Exhibit(a)(3)
Bankers Trust New York Corporation Credit Suisse First Boston
000 Xxxxxxx Xxxxxx 00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
February 10, 1998
Sombrero Acquisition Corp.
c/o Apollo Management, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
re MTL Recapitlization/Refinancing
Bridge Loan Indemnity Letter
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Ladies and Gentlemen:
In connection with our bridge loan commitment letter, dated the date
hereof, to Sombrero Acquisition Corp. ("Acquisition Corp.") with respect to the
recapitalization of MTL, Inc. ("MTL") (the "Bridge Loan Commitment Letter"):
You hereby agree to indemnify and hold harmless Bankers Trust New York
Corporation ("BTNY"), Credit Suisse First Boston ("CSFB") and their respective
affiliates and the directors, officers, partners, agents, employees,
representatives and control persons of BTNY, CSFB and their respective
affiliates (collectively, the "Indemnified Persons") from and against all
losses, claims, damages, liabilities, awards and reasonable costs and expenses
incurred by them (including reasonable fees and disbursements of outside and in-
house counsel) which (i) are related to or arise out of (A) actions taken or
omitted to be taken (including any untrue statements made or any statements
omitted to be made) by you and/or any of your affiliates or (B) actions taken or
omitted to be taken by an Indemnified Person with the consent of you and/or any
of your affiliates or in conformity with any of the actions or omissions of you
and/or your affiliates or (ii) are otherwise related to or arise out of or in
connection with the proposed transactions giving rise to or contemplated by the
Bridge Loan Commitment Letter, including modifications or future additions
thereto, or execution of letter agreements or other related activities (all of
the foregoing being herein called the "Related Activities"), and to promptly
reimburse BTNY, CSFB and each other Indemnified Person for all reasonable
expenses (including reasonable fees and disbursements of counsel) as they are
incurred by any such Indemnified Person in connection with investigating,
preparing or
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defending any such action, claim, suit or proceeding (including, without
limitation, any arbitration) whether or not in connection with pending or
threatened litigation or arbitration in which BTNY, CSFB or any other
Indemnified Person is a party. You will not, however, be responsible for (x) any
losses, claims, damages, liabilities or expenses of any Indemnified Person (I)
pursuant to clause (ii) of the preceding sentence to the extent same are finally
judicially determined to have resulted primarily from the bad faith, wilful
misconduct or recklessness of such Indemnified Person or (II) arising out of a
breach by such Indemnified Party of its obligations under the Bridge Commitment
Letter and (y) the reimbursement of fees and disbursements of our legal counsel
and consultants and our out-of-pocket expenses, in each case incurred in
connection with the Transaction or otherwise arising out of our commitments
under the Bridge Loan Commitment Letter, except as provided in the second
paragraph of Section 6 of the Bridge Loan Commitment Letter. You also agree that
neither BTNY, CSFB nor any of their respective affiliates, nor any director,
officer, partner, employee, agent or representative of BTNY, CSFB or any of
their respective affiliates, shall have any liability to you or any of your
affiliates for or in connection with the transactions described in the Bridge
Loan Commitment Letter except for liability for (i) wilful or grossly negligent
breach of the Bridge Commitment Letter and (ii) losses, claims, damages,
liabilities, awards, costs or expenses incurred by you to the extent they are
finally judicially determined to have resulted primarily from BTNY's or CSFB's,
as the case may be, bad faith, wilful misconduct or recklessness.
Each Indemnified Person will promptly notify you of each event of
which it has knowledge that may give rise to a claim under the foregoing
paragraph, provided that the failure to so notify you shall in no way impair
your obligations under this letter agreement (except to the extent that such
failure to so notify results in material prejudice to you). If any
investigative, judicial, administrative or arbitration proceeding (a
"Proceeding") is brought against any Indemnified Person indemnified or intended
to be indemnified pursuant to this letter, you shall have the right to
participate in such Proceeding and, to the extent that you may elect by written
notice to such Indemnified Person, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Person, provided that such
Indemnified Person shall be entitled to employ counsel separate from your
counsel if counsel for such Indemnified Person shall reasonably determine that
representation of both you and the Indemnified Person would be inappropriate
under applicable standards of professional conduct due to actual or potential
conflicts of interest or inconsistent defenses between you and the Indemnified
Person, in which case the fees and disbursements of one firm of separate counsel
for all Indemnified Persons shall be paid by you. Such Indemnified Person shall
not agree to the settlement of any such claim without your consent (not to be
unreasonably withheld or delayed), unless you shall have been given notice of
the commencement of an action and shall have failed to provide the defense
thereof as herein provided.
You further agree that you (and your affiliates) will not, without the
prior written consent of BTNY and CSFB, settle or compromise or consent to the
entry of any judgment or award in any pending or threatened claim, action, suit
or proceeding
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(including, without limitation, any arbitration) in respect of which
indemnification may be sought hereunder (whether or not BTNY, CSFB or any other
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of BTNY, CSFB and each other Indemnified Person from all
liability arising out of such claim, action, suit or proceeding. If multiple
claims are brought against any Indemnified Person in an arbitration, with
respect to at least one of which indemnification is permitted under applicable
law and provided for under this letter, you agree that any arbitration award
shall be conclusively deemed to be based on claims as to which indemnification
is permitted and provided for, except to the extent the arbitration award
expressly states that the award, or any portion thereof, is based solely on a
claim as to which indemnification is not available.
You hereby agree that if any indemnification sought by an Indemnified
Person pursuant to this letter is held by a court to be unavailable for any
reason, then (whether or not BTNY or CSFB is the Indemnified Person) you, BTNY
and CSFB will contribute to the losses, claims, damages, liabilities, awards,
costs and expenses for which such indemnification is held unavailable in such
proportion as is appropriate to reflect the relative benefits to you, on the one
hand, and BTNY and CSFB, on the other hand, in connection with the Related
Activities, subject to the limitation that in any event BTNY's and CSFB's
aggregate contribution to all losses, claims, damages, liabilities, awards,
costs and expenses with respect to which contribution is available hereunder
will not exceed the amount of fees actually received by BTNY or CSFB, as the
case may be, from you, MTI or your and its subsidiaries pursuant to the Related
Activities. It is hereby agreed that the relative benefits to you, on the one
hand, and BTNY and CSFB, on the other hand, with respect to the Related
Activities shall be deemed to be in the same proportion as (i) the amount
proposed to be raised through the issuance of the Bridge Loans (as defined in
the Bridge Loan Commitment Letter) bears to (ii) the amount of fees actually
paid to BTNY or CSFB, as the case may be in, connection with the Related
Activities.
Your indemnity, reimbursement and contribution obligations under this
letter shall be in addition to any rights that BTNY, CSFB or any other
Indemnified Person may have at common law or otherwise. You hereby consent to
personal jurisdiction and service and venue in any court in which any claim,
action, suit or proceeding which is subject to this letter is brought against
BTNY, CSFB or any other Indemnified Person. This letter agreement may not be
amended or modified except in writing. THIS LETTER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS LETTER OR THE RELATED
ACTIVITIES IS HEREBY WAIVED. THE PARTIES HEREBY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW
YORK IN CONNECTION
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WITH ANY DISPUTE RELATED TO THIS LETTER OR ANY OF THE MATTERS CONTEMPLATED
HEREBY.
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Notwithstanding any provision herein to the contrary, from and after
the Closing Date (as defined in the Bridge Commitment Letter), you shall be
automatically released from each and all of your obligations under this letter
agreement (without any further action on the part of any person or entity) and
all references herein to the term "Acquisition Corp." or "you" shall be deemed
to be a reference to MTL exclusively, provided that you shall have delivered to
BTNY and CSFB documents reasonably satisfactory to BTNY and CSFB which provide
for the assumption by MTL of each and all of your obligations under this letter
agreement.
The provisions of this letter shall apply to the Related Activities
and any modification of the Related Activities and shall remain in full force
and effect following the completion of the transactions described in the Bridge
Loan Commitment Letter or termination of the Bridge Loan Commitment Letter. The
provisions hereof shall inure to the benefit of and be binding upon your
successors and assigns and the successors and assigns of BTNY, CSFB and each
other Indemnified Person.
* * * *
Very truly yours,
BANKERS TRUST NEW YORK
CORPORATION
By /s/ Xxxxxxxx Xxxxx
---------------------------------
Title:
CREDIT SUISSE FIRST BOSTON
By /s/ Xxxx Xxxxxxxxx
---------------------------------
Title: Director
By /s/ X. Xxxxx X. Xxxxxxx, XX
---------------------------------
Title: Managing Director
Agreed to and Accepted this
10th day of February, 1998
SOMBRERO ACQUISITION CORP.
By /s/ Xxxxxx Xxxxxx
---------------------------
Title: President
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