
at its option to redeem all or a portion of the Notes upon not less than 30 nor
more than 60 days' notice, at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on __________of the years set forth below:
REDEMPTION
PERIOD PRICE
- ------ ----------
2007
2008
2009 and thereafter 100.00%
D-2
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date by first-class mail to each Holder
of Notes to be redeemed at his registered address. Notes in denominations of
principal amount larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on
the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Notes (or such portions thereof) called
for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Notes will have the
right to cause the Company to repurchase all or any part of the Notes of such
Holder at a repurchase price equal to 101% of the principal amount thereof as of
the date of repurchase, plus accrued and unpaid interest, if any, to the date of
repurchase as provided in, and subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may register, transfer or exchange Notes in accordance with the
Indenture. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements or transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Security Registrar need
not register the transfer of or exchange (i) any Notes selected for redemption
(except, in the case of a Note to be redeemed in part, the portion of the Note
not to be redeemed) for a period beginning 15 business days before a selection
of Notes to be redeemed and ending on the date of such selection or (ii) any
Notes for a period beginning on a record date and ending on the next succeeding
interest payment date.
9. Persons Deemed Owners
The registered holder of this Note may be treated as the owner
of it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for one year after the date of payment of principal and interest, the
Trustee or Paying Agent shall pay the money back to the Company at its request
unless an abandoned property law designates another Person. After any such
payment, Holders entitled to the money must look only to the Company and not to
the Trustee for payment.
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11. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the Notes
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal of and interest on the Notes
to redemption or maturity, as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Notes may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity of the
outstanding Notes and (ii) any default or noncompliance with any provision may
be waived with the written consent of the Holders of a majority in principal
amount at maturity of the outstanding Notes. Subject to certain exceptions set
forth in the Indenture, without the consent of any Noteholder, the Company and
the Trustee may amend the Indenture or the Notes to cure any ambiguity,
omission, defect or inconsistency, or to comply with Section 1(u)(i) of the
Officer's Certificate, or to provide for uncertificated Notes in addition to or
in place of certificated Notes, or to add guarantees with respect to the Notes
or to secure the Notes, or to add additional covenants of or surrender rights
and powers conferred on the Company, or to make any change that does not
materially and adversely affect the rights of any Noteholder, or to comply with
any request of the SEC in connection with qualifying the Indenture under the
TIA.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default
in any payment of interest on any Note when due, continued for 30 days, (ii) a
default in the payment of principal of any Note when due at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration of
acceleration or otherwise, (iii) the failure by the Company to comply with its
obligations under Section 1(u)(i) of the Officer's Certificate, (iv) the failure
by the Company to comply for 30 days after notice with any of its other
obligations under Sections 1(r)(ii) and 1(r)(vii) through 1(r)(xvi) of the
Officer's Certificate (in each case, other than a failure to repurchase Notes),
(v) the failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture or the Officer's Certificate, (vi) the
failure by the Company or any Significant Subsidiary of the Company to pay any
Indebtedness within any applicable grace period after final maturity or the
acceleration of any such Indebtedness by the holders thereof because of a
default if the total amount of such Indebtedness unpaid or accelerated exceeds
$50 million or its foreign currency equivalent, (vii) certain events of
bankruptcy, insolvency or reorganization of the Company or any Significant
Subsidiary of the Company, or (viii) any judgment or decree for the payment of
money in excess of $50 million is rendered against the Company or any
Significant Subsidiary of the Company, remains outstanding for a period of 60
days following such judgment and is not discharged, waived or stayed within 10
days after notice. If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the outstanding
Notes may declare all the Notes to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default that will result in the
Notes being due and payable immediately upon the occurrence of such Events of
Default.
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Noteholders may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default or Event of Default
(except a Default or Event of Default in payment of principal or interest) if it
determines that withholding notice is not opposed to their interest.
14. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
15. No Recourse Against Others
No director, officer, employee, member, incorporator or
stockholder of the Company shall have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based on, in respect
of, or by reason of such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. This waiver and release
are part of the consideration for issuance of the Notes.
16. Authentication
This Note shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
17. Abbreviations
Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to
Minors Act).
18. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Notes and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Noteholders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
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19. GOVERNING LAW
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
--------------------------------------
--------------------------------------
--------------------------------------
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ______________ as agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.
Date: ________________________ Your Signature: ____________________
Sign exactly as
your name appears
on the face of
this Note.
Signature Guarantee: ___________________
(Signature must be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 1(r)(viii) or 1(r)(xii) of the Officer's Certificate, check the
appropriate box:
Section 1(r)(viii) [ ]
Section 1(r)(xii) [ ]
If you want to elect to have only part of this Note purchased by the Company
pursuant to Section 1(r)(viii) or 1(r)(xii) of the Officer's Certificate, state
the amount you elect to have purchased (must be integral multiple of $1,000): $
Date: ________________________ Your Signature: ____________________
Sign exactly as
your name appears
on the face of
this Note.
Signature Guarantee: ___________________
(Signature must be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
AMOUNT OF AMOUNT OF PRINCIPAL AMOUNT
DECREASE IN INCREASE IN OF THIS GLOBAL NOTE SIGNATURE OF
PRINCIPAL PRINCIPAL FOLLOWING SUCH AUTHORIZED OFFICER
DATE OF AMOUNT OF THIS AMOUNT OF THIS DECREASE OR OF TRUSTEE OR
EXCHANGE GLOBAL NOTE GLOBAL NOTE INCREASE NOTES CUSTODIAN
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