Exhibit 4(f)
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UNITED STATES STEEL LLC
and
UNITED STATES STEEL FINANCING CORP.,
Issuers
and
USX CORPORATION,
Guarantor
10 3/4% Senior Notes due August 1, 2008
=====================
INDENTURE
Dated as of July 27, 2001
=====================
The Bank of New York,
Trustee
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE................................1
SECTION 1.1. Definitions...........................................................1
SECTION 1.2. Other Definitions....................................................28
SECTION 1.3. Incorporation by Reference of Trust Indenture Act....................29
SECTION 1.4. Rules of Construction................................................29
SECTION 1.5. One Class of Notes...................................................30
ARTICLE II THE NOTES...............................................................30
SECTION 2.1. Form and Dating......................................................30
SECTION 2.2. Execution and Authentication.........................................31
SECTION 2.3. Registrar and Paying Agent...........................................31
SECTION 2.4. Paying Agent to Hold Money in Trust..................................32
SECTION 2.5. Noteholder Lists.....................................................32
SECTION 2.6. Transfer and Exchange................................................32
SECTION 2.7. Replacement Notes....................................................44
SECTION 2.8. Outstanding Notes....................................................45
SECTION 2.9. Treasury Notes.......................................................45
SECTION 2.10. Temporary Notes.....................................................45
SECTION 2.11. Cancellation........................................................46
SECTION 2.12. Defaulted Interest..................................................46
SECTION 2.13. CUSIP Numbers.......................................................46
ARTICLE III REDEMPTION.............................................................46
SECTION 3.1. Notices to Trustee...................................................46
SECTION 3.2. Selection of Notes to Be Redeemed....................................47
SECTION 3.3. Notice of Redemption.................................................47
SECTION 3.4. Effect of Notice of Redemption.......................................48
SECTION 3.5. Deposit of Redemption Price..........................................48
SECTION 3.6. Notes Redeemed in Part...............................................48
SECTION 3.7. Optional Redemption..................................................48
SECTION 3.8. Mandatory Redemption.................................................49
ARTICLE IV COVENANTS...............................................................50
SECTION 4.1. Payment of Notes.....................................................50
SECTION 4.2. Maintenance of Office or Agency......................................50
SECTION 4.3. Corporate Existence..................................................51
SECTION 4.4. SEC Reports..........................................................51
SECTION 4.5. Compliance Certificate...............................................51
SECTION 4.6. Stay, Extension and Usury Laws.......................................52
SECTION 4.7. Payment of Taxes and Other Claims....................................52
SECTION 4.8. Maintenance of Properties and Insurance..............................52
SECTION 4.9. Investment Grade Rating..............................................53
SECTION 4.10. Conditions to Separation............................................53
Page
SECTION 4.11. Change of Control...................................................54
SECTION 4.12. Limitation on Indebtedness..........................................55
SECTION 4.13. Limitation on Restricted Payments...................................58
SECTION 4.14. Limitation on Restrictions on Distributions from Restricted
Subsidiaries.....................................................61
SECTION 4.15. Limitation on Sales of Assets and Subsidiary Stock..................62
SECTION 4.16. Limitation on Affiliate Transactions................................64
SECTION 4.17. Limitation on the Sale or Issuance of Capital Stock of Restricted
Subsidiaries.....................................................66
SECTION 4.18. Limitation on Liens.................................................66
SECTION 4.19. Limitation on Sale/Leaseback Transactions...........................66
SECTION 4.20. Certain Covenants of USS Financing..................................67
SECTION 4.21. Further Instruments and Acts........................................67
ARTICLE V SUCCESSOR COMPANY AND SUCCESSOR GUARANTOR................................67
SECTION 5.1. When Company May Merge or Transfer Assets............................67
SECTION 5.2. When Guarantor May Merge or Transfer Assets..........................68
ARTICLE VI DEFAULTS AND REMEDIES...................................................69
SECTION 6.1. Events of Default....................................................69
SECTION 6.2. Acceleration.........................................................71
SECTION 6.3. Other Remedies.......................................................71
SECTION 6.4. Waiver of Past Defaults..............................................72
SECTION 6.5. Control by Majority..................................................72
SECTION 6.6. Limitation on Suits..................................................72
SECTION 6.7. Rights of Holders to Receive Payment.................................72
SECTION 6.8. Collection Suit by Trustee...........................................73
SECTION 6.9. Trustee May File Proofs of Claim.....................................73
SECTION 6.10. Priorities..........................................................73
SECTION 6.11. Undertaking for Costs...............................................73
SECTION 6.12. Waiver of Stay or Extension Laws....................................74
ARTICLE VII TRUSTEE................................................................74
SECTION 7.1. Duties of Trustee....................................................74
SECTION 7.2. Rights of Trustee....................................................75
SECTION 7.3. Individual Rights of Trustee.........................................76
SECTION 7.4. Money Held in Trust..................................................76
SECTION 7.5. Trustee's Disclaimer.................................................76
SECTION 7.6. Notice of Defaults...................................................76
SECTION 7.7. Reports by Trustee to Holders........................................77
SECTION 7.8. Compensation and Indemnity...........................................77
SECTION 7.9. Replacement of Trustee...............................................78
SECTION 7.10. Successor Trustee by Merger.........................................78
SECTION 7.11. Eligibility; Disqualification.......................................79
SECTION 7.12. Preferential Collection of Claims Against Issuers...................79
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE....................................79
SECTION 8.1. Discharge of Liability on Notes; Defeasance..........................79
ii
Page
SECTION 8.2. Conditions to Defeasance.............................................80
SECTION 8.3. Application of Trust Money...........................................81
SECTION 8.4. Repayment to Issuers.................................................81
SECTION 8.5. Indemnity for Government Obligations.................................81
SECTION 8.6. Reinstatement........................................................82
ARTICLE IX AMENDMENTS..............................................................82
SECTION 9.1. Without Consent of Holders...........................................82
SECTION 9.2. With Consent of Holders..............................................83
SECTION 9.3. Compliance with Trust Indenture Act..................................84
SECTION 9.4. Revocation and Effect of Consents and Waivers........................84
SECTION 9.5. Notation on or Exchange of Notes.....................................84
SECTION 9.6. Trustee to Sign Amendments...........................................84
SECTION 9.7. Payment for Consent..................................................84
ARTICLE X GUARANTEE................................................................85
SECTION 10.1. Guarantee...........................................................85
SECTION 10.2. Release of Guarantor................................................86
ARTICLE XI MISCELLANEOUS...........................................................86
SECTION 11.1. Trust Indenture Act Controls........................................86
SECTION 11.2. Notices.............................................................86
SECTION 11.3. Communication by Holders with Other Holders.........................87
SECTION 11.4. Certificate and Opinion as to Conditions Precedent..................87
SECTION 11.5. Statements Required in Certificate or Opinion.......................87
SECTION 11.6. When Notes Disregarded..............................................88
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar........................88
SECTION 11.8. Legal Holidays......................................................88
SECTION 11.9. GOVERNING LAW.......................................................88
SECTION 11.10. No Recourse Against Others.........................................88
SECTION 11.11. Successors.........................................................88
SECTION 11.12. Multiple Originals.................................................89
SECTION 11.13. Qualification of Indenture.........................................89
SECTION 11.14. Table of Contents; Cross-Reference Sheet; Headings.................89
SECTION 11.15. Severability.......................................................89
Exhibit A - Form of Note
Exhibit B - Form of Certificate of Transfer
Exhibit C - Form of Certificate of Exchange
iii
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
310(a)(1).............................................................7.9, 7.10
(a)(2)..................................................................N.A.
(a)(3)..................................................................N.A.
(a)(4)..................................................................N.A.
(a)(5)..................................................................N.A.
(b).....................................................................7.10
(b)(1)..................................................................7.10
(c).....................................................................N.A.
311(a).....................................................................7.11
(b).....................................................................7.11
(c).....................................................................N.A.
312(a).....................................................................N.A.
(b).....................................................................11.3
(c).....................................................................11.3
313(a)......................................................................7.6
(b)......................................................................7.6
(b)(1)..................................................................N.A.
(b)(2)..................................................................N.A.
(c).....................................................................N.A.
(d).....................................................................N.A.
314(a)(1)..................................................................N.A.
(a)(2)..................................................................N.A.
(a)(3)..................................................................N.A.
(a)(4)..................................................................4.5.
(b).....................................................................N.A.
(c)(1)..................................................................N.A.
(c)(2)..................................................................N.A.
(c)(3)..................................................................N.A.
(e).....................................................................N.A.
(f).....................................................................N.A.
315(a).....................................................................N.A.
(b).....................................................................N.A.
(c).....................................................................N.A.
(d).....................................................................N.A.
(e).....................................................................N.A.
316(a).....................................................................N.A.
(a)(1)..................................................................N.A.
(a)(2)..................................................................N.A.
(b).....................................................................N.A.
(c).....................................................................N.A.
317(a)(1)..................................................................N.A.
(a)(2)..................................................................N.A.
(b).....................................................................N.A.
318(a).....................................................................N.A.
(b).....................................................................N.A.
(c).....................................................................N.A.
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
INDENTURE, dated as of July 27, 2001, among United States Steel LLC, a
Delaware limited liability company (the "Company"), United States Steel
Financing Corp., a Delaware corporation ("USS Financing", and together with the
Company, the "Issuers"), USX Corporation, a Delaware corporation (the
"Guarantor"), and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Issuers' $385,000,000
aggregate principal amount at maturity 10 3/4% Senior Notes due August 1, 2008
(the "Initial Notes") and, if and when issued in exchange for Initial Notes as
provided in the Registration Rights Agreement (as defined herein), the Issuers'
10 3/4% Senior Notes due August 1, 2008 (the "Exchange Notes") and, if and when
issued pursuant to a private exchange for Initial Notes, the Issuers' 10 3/4%
Senior Notes due August 1, 2008 (the "Private Exchange Notes", and together with
the Initial Notes, any Additional Notes (as defined herein) actually issued, and
the Exchange Notes, the "Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions
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"Additional Assets" means:
(i) any property, plant or equipment used in a Related Business;
(ii) 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
(iii)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 (ii)
or (iii) above is primarily engaged in a Related Business.
"Additional Notes" means Notes (other than the Initial Notes and the
Exchange Notes) issued under this Indenture in accordance with Section 2.1
hereof.
"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 4.13, 4.15 and 4.16 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.
2
"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, Euroclear and Clearstream that apply 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 Real Property Sale or a merger, consolidation
or similar transaction (each referred to for the purposes of this definition as
a "disposition"), of:
(i) 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);
(ii) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary; or
(iii) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary.
For purposes of this definition, any transfer of assets of the U. S.
Steel Group to the Marathon Group in accordance with the Management and
Allocation Policies prior to the Separation shall be deemed to be a transfer of
assets of the Company.
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 4.15 only, (x) a disposition that
constitutes a Restricted Payment under Section 4.13 or a
Permitted Investment and (y) a disposition of all or
substantially all the assets of the Company in accordance
with Article V;
(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".
3
"Attributed to the U. S. Steel Group" means attributed to the U. S.
Steel Group in accordance with the Management and Accounting Policies.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing:
(i) 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
(ii) the sum of all such payments.
"Board of Directors" means, until the Separation Date, the Board of
Directors of the Guarantor or any committee thereof duly authorized to act on
behalf of such Board, and after the Separation Date, the Board of Directors of
the Company or any committee thereof duly authorized to act on behalf of such
Board.
"Business Day" means a day other than a Saturday, Sunday or other day
on which banking institutions in New York State are authorized or required by
law to close.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"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 4.18, 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", so long as the Guarantee in Article X is in
effect, means the occurrence of any of the following:
(i) any "person" or "group" of persons shall have acquired
"beneficial ownership" (within the meaning of Section 13(d) or
14(d) of the Securities and Exchange Act) of 1934 as amended, and
the applicable rules and regulations thereunder), of shares of
Voting Stock representing 35% or more of the Voting Power of the
Guarantor;
(ii) during any period of 25 consecutive months, commencing before or
after the Issue Date, individuals who at the beginning of such
25-month period were directors of the Guarantor (together with
any replacement or additional directors whose election was
recommended by incumbent
4
management of the Guarantor or who were elected by a majority of
directors then in office) cease to constitute a majority of the
Board of Directors of the Guarantor;
(iii)the merger or consolidation of the Guarantor with or into
another Person or the merger of another Person with or into the
Guarantor, or the sale of all or substantially all the assets of
the Guarantor (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 Guarantor 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; or
(iv) the disposition, transfer or sale of the interests held in United
States Steel LLC by the Guarantor, except in accordance with the
Separation consummated in compliance with Section 4.10;
provided, however, that in no event shall the Separation, as described in the
Offering Circular, or any transfer or reorganization in connection therewith, be
deemed to be a Change of Control for the purposes of this covenant.
The following definition of Change of Control shall be effective following the
Separation Date:
(i) 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;
(ii) individuals who on the Separation 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 BETA% of
the directors of the Company then still in office who were either
directors on the Separation 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;
(iii)the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(iv) 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
5
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.
"Clearstream" means Clearstream Banking, S.A.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means United States Steel LLC, a Delaware limited liability
company, until a successor replaces it in accordance with the applicable
provisions of this Indenture, 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:
(i) 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;
(ii) 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;
(iii)if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition,
EBITDA for such period shall be reduced by an amount equal to
EBITDA (if positive) directly attributable to the assets which
are the subject of such Asset
6
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);
(iv) 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
(v) 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 (iii) or (iv) 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.
For purposes of this definition, any assets, properties, Indebtedness or other
liabilities or obligations that are Attributed to the U. S. Steel Group prior to
the Separation are deemed to be assets, properties, Indebtedness, liabilities or
obligations 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).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries
(prior to the Separation, as
7
Attributed to the U. S. Steel Group) 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:
(i) interest expense attributable to capital leases and the interest
expense attributable to leases constituting part of a
Sale/Leaseback Transaction;
(ii) amortization of debt discount and debt issuance cost;
(iii)capitalized interest;
(iv) non-cash interest expenses;
(v) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(vi) net payments pursuant to Hedging Obligations in respect of
Indebtedness;
(vii)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);
(viii)interest incurred in connection with Investments in
discontinued operations;
(ix) 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
(x) the cash contributions to any employee stock ownership plan or
similar trust to the extent the proceeds of 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
in each case for such period and, prior to Separation, as such amounts are
Attributed to the U. S. Steel Group.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Restricted Subsidiaries determined in accordance of
GAAP (prior to the Separation, as Attributed to U. S. Steel Group); provided,
however, that there shall not be included in such Consolidated Net Income:
(i) 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 (iv) 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 dividend or other
distribution (subject, in the case of a dividend or
8
other distribution paid to a Restricted Subsidiary, to the
limitations contained in clause (iii) 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;
(ii) 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;
(iii) 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 (iv) 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;
(iv) 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;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting principles
in each case for such period and, prior to Separation, as such amounts are
Attributed to the U.S. Steel Group. Notwithstanding the foregoing, for the
purposes of Section 4.13 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.
9
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries (or, prior to the
Separation, of the U. S. Steel Group), 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:
(i) the par or stated value of all outstanding Capital Stock of the
Company plus
(ii) paid-in capital or capital surplus relating to such Capital Stock
plus
(iii)any retained earnings or earned surplus (or, prior to the
Separation, the amount shown as "USX's net investment" instead of
the sum of clauses (i), (ii) and (iii))
less (A) any accumulated deficit and (B) any amounts attributable to
Disqualified Stock.
"Corporate Trust Office of the Trustee" means the address of the
Trustee specified in Section 11.2 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"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.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.6 hereof in the form
of Exhibit A hereto, except that such Note shall not bear the Global Note Legend
and shall not have the "Schedule of Exchanges of Interests in the Global Note"
attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
10
"Directors" means, until the Separation Date, the persons who are
members of the Board of Directors of USX Corporation, and after the Separation
Date, 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:
(i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise;
(ii) is convertible or exchangeable at the option of the holder for
Indebtedness or Disqualified Stock; or
(iii) 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:
(i) 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 4.11 and 4.15; and
(ii) 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.
"Distribution Compliance Period" means the 40-day period commencing on
the date Notes are first issued under this Indenture.
"EBITDA" for any period means the sum of Consolidated Net Income (but
without giving effect to any gains or losses from Asset Dispositions), minus
noncash net pension credits to the extent included in calculating such
Consolidated Net Income and plus the following to the extent deducted in
calculating such Consolidated Net Income:
11
(i) all income tax expense of the Company and its consolidated
Restricted Subsidiaries;
(ii) Consolidated Interest Expense;
(iii)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);
(iv) 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
(v) net periodic benefit cost recorded for postretirement benefits
other than pensions, to the extent such cost exceeds (x) payments
made by the Company for such benefits that are not reimbursed by
plan assets and (y) any funding by the Company to the VEBA trust
in each case for such period and, prior to the Separation, as such amounts are
Attributed to the U. S. Steel Group. 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.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the debt securities of the Company issued
pursuant to the Indenture in exchange for, and in an aggregate principal amount
at maturity equal to, the Initial Notes, in compliance with the terms of the
Registration Rights Agreement.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Excluded Real Property Sales" means sales of real property by
installment 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.
12
"Financial Matters Agreement" means the financial matters agreement to
be entered into by USX Corporation and the Company in connection with the
Separation, as described in the Offering Circular.
"Financing Entity" means any Wholly Owned Subsidiary formed solely 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 the Issue Date, 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 Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes.
"Global Note Legend" means the legend set forth in Section 2.6(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"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.
"Guarantor" means USX Corporation or any successor thereto, so long as
the Guarantee of the Notes is in effect.
13
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the 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 4.12, 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 (vi) 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 Oil Corporation
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 Oil Corporation 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):
(i) 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;
(ii) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale/Leaseback Transactions entered into by
such Person;
(iii)all Purchase Money Indebtedness of such Person;
(iv) 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 (i) through (iii) 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 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);
(v) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified
Stock of
14
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);
(vi) all obligations of the type referred to in clauses (i) through
(v) 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;
(vii)all obligations of the type referred to in clauses (i) through
(vi) 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 or the amount
of the obligation so secured;
(viii)to the extent not otherwise included in this definition, any
financing of accounts receivable or inventory of such Person; and
(ix) 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 Oil Corporation 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 Oil Corporation 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 Indebtedness sold at a discount, the amount of such
Indebtedness at any time will be the accreted value thereof at such time.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
15
"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.
Prior to the Separation, any Investment made by another Person that is
Attributed to the U.S. Steel Group shall be deemed to be made by the Company.
For purposes of the definition of "Unrestricted Subsidiary", the
definition of "Restricted Payment" and Section 4.13:
(i) "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
(ii) 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 Investor Service, Inc. and BBB- (or the
equivalent) by Standard & Poor's Rating Group, Inc.
16
"Issue Date" means the date on which the Notes are originally issued.
"Legal Holiday" has the meaning ascribed in Section 11.8.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"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 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).
"Management and Allocation Policies" means the policies and procedures
adopted by the board of directors of USX Corporation or otherwise used by USX
Corporation for the purpose of preparing financial statements of the U. S. Steel
Group.
"Marathon Group" means the Marathon Group of USX Corporation, as
defined in the Certificate of Incorporation of USX Corporation.
"Net Available Cash" from an Asset Disposition 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:
(i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a
liability under GAAP, as a consequence of such Asset Disposition;
(ii) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, 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 Disposition, or
by applicable law, be repaid out of the proceeds from such Asset
Disposition;
(iii)all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result
of such Asset Disposition; and
(iv) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities
associated with the
17
property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such
Asset Disposition.
"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.
"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.
"Offering Circular" means the final offering circular of the Issuers
relating to the offering of the Notes.
"Officer" means the Chairman of the Board, the President, the Chief
Executive Officer, any Vice President, the Chief Financial Officer, the
Treasurer or the Secretary of the Company and USS Financing, as applicable.
"Officers' Certificate" means a certificate that meets the
requirements of Section 11.5 signed by any Officer of each of the Company and
USS Financing, as applicable.
"Opinion of Counsel" means a written opinion that meets the
requirements of Section 11.5 from legal counsel who is reasonably acceptable to
the Trustee. The counsel may be an employee of or counsel to the Issuers.
"Parent" means until the Separation Date, USX Corporation.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(i) the 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;
(ii) 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;
(iii)cash and Temporary Cash Investments;
(iv) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and
payable or
18
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;
(v) 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;
(vi) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such
Restricted Subsidiary;
(vii)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;
(viii)any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset
Disposition as permitted in Section 4.15;
(ix) 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;
(x) loans or advances to USS/POSCO Industries for repairs of damages
and business interruption caused by the fire that occurred on May
31, 2001 in an amount not to exceed $25 million; provided that to
the extent such amounts are not repaid with the proceeds of
insurance on or before June 30, 2003, such amounts will be
included as a Restricted Payment in the calculation of Restricted
Payments; and
(xi) 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".
19
"Permitted Liens" means, with respect to any Person:
(i) 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 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;
(ii) 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;
(iii)Liens for property taxes not yet subject to penalties for
non-payment or which are being contested in good faith by
appropriate proceedings;
(iv) 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;
(v) 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;
(vi) 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
20
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, improvement, addition or commencement of
full operation of the property subject to the Lien;
(vii) Liens existing on the Issue Date;
(viii)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);
(ix) Liens on the inventory or accounts receivable of the Company or
any Restricted Subsidiary securing Indebtedness permitted under
the provisions described in clause (b)(i) under Section 4.12;
(x) Liens securing industrial revenue or pollution control bonds
issued by the Company, or prior to the Separation, by the USX
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;
(xi) 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);
(xii)Liens securing Indebtedness or other obligations of a Subsidiary
of such Person owing to such Person or a wholly owned Subsidiary
of such Person;
(xiii)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;
(xiv) 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 (vi), (viii), (ix) or (x);
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
21
(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 (vi),
(viii), (ix) or (x) 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
(xv) Liens on assets subject to a Sale/Leaseback Transaction securing
Attributable Debt permitted to be Incurred under Section 4.12.
Notwithstanding the foregoing, "Permitted Liens" will not include any Lien
described in clauses (vi), (ix) or (x) above to the extent such Lien applies to
any Additional Assets acquired directly or indirectly from Net Available Cash
under Section 4.15.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Plan of Reorganization" means the Agreement and Plan of
Reorganization to be entered into among USX Corporation, the Company and certain
subsidiaries in connection with the Separation, as described in the Offering
Circular.
"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.
"Private Exchange" means the offer by the Issuers, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Notes held by the Initial
Purchaser as part of its initial distribution, a like aggregate principal amount
at maturity of Private Exchange Notes.
"Private Exchange Notes" means the 10 3/4% Senior Notes due August 1,
2008, if any, to be issued pursuant to this Indenture to the Initial Purchasers
in a Private Exchange.
"Private Placement Legend" means the legend set forth in Section
2.6(g)(i)(A) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"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
22
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 Agency" means Standard & Poor's Ratings Group, Inc. and
Moody's Investors Service, Inc. or if Standard & Poor's Ratings Group, Inc. or
Moody's Investors Service, Inc. or both shall not make a rating on the 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 Standard &
Poor's Ratings Group, Inc. or Moody's Investors Service, Inc. or both, as the
case may be.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, purchase, 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:
(i) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced;
(ii) 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
(iii) 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.
"Registration Rights Agreement" means the Registration Rights
Agreement among the Issuers, Credit Suisse First Boston Corporation, J.P. Morgan
Securities Inc., Lehman Brothers Inc., Salomon Smith Barney Inc., BNY Capital
Markets, Inc., Mellon Financial Markets, LLC, NatCity Investments, Inc., PNC
Capital Markets, Inc. and Scotia Capital Inc. related to the Notes.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"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.
23
"Representative" means with respect to a Person any trustee, agent or
representative (if any) for an issue of Senior Indebtedness of such Person.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a global Note in the form of Exhibit A
attached hereto that bears the Global Note Legend and the Private Placement
Legend and that is deposited with or on behalf of and registered in the name of
the Depositary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Restricted Payment" with respect to any Person means:
(i) 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 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));
(ii) 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);
(iii) 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
(iv) the making of any Investment (other than a Permitted Investment)
in any Person;
24
provided, however, that prior to the Separation (x) any reduction of
Indebtedness that is Attributed to the U. S. Steel Group shall be deemed not to
be a Restricted Payment, (y) Capital Stock or Subordinated Obligations of the
Company shall be deemed to include Capital Stock or Subordinated Obligations of
any Person that is Attributed to the U. S. Steel Group (including Steel Stock,
but excluding any Preferred Stock or Subordinated Obligations of other Persons
outstanding as of the Issue Date) and the Company shall be deemed to make any
Restricted Payment made in respect of such Capital Stock or Subordinated
Obligations; provided further, 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 4.13 pursuant to the Company's dividend
reinvestment plan shall not, in either case, be a "Restricted Payment".
"Restricted Subsidiary" means (i) any Subsidiary of the Company that
is not an Unrestricted Subsidiary and (ii) USS Financing.
"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.
"Secured Indebtedness" means any Indebtedness of the Issuer secured by
a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means with respect to any Person:
(i) Indebtedness of such Person (including, prior to the Separation,
any Indebtedness to the extent it is Attributed to the U. S.
Steel Group), whether outstanding on the Issue Date or thereafter
Incurred; and
(ii) 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 (in each case including, prior to
Separation, any such Indebtedness to the extent it is Attributed
to the U. S. Steel Group)
unless, in the case of clauses (i) and (ii), 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:
(i) any obligation of such Person to any Subsidiary;
(ii) any liability for Federal, state, local or other taxes owed or
owing by such Person;
25
(iii)any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities);
(iv) 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
(v) that portion of any Indebtedness which at the time of Incurrence
is Incurred in violation of the Indenture.
"Separation" means the separation of the Company from USX Corporation
pursuant to the Plan of Reorganization.
"Separation Date" means the date the Separation occurs; provided such
date is on or prior to December 31, 2002.
"Separation Documents" means the Plan of Reorganization, the Financial
Matters Agreement and the Tax Sharing Agreement.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Issuer within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the 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 beyond the control of the issuer unless such contingency has
occurred).
"Steel Stock" means USX--U. S. Steel Group Common Stock of USX
Corporation.
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is 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:
(i) such Person;
(ii) such Person and one or more Subsidiaries of such Person; or
(iii) one or more Subsidiaries of such Person;
26
provided that, prior to the Separation, any Subsidiary of another Person that is
Attributed to the U. S. Steel Group shall be deemed a Subsidiary of the Company,
and any Voting Stock of that Subsidiary owned by such Person shall be deemed to
be owned by the Company.
"Tax Sharing Agreement" means the tax sharing agreement to be entered
into by USX Corporation and the Company its connection with the Separation, as
described in the Offering Circular.
"Temporary Cash Investments" means any of the following: (i) 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; (ii) 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 whose long-term debt is rated
"A" (or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money market fund sponsored by a registered broker dealer
or mutual fund distributor; (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above; (iv) 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 Investors Service, Inc. or "A-1" (or higher)
according to Standard & Poor's Ratings Group; (v) 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 or taxing authority thereof, and rated
at least "A" by Standard & Poor's Ratings Group or "A" by Moody's Investors
Service, Inc.; (vi) overnight investments with banks rated "B" or better by
Fitch, Inc.; (vii) in the case of a Foreign Restricted Subsidiary, investments
of the type and maturity described in clauses (i) through (vi) 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 (viii) deposits in Slovak financial institutions that do
not at any time exceed $5 million in the aggregate.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means such successor.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
27
"Tubular Business" means the business of Lorain Tubular Company LLC
and any other assets and liabilities of the Company or any of its Subsidiaries
primarily related to its tubular products business.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note in the form
of Exhibit A attached hereto that bears the Global Note Legend but not the
Private Placement Legend and that is deposited with or on behalf of and
registered in the name of the Depositary.
"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 4.13. 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 paragraph Section 4.12(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. 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 4.12, whenever it is necessary 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 or redeemable at the issuer's option.
28
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
"U. S. Steel Group" means the United States Steel Group of USX
Corporation, as defined in the Restated Certificate of Incorporation of USX
Corporation.
"USS Financing" means United States Steel Financing Corp., a Delaware
corporation, until a successor replaces it in accordance with the applicable
provisions of this Indenture, and thereafter, means such successor.
"USSK" means U.S. Steel Kosice, s.r.o., a company organized under the
laws of the Slovak Republic.
"USS-POSCO Industries" means USS-POSCO Industries, a California
general partnership whose general partners are POSCO-CALIFORNIA CORPORATION, a
Delaware corporation, and PITCAL, INC., a Delaware corporation.
"Voting Power" as applied to the stock of any Person means the total
voting power represented by all outstanding Voting Stock of such corporation.
"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 trustee thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company
all the Capital Stock of which (other than directors' qualifying shares) is
owned by the Company or one or more Wholly Owned Subsidiaries.
SECTION 1.2. Other Definitions
-----------------
Defined in
Term Section
---- ----------
"Affiliate Transaction".................................... 4.16
"Authenticating Agent"..................................... 2.2
"Authentication Order"..................................... 2.2
"Bankruptcy Law"........................................... 6.1
"Change of Control Offer".................................. 4.11
"covenant defeasance option"............................... 8.1(b)
"Custodian"................................................ 6.1
"Event of Default"......................................... 6.1
"Initial Lien"............................................. 4.18
"legal defeasance option".................................. 8.1(b)
"Notice of Default"........................................ 6.1
"Paying Agent"............................................. 2.3
"Registrar"................................................ 2.3
"Successor Company"........................................ 5.1
"Successor Guarantor"...................................... 5.2
"Suspended Covenants"...................................... 4.9
29
Defined in
Term Section
---- ----------
SECTION 1.3. Incorporation by Reference of Trust Indenture Act
-------------------------------------------------
The mandatory provisions of the TIA are incorporated by reference in
and made a part of this Indenture. The following TIA terms have the following
meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuers and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate
or junior to Secured Indebtedness merely by virtue of its nature as
unsecured Indebtedness;
(7) except as otherwise expressly provided, the principal amount
of any noninterest bearing or other discount security at any date
shall be the principal amount thereof that would be shown on a balance
sheet of the issuer dated such date prepared in accordance with GAAP;
30
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation preference of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater; and
(9) except as otherwise expressly provided, all references to the
date the Notes were originally issued shall refer to the date the
Initial Notes were originally issued.
SECTION 1.5. One Class of Notes. The Initial Notes, the Additional
------------------
Notes, the Private Exchange Notes and the Exchange Notes shall vote and consent
together on all matters as one class and none of the Initial Notes, the
Additional Notes, the Private Exchange Notes or the Exchange Notes shall have
the right to vote or consent as a separate class on any matter.
ARTICLE II
The Notes
SECTION 2.1. Form and Dating
---------------
(a) General.
-------
The Notes will initially be issued in an aggregate principal amount of
$385,000,000, except for Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section
2.6, 2.7, 2.10, 3.6 or 9.5. The Issuers may create and issue Additional Notes in
such an aggregate principal amount as would be permitted on the date of issuance
to be incurred under Section 4.12(b)(iv). The Additional Notes will rank equally
with the Initial Notes and otherwise similar in all respects so that the
Additional Notes shall be consolidated and form a single series with the Initial
Notes. The Trustee shall authenticate Additional Notes upon receipt of an
Authentication Order and an Officers' Certificate and Opinion of Counsel, both
meeting the requirements of Section 11.5, subject to Section 2.2, specifying the
amount of Additional Notes to be authenticated.
The Issuers may issue Exchange Notes or Private Exchange Notes
pursuant to an Exchange Offer or a Private Exchange and a Board Resolution,
subject to Section 2.2, included in an Officers' Certificate and an Opinion of
Counsel both meeting the requirements of Section 11.5 delivered to the Trustee,
in authorized denominations in exchange for a like principal amount of Initial
Notes. Upon any such exchange, any Initial Notes and Additional Notes exchanged
for Exchange Notes or Private Exchange Notes shall be canceled in accordance
with Section 2.11 and shall no longer be deemed outstanding for any purpose.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
shall be dated the date of its authentication. The Notes shall be issuable only
in fully registered form, without coupons, in denominations of $1,000 and
integral multiples thereof. Interest on the Notes shall be computed on the basis
of a 360-day year consisting of twelve 30-day months.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Issuers and the
Trustee, by their execution and
31
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby. However, to the extent any provision of any Note conflicts
with the express provisions of this Indenture, the provisions of this Indenture
shall govern and be controlling.
(b) Global Notes and Definitive Notes.
---------------------------------
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the Global Note Legend thereon and the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding 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 Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.
(c) Euroclear, Clearstream Procedures Applicable.
--------------------------------------------
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Clearstream Banking" and "Customer Handbook" of Clearstream shall
be applicable to transfers of beneficial interests in the Regulation S Global
Notes that are held by Participants through Euroclear or Clearstream.
SECTION 2.2. Execution and Authentication
----------------------------
An Officer of each Issuer shall sign the Notes for the Issuers by
manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the
Trustee, upon a written order of the Issuers signed by an Officer of each of the
Issuers (an "Authentication Order"), manually authenticates the Note. The
signature of the Trustee on a Note shall be conclusive evidence that such Note
has been duly and validly authenticated and issued under this Indenture.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Issuers to authenticate the Notes. Unless limited
by the terms of such appointment, any such Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
SECTION 2.3. Registrar and Paying Agent
--------------------------
32
The Company shall (i) appoint an agent (the "Registrar") who shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange and (ii) an agent (the "Paying Agent") who shall
maintain an office or agency where Notes may be presented for payment. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Registrar and the Paying Agent shall initially be the Company. The Company
may have one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any such additional paying agent.
In the event the Company shall retain any Person not a party to this
Indenture as an agent hereunder, the Company shall enter into an appropriate
agency agreement with any Registrar, Paying Agent or co-registrar not a party to
this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent. The
Company shall promptly notify the Trustee of the name and address of each such
agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.7. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent.
The Issuers initially appoint The Depository Trust Company to act as
depositary with respect to the Global Notes.
SECTION 2.4. Paying Agent to Hold Money in Trust
-----------------------------------
By at least 11:00 a.m. prevailing Eastern (U.S.) time on the date on
which any principal or interest on any Note is due and payable, the Issuers
shall deposit with the Paying Agent a sum sufficient to pay such principal or
interest when due. The Issuers shall require each Paying Agent (other than the
Trustee) to agree in writing that such Paying Agent shall hold in trust for the
benefit of Noteholders or the Trustee all money held by such Paying Agent for
the payment of principal or interest on the Notes and shall notify the Trustee
of any default by the Issuers in making any such payment. If the Company or any
of its Subsidiaries acts as Paying Agent, it shall segregate the money held by
it as Paying Agent and hold it as a separate trust fund. The Issuers at any time
may require a Paying Agent (other than the Trustee) to pay all money held by it
to the Trustee and to account for any funds disbursed by such Paying Agent. Upon
complying with this Section 2.4, the Paying Agent (if other than either Issuer
or any of its Subsidiaries) shall have no further liability for the money
delivered to the Trustee. Upon any bankruptcy, reorganization or similar
proceeding with respect to the Issuers, the Trustee shall serve as Paying Agent
for the Notes.
SECTION 2.5. Noteholder Lists
----------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee or any Paying Agent is not the Registrar, the
Issuers shall cause the Registrar to furnish to the Trustee or any such Paying
Agent, in writing at least five Business Days before each interest payment date
and at such other times as the Trustee or any such Paying Agent may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Noteholders.
SECTION 2.6. Transfer and Exchange
---------------------
33
(a) Transfer and Exchange of Global Notes.
-------------------------------------
A Global Note may not be transferred except as a whole 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 will be exchanged by the Issuers for Definitive
Notes if (i) the Depositary notifies the Issuers that it is unwilling or unable
to continue to act as Depositary or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, the Issuers are unable to
locate a qualified successor Depositary within 90 days after the date of such
notice from the Depositary or (ii) the Issuers, in their discretion at any time,
determine not to have all the Notes represented by Global Notes or (iii) a
Default entitling the Holders to accelerate the maturity of the Notes has
occurred and is continuing. Upon the occurrence of either of the preceding
events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee in writing. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.7
and 2.11 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.6 or
Section 2.7 or 2.10 hereof, shall be authenticated and delivered in the form of,
and shall be, a Global Note, except as otherwise provided herein. A Global Note
may not be exchanged for another Note other than as provided in this Section
2.6(a), however, beneficial interests in a Global Note may be transferred and
exchanged as provided in Section 2.6(b), (c) or (f) hereof.
(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 Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described
in this Section 2.6(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.6(b)(i) above, the transferor
of such beneficial interest must deliver to the 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)
34
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 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 consummation of
an Exchange Offer by the Issuers in accordance with Section 2.6(f) hereof,
the requirements of this Section 2.6(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. 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 Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.6(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.6(b)(ii) above and the
Registrar receives a certificate in the form of Exhibit B hereto, including
the certifications in item (1) or (2) thereof, as applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted Global
Note. A beneficial interest in any Restricted Global Note may be exchanged
by any holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.6(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an Affiliate of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate
35
from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Issuers shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
(v) Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
-----------------------------------------------------------------
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under
36
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the
Issuers or any of their respective Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(F) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.6(h) hereof, and the
Issuers shall execute and the Trustee shall upon receipt of an Authentication
Order authenticate and 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 in a Restricted Global Note pursuant to
this Section 2.6(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 Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall (at the expense
of the Issuers) deliver such Definitive Notes to the Persons in whose names such
Notes are so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.6(c)(i) shall
bear the Private Placement Legend and shall be subject to all restrictions on
transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an Affiliate of the
Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
37
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in
the form of Exhibit C hereto, including the certifications
in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item
(4) thereof,
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted 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 2.6(b)(ii) hereof, the
Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.6(h) hereof, and the
Issuers 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 2.6(c)(iii) 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
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall (at the expense of the Issuers)
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.6(c)(iii) shall not bear the Private
Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests
------------------------------------------------------------------
in Global Notes.
- ---------------
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
38
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a Qualified Institutional Buyer in accordance with Rule 144A
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred
to the Issuers or any of their respective Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof;
the Trustee shall cancel the Restricted Definitive Note and increase or cause to
be increased the aggregate principal amount of the appropriate Restricted Global
Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an Affiliate of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
39
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications
in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.6(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a written request for such an exchange or transfer,
the Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
(iv) If any such exchange or transfer from a Definitive Note to a
beneficial interest in an Unrestricted Global Note is effected pursuant to
subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an
Unrestricted Global Note has not yet been issued, the Issuers shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.2
hereof, the Trustee shall authenticate one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) 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 2.6(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall
40
present or surrender to the Registrar the Definitive Notes duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
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, required pursuant to
the following provisions of this Section 2.6(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
Any Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications required by
item (3) thereof.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted Definitive
Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the Letter of
Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an Affiliate of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in item
(1)(d) thereof; or
41
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer.
--------------
Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Issuers shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.2, the Trustee shall
authenticate (i) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes tendered for acceptance by Persons that certify in the
Letters of Transmittal that (x) they are not Broker-Dealers, (y) they are not
participating in a distribution of the Exchange Notes and (z) they are not
Affiliates of the Issuers, and accepted for exchange in the Exchange Offer and
(ii) Definitive Notes in an aggregate principal amount equal to the principal
amount of the Restricted Definitive Notes accepted for exchange in the Exchange
Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Issuers shall execute and the Trustee shall
authenticate and (at the expense of the Issuers) deliver to the Persons
designated by the Holders of Definitive Notes so accepted Definitive Notes in
the appropriate principal amount.
(g) 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 Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
42
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE".
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.6 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) 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
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 SECTION 2.6
OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE ISSUERS.
43
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN".
(h) 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 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Trustee or by the Depositary at the direction of
the Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will 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 or by the Depositary at the direction of the Trustee to
reflect such increase.
(i) Upon the consummation of a Private Exchange with respect to the
Initial Notes pursuant to which Holders of such Initial Notes are offered
Private Exchange Notes in exchange for their Initial Notes, all requirements
pertaining to such Initial Notes that Initial Notes issued to certain Holders be
issued in global form will still apply, and Private Exchange Notes in global
form will be available to Holders that exchange such Initial Notes in such
Private Exchange.
(j) General Provisions Relating to Transfers and Exchanges.
------------------------------------------------------
(i) To permit registrations of transfers and exchanges, the
Issuers shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance with
Section 2.2 hereof or upon receipt of a written request of the Registrar.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Issuers may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.6 and 9.5 hereof).
44
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Issuers, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Issuers shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.2 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (c) to register the transfer
of or to exchange a Note between a record date and the next succeeding
interest payment date.
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Issuers may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Note and for all other purposes, and none of the Trustee, any Agent or
the Issuers shall be affected by notice to the contrary.
(vii) Each Holder of a Security agrees to indemnify the Company
and the Trustee against any liability that may result from the transfer,
exchange or assignment of such Holder's Security in violation of any
provision of this Indenture and/or applicable United States Federal or
state securities law.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any
transfers between or among Depositary Participants or beneficial
owners of interests in any Global Security) 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.
(viii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.2 hereof.
(ix) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.6 to
effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.7. Replacement Notes
-----------------
45
If a mutilated Note is surrendered to the Registrar or if the Holder
of a Note shall provide the Issuers and the Trustee with evidence to their
satisfaction that the Note has been lost, destroyed or wrongfully taken, the
Issuers shall issue and the Trustee shall authenticate a replacement Note if the
requirements of Section 8-405 of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. If required
by the Trustee or either of the Issuers, such Holder shall furnish an indemnity
bond sufficient in the judgment of the Issuers and the Trustee to protect the
Issuers, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Note is replaced. The Issuers and the
Trustee may charge the Holder for their expenses in replacing a Note, including
reasonable fees and expenses of counsel. Every replacement Note is an additional
Obligation of the Issuers.
SECTION 2.8. Outstanding Notes
-----------------
Notes outstanding at any time are all Notes authenticated by the
Trustee except for those canceled, those delivered for cancellation and those
described in this Section 2.8 as not outstanding. A Note does not cease to be
outstanding because an Issuer or an Affiliate of an Issuer holds the Note.
If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Issuers receive proof satisfactory to
them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the 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 this Indenture, then on and after that date such Notes
(or portions thereof) cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.9. Treasury Notes
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by any
Issuer, the Guarantor or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with any Issuer or the
Guarantor shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that a Trust Officer actually
knows are so owned shall be so disregarded.
SECTION 2.10. Temporary Notes
---------------
Until Definitive Notes are ready for delivery, the Issuers may prepare
and the Trustee, upon receipt of an Authentication Order, shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
Definitive Notes but may have variations that the Issuers and the Trustee
consider appropriate for temporary Notes. Without unreasonable delay, the
Issuers shall prepare and the Trustee shall authenticate Definitive Notes. After
the preparation of Definitive Notes, the temporary Notes shall be exchangeable
for Definitive Notes upon surrender of the temporary Notes at any office or
agency maintained by the Issuers for that purpose and such exchange shall be
without charge to the Holder. Upon surrender for
46
cancellation of any one or more temporary Notes, the Issuers shall execute, and
the Trustee shall authenticate and deliver in exchange therefor, one or more
Definitive Notes representing an equal principal amount of Notes. Until so
exchanged, the Holder of temporary Notes shall in all respects be entitled to
the same benefits under this Indenture as a Holder of Definitive Notes.
SECTION 2.11. Cancellation
------------
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
for cancellation any Notes surrendered to them for registration of transfer or
exchange or payment. The Trustee shall cancel and dispose of (subject to the
record retention requirements of the Exchange Act) all Notes surrendered for
registration of transfer or exchange, payment or cancellation according to its
normal operating procedures and deliver a certificate of such destruction to the
Issuers unless the Issuers direct the Trustee to deliver canceled Notes to the
Issuers. The Issuers may not issue new Notes to replace Notes they have
redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest
------------------
If the Issuers default in a payment of interest on the Notes, the
Issuers shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the rate specified therefor in the Notes in any lawful
manner. The Issuers may pay the defaulted interest to the Persons who are
Noteholders on a subsequent special record date. The Issuers shall fix or cause
to be fixed (or upon the Issuers' failure to do so the Trustee shall fix) any
such special record date and payment date which specified record date shall not
be less than 10 days prior to the payment date for such defaulted interest and
shall promptly mail or cause to be mailed to each Noteholder a notice that
states the special record date, the payment date and the amount of defaulted
interest to be paid. The Issuers shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment, and at the same time the Issuers shall deposit with the
Paying Agent an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when so deposited to be held in trust for the benefit of the
Person entitled to such defaulted interest as provided in this Section 2.12.
SECTION 2.13. CUSIP Numbers
-------------
The Issuers in issuing the Notes may use "CUSIP" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers.
ARTICLE III
Redemption
SECTION 3.1. Notices to Trustee
------------------
47
If the Issuers elect to redeem Notes pursuant to the provisions of
Section 3.7, they shall notify the Trustee and the Paying Agent in writing of
the redemption date and the principal amount at maturity of Notes to be redeemed
and the redemption price.
The Issuers shall give each notice to the Trustee and the Paying Agent
provided for in this Section 3.1 at least 15 days prior to the date notice of
redemption is to be delivered to Holders of Notes unless the Trustee and the
Paying Agent consent to a shorter period. Such notice shall be accompanied by an
Officers' Certificate from the Issuers to the effect that such redemption will
comply with the conditions herein. The record date relating to such redemption
shall be selected by the Issuers and set forth in the related notice given to
the Trustee and the Paying Agent, which record date shall be not less than 15
days prior to the date selected for redemption by the Issuers.
SECTION 3.2. Selection of Notes to Be Redeemed
---------------------------------
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Note of $1,000 in original principal amount or less
will be redeemed in part. Provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
Upon request of the Issuers, the Trustee shall notify the Issuers of the Notes
or portions of Notes to be redeemed.
SECTION 3.3. Notice of Redemption
--------------------
At least 30 days but not more than 60 days before a date for
redemption of Notes, the Trustee at the expense of the Issuers shall mail a
notice of redemption by first-class mail to each Holder of Notes to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price plus accrued and unpaid
interest, if any;
(v) if fewer than all the outstanding Notes are to be redeemed, the
identification and principal amounts of the particular Notes to be
redeemed;
(vi) that, unless the Issuers default in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Notes (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(vii) the CUSIP number, if any, printed on the Notes being redeemed;
and
48
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.
The Trustee shall give the notice of redemption in the Issuers' name
and at the Issuers' expense. In such event, the Issuers shall provide the
Trustee with the information required by this Section 3.3.
SECTION 3.4. Effect of Notice of Redemption
------------------------------
Once notice of redemption is mailed, Notes called for redemption shall
become due and payable on the redemption date and at the redemption price stated
in the notice. Upon surrender to the Paying Agent, such Notes shall be paid at
the redemption price stated in the notice, plus accrued and unpaid interest, if
any, to the redemption date; provided that the Issuers shall have deposited the
redemption price with the Paying Agent or the Trustee on or before 11:00 a.m.
prevailing Eastern (U.S.) time on the date of redemption; provided, further,
that if the redemption date is after a regular record date and on or prior to
the related interest payment date, the accrued and unpaid interest shall be
payable to the Noteholder of the redeemed Notes registered on that record date.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.5. Deposit of Redemption Price
---------------------------
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 Issuers
shall deposit with the Paying Agent (or, if an Issuer or a Subsidiary is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued and unpaid interest, if any, on all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption which are owned by the Issuers or any of their Subsidiaries and have
been delivered by the Issuers or any such Subsidiary to the Trustee for
cancellation.
If the Issuers comply with the preceding paragraph, then, unless the
Issuers default in the payment of such redemption price, interest on the Notes
to be redeemed will cease to accrue on and after the applicable redemption date,
whether or not such Notes are presented for payment.
SECTION 3.6. Notes Redeemed in Part
----------------------
Upon surrender of a Note that is redeemed in part, the Issuers shall
execute and the Trustee shall authenticate for the Holder (at the Issuers'
expense) a new Note equal in a principal amount at maturity to the unredeemed
portion of the Note surrendered.
SECTION 3.7. Optional Redemption
-------------------
Except as set forth in the following paragraphs, the Notes will not be
redeemable at the option of the Issuers prior to the Stated Maturity.
Before August 1, 2004, the Issuers may at their 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 relevant series of Notes originally issued at a redemption price
(expressed as a percentage of principal amount) of
49
110.75%, 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.
Further, at any time on or prior to December 31, 2002, the Issuers
may, at their option, give written notice to redeem the Notes, which notice
shall be no less than 30 nor more than 60 days prior to the redemption date, in
whole or in part at a redemption price (expressed as a percentage of principal
amount) of 101%, plus accrued and unpaid interest to the redemption date;
provided that
(i) the Board of Directors shall have determined not to proceed with the
Separation (and the Guarantee of the Guarantor will stay in effect
until the Notes are fully paid);
(ii) if the Issuers elect to redeem the Notes in part, they may redeem up
to an aggregate principal amount not to exceed 35% of the aggregate
principal amount of the Notes originally issued; and
(iii) 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).
SECTION 3.8. Mandatory Redemption
--------------------
Except as set forth in Sections 4.11 and 4.15, the Issuers shall not
be required to make mandatory redemption or sinking fund payments with respect
to the Notes.
50
ARTICLE IV
Covenants
SECTION 4.1. Payment of Notes
----------------
The Issuers shall promptly pay the principal of and interest on the
Notes on the dates and in the manner provided in the Notes and in this
Indenture. Principal and interest shall be considered paid on the date due if on
or before 11:00 a.m. prevailing Eastern (U.S.) time on such date the Trustee or
the Paying Agent holds (or, if an Issuer or a Subsidiary of an Issuer is the
Paying Agent, the segregated account or separate trust fund maintained by such
Issuer or such Subsidiary pursuant to Section 2.4) in accordance with this
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent (or, if an Issuer or a Subsidiary of an Issuer is
the Paying Agent, such Issuer or such Subsidiary), as the case may be, is not
prohibited from paying such money to the Noteholders on that date pursuant to
the terms of this Indenture.
The Issuers shall pay interest on overdue principal at the rate
specified therefor in the Notes, and they shall pay interest on overdue
installments of interest at the same rate to the extent lawful as provided in
Section 2.11.
Notwithstanding anything to the contrary contained in this Indenture,
the Issuers or the Paying Agent may, to the extent it is required to do so by
law, deduct or withhold income or other similar taxes imposed by the United
States of America or other domestic or foreign taxing authorities from principal
or interest payments hereunder.
SECTION 4.2. Maintenance of Office or Agency
-------------------------------
The Issuers shall maintain an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Issuers in respect of the Notes and this Indenture may be
served. The Issuers shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Issuers shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Issuers of their obligations to maintain an office or agency for such purposes.
The Issuers shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee
as one such office or agency of the Issuers in accordance with Section 2.3.
51
SECTION 4.3. Corporate Existence
-------------------
Except as otherwise permitted by Article V and Section 4.11, each of
the Issuers 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 such Issuer and each such Subsidiary;
provided, however, that an Issuer 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 such Issuer 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 such Issuer and
the Subsidiaries, taken as a whole.
SECTION 4.4. SEC Reports
-----------
(a) So long as the Guarantee in Article X is in effect, the Issuers
shall cause the Guarantor to 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 and to include financial statements and other
information with respect to the U. S. Steel Group in form and substance
consistent with the information provided in its previous Exchange Act filings,
subject to the requirements of the SEC.
(b) Following the Separation, the Issuers 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.
(c) In addition, the Issuers shall furnish to the Holders of the Notes
and to prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so
long as the Notes are not freely transferable under the Securities Act.
SECTION 4.5. Compliance Certificate
----------------------
(a) Each of the Issuers shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Issuers and their respective Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each of the Issuers and their
respective Subsidiaries has 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 each Issuer
and their respective Subsidiaries has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action each Issuer and their respective Subsidiaries is taking or propose to
take with respect thereto) and that to the best of his or her
52
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).
(b) Each of the Issuers 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 Issuers are taking or propose to
take with respect thereto.
(c) The Issuers shall comply with TIA Section 314(a)(4).
SECTION 4.6. Stay, Extension and Usury Laws
------------------------------
Each of the Issuers and the Guarantor covenant 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. Each of the Issuers and the Guarantor (to the extent it may
lawfully do so) 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.
SECTION 4.7. Payment of Taxes and Other Claims
---------------------------------
Each of the Issuers 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 Issuers shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings properly instituted and
diligently conducted for which adequate reserves, to the extent required under
GAAP, have been taken.
SECTION 4.8. Maintenance of Properties and Insurance
---------------------------------------
(a) Each of the Issuers 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 such Issuer is necessary so that the business carried
on by such Issuer and its Significant Subsidiaries may be actively conducted;
provided, however, that nothing in this Section 4.19 shall prevent such Issuer
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
each Issuer 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.
53
(b) Each of the Issuers 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 such Issuer, are adequate and appropriate for the conduct
of the business of such Issuer 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 such Issuer, for companies similarly situated in the
industry.
SECTION 4.9. Investment Grade Rating
-----------------------
Following the first day:
(i) that is after the earliest to occur of (A) the day the Separation
shall have occurred, (B) December 31, 2002 or (C) the day the
Board of Directors of USX Corporation shall have determined not
to proceed with the Separation,
(ii) the Notes have an Investment Grade Rating from both of the Rating
Agencies, and
(iii) no Default has occurred and is continuing under the Indenture,
the Company and its Restricted Subsidiaries will not be subject
to Sections 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and clause (iii)
of Section 5.1 (collectively, the "Suspended Covenants").
The Issuers 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 4.13 as though such
section had been in effect since the date the Notes were originally issued.
SECTION 4.10. Conditions to Separation
------------------------
The Company shall not permit the Separation to occur, unless:
(i) USX Corporation shall have received a private letter ruling from
the IRS that the Separation will qualify as a tax-free
transaction within the meaning of Section 355 of the Code,
(ii) the transactions that give effect to the Value Transfer as
described in the Offering Circular shall have occurred,
(iii) USX Corporation shall not have amended (x) the definition of
U.S. Steel Group in its certificate of incorporation or by-laws
or (y) its Management
54
and Allocation Policies, in either case, in any manner adverse to
the holders of the Notes,
(iv) immediately following the Separation and after giving pro forma
effect to any subsequent payments to be made as part of the
Separation, (x) the Company and its Subsidiaries shall have an
aggregate of at least $400 million available in undrawn
financings and cash, of which at least $300 million shall be
available under facilities with terms extending at least three
years after the date such facilities are put in place, and (y) no
Default shall have occurred and be continuing, and
(v) any differences between the Separation Documents (x) as executed
and delivered and (y) as described in the Offering Circular do
not have a material adverse effect on the Holders of the Notes.
SECTION 4.11. 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:
(i) 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);
(ii) 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);
(iii) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(iv) the instructions, as determined by the Company, consistent with
this Section 4.11, 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
55
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 4.11, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached our obligations under this Section 4.11 by virtue of its
compliance with such securities laws or regulations.
SECTION 4.12. 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:
(i) 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 4.15(b)(iii)(1) 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, provided further, however, that in no event shall
the aggregate principal amount of all Indebtedness Incurred under
this clause (i) at any time outstanding exceed $1.2 billion;
(ii) 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;
(iii) the Notes and the Exchange Notes (other than any Additional
Notes) and any other Indebtedness of the Company or any
Restricted Subsidiary outstanding on the Issue Date;
56
(iv) Indebtedness Incurred or outstanding on or before the Separation
Date (other than Indebtedness described in clause (i) or any
other clause (other than clause (xvii)) of this Section 4.12(b)),
to the extent it does not exceed (w) the amount of indebtedness
that is Attributed to the U. S. Steel Group on its balance sheet
as of March 31, 2001 less (x) the amount of any Indebtedness
described in clause (iii) of this Section 4.12(b) or any
Indebtedness described in clause (vi) or (vii) of this Section
4.12(b) that is Incurred by the Company pursuant to the Financial
Matters Agreement less (y) $629 million plus (z) $40 million;
(v) 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
4.12(a);
(vi) 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;
(vii) Indebtedness to Marathon Oil Corporation Incurred pursuant to
the Financial Matters Agreement in respect of Capital Lease
Obligations, in an aggregate principal amount not to exceed $92
million;
(viii) Indebtedness to Marathon Oil Corporation Incurred pursuant to
the Financial Matters Agreement in respect of Guarantees of USX
Corporation, in an aggregate principal amount not to exceed $145
million;
(ix) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.12(a) or pursuant to clause (iii), (iv),
(v) or (vii) of this Section 4.12(b) or this clause (ix);
provided, however, that to the extent such Refinancing
Indebtedness directly or indirectly Refinances Indebtedness of a
Subsidiary Incurred pursuant to clause (v) of this Section
4.12(b), such Refinancing Indebtedness shall be Incurred only by
such Subsidiary or by the Company;
(x) Hedging Obligations directly related to Indebtedness permitted to
be Incurred by the Company pursuant to the Indenture or to
mitigate currency or business risk;
(xi) 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;
57
(xii) 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;
(xiii) Guarantees by the Company of obligations of any of its joint
ventures in an aggregate amount not to exceed $100 million;
(xiv) 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;
(xv) Attributable Debt related to Sale/Leaseback Transactions in an
amount not to exceed $150 million;
(xvi) 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 in each of the
first three years following the Issue Date and $50 million in
each of the years thereafter; and
(xvii) 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 (i) through (xvi) of this
Section 4.12(b) above or Section 4.12(a)) does not exceed $150
million.
(c) Notwithstanding the foregoing, the Company shall not incur any
Indebtedness under Section 4.12(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 or the Guarantee to at least the
same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with this Section 4.12, 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 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 4.12(b) into another
clause in Section 4.12(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.
58
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.
SECTION 4.13. 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 4.12(a); or (3) the aggregate amount of such Restricted
Payment and all other Restricted Payments since 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 Issue Date 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
(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 the Issue Date (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 the Issue Date; plus
(C) the amount by which Indebtedness of the Company (other
than Subordinated Obligations) is reduced on the Company's
balance sheet (or, prior to the Separation, on the balance sheet
of the U.S. Steel Group) upon the conversion or exchange (other
than by a Subsidiary of the Company) subsequent to the Issue Date
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
59
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:
(i) 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 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;
(ii) 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 4.12; 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;
(iii) dividends paid within 60 days after the date
of declaration thereof if at such date of
declaration such dividend would have complied
with this
60
Section 4.13(b); 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;
(iv) 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;
(v) prior to the Separation Date, dividends,
distributions or other payments to USX
Corporation to the extent such amounts, after
such dividend, distribution or other payment,
are still attributed to, or used to reduce
Indebtedness attributed to, the U. S. Steel
Group in accordance with the Management and
Allocation Policies of USX Corporation;
provided, however, that such dividends,
distributions or other payments shall be
excluded in the calculation of the amount of
Restricted Payments;
(vi) so long as no Default has occurred and is
continuing, the declaration and payment of
one or more dividends on Steel Stock or
common stock of United States Steel
Corporation with respect to the period ending
on December 31, 2003 in an aggregate amount
not to exceed $50.0 million; provided that
such dividends shall be excluded in
61
the calculation of the amount of Restricted
Payments; or
(vii) 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 (vii) on or
after the Issue Date, does not exceed $30
million; provided, however, that such
Restricted Payments shall be included in the
calculation of the amount of Restricted
Payments.
(c) For purposes of this Section 4.13, Capital Stock or Indebtedness
(including Subordinated Obligations) of the Company shall be deemed to include
Capital Stock or Indebtedness (including Subordinated Obligations) of any Person
that is Attributed to the U. S. Steel Group (including Steel Stock, but
excluding any Preferred Stock or Subordinated Obligations of other Persons
outstanding as of the Issue Date) and proceeds of the issuance of any such
Capital Stock shall be deemed received by the Company to the extent they are
Attributed to the U. S. Steel Group.
SECTION 4.14. 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 4.14 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 4.14 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
62
(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.
SECTION 4.15. 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") any Capital Stock of any Person that owns,
directly or indirectly, all or a significant portion of the Tubular Business,
unless:
(i) 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;
(ii) 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
(iii) an amount equal to 75% of the Net Available
Cash from such disposition 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 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:
(i) the Company or such Restricted Subsidiary
receives consideration at the time of such
Asset Disposition
63
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 Issuer of
the shares and assets subject to such Asset
Disposition and
(ii) 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
(iii) 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): (1) 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 receipt of such Net
Available Cash; (2) second, to the extent of
the balance of such Net Available Cash after
application in accordance with clause (1), 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 (3) third, to the extent of the balance
of such Net Available Cash after application
in accordance with clauses (1) and (2), 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 (1) or (3) 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 4.15(b), the
Company and the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with Section 4.15(b) except to the extent that the
aggregate Net Available Cash from all Asset Dispositions which are not applied
in accordance with Section 4.15(b) exceeds $25 million.
64
Pending application of Net Available Cash pursuant to Section 4.15(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 4.15(a) and (b), the following are
deemed to be cash or cash equivalents: (A) 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; (B) 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; and
(C) any reduction of Indebtedness Attributed to the U. S. Steel Group in
connection with such Asset Disposition.
(d) In the event of an Asset Disposition that requires the purchase of
Notes (and other Senior Indebtedness) pursuant to Section (a)(iii) or
(b)(iii)(3) above, the Company shall purchase Notes tendered pursuant to an
offer by the Company for the 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 Notes will be denominations of $1,000
principal amount or multiples thereof. The Company shall not be required to make
such an offer to purchase Notes (and other Senior Indebtedness) pursuant to
Section 4.15(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 Notes pursuant to this
Section 4.15. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.15, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this clause by virtue of its
compliance with such securities laws or regulations.
SECTION 4.16. 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:
(i) 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;
65
(ii) 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 (i) are satisfied and
have approved the relevant Affiliate
Transaction as evidenced by a Board
resolution; and
(iii) 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:
(i) any Investment (other than a Permitted
Investment) or other Restricted Payment, in
each case permitted to be made under Section
4.13;
(ii) 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;
(iii) 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;
(iv) 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;
(v) 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
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or otherwise controls such Restricted
Subsidiary, joint venture or similar entity;
(vi) the issuance or sale of any Capital Stock
(other than Disqualified Stock) of the
Company;
(vii) any transaction in connection with
Separation, as described in the Offering
Circular; and
(viii) 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.
SECTION 4.17. 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 4.15 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 4.13 if made on the
date of such issuance, sale, transfer or other disposition.
SECTION 4.18. Limitation on Liens
-------------------
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.
SECTION 4.19. Limitation on Sale/Leaseback Transactions
-----------------------------------------
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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 4.12 and (B) create a Lien on such property securing
such Attributable Debt without equally and ratably securing the Notes under
Section 4.18; (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 4.15.
SECTION 4.20. Certain Covenants of USS Financing
----------------------------------
USS Financing shall not (a) own any assets other than nominal equity
capital, (b) incur any Indebtedness other than the Notes, (c) engage in any
business other than the co-issuance of the Notes or (d) consolidate with or
merge into any Person other than United States Steel Corporation.
SECTION 4.21. Further Instruments and Acts
----------------------------
Upon reasonable request of the Trustee, the Issuers 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.
ARTICLE V
SUCCESSOR COMPANY AND SUCCESSOR GUARANTOR
SECTION 5.1. When Company May Merge or Transfer Assets
-----------------------------------------
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:
(i) 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 Successor Company (if not the
Company) will expressly assume, by supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Notes
or the Guarantee thereof, as the case may be, and this Indenture;
(ii) 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 the Successor Company or
such Subsidiary at the time of such transaction), no Default or
Event of Default shall have occurred and be continuing;
68
(iii)immediately after giving pro forma effect to such transaction,
the Successor Company would be able to Incur an additional $1.00
of Indebtedness under Section 4.12(a);
(iv) 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;
(v) 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
(vi) 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 (iii) and (iv) 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 Notes.
SECTION 5.2. When Guarantor May Merge or Transfer Assets
-------------------------------------------
So long as the Guarantee in Article X is in effect, the Guarantor
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:
(i) the resulting, surviving or transferee Person (the "Successor
Guarantor") 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 Successor Guarantor (if not the
Guarantor) 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 Guarantor
under the Notes and the Indenture;
(ii) immediately after such transaction, no Default shall have
occurred and be continuing;
(iii)immediately after giving pro forma effect to such transaction,
the Successor Guarantor shall have Consolidated Net Worth in an
amount that
69
is not less than the Consolidated Net Worth of the Guarantor
immediately prior to such transaction;
(iv) the Guarantor 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 Indentures; and
(v) the Guarantor 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 clause (iii) 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 Guarantor or (B) the Guarantor merging with an
Affiliate of the Guarantor solely for the purpose and with the sole effect of
reincorporating the Guarantor in another jurisdiction.
The Successor Guarantor will be the successor to the Guarantor and
shall succeed to, and be substituted for, and may exercise every right and power
of, the Guarantor under the Indenture, and the predecessor Guarantor, except in
the case of a lease, shall be released from its obligations under the Guarantee
of the Notes.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default
-----------------
An "Event of Default" occurs if:
(i) the Company defaults in any payment of interest on any Note when
the same becomes due and payable, and such default continues for
a period of 30 days;
(ii) the Company defaults in the payment of the principal of any Note
when the same becomes due and payable at its Stated Maturity,
upon optional redemption, upon required repurchase, upon
declaration or otherwise;
(iii)the Company fails to comply with its obligations under Article
V;
(iv) the Company fails to comply with Section 4.4, any of Sections 4.9
through 4.19 (other than a failure to repurchase Notes when
required pursuant to Section 4.11 or 4.15, which failure shall
constitute an Event of Default under Section 6.1(ii)) and such
failure continues for 30 days after the notice specified below;
(v) the Company or the Guarantor fails to comply with any of its
agreements in the Notes, the Guarantee or this Indenture (other
than those referred to
70
in (i), (ii), (iii) or (iv) above) and such failure continues for
60 days after the notice specified below;
(vi) the Company or any Significant Subsidiary of the Company fails 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
or its foreign currency equivalent at the time;
(vii)the Company, the Guarantor 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, the Guarantor or any
Significant Subsidiary of the Company in an involuntary case;
(B) appoints a Custodian of the Company, the Guarantor or any
Significant Subsidiary or for any substantial part of its property of
the Company, the Guarantor or any Significant Subsidiary; or
(C) orders the winding up or liquidation of the Company, the
Guarantor 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;
(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; or
(x) prior to the Separation, the Guarantee with respect to the Notes shall
cease for any reason to be in full force and effect (other than in accordance
with its terms) or the Guarantor (or its successors or assigns) or any Person
acting on behalf of the Guarantor (or its successors or assigns) shall deny or
disaffirm its obligations under the Guarantee.
71
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (iv) and (v) of this Section 6.1 is not an
Event of Default until the Trustee by notice to the Issuers or the Holders of at
least 25% in aggregate principal amount of the outstanding Notes by notice to
the Company give notice of the Default and the Company does not cure such
Default within the time specified in said clause (iv) and (v) after receipt of
such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".
The Issuers shall deliver to the Trustee, within 30 days after its
knowledge of the occurrence thereof, written notice in the form of an Officers'
Certificate of any Event of Default under clause (vi) or (x) of this Section 6.1
and any event which with the giving of notice or the lapse of time would become
an Event of Default under clause (iv), (v) or (ix) of this Section 6.1 and what
action the Issuers is taking or proposes to take with respect thereto.
SECTION 6.2. Acceleration
------------
If an Event of Default (other than an Event of Default specified in
Section 6.1(vii) or (viii) with respect to the Issuers) occurs and is
continuing, the Trustee by notice to the Issuers, or the Holders of at least 25%
in aggregate principal amount at maturity of the outstanding Notes by notice to
the Issuers, may declare the principal of and accrued but unpaid interest on all
the Notes to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.1(vii) or (viii) with respect to the Issuers occurs and is
continuing, the principal of and accrued interest on all the Notes shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holders. The Holders of a majority in
aggregate principal amount at maturity of the outstanding Notes by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of acceleration and the Trustee has been paid all
amounts then due to it pursuant to Section 7.7. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.
SECTION 6.3. Other Remedies
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of or interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No
72
remedy is exclusive of any other remedy. All available remedies are, to the
extent permitted by law, cumulative.
SECTION 6.4. Waiver of Past Defaults
-----------------------
The Holders of a majority in aggregate principal amount at maturity of
the Notes then outstanding by notice to the Trustee may waive any past or
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Note or (ii) a Default in respect of a provision
that under Section 9.2 cannot be amended without the consent of each Noteholder
affected. When a Default is waived, it is deemed cured, and any Event of Default
arising therefrom shall be deemed to have been cured, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right.
SECTION 6.5. Control by Majority
-------------------
Upon provision of reasonable indemnity to the Trustee satisfactory to
the Trustee, the Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. However, the Trustee, which may conclusively
rely on opinions of counsel, may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Section 7.1, that the Trustee
determines is unduly prejudicial to the rights of other Noteholders or would
involve the Trustee in personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction.
SECTION 6.6. Limitation on Suits
-------------------
A Holder may not pursue any remedy with respect to this Indenture or
the Notes unless:
(i) the Holder gives to the Trustee previous written notice stating
that an Event of Default is continuing;
(ii) the Holders of at least 25% in aggregate principal amount at
maturity of the Notes then outstanding make a written request to
the Trustee to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee reasonable security
or indemnity satisfactory to it against any loss, liability or
expense;
(iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity;
and
(v) the Holders of a majority in aggregate principal amount of the
Notes then outstanding do not give the Trustee a direction
inconsistent with such request within such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.7. Rights of Holders to Receive Payment
------------------------------------
73
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of the principal of and interest on the Notes held
by such Holder, on or after the respective due dates expressed in the Notes, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.8. Collection Suit by Trustee
--------------------------
If an Event of Default specified in Section 6.1(i) or (ii) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against any Issuer or the Guarantor for the whole amount
then due and owing (together with interest on any unpaid interest to the extent
lawful) and the amounts provided for in Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Noteholders allowed in any judicial proceedings relative to any
Issuer, the Guarantor, its creditors or its property and shall be entitled and
empowered to collect, receive and distribute any money or other securities or
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceeding is hereby authorized by each
Holder to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts then due the Trustee under Section 7.7.
SECTION 6.10. Priorities
----------
If the Trustee collects any money or property pursuant to this Article
VI, it shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts then due under Section 7.7;
SECOND:to Noteholders for amounts due and unpaid on the Notes for the
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes
for the principal and interest, respectively; and
THIRD: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. At least 15 days before such record
date, the Issuers shall mail to each Noteholder and the Trustee a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the
74
costs of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a suit
by the Trustee or a suit by a Holder pursuant to Section 6.7.
SECTION 6.12. Waiver of Stay or Extension Laws
--------------------------------
The Issuers (to the extent it may lawfully do so) shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Issuers (to the extent that it may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and the TIA and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
75
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.1.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.1 and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee
-----------------
(a) The Trustee may conclusively rely upon, and shall be fully
protected from acting or refraining from acting, on any document believed by it
to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may request an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.
76
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Notes unless either (1) a Trust Officer
shall have actual knowledge of such Default or Event of Default or (2) written
notice of such Default or Event of Default making reference to this Indenture
and to the Notes shall have been given to the Trustee by the Issuer or by any
Holder of the Notes.
(h) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(i) The Trustee may require any Paying Agent(s) to pay to it all sums
held by such Agent upon the occurrences of an Event of Default.
SECTION 7.3. Individual Rights of Trustee
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Issuers or their
respective Affiliates with the same rights it would have if it were not Trustee.
Any Paying Agent, Registrar, co-registrar or co-paying agent may do
the same with like rights. However, the Trustee must comply with Sections 7.10
and 7.11.
SECTION 7.4. Money Held in Trust
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 7.5. Trustee's Disclaimer
--------------------
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes. It shall not be
accountable for the Issuers' use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuers in this Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Trustee's certificate of authentication.
SECTION 7.6. Notice of Defaults
------------------
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee must mail to each Noteholder notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of, premium (if any) or interest on any Note, the Trustee
may withhold notice if and so long as a committee of its Trust Officers in good
faith determines that withholding notice is not opposed to the interests of
Noteholders.
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SECTION 7.7. Reports by Trustee to Holders
-----------------------------
As promptly as practicable after each May 15 beginning with May 15
following the date of this Indenture, the Trustee shall mail to each Noteholder
a brief report dated as of such May 15 that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b). The Trustee shall
promptly deliver to the Issuer a copy of any report it delivers to Holders
pursuant to this Section 7.6.
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Trustee with the SEC and each stock exchange (if any) on which
the Notes are listed. The Issuers agree to notify promptly the Trustee whenever
the Notes become listed on any stock exchange and of any delisting thereof.
SECTION 7.8. Compensation and Indemnity
--------------------------
The Issuers shall pay to the Trustee from time to time such
compensation for its services as the Issuers and the Trustee shall from time to
time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuers shall
reimburse the Trustee upon request for all reasonable and documented fees and
expenses, including out-of-pocket expenses, incurred or made by it in connection
with the performance of its duties hereunder, including costs of collection, in
addition to such compensation for its services, except any such expense,
disbursement or advance as may arise from its negligence, willful misconduct or
bad faith, unless the Trustee shall have complied with the applicable standard
of care required by the TIA. Such expenses shall include the reasonable
compensation and documented out-of-pocket expenses, disbursements and advances
of the Trustee's agents, counsel, accountants and experts. The Trustee shall
provide the Issuers reasonable notice of any expenditure not in the ordinary
course of business; provided that prior approval by the Issuers of any such
expenditure shall not be a requirement for the making of such expenditure nor
for reimbursement by the Issuers thereof. The Issuers shall jointly and
severally indemnify each of the Trustee and any predecessor Trustees against any
and all loss, damage, claim, liability or expense and tax (including reasonable
and documented attorneys' fees and out-of-pocket expenses) (other than taxes
applicable to the Trustee's compensation hereunder) incurred by it in connection
with the acceptance or administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Issuers promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Issuers
shall not relieve the Issuers of their obligations hereunder. The Issuers shall
defend the claim and the Trustee may have separate counsel, and the Issuers will
pay the reasonable fees and expenses of such counsel. The Issuers need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own willful misconduct, negligence
or bad faith, unless the Trustee shall have complied with the applicable
standard of care required by the TIA.
To secure the Issuers' payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes.
When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(vii) or (viii) with respect to the Issuers, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law, provided, however, that this shall not affect the Trustee's
rights as set forth in the preceding paragraph or Section 6.10. The terms of
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this Section 7.8 shall survive the termination of this Indenture and the removal
or resignation of the Trustee.
SECTION 7.9. Replacement of Trustee
----------------------
The Trustee may resign at any time with 30 days notice to the Issuers.
The Holders of a majority in principal amount of the Notes then outstanding, may
remove the Trustee with 30 days notice to the Trustee and the Issuers and may
appoint a successor Trustee. So long as no Default or Event of Default shall
have occurred and been outstanding within the previous 12 month period, the
Issuers may remove the Trustee at any time by appointing a successor Trustee
that complies with Section 7.10.
If the Trustee resigns, is removed by the Issuers or by the Holders of
a majority in principal amount of the Notes and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office and deliver the written
notice contemplated by this Section 7.9 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in
principal amount of the Notes may, at the expense of the Issuers petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.10. Successor Trustee by Merger
---------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee,
provided that such corporation shall be eligible under this Article VII and TIA
Section 3.10(a).
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full
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force which it is anywhere in the Notes or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.11. Eligibility; Disqualification
-----------------------------
The Trustee shall at all times satisfy the requirements of TIA Section
310(a). The Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Issuers are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.12. Preferential Collection of Claims Against Issuers
-------------------------------------------------
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Notes; Defeasance
-------------------------------------------
(a) When (i) the Issuers deliver to the Trustee all outstanding Notes
(other than Notes replaced pursuant to Section 2.7) for cancellation or (ii) all
outstanding Notes have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article III hereof
or the Notes will become due and payable at their Stated Maturity within 91
days, or the Notes are to be called for redemption within 91 days under
arrangements satisfying the terms of this Indenture, and, in each case of this
clause (ii), the Issuers irrevocably deposit or cause to be deposited with the
Trustee funds sufficient to pay at maturity or upon redemption all outstanding
Notes, including interest thereon to maturity or such redemption date (other
than Notes replaced pursuant to Section 2.7), and if in either case the Issuers
pay all other sums payable hereunder by the Issuers, then this Indenture shall,
subject to Section 8.1(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Issuers accompanied by an Officers' Certificate and an Opinion of Counsel from
the Issuers that all conditions precedent provided herein for relating to
satisfaction and discharge of this Indenture have been complied with and at the
cost and expense of the Issuers.
(b) Subject to Sections 8.1(c) and 8.2, the Issuers at any time may
terminate (i) all of their obligations (and the obligations of the Guarantor in
respect of the Guarantee with respect to the Notes) under the Notes and this
Indenture ("legal defeasance option") or (ii) their obligations under Sections
4.2 through 4.19 and the operation of Sections 5.1(iii), 6.1(vi), 6.1(vii) (but
only with respect to a Significant Subsidiary), 6.1(viii) (but only with respect
to a Significant Subsidiary) and 6.1(ix) ("covenant defeasance option"). The
Issuers may exercise their legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
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If the Issuers exercise their legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default. If the Issuers
exercise its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Section 6.1(iv),
6.1(vi), 6.1(vii) (but only with respect to a Significant Subsidiary), 6.1(viii)
(but only with respect to a Significant Subsidiary), 6.1(ix) or because of the
failure of the Issuers to comply with Section 5.1(iii).
Upon satisfaction of the conditions set forth herein and upon request
of the Issuers, the Trustee shall acknowledge in writing the discharge of those
obligations that the Issuers terminate.
(c) Notwithstanding clauses (a) and (b) above, the Issuers'
obligations in Sections 2.3, 2.4, 2.5, 2.7, 4.1, Sections 4.2 through 4.19, 7.7,
7.8, 8.4, 8.5 and 8.6 (and the obligations of the Guarantor in respect of the
Guarantee with respect to the Notes) shall survive until the Notes have been
paid in full. Thereafter, the Issuers' obligations in Sections 7.7, 8.4 and 8.5
shall survive.
SECTION 8.2. Conditions to Defeasance
------------------------
The Issuers may exercise the legal defeasance option or the covenant
defeasance option only if:
(i) the Issuers irrevocably deposit or cause 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 2.7) to maturity or
redemption, as the case may be;
(ii) the Issuers deliver 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 2.7)
to maturity or redemption, as the case may be;
(iii)123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.1(7) or (8) with respect
to the Issuers occurs which is continuing at the end of the
period;
(iv) the deposit does not constitute a default under any other
material agreement binding on the Issuers;
(v) the Issuers deliver 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;
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(vi) in the case of the legal defeasance option, the Issuers shall
have delivered to the Trustee an Opinion of Counsel stating that
(i) the Issuers have 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;
(vii)in the case of the covenant defeasance option, the Issuers 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
(viii)the Issuers deliver 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 Article VIII have been complied with.
Before or after a deposit, the Issuers may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article III.
SECTION 8.3. Application of Trust Money
--------------------------
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article VIII. 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.
SECTION 8.4. Repayment to Issuers
--------------------
The Trustee and the Paying Agent shall promptly turn over to the
Issuers 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 Issuers 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 Issuers for
payment as general creditors.
SECTION 8.5. Indemnity for Government Obligations
------------------------------------
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The Issuers and the Guarantor 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.
SECTION 8.6. Reinstatement
-------------
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article VIII 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 Issuers' and the Guarantor's obligations under this Indenture,
the Notes and the Guarantee with respect to the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to this Article VIII 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 Article VIII; provided,
however, that, (a) if the Issuers or the Guarantor have made any payment of
interest on or principal of any Notes following the reinstatement of their
obligations, the Issuers or the Guarantor 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 Issuers or the Guarantor promptly
after receiving a written request therefor at any time, if such reinstatement of
the Issuers' and the Guarantor's obligations has occurred and continues to be in
effect.
ARTICLE IX
AMENDMENTS
SECTION 9.1. Without Consent of Holders
--------------------------
The Issuers, the Guarantor and the Trustee may amend this Indenture,
the Notes or the Guarantee with respect to the Notes without notice to or
consent of any Noteholder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to comply with Article V;
(iii)to provide for uncertificated Notes in addition to or in place
of certificated Notes (provided, however, that the uncertificated
Notes are issued in registered form for purposes of Section
163(f) of the Code or in a manner such that the uncertificated
Notes are as described in Section 163(f)(2)(B) of the Code);
(iv) to add Guarantees with respect to the Notes;
(v) to secure the Notes;
(vi) to add to the covenants of the Issuers for the benefit of the
Noteholders or to surrender any right or power herein conferred
upon the Issuers;
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(vii) to make any change that does not materially and adversely affect
the rights of any Noteholder; and
(viii) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA.
After an amendment under this Section 9.1 becomes effective, the
Issuers shall mail to Noteholders a notice briefly describing such amendment.
The failure to give such notice to all Noteholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section 9.1.
SECTION 9.2. With Consent of Holders
-----------------------
The Issuers, the Guarantor and the Trustee may amend this Indenture,
the Notes or the Guarantee with respect to the Notes without notice to any
Noteholder but with the written consent of the Holders of at least a majority in
principal amount at maturity of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange for Notes). However,
without the consent of each Noteholder of an outstanding Note affected, an
amendment may not:
(i) reduce the amount of Notes whose Holders must consent to an
amendment;
(ii) reduce the rate of or extend the time for payment of interest on
any Note;
(iii) reduce the principal of or extend the Stated Maturity of any
Note;
(iv) reduce the amount payable upon the redemption of any Note or
change the time at which any Note may be redeemed in accordance
with Article III;
(v) make any Note payable in currency other than that stated in the
Note;
(vi) impair the right of any Holder to receive payment of principal of
and interest on such Holder's Notes on or after the due dates
therefor or to institute suit for the enforcement of any payment
on or with respect to such Holder's Notes;
(vii) make any change in this second sentence of Section 9.2;
(viii) make any change in the ranking or priority of the Notes that
would adversely affect the Noteholders; and
(ix) make any change in the Guarantee that would adversely affect the
Holders.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.2 becomes effective, the
Issuers shall mail to Noteholders a notice briefly describing such amendment.
The failure to give such notice
84
to all Noteholders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.2.
SECTION 9.3. Compliance with Trust Indenture Act
-----------------------------------
Every amendment to this Indenture or the Notes shall comply with the
TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers
---------------------------------------------
A consent to an amendment or a waiver by a Holder of a Note shall bind
the Holder and every subsequent Holder of that Note or portion of the 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 Note. After an amendment or waiver becomes
effective, it shall bind every Noteholder.
The Issuers 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 Indenture. 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.
SECTION 9.5. Notation on or Exchange of Notes
--------------------------------
If an amendment changes the terms of a Note, the Trustee may require
the Holder of the Note to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Note regarding the changed terms and return it to
the Holder. Alternatively, if the Issuers or the Trustee so determine, the
Issuers in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such amendment.
SECTION 9.6. Trustee to Sign Amendments
--------------------------
The Trustee shall sign any amendment authorized pursuant to this
Article IX 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 7.1) shall be fully protected in relying upon, in addition to the
documents required by Section 11.4, an Officers' Certificate and an Opinion of
Counsel stating that such amendment complies with the provisions of this Article
IX; 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.
SECTION 9.7. Payment for Consent
-------------------
Neither the Issuers, the Guarantor nor any affiliate of any Issuer
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or
85
otherwise, to any Holder for, or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid to all Holders that so consent,
waive or agree to amend in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
ARTICLE X
Guarantee
SECTION 10.1. Guarantee
---------
Subject to the next paragraph, until the Separation Date, the
Guarantor shall fully and unconditionally guarantee, on a senior unsecured
basis, to each Holder of a Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the Obligations of the Issuers
under this Indenture or the Notes, that: (i) the principal of, premium, if any,
and interest, if any, on the Notes will be paid in full when due, whether at the
maturity or interest payment or redemption date, by acceleration, call for
redemption, offer to purchase or otherwise, and interest on the overdue
principal of, premium, and interest, if any, on the Notes and all other
Obligations of the Issuers to the Holders or the Trustee under this Indenture or
the Notes will be promptly paid in full or performed, all in accordance with the
terms of this Indenture and the Notes; (ii) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, they will be
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at maturity, by acceleration or otherwise; and (iii) any and
all costs and expenses (including reasonable and documented attorneys' fees)
incurred by the Trustee or any Holder in enforcing any rights under the
Guarantee with respect to the Notes will be paid. Failing payment when due of
any amount so guaranteed for whatever reason, the Guarantor will be obligated
(subject to any grace periods allowed pursuant to Section 6.1 hereof) to pay the
same whether or not such failure to pay has become an Event of Default which
could cause acceleration pursuant to Section 6.2 hereof. An Event of Default
under this Indenture or the Notes shall constitute an event of default under the
Guarantee of the Notes, and shall entitle the Holders of Notes to accelerate the
Obligations of the Guarantor hereunder in the same manner and to the same extent
as the Obligations of the Issuers. The Guarantor agrees that its Obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Issuers, any action to enforce the same or any other circumstance (other than
payment) that might otherwise constitute a legal or equitable discharge or
defense of the Guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of either or both of the Issuers, protest, notice and all demands
whatsoever and covenants that its Guarantee with respect to the Notes will not
be discharged except by complete performance of its Obligations under the Notes
and this Indenture. Notwithstanding the provisions of Section 10.2, if any
Holder or the Trustee is required by any court or otherwise to return to any
Issuer, the Guarantor or any custodian, trustee, liquidator or other similar
official acting in relation to either any Issuer or the Guarantor any amount
paid by any such entity to the Trustee or such Holder, this Guarantee of the
Notes, to the extent theretofore discharged, shall be reinstated in full force
and effect. The Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holder in respect of any Obligations guaranteed
hereby until payment in full of all
86
Obligations guaranteed hereby. The Guarantor agrees that, as between it, on the
one hand, and the Holders of Notes and the Trustee, on the other hand, (x) the
maturity of the Obligations guaranteed hereby may be accelerated as provided in
Article 6 hereof for the purposes hereof, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any acceleration of such Obligations
as provided in Article 6 hereof, such Obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantor for the purpose
of such Guarantee of the Notes.
If the Separation Date does not occur on or before December 31, 2002
or if the Board of Directors determines not to proceed with the Separation, the
Guarantee of the Notes by the Guarantor shall stay in effect until the Notes
have been paid in full.
Each Holder of a Note by its acceptance thereof agrees to and shall be
bound by the provisions of this Section 10.1.
SECTION 10.2. Release of Guarantor
--------------------
Upon the occurrence of the earlier of (i) the Separation Date (if the
Separation Date occurs on or prior to December 31, 2002) or (ii) the payment in
full of all of the Issuers' Obligations under the Notes and this Indenture
(other than with respect to any indemnification obligations), the Guarantor
shall be released from and relieved of its Obligations with respect to the Notes
under this Article X.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Trust Indenture Act Controls
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the provision required by the TIA shall control.
SECTION 11.2. Notices
-------
Any notice or communication shall be in writing and be effective upon
receipt or refusal of delivery at the following addresses:
if to any Issuer:
United States Steel LLC
600 Grand Street
Pittsburgh, PA 15219-4776
Attention: Vice President - Finance and Accounting
Facsimile: 412-433-1131
if to the Trustee:
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The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Facsimile: (212) 815-5915 or (212) 815-5917
The Issuers or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
the Noteholder at the Noteholder's address as it appears on the registration
books of the Registrar and shall be sufficiently given if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 11.3. Communication by Holders with Other Holders
-------------------------------------------
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Issuers, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.4. Certificate and Opinion as to Conditions Precedent
--------------------------------------------------
Upon any request or application by the Issuers to the Trustee to take
or refrain from taking any action under this Indenture, the Issuers shall
furnish to the Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signer, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied
with; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.5. Statements Required in Certificate or Opinion
---------------------------------------------
Each certificate or opinion with respect to compliance with a covenant
or condition provided for in this Indenture shall include:
(i) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
88
(iii)a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.6. When Notes Disregarded
----------------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuers or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuers shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes which a Trust Officer of the Trustee knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Notes outstanding
at the time shall be considered in any such determination.
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar
--------------------------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Noteholders. The Registrar and the Paying Agent may make reasonable rules for
their functions.
SECTION 11.8. Legal Holidays
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York. If a payment
date is a Legal Holiday, payment shall be made on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue on such payment for the
intervening period. If a regular record date is a Legal Holiday, the record date
shall not be affected.
SECTION 11.9. GOVERNING LAW. THIS INDENTURE, THE NOTES AND THE
-------------
GUARANTEE OF THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
SECTION 11.10. No Recourse Against Others
--------------------------
No director, officer, employee, member, incorporator or stockholder of
any Issuer or the Guarantor, as such, shall have any liability for any
obligations of any Issuer or the Guarantor under the Notes, this 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.
SECTION 11.11. Successors
----------
All agreements of the Issuers and the Guarantor in this Indenture and
the Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successors.
89
SECTION 11.12. Multiple Originals
------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
SECTION 11.13. Qualification of Indenture
--------------------------
The Issuers shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all reasonable costs and expenses (including attorneys' fees for the Issuers,
the Trustee and the Holders) incurred in connection therewith, including, but
not limited to, costs and expenses of qualification of this Indenture and the
Notes. The Trustee shall be entitled to receive from the Issuers any such
Officers' Certificates, Opinions of Counsel or other documentation as it may
reasonably request in connection with any such qualification of this Indenture
under the TIA.
SECTION 11.14. Table of Contents; Cross-Reference Sheet; Headings
--------------------------------------------------
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
SECTION 11.15. Severability
------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions shall not in any way be affected or impaired thereby.
90
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
Issuers:
--------
UNITED STATES STEEL LLC
By: /s/ Gretchen R. Haggerty
---------------------------------------
Name: Gretchen R. Haggerty
Title: Vice President - Accounting
& Finance
UNITED STATES STEEL FINANCING CORP.
By: /s/ R. M. Stanton
--------------------------------------
Name: R. M. Stanton
Title: President
Guarantor:
---------
USX CORPORATION
By: /s/ M. J. Hatcher
---------------------------------------
Name: M. J. Hatcher
Title: Assistant Treasurer -
Corporate Finance
Trustee:
--------
THE BANK OF NEW YORK
By: /s/ Terence Rawlins
---------------------------------------
Name: Terence Rawlins
Title: Vice President
EXHIBIT A
(Face of Note)
[Insert the Global Note Legend, if applicable pursuant to the provisions of
the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
UNITED STATES STEEL LLC
and
UNITED STATES STEEL FINANCING CORP.
No. Principal Amount $
---- ---------
CUSIP NO.
-----------------
10 3/4% Senior Notes due August 1, 2008
United States Steel LLC, a Delaware limited liability company, and
United States Steel Financing Corp., a Delaware corporation, promise to pay to
Cede & Co., or registered assigns, the principal sum of
------------------------
Dollars on August 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Note are set forth on the other side of
this Note.
Dated: UNITED STATES STEEL LLC
By:
-------------------------------
Name:
Title:
UNITED STATES STEEL FINANCING CORP.
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
A-1
By:
--------------------------------------------------
Authorized Signatory
A-2
(Reverse of Note)
10 3/4% Senior Notes due August 1, 2008
1. Interest
United States Steel LLC, a Delaware limited liability company (the
"Company"), and United States Steel Financing Corp., a Delaware corporation
("USS Financing", and together with the Company, the "Issuers"), promise to pay
interest on the principal amount of this Note at the rate per annum shown above;
provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional cash interest will accrue on
this Note at a rate of 0.25% per annum for the first 90-day period immediately
following the occurrence of the Registration Default, and such rate shall
increase by an additional 0.25% per annum until all Registration Defaults have
been cured, calculated on the principal of this Note as of the date on which
such interest is payable; provided, however, that in no event shall the
aggregate amount of such additional interest exceed 1.0% per annum. Such
interest is payable in addition to any other interest payable from time to time
with respect to this Note. The Trustee will not be deemed to have notice of a
Registration Default until it shall have received actual notice of such
Registration Default from the Issuers.
The Issuers shall pay accrued interest semi-annually on each February
1 and August 1 commencing February 1, 2002 or if any such day is not a Business
Day (as defined in the Indenture referred to below), on the next Business Day.
The Issuers 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 Issuers
shall irrevocably deposit with the Trustee or the Paying Agent money sufficient
to pay such principal and/or interest. The Issuers will pay interest (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on January 15 or July 15 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 Issuers 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 Registrar
Initially, the Company will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, 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.
A-3
4. Indenture
The Issuers issued the Notes under an Indenture dated as of July 27,
2001 (as it may be amended or supplemented from time to time in accordance with
the terms thereof, the "Indenture"), among the Issuers, USX Corporation, a
Delaware corporation (the "Guarantor") 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.
The Notes are senior unsecured obligations of the Issuers limited to
$385,000,000 aggregate principal amount at maturity (subject to Section 2.1(a)
of the Indenture, which, inter alia, allows for the issuance of Additional Notes
in some circumstances).
The Notes include the Initial Notes, any Private Exchange Note and
Exchange Notes issued in exchange for the Initial Notes pursuant to the
Indenture and the Registration Rights Agreement, and any Additional Notes
actually issued. The Initial Notes, the Private Exchange Notes, the Exchange
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 Issuers prior to the Stated Maturity.
Before August 1, 2004, the Issuers may at their 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 110.75%, 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.
A-4
Further, at any time on or prior to December 31, 2002, the Issuers
may, at their option, give written notice to redeem the Notes, which notice
shall be no less than 30 nor more than 60 days prior to the redemption date, in
whole or in part at a redemption price (expressed as a percentage of principal
amount) of 101%, plus accrued and unpaid interest to the redemption date;
provided that
(i) the Board of Directors shall have determined not to proceed with
the Separation (and the Guarantee of the Guarantor shall stay in
effect until the Notes are fully paid);
(ii) if the Issuers elect to redeem the Notes in part, they may redeem
up to an aggregate principal amount not to exceed 35% of the
aggregate principal amount of the Notes originally issued; and
(iii) 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 Issuers or their Affiliates).
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 Issuers 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. Registration Rights
The Issuers are parties to a Registration Rights Agreement, dated as
of July 27, 2001, among the Issuers, Credit Suisse First Boston Corporation,
J.P. Morgan Securities Inc., Lehman Brothers Inc., Salomon Smith Barney Inc.,
BNY Capital Markets, Inc., Mellon Financial Markets, Inc., NatCity Investments,
Inc., PNC Capital Markets, Inc. and Scotia Capital (USA) Inc. pursuant to which
they are obligated to pay additional interest upon the occurrence of certain
Registration Defaults (as defined therein).
A-5
9. 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 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 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.
10. Persons Deemed Owners
The registered holder of this Note may be treated as the owner of it
for all purposes.
11. 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 Issuers at their request unless an
abandoned property law designates another Person. After any such payment,
Holders entitled to the money must look only to the Issuers and not to the
Trustee for payment.
12. Defeasance
Subject to certain conditions set forth in the Indenture, the Issuers
at any time may terminate some or all of their obligations under the Notes and
the Indenture if the Issuers deposit 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.
13. 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 Issuers and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with Article V of the Indenture, 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 Issuers, 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.
A-6
14. 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 Article V of the Indenture, (iv) the failure by the Company to comply for
30 days after notice with any of its obligations under Section 4.4 or any of
Sections 4.9 through 4.19 of the Indenture (in each case, other than a failure
to repurchase Notes), (v) the failure by the Company or the Guarantor to comply
for 60 days after notice with its other agreements contained in the Indenture,
(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, the Guarantor or any
Significant Subsidiary of the Company, (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, or (ix) prior to the Separation, the Guarantee with respect
to the Notes ceases for any reason to be in full force and effect (other than in
accordance with its terms) or the Guarantor denies or disaffirms its obligations
under the Guarantee. 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.
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.
15. Guarantee of the Notes
Subject to the next paragraph, prior to the Separation, payment of
principal, premium, if any, and interest, if any (including interest on overdue
principal and overdue interest, if lawful), on the Notes is fully and
unconditionally guaranteed by the Guarantor pursuant to, and subject to the
terms of, Article X of the Indenture.
If the Separation Date does not occur on or before December 31, 2002
or if the Board of Directors determines not to proceed with the Separation, the
Guarantee of the Notes by the Guarantor shall stay in effect until the Notes
have been paid in full.
A-7
16. Trustee Dealings with the Issuers
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 Issuers or their respective Affiliates and may otherwise deal
with the Issuers or their respective Affiliates with the same rights it would
have if it were not Trustee.
17. No Recourse Against Others
No director, officer, employee, member, incorporator or stockholder of
the Issuers or the Guarantor, as such, shall have any liability for any
obligations of the Issuers under the Notes, the Guarantee, 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.
18. 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.
19. 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).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuers have caused CUSIP numbers to be
printed on the Notes and have 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.
21. GOVERNING LAW
THIS NOTE AND THE GUARANTEE OF THE NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
A-8
NOTATION RELATING TO GUARANTEE
The undersigned (the "Guarantor") has fully and unconditionally
guaranteed, on a senior unsecured basis (the "Guarantee"), that: (i) the
principal of, premium, if any, and interest, if any, on the Notes will be paid
in full when due, whether at the maturity or interest payment or redemption
date, by acceleration, call for redemption, offer to purchase or otherwise, and
interest on the overdue principal of, premium, and interest, if any, on the
Notes and all other Obligations of the Issuers to the Holders of the Notes or
the Trustee under the Indenture or the Notes will be promptly paid in full or
performed, all in accordance with Article X of the Indenture and the Notes; (ii)
in case of any extension of time of payment or renewal of any Notes or any of
such other Obligations, they will be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise; and (iii) any and all costs and expenses (including
reasonable and documented attorneys' fees) incurred by the Trustee or any Holder
of the Notes in enforcing any rights under this Guarantee with respect to the
Notes will be paid.
If the Separation Date does not occur on or before December 31, 2002
or if the Board of Directors determines not to proceed with the Separation, this
Guarantee shall stay in effect until the Notes have been paid in full.
The obligations of the undersigned to the Holders of the Notes and to
the Trustee are expressly set forth in Article X to the Indenture and reference
is hereby made to the Indenture for the precise terms of the Guarantee.
Date: July 27, 2001 USX CORPORATION
--------------------
By:
Title:
A-9
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 Issuers. 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)
A-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.11 or 4.15 of the Indenture, check the appropriate box:
Section 4.11 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the Issuers
pursuant to Section 4.11 or 4.15 of the Indenture, 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)
A-11
[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:
Signature of
Amount of decrease in Amount of increase in Principal Amount of this authorized officer of
Date of Principal Amount of Principal Amount of Global Note following Trustee or Notes
Exchange this Global Note this Global Note such decrease or increase Custodian
- -------- --------------------- --------------------- ------------------------- ---------------------
A-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
United States Steel LLC
600 Grant Street
Pittsburgh, PA 15219-4776
Attention: Vice President - Finance and Accounting
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Trustee Administration
Re: 10 3/4% Senior Notes due August 1, 2008
---------------------------------------
Reference is hereby made to the Indenture, dated as of July [ ], 2001
(the "Indenture"), among United States Steel LLC (the "Company"), United States
Steel Financing Corp. ("USS Financing", and together with the Company, the
"Issuers"), USX Corporation (the "Guarantor") and The Bank of New York, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
(the "Transferor") owns and proposes to transfer
------------------
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $ in such Note[s] or interests (the "Transfer"), to
-------
(the "Transferee"), as further specified in Annex A hereto. In
- -----------
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial interest in the
----------------------------------------------------------------------
144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
- -----------------------------------------------------------
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] Check if Transferee will take delivery of a beneficial interest in the
----------------------------------------------------------------------
Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
- ----------------------------------------------------------------------
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time
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the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Distribution Compliance
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
3. [ ] Check and complete if Transferee will take delivery of a beneficial
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interest in a Definitive Note pursuant to any provision of the Securities Act
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other than Rule 144A or Regulation S. The Transfer is being effected in
- ------------------------------------
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Issuers or any of their
respective subsidiaries thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act.
4. [ ] Check if Transferee will take delivery of a beneficial interest in an
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Unrestricted Global Note or of an Unrestricted Definitive Note.
- --------------------------------------------------------------
(a) [ ] Check if Transfer is Pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
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(b) [ ] Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ]Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
---------------------------
[Insert Name of Transferor]
By:
-----------------------
Name:
Title:
Dated:
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
--------
(ii) [ ] Regulation S Global Note (CUSIP ); or
--------
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(c) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
-------
(ii) [ ] Regulation S Global Note (CUSIP ), or
-------
(iii) [ ] Unrestricted Global Note (CUSIP ); or
-------
(d) [ ] a Restricted Definitive Note; or
(e) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
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EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
United States Steel LLC
600 Grant Street
Pittsburgh, PA 15219-4776
Attention: Vice President - Finance and Accounting
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Trustee Administration]
Re: 10 3/4 % Senior Notes due August 1, 2008
----------------------------------------
(CUSIP )
--------------------
Reference is hereby made to the Indenture, dated as of July [ ], 2001
(the "Indenture"), among United States Steel LLC (the "Company"), United States
Steel Financing Corp. ("USS Financing", and together with the Company, the
"Issuers"), USX Corporation (the "Guarantor") and The Bank of New York, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
(the "Owner") owns and proposes to exchange the
----------------
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$ in such Note[s] or interests (the "Exchange"). In connection with the
--------
Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
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Global Note to beneficial interest in an Unrestricted Global Note. In connection
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with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [ ] Check if Exchange is from beneficial interest in a Restricted
-------------------------------------------------------------
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
- -------------------------------------------
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the
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Securities Act and (iv) the Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
(c) [ ] Check if Exchange is from Restricted Definitive Note to
-------------------------------------------------------
beneficial interest in an Unrestricted Global Note. In connection with the
- --------------------------------------------------
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] Check if Exchange is from Restricted Definitive Note to
-------------------------------------------------------
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
- ----------------------------
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
-------------------------------------------------------------
Global Note to Restricted Definitive Note. In connection with the Exchange of
- -----------------------------------------
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] Check if Exchange is from Restricted Definitive Note to
-------------------------------------------------------
beneficial interest in a Restricted Global Note. In connection with the Exchange
- -----------------------------------------------
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
---------------------
[Insert Name of Owner]
By:
-----------------------
Name:
Title:
Dated:
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