Note Purchase Agreement - Pittston Co.
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THE PITTSTON COMPANY
7.84% Senior Notes, Series A, due 2007
8.02% Senior Notes, Series B, due 2008
NOTE PURCHASE AGREEMENT
Dated as of January 18, 2001
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Table of Contents
Page
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1. AUTHORIZATION OF NOTES...............................................................................1
1.1. The Notes...............................................................................1
1.2. The Subsidiary Guarantees...............................................................1
2. SALE AND PURCHASE OF NOTES...........................................................................2
3. CLOSING..............................................................................................2
4. CONDITIONS TO CLOSING................................................................................2
4.1. Representations and Warranties..........................................................3
4.2. Performance; No Default.................................................................3
4.3. Compliance Certificates.................................................................3
4.4. Opinions of Counsel.....................................................................3
4.5. Subsidiary Guarantees...................................................................3
4.6. Purchase Permitted by Applicable Law, etc...............................................4
4.7. Payment of Special Counsel Fees.........................................................4
4.8. Private Placement Numbers...............................................................4
4.9. Changes in Corporate Structure..........................................................4
4.10. Proceedings and Documents...............................................................4
4.11. Sale of Notes to Other Purchasers.......................................................4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................5
5.1. Organization; Power and Authority.......................................................5
5.2. Authorization, etc......................................................................5
5.3. Disclosure..............................................................................5
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates........................6
5.5. Financial Statements....................................................................6
5.6. Compliance with Laws, Other Instruments, etc............................................7
5.7. Governmental Authorizations, etc........................................................7
5.8. Litigation; Observance of Agreements, Statutes and Orders...............................7
5.9. Taxes...................................................................................7
5.10. Title to Property; Leases...............................................................8
5.11. Licenses, Permits, etc..................................................................8
5.12. Compliance with ERISA...................................................................8
5.13. Private Offering by the Company.........................................................9
5.14. Use of Proceeds; Margin Regulations.....................................................10
5.15. Existing Indebtedness...................................................................10
5.16. Foreign Assets Control Regulations, etc.................................................10
5.17. Status Under Certain Statutes...........................................................11
5.18. Environmental Matters...................................................................11
6. REPRESENTATIONS OF THE PURCHASER.....................................................................11
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6.1. Purchase of Notes.......................................................................11
6.2. Source of Funds.........................................................................12
7. INFORMATION AS TO COMPANY............................................................................13
7.1. Financial and Business Information......................................................13
7.2. Officer's Certificate...................................................................16
7.3. Inspection..............................................................................16
8. PREPAYMENT OF THE NOTES..............................................................................17
8.1. Required Prepayments of Series A Notes..................................................17
8.2. Optional Prepayments with Make-Whole Amount.............................................18
8.3. Notice of Prepayment....................................................................18
8.4. Allocation of Partial Prepayments.......................................................18
8.5. Maturity; Surrender, etc................................................................18
8.6. Purchase of Notes.......................................................................19
8.7. Make-Whole Amount.......................................................................19
9. AFFIRMATIVE COVENANTS................................................................................20
9.1. Compliance with Law.....................................................................20
9.2. Insurance...............................................................................21
9.3. Maintenance of Properties...............................................................21
9.4. Payment of Taxes and Claims.............................................................21
9.5. Corporate Existence, etc................................................................22
9.6. Additional Subsidiary Guarantees; Release of Subsidiary Guarantees......................22
10. NEGATIVE COVENANTS...................................................................................23
10.1. Liens...................................................................................23
10.2. Restricted Subsidiary Indebtedness......................................................24
10.3. Limitation on Sale and Leaseback Transactions...........................................25
10.4. Limitation on Asset Sales...............................................................25
10.5. Financial Conditions....................................................................26
10.6. Merger, Consolidation, etc..............................................................27
10.7. Lines of Business.......................................................................28
10.8. Transactions with Affiliates............................................................28
10.9. Designation of Restricted and Unrestricted Subsidiaries.................................29
11. EVENTS OF DEFAULT....................................................................................29
12. REMEDIES ON DEFAULT, ETC.............................................................................31
12.1. Acceleration............................................................................31
12.2. Other Remedies..........................................................................32
12.3. Rescission..............................................................................32
12.4. No Waivers or Election of Remedies, Expenses, etc.......................................33
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES........................................................33
13.1. Registration of Notes...................................................................33
13.2. Transfer and Exchange of Notes..........................................................33
(ii)
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13.3. Replacement of Notes....................................................................34
14. PAYMENTS ON NOTES....................................................................................34
14.1. Place of Payment........................................................................34
14.2. Home Office Payment.....................................................................34
15. EXPENSES, ETC........................................................................................35
15.1. Transaction Expenses....................................................................35
15.2. Survival................................................................................35
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.........................................35
17. AMENDMENT AND WAIVER.................................................................................36
17.1. Requirements............................................................................36
17.2. Solicitation of Holders of Notes........................................................36
17.3. Binding Effect, etc.....................................................................36
17.4. Notes held by Company, etc..............................................................37
18. NOTICES..............................................................................................37
19. REPRODUCTION OF DOCUMENTS............................................................................37
20. CONFIDENTIAL INFORMATION.............................................................................38
21. SUBSTITUTION OF PURCHASER............................................................................39
22. MISCELLANEOUS........................................................................................39
22.1. Successors and Assigns..................................................................39
22.2. Construction............................................................................39
22.3. Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.......................39
22.4. Payments Due on Non-Business Days.......................................................40
22.5. Severability............................................................................40
22.6. Accounting Terms; Changes in GAAP.......................................................40
22.7. Counterparts............................................................................41
22.8. Governing Law...........................................................................41
Exhibit 1.1(a) -- Form of 7.84% Senior Note, Series A, due 2007
Exhibit 1.1(b) -- Form of 8.02% Senior Note, Series B, due 2008
Exhibit 1.2 -- Form of Subsidiary Guarantee
Exhibit 4.4(a)(i) -- Form of Opinion of Special Counsel for the Company
Exhibit 4.4(a)(ii) -- Form of Opinion of Counsel for the Company
Exhibit 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
(iii)
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Schedule A -- Names and Addresses of Purchasers
Schedule B -- Defined Terms
Schedule 5.3 -- Disclosure Documents
Schedule 5.4 -- Subsidiaries
Schedule 5.8 -- Litigation
Schedule 5.11 -- Licenses, etc.
Schedule 5.15 -- Existing Indebtedness
(iv)
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THE PITTSTON COMPANY
1801 Bayberry Court
P.O. Box 18100
Richmond, VA 23226
Telephone: 804-289-9600
Telecopier: 804-289-9770
7.84% Senior Notes, Series A, due 2007
8.02% Senior Notes, Series B, due 2008
As of January 18, 2001
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
THE PITTSTON COMPANY, a Virginia corporation (the "Company"), agrees
with you as follows:
1. AUTHORIZATION OF NOTES.
1.1. The Notes.
The Company has duly authorized the issue and sale of $75,000,000
aggregate principal amount of its Senior Notes, comprising $55,000,000 aggregate
principal amount of its 7.84% Senior Notes, Series A, due 2007 (the "Series A
Notes") and $20,000,000 aggregate principal amount of its 8.02% Senior Notes,
Series B, due 2008 (the "Series B Notes" and, together with the Series A Notes,
collectively the "Notes"), such notes to be substantially in the respective
forms set out in Exhibits 1.1(a) and 1.1(b). As used herein, the term "Notes"
shall mean all notes (irrespective of series unless otherwise specified)
originally delivered pursuant to this Agreement and the Other Agreements
referred to below and all notes delivered in substitution or exchange for any
such note and, where applicable, shall include the singular number as well as
the plural. The terms "Note", "Series A Note" and "Series B Note" mean one of
the Notes, Series A Notes and Series B Notes, respectively. Certain capitalized
and other terms used in this Agreement are defined in Schedule B; references to
a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or
an Exhibit attached to this Agreement.
1.2. The Subsidiary Guarantees.
The Notes will be unconditionally guaranteed by certain of the
Company's existing Restricted Subsidiaries, pursuant to subsidiary guarantees
substantially in the form of Exhibit 1.2 (individually a "Subsidiary Guarantee"
and collectively the "Subsidiary
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Guarantees", which terms shall include after the date of the Closing all
additional Subsidiary Guarantees from time to time executed and delivered
pursuant to Section 9.6).
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes of the series and in the principal amount
specified opposite your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other purchasers
named in Schedule A (the "Other Purchasers"), providing for the sale at such
Closing to each of the Other Purchasers of Notes of the series and in the
principal amount specified opposite its name in Schedule A. Your obligation
hereunder and the obligations of the Other Purchasers under the Other Agreements
are several and not joint obligations and you shall have no obligation under any
Other Agreement and no liability to any Person for the performance or
non-performance by any Other Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Willkie Farr & Gallagher, 787 Seventh
Avenue, New York, NY 10019 at 10:00 a.m., New York time, at a closing (the
"Closing") on January 18, 2001 or on such other Business Day thereafter on or
prior to January 23, 2001 as may be agreed upon by the Company and you and the
Other Purchasers. At the Closing the Company will deliver to you the Notes to be
purchased by you in the form of a single Note of the series to be purchased by
you (or such greater number of Notes in denominations of at least $100,000 as
you may request prior to the Closing) dated the date of the Closing and
registered in your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in the amount of
the purchase price therefor by wire transfer of immediately available funds to
the Company's account (account number 9104010609) at The Chase Manhattan Bank,
ABA number 021000021.
If at the Closing the Company shall fail to tender such Notes to you as
provided above in this Section 3, or any of the conditions specified in Section
4 shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
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4.1. Representations and Warranties.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
4.2. Performance; No Default.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Section 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Section 10.1 or 10.2 had such Sections applied since such date.
4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you a
certificate of the Secretary or an Assistant Secretary of the Company certifying
as to the resolutions attached thereto and other corporate proceedings relating
to the authorization, execution and delivery of the Notes and this Agreement and
the Other Agreements.
4.4. Opinions of Counsel.
You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing (a) from Cravath, Swaine & Moore, special
counsel for the Company, substantially in the form set forth in Exhibit
4.4(a)(i) and from Austin F. Reed, Vice President, General Counsel and Secretary
of the Company substantially in the form set forth in Exhibit 4.4(a)(ii) (and
the Company hereby instructs its counsel to deliver such opinions to you) and
(b) from Willkie Farr & Gallagher, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as you may reasonably request.
4.5. Subsidiary Guarantees.
A Subsidiary Guarantee, dated as of a date on or before the date of the
Closing and in the form hereinabove recited, shall have been executed and
delivered by Brink's, Incorporated, Brink's Home Security, Inc., Pittston
Services Group, Inc., Brink's Holding Company, BAX Holding Company, Pittston
Coal Company, BAX Global Inc. and Pittston Minerals Group Inc. (in such capacity
sometimes individually called a "Subsidiary Guarantor" and collectively the
"Subsidiary Guarantors", which term shall include after the date of the Closing
all additional Restricted Subsidiaries that from time to time execute and
deliver Subsidiary Guarantees pursuant to Section 9.6) and each such Subsidiary
Guarantee shall be in full force and effect.
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4.6. Purchase Permitted by Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including without limitation
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (c) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
4.7. Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
4.8. Private Placement Numbers.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes
of each series.
4.9. Changes in Corporate Structure.
The Company shall not have changed its jurisdiction of incorporation or
been a party to any merger or consolidation or succeeded to all or any
substantial part of the liabilities of any other entity at any time following
the date of the most recent financial statements referred to in Section 5.5.
4.10. Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
4.11. Sale of Notes to Other Purchasers.
The Company shall sell to the Other Purchasers and the Other Purchasers
shall purchase the Notes to be purchased by them at the Closing as specified in
Schedule A.
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5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. Organization; Power and Authority.
The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement and the Other Agreements and the Notes and to perform the provisions
hereof and thereof.
5.2. Authorization, etc.
This Agreement and the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
5.3. Disclosure.
The Company, through its agent, Credit Suisse First Boston Corporation,
has delivered to you a copy of a Confidential Direct Placement Memorandum, dated
November 2000 (the "Memorandum"), relating to the transactions contemplated
hereby. The Memorandum fairly describes, in all material respects, the general
nature of the business and principal properties of the Company and its
Subsidiaries, except that the description of the coal business which the Company
intends to dispose of is limited. This Agreement, the Memorandum (including the
Appendices thereto), the documents, certificates or other writings delivered to
you by or on behalf of the Company in connection with the transactions
contemplated hereby and described in Schedule 5.3 (together with the Memorandum,
the "Disclosure Documents"), and the financial statements included in the
Appendices to the Memorandum, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Since December 31, 1999, there has been no change in the
financial condition, operations, business, properties or prospects of the
Company or any Subsidiary except as disclosed in the Disclosure Documents or in
the financial statements included in the Appendices to the Memorandum and other
changes that individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect. There is no fact known to the Company that
could
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reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other Disclosure Documents.
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary and (ii) of
the Company's directors and senior officers. Schedule 5.4 also identifies each
Restricted Subsidiary and each Unrestricted Subsidiary as of the date of this
Agreement. No Subsidiary listed in Schedule 5.4 is a guarantor under the Bank
Credit Agreement other than the Subsidiary Guarantors listed in Section 4.5.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact and, in the case of Subsidiary Guarantors, to execute and deliver and
perform its obligations under their respective Subsidiary Guarantees.
(d) No Restricted Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or any
of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.
5.5. Financial Statements.
The Company's financial statements included in the Appendices to the
Memorandum (including in each case the related schedules and notes) fairly
present in all material respects the consolidated financial position of the
Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
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7
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this
Agreement and the Notes and by the Subsidiary Guarantors of their respective
Subsidiary Guarantees will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (iii) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to the
Company or any Subsidiary.
5.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required for the validity of the
execution, delivery or performance by the Company of this Agreement or the Notes
or by the Subsidiary Guarantors of their respective Subsidiary Guarantees.
5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
5.9. Taxes.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and
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8
reserves on the books of the Company and its Subsidiaries in respect of Federal,
state or other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1993.
5.10. Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11. Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, proprietary
software, service marks, trademarks and trade names, or rights thereto,
that individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person; and
(c) to the knowledge of the Company, there is no Material violation by
any Person of any right of the Company or any of its Subsidiaries with
respect to any patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned or used by the Company or any of
its Subsidiaries.
5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not be individually or in the aggregate
Material.
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9
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities that have not been discharged (and are not currently subject to
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the aggregate are
Material.
(d) Except as disclosed in the Disclosure Documents, the expected post
retirement benefit obligation (determined as of the last day of the Company's
most recently ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by section 4980B of the Code) of the Company and
its Subsidiaries is not Material.
(e) With respect to each employee benefit plan, if any, disclosed by
you in writing to the Company in accordance with Section 6.2(c), neither the
Company nor any "affiliate" of the Company (as defined in Section V(c) of the
QPAM Exemption) has at this time, nor has exercised at any time during the
immediately preceding year, the authority to appoint or terminate the "QPAM" (as
defined in Part V of the QPAM Exemption) disclosed by you to the Company
pursuant to Section 6.2(c) as manager of any of the assets of any such plan or
to negotiate the terms of any management agreement with such QPAM on behalf of
any such plan, and the Company is not an "affiliate" (as so defined) of such
QPAM. The Company has advised you if it is a party in interest with respect to
any employee benefit plan originally disclosed by you in accordance with Section
6.2(b) or 6.2(e). The execution and delivery of this Agreement and the issuance
and sale of the Notes at the Closing hereunder will not involve any prohibited
transaction (as such term is defined in section 406(a) of ERISA and section
4975(c)(1)(A)-(D) of the Code), that could subject the Company or any holder of
a Note to any tax or penalty on prohibited transactions imposed under said
section 4975 of the Code or by section 502(i) of ERISA. The representation by
the Company in the preceding sentence of this Section 5.12(e) is made in
reliance upon and subject to the accuracy of your representation in Section 6.2
as to the source of the funds used to pay the purchase price of the Notes to be
purchased by you (including without limitation after giving effect to your
necessary change in the source in respect of a party in interest identified by
the Company as aforesaid).
5.13. Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered the
Notes, the Subsidiary Guarantees or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any person other than you, the Other
Purchasers and not more than 35 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the
<PAGE>
10
Notes or the issuance of the Subsidiary Guarantees to the registration
requirements of Section 5 of the Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Company will apply the net proceeds of the sale of the Notes to
repay Indebtedness and for general corporate purposes. No part of the proceeds
from the sale of the Notes hereunder will be used, and no part of the proceeds
of such Indebtedness being repaid was used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for
the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 5% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 25% of the value of such assets. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.
5.15. Existing Indebtedness.
Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Restricted Subsidiaries in an unpaid
principal amount exceeding $25,000,000 as of December 31, 2000, since which date
there has been no Material change in the amounts, interest rates, sinking funds,
instalment payments or maturities of the Indebtedness of the Company or its
Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is in
default, and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Restricted
Subsidiary, and no event or condition exists with respect to any Indebtedness of
the Company or any Restricted Subsidiary that would permit (or that with the
giving of notice or the lapse of time, or both, would permit) one or more
Persons to cause such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.
Except as disclosed in Schedule 5.15, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien that would not be
permitted by Section 10.1 without equally and ratably securing the Notes.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
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11
5.17. Status Under Certain Statutes.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
5.18. Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any written notice of any claim against the Company or any of its
Subsidiaries that is outstanding or unresolved, and no proceeding has been
instituted and is pending raising any claim against the Company or any of its
Subsidiaries or any of their respective real properties now owned, leased or
operated by any of them or other assets, alleging any damage to the environment
or violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect. Except as
otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of any facts
which would be reasonably likely to result in any claim, public or private,
against the Company or any Subsidiary under any Environmental Laws, except,
in each case, for such claims that could not reasonably be expected to
result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them or disposed of any Hazardous Materials, in any case
in a manner contrary to any Environmental Laws that could reasonably be
expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or operated
by the Company or any of its Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. Purchase of Notes.
You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds for which you are the financial advisor or
investment manager and not with a view to the distribution thereof, provided
that the disposition of your or their property shall at all times be within your
or their control. You understand that the Notes have not been registered under
the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required to
register the Notes.
<PAGE>
12
6.2. Source of Funds.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account", as such term
is defined in Prohibited Transaction Exemption ("PTE") 95-60 (issued July
12, 1995), and there is no plan with respect to which the aggregate amount
of such general account's reserves and liabilities for the contracts held
by or on behalf of such plan and all other plans maintained by the same
employer (and affiliates thereof as defined in section V(a)(1) of PTE
95-60) or by the same employee organization (in each case determined in
accordance with PTE 95-60) exceeds or will exceed 10% of the total of all
reserves and liabilities of such general account (determined in accordance
with PTE 95-60, exclusive of separate account liabilities, plus any
applicable surplus) as of the date of the Closing; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except for any employee benefit plan or a group
of plans disclosed to the Company in writing pursuant to this paragraph (b)
(in response to which the Company has not advised you that it is a party in
interest with respect to any such plan or group of plans), no employee
benefit plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to
such pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity
of such QPAM and (ii) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been
<PAGE>
13
identified to the Company in writing pursuant to this paragraph (e) and the
Company has not advised you that it is a party in interest with respect to
any such plan; or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. Financial and Business Information.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies of
(i) a consolidated balance sheet of the Company and its
Subsidiaries or its Restricted Subsidiaries as at the end of such
quarter, and
(ii) consolidated statements of income and cash flows of the
Company and its Subsidiaries or its Restricted Subsidiaries, for such
quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments, provided that
delivery within the time period specified above of copies of the Company's
Quarterly Report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section 7.1(a);
(b) Annual Statements -- within 120 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries or its Restricted Subsidiaries as at the end of such
year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries or its
Restricted Subsidiaries for such year,
<PAGE>
14
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent public accountants of
recognized national standing, which opinion shall state that such
financial statements present fairly, in all material respects,
the financial position of the companies being reported upon and
their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been
made in accordance with generally accepted auditing standards,
and that such audit provides a reasonable basis for such opinion
in the circumstances,
(B) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making
their audit, they have become aware of any condition or event
that then constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it
being understood that such accountants shall not be liable,
directly or indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in accordance
with generally accepted auditing standards or did not make such
an audit), and
(C) in case such audited financial statements include the
accounts of Unrestricted Subsidiaries and all Unrestricted
Subsidiaries, if taken as a single Subsidiary, produced more than
10% of Consolidated Net Income for such fiscal year or the assets
of all Unrestricted Subsidiaries exceeded 10% of the consolidated
assets of the Company and its Subsidiaries as of the last day of
such fiscal year, a certificate of a Senior Financial Officer
containing calculations in reasonable detail deleting the
accounts of all Unrestricted Subsidiaries from such financial
statements,
provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with
the Company's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountants' certificate described in clause
(B) above and (if required) the certificate of a Senior Financial Officer
described in clause (C) above, shall be deemed to satisfy the requirements
of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming available,
one copy of (i) each financial statement, written report, material notice
or proxy statement sent by the Company or any Restricted Subsidiary
generally to its public securities holders or its lending banks, (ii) each
regular or periodic report, each registration statement (without exhibits
except as expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Restricted Subsidiary with
the Securities and Exchange Commission and (iii) all press releases and
<PAGE>
15
other statements made available generally by the Company to the public
concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has given
any notice or taken any action with respect to a claimed default hereunder
or that any Person has given any notice or taken any action with respect to
a claimed default of the type referred to in Section 11(f), a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days after
a Responsible Officer becoming aware of any of the following, a written
notice setting forth the nature thereof and the action, if any, that the
Company or an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof;
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
or such penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then existing,
would have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or
any Subsidiary from any United States Federal or state Governmental
Authority relating to any order, ruling, statute or other law or regulation
that could reasonably be expected to have a Material Adverse Effect; and
(g) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes or relating to the ability of a
Subsidiary Guarantor to perform its obligations under its respective
<PAGE>
16
Subsidiary Guarantee, in each case as from time to time may be reasonably
requested in writing by any such holder of Notes (subject to the
limitations of the final paragraph of Section 7.3).
7.2. Officer's Certificate.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.1 through 10.8 inclusive,
during the quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage, as
the case may be, permissible under the terms of such Sections, and the
calculation of the amount, ratio or percentage then in existence); and
(b) Default -- a statement that such Senior Financial Officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including without limitation any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
In case any of the calculations provided pursuant to clause (a) above are made
without giving effect to a change in GAAP, by reason of an objection by the
Company or the Required Holders pursuant to Section 22.6 to calculations taking
into account such change in GAAP, such certificate of a Senior Financial Officer
shall be accompanied by a certificate or letter from the Company's independent
public accountants to the effect that they have reviewed and verified such
calculations.
7.3. Inspection.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor (subject to compliance with Section 20):
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
Company's officers, and (with the consent of the Company, which consent
will not be
<PAGE>
17
unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each Subsidiary,
all at such reasonable times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Company, to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers, employees and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts
of the Company and its Subsidiaries), all at such times and as often as may
be requested.
Notwithstanding the foregoing, the Company shall not be required to
disclose to any holder of Notes any information (other than financial
information and other data related to the financial performance of the Company
and its Subsidiaries, including without limitation copies of written reports
that the Company provides to its lending banks) to the extent that the Company
is advised in writing by internal or external legal counsel that the Company is
prohibited from disclosing such information at such time to its creditors
generally under any applicable law, rule, regulation or order (or other binding
restriction imposed by any Governmental Authority) or as a result of any
agreement entered into in good faith with third parties that are not lenders to
the Company or a Subsidiary.
8. PREPAYMENT OF THE NOTES.
In addition to the payment of the entire unpaid principal amount of the
Notes of each series at the final maturity thereof, the Company will make
required prepayments on account of the Series A Notes and may make optional
prepayments in respect of the Notes as hereinafter provided.
8.1. Required Prepayments of Series A Notes.
On January 18, 2005 and January 18, 2006 the Company will prepay
$18,333,000 aggregate principal amount (or such lesser principal amount as shall
then be outstanding) of the Series A Notes, such prepayment to be made at the
principal amount to be prepaid, together with accrued interest thereon to the
date of such prepayment, without payment of any Make-Whole Amount or other
premium, allocated as provided in Section 8.4.
No partial prepayment of the Series A Notes pursuant to Section 8.2
shall relieve the Company of its obligation to make prepayments of the Notes
required by this Section 8.1 (with the effect that such optional prepayments
shall be applied to such required prepayments and to the payment at the final
maturity of the Series A Notes in inverse order), provided that upon any
purchase of less than all of the outstanding Series A Notes pursuant to Section
8.6 the principal amount of each required prepayment of the Series A Notes
becoming due under this Section 8.1 on and after the date of such purchase shall
be reduced in the same proportion as the aggregate unpaid principal amount of
the Series A Notes is reduced as a result of such purchase.
<PAGE>
18
8.2. Optional Prepayments with Make-Whole Amount.
The Company may, at its option and upon notice as provided in Section
8.3, prepay at any time all, or from time to time any part of, the Notes (in a
minimum amount of $5,000,000 and otherwise in multiples of $100,000) at the
principal amount so prepaid, together with interest accrued thereon to the date
of such prepayment, plus the Make-Whole Amount for the Notes of each series
determined for the prepayment date with respect to such principal amount.
8.3. Notice of Prepayment.
The Company will give each holder of Notes written notice of each
optional prepayment under Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
the date fixed for such prepayment (which shall be a Business Day), the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of Notes held by such holder to be prepaid (determined in
accordance with Section 8.4) and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid.
Each such notice of prepayment shall be accompanied by a certificate of
a Senior Financial Officer as to the estimated Make-Whole Amount for the Notes
of each series due in connection with such prepayment (calculated as if the date
of such notice were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amounts as of the specified
prepayment date.
8.4. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Series A Notes pursuant
to Section 8.1 or all Notes pursuant to Section 8.2, the principal amount of the
Series A Notes or all Notes, as the case may be, to be prepaid shall be
allocated among all of the Series A Notes or all of the Notes, as the case may
be, at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof.
8.5. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
<PAGE>
19
8.6. Purchase of Notes.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except (a) upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes or (b) pursuant to an
offer to purchase made by the Company or an Affiliate pro rata to the holders of
all Notes at the time outstanding upon the same terms and conditions (except for
differences to reflect the terms of the Notes of each series). Any such offer
shall provide each holder with sufficient information to enable it to make an
informed decision with respect to such offer and shall remain open for at least
30 days. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any such offer and no Notes may be issued in substitution
or exchange for any such Notes.
Promptly and in any event within ten Business Days after each such
purchase of Notes, the Company will furnish each holder of the Notes with a
certificate of a Senior Financial Officer describing such purchase (including
the aggregate principal amount of Notes of each series so purchased and the
purchase price therefor) and certifying that such purchase was made in
compliance with the requirements of this Section.
8.7. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, .50% (50 basis points) over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the second
Business Day preceding the Settlement Date with respect to such Called
Principal, on (x) the Bloomberg Financial Markets News screen PX1 or the
equivalent screen provided by Bloomberg Financial Markets News, or (y) if
such on-line market data is not at the time provided by Bloomberg Financial
Markets News, on the display designated as "Page 500" on the Dow Jones
Markets service (or such other display as may replace Page 500 on the Dow
Jones Markets service), in any case for actively traded non-callable U.S.
Treasury securities
<PAGE>
20
having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields
have been so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by
(a) converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between (1) the actively traded U.S. Treasury security with a maturity
closest to and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with a maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number
of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
12.1.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
9.1. Compliance with Law.
The Company will and will cause each of its Restricted Subsidiaries to
comply with all laws, ordinances or governmental rules or regulations to which
each of them is subject, including without limitation Environmental Laws, and
will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the
<PAGE>
21
ownership of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that non-compliance
with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
9.2. Insurance.
The Company will and will cause each of its Restricted Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance if adequate reserves are maintained
with respect thereto to the extent required by GAAP) as is customary in the case
of entities of established reputations engaged in the same or a similar business
and similarly situated.
9.3. Maintenance of Properties.
The Company will and will cause each of its Restricted Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
conducted properly at all times, provided that this Section shall not prevent
the Company or any Restricted Subsidiary from selling all or any substantial
part of the assets of any member of the Pittston Minerals Group or from
discontinuing the operation and the maintenance of any of its other properties
if such discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
9.4. Payment of Taxes and Claims.
The Company will and will cause each of its Restricted Subsidiaries to
file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Restricted
Subsidiary, provided that neither the Company nor any Restricted Subsidiary need
pay any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Restricted Subsidiary on a
timely basis in good faith and in appropriate proceedings, and the Company or a
Restricted Subsidiary has established adequate reserves therefor in accordance
with GAAP on the books of the Company or such Restricted Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
<PAGE>
22
9.5. Corporate Existence, etc.
Subject to Section 10.6, the Company will at all times preserve and
keep in full force and effect its corporate existence. Subject to Sections 10.4
and 10.6, the Company will at all times preserve and keep in full force and
effect the corporate existence of each of its Restricted Subsidiaries (unless
merged into the Company or a Restricted Subsidiary) and all rights and
franchises of the Company and its Restricted Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
9.6. Additional Subsidiary Guarantees; Release of Subsidiary Guarantees.
(a) So long as the Bank Credit Agreement remains in effect the Company
will cause each Restricted Subsidiary that becomes a borrower or a guarantor
thereunder or in respect thereof after the date of the Closing (if such
Restricted Subsidiary is not at the time a Subsidiary Guarantor) to become a
Subsidiary Guarantor by executing and delivering a Subsidiary Guarantee, prior
to or concurrently with so becoming a borrower or a guarantor; and promptly and
in any event within ten Business Days thereafter the Company will furnish each
holder of the Notes with a counterpart of such executed Subsidiary Guarantee,
together with an opinion of Cravath, Swaine & Moore or other counsel reasonably
satisfactory to the Required Holders (which opinion may be subject to customary
exceptions, qualifications and limitations under the circumstances none of which
shall affect the parity of obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee and the obligations of such Subsidiary Guarantor as a
borrower or guarantor under the Bank Credit Agreement) to the effect that such
Subsidiary Guarantee has been duly authorized, executed and delivered by such
Restricted Subsidiary and is valid, binding and enforceable in accordance with
its terms.
(b) Except as provided in Subsection (c) below, the Company will cause
each Subsidiary Guarantee to remain in full force and effect at all times after
the execution and delivery thereof, provided that you and each other holder of a
Note, by acceptance of such Note, agree that any Subsidiary Guarantor shall
automatically be discharged from all of its obligations and liabilities under
its Subsidiary Guarantee, effective at the time such Subsidiary Guarantor ceases
to be a Subsidiary of the Company after giving effect to a consolidation,
merger, sale or other disposition (other than in a transaction resulting in an
assumption by the successor pursuant to Section 10.6(a)(ii)), and except that
this proviso shall not apply (i) if a Default or Event of Default has occurred
and is continuing, (ii) to a Subsidiary Guarantor if any amount is then due and
payable under its Subsidiary Guarantee, (iii) to a Subsidiary Guarantor which at
the time is a guarantor of any other Indebtedness of the Company or another
Restricted Subsidiary (other than a Restricted Subsidiary that ceases to be a
Subsidiary of the Company after giving effect to such transaction) that is not
also concurrently being released or (iv) unless within three Business Days after
such discharge, the Company shall have furnished each holder of the Notes with a
certificate of a Senior Financial Officer describing such transaction and
certifying that such discharge was effected in compliance with the terms of this
Subsection (b).
(c) Notwithstanding the requirements of the foregoing Subsection (b),
Pittston Minerals Group Inc. and any Subsidiary of Pittston Minerals Group Inc.
that is a Subsidiary
<PAGE>
23
Guarantor shall automatically be discharged from their respective Subsidiary
Guarantees, without further action on the part of the holders of any of the
Notes, upon the sale by the Company of the capital stock of any member of the
Pittston Minerals Group to a Person which is not an Affiliate of the Company or
the sale of all or any substantial part of the assets of any member of the
Pittston Minerals Group to any person.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
10.1. Liens.
The Company will not and will not permit any Restricted Subsidiary to
create, assume, incur or suffer to exist any Lien upon or with respect to any
property or assets, whether now owned or hereafter acquired, securing any
Indebtedness without making effective provision (pursuant to documentation in
form and substance reasonably satisfactory to the Required Holders) whereby the
Notes shall be secured by such Lien equally and ratably with or prior to any and
all Indebtedness and other obligations to be secured thereby, provided that
nothing in this Section 10.1 shall prohibit:
(a) Liens in respect of property of the Company or a Restricted
Subsidiary existing on the date of the Closing and described in Schedule
5.15;
(b) Liens in respect of property acquired or constructed or improved
by the Company or a Restricted Subsidiary after the date of the Closing,
which are created at the time of or within one year after acquisition or
completion of construction or improvement of such property to secure
Indebtedness assumed or incurred to finance all or any part of the purchase
price or cost of construction or improvement of such property, provided
that in any such case
(i) no such Lien shall extend to or cover any other property of
the Company or such Restricted Subsidiary, as the case may be, and
(ii) the aggregate principal amount of Indebtedness secured by
all such Liens in respect of any such property shall not exceed the
cost of such property and any improvements then being financed;
(c) Liens in respect of property acquired by the Company or a
Restricted Subsidiary after the date of the Closing, existing on such
property at the time of acquisition thereof (and not created in
anticipation thereof), or in the case of any Person that after the date of
the Closing becomes a Subsidiary or is consolidated with or merged with or
into the Company or a Restricted Subsidiary or sells, leases or otherwise
disposes of all or substantially all of its property to the Company or a
Restricted Subsidiary, Liens existing at the time such Person becomes a
Subsidiary or is so consolidated or merged or effects such sale, lease or
other disposition of property (and not created in anticipation thereof),
provided that in any such case no such Lien shall extend to or cover any
other property of the Company or such Restricted Subsidiary, as the case
may be;
<PAGE>
24
(d) Liens securing Indebtedness owed by a Restricted Subsidiary to the
Company or to a Wholly-Owned Restricted Subsidiary;
(e) extensions, renewals or replacements of Liens permitted by clause
(a), (b), (c) or (d) above (including successive extensions, renewals and
replacements), provided that the principal amount of Indebtedness (or the
maximum commitment therefor) secured by any such Lien is not increased and
such Lien does not extend to or cover any property other than the property
covered by such Lien on the date of such extension, renewal or replacement;
and
(f) Liens which would otherwise not be permitted by clauses (a)
through (e) above, securing additional Indebtedness of the Company or a
Restricted Subsidiary, provided that after giving effect thereto (and to
the substantially concurrent application of the proceeds of such
Indebtedness) Priority Debt does not exceed 35% of Consolidated
Capitalization.
As used in this Agreement the term "Priority Debt" means, at any date,
the sum (without duplication) of (A) the aggregate unpaid principal amount of
Indebtedness (including Capitalized Lease Obligations) of the Company and its
Restricted Subsidiaries secured by Liens permitted by Section 10.1(f) plus (B)
the aggregate unpaid principal amount of Indebtedness of all Restricted
Subsidiaries (other than Indebtedness permitted by clauses (a) to (d),
inclusive, of Section 10.2) plus (C) the aggregate Attributable Debt in
connection with all sale and leaseback transactions of the Company and its
Restricted Subsidiaries entered into after the date of the Closing in accordance
with the provisions of Section 10.3(a).
For purposes of this Section 10.1: any Lien existing in respect of
property of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary
is designated a Restricted Subsidiary pursuant to Section 10.9 shall be deemed
to have been created at that time; and the sale or transfer of (x) coal, oil,
gas or other minerals in place for a period of time until, or in an amount such
that, the transferee will realize therefrom a specified amount of money (however
determined) or a specified amount of such coal or other minerals or (y) any
other interest in property of the character commonly referred to as a
"production payment" shall not be deemed to constitute Indebtedness secured by a
Lien.
10.2. Restricted Subsidiary Indebtedness.
The Company will not permit any Restricted Subsidiary to create,
assume, incur, guarantee or otherwise become liable in respect of any
Indebtedness except
(a) Indebtedness secured by Liens permitted by clause (b), (c), (d) or
(e) of Section 10.1,
(b) in the case of any Person that after the date of the Closing
becomes a Restricted Subsidiary or is consolidated with or merged with or
into a Restricted Subsidiary or sells, leases or otherwise disposes of all
of its property to a Restricted Subsidiary, Indebtedness outstanding at the
time such Person becomes a Restricted Subsidiary or is so consolidated or
merged or effects such sale, lease or other disposition of property (and
not created in anticipation thereof, including extensions, renewals or
<PAGE>
25
replacements of such Indebtedness, provided that the principal amount of
such Indebtedness is not increased,
(c) Indebtedness of any Subsidiary Guarantor,
(d) Indebtedness owing to the Company or a Wholly-Owned Restricted
Subsidiary, and
(e) other Indebtedness, provided that immediately after giving effect
to such other Indebtedness Priority Debt does not exceed 35% of
Consolidated Capitalization.
For purposes of this Section 10.2: a Restricted Subsidiary shall be
deemed to have incurred Indebtedness in respect of any obligation previously
owed to the Company or to a Wholly-Owned Restricted Subsidiary on the date the
obligee ceases for any reason to be the Company or a Wholly-Owned Restricted
Subsidiary; a Person that hereafter becomes a Restricted Subsidiary shall be
deemed at that time to have incurred all of its outstanding Indebtedness; and
any Unrestricted Subsidiary or other Person that hereafter becomes a Restricted
Subsidiary shall be deemed at that time to have incurred all of its outstanding
Indebtedness.
10.3. Limitation on Sale and Leaseback Transactions.
The Company will not and will not permit any Restricted Subsidiary to
sell, lease, transfer or otherwise dispose of (collectively, a "transfer") any
asset on terms whereby the asset or a substantially similar asset is or may be
leased or reacquired by the Company or any Restricted Subsidiary over a period
in excess of three years, unless either
(a) after giving effect to such transaction and the incurrence of
Attributable Debt in respect thereof Priority Debt does not exceed 35% of
Consolidated Capitalization, or
(b) the net proceeds realized from the transfer are applied within 365
days after the receipt thereof to reinvest in property or assets for use in
the business of the Company and its Restricted Subsidiaries or to repay
unsubordinated funded Indebtedness of the Company or a Restricted
Subsidiary (which may, but need not, include prepayment of the Notes
pursuant to Section 8.2 or an offer to purchase Notes in accordance with
Section 8.7).
10.4. Limitation on Asset Sales.
The Company will not and will not permit any Restricted Subsidiary to,
directly or indirectly, make any sale, transfer, lease (as lessor), loan or
other disposition of any property or assets (an "Asset Sale") other than:
(a) Asset Sales in the ordinary course of business;
(b) Asset Sales of property or assets by a Restricted Subsidiary to
the Company or a Wholly-Owned Restricted Subsidiary;
<PAGE>
26
(c) any Asset Sale involving assets or the capital stock of any member
of the Pittston Minerals Group;
(d) any Asset Sale involving aircraft, aircraft replacement parts and
facilities and equipment by BAX Global Inc. and/or its Subsidiaries up to
$75,000,000 on a cumulative basis for all periods after September 30, 2000;
(e) any Asset Sale to the extent made in exchange for other property
or assets for use in the business of the Company and its Restricted
Subsidiaries; and
(f) other Asset Sales, provided that in each case
(i) immediately before and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing, and
(ii) the aggregate net book value of property or assets disposed
of in such Asset Sale and all other Asset Sales under this clause (f)
by the Company and its Restricted Subsidiaries does not exceed (x) 15%
of Consolidated Total Assets during the immediately preceding twelve
months or (y) 30% of Consolidated Total Assets since the date of the
Closing (Consolidated Total Assets in each case determined as of the
last day of the quarterly accounting period ending on or most recently
prior to the date of such Asset Sale)
and provided further that for purposes of subclause (ii) above there shall
be included the net book value of property or assets disposed of in an
Asset Sale only to the extent that an amount equal to the net proceeds
realized upon such Asset Sale has not been applied by the Company or such
Restricted Subsidiary, as the case may be, within 365 days after the
effective date of such Asset Sale to (1) the reinvestment in property or
assets for use in the business of the Company and its Restricted
Subsidiaries, (2) the repayment of unsubordinated funded Indebtedness or
(3) payment into The Pittston Company Employee Welfare Benefit Trust or any
successor of such trust.
10.5. Financial Conditions.
(a) The Company will not permit Consolidated EBITDA for any period of
four consecutive fiscal quarters (commencing with the four fiscal quarters
ending March 31, 2001) to be less than 300% of Consolidated Interest Expense for
such period.
(b) The Company will not at any time permit Consolidated Net Worth to
be less than the sum of (a) $554,000,000 plus (b) 25% of Consolidated Net Income
(if positive) for the fiscal quarter ending December 31, 2000 plus (c) 25% of
Consolidated Net Income for each fiscal year thereafter for which Consolidated
Net Income is positive.
(c) The Company will not permit the Ratio of Consolidated Indebtedness
to Consolidated Capitalization as of the last day of any fiscal quarter
(beginning on March 31, 2001) to exceed 0.60 to 1.00.
<PAGE>
27
As used in this Section 10.5(c): the term "Ratio of Consolidated
Indebtedness to Consolidated Capitalization" means, as of any date, the ratio of
(a) the sum of (i) Consolidated Indebtedness plus (ii) the amount, if any, by
which Discounted Consolidated Lease Rentals exceeds $350,000,000 to (b) the sum
of (i) the amount determined pursuant to the preceding clause (a) plus (ii)
Consolidated Net Worth; the term "Discounted Consolidated Lease Rentals" means,
as of the December 31 next preceding such date of determination (or as of such
date if such date is December 31), (a) the aggregate amount of Lease Rentals
payable by the Company and its Restricted Subsidiaries as lessee during the
remaining term of all noncancellable leases (other than Capital Leases) of real
or personal property (discounted on the same periodic basis from the respective
due dates thereof at an interest rate of 10% per annum) minus (b) the aggregate
minimum sublease rentals payable to the Company and its Restricted Subsidiaries
during the remaining term of all noncancellable subleases of real or personal
property (discounted as aforesaid), all determined on a consolidated basis
consistent with Note 13 to the audited financial statements of the Company at
and for the year ending December 31, 1999 (included as a Disclosure Document);
and the term "Lease Rentals" means, with respect to any particular lease or
sublease, the total amount of rent and other obligations (whether or not
designated as rent) payable by the lessee or sublessee during the remaining term
of such lease or sublease (excluding any extension or renewal thereof at the
option of either party to such lease or sublease unless such option has been
exercised), after excluding amounts required to be paid by the lessee or
sublessee (whether or not designated as rental or additional rental) on account
of maintenance and repairs, insurance, taxes, assessments, utilities (including
water rates), operating and labor costs and similar charges.
10.6. Merger, Consolidation, etc.
The Company will not and will not permit any Restricted Subsidiary to
consolidate with or merge with any other corporation or convey, transfer or
lease all or substantially all of its assets in a single transaction or series
of transactions to any Person (other than Asset Sales permitted by Section
10.4(c) and any consolidation or merger of any member of the Pittston Minerals
Group with, or conveyance, transfer or lease by any member of the Pittston
Minerals Group to, a Person which is not an Affiliate of the Company), except as
follows:
(a) a Restricted Subsidiary may consolidate with or merge with any
other corporation or convey or transfer all or substantially all of its
assets to
(i) the Company (provided that the Company shall be the
continuing or surviving corporation) or a then existing Restricted
Subsidiary, or
(ii) any other Person, provided that
(A) if such Restricted Subsidiary is a Subsidiary Guarantor
and the continuing, surviving or acquiring corporation is another
Subsidiary, such continuing, surviving or acquiring corporation
shall have (1) executed and delivered to each holder of a Note
its assumption of the due and punctual performance and observance
of all obligations of such Restricted Subsidiary under its
Subsidiary Guarantee and (2) caused to be delivered to each
holder of a Note an opinion of counsel reasonably
<PAGE>
28
satisfactory to the Required Holders to the effect that all
agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the
terms hereof, and
(B) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be
continuing; and
(b) the Company may consolidate with or merge with any other
corporation or convey or transfer all or substantially all of its assets to
a corporation organized and existing under the laws of the United States or
any State thereof, provided that
(i) the continuing, surviving or acquiring corporation (if not
the Company) shall have (A) executed and delivered to each holder of a
Note its assumption of the due and punctual performance and observance
of all obligations of the Company under this Agreement, the Other
Agreements and the Notes and (B) caused to be delivered to each holder
of a Note an opinion of counsel reasonably satisfactory to the
Required Holders to the effect that all agreements or instruments
effecting such assumption are enforceable in accordance with their
terms and comply with the terms hereof, and
(ii) immediately after giving effect to such transaction, (A) no
Default or Event of Default shall have occurred and be continuing and
(B) the Company would be in compliance with paragraphs (a) and (c) of
Section 10.5 on a pro forma basis as if such transaction had occurred
on the last day of the most recently ended fiscal quarter.
No such conveyance, transfer or lease of all or substantially all of the assets
of the Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.6 from its liability under this Agreement or the Notes.
10.7. Lines of Business.
The Company will not and will not permit any Restricted Subsidiary to
engage in any business other than (a) the businesses in which the Company and
its Restricted Subsidiaries are engaged on the date of the Closing (as described
in the Memorandum) and businesses reasonably related or complementary thereto or
in furtherance thereof and (b) lines of business that are insignificant when
viewed in the overall context of the business then engaged in by the Company and
its Restricted Subsidiaries taken as a whole.
10.8. Transactions with Affiliates.
The Company will not and will not permit any Restricted Subsidiary to
enter into directly or indirectly any Material transaction or Material group of
related transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Restricted Subsidiary), except in
the ordinary course and pursuant to the reasonable requirements of the Company's
or such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the
<PAGE>
29
Company or such Restricted Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate. For purposes of this
Section 10.8 a Material transaction or Material group of related transactions
shall be measured in relation to the Company and the Subsidiary Guarantors at
the time, taken as a whole.
10.9. Designation of Restricted and Unrestricted Subsidiaries.
(a) Subject to paragraph (b) below, the Company will not designate any
Restricted Subsidiary as an Unrestricted Subsidiary if such Restricted
Subsidiary was (i) more than twice previously (directly or indirectly) an
Unrestricted Subsidiary in the case of any Restricted Subsidiary listed as an
Unrestricted Subsidiary in Schedule 5.4 or any Restricted Subsidiary that is
designated as an Unrestricted Subsidiary at the time such Restricted Subsidiary
first became a Subsidiary or (ii) more than once previously (directly or
indirectly) an Unrestricted Subsidiary in the case of any other Restricted
Subsidiary.
(b) The Company will not designate any Restricted Subsidiary as an
Unrestricted Subsidiary or any Unrestricted Subsidiary or other Person as a
Restricted Subsidiary unless immediately after giving pro forma effect to such
designation, (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the Company would be in compliance with paragraphs (a) and
(c) of Section 10.5 on a pro forma basis as if such designation had occurred on
the last day of the most recently ended fiscal quarter.
(c) Forthwith and in any event within ten Business Days after a
designation pursuant to this Section 10.9, the Company will furnish each holder
of the Notes with a certificate of a Senior Financial Officer specifying the
effective date of such designation and setting forth calculations in reasonable
detail demonstrating compliance with the conditions to such designation set
forth in the immediately preceding paragraph
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in Section 7.1(d) or Sections 10.1 to 10.6, inclusive, and
in the case of Section 10.5(b) such default is not remedied within 30 days
after a Responsible Officer obtains knowledge thereof (so long as the
Company is proceeding diligently and in good faith to cure such default);
or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b)
and (c) of this
<PAGE>
30
Section 11) and such default is not remedied within 30 days after a
Responsible Officer obtains knowledge of such default; or
(e) any representation or warranty made in writing by or on behalf of
the Company or any Subsidiary or by any officer of the Company or any
Subsidiary in this Agreement or a Subsidiary Guarantee or in any writing
furnished in connection with the transactions contemplated hereby proves to
have been false or incorrect in any material respect on the date as of
which made; or
(f) (i) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Indebtedness (other
than the Notes) that is outstanding in an aggregate principal amount of at
least $25,000,000 (or its equivalent in any other currency) beyond any
period of grace provided with respect thereto, or (ii) the Company or any
Restricted Subsidiary is in default in the performance of or compliance
with any term of any evidence of any Indebtedness outstanding in an
aggregate principal amount of at least $25,000,000 (or its equivalent in
any other currency) or of any mortgage, indenture or other agreement
relating thereto or any other default exists, and as a consequence of any
such default such Indebtedness has become, or has been declared, due and
payable before its stated maturity or before its regularly scheduled dates
of payment, or (iii) in any case as a consequence of the occurrence or
continuation of a change of control or rating downgrade or any other
similar adverse event the Company or any Restricted Subsidiary has become
obligated to purchase or repay Indebtedness outstanding in an aggregate
principal amount of at least $25,000,000 (or its equivalent in any other
currency) before its regular maturity or before its regularly scheduled
dates of payment; or
(g) the Company or any Restricted Subsidiary (i) admits in writing its
inability to pay, or is generally not paying, its debts as they become due
(within the meaning of the Federal Bankruptcy Code), (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of the
foregoing; or
(h) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any Restricted
Subsidiary, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of the
Company or such Restricted Subsidiary, or any such petition shall be filed
against the Company or such Restricted Subsidiary and such petition shall
not be dismissed within 60 days; or
<PAGE>
31
(i) a final judgment or judgments for the payment of money aggregating
in excess of $25,000,000 (or its equivalent in any other currency) are
rendered against one or more of the Company and its Restricted Subsidiaries
which judgments are not, within 60 days after entry thereof, bonded, paid,
discharged or stayed pending appeal, or are not discharged within 60 days
after the expiration of such stay; or
(j) if any Subsidiary Guarantor (or any Person at its authorized
direction or on its behalf) shall assert in writing that the Subsidiary
Guarantee of such Subsidiary Guarantor is unenforceable in any material
respect or any Subsidiary Guarantee shall cease to be in full force and
effect as an enforceable instrument except as permitted by Section 9.6; or
(k) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan (other than in connection with the
disposition of all or any part of the assets of the Pittston Minerals
Group), or (vi) the Company or any Subsidiary establishes or amends any
employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company or
any Subsidiary thereunder; and any such event or events described in
clauses (i) through (vi) above, either individually or together with any
other such event or events, would have a Material Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to the Company described in
paragraph (g) or (h) of Section 11 (other than an Event of Default described in
clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
<PAGE>
32
(b) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes at the time outstanding to be immediately due
and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
Upon any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided) and that the provision for payment of a
Make-Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and payable pursuant
to paragraph (b) or (c) of Section 12.1, the Required Holders, by written notice
to the Company, may rescind and annul any such declaration and its consequences
if (a) the Company has paid all overdue interest on the Notes, all principal of
and Make-Whole Amount, if any, on any Notes that are due and payable and are
unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than the non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.
<PAGE>
33
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including without limitation
reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), within five Business
Days thereafter the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes of the same series (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request. Each such
new Note shall be dated and bear interest from the date to which interest shall
have been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon. The Company may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Notes. Notes shall not be transferred in
denominations of less than $100,000, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note
may be in a denomination of less than $100,000. Any transferee, by its
acceptance of a Note registered in its name (or the name of its nominee), shall
be deemed to have made the representations set forth in Sections 6.1 (so long as
applicable) and 6.2.
<PAGE>
34
13.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
nominee for, an original Purchaser or any other Institutional Investor,
such Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
within five Business Days thereafter the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note of the same series, dated and
bearing interest from the date to which interest shall have been paid on such
lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made at the
principal office of The Chase Manhattan Bank in New York City. The Company may
at any time, by notice to each holder of a Note, change the place of payment of
the Notes so long as such place of payment shall be either the principal office
of the Company in New York City or the principal office of a bank or trust
company in New York City.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that
<PAGE>
35
is the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you have
made in this Section 14.2.
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of your special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
reasonably determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained by you).
In furtherance of the foregoing, on the date of the Closing the Company
will pay or cause to be paid the fees and disbursements and other charges
(including estimated unposted disbursements and other charges as of the date of
the Closing) of your special counsel which are reflected in the statement of
such special counsel submitted to the Company on or prior to the date of the
Closing. The Company will also pay, promptly upon receipt of supplemental
statements therefor, reasonable additional fees, if any, and disbursements and
charges of such special counsel in connection with the transactions hereby
contemplated (including disbursements and other charges unposted as of the date
of the Closing to the extent such disbursements and other charges exceed
estimated amounts paid as aforesaid).
15.2. Survival.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed
<PAGE>
36
representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between you and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21, or any defined term (as it is used
therein), will be effective as to you unless consented to by you in writing, and
(b) no such amendment or waiver may, without the written consent of the holder
of each Note at the time outstanding, (i) subject to the provisions of Section
12 relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or change the rate or the time of payment
or method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to such holder's consideration of or
entering into by any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each holder of
Notes then outstanding even if such holder did not consent to such waiver or
amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair
<PAGE>
37
any right consequent thereon. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used
herein, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
17.4. Notes held by Company, etc.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(a) if to you or your nominee, to you or it at the address specified
for such communications in Schedule A, or at such other address as you or
it shall have specified to the Company in writing,
(b) if to any other holder of any Note, to such holder at such address
as such other holder shall have specified to the Company in writing, or
(c) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of the Treasurer, or at such other
address as the Company shall have specified to the holder of each Note in
writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
<PAGE>
38
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information (including without limitation the Memorandum) delivered to you by or
on behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement, provided that such term
does not include information that (a) was publicly known or otherwise known to
you prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by you or any person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the Company or
any Subsidiary or by a source that you know is required to maintain the
confidentiality of such information or (d) constitutes financial statements
delivered to you under Section 7.1 that are otherwise publicly available. You
will maintain the confidentiality of such Confidential Information in accordance
with procedures adopted by you in good faith to protect confidential information
of third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, officers, trustees, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes and by
virtue of their position they are required to comply with this Section 20), (ii)
your financial advisors and other professional advisors whose duties require
them to hold confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other holder of any
Note, (iv) any Institutional Investor to which you sell or offer to sell such
Note or any part thereof or any participation therein (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be bound by
the provisions of this Section 20), (v) any Person from which you offer to
purchase any security of the Company (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (vi) any federal or state regulatory authority having
jurisdiction over you, (vii) the National Association of Insurance Commissioners
or any similar organization, or any nationally recognized rating agency that
requires access to information about your investment portfolio or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to you, (x) in response to any subpoena or other legal process, (y)
in connection with any litigation to which you are a party or (z) if an Event of
Default has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under your Notes
and this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.
<PAGE>
39
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
22. MISCELLANEOUS.
22.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including without limitation any subsequent
holder of a Note) whether so expressed or not.
22.2. Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
22.3. Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.
(a) The Company irrevocably submits to the non-exclusive in personam
jurisdiction of any New York State or federal court sitting in the Borough of
Manhattan, The City of New York, over any suit, action or proceeding arising out
of or relating to this Agreement or the Notes. To the fullest extent it may
effectively do so under applicable law, the Company irrevocably waives and
agrees not to assert, by way of motion, as a defense or otherwise, any claim
that it is not subject to the in personam jurisdiction of any such court, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) The Company consents to process being served in any suit, action or
proceeding of the nature referred to in paragraph (a) of this Section 22.3 by
mailing a copy thereof by registered or certified mail, postage prepaid, return
receipt requested, to the address of
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40
such party specified in Section 18 or at such other address of which you shall
then have been notified pursuant to said Section. The Company agrees that such
service upon receipt (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall, to the
full extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to such party. Notices hereunder shall be
conclusively presumed received as evidenced by a delivery receipt furnished by
the United States Postal Service or any reputable commercial delivery service.
(c) Nothing in this Section 22.3 shall affect the right of any holder
of Notes to serve process in any manner permitted by law, or limit any right
that the holders of any of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(d) EACH OF THE PARTIES HERETO WAIVES TRIAL BY JURY IN ANY ACTION
BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT
EXECUTED IN CONNECTION HEREWITH OR THEREWITH.
22.4. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary notwithstanding
(but without limiting the requirement in Section 8.3 that notice of any optional
prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount or interest on any Note that is due
on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.
22.5. Severability.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the fullest extent permitted by applicable law) not
invalidate or render unenforceable such provision in any other jurisdiction.
22.6. Accounting Terms; Changes in GAAP.
All accounting terms used herein which are not expressly defined in
this Agreement have the meanings respectively given to them in accordance with
GAAP. Except as otherwise specifically provided herein, all computations made
pursuant to this Agreement shall be made in accordance with GAAP and all balance
sheets and other financial statements with respect thereto shall be prepared in
accordance with GAAP; provided, however, if (a) at the time of delivery of any
financial statements pursuant to Section 7.1 the Company shall object to making
computations for the purpose of determining compliance with this Agreement on
the basis of any change in GAAP after the date of this Agreement or (b) the
Required Holders shall so object in writing within 60 days after receipt of such
financial statements, then in either case such computations shall be made on a
basis consistent with the most recent financial statements
<PAGE>
41
delivered by the Company to the holders of Notes as to which no such objection
shall have been made (or, prior to the delivery of the first financial
statements pursuant to Section 7.1, consistent with the annual audited financial
statements included in the Appendices to the Memorandum).
Without limiting the generality of Section 7.1, prior to or
concurrently with the delivery of financial statements reflecting any change in
GAAP, the Company will give notice of such change to the holders of Notes (and
for such purpose a note or explanation in reasonable detail accompanying such
financial statements shall be deemed to constitute notice). The Company will
also give prompt written notice to the holders of Notes in the event that the
Administrative Agent or Required Lenders (as such terms are defined in the Bank
Credit Agreement) object to determining compliance with the Bank Credit
Agreement on the basis of any change in GAAP.
Except as otherwise specifically provided herein, any consolidated
financial statement or financial computation shall be done in accordance with
GAAP; and, if at the time that any such statement or computation is required to
be made the Company shall not have any Restricted Subsidiary, such terms shall
mean a financial statement or a financial computation, as the case may be, with
respect to the Company only.
22.7. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.8. Governing Law.
This Agreement and the Notes shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.
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42
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
THE PITTSTON COMPANY
By /s/ James B. Hartough
----------------------------------
Title: Vice President -- Corporate
Finance and Treasurer
The foregoing is hereby agreed to as of
the date thereof.
AMERICAN HERITAGE LIFE INSURANCE COMPANY
By /s/ Ronald Mendel
-------------------------------------
Ronald Mendel
Authorized Signatory
By /s/ Charles D. Mires
-------------------------------------
Charles D. Mires
Authorized Signatory
<PAGE>
42
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
THE PITTSTON COMPANY
By /s/ James B. Hartough
----------------------------------
Title: Vice President -- Corporate
Finance and Treasurer
The foregoing is hereby agreed to as of
the date thereof.
ALLSTATE LIFE INSURANCE COMPANY
By /s/ Ronald Mendel
-------------------------------------
Ronald Mendel
Authorized Signatory
By /s/ Charles D. Mires
-------------------------------------
Charles D. Mires
Authorized Signatory
<PAGE>
42
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
THE PITTSTON COMPANY
By /s/ James B. Hartough
----------------------------------
Title: Vice President -- Corporate
Finance and Treasurer
The foregoing is hereby agreed to as of
the date thereof.
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA
By /s/ Thomas M. Donohue
-------------------------------------
Thomas M. Donohue
<PAGE>
42
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
THE PITTSTON COMPANY
By /s/ James B. Hartough
----------------------------------
Title: Vice President -- Corporate
Finance and Treasurer
The foregoing is hereby agreed to as of
the date thereof.
NATIONWIDE LIFE INSURANCE COMPANY
By /s/ Mark W. Poeppelman
-------------------------------------
Mark W. Poeppelman
Associate Vice President
<PAGE>
42
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
THE PITTSTON COMPANY
By /s/ James B. Hartough
----------------------------------
Title: Vice President -- Corporate
Finance and Treasurer
The foregoing is hereby agreed to as of
the date thereof.
NATIONWIDE LIFE AND ANNUITY
INSURANCE COMPANY
By /s/ Mark W. Poeppelman
-------------------------------------
Mark W. Poeppelman
Associate Vice President
<PAGE>
42
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
THE PITTSTON COMPANY
By /s/ James B. Hartough
----------------------------------
Title: Vice President -- Corporate
Finance and Treasurer
The foregoing is hereby agreed to as of
the date thereof.
GUARDIAN INSURANCE & ANNUITY
COMPANY
By /s/ Thomas M. Donohue
-------------------------------------
Thomas M. Donohue
<PAGE>
42
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
THE PITTSTON COMPANY
By /s/ James B. Hartough
----------------------------------
Title: Vice President -- Corporate
Finance and Treasurer
The foregoing is hereby agreed to as of
the date thereof.
AMERICAN GENERAL ANNUITY
INSURANCE COMPANY
By /s/ C. Scott Inglis
-------------------------------------
C. Scott Inglis
Investment Officer
<PAGE>
42
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.
Very truly yours,
THE PITTSTON COMPANY
By /s/ James B. Hartough
----------------------------------
Title: Vice President -- Corporate
Finance and Treasurer
The foregoing is hereby agreed to as of
the date thereof.
AMERICAN GENERAL LIFE INSURANCE
COMPANY
By /s/ C. Scott Inglis
-------------------------------------
C. Scott Inglis
Investment Officer
<PAGE>
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, with respect to any Person (including
without limitation the Company), (a) any other Person that at such time directly
or indirectly through one or more intermediaries Controls, or is Controlled by,
or is under common Control with, such first Person, and (b) any Person
beneficially owning or holding, directly or indirectly, 10% or more of any class
of voting or equity interests of the Company or any Subsidiary or any
corporation of which the Company and its Subsidiaries beneficially own or hold,
in the aggregate, directly or indirectly, 10% or more of any class of voting or
equity interests. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of the
Company.
"Asset Sale" is defined in Section 10.4.
"Attributable Debt" means, as to any particular lease relating to a
sale and leaseback transaction, the Lease Rentals under such lease (discounted
on the same periodic basis from the respective due dates thereof at an interest
rate of 10% per annum) during the remaining term thereof.
"Bank Credit Agreement" means the Credit Agreement dated as of October
3, 2000 among the Company, certain of its Subsidiaries, Fleet National Bank and
The Chase Manhattan Bank, as Co-Syndication Agents, Bank of America, N.A., as
Administrative Agent, and the Lenders named therein, as supplemented, amended,
restated or refinanced from time to time.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City are required or authorized to be
closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capitalized Lease Obligations" means with respect to any Person, all
outstanding obligations of such Person in respect of Capital Leases, taken at
the capitalized amount thereof accounted for as indebtedness in accordance with
GAAP.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
Schedule B
<PAGE>
-2-
"Company" means The Pittston Company, a Virginia corporation.
"Consolidated EBITDA" means, for any period, an amount equal to the sum
of (a) Consolidated Net Income for such period plus (b) to the extent deducted
in determining Consolidated Net Income for such period, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation, depletion and
amortization, and (iv) all other non-cash charges, in each case determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, as applied to
the Company and its Restricted Subsidiaries, all interest expense (whether paid
or accrued) and capitalized interest, including without limitation (a)
amortization of debt discount and premium and (b) the interest component under
Capital Leases, in each case determined on a consolidated basis in accordance
with GAAP.
"Confidential Information" is defined in Section 20.
"Consolidated Capitalization" means, at any date, the sum of (a)
Consolidated Indebtedness plus (b) Consolidated Net Worth, all as determined on
a consolidated basis for the Company and its Restricted Subsidiaries in
accordance with GAAP.
"Consolidated Indebtedness" means, at any date, all Indebtedness of the
Company and its Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income of the
Company and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, excluding
(a) the proceeds of any life insurance policy,
(b) any gains arising from (i) the sale or other disposition of any
assets (other than current assets) to the extent that the aggregate amount
of the gains during such period exceeds the aggregate amount of the losses
(other than losses described in clause (h) below) during such period from
the sale, abandonment or other disposition of assets (other than current
assets), (ii) any write-up of assets or (iii) the acquisition of
outstanding securities of the Company or any Restricted Subsidiary,
(c) any amount representing any interest in the undistributed earnings
of any person other than a Restricted Subsidiary,
(d) any earnings, prior to the date of acquisition, of any person
acquired in any manner, and any earnings of any Subsidiary acquired prior
to its becoming a Restricted Subsidiary,
(e) any earnings of a successor to or transferee of the assets of the
Company prior to its becoming such successor or transferee,
Schedule B
<PAGE>
-3-
(f) any deferred credit (or amortization of a deferred credit) arising
from the acquisition of any person,
(g) any extraordinary gains not covered by clause (b) above, and
(h) any loss arising from or relating to the initial classification of
any portion of the Pittston Minerals Group as discontinued operations
and/or subsequent adjustments associated with the dispositions of such
discontinued operations and any loss or charges in connection with the
disposition of assets relating to aircraft, aircraft replacement parts and
facilities and equipment by BAX Global Inc. and/or its Subsidiaries up to
$75,000,000 on a cumulative basis for all periods after September 30, 2000.
"Consolidated Net Worth" means, at any date, on a consolidated basis
for the Company and its Restricted Subsidiaries, shareholders' equity or net
worth as determined and computed on a consolidated basis in accordance with
GAAP, provided that in determining "Consolidated Net Worth" there shall be (a)
included any issuance of Preferred Stock by the Company (except mandatorily
redeemable Preferred Stock), (b) added back the amount of any minority interest
and (c) excluded (i) any loss arising from or relating to sale of or the initial
classification of any portion of the Pittston Minerals Group as discontinued
operations and any subsequent adjustments associated with the disposition of
such discontinued operations, (ii) any loss or charges in connection with the
disposition of assets relating to aircraft, aircraft replacement parts and
facilities and equipment by BAX Global Inc. and/or its Subsidiaries up to
$75,000,000 on a cumulative basis for all periods after September 30, 2000.
"Default" means an event or condition the occurrence or existence of
which would, with the giving of notice or the lapse of time, or both, become an
Event of Default.
"Default Rate" means that rate of interest for the Notes of each series
that is the greater of (i) 2% per annum above the stated interest rate for the
Notes of such series and (ii) 2% above the rate of interest publicly announced
by The Chase Manhattan Bank from time to time at its principal office in New
York City as its prime rate.
"Discounted Consolidated Lease Rentals" is defined in Section 10.5(c).
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
Schedule B
<PAGE>
-4-
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"GAAP" means, except as otherwise provided in Section 22.6, generally
accepted accounting principles as in effect from time to time in the United
States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including without limitation obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the
obligor under any Guaranty, the Indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be direct obligations of such
obligor.
Schedule B
<PAGE>
-5-
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances, the removal of which may be required or the
generation, manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is restricted, prohibited or penalized by any
applicable law (including without limitation asbestos, urea formaldehyde foam
insulation and polycholorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of Preferred Stock that is mandatorily redeemable prior to the
final maturity of the Notes,
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business and not overdue but including all liabilities created or
arising under any conditional sale or other title retention agreement with
respect to any such property),
(c) its Capitalized Lease Obligations,
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities),
(e) the maximum amount of all drafts drawn under standby letters of
credit issued or bankers' acceptance facilities created for the account of
such Person (to the extent unreimbursed),
(f) Swaps of such Person not entered into for the purpose of hedging
in the ordinary course of business, and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) above.
Indebtedness of any person shall include all obligations of such person of the
character described in clauses (a) through (g) above to the extent such person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding (together with one or more of its Affiliates)
more than 2% of the aggregate principal amount of the Notes then outstanding,
and (c) any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form.
Schedule B
<PAGE>
-6-
"Lease Rentals" is defined in Section 10.5(c).
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.7.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, (b) the ability of the
Company to perform its obligations under this Agreement and the Notes or (c) the
validity or enforceability of this Agreement or the Notes or any Subsidiary
Guarantee.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Pittston Minerals Group" means Pittston Minerals Group Inc. and its
Subsidiaries from time to time.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which
Schedule B
<PAGE>
-7-
contributions are or, within the preceding five years, have been made or
required to be made, by the Company or any ERISA Affiliate or with respect to
which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Debt" is defined in Section 10.1.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, inchoate
or otherwise.
"PTE" is defined in Section 6.2.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued on March 13, 1984 by the United States Department of Labor.
"Required Holders" means, at any time, the holders of at least a
majority in unpaid principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer.
"Restricted Subsidiary" means as of the date of this Agreement each
Subsidiary as designated as such in Schedule 5.4 and thereafter means each other
Subsidiary that is not an Unrestricted Subsidiary; provided that each of the
Subsidiary Guarantors listed in Section 4.5 shall at all times remain a
Restricted Subsidiary, in each case so long as such corporation is a Subsidiary
Guarantor.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"Series A Notes" is defined in Section 1.1.
"Series B Notes" is defined in Section 1.1.
"Subsidiary" means, as to any Person, any corporation or other business
entity a majority of the combined voting power of all Voting Stock of which is
owned by such Person or one or more of its Subsidiaries or such Person and one
or more of its Subsidiaries. Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Guarantee" is defined in Section 1.2.
Schedule B
<PAGE>
-8-
"Subsidiary Guarantors" is defined in Section 4.5.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Unrestricted Subsidiary" means any Subsidiary that has been designated
as an Unrestricted Subsidiary on Schedule 5.4, any Restricted Subsidiary that is
designated as an Unrestricted Subsidiary after the date of the Closing pursuant
to Section 10.9 and any Person that becomes a Subsidiary after the date of the
Closing that is not designated as a Restricted Subsidiary pursuant to said
Section, in each case other than an Unrestricted Subsidiary that is subsequently
redesignated as a Restricted Subsidiary pursuant to said Section.
"Voting Stock" means, with respect to any Person, any shares of stock
or other equity interests of any class or classes of such Person whose holders
are entitled under ordinary circumstances (irrespective of whether at the time
stock or other equity interests of any other class or classes shall have or
might have voting power by reason of the happening of any contingency) to vote
for the election of a majority of the directors, managers, trustees or other
governing body of such Person.
"Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary all of the equity interests (except directors' qualifying shares) and
voting interests of which are owned by any one or more of the Company and the
Company's other Wholly-Owned Restricted Subsidiaries at such time.
Schedule B