Exhibit
10.19.1


 


Execution Counterpart


 


	
   

  



 


 


THE DOE RUN RESOURCES
CORPORATION


 


 


CREDIT AGREEMENT


 


 


Dated as of October 29,
2002


 


 


REGIMENT CAPITAL
ADVISORS, L.L.C., Agent


 


 


	
   

  



 

















 


TABLE OF CONTENTS


 


	
  1.

  	
  Definitions;
  Certain Rules of Construction

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Credits

  
	
   

  	
  2.1.

  	
  Term Credit

  
	
   

  	
  2.2.

  	
  Discretionary Credits

  
	
   

  	
  2.3.

  	
  Application of Proceeds

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Interest; Discount; Fees

  
	
   

  	
  3.1.

  	
  Interest

  
	
   

  	
  3.2.

  	
  Discount

  
	
   

  	
  3.3.

  	
  Fees

  
	
   

  	
  3.4.

  	
  Changes in
  Circumstances; Yield Protection

  
	
   

  	
  3.5.

  	
  Computations of
  Interest and Fees

  
	
   

  	
  3.6.

  	
  Maximum Lawful Interest
  Rate

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Payment

  
	
   

  	
  4.1.

  	
  Payment at Maturity

  
	
   

  	
  4.2.

  	
  Contingent Required
  Prepayments

  
	
   

  	
  4.3.

  	
  Voluntary Prepayments

  
	
   

  	
  4.4.

  	
  Reborrowing; Application of Payments, etc.

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Conditions to Extending
  Credit

  
	
   

  	
  5.1.

  	
  Notes

  
	
   

  	
  5.2.

  	
  Guarantee and Security
  Agreement

  
	
   

  	
  5.3.

  	
  Real Estate Collateral

  
	
   

  	
  5.4.

  	
  Perfection of Security

  
	
   

  	
  5.5.

  	
  Pledge Agreement

  
	
   

  	
  5.6.

  	
  Congress/CIT
  Loan and Security Agreement

  
	
   

  	
  5.7.

  	
  Renco Credit Support Agreement

  
	
   

  	
  5.8.

  	
  Congress/CIT Intercreditor Agreement

  
	
   

  	
  5.9.

  	
  Exchange Offer

  
	
   

  	
  5.10.

  	
  Existing Supplemental Indentures

  
	
   

  	
  5.11.

  	
  New Indenture; New Bonds

  
	
   

  	
  5.12.

  	
  Warrant Agreement; Warrants

  
	
   

  	
  5.13.

  	
  Investor Rights Agreement

  
	
   

  	
  5.14.

  	
  Bondholder Intercreditor
  Agreement

  
	
   

  	
  5.15.

  	
  Preferred Stock Purchase
  Agreement

  
	
   

  	
  5.16.

  	
  Subordination Agreement

  
	
   

  	
  5.17.

  	
  Asset Transfer Agreement

  
	
   

  	
  5.18.

  	
  Capitalization

  
	
   

  	
  5.19.

  	
  Solvency

  



 


i

















 


	
   

  	
  5.20.

  	
  Officer’s Certificate

  
	
   

  	
  5.21.

  	
  Legal Opinions

  
	
   

  	
  5.22.

  	
  Payment of Fees

  
	
   

  	
  5.23.

  	
  Legality,
  etc.

  
	
   

  	
  5.24.

  	
  Proper Proceedings

  
	
   

  	
  5.25.

  	
  General

  
	
   

  	
   

  	
   

  
	
  6.

  	
  General Covenants

  
	
   

  	
  6.1.

  	
  Taxes and Other Charges;
  Accounts Payable

  
	
   

  	
  6.2.

  	
  Conduct of Business, etc.

  
	
   

  	
  6.3.

  	
  Insurance

  
	
   

  	
  6.4.

  	
  Financial Statements and Reports

  
	
   

  	
  6.5.

  	
  Certain Financial Tests

  
	
   

  	
  6.6.

  	
  Indebtedness

  
	
   

  	
  6.7.

  	
  Liens

  
	
   

  	
  6.8.

  	
  Investments and
  Acquisitions

  
	
   

  	
  6.9.

  	
  Distributions

  
	
   

  	
  6.10.

  	
  Asset Dispositions and Mergers

  
	
   

  	
  6.11.

  	
  Issuance of Equity by Subsidiaries;
  Subsidiary Distributions.

  
	
   

  	
  6.12.

  	
  Voluntary
  Prepayments of Other Indebtedness

  
	
   

  	
  6.13.

  	
  Derivative Contracts

  
	
   

  	
  6.14.

  	
  Negative
  Pledge Clauses

  
	
   

  	
  6.15.

  	
  ERISA,
  etc.

  
	
   

  	
  6.16.

  	
  Transactions with Affiliates

  
	
   

  	
  6.17.

  	
  Environmental Laws

  
	
   

  	
  6.18.

  	
  Management Fees

  
	
   

  	
  6.19.

  	
  Transfer
  of Assets

  
	
   

  	
  6.20.

  	
  Future Subsidiaries; Further
  Assurances

  
	
   

  	
  6.21.

  	
  Observer
  Rights

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Representations and Warranties of
  Company

  
	
   

  	
  7.1.

  	
  Organization and Business

  
	
   

  	
  7.2.

  	
  Financial
  Statements and Other Information; Material Agreements

  
	
   

  	
  7.3.

  	
  Agreements
  Relating to Financing Debt, Investments, etc.

  
	
   

  	
  7.4.

  	
  Changes
  in Condition

  
	
   

  	
  7.5.

  	
  Title
  to Assets

  
	
   

  	
  7.6.

  	
  Operations in Conformity with Law, etc.

  
	
   

  	
  7.7.

  	
  Litigation

  
	
   

  	
  7.8.

  	
  Authorization and Enforceability

  
	
   

  	
  7.9.

  	
  No Legal Obstacle to Agreements

  
	
   

  	
  7.10.

  	
  Defaults

  
	
   

  	
  7.11.

  	
  Licenses,
  etc.

  
	
   

  	
  7.12.

  	
  Taxes

  
	
   

  	
  7.13.

  	
  Certain
  Business Representations

  



 


ii

















 


	
   

  	
  7.14.

  	
  Pension Plans

  
	
   

  	
  7.15.

  	
  Environmental Regulations

  
	
   

  	
  7.16.

  	
  Indentures

  
	
   

  	
  7.17.

  	
  Government Regulation; Margin
  Stock

  
	
   

  	
  7.18.

  	
  Solvency

  
	
   

  	
  7.19.

  	
  Brokerage
  Fees, etc.

  
	
   

  	
  7.20.

  	
  Disclosure

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Defaults

  
	
   

  	
  8.1.

  	
  Events of Default

  
	
   

  	
  8.2.

  	
  Certain Actions Following an
  Event of Default

  
	
   

  	
  8.3.

  	
  Annulment of Defaults

  
	
   

  	
  8.4.

  	
  Waivers

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Expenses; Indemnity

  
	
   

  	
  9.1.

  	
  Expenses

  
	
   

  	
  9.2.

  	
  General Indemnity

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Agent

  
	
   

  	
  10.1.

  	
  Percentage Interests

  
	
   

  	
  10.2.

  	
  Agent’s Authority to Act, etc.

  
	
   

  	
  10.3.

  	
  Company to Pay Agent, etc.

  
	
   

  	
  10.4.

  	
  Lender Operations for
  Advances, etc.

  
	
   

  	
  10.5.

  	
  Sharing of Payments, etc.

  
	
   

  	
  10.6.

  	
  Agent’s Resignation

  
	
   

  	
  10.7.

  	
  Concerning the Agent.

  
	
   

  	
  10.8.

  	
  Rights as a Lender

  
	
   

  	
  10.9.

  	
  Independent Credit Decision

  
	
   

  	
  10.10.

  	
  Indemnification

  
	
   

  	
  10.11.

  	
  Assumption of Agent’s
  Rights

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Successors and Assigns; Lender
  Assignments and Participations

  
	
   

  	
  11.1.

  	
  Successors and Assigns

  
	
   

  	
  11.2.

  	
  Assignments by Lenders

  
	
   

  	
  11.3.

  	
  Credit Participants

  
	
   

  	
  11.4.

  	
  Special Purpose
  Funding Vehicles

  
	
   

  	
  11.5.

  	
  Replacement of Affected
  Lender

  
	
   

  	
  11.6.

  	
  Replacement of
  Departing Lenders

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Confidentiality

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Notices

  



 


iii

















 


	
  14.

  	
  Amendments, Consents, Waivers, etc.

  
	
   

  	
  14.1.

  	
  Lender Consents for
  Amendments

  
	
   

  	
  14.2.

  	
  Course of Dealing; No Implied Waivers

  
	
   

  	
   

  	
   

  
	
  15.

  	
  General Provisions.

  
	
   

  	
  15.1.

  	
  Defeasance

  
	
   

  	
  15.2.

  	
  No Strict Construction

  
	
   

  	
  15.3.

  	
  Certain Acknowledgments

  
	
   

  	
  15.4.

  	
  Venue;
  Service of Process; Certain Waivers

  
	
   

  	
  15.5.

  	
  WAIVER OF JURY TRIAL

  
	
   

  	
  15.6.

  	
  Interpretation; Governing Law; etc

  



 


iv

















 


EXHIBITS


 


	
  Exhibit 2.1.2

  	
  -

  	
  Note

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.2

  	
  -

  	
  Guarantee and Security Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.3

  	
  -

  	
  Mortgages

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.5

  	
  -

  	
  Pledge Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.8

  	
  -

  	
  Congress/CIT Intercreditor Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.12

  	
  -

  	
  Warrant Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.13

  	
  -

  	
  Investor Rights Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.14

  	
  -

  	
  Bondholder Intercreditor Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.16

  	
  -

  	
  Subordination Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 5.20

  	
  -

  	
  Officer’s Certificate

  
	
   

  	
   

  	
   

  
	
  Exhibit 6.4

  	
  -

  	
  Compliance Certificate

  
	
   

  	
   

  	
   

  
	
  Exhibit 6.15

  	
  -

  	
  Post-Employment Health Care Benefits

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.1

  	
  -

  	
  Company and its Subsidiaries

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.1.5

  	
  -

  	
  Capitalization

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.2.1

  	
  -

  	
  Contingent Liabilities

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.2.2

  	
  -

  	
  Material Agreements

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.3

  	
  -

  	
  Financing Debt and Investments

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.6

  	
  -

  	
  Operations in Conformity with Law

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.7

  	
  -

  	
  Litigation

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.9

  	
  -

  	
  Approvals and Authorizations

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.11

  	
  -

  	
  Licenses

  



 


v

















 


	
  Exhibit 7.12

  	
  -

  	
  Taxes

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.13.1

  	
  -

  	
  Labor Relations

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.13.2

  	
  -

  	
  Distributors, Customers and Suppliers

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.13.5

  	
  -

  	
  Extraordinary Obligations

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.13.6

  	
  -

  	
  Future Expenditures

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.14

  	
  -

  	
  Multi-employer and Defined Benefit Plans

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.15.1

  	
  -

  	
  Environmental Compliance

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.15.2

  	
  -

  	
  Environmental Litigation

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.15.3

  	
  -

  	
  Hazardous Materials

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.15.4

  	
  -

  	
  Environmental Condition of Properties

  
	
   

  	
   

  	
   

  
	
  Exhibit 7.19

  	
  -

  	
  Brokerage Fees

  
	
   

  	
   

  	
   

  
	
  Exhibit 10.1

  	
  -

  	
  Percentage Interests

  
	
   

  	
   

  	
   

  
	
  Exhibit 11.2.1

  	
  -

  	
  Assignment and Acceptance

  



 


vi

















 


THE DOE RUN RESOURCES
CORPORATION


 


CREDIT AGREEMENT


 


This Credit Agreement, dated as of October 29, 2002,
is among The Doe Run Resources Corporation, a New York corporation, the Lenders
(as defined below) from time to time party hereto and Regiment Capital
Advisors, L.L.C., a Delaware limited liability company, in its capacity as
Agent (as defined below) for the Lenders. 
The parties agree as follows:


 


1.  Definitions;
Certain Rules of Construction. 
Certain capitalized terms are used in this Agreement with the specific
meanings defined below in this Section 1. 
Except as otherwise explicitly specified to the contrary or unless the
context clearly requires otherwise, (a) the capitalized term “Section” refers
to sections of this Agreement, (b) the capitalized term “Exhibit” refers to
exhibits to this Agreement, (c) references to a particular
Section include all subsections thereof, (d) the word “including” shall be
construed as “including without limitation”, (e) accounting terms not
otherwise defined herein have the meaning provided under GAAP,
(f) references to a particular statute or regulation include all rules and
regulations thereunder and any successor statute, regulation or rules, in each
case as from time to time in effect, (g) references to a particular Person
include such Person’s successors and assigns to the extent not prohibited by
this Agreement and the other Credit Documents, (h) references to “$” means
United States Funds and (i) references to “the date hereof” mean the date first
set forth above.


 


“Accumulated Benefit Obligations” means the
actuarial present value of the accumulated benefit obligations under any Plan,
calculated in a manner consistent with Statement No. 87 of the United
States Financial Accounting Standards Board.


 


“Actual Pro Forma Tax Liability” means, with
respect to any fiscal year of the Company, the pro forma federal and state
income tax liability of the Company for such fiscal year based on Taxable Net
Income for such fiscal year and all relevant tax attributes; provided, however,
that for purposes of calculating Actual Pro Forma Tax Liability, (a) each of
the Company and its Subsidiaries shall be deemed to have become a C corporation
under the Code on the day after the Closing Date, (b) the Company shall be
deemed to be subject to the taxes imposed on C corporations by Subtitle A
of the Code and similar provisions of state law and (c) neither the
Company nor any of its Subsidiaries shall take into account (i) any income
attributable to any cancellation of Indebtedness occurring as a result of any
transaction on or prior to the Closing Date or (ii) any ancillary effect
of any such cancellation of Indebtedness on the basis of the assets of the
Company or any of its Subsidiaries.


 


“Affected Lender” is defined in Section 11.5.


 


“Affiliate” means, with respect to the Company
(or any other specified Person), any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with the
Company (or such specified Person), and shall include (a) any officer,
director, general partner or managing member of the Company (or such specified
Person ), (b) any Person of which the Company (or such specified Person) or any
Affiliate (as defined in clause (a) above) of the Company (or such specified
Person) shall, directly or indirectly, beneficially own either (i) at


 

















 


least 10% of the outstanding equity securities having the general power
to vote or (ii) at least 10% of all equity interests, (c) any Person which
shall, directly or indirectly, beneficially own either (i) at least 10% of
the outstanding equity securities of the Company (or such specified Person)
having the general power to vote or (ii) at least 10% of all equity interests
of the Company (or such specified Person) and (d) any Person directly or
indirectly possessing the power to control the Company (or such specified
Person) through a management agreement, voting agreement or other contract.


 


“Agent” means Regiment in its capacity as agent
for the Lenders hereunder, as well as its successors and assigns in such
capacity pursuant to Section 10.6.


 


“Agreement” means this Credit Agreement as from
time to time amended, modified and in effect.


 


“Annualized Taxable Net Income” means:


 


(a)  with
respect to any Tax Payment Date occurring on February 15 or April 15,
Taxable Net Income for the fiscal quarter of the Company ended on the most
recent January 31, as computed on an annualized basis in accordance with the
provisions of section 6655 of the Code and the related regulations;


 


(b)  with
respect to any Tax Payment Date occurring on July 15, Taxable Net Income for
the period of two consecutive fiscal quarters of the Company ended on the most
recent April 30, as computed on an annualized basis in accordance with the
provisions of section 6655 of the Code and the related regulations; and


 


(c)  with
respect to any Tax Payment Date occurring on October 15, Taxable Net Income for
the period of three consecutive fiscal quarters of the Company ended on the
most recent July 31, as computed on an annualized basis in accordance with the
provisions of section 6655 of the Code and the related regulations


 


“Applicable Percentage” means:


 


(a)  with
respect to each Tax Payment Date occurring on February 15, 25%;


 


(b)  with
respect to each Tax Payment Date occurring on April 15, 50%;


 


(c)  with
respect to each Tax Payment Date occurring on July 15, 75%; and


 


(d)  with
respect to each Tax Payment Date occurring on October 15, 100%.


 


“Applicable Rate” means:


 


(a)  on any
date on which no Event of Default exists, 111⁄4%; and


 


(b)  on any
date on which any Event of Default exists, 131⁄4%.


 


 


2

















 


“Approving Lenders” means, with respect to any
Discretionary Credit, the Required Lenders approving the Discretionary Credit
Request for such Discretionary Credit.


 


“Asset Transfer Agreement” means the Asset
Transfer Agreement dated as of October 29, 2002, as amended and in effect
from time to time, between the Company and Doe Run Buick.


 


“Asset Transfer Documents” means:


 


(a)  the Asset
Transfer Agreement;


 


(b)  the Bill
of Sale to be executed and delivered by each of the Company and Doe Run Buick
after the date hereof as required by the Asset Transfer Agreement;


 


(c)  the
Intellectual Property License to be executed and delivered by each of the
Company and Doe Run Buick after the date hereof as required by the Asset
Transfer Agreement;


 


(d)  the
Assignment of Contracts to be executed and delivered by each of the Company and
Doe Run Buick after the date hereof as required by the Asset Transfer
Agreement;


 


(e)  the
Quitclaim Deed to be executed and delivered by each of the Company and Doe Run
Buick after the date hereof as required by the Asset Transfer Agreement; and


 


(f)  the
Facilities Operating Agreement to be executed and delivered by each of the
Company and Doe Run Buick after the date hereof as required by the Asset
Transfer Agreement.


 


“Assignee” is defined in Section 11.2.1.


 


“Assignment and Acceptance” is defined in
Section 11.2.1.


 


“Bankruptcy Code” means Title 11 of the United
States Code.


 


“Bankruptcy Default” means an Event of Default
referred to in Section 8.1.12.


 


“BCP” means Banco de Crédito de Peru.


 


“BCP Credit Agreement” means the Contrato de
Linea de Crédito en Moneda Extranjera dated as of September 17, 2002 and
effective as of September 25, 2002, as amended and in effect from time to time,
among the lenders party thereto, BCP, as agent for such lenders, and Doe Run
Peru.


 


“Board of Directors” means each of (a) the
board of directors of the Company, (b) each committee of the board of directors
of the Company, (c) the board of directors of each Subsidiary of the Company
and (d) each committee of the board of directors of each Subsidiary of the
Company.


 


3

















 


“Bondholder Intercreditor Agreement” means the
Intercreditor Agreement dated as of October 29, 2002, as amended and in
effect from time to time, among Congress, as agent under the Congress/CIT Loan
and Security Agreement, the Agent and the Collateral Agent.


 


“Buick Assets” means all the assets of the
Company and its Subsidiaries that pertain to the Buick division of the Company,
except for the Excluded Assets (as defined in the Asset Transfer Agreement).


 


“By-laws” means all written by-laws, rules,
regulations and other documents relating to the management, governance or
internal regulation of any Person other than an individual, all as from time to
time in effect.


 


“Business Day” means any day other than
Saturday, Sunday or a day on which banks in Boston, Massachusetts are
authorized or required by law or other governmental action to close.


 


“Capital Expenditure Formula Amount” means,
with respect to any fiscal year of the Company, the greater of:


 


(a)  the total
of (i) Consolidated Domestic EBITDA during the fiscal year of the Company
most recently ended minus (ii) Consolidated Domestic Fixed Charges
(other than Distributions made by the Company pursuant to Sections 6.9.6 and
6.9.7) during the fiscal year of the Company most recently ended; and


 


(b) 
$5,000,000.


 


“Capital Expenditures” means, for any period,
amounts added or required to be added to the property, plant and equipment or
other fixed assets account on the Consolidated balance sheet of the Company and
its Subsidiaries, prepared in accordance with GAAP, including expenditures in
respect of (a) the acquisition, construction, improvement or replacement
of land, buildings, machinery, equipment, leaseholds and any other real or
personal property, (b) to the extent not included in clause (a) above,
materials, contract labor and direct labor relating thereto (excluding amounts
properly expensed as repairs and maintenance in accordance with GAAP) and
(c) software development costs to the extent not expensed; provided,
however, that Capital Expenditures shall not include (i) the purchase
price for the acquisition of another Person (or substantially all the assets of
another Person) as a going concern permitted by Section 6.8 or
(ii) expenditures made in accordance with this Agreement with the proceeds
of insurance claims or condemnation awards.


 


“Capitalized Lease” means any lease which is
required to be capitalized on the balance sheet of the lessee in accordance
with GAAP, including Statement Nos. 13 and 98 of the United States Financial
Accounting Standards Board.


 


“Capitalized Lease Obligations” means the
amount of the liability reflecting the aggregate discounted amount of future
payments under all Capitalized Leases calculated in accordance with GAAP,
including Statement Nos. 13 and 98 of the United States Financial Accounting
Standards Board.


 


4

















 


“Cash Equivalents” means:


 


(a)  negotiable certificates of deposit, time
deposits (including sweep accounts), demand deposits and bankers’ acceptances
having a maturity of nine months or less and issued by any United States
financial institution having capital and surplus and undivided profits
aggregating at least $100,000,000 and rated at least Prime-1 by Moody’s
or A-1 by S&P;


 


(b)  corporate
obligations having a maturity of nine months or less and rated at least Prime-1
by Moody’s or A-1 by S&P;


 


(c)  any direct
obligation of the United States of America or any agency or instrumentality
thereof, or of any state or municipality thereof, (i) which has a
remaining maturity at the time of purchase of not more than one year or which
is subject to a fully collateralized repurchase agreement with any Lender or
any financial institution referred to in clause (a) above  exercisable within one year from the time of
purchase and (ii) which, in the case of obligations of any state or
municipality, is rated at least Aaa by Moody’s or AAA by S&P;


 


(d)  any mutual
fund or other pooled investment vehicle rated at least Aa by Moody’s or AA by
S&P which invests principally in obligations described above; and


 


(e)  any
Investment by Doe Run Peru in negotiable certificates of deposit, time deposits
(including sweep accounts), demand deposits and bankers’ acceptances having a
maturity of nine months or less and issued by BCP or any other financial
institution satisfactory to the Required Lenders, in their sole and absolute discretion.


 


“CERCLA” means the federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980.


 


“Change of Control” means an Event of Default
referred to in Section 8.1.6(a), 8.1.6(b) or 8.1.6(c).


 


“Charter” means the articles of organization,
certificate of incorporation, statute, constitution, joint venture agreement,
partnership agreement, trust indenture, limited liability company agreement or
other charter document of any Person other than an individual, each as from
time to time in effect.


 


“CIT” means The CIT Group/Business Credit,
Inc., a New York corporation.


 


“Closing Date” means such date prior to October
31, 2002 agreed to by the Company and the Required Lenders as the closing date
hereunder.


 


“Code” means the federal Internal Revenue Code
of 1986.


 


“Collateral Agent” means the Trustee, in its
capacity as collateral agent under the Security Agreement (as defined in the
New Indenture).


 


5

















 


“Combined” means, when used with reference to
any term, such term as applied to the accounts of such of the Subsidiaries of
the Company as may be specified, combined in accordance with GAAP and with
appropriate deductions for minority interests in Subsidiaries.


 


“Combined Foreign EBITDA” means, for any
period, the total of:


 


(a)  Combined
Foreign Net Income; plus


 


(b)  all
amounts deducted in computing such Combined Foreign Net Income in respect of:


 


(i)  depletion,
depreciation, amortization and other non-cash charges, except for (A) the
write-down of current assets (other than LIFO adjustments) and (B) non-cash
compensation charges for annual performance bonuses payable to management of
the Foreign Subsidiaries in respect of the fiscal year of the Company most
recently ended;


 


(ii)  interest
expense, including Combined Foreign Interest Expense; and


 


(iii)  income
tax expense; minus


 


(c)  all cash
payments made during such period on account of reserves, restructuring charges
and other non-cash charges, in each case that have been added back to Combined
Foreign EBITDA in a previous period; minus


 


(d)  all
amounts included in Combined Foreign Net Income in respect of deferred income
tax benefits and other non-cash income items.


 


“Combined Foreign Interest Expense” means, for
any period, the total of:


 


(a)  the
aggregate amount of interest, including commitment fees, payments in the nature
of interest under Capitalized Leases and net payments under Financial Hedge
Agreements, accrued by Doe Run Peru and its Subsidiaries (whether such interest
is reflected as an item of expense or capitalized) in accordance with GAAP on a
Consolidated basis; minus


 


(b)  to the
extent otherwise included in clause (a) above, (i) the amortization of deferred
financing fees and costs, (ii) original issue discount relating to Indebtedness,
(iii) accrued interest on Indebtedness not paid in cash to the extent
permitted by the terms, including subordination terms, of such Indebtedness
(including PIK Interest), and (iv) the aggregate amount of interest in
respect of inter-company Indebtedness among the Company and its Subsidiaries; plus


 


(c)  actual
cash payments with respect to accrued and unpaid interest (including PIK
Interest) that has previously reduced Combined Foreign Interest Expense
pursuant to clause (b) above;


 


6

















 


provided, however, that
Combined Foreign Interest Expense shall not include the effects of any
adjustments required by Statement No. 15 of the United States Financial
Accounting Standards Board.


 


“Combined Foreign Net Income” means, for any
period, the net income (or loss) of Doe Run Peru and its Subsidiaries,
determined in accordance with GAAP on a Combined basis; provided, however,
that  Combined
Foreign Net Income shall not include:


 


(a)  except
with respect to determinations made on a pro forma basis with respect to
acquisitions permitted hereunder, the income (or loss) of any Person accrued
prior to the date such Person becomes a Subsidiary of Doe Run Peru or is merged
into or consolidated with Doe Run Peru or any of its Subsidiaries;


 


(b)  the income
(or loss) of any Person (other than a Subsidiary of Doe Run Peru) in which Doe
Run Peru or any of its Subsidiaries has an ownership interest; provided,
however, that (i) Combined Foreign Net Income shall include amounts
in respect of the income of such Person when actually received in cash by Doe
Run Peru or any of its Subsidiaries in the form of dividends or similar
Distributions and (ii) Combined Foreign Net Income shall be reduced by the
aggregate amount of all Investments, regardless of the form thereof, made by
Doe Run Peru or any of its Subsidiaries in such Person for the purpose of
funding any deficit or loss of such Person;


 


(c)  all
amounts included in computing such net income (or loss) in respect of
(i) the write-up of any asset on or after October 31, 2001 or (ii)
the retirement of any Indebtedness or equity at less than face value after
October 31, 2001;


 


(d)  any
extraordinary and nonrecurring gains and losses (including restructuring costs)
and the related tax effects;


 


(e)  any gains
or losses from the sale of assets, investment activities or the write-down of
any assets of the Cobriza division of Doe Run Peru;


 


(f)  the income
of any Subsidiary of Doe Run Peru to the extent the payment of such income in the
form of a Distribution or repayment of Indebtedness to Doe Run Peru or any of
its Wholly-Owned Subsidiaries is not permitted, whether on account of any
Charter or By-law restriction, any agreement, instrument, deed or lease or any
law, statute, judgment, decree or governmental order, rule or regulation
applicable to such Subsidiary;


 


(g)  any
after-tax gains or losses attributable to returned surplus assets of any Plan;


 


(h)  the
effects of any adjustments to income for unrealized gains or losses or any
non-cash adjustments to income or expenses required by Statement No. 133 (as
modified by Statement No. 138) of the United States Financial Accounting
Standards Board; and


 


(i)  the
effects of any adjustments required by Statement No. 15 of the United States
Financial Accounting Standards Board.


 


7

















 


“Commitment” means, with respect to any Lender
(without duplication), such Lender’s obligations to extend the respective
credits contemplated by Section 2 and its interests in such credits at any time
outstanding.  The original Commitments
are set forth in Exhibit 10.1 and the subsequent Commitments are recorded from
time to time in the Register.


 


“Common Stock” means the Company’s Common
Stock, $.01 par value per share.


 


“Company” means The Doe Run Resources
Corporation, a New York corporation.


 


“Computation Covenants” means Sections 6.5,
6.6.2, 6.6.12, 6.6.13, 6.6.14, 6.6.17 through 6.6.21, 6.8.5, 6.8.9, 6.9.2
through 6.9.4, 6.9.6, 6.9.7, 6.10.1 and 6.10.4.


 


“Congress” means Congress Financial
Corporation, a Delaware corporation.


 


“Congress/CIT Intercreditor Agreement” means
the Intercreditor Agreement dated as of October 29, 2002, as amended and
in effect from time to time, between Congress, as agent under the Congress/CIT
Loan and Security Agreement, and the Agent.


 


“Congress/CIT Loan and Security Agreement”
means the Amended and
Restated Loan and Security Agreement dated as of October 29, 2002 among the
Company, the Domestic Subsidiaries from time to time party thereto, the
financial institutions from time to time party thereto as lenders, Congress, in
its capacity as agent for such lenders, and CIT, in its capacity as co-agent,
as the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated, refinanced, replaced or restructured (in whole or
in part and including with, to or in favor of any other lender or group of
lenders that at any time refinances, replaces or succeeds to all or any portion
of the Indebtedness thereunder).


 


“Consolidated” and “Consolidating”
means, when used with reference to any term, such term as applied to the
accounts of the Company (or other specified Person) and all of its Subsidiaries
(or other specified group of Persons), or such of its Subsidiaries as may be
specified, consolidated (or combined) or consolidating (or combining), as the
case may be, in accordance with GAAP and with appropriate deductions for
minority interests in Subsidiaries.


 


“Consolidated Adjusted Financing Debt” means,
at any date, all Financing Debt of the Company and its Subsidiaries on a
Consolidated basis, except for (a) Indebtedness in respect of the Warrant
Obligations, (b) Indebtedness in respect of the Preferred Stock,
(c) Indebtedness in respect of PIK Interest paid by the Company with
respect to the Preferred Stock and (d) reimbursement obligations (whether
contingent or matured) with respect to surety bonds; provided, however,
that Consolidated Adjusted Financing Debt shall not include the effects of any
adjustments required by Statement Nos. 15 and 133 (as modified by Statement No.
138) of the United States Financial Accounting Standards Board.


 


“Consolidated Domestic Current Assets” means,
at any date, all amounts carried as current assets on the balance sheet of the
Company and the Domestic Subsidiaries determined in accordance with GAAP on a
Consolidated basis, excluding cash and Cash Equivalents; provided, however,
that Consolidated Domestic Current Assets shall not include the effects of any
adjustments required by Statement Nos. 15 and 133 (as modified by Statement No.
138) of the United States Financial Accounting Standards Board.


 


8

















 


“Consolidated Domestic Current Liabilities”
means, at any date, all amounts that are or should be carried as current
liabilities on the balance sheet of the Company and the Domestic Subsidiaries
determined in accordance with GAAP on a Consolidated basis, excluding
(a) the current portion of long-term Financing Debt and Indebtedness consisting
of revolving loans, each to the extent they are included in Consolidated
Domestic Fixed Charges, and (b) during the Deferral Period (as defined in the
Warrant Agreement), the Warrant Obligations; provided, however,
that Consolidated Domestic Current Liabilities shall not include the effects of
any adjustments to income or expenses required by Statement Nos. 15 and 133 (as
modified by Statement No. 138) of the United States Financial Accounting
Standards Board.


 


“Consolidated Domestic EBITDA” means, for any
period, the total of:


 


(a) 
Consolidated Domestic Net Income; plus


 


(b)  all
amounts deducted in computing such Consolidated Domestic Net Income in respect
of:


 


(i)  depletion,
depreciation, amortization and non-cash charges (including  non-cash charges in respect of amounts owing
by the Company to Renco under the Tax Sharing Agreement), except for
(A) the write-down of current assets (other than LIFO adjustments) and (B)
non-cash compensation charges for annual performance bonuses payable to management
of the Company and the Domestic Subsidiaries in respect of the fiscal year of
the Company most recently ended;


 


(ii)  interest
expense, including Consolidated Domestic Interest Expense; and


 


(iii)  income
tax expense; minus


 


(c)  all cash
payments made during such period on account of reserves, restructuring charges
and other non-cash charges, in each case that have been added back to
Consolidated Domestic EBITDA in a previous period; minus


 


(d)  all
amounts included in Consolidated Domestic Net Income in respect of deferred
income tax benefits and other non-cash income items.


 


“Consolidated Domestic Fixed Charges” means,
for any period, the sum of:


 


(a) 
Consolidated Domestic Interest Expense; plus


 


(b)  the
aggregate amount of all mandatory scheduled payments of principal, mandatory
scheduled prepayments of principal, sinking fund payments and mandatory
reductions in revolving loans as a result of mandatory permanent reductions in
revolving credit availability, all with respect to Financing Debt of the Company
and the Domestic Subsidiaries in accordance with GAAP on a Consolidated basis,
including payments in the nature of principal under Capitalized Leases, but in
no event including contingent prepayments required by Section 4.2; plus


 


9

















 


(c)  any
mandatory dividends paid or payable in cash by the Company or any of the
Domestic Subsidiaries to third parties; plus


 


(d)  the
aggregate amount of all Distributions made by the Company pursuant to Sections
6.9.6 and 6.9.7;


 


provided, however, that
Consolidated Domestic Fixed Charges shall not include the effects of any
adjustments required by Statement No. 15 of the United States Financial
Accounting Standards Board.


 


“Consolidated Domestic Interest Expense” means,
for any period, the total of:


 


(a)  the
aggregate amount of interest, including commitment fees, payments in the nature
of interest under Capitalized Leases and net payments under Financial Hedge
Agreements, accrued by the Company and the Domestic Subsidiaries (whether such
interest is reflected as an item of expense or capitalized) in accordance with
GAAP on a Consolidated basis; minus


 


(b)  to the
extent otherwise included in clause (a) above, (i) the amortization of deferred
financing fees and costs, (ii) original issue discount relating to
Indebtedness, (iii) accrued interest on Indebtedness not paid in cash to
the extent permitted by the terms, including subordination terms, of such
Indebtedness (including PIK Interest), (iv) the aggregate amount of interest
in respect of inter-company Indebtedness among the Company and its Subsidiaries
and (v) the aggregate amount of interest in respect of the Warrants during
the Deferral Period (as defined in the Warrant Agreement); plus


 


(c)  actual
cash payments with respect to accrued and unpaid interest (including PIK
Interest) that has previously reduced Consolidated Domestic Interest Expense
pursuant to clause (b) above;


 


provided, however, that
Consolidated Domestic Interest Expense shall not include the effects of any
adjustments required by Statement No. 15 of the United States Financial
Accounting Standards Board.


 


“Consolidated Domestic Net Income” means, for
any period, the total of (a) Consolidated Net Income minus
(b) Combined Foreign Net Income.


 


“Consolidated Domestic Net Working Capital”
means, at any date, the amount (whether positive or negative) equal to (a)
Consolidated Domestic Current Assets minus (b) Consolidated Domestic
Current Liabilities.


 


“Consolidated EBITDA” means, for any period,
the total of:


 


(a) 
Consolidated Net Income; plus


 


(b)  all
amounts deducted in computing such Consolidated Net Income in respect of:


 


10

















 


(i)  depletion,
depreciation, amortization and non-cash charges (including non-cash charges in
respect of amounts owing by the Company to Renco under the Tax Sharing
Agreement), except for (A) the write-down of current assets (other than
LIFO adjustments) and (B) non-cash compensation charges for annual
performance bonuses payable to management of the Company and its Subsidiaries
in respect of the fiscal year of the Company most recently ended;


 


(ii)  interest
expense, including Consolidated Interest Expense; and


 


(iii)  income
tax expense; minus


 


(c)  all cash
payments made during such period on account of reserves, restructuring charges
and other non-cash charges, in each case that have been added back to
Consolidated EBITDA in a previous period; minus


 


(d)  all
amounts included in Consolidated Net Income in respect of deferred income tax
benefits and other non-cash income items.


 


“Consolidated Excess Cash Flow” means, for any
period, the total of:


 


(a) 
Consolidated Domestic EBITDA; minus


 


(b)  Capital
Expenditures made by the Company or any of its Domestic Subsidiaries except to
the extent (i) attributable to Capitalized Lease Obligations or otherwise
financed with the proceeds of Financing Debt (other than Financing Debt under
the Congress/CIT Loan and Security Agreement) or (ii) attributable to the
reinvestment of Net Asset Sale Proceeds; minus


 


(c)  taxes
based upon or measured by net income of the Company and its Domestic
Subsidiaries that are actually paid in cash by the Company or any of its
Subsidiaries; minus


 


(d) 
Consolidated Domestic Fixed Charges (but in no event including
contingent prepayments required by Section 4.2); minus


 


(e)  to the
extent such amount does not reduce Consolidated Domestic Fixed Charges,
voluntary prepayments of (i) the Loan, (ii) other term Financing Debt
of the Company and its Domestic Subsidiaries permitted by this Agreement and
(iii) revolving Financing Debt of the Company and its Domestic
Subsidiaries permitted by this Agreement to the extent necessary to reduce such
revolving Financing Debt to the level established by a voluntary permanent
reduction of the availability of such revolving Financing Debt; minus


 


(f)  the
amount, if any, by which Consolidated Domestic Net Working Capital increased
during such period; plus


 


(g)  the
amount, if any, by which Consolidated Domestic Net Working Capital decreased
during such period; plus


 


11

















 


(h)  the
excess, if any, of (i) the aggregate amount of Distributions (other than
Distributions in respect of the Inter-Company Note) made by Doe Run Peru and
its Subsidiaries to the Company or any of the Domestic Subsidiaries over
(ii) the sum of (A) $4,000,000 plus (B) the aggregate
amount of management fees paid by the Company and its Subsidiaries pursuant to
Section 6.9.3.


 


“Consolidated Interest Expense” means, for any
period, the total of:


 


(a)  the
aggregate amount of interest, including commitment fees, payments in the nature
of interest under Capitalized Leases and net payments under Financial Hedge
Agreements, accrued by the Company and its Subsidiaries (whether such interest
is reflected as an item of expense or capitalized) in accordance with GAAP on a
Consolidated basis; minus


 


(b)  to the
extent otherwise included in clause (a) above, (i) the amortization of deferred
financing fees and costs, (ii) original issue discount relating to
Indebtedness, (iii) accrued interest on Indebtedness not paid in cash to
the extent permitted by the terms, including subordination terms, of such
Indebtedness (including PIK Interest), (iv) the aggregate amount of interest
in respect of inter-company Indebtedness among the Company and its Subsidiaries
and (v) the aggregate amount of interest in respect of the Warrants during
the Deferral Period (as defined in the Warrant Agreement); plus


 


(c)  actual
cash payments with respect to accrued and unpaid interest (including PIK
Interest) that has previously reduced Consolidated Interest Expense pursuant to
clause (b) above;


 


provided, however, that
Consolidated Interest Expense shall not include the effects of any adjustments
to income or expenses required by Statement No. 15 of the United States
Financial Accounting Standards Board.


 


“Consolidated Net Income” means, for any
period, the net income (or loss) of the Company and its Subsidiaries,
determined in accordance with GAAP on a Consolidated basis; provided, however,
that  Consolidated
Net Income shall not include:


 


(a)  except
with respect to determinations made on a pro forma basis with respect to
acquisitions permitted hereunder, the income (or loss) of any Person accrued
prior to the date such Person becomes a Subsidiary or is merged into or
consolidated with the Company or any of its Subsidiaries;


 


(b)  the income
(or loss) of any Person (other than a Subsidiary) in which the Company or any
of its Subsidiaries has an ownership interest; provided, however,
that (i) Consolidated Net Income shall include amounts in respect of the
income of such Person when actually received in cash by the Company or such
Subsidiary in the form of dividends or similar Distributions and
(ii) Consolidated Net Income shall be reduced by the aggregate amount of
all Investments, regardless of the form thereof, made by the Company or any of
its Subsidiaries in such Person for the purpose of funding any deficit or loss
of such Person;


 


12

















 


(c)  all
amounts included in computing such net income (or loss) in respect of
(i) the write-up of any asset on or after October 31, 2001 or (ii)
the retirement of any Indebtedness or equity at less than face value after
October 31, 2001;


 


(d)  any
extraordinary and nonrecurring gains and losses (including restructuring costs)
and the related tax effects;


 


(e)  any gains
and losses from the sale of assets, investment activities or the write-down of
any assets of the Cobriza division of Doe Run Peru;


 


(f)  the income
of any Subsidiary of the Company to the extent the payment of such income in
the form of a Distribution or repayment of Indebtedness to the Company or any
of its Wholly-Owned Subsidiaries is not permitted, whether on account of any
Charter or By-law restriction, any agreement, instrument, deed or lease or any
law, statute, judgment, decree or governmental order, rule or regulation
applicable to such Subsidiary; provided, however, that
Consolidated Net Income shall include the income of Doe Run Peru and its
Subsidiaries to the extent the payment of such income in the form of a
Distribution or repayment of Indebtedness to the Company or any of its
Wholly-Owned Subsidiaries is prohibited solely under the BCP Credit Agreement or
any credit facility that replaces the BCP Credit Agreement in connection with
any refinancing thereof permitted by Section 6.6.11;


 


(g)  any
after-tax gains or losses attributable to returned surplus assets of any Plan;


 


(h)  the
effects of any adjustments to income for unrealized gains or losses or any
non-cash adjustments to income or expenses required by Statement No. 133 (as
modified by Statement No. 138) of the United States Financial Accounting
Standards Board; and


 


(i)  the
effects of any adjustments required by Statement No. 15 of the United
States Financial Accounting Standards Board.


 


“Consolidated Revenues” means, for any period:


 


(a)  the net
operating revenues (after reductions for returns, discounts, commissions,
freight and bad debt expense) of the Company and its Subsidiaries determined in
accordance with GAAP on a Consolidated basis; minus


 


(b)  any
proceeds included in such net operating revenues from the sale, refinancing,
condemnation or destruction of any assets;


 


provided, however, that
Consolidated Revenues shall not include the effects of any adjustments to
income or expenses required by Statement No. 15 of the United States Financial
Accounting Standards Board.


 


13

















 


“Contingent Interest” means:


 


(a)  on any
date on or prior to the first anniversary of the Closing Date, interest in the
aggregate amount of $500,000;


 


(b)  on any
date after the first anniversary of the Closing Date and on or prior to the
second anniversary of the Closing Date, interest in the aggregate amount of
$1,500,000; and


 


(c)  on any
date after the second anniversary of the Closing Date, interest in the
aggregate amount of $3,000,000.


 


“Credit Documents” means:


 


(a)  this
Agreement, the Notes, the Guarantee and Security Agreement, the Pledge
Agreement, the Congress/CIT Intercreditor Agreement, the Bondholder
Intercreditor Agreement, the Subordination Agreement and each Financial Hedge
Agreement provided by a Lender (or an Affiliate of a Lender) to the Company or
any of its Subsidiaries, each as from time to time in effect;


 


(b)  any
agreement or instrument from time to time entered into between the Company, any
of its Subsidiaries or any other Obligor, on one hand, and all the Approving
Lenders or the Agent, on the other hand, evidencing or relating to any
Discretionary Credit, each as from time to time in effect; and


 


(c)  any other
present or future agreement or instrument from time to time entered into among
the Company, any of its Subsidiaries or any other Obligor, on one hand, and all
the Lenders or the Agent, on the other hand, relating to, amending or modifying
this Agreement or any other Credit Document referred to above or which is
stated to be a Credit Document, each as from time to time in effect.


 


“Credit Obligations” means all present and
future liabilities, obligations and Indebtedness of the Company, any of its
Subsidiaries or any other Obligor owing to any Lender (or any Affiliate of a
Lender) or the Agent under or in connection with this Agreement or any other
Credit Document, including obligations in respect of principal, premium,
interest, discount, reimbursement obligations under Financial Hedge Agreements
provided by a Lender (or an Affiliate of a Lender) at the time of the issuance
thereof, amounts provided for in Sections 3.4 and 9 and other fees,
charges, indemnities and expenses from time to time owing hereunder or under
any other Credit Document (all whether accruing before or after a Bankruptcy
Default and regardless of whether allowed as a claim in bankruptcy or similar
proceedings).


 


“Credit Participant” is defined in Section
11.3.


 


“Credit Security” means all assets now or from
time to time hereafter subjected to a security interest, mortgage or charge (or
intended or required so to be subjected pursuant to the Guarantee and Security
Agreement, the Pledge Agreement or any other Credit Document) to secure the
payment or performance of any of the Credit Obligations on a pari passu,
ratable basis


 


14

















 


among the holders of the Credit Obligations, including the assets
described in section 3.1 of the Guarantee and Security Agreement and section
2.1 of the Pledge Agreement.


 


“Currency Exchange Agreement” means any
currency swap, foreign exchange contract or similar arrangement providing for
protection against fluctuations in currency exchange rates, either generally or
under specific contingencies.


 


“Daily Interest” is defined in Section 3.1.1.


 


“Default” means any Event of Default and any
event or condition which with the passage of time or giving of notice, or both,
would become an Event of Default, including the filing against the Company, any
of its Subsidiaries or any other Obligor of a petition commencing an
involuntary case under the Bankruptcy Code.


 


“Delinquency Period” is defined in
Section 10.4.3.


 


“Delinquent Payment” is defined in
Section 10.4.3.


 


“Departing Lenders” is defined in Section 11.6.


 


“Discount Amount” is defined in Section 3.2.


 


“Discretionary Credit” is defined in
Section 2.2.


 


“Discretionary Credit Obligations” means all
present and future liabilities, obligations and Indebtedness of the Company,
any of its Subsidiaries or any other Obligor owing to any Approving Lender (or
any Affiliate of an Approving Lender) or the Agent under or in connection with
any agreement evidencing or relating to any other Discretionary Credit,
including obligations in respect of principal, premium, interest, discount,
reimbursement obligations under Financial Hedge Agreements or other hedging
arrangements provided by an Approving Lender (or an Affiliate of an Approving
Lender) at the time of the issuance thereof, and other fees, charges,
indemnities and expenses from time to time owing under any agreement evidencing
or relating to any Discretionary Credit (all whether accruing before or after a
Bankruptcy Default and regardless of whether allowed as a claim in bankruptcy
or similar proceedings).


 


“Discretionary Credit Request” is defined in
Section 2.2.


 


“Discretionary Credit Term Sheet” is defined in
Section 2.2.


 


“Distribution” means, with respect to the
Company (or other specified Person):


 


(a)  the
declaration or payment of any dividend or distribution on or in respect of any
shares of any class of capital stock of or other equity interests in the
Company (or such specified Person);


 


15

















 


(b)  the purchase, redemption or other retirement
of any shares of any class of capital stock of or other equity interest in the
Company (or such specified Person) or any of its Subsidiaries, or of options,
warrants or other rights for the purchase of such shares, directly, indirectly
through a Subsidiary or corporate parent or otherwise;


 


(c)  any other
distribution on or in respect of any shares of any class of capital stock of or
equity or other beneficial interest in the Company (or such specified Person);


 


(d)  any
payment of principal, interest or fees with respect to, or any purchase,
redemption or defeasance of, any Financing Debt of the Company (or such
specified Person) or any of its Subsidiaries which by its terms or the terms of
any agreement is subordinated to the payment of the Credit Obligations;


 


(e)  any
payment, loan or advance by the Company (or such specified Person) to, or any
other Investment by the Company (or such specified Person) in, the holder of
any shares of any class of capital stock of or equity interest in the Company
(or such specified Person) or any of its Subsidiaries, or any Affiliate of such
holder (including the payment of management and transaction fees and expenses);
and


 


(f)  any
payment by the Company (or such specified Person) to any Person under any Net
Worth Appreciation Agreement;


 


provided, however, that the
term “Distribution” shall not include (i) dividends payable in, or conversion
of securities into, perpetual common stock of or other similar equity interests
in the Company (or such specified Person), (ii) the issuance of PIK Interest or
(iii) payments in the ordinary course of business in respect of
(A) reasonable compensation paid to employees, officers and directors
(other than payments under Net Worth Appreciation Agreements and profit sharing
plans), (B) advances and reimbursements to employees for travel expenses,
drawing accounts, relocation costs and similar expenditures, or (C) rent paid
to, or accounts payable for services rendered or goods sold by, non-Affiliates
that own capital stock of or other equity interests in the Company (or such
specified Person) or any of its Subsidiaries.


 


“Doe Run Buick” means The Buick Resource
Recycling Facility, LLC, a Delaware limited liability company.


 


“Doe Run Exploration” means Doe Run Exploration
S.A. Ltd., a South African limited liability company.


 


“Doe Run Peru” means Doe Run Peru S.R.L., a
Peruvian limited liability company.


 


“Domestic Subsidiary” means any Subsidiary of
the Company that is not a Foreign Subsidiary.


 


“DRAC” means DR Acquisition Corp., a Missouri
corporation.


 


16

















 


“Eligible Transferee” means (a) a Lender, (b)
an Affiliate of a Lender, (c) a Related Fund and (d) subject to the prior
approval of the Agent (such approval by the Agent not to be unreasonably
withheld in the case of clauses (i) through (v) below):


 


(i)  a commercial bank organized under the laws
of the United States of America, or any state thereof, and having total assets
in excess of $100,000,000;


 


(ii)  a savings and loan association or savings
bank organized under the laws of the United States of America, or any state
thereof, and having total assets in excess of $100,000,000;


 


(iii)  a commercial bank organized under the laws
of any other country that is a member of the Organization for Economic
Cooperation and Development or has concluded special lending arrangements with
the International Monetary Fund associated with its General Arrangements to
Borrow or of the Cayman Islands, or a political subdivision of any such
country, and having total assets in excess of $100,000,000, so long as such
bank is acting through a branch or agency located in the United States of
America;


 


(iv)  the central bank of any country that is a
member of the Organization for Economic Cooperation and Development;


 


(v)  a finance company, insurance company or
other financial institution or fund (whether a corporation, partnership, trust
or other entity) that is engaged in making, purchasing or otherwise investing
in commercial loans in the ordinary course of its business and having total
assets in excess of $100,000,000; and


 


(vi)  any other Person satisfactory to the
Company;


 


provided, however, that no
Obligor or Affiliate of an Obligor shall qualify as an Eligible Transferee
under any circumstances.


 


“Employee Benefit Plan” means any plan,
program, agreement, policy or arrangement, whether covering a single individual
or group of individuals, and whether or not reduced to writing, that is:  (a) an “employee welfare benefit plan”
within the meaning of section 3(1) of ERISA; (b) an “employee pension benefit
plan” within the meaning of section 3(2) of ERISA; (c) a stock bonus, stock purchase,
stock option, restricted stock, stock appreciation right or similar
equity-based plan; or (d) any other deferred-compensation, retirement,
welfare-benefit, bonus, incentive or fringe benefit plan or arrangement,
vacation, sick, holiday or other paid leave plan, life insurance or other death
benefit plan, severance or other similar benefit plan.


 


“Employment Agreements” means each of:


 


(a)  the
Employment Agreements dated as of April 7, 1994, as amended and in effect from
time to time, between the Company, on one hand, and Jeffrey L. Zelms, Marvin
Kaiser, David Chaput, Daniel Vornberg and Richard Amistadi, respectively, on
the other hand;


 


17

















 


(b)  the
Employment Agreement dated as of January 1, 1996, as amended and in effect from
time to time, between the Company and Kenneth R. Buckley; and


 


(c)  the
Employment Agreement dated as of September 17, 2001, as amended and in effect
from time to time, between the Company and Jerry L. Pyatt.


 


“Environmental Laws” means all applicable
federal, state, local or foreign statutes, laws, ordinances, codes, rules,
regulations and guidelines (including consent decrees and administrative
orders) relating to public health and safety and protection of the environment,
including the federal Occupational Health and Safety Act.


 


“ERISA” means the federal Employee Retirement
Income Security Act of 1974.


 


“ERISA Group Person” means the Company, any of
its Subsidiaries and any Person which is a member of the controlled group or under
common control with the Company or any of its Subsidiaries within the meaning
of section 414 of the Code or section 4001(a)(14) of ERISA.


 


“Event of Default” is defined in Section 8.1.


 


“Exchange Act” means the federal Securities
Exchange Act of 1934.


 


“Exchange Offer” means the offer by the Company
to the holders of Existing Bonds to issue New Bonds in exchange for Existing
Bonds in accordance with the terms of the Exchange Offer Documents.


 


“Exchange Offer Documents” means:


 


(a)  the
Offering Circular; and


 


(b)  all other
agreements, instruments and other documents (including press releases,
advertisements and other communications) that (i) are filed by or on behalf of
the Company, any of its Subsidiaries or any other Obligor with any federal or
state regulatory authority or (ii) are otherwise authorized or entered
into by the Company, any of its Subsidiaries or any other Obligor, in each case
relating to the Exchange Offer.


 


“Existing Bonds” means each of the Existing
Senior Bonds, the Existing Floating Rate Bonds and the Existing Senior Secured
Bonds.


 


“Existing Floating Rate Bonds” means the
Floating Interest Rate Senior Notes due 2003, Series B issued by the Company
pursuant to the Existing Senior Note Indenture.


 


“Existing Indentures” means each of the
Existing Senior Note Indenture and the Existing Senior Secured Note Indenture.


 


“Existing Senior Bonds” means the 111⁄4% Senior
Notes due 2005, Series B issued by the Company pursuant to the Existing Senior
Note Indenture.


 


18

















 


“Existing Senior Note Indenture” means the
Indenture dated as of March 12, 1998, as amended and in effect from time to
time, among the Company, its Subsidiaries party thereto, as guarantors, and the
Trustee.


 


“Existing Senior Secured Bonds” means the 111⁄4%
Senior Secured Notes due 2005, Series B issued by the Company pursuant to the
Existing Senior Secured Note Indenture.


 


“Existing Senior Secured Note Indenture” means
the Indenture dated as of September 1, 1998, as amended and in effect from
time to time, among the Company, its Subsidiaries party thereto, as guarantors,
and the Trustee.


 


“Existing Supplemental Indentures” means each
of:


 


(a)  the Fourth
Supplemental Indenture dated as of October 29, 2002 among the Company, its
Subsidiaries party thereto, as guarantors, and the Trustee, which amends the
Existing Senior Note Indenture; and


 


(b)  the Third
Supplemental Indenture dated as of October 29, 2002 among the Company, its
Subsidiaries party thereto, as guarantors, and the Trustee, which amends the
Existing Senior Secured Note Indenture.


 


“Financial Hedge Agreement” means,
collectively, Currency Exchange Agreements and Interest Rate Protection
Agreements.


 


“Financial Officer” of the Company (or other
specified Person) means its chief executive officer, chief financial officer,
chief operating officer, chairman, president, treasurer, controller or any of
its vice presidents whose primary responsibility is for its financial affairs,
in each case whose incumbency and signatures have been certified to the Lenders
and the Agent by the secretary or other appropriate attesting officer of the
Company (or such specified Person).


 


“Financing Debt” means each of the items
described in clauses (a) through (f) of the definition of the term “Indebtedness”
and, without duplication, any Guarantees of such items.


 


“Foreign Subsidiary” means each Subsidiary of
the Company that is organized under the laws of, and conducts its business
primarily in a jurisdiction outside of, the United States of America and that
is not domesticated or dually incorporated under the laws of the United States
of America or any state thereof.


 


“GAAP” means generally accepted accounting
principles as from time to time in effect, including the statements and
interpretations of the United States Financial Accounting Standards Board; provided,
however, that (a) for purposes of compliance with Sections 4.2.1 and 6
(other than Section 6.4) and the related definitions, “GAAP” means such
principles as in effect on October 31, 2001 as applied by the Company and
its Subsidiaries in the preparation of the most recent annual statements
referred to in Section 7.2.1(a), and consistently followed, without giving
effect to any subsequent changes thereto and (b) in the event of a change in
generally accepted accounting principles after such date, either the Company or
the Required Lenders may request a change in the definition of “GAAP”, in which
case the parties hereto shall negotiate in good faith with respect to an
amendment of this Agreement implementing such change.


 


19

















 


“Granting Lender” is defined in Section 11.4.


 


“Guarantee” means, with respect to the Company
(or other specified Person):


 


(a)  any
guarantee by the Company (or such specified Person) of the payment or
performance of, or any contingent obligation by the Company (or such specified
Person) in respect of, any Indebtedness or other obligation of any primary
obligor;


 


(b)  any other
arrangement whereby credit is extended to a primary obligor on the basis of any
promise or undertaking of the Company (or such specified Person), including any
binding “comfort letter” or “keep well agreement” written by the Company (or
such specified Person), to a creditor or prospective creditor of such primary
obligor, to (i) pay the Indebtedness of such primary obligor, (ii) purchase an
obligation owed by such primary obligor, (iii) pay for the purchase or lease of
assets or services regardless of the actual delivery thereof or (iv) maintain
the capital, working capital, solvency or general financial condition of such
primary obligor;


 


(c)  any
liability of the Company (or such specified Person), as a general partner of a
partnership in respect of Indebtedness or other obligations of such
partnership;


 


(d)  any
liability of the Company (or such specified Person) as a joint venturer of a
joint venture in respect of Indebtedness or other obligations of such joint
venture;


 


(e)  any
liability of the Company (or such specified Person) with respect to the tax
liability of others as a member of a group (other than a group consisting
solely of the Company and its Subsidiaries) that is consolidated for tax
purposes; and


 


(f) 
reimbursement obligations, whether contingent or matured, of the Company
(or such specified Person) with respect to letters of credit, bankers
acceptances, surety bonds, other financial guarantees and Financial Hedge
Agreements;


 


in each case whether or not any of the foregoing are reflected on the
balance sheet of the Company (or such specified Person) or in a footnote
thereto; provided, however, that the term “Guarantee” shall not
include endorsements for collection or deposit in the ordinary course of
business.  The amount of any Guarantee
and the amount of Indebtedness resulting from such Guarantee shall be the
maximum amount that the guarantor may become obligated to pay in respect of the
obligations (whether or not such obligations are outstanding at the time of
computation).


 


“Guarantee and Security Agreement” means the
Guarantee and Security Agreement dated as of October 29, 2002, as amended
and in effect from time to time, among DRAC, the Company, its Subsidiaries and
the Agent.


 


“Hazardous Material” means any petroleum
fraction, pollutant, contaminant or toxic or hazardous material or waste,
including any “hazardous substance” as defined in section 101(14) of
CERCLA or any other Environmental Law, which is regulated as toxic or
hazardous, or may result in liability, under any Environmental Law.


 


20

















 


“Indebtedness” means all obligations,
contingent or otherwise, which in accordance with GAAP are required to be
classified upon the balance sheet of the Company (or other specified Person) as
liabilities (other than ordinary trade accounts payable on customary terms in
the ordinary course of business), but in any event including (without
duplication):


 


(a) 
indebtedness for borrowed money;


 


(b) 
indebtedness evidenced by notes, debentures or similar instruments;


 


(c) 
Capitalized Lease Obligations and Synthetic Lease Obligations;


 


(d)  the
deferred purchase price of assets, services or securities, including related
noncompetition, consulting and stock repurchase obligations;


 


(e)  mandatory
redemption, repurchase or dividend rights on capital stock (or other equity),
including provisions that require the exchange of such capital stock (or other
equity) for Indebtedness from the issuer;


 


(f) 
reimbursement obligations, whether contingent or matured, with respect
to letters of credit, bankers acceptances, surety bonds, other financial
guarantees and Financial Hedge Agreements (without duplication of other
Indebtedness supported or guaranteed thereby);


 


(g)  unfunded
pension liabilities;


 


(h) 
obligations that are immediately and directly due and payable out of the
proceeds of or production from property;


 


(i) 
liabilities secured by any Lien existing on property owned or acquired
by the Company (or such specified Person), whether or not the liability secured
thereby shall have been assumed; and


 


(j)  all
Guarantees in respect of Indebtedness of others.


 


“Indemnified Party” is defined in
Section 9.2.


 


“Indemnity Agreement” means each indemnity
agreement entered into between Renco and any Independent Director or Special
Director (each as defined in the Investor Rights Agreement) from time to time
pursuant to the Investor Rights Agreement.


 


“Inter-Company Note” means the Subordinated
Promissory Note dated September 12, 2002, as amended and in effect from
time to time, issued by Doe Run Peru to the Company in the principal amount of
$139,062,500.


 


“Interest Rate Protection Agreement” means any
interest rate swap, interest rate cap, interest rate hedge or other contractual
arrangement that converts variable interest rates into fixed interest rates,
fixed interest rates into variable interest rates or other similar
arrangements.


 


21

















 


“Investment” means, with respect to the Company
(or other specified Person):


 


(a)  any share
of capital stock, partnership or other equity interest, evidence of
Indebtedness or other security issued by any other Person;


 


(b)  any loan,
advance or extension of credit to, or contribution to the capital of, any other
Person;


 


(c)  any
Guarantee of the obligations of any other Person;


 


(d)  any
acquisition of all, or any division or similar operating unit of, the business
of any other Person or the assets comprising such business, division or unit;
and


 


(e)  any other
similar investment.


 


The investments described in the foregoing clauses
(a) through (e) shall be included in the term “Investment” whether they
are made or acquired by purchase, exchange, issuance of stock or other
securities, merger, reorganization or any other method; provided, however,
that the term “Investment” shall not include (i) trade and customer accounts
receivable for property leased, goods furnished or services rendered in the
ordinary course of business and payable within one year in accordance with
customary trade terms, (ii) deposits, advances or prepayments to suppliers for
property leased or licensed, goods furnished and services rendered in the
ordinary course of business, (iii) advances to employees for relocation
and travel expenses, drawing accounts and similar expenditures, (iv) stock
or other securities acquired in connection with the satisfaction or enforcement
of Indebtedness or claims due to the Company (or such specified Person) or as
security for any such Indebtedness or claim or (v) demand deposits in
banks or similar financial institutions.


 


In determining the amount of outstanding Investments:


 


(A)  the amount of any Investment shall be the
cost thereof minus any returns of capital in cash on such Investment
(determined in accordance with GAAP without regard to amounts realized as
income on such Investment);


 


(B)  the amount of
any Investment in respect of a purchase described in clause (d) above shall
include the amount of any Financing Debt assumed in connection with such
purchase or secured by any asset acquired in such purchase (whether or not any
Financing Debt is assumed) or for which any Person that becomes a Subsidiary is
liable on the date on which the securities of such Person are acquired; and


 


(C)  no Investment shall be increased as the
result of an increase in the undistributed retained earnings of the Person in
which the Investment was made or decreased as a result of an equity interest in
the losses of such Person.


 


“Investor Rights Agreement” means the Investor
Rights Agreement dated as of October 29, 2002, as amended and in effect
from time to time, among Renco, DRAC, the Company and the Warrant Agent.


 


22

















 


“Legal Requirement” means any present or future
requirement imposed upon any of the Company, its Subsidiaries or the Lenders by
any law, statute, rule, regulation, directive, order, decree or guideline (or
any interpretation thereof by courts or of administrative bodies) of the United
States of America or any other country where the Company or any of its
Subsidiaries owns property or conducts its business or any state or political
subdivision of any foregoing, or by any board, governmental or administrative
agency, central bank or monetary authority of the United States of America or
any other country where the Company or any of its Subsidiaries owns property or
conducts its business or any state or political subdivision of any of the
foregoing.  Any such law, statute, rule,
regulation, directive, order, decree, guideline or interpretation imposed on
any Lender and not having the force of law shall be deemed to be a Legal
Requirement for purposes of Section 3 if such Lender reasonably believes that
compliance therewith is customary commercial practice.


 


“Lender” means each of the Persons listed as
lenders on the signature page hereto and such other Persons who may from time
to time own a Percentage Interest in the Credit Obligations, but the term
“Lender” shall not include any Credit Participant in such capacity.


 


“Lien” means, with respect to the Company (or
any other specified Person):


 


(a)  any lien,
encumbrance, mortgage, pledge, charge or security interest of any kind upon any
property or assets of the Company (or such specified Person), whether now owned
or hereafter acquired, or upon the income or profits therefrom (excluding in
any event (i) any financing statement filed by a lessor under an operating
lease not intended to be a secured financing and (ii) any precautionary
financing statement filed in connection with a tolling or consignment
arrangement not intended to be a secured financing);


 


(b)  the
acquisition of, or the agreement to acquire, any property or asset upon
conditional sale or subject to any other title retention agreement, device or
arrangement (including a Capitalized Lease and a Synthetic Lease);


 


(c)  the sale,
assignment, pledge or transfer for security of any accounts, general
intangibles or chattel paper of the Company (or such specified Person), with or
without recourse;


 


(d)  in the
case of securities, any purchase option, call or similar purchase right of a third
party;


 


(e)  the
transfer of any tangible property or assets for the purpose of subjecting such
items to the payment of previously outstanding Indebtedness in priority to
payment of the general creditors of the Company (or such specified Person); and


 


(f)  the
existence for a period of more than 120 consecutive days of any Indebtedness
against the Company (or such specified Person) which if unpaid would by law or
upon a Bankruptcy Default be given priority over general creditors.


 


“Loan” is defined in Section 2.1.1.


 


23

















 


“Management Agreement” means the Management
Consultant Agreement dated as of April 7, 1994, as amended and in effect
from time to time, between the Company and Renco.


 


“Margin Stock” means “margin stock” within the
meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System.


 


“Material Adverse Change” means, since any
specified date or from the circumstances existing immediately prior to the
happening of any specified event, a material adverse change in (a) the
business, assets, financial condition, income or prospects of (i) the Company
and its Subsidiaries (on a Consolidated basis) or (ii) Doe Run Peru and its
Subsidiaries (on a Consolidated basis), whether as a result of (A) general
economic conditions affecting the  metals mining, smelting and recycling
industry or the metal products fabrication industry, (B) difficulties in
obtaining supplies and raw materials, (C) fire, flood or other natural
calamities, (D) environmental pollution, (E) regulatory changes, judicial
decisions, war or other governmental action or (F) any other event or
development, whether or not related to those enumerated above, or (b) the
ability of any Obligor to perform material obligations under the Credit
Documents or the Warrant Documents or (c) the rights and remedies of the
Lenders and the Agent under the Credit Documents.


 


“Material Agreements” means:


 


(a)  the
Charter and By-laws of each Obligor;


 


(b)  the
Exchange Offer Documents, the Congress/CIT Loan and Security Agreement, the
Renco Credit Support Agreement, the BCP Credit Agreement, the Existing
Indentures, the Existing Bonds, the Existing Supplemental Indentures, the New
Indenture, the New Bonds, the Preferred Stock Purchase Agreement, the
Management Agreement, the Tax Sharing Agreement, the Employment Agreements, the
Net Worth Appreciation Agreements, the Inter-Company Note, the Sale/Leaseback
Agreement and the Asset Transfer Documents; and


 


(c)  all other
agreements and instruments material to the Company and its Subsidiaries on a
Consolidated basis.


 


“Material Financing Debt” means any Financing
Debt (other than the Credit Obligations and the Warrant Obligations)
outstanding in an aggregate amount of principal (whether or not due) and
accrued interest exceeding $2,500,000.


 


“Maturity Date” means the third anniversary of
the Closing Date.


 


“Moody’s” means Moody’s Investors Service, Inc.


 


“Multiemployer Plan” means any Plan that is a
“multiemployer plan” as defined in section 4001(a)(3) of ERISA.


 


“Net Asset Sale Proceeds” means the cash
proceeds of the sale or disposition of assets (including by way of merger), and
the cash proceeds of any insurance payments or condemnation awards on account
of the destruction or loss of property, by the Company or any of its


 


24

















 


Subsidiaries after the Closing Date, net of (a) any Indebtedness
permitted by Section 6.6.2 (purchase money Indebtedness and Capitalized Leases)
secured by assets being sold in such transaction required to be paid from such
proceeds, (b) the portion of the Actual Pro Forma Tax Liability for the fiscal
year of the Company in which such sale or disposition occurs that (i) as
estimated by the Company in good faith, will be directly attributable to such
proceeds and (ii) will be paid as a Distribution by the Company or any of
its Subsidiaries in cash pursuant to Section 6.9.6 or 6.9.7 as a result
of, and within 16 months after, such sale or disposition (provided that any
such amounts that are not actually distributed in cash pursuant to
Section 6.9.6 or 6.9.7 within such period shall automatically become Net
Asset Sale Proceeds), (c) reasonable reserves for liabilities, indemnification,
escrows and purchase price adjustments resulting from the sale of assets, (d)
transfer, sales, use and other similar taxes payable in connection with such
sale or disposition and (e) all reasonable expenses of the Company or any of
its Subsidiaries payable in connection with the sale or disposition; provided,
however, that Net Asset Sale Proceeds shall not include net cash
proceeds of:


 


(i)  asset sales
permitted by Section 6.10.4, insurance payments and condemnation awards to
the extent that:


 


(A)  such proceeds (1) constitute collateral on
which the Company or any of its Subsidiaries has granted a Lien to Congress, as
agent under the Congress/CIT Loan and Security Agreement, to secure the
obligations of the Company and its Subsidiaries under the Congress/CIT Loan and
Security Agreement and (2) are used by the Company or any of its Subsidiaries
to repay Indebtedness (and to permanently reduce the revolving loan
availability) under the Congress/CIT Loan and Security Agreement in accordance
with the terms of the Congress/CIT Intercreditor Agreement;


 


(B)  Doe Run Peru or
any of its Subsidiaries (1) receives such proceeds and (2) is prohibited
from using such proceeds to make a Distribution or repayment of Indebtedness to
the Company or any of its Wholly-Owned Subsidiaries under the BCP Credit Agreement
or any credit facility that replaces the BCP Credit Agreement in connection
with any refinancing thereof permitted by Section 6.6.11;


 


(C)  such proceeds (1) are insurance
payments with respect to damaged or lost inventory (including concentrates and
other raw materials) and (2) are used by the Company or any of its
Subsidiaries within 180 days after receipt of such proceeds to purchase
replacement inventory (including concentrates and other raw materials); or


 


(D)  such proceeds (1) do not exceed $1,000,000 in
the aggregate during any fiscal year of the Company and (2) either (y) are
used by the Company or any of its Subsidiaries within 180 days after receipt of
such proceeds to repair damaged assets or to acquire replacement or other
assets of the business of the Company and its Subsidiaries or (z) in the
case of insurance payments and condemnation awards, reimburse the Company or
any of its Subsidiaries for expenditures made by the Company or any of its
Subsidiaries within one year


 


25

















 


prior to receipt of such proceeds to repair or replace
the specific assets which (I) were damaged, destroyed or condemned and
(II) are the subject of such insurance payment or condemnation award, as
the case may be;


 


(ii)  asset sales permitted by Section 6.10.1; or


 


(iii)  mergers
permitted by Section 6.10.3.


 


“Net Debt Proceeds” means cash proceeds from
the incurrence by the Company or any of its Subsidiaries after the Closing Date
of Financing Debt, net of reasonable out-of-pocket transaction fees and
expenses (including underwriters’ customary discounts and commissions); provided,
however, that Net Debt Proceeds shall not include cash proceeds of:  (a) Financing Debt permitted by
Sections 6.6.1 (Credit Obligations and the Warrant Obligations),
6.6.2 (purchase money Indebtedness and Capitalized Leases),
6.6.9 (inter-company Indebtedness), 6.6.12 (Indebtedness of Foreign
Subsidiaries), 6.6.13 (Congress/CIT Loan and Security Agreement),
6.6.14 (BCP Credit Agreement), 6.6.18 (Renco Credit Support Agreement)
and 6.6.19 (Indebtedness to finance insurance policy premiums); and
(b) any refinancing or extension of Indebtedness to the extent that such
refinancing or extension is permitted by Section 6.6.


 


“Net Equity Proceeds” means the cash proceeds
received by the Company or any of its Subsidiaries in connection with any
issuance by the Company or any of its Subsidiaries after the Closing Date of
any shares of its capital stock, other equity interests or options, warrants or
other purchase rights to acquire such capital stock or other equity interests
to, or receipt of a capital contribution from, any Person (other than any
Obligors or their officers, employees and directors), net of reasonable
out-of-pocket fees and expenses (including underwriters’ customary discounts
and commissions).


 


“Net Worth Appreciation Agreements” means each
of the Net Worth Appreciation Agreements dated as of October 29, 2002, as
amended and in effect from time to time, between the Company, on one hand, and
Jeffrey L. Zelms, Marvin Kaiser, Richard L. Amistadi, Kenneth R. Buckley,
David Chaput, Daniel Vornberg and Jerry L. Pyatt, respectively, on the other
hand.


 


“New Bonds” means the 113⁄4% Notes due 2008
issued by the Company pursuant to the New Indenture.


 


“New Indenture” means the Indenture dated as of
October 29, 2002 among the Company, its Subsidiaries party thereto, as
guarantors, and the Trustee.


 


“Nonperforming Lender” is defined in Section
10.4.3.


 


“Note” is defined in Section 2.1.2.


 


“Obligor” means Renco, DRAC, the Company, its
Subsidiaries and each other Person guaranteeing or providing collateral for the
Credit Obligations.


 


26

















 


“Offering Circular” means the Amended and
Restated Exchange Offer, Consent Solicitation and Solicitation of Acceptances
for All Outstanding 11.25% Senior Secured Notes due 2005, Series B, Senior
Notes due 2005, Series B, and Floating Interest Rate Senior Notes due 2005,
Series B, dated September 20, 2002, as amended and in effect from time to time,
issued by the Company to the holders of Existing Bonds in connection with the
commencement of the Exchange Offer.


 


“Payment Date” means (a) the last Business Day
of each calendar month, beginning on the first such date after the date hereof,
and (b) the Maturity Date.


 


“PBGC” means the Pension Benefit Guaranty
Corporation or any successor entity.


 


“Percentage Interest” means, with respect to
any Lender, the Commitment of such Lender with respect to the Loan.  For purposes of determining votes or
consents by the Lenders, the Percentage Interest of any Lender shall be
computed as follows:  (a) at all times
when no Event of Default under Section 8.1.1 and no Bankruptcy Default exists,
the ratio that the Commitment of such Lender bears to the total Commitments of
all Lenders as from time to time in effect and reflected in the Register; and
(b) at all other times, the ratio that the total amount of the outstanding Loan
and Discretionary Credits owing to such Lender bears to the total amount of the
outstanding Loan and Discretionary Credits owing to all Lenders.


 


“Performing Lender” is defined in Section
10.4.3.


 


“Person” means any present or future natural
person or any corporation, association, partnership, joint venture, limited
liability, joint stock or other company, business trust, trust, organization,
business or government or any governmental agency or political subdivision
thereof.


 


“PIK Interest” means any accrued interest or
dividend payments on Financing Debt that are postponed or made through the
issuance of “payment-in-kind” notes, stock or other similar securities
(including book-entry accrual with respect to such postponed interest
payments), all in accordance with the terms of such Financing Debt; provided,
however, that in no event shall PIK Interest include payments made with
cash or Cash Equivalents.


 


“Plan” means, at any date, any Employee Benefit
Plan subject to Title IV of ERISA (a) which is maintained by any ERISA
Group Person or (b) which was maintained by any ERISA Group Person within
six years prior to such date and with respect to which the Company or any of
its Subsidiaries could reasonably be expected to have any liability (contingent
or otherwise).


 


“Pledge Agreement” means the Pledge Agreement
dated as of October 29, 2002, as amended and in effect from time to time,
between Renco and the Agent.


 


“Preferred Stock” means the Company’s 121⁄2%
Series A Redeemable PIK Preferred Stock, $1,000 par value per share.


 


27

















 


“Preferred Stock Purchase Agreement” means the
Preferred Stock Purchase Agreement dated as of October 29, 2002, as amended and
in effect from time to time, between the Company and Renco.


 


“Regiment” means Regiment Capital Advisors,
L.L.C., a Delaware limited liability company.


 


“Register” is defined in Section 11.2.3.


 


“Related Fund” means, with respect to any
Lender that is a fund that invests in senior bank loans, any other fund that
invests in senior bank loans and is managed by the same investment advisor as
such Lender or by an Affiliate of such investment advisor.


 


“Renco” means The Renco Group, Inc., a New York
corporation.


 


“Renco Credit Support Agreement” means the
Junior Participation Agreement dated as of October 29, 2002, as amended
and in effect from time to time, among Renco, the lenders from time to time
party to the Congress/CIT Loan and Security Agreement and Congress, as agent
under the Congress/CIT Loan and Security Agreement.


 


“Replacement Lender” is defined in Section
11.5.


 


“Required Lenders” means, with respect to any
approval, consent, modification, waiver or other action to be taken by the
Agent or the Lenders under the Credit Documents which require action by the
Required Lenders, such Lenders as own at least a majority of the Percentage
Interests; provided, however, that with respect to any matters
referred to in the proviso to Section 14.1, Required Lenders means such Lenders
as own at least the respective portions of the Percentage Interests required by
Section 14.1.


 


“S&P” means Standard & Poor’s, a
division of The McGraw Hill Companies, Inc.


 


“Sale/Leaseback Agreement” means the Financial
Leasing dated January 20, 1999, as amended and in effect from time to time,
between Crédito Leasing S.A. and BCP, as lessors, and Doe Run Peru, as lessee.


 


“Securities Act” means the federal Securities
Act of 1933.


 


“SPV” is defined in Section 11.4.


 


“State Street” means State Street Bank and
Trust Company, a Massachusetts trust company.


 


“Subordination Agreement” means the
Subordination Agreement dated as of October 29, 2002, as amended and in
effect from time to time, among Renco, DRAC, the Company and the Agent.


 


28

















 


“Subsidiary” means any Person of which the
Company (or other specified Person) shall at the time, directly or indirectly
through one or more of its Subsidiaries, (a) own at least 50% of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally, (b) hold at least 50% of the partnership, joint venture or
similar interests or (c) be a general partner or joint venturer.


 


“Synthetic Lease” means a lease by the Company
and its Subsidiaries that is treated as an operating lease under GAAP and as a
loan or other financing for federal income tax purposes.


 


“Synthetic Lease Obligations” means the
aggregate amount of future rental payments under all Synthetic Leases,
discounted as if such Synthetic Leases were Capitalized Leases.


 


“Tax” means any present or future tax, levy,
duty, impost, deduction, withholding or other charges of whatever nature at any
time required by any Legal Requirement (a) to be paid by any Lender or (b) to
be withheld or deducted from any payment otherwise required hereby to be made
to any Lender, in each case on or with respect to its obligations hereunder,
the Loan or any payment in respect of the Credit Obligations; provided, however,
that the term “Tax” shall not include taxes imposed upon or measured by the net
income of such Lender or franchise taxes in lieu of net income taxes, in each
case imposed by the jurisdiction in which such Lender’s principal place of
business in the United States of America is located; provided, further,
however, that the term “Tax” shall include withholding taxes in any
event.


 


“Taxable Net Income” means, for any period, the
taxable net income (or loss) of the Company and such of its Subsidiaries that
are eligible to file consolidated tax returns for federal income tax purposes,
determined in accordance with federal and state income tax laws on a
consolidated or combined basis; provided, however, that for
purposes of calculating Taxable Net Income, (a) each of the Company and
its Subsidiaries shall be deemed to have become a C corporation under the
Code on the day after the Closing Date, (b) the Company shall be deemed to
be subject to the taxes imposed on C corporations by Subtitle A of the Code and
similar provisions of state law and (b) neither the Company nor any of its
Subsidiaries shall take into account (i) any income attributable to any
cancellation of Indebtedness occurring as a result of any transaction on or
prior to the Closing Date or (ii) any ancillary effect of any such
cancellation of Indebtedness on the basis of the assets of the Company or any
of its Subsidiaries.


 


“Tax Distribution Amount” means, with respect
to any Tax Payment Date during any fiscal year of the Company, an amount equal
to the excess, if any, of:


 


(a)  the
product of (i) the estimated pro forma federal and state income tax
liability of the Company for such fiscal year based on Annualized Taxable Net
Income with respect to such Tax Payment Date, multiplied by
(ii) the Applicable Percentage with respect to such Tax Payment Date; over


 


(b)  the
aggregate amount of Distributions previously made by the Company pursuant to
Section 6.9.6 with respect to such fiscal year.


 


“Tax Payment Date” means February 15, April 15,
July 15 and October 15 in each year.


 


29

















 


“Tax Retention Amount” means, with respect to
any Tax Payment Date during any fiscal year of the Company, the aggregate
amount of Distributions which the Company (a) was entitled to make on or
prior to such Tax Payment Date pursuant to Section 6.9.6 with respect to such
fiscal year and (b) retained as capital pursuant to irrevocable written
instructions furnished by Renco and DRAC to the Company and the Agent on or
prior to such Tax Payment Date.


 


“Tax Sharing Agreement” means the Tax Sharing
Agreement dated as of October 29, 2002, as amended and in effect from time to
time, between Renco and the Company.


 


“Transaction Documents” means each of this
Agreement, the other Credit Documents, the Warrant Documents, the Exchange
Offer Documents, the Congress/CIT Loan and Security Agreement, the Renco Credit
Support Agreement, the BCP Credit Agreement, the Existing Indentures, the
Existing Bonds, the Existing Supplemental Indentures, the New Indenture, the
New Bonds, the Inter-Company Note, the Sale/Leaseback Agreement and the Asset
Transfer Documents.


 


“Transfer Amount” means, on any date, the
aggregate amount which the Company would have to pay to the Lenders and the
Agent on such date if (a) the Loan, together with all accrued and unpaid
premium, interest and fees with respect thereto and all other Credit
Obligations then outstanding, were due on such date and (b) no assignment
were being made pursuant to Section 11.6 on such date.


 


“Trustee” means State Street in its capacity as
trustee under the Existing Indentures and the New Indenture.


 


“United States Funds” means such coin or
currency of the United States of America as at the time shall be legal tender
therein for the payment of public and private debts.


 


“Warrant Agent” means State Street in its
capacity as warrant agent for the holders of the Warrants under the Warrant
Agreement, as well as its successors and assigns in such capacity pursuant to
section 12 of the Warrant Agreement.


 


“Warrant Agreement” means the Warrant Agreement
dated as of October 29, 2002, as amended and in effect from time to time,
between the Company and the Warrant Agent.


 


“Warrant Documents” means:


 


(a)  the
Warrant Agreement, the Warrants, the Investor Rights Agreement and each
Indemnity Agreement, each as from time to time in effect; and


 


(b)  any other
present or future agreement or instrument from time to time entered into among
the Company, any of its Subsidiaries or any other Obligor, on one hand, and all
the holders of Warrants or the Warrant Agent, on the other hand, relating to,
amending or modifying any Warrant Document referred to above or which is stated
to be a Warrant Document, each as from time to time in effect.


 


30

















 


“Warrant Obligations” means all present and
future liabilities, obligations and Indebtedness of the Company, any of its
Subsidiaries or any other Obligor owing to any Lender (or any Affiliate of a
Lender) or the Agent under or in connection with any Warrant Document,
including all fees, charges, indemnities and expenses from time to time owing
under any Warrant Document (all whether accruing before or after a Bankruptcy
Default and regardless of whether allowed as a claim in bankruptcy or similar
proceedings).


 


“Warrants” means the warrants issued by the
Company from time to time under the Warrant Agreement.


 


“Wholly-Owned Subsidiary” means any Subsidiary
of the Company (or other specified Person) of which all of the outstanding
capital stock (or other shares of beneficial interest) entitled to vote
generally (other than (a) directors’ qualifying shares, (b) in the case of
Foreign Subsidiaries, shares required by Legal Requirements to be held by
foreign nationals and (c) in the case of Doe Run Peru, shares held on the
date hereof by employees and former employees of Doe Run Peru and Empresa
Minera del Centro del Peru S.A. and their respective transferees) is owned by
the Company (or such specified Person) directly, or indirectly through one or
more Wholly-Owned Subsidiaries.


 


2.  Credits.


 


2.1.  Term Credit.


 


2.1.1.  Loan.  Subject to the terms and conditions of this
Agreement and so long as no Default exists, on the Closing Date the Lenders
will, in accordance with their respective Percentage Interests, severally lend
to the Company as a term loan an aggregate amount of $15,500,000.  The aggregate principal amount of the loans
made pursuant to this Section 2.1.1 at any one time outstanding is
referred to as the “Loan”.  In
connection with the Loan, the Company shall furnish to the Lenders a
certificate in substantially the form of Exhibit 5.20.


 


2.1.2.  Notes.  The Loan shall be made by wire transfer of
immediately available funds to an account of the Company designated in writing
by the Company to the Agent.  The Agent
shall keep a record of the Loan and the respective interests of the Lenders
therein as part of the Register, which shall evidence the Loan.  The Loan shall be deemed owed to each Lender
severally in accordance with such Lender’s Percentage Interest therein, and all
payments thereon shall be for the account of each Lender in accordance with its
Percentage Interest therein.  The
Company’s obligations to pay such Lender’s Percentage Interest in the Loan
shall be further evidenced by a separate note of the Company in substantially
the form of Exhibit 2.1.2 (each, a “Note”), payable to such Lender in
accordance with such Lender’s Percentage Interest in the Loan.


 


2.2.  Discretionary
Credits.


 


2.2.1.  Requests
for Discretionary Credits.  Subject
to all the terms of this Agreement and so long as no Default exists, from time
to time on and after the Closing Date and prior to the Maturity Date, the
Company may, by written notice to the Lenders (each such notice, a “Discretionary
Credit Request”), request that the Lenders provide the


 


31

















 


Company with a loan, letter of credit, Financial Hedge
Agreement or other hedging arrangement (each, a “Discretionary Credit”).  Each Discretionary Credit Request shall
include a term sheet that sets forth in reasonable detail the terms and
conditions of the proposed Discretionary Credit (each, a “Discretionary
Credit Term Sheet”).  Each Lender
(a) shall consider each Discretionary Credit Request in its sole and
absolute discretion and (b) shall provide each of the Company and the
other Lenders a written notice which approves or rejects such Discretionary
Credit Request not later than 30 days after receipt of such Discretionary
Credit Request; provided, however, that if any Lender shall have
failed to provide such written notice within 30 days after receipt of such
Discretionary Credit Request, then such Lender shall be deemed to have rejected
such Discretionary Credit Request.


 


2.2.2.  Closings
of Discretionary Credits.  If the
Required Lenders approve any Discretionary Credit Request, then (a) the
Approving Lenders shall promptly notify each other Lender of such approval and
(b) subject to Section 2.2.3 and upon not less than 10 Business Days’
prior written notice from the Approving Lenders to the other Lenders, the
Company and the Approving Lenders shall execute and deliver definitive
documentation with respect to the Discretionary Credit that is the subject of
such Discretionary Credit Request and (c) subject to Section 2.2.3 and the
terms of such definitive documentation, the Approving Lenders shall, severally
in accordance with their respective Percentage Interests, fund such
Discretionary Credit.


 


2.2.3.  Nature
of Obligations of Approving Lenders. 
Notwithstanding anything in this Section 2.2 to the contrary, no
Approving Lender shall have any obligation to enter into any definitive
documentation with respect to, or to fund any portion of, any Discretionary
Credit unless:


 


(a)  the
Approving Lenders shall have completed, and, in their sole and absolute
discretion, shall be satisfied with the results of, their accounting, business,
legal, tax and employee benefits reviews of the Company and its Subsidiaries;


 


(b)  the
definitive documentation with respect to such Discretionary Credit shall be in
form and substance satisfactory to the Approving Lenders, in their sole and
absolute discretion;


 


(c)  the
material terms and conditions of such Discretionary Credit set forth in the
definitive documentation with respect to such Discretionary Credit shall be no
less favorable to the Approving Lenders than the proposed terms and conditions
of such Discretionary Credit set forth in Discretionary Credit Term Sheet for
such Discretionary Credit;


 


(d)  the
execution and delivery of the definitive documentation with respect to, and the
funding of, such Discretionary Credit shall occur within 90 days after the
receipt by the Approving Lenders of the Discretionary Credit Request for such
Discretionary Credit;


 


32

















 


(e)  the sum of
(i) the principal amount of such Discretionary Credit plus (ii) the
aggregate principal amount of all other Discretionary Credits which (A) are
outstanding or (B) the Lenders are committed to fund pursuant to this
Section 2.2, in each case immediately prior to the execution and delivery
of the definitive documentation for such Discretionary Credit, shall be less than
or equal to $20,000,000;


 


(f)  such
Discretionary Credit shall mature on or prior to the Maturity Date; and


 


(g)  no Default
shall exist prior to or immediately after giving effect to the funding of such
Discretionary Credit; except for Material Adverse Changes which
(i) occurred after October 31, 2001 and prior to the date hereof and
(b) are described in the Offering Circular, no Material Adverse Change
shall have occurred since October 31, 2001; and the Company shall have
furnished to the Lenders on the funding date for such Discretionary Credit a
certificate to these effects, signed by a Financial Officer.


 


2.3.  Application
of Proceeds.


 


2.3.1.  Loan.  The Company will apply the proceeds of the
Loan to (a) the repayment of existing Indebtedness outstanding under the
Congress/CIT Loan and Security Agreement, (b) the payment of accrued and
unpaid interest on the Existing Bonds as of September 15, 2002 pursuant to the
Exchange Offer and (c) the payment of fees and expenses incurred by the
Company in connection with the transactions contemplated by the Credit
Documents, the Warrant Documents and the Exchange Offer.


 


2.3.2.  Discretionary
Credits.  The Company will apply the
proceeds of each Discretionary Credit only to such lawful corporate purposes as
the Company has specified in the Discretionary Credit Request for such
Discretionary Credit.


 


2.3.3.  Specifically
Prohibited Applications.  The
Company will not, directly or indirectly, apply any part of the proceeds of any
extension of credit made pursuant to the Credit Documents to purchase or to
carry Margin Stock or to any transaction prohibited by any Credit Document, any
Warrant Document or any Legal Requirement.


 


3.  Interest;
Discount; Fees.


 


3.1.  Interest.


 


3.1.1.  Daily
Interest.  The Loan shall accrue and
bear daily interest at a rate per annum which shall at all times equal the
Applicable Rate (the “Daily Interest”). 
Prior to the Maturity Date or any accelerated maturity of the Loan, the
Company will, on each Payment Date, pay the accrued and unpaid Daily Interest
on the Loan.  On the Maturity Date or
any accelerated maturity of the Loan, the Company will pay all accrued and
unpaid Daily Interest on the Loan.  Upon
the occurrence and during the continuance of an Event of Default, the Required
Lenders may require accrued Daily Interest to be payable on demand or at
regular intervals more frequent than each Payment Date.  All payments of Daily Interest hereunder
shall be made to the Agent for the account of each Lender in accordance with
such Lender’s Percentage Interest therein.


 


33

















 


3.1.2.  Contingent
Interest.  In addition to the Daily
Interest, the Loan shall accrue and bear Contingent Interest.  On the earliest of (a) April 29, 2005,
(b) any accelerated maturity of the Loan or (c) the date on which the
Loan is paid in full, the Company will pay all accrued and unpaid Contingent
Interest on the Loan.  All payments of
Contingent Interest hereunder shall be made to the Agent for the account of
each Lender in accordance with such Lender’s Percentage Interest therein.


 


3.2.  Discount.  Each of the Company and the Lenders
acknowledges and agrees that: 
(a) the Lenders are only willing to make the loan provided for in
Section 2.1.1 at a discount of $465,000 (the “Discount Amount”); (b)
contemporaneously with the making of the Loan, the Company will remit to the
Agent for the account of the Lenders in accordance with the Lenders’ respective
Percentage Interests the Discount Amount; (c) the remittance by the
Company to the Agent of the Discount Amount is not a payment of any portion of
the Loan or any interest or fees on or in respect of the Loan; (d) the Discount
Amount will, for federal income tax purposes, be included in the Loan’s
original issue discount; and (e) immediately after giving effect to the
remittance by the Company to the Agent of the Discount Amount, the Loan will be
outstanding in the amount of $15,500,000.


 


3.3.  Fees.  In consideration of the Lenders’ willingness
to make the extensions of credit provided for in Sections 2.1 and 2.2, the
Company will pay to the Lenders the following fees:


 


3.3.1.  Funding
Fee.  On the Closing Date, the
Company will pay to the Agent for the account of the Lenders in accordance with
the Lenders’ respective Percentage Interests a funding fee in the amount of
$750,000.


 


3.3.2.  Anniversary
Fee.  On (a) each anniversary
of the Closing Date prior to the Maturity Date and (b) the Maturity Date,
the Company will pay to the Agent for the account of the Lenders in accordance
with the Lenders’ respective Percentage Interests an anniversary fee in the
amount of $75,000.


 


3.4.  Changes
in Circumstances; Yield Protection.


 


3.4.1.  Taxes.


 


(a)  All
payments of the Credit Obligations shall be made without set-off or
counterclaim and free and clear of any deductions, including deductions for
Taxes, unless the Company is required by law to make such deductions.  If (i) any Lender shall be subject to any
Tax with respect to any payment of the Credit Obligations or its obligations
hereunder or (ii) the Company shall be required to withhold or deduct any Tax
on any payment on the Credit Obligations, then such Lender may claim
compensation from the Company under Section 3.4.3 to the extent such Lender is
then in compliance with any applicable requirements of
Section 3.4.1(b).  Whenever Taxes
must be withheld by the Company with respect to any payments of the Credit
Obligations, the Company shall promptly furnish to each applicable Lender
official receipts (to the extent that the relevant governmental authority
delivers such receipts) evidencing payment of any such Taxes so withheld.  If the Company fails to pay any such Taxes
when due or fails to remit to each applicable Lender the required receipts
evidencing payment of any


 


34

















 


such Taxes so withheld or deducted, the Company shall
indemnify each affected Lender for any incremental Taxes and interest or
penalties that may become payable by such Lender as a result of any such
failure.  In the event any Lender
receives a refund of any Taxes for which it has received payment from the
Company under this Section 3.4.1, such Lender shall promptly pay the
amount of such refund to the Company, together with any interest thereon
actually earned by such Lender.


 


(b)  If any
Lender is not created or organized in, or under the laws of, the United States
of America or any state thereof, such Lender shall deliver to the Company such
duly executed forms and statements from time to time as may be necessary or as
may be reasonably requested by the Company, in each case so that such Lender is
entitled to receive payments of the Credit Obligations payable to it without
deduction or withholding of any United States federal income taxes, to the
extent such exemption is available to such Lender.  If (i) no such exemption is available at the time any Lender
becomes party to this Agreement, (ii) any such exemption that is available at
the time such Lender becomes party to this Agreement only partially exempts
such Lender from such deduction or withholding or (c) at any time the Company
has not received all forms and statements (including any renewals thereof)
required to be provided by such Lender pursuant to this Section 3.4.1(b), then
Section 3.4.1(a) shall not apply with respect to any amount of  United States federal income taxes required
to be withheld from payments of the Credit Obligations to such Lender.


 


3.4.2.  Regulatory
Changes.  If any Lender shall
determine that (a) any change in any Legal Requirement (including any new Legal
Requirement) after the date hereof shall directly or indirectly (i) reduce the
amount of any sum received or receivable by such Lender with respect to the
Loan or the return to be earned by such Lender on the Loan, (ii) impose a cost
on such Lender or any Affiliate of such Lender that is attributable to the
making or maintaining of its portion of the Loan, or (iii) require such Lender
or any Affiliate of such Lender to make any payment on, or calculated by
reference to, the gross amount of any amount received by such Lender under any
Credit Document (other than Taxes or income or franchise taxes imposed by
(A) the jurisdiction in which such Lender’s principal place of business in
the United States of America is located or (B) in the case of a foreign Lender,
the foreign jurisdiction in which such foreign Lender’s principal place of
business is located), and (b) such reduction, increased cost or payment shall
not be fully compensated for by an adjustment in the Applicable Rate, then such
Lender may claim compensation from the Company under Section 3.4.3.


 


3.4.3.  Compensation
Claims.  Within 15 days after the
receipt by the Company of a certificate from any Lender setting forth why it is
claiming compensation under this Section 3.4 and computations (in reasonable
detail) of the amount thereof, the Company shall pay to such Lender such
additional amounts as such Lender sets forth in such certificate as sufficient
fully to compensate it on account of the foregoing provisions of this Section
3.4, together with interest on such amount from the 15th day after receipt of
such certificate until payment in full thereof at the Applicable Rate.  The determination by such Lender of the
amount to be paid to it and the basis for computation thereof hereunder shall be
conclusive so long as (a) such determination is made in good faith,


 


35

















 


(b) no manifest error appears therein and (c)
such Lender uses reasonable averaging and attribution methods.


 


3.4.4.  Mitigation.  Each Lender shall take such commercially
reasonable steps as it may determine are not disadvantageous to it in order to
reduce amounts otherwise payable by the Company to such Lender pursuant to this
Section 3.4.  In addition, the Company
shall not be responsible for costs under this Section 3.4 arising more than 90
days prior to receipt by the Company of the certificate from the affected
Lender pursuant to this Section 3.4.


 


3.5.  Computations
of Interest and Fees.  For
purposes of this Agreement, interest (and any other amount expressed as
interest) shall be computed on the basis of a 360-day year for actual days
elapsed.  If any payment required by
this Agreement becomes due on any day that is not a Business Day, such payment
shall be made on the next succeeding Business Day.  If the due date for any payment of principal is extended as a
result of the immediately preceding sentence, interest shall be payable for the
time during which payment is extended at the Applicable Rate.


 


3.6.  Maximum
Lawful Interest Rate.  All
Credit Documents are expressly limited so that in no event, including the
acceleration of the maturity of the Credit Obligations, shall the amount paid
or agreed to be paid in respect of interest on the Credit Obligations (or fees
or other amounts deemed payment for the use of funds) exceed the maximum
permissible amount under applicable law, as in effect on the date hereof and as
subsequently amended or modified to allow a greater amount of interest (or fees
or other amounts deemed payment for the use of funds) to be paid under the
Credit Documents.  If for any reason the
amount in respect of interest (or fees or other amounts deemed payment for the
use of funds) required by the Credit Documents exceeds such maximum permissible
amount, the obligation to pay interest under the Credit Documents (or fees or
other amounts deemed payment for the use of funds) shall be automatically
reduced to such maximum permissible amount and any amounts in respect of
interest (or fees or other amounts deemed payment for the use of funds)
previously paid to the Lenders in excess of such maximum permissible amount
shall be automatically applied to reduce the amount of the Loan.


 


4.  Payment.


 


4.1.  Payment at
Maturity.  On the Maturity Date
or any accelerated maturity of the Loan, the Company will pay to the Agent an
amount equal to the Loan then due, together with all accrued and unpaid
premium, interest and fees with respect thereto and all other Credit
Obligations then outstanding.


 


4.2.  Contingent
Required Prepayments.


 


4.2.1.  Excess
Cash Flow.  Within five Business
Days after the date annual financial statements have been (or are required to
have been) furnished by the Company to the Lenders in accordance with Section
6.4.1, the Company shall pay to the Agent as a prepayment of the Loan and the
Discretionary Credit Obligations to be applied as provided in Section 4.4.2 the
lesser of (a) 75% of Consolidated Excess Cash Flow for the


 


36

















 


most recently completed fiscal year of the Company or
(b) the sum of (i) the amount of the Loan plus (ii) the amount
of the Discretionary Credit Obligations then outstanding.


 


4.2.2.  Net Asset Sale Proceeds.  Upon receipt of Net Asset Sale Proceeds by
the Company or any of its Subsidiaries, the Company shall within five Business
Days pay to the Agent as a prepayment of the Loan and the Discretionary Credit
Obligations to be applied as provided in Section 4.4.2 the lesser of (a) the
amount of such Net Asset Sale Proceeds or (b) the sum of (i) the amount of
the Loan plus (ii) the amount of the Discretionary Credit
Obligations then outstanding.


 


4.2.3.  Net
Debt Proceeds.  Upon receipt of Net
Debt Proceeds by the Company or any of its Subsidiaries, the Company shall
within five Business Days pay to the Agent as a prepayment of the Loan and the
Discretionary Credit Obligations to be applied as provided in Section 4.4.2 the
lesser of (a) the amount of such Net Debt Proceeds or (b) the sum of
(i) the amount of the Loan plus (ii) the amount of the
Discretionary Credit Obligations then outstanding.


 


4.2.4.  Net
Equity Proceeds.  Upon receipt of
Net Equity Proceeds by the Company or any of its Subsidiaries, the Company
shall within five Business Days pay to the Agent as a prepayment of the Loan and
the Discretionary Credit Obligations to be applied as provided in Section 4.4.2
the lesser of (a) the amount of such Net Equity Proceeds or (b) the sum of
(i) the amount of the Loan plus (ii) the amount of the
Discretionary Credit Obligations then outstanding.


 


4.2.5.  Change
of Control.  Upon written request
from the Required Lenders to the Company at any time within 60 days after the
occurrence of a Change of Control, the Company will, within five Business Days,
pay to the Agent an amount equal to 101% of the Loan, together will all accrued
and unpaid interest and fees with respect thereto and all other Credit
Obligations then outstanding.


 


4.2.6.  Inter-Company
Note.  Upon receipt by the Company
or any of its Subsidiaries of any payment in respect of the Inter-Company Note,
the Company shall within five Business Days pay to the Agent as a prepayment of
the Loan and the Discretionary Credit Obligations to be applied as provided in
Section 4.4.2 the lesser of (a) the amount of such payment of the Inter-Company
Note or (b) the sum of (i) the amount of the Loan plus
(ii) the amount of the Discretionary Credit Obligations then outstanding.


 


4.3.  Voluntary
Prepayments.  In addition to the
prepayments required by Section 4.2, the Company may from time to time prepay
all or any portion of the Loan (in a minimum amount of $1,000,000 and an
integral multiple of $250,000, or such lesser amount as is then outstanding),
without premium or penalty of any type. 
The Company shall give the Lenders at least five Business Days prior
notice of its intention to prepay the Loan under this Section 4.3, specifying
the date of payment, the total amount of the Loan to be paid on such date and
the amount of interest to be paid with such prepayment.


 


37

















 


4.4.  Reborrowing;
Application of Payments, etc.


 


4.4.1.  Reborrowing.  No portion of the Loan prepaid hereunder may
be reborrowed.


 


4.4.2.  Order
of Application.  Any prepayment made
pursuant to Section 4.2 shall be applied: 
(a) first, to any Discretionary Credit Obligations then outstanding to
the extent required by the terms of the agreements and instruments evidencing
such Discretionary Credit Obligations; and (b) second, to the Loan.  Any prepayment of Discretionary Credit
Obligations made pursuant to Section 4.2 shall be applied to such
Discretionary Credit Obligations in accordance with the terms of the agreements
and instruments evidencing such Discretionary Credit Obligations.


 


4.4.3.  Payment
with Accrued Interest, etc.  Upon all
prepayments of the Loan and the principal of the Discretionary Credit
Obligations, the Company shall pay to the Agent, together with the principal
amount to be prepaid, unpaid interest in respect thereof accrued to the date of
prepayment.  Notice of prepayment having
been given in accordance with Section 4.3, and whether or not notice is given
of prepayments pursuant to Section 4.2, the amount specified to be prepaid
shall become due and payable on the date specified for prepayment.


 


4.4.4.  Payments
for Lenders.  All payments of
principal, interest, fees and other amounts hereunder shall be made to the
Agent for the account of the Lenders in accordance with the Lenders’ respective
Percentage Interests in the Credit Obligations so repaid.


 


5.  Conditions
to Extending Credit.  The
obligations of the Lenders to make the extension of credit pursuant to Section
2.1 shall be subject to the satisfaction, on or before the Closing Date, of the
conditions set forth in this Section 5. 
If the conditions set forth in this Section 5 are not met on or prior to
the Closing Date, the Lenders shall have no obligation to make any extension of
credit hereunder.


 


5.1.  Notes.  The Company shall have duly authorized,
executed and delivered to the Agent a Note for each Lender.


 


5.2.  Guarantee
and Security Agreement.  Each of
DRAC, the Company and its Subsidiaries (other than Doe Run Exploration) shall
have duly authorized, executed and delivered to the Agent the Guarantee and
Security Agreement, which shall be in substantially the form of
Exhibit 5.2.


 


5.3.  Real Estate
Collateral.  Each of the Company
and the Domestic Subsidiaries shall have duly authorized, executed,
acknowledged and delivered to the Agent (a) a mortgage or deed of trust on
each real property owned by the Company or such Domestic Subsidiary, as the
case may be, and listed on Exhibit 5.3 and (b) a leasehold mortgage or
leasehold deed of trust on each material real property leased by the Company or
such Domestic Subsidiary, as the case may be, and listed on Exhibit 5.3, with a
landlord’s consent and waiver and any other documents required to allow for the
recording or filing of a leasehold mortgage or leasehold deed of trust, in each
case in form and substance reasonably satisfactory to the Required Lenders, together
with, for


 


38

















 


each such real
property:  (i) title insurance with such
insurer, in such amount, in such form and with such exceptions as are
reasonably satisfactory to the Required Lenders; (ii) if requested by the
Required Lenders, an environmental site assessment report in such form, with
such conclusions and from such environmental engineering firm as are reasonably
satisfactory to the Required Lenders; (iii) if requested by the Required
Lenders, a survey on each real property owned by the Company or such Domestic
Subsidiary that is reasonably satisfactory to the Required Lenders; and (iv) a
legal opinion of local counsel with respect to the recording and enforceability
of such mortgages, deeds of trust, leasehold mortgages and leasehold deeds of
trust in form and substance reasonably satisfactory to the Required Lenders.


 


5.4.  Perfection
of Security.  Each Obligor shall
have duly authorized, executed, acknowledged, delivered, filed, registered and
recorded such security agreements, notices, financing statements, memoranda of
intellectual property security interests and other instruments as the Required
Lenders may have reasonably requested in order to perfect the Liens purported
or required pursuant to the Credit Documents to be created in the Credit
Security and shall have paid all filing or recording fees or taxes required to
be paid in connection therewith, including any recording, mortgage,
documentary, transfer or intangible taxes.


 


5.5.  Pledge Agreement.  Renco shall have duly authorized, executed
and delivered to the Agent the Pledge Agreement, which shall be in
substantially the form of Exhibit 5.5.


 


5.6.  Congress/CIT
Loan and Security Agreement.  Each
of the Company, its Domestic Subsidiaries party thereto, Congress, CIT and the
other lenders party thereto, and Congress, as agent thereunder, shall have duly
authorized, executed and delivered the Congress/CIT Loan and Security
Agreement, which shall be in form and substance satisfactory to the Required
Lenders.


 


5.7.  Renco Credit
Support Agreement.  Each
of Renco, the Company and Congress, as agent under the Congress/CIT Loan and
Security Agreement, shall have duly authorized, executed and delivered the
Renco Credit Support Agreement, which shall be in form and substance
satisfactory to the Required Lenders.


 


5.8.  Congress/CIT
Intercreditor Agreement. 
Congress, as agent under the Congress/CIT Loan and Security Agreement,
shall have duly authorized, executed and delivered to the Agent the Congress/CIT
Intercreditor Agreement, which shall be in substantially the form of
Exhibit 5.8.


 


5.9.  Exchange Offer.  Holders of at least 95% of the aggregate
face amount of each of the Existing Senior Bonds, the Existing Floating Rate
Bonds and the Existing Senior Secured Bonds shall have delivered the requisite
consents to the Exchange Offer, and contemporaneously with the extension of
credit by the Lenders pursuant to Section 2.1, the Company shall consummate the
Exchange Offer in accordance with the terms of the Exchange Offer Documents and
all applicable Legal Requirements.


 


5.10.  Existing
Supplemental Indentures. 
Each of the Company and the Trustee shall have duly authorized, executed
and delivered the Existing Supplemental Indentures, each of which shall be in
form and substance satisfactory to the Required Lenders.


 


39

















 


5.11.  New
Indenture; New Bonds.  Each of
the Company and the Trustee shall have duly authorized, executed and delivered
the New Indenture, which shall be in form and substance satisfactory to the
Required Lenders.  Contemporaneously
with the extension of credit by the Lenders pursuant to Section 2.1, the
Company shall issue the New Bonds under the New Indenture and in accordance
with the terms of the Exchange Offer Documents, and each of the New Bonds shall
be in form and substance satisfactory to the Required Lenders.


 


5.12.  Warrant
Agreement; Warrants.  Each of
the Company and the Warrant Agent shall have duly authorized, executed and delivered
the Warrant Agreement, which shall be in substantially the form of
Exhibit 5.12.  Contemporaneously
with the extension of credit by the Lenders pursuant to Section 2.1, the
Company shall issue the Warrants under the Warrant Agreement and in accordance
with the terms of the Exchange Offer Documents, and each of the Warrants shall
be in substantially the form of exhibit A to the Warrant Agreement.


 


5.13.  Investor
Rights Agreement.  Each of
Renco, DRAC, the Company and the Warrant Agent shall have duly authorized,
executed and delivered the Investor Rights Agreement, which shall be in
substantially the form of Exhibit 5.13.


 


5.14.  Bondholder
Intercreditor Agreement.  Each
of Congress, as agent under the Congress/CIT Loan and Security Agreement, and
the Collateral Agent shall have duly authorized, executed and delivered to the
Agent the Bondholder Intercreditor Agreement, which shall be in substantially
the form of Exhibit 5.14.


 


5.15.  Preferred
Stock Purchase Agreement.  Each
of Renco and the Company shall have duly authorized, executed and delivered the
Preferred Stock Purchase Agreement, which shall be in form and substance
satisfactory to the Required Lenders. 
Contemporaneously with the extension of credit by the Lenders pursuant
to Section 2.1, the Company shall receive at least $20,000,000 in proceeds
from the sale of Preferred Stock to Renco pursuant to the Preferred Stock
Purchase Agreement, which proceeds shall be applied by the Company in
accordance with the terms of the Exchange Offer Documents.


 


5.16.  Subordination
Agreement.  Each of Renco, DRAC
and the Company shall have duly authorized, executed and delivered to the Agent
the Subordination Agreement, which shall be in substantially the form of
Exhibit 5.16.


 


5.17.  Asset
Transfer Agreement.  Each of the
Company and Doe Run Buick shall have duly authorized, executed and delivered
the Asset Transfer Agreement, which shall be in form and substance satisfactory
to the Required Lenders.


 


5.18.  Capitalization.  The Required Lenders shall be satisfied with
the ownership, corporate and legal structure and capitalization of the Company
and its Subsidiaries, including the terms and conditions of the Charter and
By-laws of, and the capital stock and other equity interests issued by, each of
the Company and its Subsidiaries and any agreements (including the Investor
Rights Agreement) relating thereto.


 


40

















 


5.19.  Solvency.  After giving effect to the incurrence of the
Credit Obligations and the consummation of the Exchange Offer, the Company and
its Subsidiaries, taken as a whole:


 


(a)  shall be solvent;


 


(b)  shall have
assets having a fair saleable value in excess of the amount required to pay
their probable liability on their existing debts as such debts become absolute
and mature;


 


(c)  shall have
access to adequate capital for the conduct of their business; and


 


(d)  shall have
the ability to pay their debts from time to time incurred.


 


5.20.  Officer’s
Certificate.  The
representations and warranties contained in Section 7 shall be true and correct
on and as of the Closing Date with the same force and effect as though made on
and as of such date; no Default shall exist on the Closing Date immediately
after giving effect to the incurrence of the Credit Obligations and the
consummation of the Exchange Offer; except for Material Adverse Changes which
(a) occurred after October 31, 2001 and prior to the date hereof and
(b) are described in the Offering Circular, no Material Adverse Change shall
have occurred since October 31, 2001; and the Company shall have furnished
to the Lenders in connection with the incurrence of the Credit Obligations a
certificate to these effects, in substantially the form of Exhibit 5.20,
signed by a Financial Officer.


 


5.21.  Legal Opinions.  On the Closing Date, the Lenders shall have
received from the following counsel their respective opinions with respect to
the transactions contemplated by this Agreement and the other Transaction
Documents, which opinions shall be in form and substance reasonably
satisfactory to the Lenders:


 


(a) 
Cadwalader, Wickersham & Taft, special counsel for Renco, DRAC, the
Company and its Subsidiaries.


 


(b)  Maples and
Calder, special Cayman Islands counsel for the Company and its Subsidiaries.


 


(c)  Estudio
Ferrero, special Peru counsel for the Company and its Subsidiaries.


 


(d)  Schnapp,
Fulton, Fall, Silvey & Reid, L.L.C., special Missouri counsel for the
Company and its Subsidiaries.


 


The Company authorizes and directs its special
counsels to furnish the foregoing opinions.


 


5.22.  Payment of Fees.  The Company shall have paid all fees and
expenses of the Lenders and the Agent (including fees and disbursements of
counsel to the Lenders and the Agent) which the Company is required to pay
pursuant to this Agreement and for which statements have been rendered on or
prior to the Closing Date.


 


41

















 


5.23.  Legality, etc.  The making of the Loan shall not
(a) subject any Lender to any penalty or special tax (other than a Tax for
which the Company is required to reimburse the Lenders under Section 3.4),
(b) be prohibited by any Legal Requirement or (c) violate any credit
restraint program of the executive branch of the government of the United
States of America, the Board of Governors of the Federal Reserve System or any
other governmental or administrative agency so long as any Lender reasonably
believes that compliance therewith is customary commercial practice.


 


5.24.  Proper
Proceedings.  This Agreement,
each other Transaction Document and the transactions contemplated hereby and
thereby shall have been authorized by all necessary corporate or other
proceedings.  All necessary consents,
approvals and authorizations of any governmental or administrative agency or
any other Person of any of the transactions contemplated hereby or by any other
Transaction Document shall have been obtained and shall be in full force and
effect.


 


5.25.  General.  All legal and corporate proceedings in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents shall be reasonably satisfactory in form and substance to
the Required Lenders and the Agent, and the Required Lenders and the Agent
shall have received copies of all documents, including certified copies of the
Charter and By-laws of the Company and the other Obligors, records of corporate
proceedings, certificates as to signatures and incumbency of officers and
opinions of counsel, which the Required Lenders or the Agent may have reasonably
requested in connection therewith, such documents where appropriate to be
certified by proper corporate or governmental authorities.


 


6.  General
Covenants.  The Company
covenants with the Lenders that: 
(a) until (i) all of the Credit Obligations shall have been
paid in full and (ii) the Lenders’ commitments to extend credit under this
Agreement and any other Credit Document shall have irrevocably terminated, the
Company and its Subsidiaries will comply with the provisions of Sections 6.1
through 6.21; and (b) until (i) all of the Credit Obligations and the
obligations of the Company under the Warrant Documents shall have been paid in
full and (ii) the Lenders’ commitments to extend credit under this
Agreement and any other Credit Document shall have irrevocably terminated, the
Company and its Subsidiaries will comply with Sections 6.1
through 6.4, Sections 6.6 through 6.19 and Section 6.21.


 


6.1.  Taxes and
Other Charges; Accounts Payable.


 


6.1.1.  Taxes
and Other Charges.  Each of the
Company and its Subsidiaries shall duly pay and discharge, or cause to be paid
and discharged, before the same become in arrears, all taxes, assessments and
other governmental charges imposed upon such Person and its properties, sales
or activities, or upon the income or profits therefrom, as well as all claims
for labor, materials or supplies which if unpaid might by law become a Lien
upon any of its property; provided, however, that any such tax,
assessment, charge or claim need not be paid if the validity or amount thereof
shall at the time be contested in good faith by appropriate proceedings and if
such Person shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto; and provided, further,
that each of the Company and its Subsidiaries shall pay or bond, or cause to be


 


42

















 


paid or bonded, all such taxes, assessments, charges
or other governmental claims immediately upon the commencement of proceedings
to foreclose any Lien which may have attached as security therefor (except to
the extent such proceedings have been dismissed or stayed).


 


6.1.2.  Accounts
Payable.  Each of the Company and
its Subsidiaries shall promptly pay when due, or in conformity with customary
trade terms or consistent with its past practice, all accounts payable incident
to the operations of such Person not referred to in Section 6.1.1; provided,
however, that any such accounts payable need not be paid if the validity
or amount thereof shall at the time be contested in good faith and if such
Person shall, in accordance with GAAP, have set aside on its books adequate
reserves with respect thereto.


 


6.2.  Conduct of
Business, etc.


 


6.2.1.  Types
of Business.  The Company and its
Subsidiaries shall engage only in (a) the business of exploring for, and
mining, smelting, refining and recycling, metals, (b) the business of
fabricating metal products and (c) other activities related thereto.


 


6.2.2.  Maintenance
of Properties.  Each of the Company
and its Subsidiaries:


 


(a)  shall keep
its properties in such repair, working order and condition, and shall from time
to time make such repairs, replacements, additions and improvements thereto, as
are necessary for the efficient operation of its business and shall comply at
all times in all material respects with all material franchises, licenses and
leases to which it is party so as to prevent any loss or forfeiture thereof or
thereunder, except where (i) compliance is at the time being contested in good
faith by appropriate proceedings and (ii) failure to comply with the provisions
being contested has not resulted, and does not create a material risk of
resulting, in the aggregate in any Material Adverse Change; and


 


(b)  shall do
all things necessary to preserve, renew and keep in full force and effect and
in good standing its legal existence and authority necessary to continue its
business; provided, however, that this Section 6.2.2(b)
shall not prevent the merger, consolidation or liquidation of Subsidiaries of
the Company permitted by Section 6.10.


 


6.2.3.  Compliance
with Legal Requirements.  Each of
the Company and its Subsidiaries shall comply in all material respects with all
valid Legal Requirements applicable to it, except (a) as set forth on
Exhibit 7.15.1 or (b) where (i) compliance therewith shall at the
time be contested in good faith by appropriate proceedings and
(ii) failure so to comply with the provisions being contested has not
resulted, and does not create a material risk of resulting, in the aggregate in
any Material Adverse Change.


 


6.2.4.  Compliance
with Material Agreements.  Each of
the Company and its Subsidiaries shall comply in all material respects with the
Material Agreements (other than the Employment Agreements and the Net Worth
Appreciation Agreements) to the extent such compliance is not in violation of
the other provisions of this Agreement, any other Credit Document or any
Warrant Document.  Without the prior
written consent of the Required Lenders: 
(a) no provision of the Charter or By-laws of DRAC, the


 


43

















 


Company or any of its Subsidiaries shall be amended,
modified, waived or terminated; and (b) no provision of any other Material
Agreement shall be amended, modified, waived or terminated in any manner that
would have in any material respect an adverse effect on the interests of the
Lenders.


 


6.3.  Insurance.


 


6.3.1.  Business
Interruption Insurance.  Each of the
Company and its Subsidiaries shall maintain with financially sound and
reputable insurers insurance related to interruption of business, either for
loss of revenues or for extra expense, in the manner customary for businesses
of similar size engaged in similar activities.


 


6.3.2.  Property
Insurance.  Each of the Company and
its Subsidiaries shall keep its assets which are of an insurable character
insured by financially sound and reputable insurers against theft and fraud and
against loss or damage by fire, explosion and hazards insured against by
extended coverage to the extent, in amounts and with deductibles at least as
favorable as those generally maintained by businesses of similar size engaged
in similar activities.


 


6.3.3.  Liability
Insurance.  Each of the Company and
its Subsidiaries shall maintain with financially sound and reputable insurers
insurance against liability for hazards, risks and liability to persons and
property, including product liability insurance, to the extent, in the amounts
and with deductibles at least as favorable as those generally maintained by
businesses of similar size engaged in similar activities; provided, however,
that it may effect workers’ compensation insurance or similar coverage with
respect to operations in any particular state or other jurisdiction through an
insurance fund operated by such state or jurisdiction or by meeting the
self-insurance requirements of such state or jurisdiction.


 


6.3.4.  Flood
Insurance.  Each of the Company and
its Subsidiaries shall at all times keep each parcel of real property (other
than mineral interests) owned or leased by it which is (a) included in the
Credit Security, (b) in an area determined by the Director of the Federal
Emergency Management Agency to be subject to special flood hazard and
(c) in a community participating in the National Flood Insurance Program,
insured against such special flood hazards in an amount necessary to ensure
compliance with the federal National Flood Insurance Act of 1968.


 


6.3.5.  Political
Risk Insurance.  The Company and its
Subsidiaries shall maintain with financially sound and reputable insurers
insurance related to political risk, to the extent, in the amounts and with
deductibles at least as favorable as those maintained by the Company and its
Subsidiaries on the date hereof, so long as such insurance is available at a commercially
reasonable cost; provided, however, that if the Independent
Director or the Special Director (each as defined in the Investor Rights
Agreement) consents in writing to the cancellation of such insurance, then the
Company and its Subsidiaries shall not be required to maintain such insurance.


 


44

















 


6.3.6.  Independent
Director’s Insurance.  The Company
and its Subsidiaries shall maintain with financially sound and reputable
insurers individual insurance for each of (a) the Person serving as the
Independent Director (as defined in the Investor Rights Agreement) and (b) the
Person serving as the Special Director (as defined in the Investor Rights
Agreement), in each case against claims and liabilities that (i) are
customarily covered by insurance of such type and (ii) arise by reason of
such Person being, or having been, a director of the Company or any of its
Subsidiaries or by reason of any action taken or omitted (or alleged to have
been taken or omitted) by such Person as a director of the Company or any of
its Subsidiaries, including any action taken or omitted (or alleged to have
been taken or omitted) that may be determined to constitute negligence, whether
or not the Company or any of its Subsidiaries would have the power to indemnify
such Person against such liability.


 


6.4.  Financial
Statements and Reports. 
Each of the Company and its Subsidiaries shall maintain a system of
accounting in which full and correct entries will be made of all transactions
in relation to their business and affairs in accordance with generally accepted
accounting practice.  The fiscal year of
the Company and its Subsidiaries shall end on October 31 in each year and the
fiscal quarters of the Company and its Subsidiaries shall end on January 31,
April 30, July 31 and October 31 in each year.


 


6.4.1.  Annual
Reports.  The Company shall furnish
to the Lenders as soon as available, and in any event within 90 days after
the end of each fiscal year, the Consolidated and Consolidating balance sheets
of the Company and its Subsidiaries as at the end of such fiscal year, the
Consolidated and Consolidating statements of income and Consolidated statements
of changes in shareholders’ equity and of cash flows of the Company and its Subsidiaries
for such fiscal year (all in reasonable detail) and, in the case of
Consolidated financial statements, comparative figures for the immediately
preceding fiscal year, all accompanied by:


 


(a)  Reports of
KPMG LLP (or other independent certified public accountants of recognized
national standing reasonably satisfactory to the Required Lenders), containing
no material qualification, to the effect that they have audited the foregoing
Consolidated financial statements in accordance with generally accepted
auditing standards and that such Consolidated financial statements present
fairly, in all material respects, the financial position of the Company and its
Subsidiaries at the dates thereof and the results of their operations for the
periods covered thereby in conformity with GAAP.


 


(b)  The
statement of such accountants that they have caused this Agreement to be
reviewed and that in the course of their audit of the Company and its
Subsidiaries no facts have come to their attention that cause them to believe
that any Default exists and in particular that they have no knowledge of any
Default under the Computation Covenants or, if such is not the case, specifying
such Default and the nature thereof. 
This statement is furnished by such accountants with the understanding
that the examination of such accountants cannot be relied upon to give such
accountants knowledge of any such Default except as it relates to accounting or
auditing matters within the scope of their audit.


 


45

















 


(c)  A
certificate of the Company signed by a Financial Officer to the effect that
such officer has caused this Agreement to be reviewed and has no knowledge of
any Default, or if such officer has such knowledge, specifying such Default and
the nature thereof, and what action the Company has taken, is taking or
proposes to take with respect thereto.


 


(d) 
Computations by the Company comparing the financial statements referred
to above with the most recent budget for such fiscal year furnished to the
Lenders in accordance with Section 6.4.4.


 


(e) 
Computations by the Company in substantially the form of Exhibit 6.4
demonstrating, as of the end of such fiscal year, compliance with the
Computation Covenants and Consolidated Excess Cash Flow, signed by a Financial
Officer.


 


(f) 
Calculations, as at the end of such fiscal year, of (i) the Accumulated
Benefit Obligations for each Plan (other than Multiemployer Plans) of the
Company and its Subsidiaries and (ii) the fair market value of the assets of
such Plan allocable to such benefits.


 


(g) 
Supplements to Exhibits 7.1, 7.2.2, 7.3 and 7.14 showing any changes in
the information set forth in such exhibits not previously furnished to the
Lenders in writing, as well as any changes in the Charter, By-laws or
incumbency of officers of DRAC, the Company and its Subsidiaries from those
previously certified to the Lenders and the Agent.


 


(h)  In the
event of a change in GAAP, computations by the Company, signed by a Financial
Officer, reconciling the financial statements referred to above with financial
statements prepared in accordance with GAAP as applied to the other covenants
in Section 9 and related definitions.


 


(i)  In
reasonable detail, management’s discussion and analysis of the results of
operations and the financial condition of the Company and its Subsidiaries as
at the end of and for the year covered by such financial statements.


 


6.4.2.  Quarterly
Reports.  The Company shall furnish
to the Lenders as soon as available and, in any event, within 45 days after the
end of each of the first three fiscal quarters of the Company, the internally
prepared Consolidated balance sheet of the Company and its Subsidiaries as of
the end of such fiscal quarter, the Consolidated statements of income, of
changes in shareholders’ equity and of cash flows of the Company and its
Subsidiaries for such fiscal quarter and for the portion of the fiscal year
then ended (all in reasonable detail) and comparative figures for the same
period in the preceding fiscal year, all accompanied by:


 


(a)  A
certificate of the Company signed by a Financial Officer to the effect that
such financial statements have been prepared in accordance with GAAP and
present fairly, in all material respects, the financial position of the Company
and its Subsidiaries at the dates thereof and the results of their operations
for the periods covered thereby, subject only to normal year-end audit
adjustments and the addition of footnotes.


 


46

















 


(b)  A certificate
of the Company signed by a Financial Officer to the effect that such officer
has caused this Agreement to be reviewed and has no knowledge of any Default,
or if such officer has such knowledge, specifying such Default and the nature
thereof and what action the Company has taken, is taking or proposes to take
with respect thereto.


 


(c) 
Computations by the Company comparing the financial statements referred
to above with the most recent budget for the period covered thereby furnished
to the Lenders in accordance with Section 6.4.4.


 


(d) 
Computations by the Company in substantially the form of Exhibit 6.4
demonstrating, as of the end of such quarter, compliance with the Computation
Covenants, signed by a Financial Officer.


 


(e) 
Supplements to Exhibits 7.1, 7.2.2 and 7.3 showing any changes in the
information set forth in such exhibits not previously furnished to the Lenders
in writing, as well as any changes in the Charter, By-laws or incumbency of
officers of DRAC, the Company and its Subsidiaries from those previously
certified to the Lenders and the Agent.


 


(f)  In
reasonable detail, management’s discussion and analysis of the results of
operations and financial condition of the Company and its Subsidiaries as at
the end of and for the fiscal period covered by the financial statements
referred to above.


 


(g)  A
certificate of the Company, signed by a Financial Officer, (i) setting
forth in reasonable detail (A) computations of (1) Taxable Net Income for such
fiscal quarter and the portion of the fiscal year of the Company then ended and
(2) Annualized Taxable Net Income with respect to the most recent Tax
Payment Date during such fiscal quarter, and (B) a reconciliation of
(1) Consolidated Net Income for such fiscal quarter and the portion of
such fiscal year then ended and (2) Taxable Net Income for such fiscal
quarter and the portion of such fiscal year then ended, and (ii) stating
that such computations of Taxable Net Income and Annualized Taxable Net Income
(A) have been reviewed and approved by KPMG LLP (or other independent
certified public accountants of recognized national standing reasonably
satisfactory to the Required Lenders) and (B) present fairly, in all
material respects, (1) the Taxable Net Income for such fiscal quarter and
the portion of such fiscal year then ended and (2) Annualized Taxable Net
Income with respect to the most recent Tax Payment Date during such fiscal
quarter.


 


(h)  A
certificate of the Company, signed by a Financial Officer, (i) setting forth in
reasonable detail computations of the Tax Distribution Amount with respect to
the most recent Tax Payment Date during such fiscal quarter,
(ii) attaching pro forma annual federal and state income tax returns of
the Company based on Annualized Taxable Net Income with respect to the most
recent Tax Payment Date during such fiscal quarter and (iii) stating that such
pro forma tax returns (A) have been reviewed and approved by KPMG LLP (or
other independent certified public accountants of recognized national standing
reasonably satisfactory to the Required Lenders) and (B) present fairly,
in all


 


47

















 


material respects, the Tax Distribution Amount with
respect to the most recent Tax Payment Date during such fiscal quarter.


 


6.4.3.  Monthly
Reports.  The Company shall furnish
to the Lenders as soon as available and, in any event, within 30 days after the
end of each month, the internally prepared Consolidated balance sheet of the
Company and its Subsidiaries as at the end of such month and the Consolidated
statement of income of the Company and its Subsidiaries for such month (all in
reasonable detail), all accompanied by a certificate of the Company signed by a
Financial Officer to the effect that such financial statements were prepared in
accordance with GAAP and present fairly, in all material respects, on a summary
basis the financial position of the Company and its Subsidiaries at the dates
thereof and the results of their operations for the periods covered thereby,
subject only to normal year-end audit adjustments and the addition of
footnotes.


 


6.4.4.  Other
Reports.  The Company shall promptly
furnish to the Lenders:


 


(a)  As soon as
prepared, and in any event within 15 days after the beginning of each fiscal
year, an annual budget and operating projections for such fiscal year of the
Company and its Subsidiaries, prepared in a manner consistent with the manner
in which the financial projections described in Section 7.2.1(f) were prepared.


 


(b)  Any
material updates of such budget and projections.


 


(c)  Any
management letters furnished to Company or any of its Subsidiaries by the
Company’s auditors.


 


(d)  All
budgets, projections, statements of operations and other reports furnished
generally to the shareholders of the Company.


 


(e)  Such
registration statements, proxy statements and reports, including
Forms S-1, S-2, S-3, S-4, 10-K, 10-Q and 8-K, as may be filed by the
Company or any of its Subsidiaries with the Securities and Exchange Commission.


 


(f)  Any 90-day
letter (or any applicable portions thereof) or 30-day letter (or any applicable
portions thereof) received by the Company, any of its Subsidiaries or any other
Obligor from the federal Internal Revenue Service (or the equivalent notice
received from state or other taxing authorities) asserting tax deficiencies
against the Company or any of Subsidiaries.


 


6.4.5.  Notice
of Litigation; Notice of Defaults. 
The Company shall promptly furnish to the Lenders notice of any
litigation or any administrative or arbitration proceeding (a) which creates a
material risk of resulting, after giving effect to any applicable insurance, in
the payment by the Company and its Subsidiaries of more than $2,500,000 or (b)
which results, or creates a material risk of resulting, in a Material Adverse Change.  Promptly upon acquiring knowledge thereof,
the Company shall notify the Lenders of the existence of any Default or
Material Adverse Change, specifying the nature thereof and what action the
Company or any of its Subsidiaries has taken, is taking or proposes to take
with respect thereto.


 


48

















 


6.4.6.  ERISA
Reports.  The Company shall furnish
to the Lenders as soon as available the following items with respect to any
Plan:


 


(a)  any
request for a waiver of the funding standards or an extension of the
amortization period;


 


(b)  notice of
any “reportable event” (as defined in section 4043 of ERISA), unless the notice
requirement with respect thereto has been waived by regulation;


 


(c)  any notice
received by any ERISA Group Person that the PBGC has instituted or intends to
institute proceedings to terminate any Plan, or that any Multiemployer Plan is
insolvent or in reorganization;


 


(d)  notice of
the intention of any ERISA Group Person to withdraw, in whole or in part, from
any Multiemployer Plan;


 


(e)  notice of
the filing by the administrator of any Plan of the Company or any of its
Subsidiaries with the PBGC of any notice of intent to terminate such Plan
pursuant to section 4041(b) of ERISA; and


 


(f)  notice of
the filing by the administrator of any Plan of any ERISA Group Person (other
than the Company and its Subsidiaries) of any notice of intent to terminate
such Plan.


 


In addition, at least 30 days prior to the filing by
the administrator of any Plan of the Company or any of its Subsidiaries with
the PBGC of any notice of intent to terminate such Plan pursuant to section
4041(c) of ERISA, the Company shall furnish the Lenders with written notice of
the intention of the administrator to make such filing with the PBGC and to
terminate such Plan.


 


6.4.7.  Tax
Reports.  The Company shall furnish
to the Lenders as soon as available and, in any event within 150 days after the
end of each fiscal year of the Company:


 


(a)  A
certificate of the Company, signed by a Financial Officer, (i) setting
forth in reasonable detail (A) a computation of Taxable Net Income for such
fiscal year and (B) a reconciliation of (1) Consolidated Net Income for
such fiscal year and (2) Taxable Net Income for such fiscal year, and
(ii) stating that such computation of Taxable Net Income (A) has been
reviewed and approved by KPMG LLP (or other independent certified public
accountants of recognized national standing reasonably satisfactory to the
Required Lenders) and (B) presents fairly, in all material respects, the
Taxable Net Income for such fiscal year.


 


(b)  A
certificate of the Company, signed by a Financial Officer, (i) setting forth in
reasonable detail a computation of the Actual Pro Forma Tax Liability for such
fiscal year, (ii) attaching pro forma annual federal and state income tax
returns of the Company for such fiscal year based on Taxable Net Income for
such fiscal year and (iii) stating that such pro forma tax returns
(A) have been reviewed and approved by KPMG LLP (or


 


49

















 


other independent certified public accountants of
recognized national standing reasonably satisfactory to the Required Lenders)
and (B) present fairly, in all material respects, the Actual Pro Forma Tax
Liability for such fiscal year.


 


6.4.8.  Other
Information; Audit.  From time to
time at reasonable intervals upon request of any authorized officer of any
Lender, each of the Company and its Subsidiaries shall furnish to such Lender
such other information regarding the business, assets, financial condition,
income or prospects of the Company and its Subsidiaries as such officer may
reasonably request, including copies of all pro forma and other tax returns of
the Company and its Subsidiaries and all licenses, agreements, leases and
instruments to which any of the Company or its Subsidiaries is party.  Each Lender’s authorized officers and
representatives shall have the right during normal business hours upon
reasonable notice and at reasonable intervals to examine the books and records
of the Company and its Subsidiaries, to make copies and notes therefrom for the
purpose of ascertaining compliance with or obtaining enforcement of this
Agreement or any other Credit Document. 
The Agent, upon reasonable advance notice, may undertake to have the
Company and its Subsidiaries reviewed by the Agent’s commercial financial
examiners and fixed asset appraisers, and the Company and its Subsidiaries
shall cooperate with the Agent and its commercial financial examiners and fixed
asset appraisers in conducting each such review.


 


6.5.  Certain
Financial Tests.


 


6.5.1.  Consolidated
Adjusted Financing Debt to Consolidated EBITDA.  On the last day of each fiscal quarter of the Company ending
during any period specified in the table below, Consolidated Adjusted Financing
Debt shall not exceed the percentage of Consolidated EBITDA for the period of
four consecutive fiscal quarters ending on such date, specified opposite such
period in such table.


 


	
  Period
  Ending

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2002
  through

  October 31, 2003

  	
   

  	
  1,000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2003
  through

  October 31, 2004

  	
   

  	
  950

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2004
  through

  Maturity Date

  	
   

  	
  900

  	
  %

  



 


6.5.2.  Consolidated
EBITDA to Consolidated Interest Expense. 
On the last day of each fiscal quarter of the Company commencing on or
after November 1, 2002, Consolidated EBITDA for the period of four
consecutive fiscal quarters ending on such date shall equal or exceed 225% of
Consolidated Interest Expense for such period; provided, however,
that for purposes of this Section 6.5.2, the calculation of Consolidated
Interest Expense for any period of four consecutive fiscal quarters of the
Company


 


50

















 


ending on or after April 30, 2005 shall not include
any Contingent Interest actually paid by the Company during such period.


 


6.5.3.  Consolidated
Domestic EBITDA.  On the last day of
any fiscal quarter of the Company ending during any period specified in the
table below, Consolidated Domestic EBITDA for the period of four consecutive
fiscal quarters ending on such date shall equal or exceed the amount specified
opposite such period in such table.


 


	
  Period
  Ending

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2002
  through

  January 31, 2003

  	
   

  	
  $

  	
  14,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 1, 2003
  through

  April 30, 2003

  	
   

  	
  $

  	
  11,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 1, 2003
  through

  July 31, 2003

  	
   

  	
  $

  	
  12,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2003
  through

  October 31, 2003

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2003
  through

  January 31, 2004

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 1, 2004
  through

  April 30, 2004

  	
   

  	
  $

  	
  12,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 1, 2004
  through

  January 1, 2005

  	
   

  	
  $

  	
  14,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 1, 2005
  through

  April 30, 2005

  	
   

  	
  $

  	
  14,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 1, 2005
  through

  July 31, 2005

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2005
  through

  Maturity Date

  	
   

  	
  $

  	
  18,500,000

  	
   

  



 


6.5.4.  Combined
Foreign EBITDA.  On the last day of
any fiscal quarter of the Company ending during any period specified in the
table below, Combined Foreign EBITDA for the period of four consecutive fiscal
quarters ending on such date shall equal or exceed the amount specified
opposite such period in such table.


 


51

















 


	
  Period
  Ending

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2002
  through

  July 31, 2003

  	
   

  	
  $

  	
  15,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2003
  through

  October 31, 2003

  	
   

  	
  $

  	
  16,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2003
  through

  October 31, 2004

  	
   

  	
  $

  	
  16,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2004
  through

  January 31, 2005

  	
   

  	
  $

  	
  18,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 1, 2005
  through

  April 30, 2005

  	
   

  	
  $

  	
  19,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 1, 2005 through

  July 31, 2005

  	
   

  	
  $

  	
  21,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2005
  through

  Maturity Date

  	
   

  	
  $

  	
  22,500,000

  	
   

  



 


6.5.5.  Consolidated
Domestic Net Working Capital.  On
the last day of any fiscal quarter of the Company ending during any period
specified in the table below, Consolidated Domestic Net Working Capital shall
equal or exceed the amount specified opposite such period in such table.


 


	
  Period Ending

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2002
  through

  January 31, 2003

  	
   

  	
  $

  	
  45,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 1, 2003
  through

  April 30, 2003

  	
   

  	
  $

  	
  52,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 1, 2003
  through

  July 31, 2003

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2003
  through

  October 31, 2003

  	
   

  	
  $

  	
  45,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2003
  through

  January 31, 2004

  	
   

  	
  $

  	
  41,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 1, 2004
  through

  April 30, 2004

  	
   

  	
  $

  	
  38,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 1, 2004
  through

  July 31, 2004

  	
   

  	
  $

  	
  45,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2004
  through

  October 31, 2004

  	
   

  	
  $

  	
  51,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1, 2004
  through

  January 31, 2005

  	
   

  	
  $

  	
  47,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  February 1, 2005
  through

  April 30, 2005

  	
   

  	
  $

  	
  41,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 1, 2005
  through

  July 31, 2005

  	
   

  	
  $

  	
  48,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2005
  through

  Maturity Date

  	
   

  	
  $

  	
  56,000,000

  	
   

  



 


52

















 


6.5.6.  Domestic
Capital Expenditures.  The aggregate
amount of Capital Expenditures made by the Company and its Domestic
Subsidiaries in the fiscal year of the Company ending on October 31, 2003 shall
not exceed $6,500,000.  The aggregate
amount of Capital Expenditures made by the Company and its Domestic Subsidiaries
in any fiscal year of the Company commencing on or after November 1, 2003
shall not exceed the lesser of:


 


(a)  the sum of
(i) Capital Expenditure Formula Amount plus (ii) the amount by which
Capital Expenditures made by the Company and its Domestic Subsidiaries in the
immediately preceding fiscal year were less than the amount permitted by this
Section 6.5.6; and


 


(b)  the sum of
(i) $15,000,000 plus (ii) the amount by which Capital
Expenditures made by the Company and its Domestic Subsidiaries in the
immediately preceding fiscal year were less than the amount permitted by this
Section 6.5.6.


 


6.5.7.  Foreign
Capital Expenditures.  The aggregate
amount of Capital Expenditures made by the Foreign Subsidiaries in any fiscal
year of the Company ending on any date specified in the table below shall not
exceed the sum of (a) the amount specified opposite such fiscal year in such
table plus (b) in each fiscal year of the Company commencing on or after
November 1, 2003, the amount by which Capital Expenditures made by the Foreign
Subsidiaries in the immediately preceding fiscal year were less than the amount
specified opposite such preceding fiscal year in such table.


 


53

















 


	
  Fiscal Year Ending

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 31, 2003

  	
   

  	
  $

  	
  12,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 31, 2004

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 31, 2005

  	
   

  	
  $

  	
  26,000,000

  	
   

  



 


6.6.  Indebtedness.  Neither the Company nor any of its
Subsidiaries shall create, incur or assume, or otherwise become or remain
liable with respect to, any Indebtedness, including Guarantees of Indebtedness
or others and reimbursement obligations, whether contingent or matured, under
letters of credit or other financial guarantees by third parties (or become
contractually committed to do so), except the following:


 


6.6.1. 
Indebtedness in respect of the Credit Obligations and the Warrant
Obligations.


 


6.6.2.  To the
extent that Capitalized Lease Obligations, Synthetic Lease Obligations and
purchase money security interests are permitted by Section 6.7.2,
Indebtedness in respect of such Capitalized Lease Obligations, Synthetic Lease
Obligations or secured by such purchase money security interests; provided,
however, that (a) the aggregate principal amount of all
Indebtedness permitted by this Section 6.6.2 and incurred by the Company and
the Domestic Subsidiaries shall not exceed $2,500,000 at any one time
outstanding and (b) the aggregate principal amount of all Indebtedness
permitted by this Section 6.6.2 and incurred by the Foreign Subsidiaries shall
not exceed $7,500,000 at any one time outstanding.


 


6.6.3.  Current
liabilities, other than Financing Debt, incurred in the ordinary course of
business or in accordance with Financial Hedge Agreements and other financial
and commodity derivative contracts permitted by the other provisions of this
Agreement.


 


6.6.4.  To the
extent that payment thereof shall not at the time be required by Section 6.1,
Indebtedness in respect of taxes, assessments, governmental charges and claims
for labor, materials and supplies.


 


6.6.5. 
Indebtedness secured by Liens of carriers, warehouses, mechanics,
landlords and other Persons permitted by Sections 6.7.5 and 6.7.6.


 


6.6.6. 
Indebtedness in respect of judgments or awards (a) which have been in
force for less than the applicable appeal period or (b) in respect of which the
Company or any of its Subsidiaries shall at the time in good faith be
prosecuting an appeal or proceedings for review and, in the case of each of
clauses (a) and (b), the Company or such Subsidiary shall have taken
appropriate reserves therefor in accordance with GAAP and execution of such
judgment or award shall not be levied.


 


54

















 


6.6.7. 
Guarantees by the Company or any of its Subsidiaries of Indebtedness and
other obligations incurred by the Company or any of its Subsidiaries and
permitted by the other provisions of this Section 6.6.


 


6.6.8. 
Indebtedness in respect of deferred taxes arising in the ordinary course
of business.


 


6.6.9. 
Indebtedness in respect of inter-company loans and advances among
the Company and its Subsidiaries which are not prohibited by Section 6.8.


 


6.6.10. 
Unfunded pension liabilities and obligations with respect to Plans so
long as the Company and all other ERISA Group Persons are in compliance with
Section 6.15.


 


6.6.11. 
Indebtedness outstanding on the date hereof and described in Exhibit 7.3
and all refinancings and extensions thereof not in excess of the amount thereof
outstanding immediately prior to such refinancing or extension.


 


6.6.12. 
Indebtedness of Foreign Subsidiaries in an aggregate principal amount
not exceeding $5,000,000 at any one time outstanding in an equivalent amount of
United States Funds.


 


6.6.13. 
Indebtedness of the Company and its Domestic Subsidiaries under the
Congress/CIT Loan and Security Agreement and all refinancings and extensions
thereof; provided, however, that the aggregate principal amount
of Indebtedness permitted by this Section 6.6.13 at any one time
outstanding shall not exceed $75,000,000.


 


6.6.14. 
Indebtedness of Doe Run Peru and its Subsidiaries under the BCP Credit
Agreement and all refinancings and extensions thereof not in excess of the
amount thereof outstanding immediately prior to such refinancing or extension; provided,
however, that the aggregate principal amount of Indebtedness permitted
by this Section 6.6.14 at any one time outstanding shall not exceed
$60,000,000.


 


6.6.15. 
Indebtedness of the Company and its Subsidiaries in respect of the
Existing Bonds outstanding on the date hereof immediately after giving effect
to the consummation of the Exchange Offer.


 


6.6.16. 
Indebtedness of the Company and its Subsidiaries in respect of the New
Bonds and PIK Interest paid by the Company with respect to the New Bonds.


 


6.6.17. 
Indebtedness of the Company in respect of the Preferred Stock and PIK
Interest paid by the Company with respect to the Preferred Stock; provided,
however, that the aggregate face amount of such Preferred Stock (other
than Preferred Stock constituting PIK Interest) shall not exceed $20,000,000.


 


6.6.18. 
Indebtedness of the Company in respect of which Renco has provided a
Guarantee under the Renco Credit Support Agreement; provided, however,
that the aggregate principal amount of Indebtedness permitted by this
Section 6.6.18 at any one time outstanding shall not exceed $15,000,000.


 


55

















 


6.6.19. 
Indebtedness of the Company incurred to finance unearned premiums in
respect of workers’ compensation, property, liability and political risk
insurance policies maintained by the Company and its Subsidiaries pursuant to
Section 6.3; provided, however, that:


 


(a)  the
aggregate principal amount of Indebtedness permitted by this
Section 6.6.19 at any one time outstanding shall not exceed $9,000,000;


 


(b)  the aggregate
principal amount of Indebtedness permitted by this Section 6.6.19 and
incurred to finance unearned premiums in respect of (i) workers’
compensation insurance policies shall not exceed $6,000,000 at any one time
outstanding and (ii) property, liability and political risk insurance
policies shall not exceed $3,000,000 at any one time outstanding;


 


(c)  such
Indebtedness shall not be secured by any assets of any Obligor, except that the
insurance policy being financed with such Indebtedness may secure such
Indebtedness to the extent of (i) any unearned insurance premiums paid by
the Company or any of its Subsidiaries in respect of such insurance policy,
(ii) any loss payments that reduce the unearned insurance premiums for such
insurance policy or (iii) any return of insurance premiums for such
insurance policy;


 


(d)  the terms
of such Indebtedness (including interest rates and fees), and the lender
providing such Indebtedness, shall be reasonably satisfactory to the Required
Lenders; and


 


(e)  the Company
shall have furnished to the Lenders and the Agent all agreements, instruments
and other documents evidencing, or relating to, such Indebtedness, and all such
agreements, instruments and other documents shall be in form and substance
reasonably satisfactory to the Required Lenders.


 


6.6.20. 
Indebtedness of the Company, the Domestic Subsidiaries and Doe Run Peru
and its Subsidiaries in respect of performance, surety or other similar bonds
incurred in the ordinary course of business; provided, however,
that (a) the aggregate amount of all such Indebtedness incurred by the
Company and the Domestic Subsidiaries at any one time outstanding shall not
exceed $3,000,000 and (b) the aggregate amount of all such Indebtedness
incurred by Doe Run Peru and its Subsidiaries at any one time outstanding shall
not exceed $7,500,000.


 


6.6.21. 
Indebtedness (other than Financing Debt) in addition to the foregoing; provided,
however, that the aggregate amount of all such Indebtedness at any one
time outstanding shall not exceed $5,000,000.


 


6.7.  Liens.  Neither the Company nor any of its
Subsidiaries shall create, incur or enter into, or suffer to be created or
incurred or to exist, any Lien (or become contractually committed to do so),
except the following:


 


6.7.1.  Liens
on the Credit Security that secure the Credit Obligations.


 


56

















 


6.7.2.  Liens
constituting (a) purchase money security interests (including mortgages,
conditional sales, Capitalized Leases, Synthetic Leases and any other title
retention or deferred purchase devices) in real property, interests in leases
or tangible personal property (other than inventory) existing or created on the
date on which such property is acquired or within 60 days thereafter, and (b) the
renewal, extension or refunding of any security interest referred to in the
foregoing clause (a) in an amount not to exceed the amount thereof remaining
unpaid immediately prior to such renewal, extension or refunding; provided,
however, that (i) each such security interest shall attach solely to the
particular item of property so acquired, and the principal amount of
Indebtedness (including Indebtedness in respect of Capitalized Lease
Obligations and Synthetic Lease Obligations) secured thereby shall not exceed
the cost (including all such Indebtedness secured thereby, whether or not
assumed) of such item of property; and (ii) the aggregate principal amount
of all Indebtedness secured by Liens permitted by this Section 6.7.2 shall not
exceed the amount permitted by Section 6.6.2.


 


6.7.3. 
Deposits or pledges made (a) in connection with, or to secure payment
of, workers’ compensation, unemployment insurance, old age pensions or other
social security, (b) in connection with casualty insurance maintained in accordance
with Section 6.3, (c) to secure the performance of bids, tenders,
contracts (other than contracts relating to Financing Debt) or leases, (d) to
secure statutory obligations or surety or appeal bonds, (e) to secure
indemnity, performance or other similar bonds in the ordinary course of
business or (f) in connection with contested amounts to the extent that payment
thereof shall not at that time be required by Section 6.1.


 


6.7.4.  Liens
in respect of judgments or awards, to the extent that such judgments or awards
are permitted by Section 6.6.6 but only to the extent that such Liens are
junior to the Liens on the Credit Security granted to secure the Credit
Obligations.


 


6.7.5.  Liens
of carriers, warehouses, mechanics and similar Liens, in each case (a) to
the extent that payment of the obligation giving rise to such Lien is not then
due or (b) if such Lien is being contested in good faith by the Company or any
of its Subsidiaries in appropriate proceedings (so long as the Company or such
Subsidiary shall, in accordance with GAAP, have set aside on its books adequate
reserves with respect thereto).


 


6.7.6. 
Encumbrances in the nature of (a) zoning restrictions, (b) easements,
(c) restrictions of record on the use of real property, (d) landlords’ and
lessors’ Liens on rented premises and (e) restrictions on transfers or
assignment of leases, which in each case do not materially detract from the
value of the encumbered property or impair the use thereof in the business of
the Company or any of its Subsidiaries.


 


6.7.7.  Liens
to secure taxes, assessments and other governmental charges, to the extent that
payment thereof shall not at the time be required by Section 6.1.


 


6.7.8. 
Restrictions under federal and state securities laws on the transfer of
securities.


 


57

















 


6.7.9.  The
sale of doubtful accounts receivable for collection in the ordinary course of
business.


 


6.7.10.  Liens
as in effect on the date hereof described in Exhibit 7.3 (and renewals and replacements
thereof) and securing Indebtedness permitted by Section 6.6.11.


 


6.7.11.  Liens
on the Collateral (as defined in the Congress/CIT Loan and Security Agreement)
that secure Indebtedness permitted by Sections 6.6.13 and 6.6.18.


 


6.7.12.  Liens
on assets of Doe Run Peru and its Subsidiaries that secure Indebtedness
permitted by Section 6.6.14.


 


6.7.13.  Liens
on the Collateral (as defined in the Existing Senior Secured Note Indenture)
that secure Indebtedness permitted by Section 6.6.15.


 


6.7.14.  Liens
on the Credit Security that secure Indebtedness permitted by
Section 6.6.16, subject to the terms of the Bondholder Intercreditor
Agreement.


 


6.7.15.  The
paramount interest of (a) the United States of America with respect to
mining claims in the United States of America and (b) the applicable
foreign government with respect to mining, exploration and beneficiation
concessions in any foreign jurisdiction.


 


6.7.16. 
Permitted Encumbrances (as defined in any mortgage or deed of trust
granted by the Company or any of its Subsidiaries to the Agent for the benefit
of the Lenders).


 


6.7.17.  Liens
on assets of the Company and its Subsidiaries described in
Section 6.6.19(b) that secure Indebtedness permitted by
Section 6.6.19.


 


6.8.  Investments
and Acquisitions.  Neither the
Company nor any of its Subsidiaries shall have outstanding, acquire or hold any
Investment, including any Investment consisting of the acquisition of any
business (or become contractually committed to do so), except the following:


 


6.8.1.  Investments
of the Company and its Subsidiaries in Domestic Subsidiaries that are
Wholly-Owned Subsidiaries of the Company; provided, however, that
except as otherwise required (a) by Section 6.19 or (b) in the
ordinary course of business of the Company and its Subsidiaries, no such
Investment shall involve the transfer by the Company or any of its Subsidiaries
of any material assets other than cash.


 


6.8.2. 
Inter-company loans and advances from any Wholly-Owned Subsidiary to the
Company but in each case only to the extent reasonably necessary for
Consolidated tax planning and working capital management; provided, however,
that loans and advances from a Foreign Subsidiary to the Company or a Domestic
Subsidiary must be subordinated to the Credit Obligations pursuant to an
inter-company subordination agreement in form and substance satisfactory to the
Required Lenders.


 


58

















 


6.8.3. 
Investments in Cash Equivalents and Financial Hedge Agreements not
prohibited by the other provisions of this Agreement.


 


6.8.4. 
Guarantees permitted by Section 6.6.


 


6.8.5.  So long
as immediately before and after giving effect thereto no Default exists,
Investments of the Company and its Wholly-Owned Subsidiaries in Foreign
Subsidiaries that are Wholly-Owned Subsidiaries as of the date hereof (other
than Doe Run Exploration); provided, however, that (a) such
Investments shall not involve the transfer of material assets from the Company
and the Domestic Subsidiaries to the Foreign Subsidiaries, other than cash and
surplus equipment, and (b) Investments of the Company and the Domestic
Subsidiaries in Foreign Subsidiaries made pursuant to this Section 6.8.5 shall
not exceed $1,000,000 at any one time outstanding.


 


6.8.6. 
Investments of the Company in its Domestic Subsidiaries that are not
Wholly-Owned Subsidiaries and in its Foreign Subsidiaries and Investments of
any Subsidiary of the Company in any other Domestic Subsidiary of the Company
that is not a Wholly-Owned Subsidiary and in any other Foreign Subsidiary of
the Company, in each case outstanding on the date hereof and described in
Exhibit 7.3.


 


6.8.7. 
Inter-company loans from the Company to Doe Run Peru that are
outstanding on the date hereof and described in Exhibit 7.3.


 


6.8.8.  Management fees owing from Doe Run Peru to the Company that
(a) are accrued and unpaid on the date hereof and described in Exhibit 7.3
or (b) accrue after the date hereof as a result of limitations on Distributions
under the BCP Credit Agreement.


 


6.8.9.  So long
as immediately before and after giving effect thereto (a) no Default
exists, (b) no Supplemental Loans (as defined in the Congress/CIT Loan and
Security Agreement) are outstanding under the Congress/CIT Loan and Security
Agreement and (c) the Excess Availability (as defined in the Congress Loan
and Security Agreement) under the Congress/CIT Loan and Security Agreement
exceeds $5,000,000, the Company may make Investments in Compass Resources NL,
an Australian corporation; provided, however, that the aggregate
amount of such Investments shall not exceed $500,000 at any one time
outstanding.


 


6.9.  Distributions.  Neither the Company nor any of its
Subsidiaries shall make any Distribution (or become contractually committed to
do so), except the following:


 


6.9.1.  So long
as immediately before and after giving effect thereto no Default exists, any
Subsidiary of the Company may make Distributions to the Company or any
Wholly-Owned Subsidiary of the Company.


 


6.9.2.  So long
as immediately before and after giving effect thereto no Default exists, the
Company and its Subsidiaries may pay a monthly management fee to Renco in
accordance with the Management Agreement; provided, however, that
the aggregate amount of management fees paid by the Company and its Subsidiaries
pursuant to this Section 6.9.2 during any calendar month shall not exceed
$100,000.


 


59

















 


6.9.3.  If
(a) Consolidated Domestic EBITDA in any fiscal year of the Company equals
or exceeds $30,000,000 and (b) the aggregate amount of cash Distributions
made by Doe Run Peru to the Company during such fiscal year exceeds
$12,000,000, then, so long as immediately before and after giving effect
thereto no Default exists, the Company and its Subsidiaries may, within 90 days
after the date annual financial statements for such fiscal year have been
furnished (or are required to have been furnished) by the Company to the
Lenders in accordance with Section 6.4.1, pay an annual management fee to Renco
in accordance with the Management Agreement; provided, however,
that the aggregate amount of management fees paid by the Company and its
Subsidiaries pursuant to this Section 6.9.3 during any fiscal year of the
Company shall not exceed the lesser of (i) $1,200,000 and (ii) the
excess, if any, of (A) the aggregate amount of cash Distributions made by
Doe Run Peru to the Company during such fiscal year over
(B) $12,000,000.


 


6.9.4.  So long
as (a) immediately before and after giving effect thereto no Default
exists and (b) on the most recent interest payment date for the New Bonds
the Company paid in cash all accrued and unpaid interest on the New Bonds, the
Company may make payments under the Net Worth Appreciation Agreements and
profit sharing plans; provided, however, that the sum of
(i) the aggregate amount of payments under the Net Worth Appreciation
Agreements (other than Net Worth Appreciation Agreements for former employees
of the Company who retired prior to the date hereof) during any fiscal year of
the Company plus (ii) the aggregate amount of payments made under
profit sharing plans by the Company and its Subsidiaries for the benefit of
members of management having any contractual arrangement with the Company or
any of its Subsidiaries in respect of employment or compensation during such
fiscal year, shall not exceed $300,000.


 


6.9.5.  So long
as immediately before and after giving effect thereto no Default exists, the
Company and its Subsidiaries may make Investments permitted by Section 6.8 that
also constitute Distributions.


 


6.9.6.  So long
as immediately before and after giving effect thereto no Default exists, the
Company may, during any fiscal year of the Company, make Distributions to Renco
and DRAC with respect to the most recent Tax Distribution Date during such
fiscal year; provided, however, that:


 


(a)  the
aggregate amount of Distributions made by the Company pursuant to this
Section 6.9.6 with respect to any Tax Distribution Date during such fiscal
year shall not exceed the total of (i) the Tax Distribution Amount with
respect to such Tax Distribution Date minus (ii) the Tax Retention
Amount with respect to such Tax Distribution Date;


 


(b)  at least
five Business Days prior to the date of any Distribution by the Company
pursuant to this Section 6.9.6, the Company shall have provided the
Lenders and the Agent with a written notice setting forth (i) the amount
of such Distribution, (ii) the date on which such Distribution is to be
made and (iii) computations, in reasonable detail, of each of the Tax Distribution
Amount and the Tax Retention Amount with respect to the most recent Tax
Distribution Date during such fiscal year;


 


60

















 


(c)  if, prior
to the date of any Distribution by the Company pursuant to this
Section 6.9.6, the Company shall have received from the Required Lenders
or the Agent a written notice setting forth a good-faith objection to such
Distribution, which objection is based on the provisions of this Agreement or
any other Credit Document, then such objection shall have been resolved to the
reasonable satisfaction of the Required Lenders; and


 


(d)  during any
Deferral Period (as defined in the Warrant Agreement), the Company shall not
make any Distribution pursuant to this Section 6.9.6 unless,
contemporaneously with the making of such Distribution, the Company shall pay
against the Aggregate Put Price (as defined in the Warrant Agreement) an amount
equal to the lesser of (i) the amount of such Distribution and (ii) the
outstanding Aggregate Put Price.


 


6.9.7.  So long
as immediately before and after giving effect thereto no Default exists, the
Company may, during any fiscal year of the Company, make Distributions to Renco
and DRAC; provided, however, that:


 


(a)  the
aggregate amount of Distributions made by the Company pursuant to this
Section 6.9.7 during such fiscal year shall not exceed an amount equal to
the excess, if any, of (i) the Actual Pro Forma Tax Liability of the
Company for the fiscal year of the Company most recently ended, over (ii) the
total of (A) the aggregate amount of Distributions made by the Company pursuant
to Section 6.9.6 during the fiscal year of the Company most recently ended
minus (B) the Tax Retention Amount of the Company with respect to
the most recent Tax Payment Date occurring during the fiscal year of the
Company most recently ended;


 


(b)  at least
five Business Days prior to the date of any Distribution by the Company
pursuant to this Section 6.9.7, the Company shall have provided the
Lenders and the Agent with a written notice setting forth (i) the amount
of such Distribution, (ii) the date on which such Distribution is to be
made and (iii) computations, in reasonable detail, of (A) the Actual Pro
Forma Tax Liability for the fiscal year of the Company most recently ended and
(B) each of the Tax Distribution Amount and the Tax Retention Amount with
respect to the most recent Tax Distribution Date occurring during the fiscal
year of the Company most recently ended;


 


(c)  if, prior
to the date of any Distribution by the Company pursuant to this
Section 6.9.7, the Company shall have received from the Required Lenders
or the Agent a written notice setting forth a good-faith objection to such
Distribution, which objection is based on the provisions of this Agreement or
any other Credit Document, then such objection shall have been resolved to the
reasonable satisfaction of the Required Lenders; and


 


(d)  during any
Deferral Period (as defined in the Warrant Agreement), the Company shall not
make any Distribution pursuant to this Section 6.9.7 unless,
contemporaneously with the making of such Distribution, the Company shall pay
against the Aggregate Put Price (as defined in the Warrant Agreement) an amount
equal to the lesser of (i) the amount of such Distribution and (ii) the
outstanding Aggregate Put Price.


 


61

















 


6.9.8.  So long
as immediately before and after giving effect thereto no Default exists, the
Company may make payments under the Renco Credit Support Agreement.


 


6.9.9.  So long
as immediately before and after giving effect thereto no Default exists, the
Company may make payments in respect of the Warrant Obligations.


 


6.9.10.  So
long as immediately before and after giving effect thereto no Default exists,
the Company may make payments to reimburse Renco for insurance premiums paid by
Renco to purchase insurance policies for the Company and its Subsidiaries; provided,
however, that any such insurance premiums shall be no less favorable to
the Company and its Subsidiaries than the insurance premiums that the Company
and its Subsidiaries would pay if the Company and its Subsidiaries has
purchased such insurance policies directly from a non-Affiliate.


 


6.10.  Asset
Dispositions and Mergers. 
Neither the Company nor any of its Subsidiaries shall merge or enter
into a consolidation or sell, lease, exchange, sell and lease back, sublease or
otherwise dispose of any of its assets (or become contractually committed to do
so), except the following:


 


6.10.1.  The
Company and any of its Subsidiaries may sell or otherwise dispose of:  (a) inventory and Cash Equivalents in the
ordinary course of business; (b) assets that (i) will be replaced in the
ordinary course of business within 12 months by other assets of equal or
greater value or (ii) are no longer used or useful in the business of the
Company or such Subsidiary; provided, however that the aggregate
fair market value (book value, if greater) of all assets sold under this clause
(b) in any fiscal year shall not exceed $1,000,000; (c) doubtful accounts
receivable for collection purposes in the ordinary course of business; and
(d) mineral reserves through depletion from normal mining operations in
the ordinary course of business.


 


6.10.2. 
Licensing or leasing of assets for fair value in the ordinary course of
business (so long as such assets are still available to be used by the Company
and its Subsidiaries to the extent necessary to their businesses).


 


6.10.3.  Any
Wholly-Owned Subsidiary of the Company may merge, consolidate or be liquidated
into the Company or any other Wholly-Owned Subsidiary of the Company, so long
as after giving effect to any such merger to which the Company is a party the
Company shall be the surviving or resulting Person.


 


6.10.4.  So
long as immediately before and after giving effect thereto no Default exists
and the net proceeds thereof are applied to repay the Loan to the extent
required by Section 4.2.2, the Company and its Subsidiaries may sell during any
fiscal year for fair value (consisting of at least 80% cash) assets
contributing not more than 5% of Consolidated Revenues for the Company’s most
recently completed fiscal year; provided, however, that the sum
of the foregoing percentages of Consolidated Revenues for all assets sold
pursuant to this Section 6.10.4 since the date hereof shall not exceed 15%.


 


62

















 


6.11.  Issuance of
Equity by Subsidiaries; Subsidiary Distributions.


 


6.11.1.  Issuance
of Equity by Subsidiaries.  No
Subsidiary of the Company shall issue or sell any shares of its capital stock
or other evidence of equity or beneficial ownership to any Person; provided,
however, that any Subsidiary of the Company may issue or sell equity
interests to (a) the Company or any Wholly-Owned Subsidiary of the Company, so
long as such equity interests shall have been pledged to the Agent as part of
the Credit Security to the extent required by the Guarantee and Security
Agreement; (b) directors of Subsidiaries of the Company as qualifying
shares to the extent required by Legal Requirements; and (c) in the case
Foreign Subsidiaries, to foreign nationals to the extent that equity interests
are required by Legal Requirements to be held by foreign nationals.


 


6.11.2.  No
Restrictions on Subsidiary Distributions. 
Except for this Agreement, the other Credit Documents, the Congress/CIT
Loan and Security Agreement, the BCP Credit Agreement, the New Indenture, the
Inter-Company Note and the Sale/Leaseback Agreement, neither the Company nor
any of its Subsidiaries shall enter into or be bound by any agreement
(including covenants requiring the maintenance of specified amounts of net
worth or working capital) restricting the right of any Subsidiary to make
Distributions or extensions of credit to the Company (directly or indirectly
through another Subsidiary).


 


6.12.  Voluntary Prepayments of Other
Indebtedness.  Neither the
Company nor any of its Subsidiaries shall make any voluntary prepayment of
principal of, or interest on, any Financing Debt or make any voluntary
redemptions or repurchases of Financing Debt, in each case except:


 


(a)  for
voluntary prepayments of principal of, or interest on, (i) the Credit
Obligations, (ii) revolving loans under the Congress/CIT Loan and Security
Agreement, (iii) Supplemental Loans (as defined in the Congress/CIT Loan
and Security Agreement) under the Congress/CIT Loan and Security Agreement,
(iv) revolving loans under the BCP Credit Agreement and (v) the
Inter-Company Note; and


 


(b)  in order
to facilitate a refinancing of Indebtedness permitted by Section 6.6.


 


6.13.  Derivative Contracts.  Neither the Company nor any of its
Subsidiaries shall enter into any Financial Hedge Agreement or other financial
or commodity derivative contracts (including puts and calls) except to provide
hedge protection for an underlying economic transaction in the ordinary course
of business.


 


6.14.  Negative Pledge
Clauses.  Neither the Company nor
any of its Subsidiaries shall enter into any agreement, instrument, deed or
lease which prohibits or limits the ability of the Company or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
their respective properties, assets or revenues, whether now owned or hereafter
acquired, or which requires the grant of any collateral for such obligation if
collateral is granted for another obligation, except the following:


 


6.14.1.  This
Agreement and the other Credit Documents.


 


63

















 


6.14.2.  The
Congress/CIT Loan and Security Agreement and refinancings thereof permitted by
Section 6.6.13.


 


6.14.3.  The
BCP Credit Agreement and refinancings thereof permitted by Section 6.6.14.


 


6.14.4.  The
New Indenture.


 


6.14.5. 
Covenants in documents creating Liens permitted by Section 6.7 prohibiting
further Liens on the assets encumbered thereby.


 


6.15.  ERISA, etc.  Each of the Company and its Subsidiaries
shall comply in all material respects with the provisions of all Legal
Requirements, including ERISA and the Code, applicable to any Employee Benefit
Plan of the Company or any of its Subsidiaries.  Each of the Company, its Subsidiaries and each other ERISA Group
Person shall meet all minimum funding requirements applicable to it with
respect to any Plan pursuant to section 302 of ERISA or section 412 of the
Code.  At no time shall the Accumulated
Benefit Obligations under any Plan of the Company or any of its Subsidiaries
that is not a Multiemployer Plan exceed the fair market value of the assets of
such Plan allocable to such benefits by more than $42,000,000.  Neither the Company, any of its Subsidiaries
nor any other ERISA Group Person shall withdraw, in whole or in part, from any
Multiemployer Plan so as to give rise to withdrawal liability exceeding $2,500,000
in the aggregate.  Except as set forth
on Exhibit 6.15, at no time shall the actuarial present value of unfunded
liabilities of the Company and its Subsidiaries for post-employment health care
benefits, whether or not provided under a Plan, calculated in a manner
consistent with Statement No. 106 of the United States Financial
Accounting Standards Board, exceed $18,000,000.


 


6.16.  Transactions with
Affiliates.  Neither the Company nor
any of its Subsidiaries shall effect any transaction, or agree to any economic
arrangements (including tax arrangements and insurance arrangements), with any
of their respective Affiliates (except for the Company and its Subsidiaries) on
a basis less favorable to the Company and its Subsidiaries than would be the
case if such transaction had been effected with a non-Affiliate; provided,
however, that the Company and its Subsidiaries may make Distributions
(including the payment of management fees and the reimbursement of insurance
premiums and fees and expenses) to Renco and DRAC to the extent permitted by Section 6.9.


 


6.17.  Environmental Laws.


 


6.17.1.  Compliance
with Law and Permits.  Except as set
forth on Exhibit 7.15.1, each of the Company and its Subsidiaries shall
use and operate all of its facilities and properties in material compliance
with all Environmental Laws, keep in effect all necessary permits, approvals,
certificates, licenses and other authorizations relating to environmental
matters and remain in material compliance therewith, and handle all Hazardous
Materials in material compliance with all applicable Environmental Laws.


 


6.17.2.  Notice
of Claims, etc.  Each of the Company
and its Subsidiaries shall immediately notify the Lenders and the Agent, and
provide copies upon receipt, of all material written claims, complaints,
notices or inquiries from governmental authorities


 


64

















 


relating to the condition of its facilities and
properties or compliance with Environmental Laws, and shall promptly cure and
have dismissed with prejudice to the reasonable satisfaction of the Required
Lenders any such action or proceeding that (a) relates to compliance with
Environmental Laws and (b) has resulted, or creates a material risk of
resulting, in a Material Adverse Change.


 


6.17.3.  Investigations.  Each of the Company and its Subsidiaries
shall permit the Agent, so long as the Agent is acting reasonably and in good
faith, for reasonable cause and upon reasonable notice, to conduct
investigations to determine whether Hazardous Materials exist on any part of
any real property owned or leased by the Company or any of its Subsidiaries in
amounts or under circumstances that could give rise to a material liability and
to determine the source, quantity and type of any such Hazardous Materials.  The Company and its Subsidiaries shall
cooperate with the Agent and its officers, employees, agents and contractors in
conducting such investigations and shall pay the costs and expenses of each
such investigation; provided, however, that the Agent shall use
reasonable efforts (a) to minimize the disruption to the operations of the
business of the Company and its Subsidiaries on any real property where any
such investigation is being conducted and (b) to minimize the costs
associated with each such investigation.


 


6.18.  Management Fees.  Except (a) to the extent permitted by
Sections 6.9.2 and 6.9.3 and (b) for consulting fees payable to any
Person that is not an Affiliate of the Company in connection with an
arms-length transaction effected in the ordinary course of business, neither
the Company nor any of its Subsidiaries shall pay any management, advisory or
similar fees to any Person.


 


6.19.  Transfer of
Assets.  The Company shall use its
best efforts to transfer all the Buick Assets to Doe Run Buick.  Within 90 days after the Closing Date, the
Company shall file all applications to obtain all required consents, approvals
and other authorizations of all applicable governmental authorities in order to
permit the Company to transfer all the Buick Assets to Doe Run Buick.


 


6.20.  Future
Subsidiaries; Further Assurances.  If, at any time after the date hereof, any Person becomes a
Subsidiary of the Company, the Company will, within five Business Days after
any such Person becomes a Subsidiary of the Company, cause such Person to
execute and deliver to the Agent, for the benefit of the Lenders and the other
holders of any Credit Obligation, (a) a joinder to the Guarantee and
Security Agreement, which joinder shall be in form and substance satisfactory
to the Required Lenders, and (b) such mortgages, deeds of trust, leasehold
mortgages and leasehold deeds of trust as are necessary to grant the Agent a
first priority security interest in all material real property owned or leased
by such Person, together with all supporting documentation described in Section
5.3; provided, however, that if such Person becomes a Subsidiary
of Doe Run Peru, then such Person will not be required (i) to join the
Guarantee and Security Agreement as a Pledgor (as defined in the Guarantee and
Security Agreement) or (ii) to execute the documents described in clause
(b) above.


 


6.21.  Observer Rights.  The Company agrees that one representative
designated by the Required Lenders:  (a)
shall be entitled to receive all notices, and to attend all meetings, of the
Board of Directors in a non-voting observer capacity; (b) shall be
entitled to receive copies of all


 


65

















 


minutes of such meetings, together with copies of any items distributed
to the members of the Board of Directors at such meetings, in each case whether
or not such designated representative attends any such meeting; and
(c) shall be entitled to receive copies of all actions by written consent
of the Board of Directors.


 


7.  Representations and
Warranties of Company.  In order to
induce the Lenders to extend credit to the Company hereunder, the Company
represents and warrants as follows:


 


7.1.  Organization and
Business.


 


7.1.1.  DRAC.  DRAC is a duly organized and validly
existing corporation, in good standing under the laws of Missouri, with all
power and authority, corporate or otherwise, necessary (a) to enter into and
perform each Transaction Document to which it is party, (b) to guarantee the
Credit Obligations, (c) to grant to the Agent for the benefit of the
Lenders the security interest in the Credit Security owned by it to secure the
Credit Obligations and (d) to own its properties and carry on the business
now conducted or proposed to be conducted by it.  Certified copies of the Charter and By-laws of DRAC have
been previously delivered to the Lenders and the Agent and are correct and
complete.  Exhibit 7.1, as from
time to time hereafter supplemented in accordance with Sections 6.4.1 and
6.4.2, sets forth, as of the later of the date hereof or the end of the most
recent fiscal quarter for which financial statements are required to be
furnished in accordance with Sections 6.4.1 and 6.4.2, (i) the jurisdiction of
organization, the organizational identification number issued by such
jurisdiction and the federal taxpayer identification number of DRAC, (ii) the
address of DRAC’s principal executive office and chief place of business, (iii)
each name, including any trade name, under which DRAC conducts its business.


 


7.1.2.  Company.  The Company is a duly organized and validly
existing corporation, in good standing under the laws of New York, with all
power and authority, corporate or otherwise, necessary (a) to enter into and
perform this Agreement and each other Transaction Document to which it is party,
(b) to incur the Credit Obligations, (c) to grant to the Agent for the
benefit of the Lenders the security interest in the Credit Security owned by it
to secure the Credit Obligations and (d) to own its properties and carry
on the business now conducted or proposed to be conducted by it.  Certified copies of the Charter and By-laws
of the Company have been previously delivered to the Lenders and the Agent and
are correct and complete. 
Exhibit 7.1, as from time to time hereafter supplemented in
accordance with Sections 6.4.1 and 6.4.2, sets forth, as of the later of
the date hereof or the end of the most recent fiscal quarter for which
financial statements are required to be furnished in accordance with Sections
6.4.1 and 6.4.2, (i) the jurisdiction of organization, the organizational
identification number issued by such jurisdiction and the federal taxpayer
identification number of the Company, (ii) the address of the Company’s
principal executive office and chief place of business, (iii) each name, including
any trade name, under which the Company conducts its business, (iv) the
jurisdictions in which the Company owns real or tangible personal property and,
in the case of real property, whether such real property is owned or leased by
the Company and (v) the number of authorized and issued equity interests and
ownership of the Company.


 


66

















 


7.1.3.  Subsidiaries.  Each Subsidiary of the Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized, with all power and authority, corporate
or otherwise, necessary (a) to enter into and perform each Transaction Document
to which it is party, (b) to guarantee the Credit Obligations, (c) to grant to
the Agent for the benefit of the Lenders the security interest in the Credit
Security owned by it to secure the Credit Obligations and (d) to own its
properties and carry on the business now conducted or proposed to be conducted
by it.  Certified copies of the Charter
and By-laws of each Subsidiary of the Company have been previously
delivered to the Lenders and the Agent and are correct and complete.  Exhibit 7.1, as from time to time hereafter
supplemented in accordance with Sections 6.4.1 and 6.4.2, sets forth, as
of the later of the date hereof or the end of the most recent fiscal quarter
for which financial statements are required to be furnished in accordance with
Sections 6.4.1 and 6.4.2, (i) the name, jurisdiction of organization, the
organizational identification number issued by such jurisdiction and the
federal taxpayer identification number of each Subsidiary of the Company, (ii)
the address of the chief executive office and principal place of business of
each such Subsidiary, (iii) each name under which each such Subsidiary conducts
its business, (iv) each jurisdiction in which each such Subsidiary owns real or
tangible personal property,  and, in the
case of real property, whether such real property is owned or leased by such
Subsidiary and (v) the number of authorized and issued equity interests and
ownership of each such Subsidiary.


 


7.1.4.  Qualification.  Each of DRAC, the Company and its
Subsidiaries is duly and legally qualified to do business as a foreign
corporation or other entity and is in good standing in each state or
jurisdiction in which such qualification is required and is duly authorized,
qualified and licensed under all laws, regulations, ordinances or orders of
public authorities, or otherwise, to carry on its business in the places and in
the manner in which it is conducted, except for failures to be so qualified,
authorized or licensed which would not in the aggregate result, or create a
material risk of resulting, in any Material Adverse Change.


 


7.1.5.  Capitalization.  Except (a) for the Warrants and (b) as set
forth on Exhibit 7.1.5, no options, warrants, conversion rights,
preemptive rights or other statutory or contractual rights to purchase shares
of capital stock or other equity securities of the Company or any of its Subsidiaries
now exist, nor has the Company or any of its Subsidiaries authorized any such
right, nor is the Company or any of its Subsidiaries obligated in any other
manner to issue shares of its capital stock or other equity securities.


 


7.2.  Financial Statements and Other
Information; Material Agreements.


 


7.2.1.  Financial
Statements and Other Information. 
The Company has previously furnished to the Lenders copies of the
following:


 


(a)  The
audited Consolidated and unaudited Consolidating balance sheets of the Company
and its Subsidiaries as at October 31 in each of 1999, 2000 and 2001 and the
audited Consolidated and unaudited Consolidating statements of income and the
audited Consolidated statements of changes in shareholders’ equity and of cash
flows of the Company and its Subsidiaries for the fiscal years of the Company
then ended.


 


67

















 


(b)  The
unaudited Consolidated balance sheet of the Company and its Subsidiaries as at
July 31, 2002 and the unaudited Consolidated statements of income, of changes
in shareholders’ equity and of cash flows of the Company and its Subsidiaries
for the portion of the fiscal year then ended.


 


(c)  The
Company’s report on 10-K for its fiscal year ended October 31, 2001, as filed with
the Securities and Exchange Commission.


 


(d)  The
Company’s report on 10-Q for its fiscal quarter ended July 31, 2002, as filed
with the Securities and Exchange Commission.


 


(e)  The three-year
financial and operational projections for the Company and its Subsidiaries
dated October 17, 2002 and covering the period from November 1, 2002 through
October 31, 2005.


 


(f) 
Calculations with respect to the Computation Covenants as of
August 31, 2002 on a pro forma basis giving effect to each of the
incurrence of the Credit Obligations and the consummation of the Exchange
Offer.


 


(g)  The
Exchange Offer Documents.


 


The audited Consolidated
financial statements (including the notes thereto) referred to in clause (a)
above were prepared in accordance with GAAP and fairly present in all material
respects the financial position of the Company and its Subsidiaries on a
Consolidated basis at the respective dates thereof and the results of their
operations for the periods covered thereby. 
The unaudited Consolidating financial statements referred to in
clause (a) above and the unaudited Consolidated financial statements
referred to in clause (b) above were prepared in accordance with GAAP and
fairly present in all material respects the financial position of the Company and
its Subsidiaries at the respective dates thereof and the results of their
operations for the periods covered thereby, subject to normal year-end audit
adjustments and the addition of footnotes in the case of interim financial
statements.  Except as set forth on
Exhibit 7.2.1, neither the Company nor any of its Subsidiaries has any known
contingent liability material to the Company and its Subsidiaries on a
Consolidated basis which is not reflected in the balance sheet referred to in
clause (b) above (or the most recent balance sheet delivered pursuant to
Section 6.4.1 or 6.4.2) or in the notes thereto.


 


Each of the Form 10-K
referred to in clause (c) above and the Form 10-Q referred to in clause (d)
above contained all information required to be contained therein and otherwise
complied in all material respects with the Exchange Act.  Neither such Form 10-K nor such Form
10-Q contained any untrue statement of material fact or omitted to state a
material fact necessary in order to make the statements contained therein not
misleading in the light of the circumstances under which they were made.


 


In the Company’s
judgment, the financial and operational projections referred to in clause (e)
above constitute a reasonable basis as of the Closing Date for the assessment
of the future performance of the Company and its Subsidiaries during the
periods


 


68

















 


indicated therein, it being understood that any
projected financial information represents an estimate, based on various
assumptions (including commodity price assumptions), of future results of
operations which may or may not in fact occur.


 


As of the date thereof,
the Exchange Offer Documents do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which they
were made; provided, however, that the descriptions in the
Exchange Offer Documents of other documents and agreements are intended to be
summaries only and do not provide comprehensive descriptions of the terms and
conditions contained in such documents and agreements.


 


7.2.2.  Material
Agreements.  Each of the Material
Agreements is listed on Exhibit 7.2.2. 
The Company has previously furnished to the Lenders correct and complete
copies, including all exhibits, schedules and amendments thereto, of the
Material Agreements, each as in effect on the date hereof.


 


7.3.  Agreements
Relating to Financing Debt, Investments, etc.  Exhibit 7.3, as from time to time hereafter
supplemented in accordance with Sections 6.4.1 and 6.4.2, sets forth:


 


7.3.1.  The
amounts (as of the dates indicated in Exhibit 7.3, as so supplemented) of all
Financing Debt of the Company and its Subsidiaries and all agreements, Liens
and Guarantees which relate to such Financing Debt.


 


7.3.2.  The
amounts (as of the dates indicated in Exhibit 7.3, as so supplemented) of all
Investments of the Company and its Subsidiaries, all agreements which relate to
such Investments and all agreements which directly or indirectly require the
Company or any Subsidiary to make any Investment.


 


7.3.3. 
Material license agreements with respect to the products of the Company
and its Subsidiaries, including the parties thereto and the expiration dates
thereof.


 


7.3.4.  All
copyrights owned by DRAC, the Company and its Subsidiaries that are registered
with the United States Copyright Office (or any office maintaining registration
of copyrights in any foreign jurisdiction) and all applications for such
registration.


 


7.3.5.  All
trademarks and service marks owned by DRAC, the Company and its Subsidiaries
that are registered with the United States Patent and Trademark Office (or any
office maintaining registration of trademarks and service marks in any state of
the United States of America or any foreign jurisdiction) and all applications
for such registration.


 


7.3.6.  All
United States and foreign patents and patent applications owned by DRAC, the
Company and its Subsidiaries.


 


7.3.7.  All
internet domain names owned by DRAC, the Company and its Subsidiaries and the
registry with which each such domain name is registered.


 


69

















 


7.3.8.  All
commercial tort claims held by DRAC, the Company and its Subsidiaries and
related information with respect to the status of the proceedings.


 


7.3.9.  All
bank and deposit accounts owned by DRAC, the Company and its Subsidiaries.


 


The Company has furnished the Lenders correct and complete copies of
any agreements described above in this Section 7.3 requested by the Lenders.


 


7.4.  Changes in
Condition.  Except as set forth in
the Exchange Offer Documents, since October 31, 2001, no Material Adverse
Change has occurred.  Except for the
transactions contemplated by this Agreement and the other Transaction
Documents, between October 31, 2001 and the date hereof, neither the Company
nor any Subsidiary of the Company has entered into any material transaction
outside the ordinary course of business.


 


7.5.  Title to Assets.  The Company and its Subsidiaries have good
and marketable title to (a) all assets necessary for or used in the
operations of their business as now conducted by them and reflected in the most
recent balance sheet referred to in Section 7.2.1 and (b) all assets
necessary for or used in the operations of their business as now conducted by
them and acquired subsequent to the date of such balance sheet, in each case
subject to no Liens except for Liens permitted by Section 6.7.


 


7.6.  Operations in
Conformity with Law, etc.  The
operations of the Company and its Subsidiaries as now conducted or proposed to
be conducted are not in violation of, nor is the Company or any of its
Subsidiaries in default under, any Legal Requirement presently in effect, except
for such violations and defaults as do not and will not, in the aggregate,
result, or create a material risk of resulting, in any Material Adverse
Change.  Except as set forth on
Exhibit 7.6, the Company has received no notice of any such violation or
default and has no knowledge of any basis on which the operations of the
Company or its Subsidiaries, as now conducted and as currently proposed to be
conducted after the date hereof, would give rise to any such violation or
default, except for such violations and defaults as do not and will not, in the
aggregate, result, or create a material risk of resulting, in any Material
Adverse Change.


 


7.7.  Litigation.  Except as set forth on Exhibit 7.7, no
litigation, at law or in equity, or any proceeding before any court, board or
other governmental or administrative agency or any arbitrator is pending or, to
the knowledge of the Company or any other Obligor, threatened which
(a) involves any material risk of any final judgment, order or liability
which, after giving effect to any applicable insurance, has resulted, or
creates a material risk of resulting, in any Material Adverse Change or
(b) seeks to enjoin the consummation, or questions the validity, of any of
the transactions contemplated by this Agreement or any other Transaction
Document.  No judgment, decree or order
of any court, board or other governmental or administrative agency or any
arbitrator has been issued against or binds the Company or any of its Subsidiaries
which has resulted, or creates a material risk of resulting, in any Material
Adverse Change.


 


7.8.  Authorization and
Enforceability.  Each Obligor has
taken all corporate action required to execute, deliver and perform each
Transaction Document to which it is party. 
No consent of stockholders of any Obligor is necessary in order to
authorize the execution, delivery


 


70

















 


or performance of any Transaction Document to which such Obligor is
party.  This Agreement and each other
Transaction Document constitutes the legal, valid and binding obligation of
each Obligor party thereto and is enforceable against such Obligor in
accordance with its terms.


 


7.9.  No Legal Obstacle
to Agreements.  Neither
the execution and delivery of this Agreement or any other Transaction Document,
nor the making of any borrowing hereunder, nor the guaranteeing of the Credit
Obligations, nor the securing of the Credit Obligations with the Credit
Security, nor the consummation of any transaction referred to in or contemplated
by this Agreement or any other Transaction Document, nor the fulfillment of the
terms hereof or thereof or of any other agreement, instrument, deed or lease
contemplated by this Agreement or any other Transaction Document, has
constituted or resulted in or will constitute or result in:


 


(a)  any breach
or termination of the provisions of (i) any agreement, instrument, deed or
lease to which the Company, any of its Subsidiaries or any other Obligor is a
party or by which any such Person is bound, or (ii) the Charter or By-laws
of the Company, any of its Subsidiaries or any other Obligor;


 


(b)  the
violation of any law, statute, judgment, decree or governmental order, rule or
regulation applicable to the Company, any of its Subsidiaries or any other
Obligor;


 


(c)  the
creation under any agreement, instrument, deed or lease of any Lien (other than
Liens on the Credit Security which secure the Credit Obligations and Liens
permitted by Section 6.7) upon any of the assets of the Company, any of its
Subsidiaries or any other Obligor; or


 


(d)  any
redemption, retirement or other repurchase obligation of the Company, any of
its Subsidiaries or any other Obligor under any Charter, By-law, agreement,
instrument, deed or lease.


 


Except (A) for filings necessary to perfect the Agent’s security
interest in the Credit Security and (B) as set forth on Exhibit 7.9
with respect to the transfer by the Company to Doe Run Buick of the Buick
Assets as required by Section 6.19, no approval, authorization or other action
by, or declaration to or filing with, any governmental or administrative
authority or any other Person is required to be obtained or made by the
Company, any of its Subsidiaries or any other Obligor in connection with the
execution, delivery and performance of this Agreement or any other Transaction
Document, the transactions contemplated hereby or thereby, the making of any
borrowing hereunder, the guaranteeing of the Credit Obligations or the securing
of the Credit Obligations with the Credit Security.


 


7.10.  Defaults.  Immediately after giving effect to the
transactions contemplated by the Transaction Documents, none of the Company,
its Subsidiaries and the other Obligors will be in default under any provision
of its Charter or By-laws or of this Agreement or any other Transaction
Document.  Immediately after giving
effect to the transactions contemplated by the Transaction Documents, none of
the Company, its Subsidiaries and the other Obligors will be in default under
any provision of any agreement, instrument, deed or lease to which it is party
or by which it or its property is bound so as to result, or create a material
risk of resulting, in any Material Adverse Change.


 


71

















 


7.11.  Licenses, etc.  Except as set forth on Exhibit 7.11, the
Company and its Subsidiaries have all patents, patent applications, patent
licenses, patent rights, trademarks, trademark rights, trade names, trade name
rights, copyrights, licenses, franchises, permits, authorizations and other rights
as are reasonably necessary for the conduct of the business of the Company and
its Subsidiaries as now conducted by them. 
All of the foregoing are in full force and effect in all material
respects, and each of the Company and its Subsidiaries is in substantial
compliance with the foregoing without any known conflict with the valid rights
of others which has resulted, or creates a material risk of resulting, in any
Material Adverse Change.  No event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any such license, franchise or other right or
which affects the rights of any of the Company and its Subsidiaries thereunder
so as to result, or to create a material risk of resulting, in any Material
Adverse Change.


 


7.12.  Taxes.  Each of the Company and its Subsidiaries has
filed all material tax and information returns which are required to be filed
by it and has paid, or made adequate provision for the payment of, all taxes
which have or may become due pursuant to such returns or to any assessment
received by it, other than taxes and assessments being contested by the Company
and its Subsidiaries in good faith by appropriate proceedings and for which
adequate reserves have been taken in accordance with GAAP.  Neither the Company nor any of its
Subsidiaries knows of any material additional assessments or any basis
therefor.  The Company reasonably
believes that the charges, accruals and reserves on the books of the Company
and its Subsidiaries in respect of taxes or other governmental charges are
adequate.  The Company is a “qualified
subchapter S subsidiary” within the meaning of section 1361(b)(3)(B) of the
Code.  Except as set forth on
Exhibit 7.12, no federal, state, local or foreign tax audits or
administrative or judicial tax proceeding is pending or, to the knowledge of
the Company or any other Obligor, threatened with respect to the Company or any
of its Subsidiaries.


 


7.13.  Certain Business
Representations.


 


7.13.1.  Labor
Relations.  Except as set forth on
Exhibit 7.13.1., no dispute or controversy between the Company or any of its
Subsidiaries and any of their respective employees has resulted, or is
reasonably likely to result, in any Material Adverse Change, and neither the
Company nor any of its Subsidiaries anticipates that its relationships with its
unions or employees will result, or are reasonably likely to result, in any
Material Adverse Change.  The Company
and each of its Subsidiaries is in compliance in all material respects with all
federal and state laws with respect to (a) non-discrimination in
employment with which the failure to comply, in the aggregate, has resulted, or
creates a material risk of resulting, in a Material Adverse Change and (b) the
payment of wages.


 


7.13.2.  Distributors,
Customers and Suppliers.  Exhibit
7.13.2 sets forth a complete and accurate list of :  (a) the ten largest distributors of the products of the Company
and its Subsidiaries during the fiscal year ended  October 31, 2001,
indicating the specific product distributed by each such distributor, the
existing contractual arrangements, if any, with each such distributor and the
volume of products distributed by each such distributor; (b) the ten largest
customers (by dollar volume) of the Company and its Subsidiaries during the
fiscal year ended  October 31, 2001, indicating the
existing contractual arrangements with each such customer by product; and (c)
all suppliers of


 


72

















 


significant materials or services to the Company and
its Subsidiaries, indicating the contractual arrangements for continued supply
from each such supplier.


 


7.13.3.  Antitrust.  To the knowledge of the Company and its
Subsidiaries, each of the Company and its Subsidiaries is in compliance in all
material respects with all federal and state antitrust laws relating to its
business and the geographic concentration of its business.


 


7.13.4.  Consumer
Protection.  Neither the Company nor
any of its Subsidiaries is in violation of any rule, regulation, order or
interpretation of any rule, regulation or order of the Federal Trade Commission
(including truth-in-lending), with which the failure to comply, in the
aggregate, has resulted, or creates a material risk of resulting, in a Material
Adverse Change.


 


7.13.5.  Extraordinary
Obligations.  Except as set forth on
Exhibit 7.13.5, neither the Company nor any of its Subsidiaries is party to or
bound by any agreement, instrument, deed or lease or is subject to any Charter,
By-law or other restriction, commitment or requirement which, in the
opinion of the management of such Person, is so unusually burdensome as in the
foreseeable future to result, or create a material risk of resulting, in a
Material Adverse Change.


 


7.13.6.  Future
Expenditures.  Except as set forth
on Exhibit 7.13.6, neither the Company nor any of its Subsidiaries anticipate
that the future expenditures, if any, by the Company and its Subsidiaries
needed to meet the provisions of any existing federal, state or foreign governmental
statutes, orders, rules or regulations (including all Environmental Laws) will
be so burdensome as to result, or create a material risk of resulting, in any
Material Adverse Change.


 


7.14.  Pension Plans.  Each Employee Benefit Plan (other than a Multiemployer
Plan) of the Company and its Subsidiaries and, to the knowledge of the Company
and its Subsidiaries, each Multiemployer Plan of the Company and its
Subsidiaries is in material compliance with the applicable provisions of all
Legal Requirements, including ERISA and the Code.  Each Plan of the Company and its Subsidiaries is set forth in
Exhibit 7.14 (as from time to time hereafter supplemented in accordance
with Section 6.4.1).  Except as
specifically set forth in Exhibit 7.14, the fair market value of the assets of
each Plan (other than a Multiemployer Plan) of the Company and its Subsidiaries
exceeds the actuarial present value of the liabilities of each such Plan.  Except as set forth in Exhibit 7.14, no
“reportable event” (as defined in section 4043 of ERISA) that could reasonably
be expected to result in termination of any Plan or the appointment by the
appropriate United States District Court of a trustee to administer any Plan,
has occurred; no ERISA Group Person has been notified, orally or in writing, by
the PBGC that any proceedings to terminate any Plan or to cause a trustee to be
appointed to administer any Plan are pending, threatened or have been
instituted; no proceeding is pending, threatened or has been instituted by any
fiduciary of any Plan against any ERISA Group Person to enforce section 515 or
4219(c)(5) of ERISA; and no Lien in favor of any Plan could reasonably be
expected to be imposed.  Each ERISA
Group Person has met all of the funding standards under section 302 of ERISA and
section 412 of the Code which are applicable to all Plans that are not
Multiemployer Plans, and no condition exists which could reasonably be expected
to result in the


 


73

















 


institution of proceedings to terminate any Plan that is not a
Multiemployer Plan under section 4042 of ERISA.  To the knowledge of the Company and its Subsidiaries, no Plan
that is a Multiemployer Plan is currently insolvent or in reorganization or has
been terminated within the meaning of ERISA.


 


7.15.  Environmental
Regulations.


 


7.15.1.  Environmental
Compliance.  Except as set forth on
Exhibit 7.15.1, each of the Company and its Subsidiaries is in compliance in
all material respects with each Environmental Law in effect in any jurisdiction
in which any properties of the Company or any of its Subsidiaries are located
or where any of them conducts its business, and with all applicable published
rules and regulations (and applicable standards and requirements) of the
federal Environmental Protection Agency and of any similar agencies in states
or foreign countries in which the Company or its Subsidiaries conducts its
business other than those which in the aggregate have not resulted, and do not
create a material risk of resulting, in a Material Adverse Change.


 


7.15.2.  Environmental
Litigation.  Except as set forth on
Exhibit 7.15.2, no suit, claim, action or proceeding of which the Company or
any of its Subsidiaries has been given notice or otherwise has knowledge is now
pending before any court, governmental agency or board or other forum, or to
the knowledge of the Company and its Subsidiaries, threatened by any Person
(nor to the knowledge of the Company and its Subsidiaries, does any factual
basis exist therefor) for, and neither the Company nor any of its Subsidiaries
have received written correspondence from any federal, state or local
governmental authority with respect to:


 


(a) 
noncompliance by the Company or any of its Subsidiaries with any
Environmental Law;


 


(b)  personal
injury, wrongful death or other tortious conduct relating to materials,
commodities or products used, generated, sold, transferred or manufactured by
the Company or any of its Subsidiaries (including products made of, containing
or incorporating asbestos, lead or other Hazardous Material; or


 


(c)  the
release into the environment by the Company or any of its Subsidiaries of any
Hazardous Material generated by the Company or any of its Subsidiaries whether
or not occurring at or on a site owned, leased or operated by the Company or
any of its Subsidiaries.


 


7.15.3.  Hazardous
Material.  Exhibit 7.15.3 (as from
time to time hereafter supplemented in accordance with Sections 6.4.1 and
6.4.2) (a) contains a list as of the date hereof of all waste disposal or dump
sites (i) at which Hazardous Material generated by either the Company or any of
its Subsidiaries has been disposed of directly by the Company or any of its
Subsidiaries since January 1, 1996 and all independent contractors to whom the
Company and its Subsidiaries have delivered any such Hazardous Material since
January 1, 1996 and (ii) to the knowledge of the Company and its Subsidiaries,
where any such Hazardous Material finally came to be located since January 1,
1996, and


 


74

















 


(b) indicates all such sites which are or have
been included (including as a potential or suspect site) in any published
federal, state or local “superfund” or other list of hazardous or toxic waste
sites.  Any waste disposal or dump sites
(A) at which Hazardous Material generated by either the Company or any of
its Subsidiaries has been disposed of directly by the Company or any of its
Subsidiaries, and all independent contractors to whom the Company or any of its
Subsidiaries have delivered Hazardous Material or (B) to the knowledge of
the Company and its Subsidiaries, where Hazardous Material finally came to be
located, has not resulted, and does not create a material risk of resulting, in
a Material Adverse Change.


 


7.15.4.  Environmental
Condition of Properties.  None of
the properties owned or leased by the Company or any of its Subsidiaries has
been used as a treatment, storage or disposal site for Hazardous Material,
other than as disclosed in Exhibit 7.15.4 (as from time to time hereafter
supplemented in accordance with Sections 6.4.1 and 6.4.2).  Except for the sites disclosed in Exhibit
7.15.4, no Hazardous Material is present in any real property currently or
formerly owned or operated by the Company or any of its Subsidiaries except
that which has not resulted, and does not create a material risk of resulting,
in a Material Adverse Change.


 


7.16.  Indentures.  Each of the Existing Indentures, the
Existing Supplemental Indentures and the New Indenture is a valid and binding
contract as to the Company and, to the knowledge of the Company, the
Trustee.  After giving effect to the
transactions contemplated by the Transaction Documents, the Company will not be
in default in any material respect of its obligations under any of the Existing
Indentures, the Existing Supplemental Indentures or the New Indenture and, to
the knowledge of the Company, the Trustee will not be in default in any
material respect of any of its obligations thereunder.  After giving effect to the transactions contemplated
by the Transaction Documents, the representations and warranties of the Company
set forth in each of the Existing Indentures, the Existing Supplemental
Indentures and the New Indenture will be true and correct in all material
respects as of the Closing Date.


 


7.17.  Government
Regulation; Margin Stock.


 


7.17.1.  Government
Regulation.  Neither the Company nor
any of its Subsidiaries, nor any Person controlling or under common control
with the Company or any of its Subsidiaries, is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act, the Interstate Commerce Act or any other statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) that regulates the incurring by the Company or any of its
Subsidiaries of Financing Debt as contemplated by this Agreement and the other
Credit Documents.


 


7.17.2.  Margin
Stock.  Neither the Company nor any
of its Subsidiaries owns any Margin Stock.


 


75

















 


7.18.  Solvency.  After giving effect to the transactions
contemplated by the Transaction Documents, the Company and its Subsidiaries,
taken as a whole:


 


(a)  are solvent;


 


(b)  have
assets having a fair saleable value in excess of the amount required to pay
their probable liability on their existing debts as such debts become absolute
and mature;


 


(c)  have
access to adequate capital for the conduct of their business; and


 


(d)  have the
ability to pay their debts from time to time incurred.


 


7.19.  Brokerage Fees,
etc.  Except as set forth on Exhibit
7.19, no broker’s, finder’s or placement fee or commission will be payable to
any Person retained by or on behalf of the Company or any of its Subsidiaries
with respect to any of the transactions contemplated by this Agreement or any
other Transaction Document.


 


7.20.  Disclosure.  Neither this Agreement, nor any other
Transaction Document, nor any financial statement, report, notice, mortgage,
assignment or certificate furnished or to be furnished to the Lenders or the
Agent by or on behalf of the Company or any of its Subsidiaries in connection
with the transactions contemplated hereby or thereby, contains any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances under which they were made. 
Except as disclosed in this Agreement or the Exchange Offer Documents,
no fact is actually known to the Company or any of its Subsidiaries which has
resulted, or in the future (so far as the Company or any of its Subsidiaries
can reasonably foresee) will result, or creates a material risk of resulting,
in any Material Adverse Change, except to the extent that present or future
general economic conditions may result in a Material Adverse Change.


 


8.  Defaults.


 


8.1.  Events of Default.  The following events are referred to as “Events
of Default”:


 


8.1.1.  Payment.  The Company, any of its Subsidiaries or any
other Obligor shall fail to make any payment in respect of:  (a) any interest, discount or fee on or
in respect of any of the Credit Obligations owed by it as the same shall become
due and payable, and such failure shall continue for a period of five Business
Days; (b) any principal of any of the Credit Obligations owed by it as the
same shall become due, whether at maturity or by acceleration or otherwise; or
(c) any of the Warrant Obligations owed by it as the same shall become due.


 


8.1.2.  Specified
Covenants.  The Company or any of
its Subsidiaries shall fail to perform or observe any of the provisions of
Section 6.4.5, Sections 6.5 through 6.21 or Section 11.6.


 


8.1.3.  Other
Covenants.  The Company, any of its
Subsidiaries or any other Obligor shall fail to perform or observe any other
covenant, agreement or provision to be


 


76

















 


performed or observed by it under this Agreement, any
other Credit Document or any Warrant Document, and such failure shall not be
rectified or cured to the written satisfaction of the Required Lenders within
30 days after the earlier of (a) notice thereof by the Required Lenders or the
Agent to the Company or (b) a Financial Officer shall have actual knowledge
thereof.


 


8.1.4.  Representations
and Warranties.  Any representation
or warranty of or with respect to the Company, any of its Subsidiaries or any
other Obligor made to the Lenders or the Agent in, pursuant to or in connection
with this Agreement, any other Credit Document or any Warrant Document, or in
any financial statement, report, notice, mortgage, assignment or certificate
delivered to any of the Lenders or the Agent by the Company, any of its
Subsidiaries or any other Obligor in connection herewith or therewith, shall be
false in any material respect on the date as of which it was made.


 


8.1.5.  Material
Financing Debt Cross Default, etc.


 


(a)  The
Company or any of its Subsidiaries shall fail to make any payment when due
(after giving effect to any applicable grace periods) in respect of any
Material Financing Debt;


 


(b)  the
Company or any of its Subsidiaries shall fail to perform or observe the terms
of any agreement or instrument relating to any Material Financing Debt, and
such failure shall continue, without having been duly cured, waived or
consented to, beyond the period of grace, if any, specified in such agreement
or instrument, and such failure shall permit the acceleration of such Material
Financing Debt;


 


(c)  all or any
part of any Material Financing Debt of the Company or any of its Subsidiaries
shall be accelerated or shall become due or payable prior to its stated
maturity for any reason whatsoever (except with respect to voluntary
prepayments or mandatory contingent payments that do not result from a default
thereunder or the occurrence of an event similar to an Event of Default
hereunder);


 


(d)  any Lien
on any property of the Company or any of its Subsidiaries securing any Material
Financing Debt shall be enforced by foreclosure or similar action; or


 


(e)  any holder
of any Material Financing Debt shall exercise any right of rescission with
respect to the issuance thereof or put, mandatory prepayment or repurchase
rights against the Company or any of its Subsidiaries with respect to such
Material Financing Debt (other than any such rights that may be satisfied with
“payment in kind” notes or other similar securities).


 


8.1.6.  Ownership;
Liquidation; etc.  Except as
permitted by Section 6.10:


 


(a)  any
Person, together with “affiliates” and “associates” of such Person within the
meaning of Rule 12b-2 of the Exchange Act, or any “group” including such
Person under sections 13(d) and 14(d) of the Exchange Act, other than Ira
Rennert and trusts of which Ira Rennert is the grantor, shall acquire after the
date hereof (i) beneficial ownership within the meaning of Rule 13d-3 of the
Exchange Act of 33% or more of


 


77

















 


either the voting stock or total equity capital of
Renco or (ii) direct or indirect control of Renco through a shareholder, voting
or similar agreement or arrangement;


 


(b)  Renco
shall cease to own, beneficially and of record, (a) all the capital stock
of DRAC and (b) all the Preferred Stock;


 


(c)  DRAC shall
cease to own, beneficially and of record, all the Common Stock, except for
Common Stock issued upon exercise of the Warrants;


 


(d)  the
Company shall cease to own, directly or indirectly, all the capital stock of
its Subsidiaries, except to the extent permitted by Section 6.11.1; or


 


(e)  the
Company or any of its Subsidiaries or any other Obligor shall initiate any
action to dissolve, liquidate or otherwise terminate its existence.


 


8.1.7.  Enforceability,
etc.  Any Credit Document or any
Warrant Document shall cease for any reason (other than the scheduled
termination thereof in accordance with its terms) to be enforceable in
accordance with its terms or in full force and effect; or any party to any
Credit Document or any Warrant Document shall so assert in a judicial or
similar proceeding; or the security interests created by this Agreement or any
other Credit Document shall cease to be enforceable and of the same effect and
priority purported to be created hereby.


 


8.1.8.  Judgments.  A final judgment (a) which, with other
outstanding final judgments against the Company and its Subsidiaries, exceeds
an aggregate of $2,500,000 in excess of applicable insurance coverage shall be
rendered against the Company or any of its Subsidiaries, or (b) which grants
injunctive relief that results, or creates a material risk of resulting, in a
Material Adverse Change and in either case if (i) within 30 days after
entry thereof, such judgment shall not have been discharged or execution
thereof stayed pending appeal or (ii) within 30 days after the expiration of
any such stay, such judgment shall not have been discharged.


 


8.1.9.  ERISA.  Any “reportable event” (as defined in
section 4043 of ERISA) shall occur that reasonably could be expected to result
in termination of any Plan or the appointment by the appropriate United States
District Court of a trustee to administer any Plan or the imposition of a Lien
in favor of any Plan, and such “reportable event” (as defined in
section 4043 of ERISA) shall not be cured or rectified within 15 days
thereafter; or any ERISA Group Person shall fail to pay when due amounts
aggregating in excess of $3,000,000 which it shall have become liable to pay to
the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate
any Plan shall be filed under Title IV of ERISA and the assets of such Plan
shall not exceed the liabilities of such Plan on a termination basis as
determined under Title IV of ERISA; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any Plan or a proceeding shall be instituted by a
fiduciary of any Plan against any ERISA Group Person to enforce section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30
days thereafter; or a


 


78

















 


condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Plan must be
terminated.


 


8.1.10.  Tax
Status.  The Company shall cease to
be a “qualified subchapter S subsidiary” within the meaning of section
1361(b)(3)(B) of the Code other than as a result of (a) the issuance by
the Company of the Warrants or (b) any Person becoming a shareholder of
the Company upon the exercise by such Person of any Warrant.


 


8.1.11.  Distributions.  On April 15 in any calendar year, the
aggregate amount of Distributions made by the Company pursuant to
Section 6.9.6 during the fiscal year of the Company most recently ended
shall exceed the sum of (a) the Actual Pro Forma Tax Liability with
respect to the fiscal year of the Company most recently ended plus
(b) the Tax Retention Amount with respect to the most recent Tax Payment
Date during the fiscal year of the Company most recently ended plus (c)
the equity capital contributions made by Renco and DRAC to the Company in cash
during the period commencing on November 1 in the immediately preceding
calendar year and ending on April 15 in such calendar year.


 


8.1.12.  Bankruptcy,
etc.  The Company, any of its
Subsidiaries or any other Obligor shall:


 


(a)  commence a
voluntary case under the Bankruptcy Code or authorize, by appropriate
proceedings of its board of directors or other governing body, the commencement
of such a voluntary case;


 


(b)  (i) have
filed against it a petition commencing an involuntary case under the Bankruptcy
Code that shall not have been dismissed within 60 days after the date on which
such petition is filed, or (ii) file an answer or other pleading within such
60-day period admitting or failing to deny the material allegations of such a
petition or seeking, consenting to or acquiescing in the relief therein
provided, or (iii) have entered against it an order for relief in any
involuntary case commenced under the Bankruptcy Code;


 


(c)  seek
relief as a debtor under any applicable law, other than the Bankruptcy Code, of
any jurisdiction relating to the liquidation or reorganization of debtors or to
the modification or alteration of the rights of creditors, or consent to or
acquiesce in such relief;


 


(d)  have
entered against it an order by a court of competent jurisdiction
(i) finding it to be bankrupt or insolvent, (ii) ordering or approving its
liquidation or reorganization as a debtor or any modification or alteration of
the rights of its creditors or (iii) assuming custody of, or appointing a
receiver or other custodian for, all or a substantial portion of its property;
or


 


(e)  make an
assignment for the benefit of, or enter into a composition with, its creditors,
or appoint, or consent to the appointment of, or suffer to exist a receiver or
other custodian for, all or a substantial portion of its property.


 


79

















 


8.2.  Certain
Actions Following an Event of Default.  If one or more Events of Default shall occur and be continuing,
then in each and every such case:


 


8.2.1.  Specific
Performance; Exercise of Rights. 
The Required Lenders may, and, upon written request of the Required
Lenders, the Agent shall, proceed to protect and enforce the Lenders’ rights by
suit in equity, action at law and/or other appropriate proceeding, either for
specific performance of any covenant or condition contained in this Agreement
or any other Credit Document (other than Financial Hedge Agreements) or in any
instrument or assignment delivered to the Lenders pursuant to this Agreement or
any other Credit Document (other than Financial Hedge Agreements), or in aid of
the exercise of any power granted in this Agreement or any other Credit
Document (other than Financial Hedge Agreements) or any such instrument or
assignment.


 


8.2.2.  Acceleration.  The Required Lenders may, and, upon written
request of the Required Lenders, the Agent shall, by notice in writing to the
Company declare all or any part of the unpaid balance of the Credit Obligations
(other than amounts under Financial Hedge Agreements) then outstanding to be
immediately due and payable; provided, however, that if a
Bankruptcy Default shall have occurred, the unpaid balance of the Credit
Obligations (other than amounts under Financial Hedge Agreements) shall
automatically become immediately due and payable.


 


8.2.3.  Enforcement
of Payment; Credit Security; Setoff. 
Upon written request of the Required Lenders, the Agent shall proceed to
enforce payment of the Credit Obligations in such manner as it may elect and to
realize upon any and all rights in the Credit Security.  The Lenders may offset and apply toward the
payment of the Credit Obligations (and/or toward the curing of any Event of
Default) any Indebtedness from the Lenders to the respective Obligors,
including any Indebtedness represented by deposits in any account maintained
with the Lenders, regardless of the adequacy of any security for the Credit
Obligations.  The Lenders shall have no
duty to determine the adequacy of any such security in connection with any such
offset.


 


8.2.4.  Cumulative
Remedies.  To the extent not
prohibited by applicable law which cannot be waived, all of the Lenders’ rights
hereunder and under each other Credit Document shall be cumulative.


 


8.3.  Annulment of
Defaults.  Once an Event of
Default has occurred, such Event of Default shall be deemed to exist and be
continuing for all purposes of the Credit Documents (other than Financial Hedge
Agreements) until:


 


(a)  such Event
of Default has been cured;


 


(b)  the Agent
(with the consent of the Required Lenders) shall have waived such Event of
Default in writing or entered into an amendment to this Agreement or any other
applicable Credit Document which by its express terms cures such Event of
Default; or


 


(c)  if such
Event of Default has occurred under Section 8.1.5 as a result of any default
relating to any Material Financing Debt, each applicable Person shall have duly


 


80

















 


waived such default in writing or entered into an
amendment to any applicable agreement which by its express terms cures such
default;


 


at which time such Event of Default shall no longer be deemed to exist
or to have continued.  No such action by
the Lenders or the Agent shall extend to or affect any subsequent Event of
Default or impair any rights of the Lenders upon the occurrence thereof.  The making of any extension of credit during
the existence of any Default or Event of Default shall not constitute a waiver
thereof.


 


8.4.  Waivers.  To the extent that such waiver is not
prohibited by the provisions of applicable law that cannot be waived, each of
the Company and its Subsidiaries waives:


 


(a)  all
presentments, demands for performance, notices of nonperformance (except to the
extent required by this Agreement or any other Credit Document), protests,
notices of protest and notices of dishonor;


 


(b)  any
requirement of diligence or promptness on the part of any Lender or the Agent
in the enforcement of its rights under this Agreement or any other Credit
Document;


 


(c)  any and
all notices of every kind and description which may be required to be given by
any statute or rule of law; and


 


(d)  any
defense (other than indefeasible payment in full) which it may now or hereafter
have with respect to its liability under this Agreement or any other Credit
Document or with respect to the Credit Obligations.


 


9.  Expenses;
Indemnity.


 


9.1.  Expenses.  Whether or not the transactions contemplated
hereby shall be consummated, the Company will pay:


 


(a)  all
reasonable expenses of the Lenders and the Agent (including reasonable fees and
disbursements of the counsel to the Lenders and the Agent) in connection with
the negotiation, preparation and duplication of this Agreement, each other
Credit Document and the Warrant Documents, examinations by, and reports of, the
Agent’s commercial financial examiners, fixed asset appraisers and
environmental consultants, the transactions contemplated hereby and thereby and
amendments, waivers, consents and other operations hereunder and thereunder;


 


(b)  all
recording and filing fees and transfer and documentary stamp and similar taxes
at any time payable in respect of this Agreement, any other Credit Document,
any Warrant Document, any Credit Security or the incurrence of the Credit
Obligations; and


 


(c)  all other
reasonable expenses incurred by any Lender, any holder of any Credit Obligation
or the Agent in connection with the enforcement of any rights hereunder or  under any other Credit Document or any
Warrant Document or any work-out negotiations relating to the Credit
Obligations, including costs of collection and


 


81

















 


reasonable attorneys’ fees (including a reasonable
allowance for the hourly cost of attorneys employed by the Lenders on a
salaried basis) and expenses.


 


9.2.  General
Indemnity.  The Company shall
indemnify the Lenders and the Agent and hold them harmless from any liability,
loss or damage resulting from the violation by the Company of
Section 2.3.3.  In addition, the
Company shall indemnify each Lender, the Agent and each of the Lenders’ and the
Agent’s directors, officers, employees, agents, attorneys, accountants,
consultants and Affiliates (each Lender, the Agent and each of such directors,
officers, employees, agents, attorneys, accountants, consultants and Affiliates
is referred to as an “Indemnified Party”) and hold each of them harmless
from and against any and all claims, damages, liabilities and reasonable
expenses (including reasonable fees and disbursements of counsel with whom any
Indemnified Party may consult in connection therewith and all reasonable
expenses of litigation or preparation therefor) which any Indemnified Party may
incur or which may be asserted against any Indemnified Party in connection with
(a) the Indemnified Party’s compliance with or contest of any subpoena or other
process issued against it in any proceeding involving the Company or any of its
Subsidiaries or their Affiliates, (b) any litigation or investigation involving
the Company, any of its Subsidiaries or their Affiliates, or any officer,
director or employee thereof, (c) the existence or exercise of any
security rights with respect to the Credit Security in accordance with the
Credit Documents, or (d) this Agreement, any other Credit Document, any Warrant
Document or any transaction contemplated hereby or thereby; provided, however,
that the foregoing indemnity shall not apply (i) to litigation commenced by the
Company or any of its Subsidiaries against the Lenders or the Agent which seeks
enforcement of any of the rights of the Company or such Subsidiary hereunder or
under any other Credit Document and is determined adversely to the Lenders or
the Agent in a final nonappealable judgment or (ii) to any Indemnified Party
to the extent such claims, damages, liabilities and expenses are determined in
a final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s own gross negligence or willful
misconduct.  THE COMPANY EXPRESSLY
ACKNOWLEDGES THAT IT MAY BE REQUIRED TO INDEMNIFY PERSONS AGAINST THEIR OWN
NEGLIGENCE.


 


10.  Agent.


 


10.1.  Percentage
Interests.  The Percentage
Interest of each Lender in the Loan, and the related Commitment, shall be
computed based on the maximum principal amount for each Lender as set forth in
the Register, as from time to time in effect. 
The current Percentage Interests are set forth in Exhibit 10.1, which
may be updated by the Agent from time to time to conform to the Register.


 


10.2.  Agent’s
Authority to Act, etc. 
Each of the Lenders appoints and authorizes Regiment to act for the
Lenders as the Lenders’ Agent in connection with the transactions contemplated
by this Agreement and the other Credit Documents (other than Financial Hedge
Agreements) on the terms set forth herein. 
All action in connection with the enforcement of, or the exercise of any
remedies (other than the Lenders’ rights of set-off as provided in
Section 8.2.4 or in any Credit Document) in respect of the Credit
Obligations and Credit Documents shall be taken by the Agent.


 


82

















 


10.3.  Company to Pay
Agent, etc.  The Company
and each other Obligor shall be fully protected in making all payments in
respect of the Credit Obligations (other than payments under Financial Hedge
Agreements) to the Agent, in relying upon consents, modifications and
amendments executed by the Agent purportedly on the Lenders’ behalf, and in
dealing with the Agent as herein provided. 
The Agent may charge the accounts of the Company, on the dates when the
amounts thereof become due and payable, with the amounts of the principal of
and interest on the Loan and all fees and other amounts owing under any Credit
Document (other than Financial Hedge Agreements).


 


10.4.  Lender
Operations for Advances, etc.


 


10.4.1.  Advances.  On the Closing Date, each Lender shall
advance to the Agent in immediately available funds such Lender’s Percentage
Interest in the Loan prior to 12:00 noon (Boston time).  If such funds are not received at such time,
but all applicable conditions set forth in Section 5 have been satisfied, each
Lender authorizes and requests the Agent to advance for such Lender’s account,
pursuant to the terms hereof, such Lender’s respective Percentage Interest in
the Loan and agrees to reimburse the Agent in immediately available funds for
the amount thereof prior to 2:00 p.m. (Boston time) on the Closing Date; provided,
however, that the Agent is not authorized to make any such advance for
the account of any Lender who has previously notified the Agent in writing that
such Lender will not be performing its obligations to make the Loan hereunder;
and provided, further, that the Agent shall be under no
obligation to make any such advance.


 


10.4.2.  Agent
to Allocate Payments, etc.  All
payments of principal and interest in respect of the extensions of credit made
pursuant to this Agreement and all fees and other amounts under this Agreement
shall, as a matter of convenience, be made by the Company and the Obligors to
the Agent in immediately available funds by noon (Boston time) on any Business
Day.  The share of each Lender shall be
credited to such Lender by the Agent in immediately available funds by 2:00
p.m. (Boston time) on such Business Day in such manner that the principal
amount of the Credit Obligations to be paid shall be paid proportionately in
accordance with the Lenders’ respective Percentage Interests in such Credit
Obligations, except as otherwise provided in this Agreement.  Under no circumstances shall any Lender be
required to produce or present its Note as evidence of its interests in the
Credit Obligations in any action or proceeding relating to the Credit
Obligations.


 


10.4.3.  Nonperforming
Lenders.  In the event that any
Lender fails to reimburse the Agent pursuant to Section 10.4.1 for the
Percentage Interest of such Lender (a “Nonperforming Lender”) in any
portion of the Loan advanced by the Agent pursuant hereto, overdue amounts (the
“Delinquent Payment”) due from the Nonperforming Lender to the Agent
shall bear interest, payable by the Nonperforming Lender on demand, at a per
annum rate equal to (a) the Applicable Rate for the first three days overdue
and (b) the sum of (i) the Applicable Rate plus (ii) 2% for any longer
period.  Such interest shall be payable
to the Agent for its own account for the period commencing on the date of the
Delinquent Payment and ending on the date the Nonperforming Lender reimburses
the Agent on account of the Delinquent Payment (to the extent not paid by any
Obligor as provided below) and the accrued interest thereon


 


83

















 


(the “Delinquency Period”), whether pursuant to
the assignments referred to below or otherwise.  Upon notice by the Agent, the Company will pay to the Agent the
principal (but not the interest) portion of the Delinquent Payment.  During the Delinquency Period, in order to
make reimbursements for the Delinquent Payment and accrued interest thereon, the
Nonperforming Lender shall be deemed to have assigned to the Agent all
interest, fees and other payments made by the Company under Section 3 that
would have thereafter otherwise been payable under the Credit Documents to the
Nonperforming Lender.  During any period
in which any Nonperforming Lender is not performing its obligations to extend
credit under Section 2, the Nonperforming Lender shall be deemed to have
assigned to each Lender that is not a Nonperforming Lender (a “Performing
Lender”) all principal and other payments made by the Company under Section
4 that would have thereafter otherwise been payable under the Credit Documents
to the Nonperforming Lender.  The Agent
shall credit a portion of such payments to each Performing Lender in an amount equal
to the Percentage Interest of such Performing Lender divided by one minus
the Percentage Interest of the Nonperforming Lender until the respective
portions of the Loan owed to all the Lenders are the same as the Percentage
Interests of the Lenders immediately prior to the failure of the Nonperforming
Lender to perform its obligations under Section 2.  The foregoing provisions shall be in addition to any other
remedies the Agent, the Performing Lenders or the Company may have under law or
equity against the Nonperforming Lender as a result of the Delinquent Payment
or as a result of its failure to perform its obligations under Section 2.


 


10.5.  Sharing of
Payments, etc.  Each
Lender agrees that (a) if by exercising any right of set-off or
counterclaim or otherwise, it shall receive payment of (i) a proportion of the
aggregate amount due with respect to its Percentage Interest in the Loan which
is greater than (ii) the proportion received by any other Lender in respect of
the aggregate amount due with respect to such other Lender’s Percentage Interest
in the Loan and (b) if such inequality shall continue for more than 10 days,
the Lender receiving such proportionately greater payment shall purchase
participations in the Percentage Interests in the Loan held by the other
Lenders, and such other adjustments shall be made from time to time (including
rescission of such purchases of participations in the event the unequal payment
originally received is recovered from such Lender through bankruptcy
proceedings or otherwise), as may be required so that all such payments of
principal and interest with respect to the Loan held by the Lenders shall be
shared by the Lenders pro rata in accordance with their respective Percentage
Interests; provided, however, that this Section 10.5 shall not
impair the right of any Lender to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to
the payment of Indebtedness of any Obligor other than such Obligor’s
Indebtedness with respect to the Loan. 
Each Lender that grants a participation in the Credit Obligations to a
Credit Participant shall require as a condition to the granting of such
participation that such Credit Participant agree to share payments received in
respect of the Credit Obligations as provided in this Section 10.5.  The provisions of this Section 10.5 are for
the sole and exclusive benefit of the Lenders and no failure of any Lender to
comply with the terms hereof shall be available to any Obligor as a defense to
the payment of the Credit Obligations.


 


10.6.  Agent’s
Resignation.  The Agent may
resign at any time by giving at least 60 days’ prior written notice of its
intention to do so to each of the Lenders and the Company and upon the
appointment by the Required Lenders of a successor Agent reasonably
satisfactory to the


 


84

















 


Company.  If no successor Agent shall have been so
appointed and shall have accepted such appointment within 45 days after the
retiring Agent’s giving of such notice of resignation, then the retiring Agent
may appoint a successor Agent which shall be a bank or a trust company
organized under the laws of the United States of America or any state thereof
and having a combined capital, surplus and undivided profit of at least $500,000,000
(so long as no Default exists) with the consent of the Company, which shall not
be unreasonably withheld; provided, however, that any successor
Agent appointed under this sentence may be removed upon the written request of
the Required Lenders, which request shall also appoint a successor Agent (so
long as no Default exists) reasonably satisfactory to the Company.  Upon the appointment of a new Agent
hereunder, the term “Agent” shall for all purposes of this Agreement thereafter
mean such successor.  After any retiring
Agent’s resignation hereunder as Agent, or the removal hereunder of any
successor Agent, the provisions of this Agreement shall continue to inure to
the benefit of such retiring or removed Agent as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.


 


10.7.  Concerning the
Agent.


 


10.7.1.  Standard
of Conduct, etc.  The Agent and its
officers, directors, employees and agents shall be under no liability to any of
the Lenders or to any future holder of any interest in the Credit Obligations
for any action or failure to act taken or suffered in the absence of gross
negligence and willful misconduct, and any action or failure to act in
accordance with an opinion of its counsel shall conclusively be deemed to be in
the absence of gross negligence and willful misconduct.  The Agent shall in all cases be entitled to
rely, and shall be fully protected in relying, on instructions given to the
Agent by the Required Lenders.


 


10.7.2.  No
Implied Duties, etc.  The Agent
shall have and may exercise such powers as are specifically delegated to the
Agent under this Agreement or any other Credit Document together with all other
powers incidental thereto.  The Agent
shall have no implied duties to any Person or any obligation to take any action
under this Agreement or any other Credit Document except for action
specifically provided for in this Agreement or any other Credit Document to be
taken by the Agent.


 


10.7.3.  Validity,
etc.  The Agent shall not be
responsible to any Lender or any future holder of any interest in the Credit
Obligations (a) for the legality, validity, enforceability or effectiveness of
this Agreement or any other Credit Document, (b) for any recitals, reports,
representations, warranties or statements contained in or made in connection
with this Agreement or any other Credit Document, (c) for the existence or
value of any assets included in any security for the Credit Obligations, (d)
for the effectiveness of any Lien purported to be included in the Credit
Security, (e) for the specification or failure to specify any particular assets
to be included in the Credit Security, or (f) unless the Agent shall have
failed to comply with Section 10.7.1, for the perfection of the security
interests in the Credit Security.


 


10.7.4.  Compliance.  The Agent shall not be obligated to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement or any other Credit Document; and in connection with any
extension of credit under this Agreement or


 


85

















 


any other Credit Document, the Agent shall be fully
protected in relying on a certificate of the Company as to the fulfillment by
the Company of any conditions to such extension of credit.


 


10.7.5.  Employment
of Agents and Counsel.  The Agent
may execute any of its duties as Agent under this Agreement or any other Credit
Document by or through employees, agents and attorneys-in-fact and
shall not be responsible to the Company, any other Obligor or any Lender for
the default or misconduct of any such agents or attorneys-in-fact
selected by the Agent acting in the absence of gross negligence and willful
misconduct.  The Agent shall be entitled
to advice of counsel concerning all matters pertaining to the agency hereby
created and its duties hereunder or under any other Credit Document.


 


10.7.6.  Reliance
on Documents and Counsel.  The Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice, order,
document, statement, telecopy, telegram, telex or teletype message or writing
reasonably believed in good faith by the Agent to be genuine and correct and to
have been signed, sent or made by the Person in question, including any
telephonic or oral statement made by such Person, and, with respect to legal
matters, upon an opinion or the advice of counsel selected by the Agent.


 


10.7.7.  Agent’s
Reimbursement.  Each of the Lenders
severally agrees to reimburse the Agent, pro rata in accordance with such
Lender’s Percentage Interest, for any reasonable expenses not reimbursed by the
Company or the other Obligors (without limiting the obligation of the Company
or the other Obligors to make such reimbursement):  (a) for which the Agent is entitled to reimbursement by the
Company or the other Obligors under this Agreement, any other Credit Document
or any Warrant Document, and (b) after the occurrence and during the
continuance of a Default, for any other reasonable expenses incurred by the
Agent on the Lenders’ behalf in connection with the enforcement of the Lenders’
rights under this Agreement or any other Credit Document; provided, however,
that the Agent shall not be reimbursed for any such expenses arising as a result
of its gross negligence or willful misconduct.


 


10.8.  Rights as a
Lender.  With respect to any
credit extended by it hereunder, Regiment shall have the same rights,
obligations and powers hereunder as any other Lender and may exercise such
rights and powers as though it were not the Agent, and unless the context
otherwise specifies, Regiment shall be treated in its individual capacity as
though it were not the Agent hereunder. 
Without limiting the generality of the foregoing, the Percentage
Interest of Regiment, if any, shall be included in any computations of
Percentage Interests.  Regiment and its
Affiliates may accept deposits from, make Investments in, act as trustee for,
and generally engage in any kind of business with, the Company, any of its Subsidiaries
or any Affiliate of any of them and any Person who may do business with or own
an equity interest in the Company, any of its Subsidiaries or any Affiliate of
any of them, all as if Regiment were not the Agent and without any duty to
account therefor to the other Lenders.


 


10.9.  Independent
Credit Decision.  Each of the
Lenders acknowledges that it has independently and without reliance upon the
Agent, based on the financial statements and other


 


86

















 


documents referred to in
Section 7.2, on the other representations and warranties contained herein and
on such other information with respect to the Company and its Subsidiaries as
such Lender deemed appropriate, made such Lender’s own credit analysis and
decision to enter into this Agreement and to make the extensions of credit
provided for hereunder.  Each Lender
represents to the Agent that such Lender will continue to make its own
independent credit and other decisions in taking or not taking action under
this Agreement or any other Credit Document. 
Each Lender expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to such Lender, and no
act by the Agent taken under this Agreement or any other Credit Document,
including any review of the affairs of the Company and its Subsidiaries, shall
be deemed to constitute any representation or warranty by the Agent.  Except for notices, reports and other
documents expressly required to be furnished to each Lender by the Agent under
this Agreement or any other Credit Document, the Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition, financial or
otherwise, or creditworthiness of the Company or any Subsidiary which may come
into the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.


 


10.10.  Indemnification.  The Lenders shall severally indemnify the
Agent and its officers, directors, employees, agents, attorneys, accountants,
consultants and controlling Persons (to the extent not reimbursed by the
Obligors and without limiting the obligation of any of the Obligors to do so),
pro rata in accordance with their respective Percentage Interests, from and
against any and all liabilities, obligations, damages, penalties, actions,
judgments, suits, losses, costs, expenses or disbursements of any kind
whatsoever which may at any time be imposed on, incurred by or asserted against
the Agent or such Persons relating to or arising out of this Agreement, any
other Credit Document, any Warrant Document, the transactions contemplated
hereby or thereby, or any action taken or omitted by the Agent in connection
with any of the foregoing; provided, however, that the foregoing
shall not extend to actions or omissions which are determined in a final,
nonappealable judgment by a court of competent jurisdiction to have taken by
the Agent with gross negligence or willful misconduct.


 


10.11.  Assumption
of Agent’s Rights. 
Notwithstanding anything herein or in any other Credit Document to the
contrary, if at any time no Person constitutes the Agent hereunder or the Agent
fails to act upon written directions from the Required Lenders, the Required
Lenders shall be entitled to exercise any power, right or privilege granted to
the Agent under any Credit Document and in so acting such Lenders shall have
the same rights, privileges, indemnities and protections provided to the Agent
under the Credit Documents.


 


11.  Successors
and Assigns; Lender Assignments and Participations.


 


11.1.  Successors
and Assigns.  Any reference in this
Agreement or any other Credit Document to any of the parties hereto shall be
deemed to include the successors and assigns of such party, and all covenants
and agreements by or on behalf of the Company, the other Obligors, the Lenders
or the Agent that are contained in this Agreement or any other Credit Document
shall bind and inure to the benefit of their respective successors and assigns;
provided, however, that (a) the Company and its Subsidiaries
may not assign their rights or obligations under this Agreement or any other
Credit Document except for mergers or liquidations permitted


 


87

















 


by Section 6.10, and (b)
the Lenders shall not be entitled to assign their respective Percentage
Interests in the credits extended hereunder or their Commitments except as set
forth in this Section 11.


 


11.2.  Assignments
by Lenders.


 


11.2.1.  Assignees
and Assignment Procedures.  Each
Lender may, in compliance with applicable laws in connection with such
assignment and in accordance with this Section 11.2.1, assign to one or
more Eligible Transferees (each, an “Assignee”) all or a portion of its
interests, rights and obligations under this Agreement and the other Credit
Documents, including all or a portion of its Commitment, the portion of the
Loan at the time owing to it and the Note held by it; provided, however,
that:


 


(a)  the
aggregate amount of the Commitment of the assigning Lender subject to each such
assignment to any Assignee other than another Lender, a Related Fund, any
Eligible Transferee that acquires all or a substantial portion of the assets of
a Lender or an Affiliate of a Lender (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the Agent) shall
be not less than $3,000,000 and in increments of $1,000,000 (or, if less, the
entire remaining amount of the assigning Lender’s Commitment); and


 


(b)  the
parties to each such assignment shall execute and deliver to the Agent an
Assignment and Acceptance substantially in the form of Exhibit 11.2.1 (the “Assignment
and Acceptance”), together with the Note subject to such assignment and,
except in the event of a transfer pursuant to another Lender, a Related Fund,
any Eligible Transferee that acquires all or a substantial portion of the
assets of a Lender or an Affiliate of a Lender, a processing fee of $3,500
payable to the Agent by the assigning Lender (or as the assigning Lender and
the Assignee may otherwise agree between themselves).


 


Upon acceptance and recording pursuant to Section
11.1.4, from and after the effective date specified in each Assignment and
Acceptance (which effective date shall be at least five Business Days after the
execution thereof unless waived by the Agent):


 


(i)  the Assignee shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement; and


 


(ii)  the assigning Lender shall, to the extent
provided in such assignment, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 3.4 and 9, as well as to any fees
accrued for its account hereunder and not yet paid).


 


11.2.2.  Terms
of Assignment and Acceptance.  By
executing and delivering an Assignment and Acceptance, the assigning Lender and
the Assignee shall be deemed to confirm to and agree with each other and the
other parties hereto as follows:


 


88

















 


(a)  other than
the representation and warranty that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Credit Document or any other instrument or document furnished pursuant hereto;


 


(b)  such
assigning Lender makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Company and its Subsidiaries or
the performance or observance by the Company or any of its Subsidiaries of any
of its obligations under this Agreement, any other Credit Document or any other
instrument or document furnished pursuant hereto;


 


(c)  such
Assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to
Section 6.4 or 7.2 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance;


 


(d)  such
Assignee will independently and without reliance upon such assigning Lender,
any other Lender or the Agent, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement;


 


(e)  such
Assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and


 


(f)  such
Assignee agrees that it will perform in accordance with the terms of this
Agreement all the obligations which are required to be performed by it as a
Lender.


 


11.2.3.  Register.  The Agent shall maintain at its principal
office (solely for the limited purpose set forth in this Section 11.2.3, as the
agent of the Company) a register (the “Register”) for the recordation of
(a) the names and addresses of the Lenders (including each Assignee which
assumes rights and obligations pursuant to an assignment under
Section 11.2.1 and each Replacement Lender which assumes rights and obligations
pursuant to an assignment under Section 11.5), (b) the Percentage Interest of
each such Lender as set forth in Exhibit 10.1 and (c) the amount of the
Loan owing to each Lender from time to time. 
The entries in the Register shall be conclusive, in the absence of
manifest error, and the Company, the Lenders and the Agent may treat each
Person whose name is registered therein for all purposes as a party to this
Agreement.  The Register shall be
available for inspection by the Company or any Lender at any reasonable time
and from time to time upon reasonable prior notice.


 


89

















 


11.2.4.  Acceptance
of Assignment and Assumption.  Upon
its receipt of a completed Assignment and Acceptance executed by an assigning
Lender and an Assignee (and any necessary consent of the Agent and the Company)
together with the processing and recordation fee referred to in Section 11.2.1
and, to the extent necessary, the Note being assigned, the Agent shall (a)
accept such Assignment and Acceptance, (b) record the information contained
therein in the Register and (c) give prompt notice thereof to the Company.  Within five Business Days after receipt of
notice, the Company, at its own expense, shall execute and deliver to the Agent
(in exchange for the surrendered Note if such Note must be surrendered or
reissued as a result of such assignment) a new Note to the order of such
Assignee in a principal amount equal to the applicable Commitment and Loan
assumed by it pursuant to such Assignment and Acceptance.  If the assigning Lender has retained a
Commitment and Loan, its Note shall be deemed to be then outstanding in a
principal amount equal to the applicable Commitment and Loan retained by it.


 


11.2.5.  Federal
Reserve Bank.  Notwithstanding the
foregoing provisions of this Section 11 (without the consent of or notice to
the Agent or the Company), any Lender may at any time pledge all or any portion
of such Lender’s rights under this Agreement and the other Credit Documents to
a Federal Reserve Bank or, in the case of any Lender that is a fund, to the
trustee of such fund to support the fund’s obligations to such trustee; provided,
however, that no such pledge or assignment shall release such Lender
from such Lender’s obligations hereunder or under any other Credit Document.


 


11.2.6.  Further
Assurances.  The Company and its
Subsidiaries shall sign such documents and take such other actions from time to
time reasonably requested by an Assignee to enable it to share in the benefits
of the rights created by the Credit Documents.


 


11.3.  Credit
Participants.  Each Lender may,
without the consent of the Company or the Agent, in compliance with applicable
laws in connection with such participation, sell to one or more commercial
banks, other financial institutions or funds in the business of making or
purchasing loans similar to the Credit Obligations (each a “Credit
Participant”) participations in all or a portion of its interests, rights
and obligations under this Agreement and the other Credit Documents (including
all or a portion of its Commitment, the Loan owing to it and the Note held by
it); provided, however, that:


 


(a)  such
Lender’s obligations under this Agreement shall remain unchanged;


 


(b)  such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations;


 


(c)  such
Lender shall provide the Company with prompt written notice of the name of the
applicable Credit Participant;


 


90

















 


(d)  such Credit Participant shall be entitled to
the benefit of the cost protection provisions contained in Sections 3.4 and 9,
but shall not be entitled to receive any greater payment thereunder than the
selling Lender would have been entitled to receive with respect to the interest
so sold if such interest had not been sold; and


 


(e)  the
Company, the other Lenders and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and, under any agreements between such Lender
and such Credit Participant, such Lender shall retain the sole right as one of
the Lenders to vote (and to determine how to vote) with respect to the
enforcement of the obligations of the Obligors relating to the Loan and the
approval of any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications, consents or waivers described
in clause (b) of the proviso to Section 14.1, with respect to which such Credit
Participant may determine how to vote).


 


The Company agrees, to the fullest extent permitted by applicable law,
that any Credit Participant and any Lender purchasing a participation from
another Lender pursuant to Section 10.5 may exercise all rights of payment
(including the right of set-off), with respect to its participation as fully as
if such Credit Participant or such Lender were the direct creditor of the
Company and a Lender hereunder in the amount of such participation.


 


11.4.  Special
Purpose Funding Vehicles. 
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle
identified in writing by the Granting Lender to the Agent and the Company from
time to time (an “SPV”) the option to provide to the Company all or part
of any extension of credit that such Granting Lender would otherwise be
obligated to make to the Company pursuant hereto; provided, however,
that (a) nothing herein shall constitute a commitment by any SPV to make any
extension of credit, (b) if an SPV elects not to exercise such option or
otherwise fails to provide all or any part of such extension of credit, the
Granting Lender shall be obligated to make such extension of credit pursuant to
the terms hereof and (c) the Granting Lender shall remain for all purposes the
Lender of record under the Credit Documents, including for the purposes of
approving amendments, waivers and other modifications of the Credit
Documents.    The making of an extension
of credit by an SPV hereunder shall utilize the Commitment of the Granting
Lender to the same extent as if such extension of credit had been made by such
Granting Lender.  No SPV shall be liable
for any indemnity or similar payment obligation under the Credit Documents (all
liability for which shall remain with the Granting Lender).  Prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPV, no party hereto will institute against, or join
any other Person in instituting against, such SPV any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings.   In addition, notwithstanding anything to
the contrary contained herein, any SPV may (i) with notice to, but without the
prior consent of, the Company and the Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Credit
Obligations to the Granting Lender or to any financial institutions (consented
to in writing by the Company and the Agent) providing liquidity or credit
support to such SPV to support the funding or maintenance of extensions of
credit and (ii) disclose on a confidential basis any non-public information
relating to its extensions of credit to any rating agency, commercial paper
dealer or provider of any surety, guarantee or credit or liquidity enhancement


 


91

















 


to such SPV.  This Section 11.4 shall survive the
termination of this Agreement and may not be amended without the written
consent of each SPV to which a grant has been made pursuant to this Section
11.4.


 


11.5.  Replacement
of Affected Lender.  In the
event that any Lender or, to the extent applicable, any Credit Participant (the
“Affected Lender”):


 


(a)  fails to
perform its obligations to fund any portion of the Loan on the Closing Date
when required to do so by the terms of the Credit Documents;


 


(b)  demands
payment under the provisions of Section 3.4 in an amount materially in excess
of the amounts with respect thereto demanded by the other Lenders; or


 


(c)  refuses to
consent to a proposed amendment, modification, waiver or other action requiring
consent of the holders of 100% of the Percentage Interests under
Section 14.1 that is consented to by Lenders owning at least 90% of the
Percentage Interests;


 


then, so long as no Event of Default exists, the Company shall have the
right to seek a replacement lender which is reasonably satisfactory to the
Agent (the “Replacement Lender”). 
The Replacement Lender shall purchase the interests of the Affected
Lender in the Loan and its Commitment and shall assume the obligations of the
Affected Lender hereunder and under the other Credit Documents upon execution
by the Replacement Lender of an Assignment and Acceptance and the tender by it
to the Affected Lender of a purchase price agreed between it and the Affected
Lender (or, if they are unable to agree, a purchase price in the amount of the
Affected Lender’s Percentage Interest in the Loan, or appropriate credit
support for contingent amounts included therein, and all other outstanding
Credit Obligations then owed to the Affected Lender).  No processing fee pursuant to Section 11.2.1 shall be required in
connection with such assignment.  Upon
consummation of such assignment, the Replacement Lender shall become party to
this Agreement as a signatory hereto and shall have all the rights and
obligations of the Affected Lender under this Agreement and the other Credit
Documents with a Percentage Interest equal to the Percentage Interest of the
Affected Lender, the Affected Lender shall be released from its obligations
hereunder and under the other Credit Documents, and no further consent or
action by any party shall be required. 
Upon the consummation of such assignment, the Company, the Affected
Lender and the Agent shall make appropriate arrangements so that a new Note is
issued to the Replacement Lender.  The
Company and the other Obligors shall sign such documents and take such other
actions reasonably requested by the Replacement Lender to enable it to share in
the benefits of the rights created by the Credit Documents.  Until the consummation of an assignment in
accordance with the foregoing provisions of this Section 11.5, the Company
shall continue to pay to the Affected Lender any Credit Obligations as they
become due and payable.


 


11.6.  Replacement
of Departing Lenders.  So long
as no Event of Default exists, the Company may, upon not less than 30 days’
prior written notice to each of the Lenders, the Credit Participants and the
Agent (collectively, the “Departing Lenders”), request that Renco
replace all (but not less than all) of the Departing Lenders.  If (a) the Company makes such request
to replace the Departing Lenders and (b) Renco, in its sole and absolute
discretion, determines to


 


92

















 


replace the Departing Lenders, then, within 60 days after delivery by
the Company to the Departing Lenders of such notice, Renco shall purchase all
(but not less than all) the interests of the Departing Lenders in the Loan, the
Commitments and the Discretionary Credits and shall assume all (but not less
than all) the obligations of the Departing Lenders hereunder and under the
other Credit Documents upon execution by Renco of an Assignment and Acceptance
and the tender by it to the Agent for the account of the Departing Lenders of
an aggregate purchase price in an amount equal to the Transfer Amount.  No processing fee pursuant to Section 11.2.1
shall be required in connection with such assignment.  Upon consummation of such assignment, Renco shall become party to
this Agreement as a signatory hereto and shall have all the rights and
obligations of the Departing Lenders under this Agreement and the other Credit
Documents with a Percentage Interest of 100%, and the Departing Lenders shall
be released from their respective obligations hereunder and under the Credit
Documents, and no further consent or action by any party shall be
required.  Upon the consummation of such
assignment, the Company and Renco shall make appropriate arrangements so that a
new Note is issued to Renco.  The
Company, the other Obligors, the Departing Lenders and Renco shall, at the cost
and expense of the Company, sign, file and record such documents and take such
other actions reasonably requested by Renco to enable it to receive the
benefits of the rights created by the Credit Documents, including the rights of
the Departing Lenders and the Agent in the Credit Security.  Until the consummation of an assignment in
accordance with the foregoing provisions of this Section 11.6, the Company
shall pay to the Departing Lenders any Credit Obligations as they become due
and payable.


 


12.  Confidentiality.  Each Lender will maintain the confidential
nature of all non-public information furnished to it by the Company or any of
its Subsidiaries in accordance with such Lender’s customary procedures for
maintaining the confidential nature of information of this nature; provided,
however, that such information may be disclosed:


 


(a)  to any
other Lender and to any parent or corporate Affiliate of such Lender or any
other Lender; provided, however, that any such Person shall agree
to comply with the restrictions set forth in this Section 12 with respect to
such information;


 


(b)  pursuant
to any statutory or regulatory requirement or any court order, subpoena or
other legal process and to any regulatory authority, including state and
federal bank and insurance regulators and the National Association of Insurance
Commissioners;


 


(c)  to any
Credit Participant, proposed Credit Participant or proposed Assignee; provided,
however, that any such Person shall agree to comply with the
restrictions set forth in this Section 12 with respect to such information;


 


(d)  to its
independent counsel, auditors and other professional advisors with an
instruction to such Persons to keep such information confidential;


 


(e)  in
connection with the enforcement of this Agreement, any other Credit Document or
any Warrant Document or any litigation or other proceeding relating to this
Agreement, any other Credit Document or any Warrant Document; and


 


93

















 


(f)  with the
prior written consent of the Company, to any other Person.


 


In addition, the Lenders
and their respective Affiliates may include references to the Company and its
Affiliates, their trade names, trademarks and logos and the credit facility
provided hereby in connection with any advertising or marketing undertaken by
such Lender or its Affiliates.


 


13.  Notices.  Except as otherwise specified in this
Agreement or any other Credit Document, any notice required to be given
pursuant to this Agreement or any other Credit Document shall be given in
writing.  Any notice, consent, approval,
demand or other communication in connection with this Agreement or any other
Credit Document shall be deemed to be given if given in writing (including by
telecopy) addressed as provided below (or to the addressee at such other
address as the addressee shall have specified by notice actually received by
the addressor), and if either (a) actually delivered in fully legible form
to such address or (b) in the case of a letter, unless actual receipt of the
notice is required by any Credit Document five days shall have elapsed after
the same shall have been deposited in the United States mails, with first-class
postage prepaid and registered or certified.


 


If to the Company, to it at its address set forth on
the signature page of this Agreement, to the attention of the chief financial
officer.


 


If to any Lender, to it at its address set forth on
the signature page of this Agreement or in the Register, with a copy to the
Agent.


 


If to the Agent, to it at its address set forth on the
signature page of this Agreement.


 


14.  Amendments,
Consents, Waivers, etc.


 


14.1.  Lender
Consents for Amendments.  Except
as otherwise set forth herein, the Agent may (and upon the written request of
the Required Lenders the Agent shall) take or refrain from taking any action
under this Agreement or any other Credit Document, including giving its written
consent to any modification of or amendment to and waiving in writing
compliance with any covenant or condition in this Agreement or any other Credit
Document (other than a Financial Hedge Agreement) or any Default or Event of
Default, all of which actions shall be binding upon all of the Lenders; provided, however,
that:


 


(a)  Except as
provided below, without the written consent of the Lenders owning at least a
majority of the Percentage Interests (disregarding the Percentage Interest of
any Nonperforming Lender so long as such Lender is treated equally with the
other Lenders with respect to any actions enumerated below), no written
modification of, amendment to, consent with respect to, waiver of compliance
with, or waiver of a Default under, any of the Credit Documents (other than a
Financial Hedge Agreement) shall be made.


 


(b)  Without
the written consent of such Lenders as own 100% of the Percentage Interests
(disregarding the Percentage Interest of any Nonperforming Lender so long as
such Lender is treated equally with the other Lenders with respect to any
actions enumerated below):


 


94

















 


(i)   None of
the conditions specified in Section 5 shall be amended, waived or modified.


 


(ii)  No
release of, or subordination of the Lenders’ interests in, all or substantially
all of the Credit Security and no release of the Company or any other Obligor
shall be made (in any event, without the written consent of the Lenders, the
Agent (A) may release particular items of Credit Security or particular
Obligors in dispositions permitted by Section 6.10, as modified by
amendments thereto approved by the Required Lenders, (B) may release all Credit
Security pursuant to Section 15.1 upon payment in full of the Credit
Obligations and termination of the Commitments, (C) may subordinate the
Lenders’ Liens on the Credit Security to purchase money liens on specific
assets permitted by Section 6.7.2 and (D) may, to the extent required
by the Congress/CIT Intercreditor Agreement, release particular items of Credit
Security that are subject to Liens permitted by Section 6.7.11).


 


(iii)  No
incurrence or existence of any Lien on all or substantially all of the Credit
Security shall be permitted (other than Liens securing the Credit Obligations).


 


(iv)   No
contractual subordination of the Loans or any other portion of the Credit
Obligations to any other Indebtedness shall be permitted.


 


(v)  No
alteration shall be made of the Lenders’ rights of set-off contained in
Section 8.2.4.


 


(vi)   No
amendment to or modification of this Section 14.1 or the definition of
“Required Lenders” shall be made.


 


(c)  Without
the written consent of each Lender that is directly affected thereby
(disregarding the Percentage Interest of any Nonperforming Lender so long as
such Lender is treated equally with the other Lenders with respect to any
actions enumerated below):


 


(i)  No
reduction shall be made in (A) the amount of principal of the Loan owing to
such Lender, (B) the interest rate on the portion of the Loan owing to such
Lender or (C) the fees or other amounts owing to such Lender with respect to
the credit facility provided herein (other than amendments and waivers approved
by the Required Lenders that modify defined terms used in calculating
Consolidated Excess Cash Flow or that waive an increase in the Applicable Rate
as a result of an Event of Default).


 


(ii)  No change
shall be made in the stated, scheduled time of payment of  any portion of the Loan owing to such Lender
or interest thereon or fees or other amounts relating to any of the foregoing
payable to such Lender and no waiver shall be made of any Default under
Section 8.1.1 with respect to such Lender.


 


95

















 


(iii)  No
increase shall be made in the amount, or extension of the term, of the stated
Commitments of such Lender beyond that provided for under Section 2.


 


(d)  Without
the written consent of the Agent, no amendment or modification of any Credit
Document shall affect the rights or duties of the Agent under the Credit
Documents.


 


14.2.  Course of Dealing;
No Implied Waivers.  No course of
dealing between any Lender or the Agent, on one hand, and the Company or any
other Obligor, on the other hand, shall operate as a waiver of any of the
Lenders’ or the Agent’s rights under this Agreement or any other Credit
Document or with respect to the Credit Obligations.  In particular, no delay or omission on the part of any Lender or
the Agent in exercising any right under this Agreement or any other Credit
Document or with respect to the Credit Obligations shall operate as a waiver of
such right or any other right hereunder or thereunder.  A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future
occasion.  No waiver, consent or
amendment with respect to this Agreement or any other Credit Document shall be
binding unless it is in writing and signed by the Agent or the Required
Lenders.


 


15.  General
Provisions.


 


15.1.  Defeasance.  When all Credit Obligations have been paid,
performed and reasonably determined by the Agent to have been indefeasibly
discharged in full, and if at the time no Lender continues to be committed to
extend any credit to the Company hereunder or under any other Credit Document,
this Agreement and the other Credit Documents shall terminate and, at the
Company’s written request, accompanied by such certificates and other items as
the Agent shall reasonably deem necessary, the Credit Security shall revert to
the Obligors and the right, title and interest of the Lenders and the Agent
therein shall terminate.  Thereupon, on
the Obligors’ demand and at their cost and expense, the Agent shall execute
proper instruments, acknowledging satisfaction of and discharging this
Agreement and the other Credit Documents, and shall redeliver to the Obligors
any Credit Security then in its possession; provided, however,
that Sections 3.4, 9, 10.7.7, 10.10, 12 and 15 shall survive the termination
of this Agreement.


 


15.2.  No Strict
Construction.  The parties have
participated jointly in the negotiation and drafting of this Agreement and the
other Credit Documents with counsel sophisticated in financing
transactions.  In the event an ambiguity
or question of intent or interpretation arises, this Agreement and the other
Credit Documents shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement and the other
Credit Documents.


 


15.3.  Certain
Acknowledgments.  The Company
acknowledges that:


 


(a)  it has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Credit Documents;


 


(b)  neither
any Lender nor the Agent has any fiduciary relationship with or duty to the
Obligors arising out of or in connection with this Agreement or any other
Credit Document, and the relationship between the Lenders and the Agent, on one
hand, and the


 


96

















 


Obligors, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and


 


(c)  no joint
venture is created hereby or by the other Credit Documents or otherwise exists
by virtue of the transactions contemplated hereby or thereby among the Obligors
and the Lenders.


 


15.4.  Venue; Service
of Process; Certain Waivers.  Each
of the Company, the Lenders and the Agent:


 


(a) 
irrevocably submits to the nonexclusive jurisdiction of the state courts
of The Commonwealth of Massachusetts and to the nonexclusive jurisdiction of
the United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding arising out of or based upon
this Agreement or any other Credit Document or the subject matter hereof or
thereof;


 


(b)  waives to
the extent not prohibited by applicable law that cannot be waived, and agrees
not to assert, by way of motion, as a defense or otherwise, in any such
proceeding brought in any of the above-named courts, any claim that it is
not subject personally to the jurisdiction of such court, that its property is
exempt or immune from attachment or execution, that such proceeding is brought
in an inconvenient forum, that the venue of such proceeding is improper, or
that this Agreement or any other Credit Document, or the subject matter hereof
or thereof, may not be enforced in or by such court;


 


(c)  consents
to service of process in any such proceeding in any manner at the time
permitted by Chapter 223A of the General Laws of The Commonwealth of
Massachusetts and agrees that service of process by registered or certified
mail, return receipt requested, at its address specified in or pursuant to
Section 13 is reasonably calculated to give actual notice; and


 


(d)  waives to
the extent not prohibited by applicable law that cannot be waived any right it
may have to claim or recover in any such proceeding any special, exemplary,
punitive or consequential damages.


 


15.5.  WAIVER OF JURY
TRIAL.  TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH OF THE COMPANY, THE
LENDERS AND THE AGENT WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE CONDUCT OF THE PARTIES HERETO,
WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR
OTHERWISE.  The Company acknowledges
that it has been informed by the Lenders that the foregoing sentence
constitutes a material inducement upon which each of the Lenders has relied and
will rely in entering into this Agreement and any other Credit Document.  The Company, any Lender or the Agent may
file an original counterpart or a copy of this Agreement with any


 


97

















 


court as written evidence
of the consent of the Company, the Lenders and the Agent to the waiver of their
rights to trial by jury.


 


15.6.  Interpretation;
Governing Law; etc.  Time is (and
shall be) of the essence in this Agreement and the other Credit Documents.  All covenants, agreements, representations
and warranties made in this Agreement or any other Credit Document or in
certificates delivered pursuant hereto or thereto shall be deemed to have been
relied on by each Lender, notwithstanding any investigation made by any Lender
on its behalf, and shall survive the execution and delivery to the Lenders
hereof and thereof.  The invalidity or
unenforceability of any provision hereof shall not affect the validity or
enforceability of any other provision hereof, and any invalid or unenforceable
provision shall be modified so as to be enforced to the maximum extent of its
validity or enforceability. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.  This Agreement, the other Credit
Documents and the Warrant Documents constitute the entire understanding of the
parties with respect to the subject matter hereof and thereof and supersede all
prior and contemporaneous understandings and agreements, whether written or
oral, with respect to such subject matter. 
This Agreement may be executed in any number of counterparts which
together shall constitute one instrument. 
This Agreement, and any issue, claim or proceeding arising out of or
relating to this Agreement or any other Credit Document or the conduct of the
parties hereto, whether now existing or hereafter arising and whether in
contract, tort or otherwise, shall be governed by and construed in accordance
with the laws (other than the conflict of laws rules) of The Commonwealth of
Massachusetts.


 


 


[The remainder of this page is intentionally blank.]


 


98

















 


[Credit Agreement]


 


 


Each of the undersigned has caused this Agreement to
be executed and delivered by its duly authorized officer as an agreement under
seal as of the date first above written.


 


	
   

  	
  THE DOE RUN RESOUCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marvin Kaiser

  	
   

  
	
   

  	
   

  	
  Title: 
  Executive Vice President

  
	
   

  	
   

  
	
   

  	
  The Doe Run Resources Corporation

  
	
   

  	
  1801 Park 270 Drive

  
	
   

  	
  Suite 300

  
	
   

  	
  St. Louis, MO 
  63146

  
	
   

  	
  Telecopy: 
  (314) 453-7178

  



 


 

















 


 


	
   

  	
  REGIMENT CAPITAL II, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Regiment Capital Advisors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Regiment Capital Advisors, L.L.C.,

  
	
   

  	
   

  	
  its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Timothy
  Peterson

  	
   

  
	
   

  	
  Name:

  	
  Timothy Peterson

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
  Regiment Capital II, L.P.

  
	
   

  	
  c/o Regiment Capital Advisors, L.L.C.

  
	
   

  	
  70 Federal Street

  
	
   

  	
  Boston, MA 02110

  
	
   

  	
  Telecopy: 
  (617) 488-1660

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REGIMENT CAPITAL ADVISORS, L.L.C.,

  
	
   

  	
  as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy Peterson

  	
   

  
	
   

  	
  Name:

  	
  Timothy Peterson

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
  Regiment Capital Advisors, L.L.C.

  
	
   

  	
  70 Federal Street

  
	
   

  	
  Boston, MA 02110

  
	
   

  	
  Telecopy: 
  (617) 488-1660

  
						



 


 

















 


 


	
   

  	
  LATHI, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Phemus Corporation,

  
	
   

  	
   

  	
  its sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Phemus Corporation

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Lathi, LLC

  
	
   

  	
  c/o Harvard Management Company

  
	
   

  	
  600 Atlantic Avenue

  
	
   

  	
  Boston, MA 02210

  
	
   

  	
  Telecopy: 
  (617) 523-5308