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EMPIRE GAS CORPORATION
and
CERTAIN SUBSIDIARY GUARANTORS HERETO
and
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, Trustee
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Indenture
Dated as of __________, 1994
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$___,000,000 Principal Amount at Maturity
Senior Secured Notes Due 2004
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CROSS-REFERENCE TABLE
Indenture
TIA Section Section
310 (a)(1)................................................. 6.10
(a)(2)................................................. 6.10
(a)(3)................................................. N.A.
(a)(4)................................................. N.A.
(a)(5)................................................. 6.10
(b) ................................................. 6.8; 6.10
11.2
(c) ................................................. N.A.
311 (a) ................................................. 6.11
(b) ................................................. 6.11
(c) ................................................. N.A.
312 (a) ................................................. 2.5
(b) ................................................. 11.3
(c) ................................................. 11.3
313 (a) ................................................. 6.6
(b)(1)................................................. N.A.
(b)(2)................................................. 6.6
(c) ................................................. 6.6
(d) ................................................. 6.6
314 (a)(1)................................................. 3.10; 11.2
(a)(2)................................................. 3.10; 11.2
(a)(3)................................................. 3.10; 11.2
(a)(4)................................................. 3.9
(b) ................................................. 10.2
(c)(1)................................................. 10.6; 11.4
(c)(2)................................................. 10.6; 11.4
(c)(3)................................................. N.A.
(d) ................................................. 10.6
(e) ................................................. 11.5
(f) ................................................. N.A.
315 (a) ................................................. 6.1(b)
(b) ................................................. 6.5; 11.2
(c) ................................................. 6.1(a)
(d) ................................................. 6.1(c)
(e) ................................................. 5.11
316 (a) (last sentence) ................................. 2.9
(a)(1)(A) ............................................ 5.5
(a)(1)(B) ............................................ 5.4
(a)(2) ............................................... N.A.
(b) ................................................. 5.7
(c) ................................................. 8.7
317 (a)(1)................................................. 5.8
(a)(2)................................................. 5.9
(b) ................................................. 2.4
318 (a) ................................................. 11.1
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N.A. means not applicable.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Other Definitions. . . . . . . . . . . . . . . . . . . . . . 26
SECTION 1.3 Incorporation by Reference of
Trust Indenture Act . . . . . . . . . . . . . . . . . . . 27
SECTION 1.4 Rules of Construction . . . . . . . . . . . . . . . . . . . 28
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.2 Execution and Authentication . . . . . . . . . . . . . . . . 30
SECTION 2.3 Registrar and Paying Agent . . . . . . . . . . . . . . . . . 31
SECTION 2.4 Paying Agent To Hold Money in Trust . . . . . . . . . . . . 31
SECTION 2.5 Securityholder Lists . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.6 Transfer and Exchange . . . . . . . . . . . . . . . . . . . 32
SECTION 2.7 Replacement Securities . . . . . . . . . . . . . . . . . . . 35
SECTION 2.8 Outstanding Securities . . . . . . . . . . . . . . . . . . . 35
SECTION 2.9 Determination of Holders' Action . . . . . . . . . . . . . . 36
SECTION 2.10 Temporary Securities . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Securities . . . . . . . . . . . . . . . . . . . 38
SECTION 3.2 Maintenance of Office or Agency . . . . . . . . . . . . . . 38
SECTION 3.3 Limitation on Restricted Payments. . . . . . . . . . . . . . 39
SECTION 3.4 Limitation on Incurrence of Indebtedness . . . . . . . . . . 43
SECTION 3.5 Limitation on Payment Restrictions
Affecting Subsidiaries . . . . . . . . . . . . . . . . . . 45
SECTION 3.6 Limitation on Sale/Leaseback Transactions . . . . . . . . . 46
SECTION 3.7 Limitation on Liens . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.8 Change of Control . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.9 Compliance Certificate . . . . . . . . . . . . . . . . . . . 52
SECTION 3.10 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.11 Transactions with Affiliates . . . . . . . . . . . . . . . . 53
SECTION 3.12 Sales of Assets . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.13 Corporate Existence . . . . . . . . . . . . . . . . . . . . 59
SECTION 3.14 Payment of Taxes and Other Claims . . . . . . . . . . . . . 60
SECTION 3.15 Notice of Defaults and Other Events . . . . . . . . . . . . 60
SECTION 3.16 Maintenance of Properties and Insurance . . . . . . . . . . 60
SECTION 3.17 Limitation on Issuance of Capital Stock
and Incurrence of Indebtedness of
Restricted Subsidiaries . . . . . . . . . . . . . . . . . 61
SECTION 3.18 Limitation on Changes in the Nature of
the Business . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE IV
CONSOLIDATION, MERGER AND SALE
SECTION 4.1 Merger and Consolidation of Company . . . . . . . . . . . . 62
SECTION 4.2 Successor Substituted . . . . . . . . . . . . . . . . . . . 66
ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.2 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 5.3 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 5.4 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . 71
SECTION 5.5 Control by Majority . . . . . . . . . . . . . . . . . . . . 72
SECTION 5.6 Limitation on Suits . . . . . . . . . . . . . . . . . . . . 72
SECTION 5.7 Rights of Holders To Receive Payment . . . . . . . . . . . . 72
SECTION 5.8 Collection Suit by Trustee . . . . . . . . . . . . . . . . . 73
SECTION 5.9 Trustee May File Proofs of Claim . . . . . . . . . . . . . . 73
SECTION 5.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 5.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . 74
SECTION 5.12 Waiver of Stay or Extension Laws . . . . . . . . . . . . . . 74
ARTICLE VI
TRUSTEE
SECTION 6.1 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . 75
SECTION 6.2 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.3 Individual Rights of Trustee . . . . . . . . . . . . . . . . 77
SECTION 6.4 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . 77
SECTION 6.5 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . 78
SECTION 6.6 Reports by Trustee to Holders . . . . . . . . . . . . . . . 78
SECTION 6.7 Compensation and Indemnity . . . . . . . . . . . . . . . . . 78
SECTION 6.8 Replacement of Trustee . . . . . . . . . . . . . . . . . . . 80
SECTION 6.9 Successor Trustee by Merger, etc. . . . . . . . . . . . . . 81
SECTION 6.10 Eligibility; Disqualification . . . . . . . . . . . . . . . 81
SECTION 6.11 Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 6.12 Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE VII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 7.1 Discharge of Liability on Securities;
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 7.2 Termination of Company's Obligations . . . . . . . . . . . . 83
SECTION 7.3 Defeasance and Discharge of Indenture . . . . . . . . . . . 84
SECTION 7.4 Defeasance of Certain Obligations . . . . . . . . . . . . . 87
SECTION 7.5 Application of Trust Money . . . . . . . . . . . . . . . . . 90
SECTION 7.6 Repayment to Company . . . . . . . . . . . . . . . . . . . . 90
SECTION 7.7 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE VIII
AMENDMENTS AND SUPPLEMENTS
SECTION 8.1 Without Consent of Holders . . . . . . . . . . . . . . . . . 91
SECTION 8.2 With Consent of Holders . . . . . . . . . . . . . . . . . . 92
SECTION 8.3 Compliance with Trust Indenture Act . . . . . . . . . . . . 94
SECTION 8.4 Revocation and Effect of Consents . . . . . . . . . . . . . 94
SECTION 8.5 Notation on or Exchange of Securities . . . . . . . . . . . 94
SECTION 8.6 Trustee To Sign Amendments . . . . . . . . . . . . . . . . . 94
SECTION 8.7 Fixing of Record Dates . . . . . . . . . . . . . . . . . . . 95
ARTICLE IX
REDEMPTION
SECTION 9.1 Notices to Trustee . . . . . . . . . . . . . . . . . . . . . 95
SECTION 9.2 Selection of Securities To Be Redeemed . . . . . . . . . . . 96
SECTION 9.3 Notice of Redemption . . . . . . . . . . . . . . . . . . . . 96
SECTION 9.4 Effect of Notice of Redemption . . . . . . . . . . . . . . . 97
SECTION 9.5 Deposit of Redemption Price . . . . . . . . . . . . . . . . 97
SECTION 9.6 Securities Redeemed in Part . . . . . . . . . . . . . . . . 97
ARTICLE X
SECURITY AND PLEDGE OF COLLATERAL
SECTION 10.1 Collateral Documents . . . . . . . . . . . . . . . . . . . . 98
SECTION 10.2 Recording and Opinions . . . . . . . . . . . . . . . . . . . 99
SECTION 10.3 Remedies Upon an Event of Default . . . . . . . . . . . . . 99
SECTION 10.4 Release of the Collateral . . . . . . . . . . . . . . . . . 100
SECTION 10.5 Purchase of Securities with Net
Available Cash . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 10.6 Certificates of Company . . . . . . . . . . . . . . . . . . 104
SECTION 10.7 Authorization of Actions to be Taken
by the Trustee Under the Pledge
Agreement . . . . . . . . . . . . . . . . . . . . . . . . 104
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Trust Indenture Act Controls . . . . . . . . . . . . . . . . 105
SECTION 11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 11.3 Communication by Holders with Other
Holders . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 11.4 Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 11.5 Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . . . . . . . . 107
SECTION 11.6 Rules by Trustee and Agents . . . . . . . . . . . . . . . . 108
SECTION 11.7 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 11.8 Successors; No Recourse Against Others . . . . . . . . . . . 108
SECTION 11.9 Duplicate Originals . . . . . . . . . . . . . . . . . . . . 108
SECTION 11.10 Other Provisions . . . . . . . . . . . . . . . . . . . . . . 108
SECTION 11.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 108
ARTICLE XII
SUBSIDIARY GUARANTEES
SECTION 12.1 Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . 109
SECTION 12.2 Execution and Delivery of Subsidiary
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 12.3 Subsidiary Guarantors May Consolidate, Etc.
on Certain Terms . . . . . . . . . . . . . . . . . . . . . 112
SECTION 12.4 Release of Subsidiary Guarantors . . . . . . . . . . . . . . 112
SECTION 12.5 Additional Subsidiary Guarantors . . . . . . . . . . . . . . 114
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
SCHEDULE I--LIST OF SUBSIDIARY GUARANTORS . . . . . . . . . . . . . . . . . I-1
EXHIBIT A--FORM OF SECURITY . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B--FORM OF GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C--FORM OF SUBORDINATION PROVISIONS . . . . . . . . . . . . . . . . C-1
EXHIBIT D--PLEDGE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . D-1
INDENTURE dated as of June ___, 1994, between Empire Gas
Corporation, a Missouri corporation (the "Company"), each of the Subsidiary
Guarantors (as hereinafter defined) and Shawmut Bank Connecticut, National
Association, a National Banking Association (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the holders of the Company's Senior
Secured Notes Due 2004:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"ACCRETED VALUE" means as of any date (the "specified date") with
respect to each $1,000 face amount of Securities, the following amount:
(i) if the specified date is one of the following dates (each an
"accrual date"), the amount set forth opposite such date below:
ACCRUAL DATE ACCRETED VALUE
______, 1994 . . . . . . . . . . . . ______
______, 1994 . . . . . . . . . . . . ______
______, 1995 . . . . . . . . . . . . ______
______, 1995 . . . . . . . . . . . . ______
______, 1996 . . . . . . . . . . . . ______
______, 1996 . . . . . . . . . . . . ______
______, 1997 . . . . . . . . . . . . ______
______, 1997 . . . . . . . . . . . . ______
______, 1998 . . . . . . . . . . . . ______
______, 1998 . . . . . . . . . . . . ______
______, 1999 . . . . . . . . . . . . $1,000;
(ii) if the specified date occurs between two accrual dates, the
sum of (A) the accreted value for the accrual date immediately preceding
the specified date and (B) an amount equal to the product of (i) the
accreted value for the immediately following accrual date less the
accreted value for
the immediately preceding accrual date and (ii) a fraction, the numerator
of which is the number of days (not to exceed 180 days) from the
immediately preceding accrual date to the specified date, using a 360-day
year of twelve 30-day months, and the denominator of which is 180 (or, if
the immediately following accrual date is _________, 1999, ___); and
(iii) if the specified date occurs after ______, 1999, $1,000.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person existing at
the time at which such Person became a Subsidiary and not incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary.
Acquired Indebtedness shall be deemed to be Incurred on the date the acquired
Person becomes a Subsidiary.
"ACQUISITION INDEBTEDNESS" means Indebtedness of a Restricted
Subsidiary incurred in connection with the acquisition of property or assets
related to the Line of Business which will be owned and used by the Company or
a Restricted Subsidiary, which Indebtedness is without recourse to the Company
or any Restricted Subsidiary other than the Restricted Subsidiary issuing such
Acquisition Indebtedness.
"ADDITIONAL ASSETS" means (i) any property or assets related to the
Line of Business which will be owned and used by the Company or a Restricted
Subsidiary, (ii) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary or (iii) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary.
"AFFILIATE" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by, or under direct or indirect common
control with, such specified Person. For the purposes of this definition,
"control," when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract
2
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. For purposes of Sections 3.11 and 3.12 only,
"Affiliate" shall also mean any beneficial owner of 5% or more of the total
Voting Shares (on a Fully Diluted Basis) of the Company or of rights or
warrants to purchase such stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof. For purposes of Section 3.3, "Affiliate" shall also
mean any Person of which the Company owns 5% or more of any class of Capital
Stock or rights to acquire 5% or more of any class of Capital Stock and any
Person who would be an Affiliate of any such Person pursuant to the first
sentence hereof.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ASSET SALE" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale/leaseback transactions, but excluding
(except as provided for in the last paragraph of Section 3.12(b)) those
permitted by Article IV hereof) in one or a series of transactions by the
Company or any Restricted Subsidiary to any Person other than the Company or
any Wholly Owned Subsidiary, of (i) all or any of the Capital Stock of the
Company or any Restricted Subsidiary, (ii) all or substantially all of the
assets of any operating unit, or line of business of the Company or any
Restricted Subsidiary or (iii) any other property or assets or rights to
acquire property or assets of the Company or any Restricted Subsidiary outside
of the ordinary course of business of the Company or such Restricted
Subsidiary.
"ATTRIBUTABLE DEBT" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
"AVERAGE LIFE" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of (A) the numbers of years from the date of
3
determination to the dates of each successive scheduled principal payment of
such Indebtedness or scheduled redemption or similar payment with respect to
such Indebtedness or Preferred Stock multiplied by (B) the amount of such
payment by (ii) the sum of all such payments.
"BASIC AGREEMENTS" means (i) the Stock Redemption Agreement, dated
May 7, 1994, among the Company, Energy, Mr. Lindsey, Mr. Robert Plaster and the
other parties named therein; (ii) the Services Agreement, between the Company
and Empire Service Corp., entered into pursuant to the Stock Redemption
Agreement; (iii) the Lease Agreement, among the Company and Evergreen National
Corporation, entered into pursuant to the Stock Redemption Agreement and (iv)
the Non-Competition Agreement, among the Company, Energy, Paul Lindsey, Robert
Plaster and Stephen Plaster, entered into pursuant to the Stock Redemption
Agreement.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any authorized committee thereof.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means each day which is not a Legal Holiday.
"CAPITAL STOCK" means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation or
any and all equivalent ownership interests in a Person (other than a
corporation).
"CAPITALIZED LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such Person; the
Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which the lease
may be terminated by the lessee
4
without payment of a penalty; and "Capitalized Lease Obligations" means the
rental obligations, as aforesaid, under such lease.
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) at any time after the occurrence of a Public Market, any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other
than the Management Group or an underwriter engaged in a firm commitment
underwriting on behalf of the Company, is or becomes the "beneficial owner" (as
such term is used in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause (i) a person shall be deemed to have beneficial
ownership of all shares that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly
or indirectly, of more than 30% of the total Voting Shares of the Company; (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors together with any new directors
whose election by the Board of Directors or whose nomination for election by
the stockholders was approved by a vote of 66-2/3% of the directors of such
person then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so approved
cease for any reason to constitute a majority of the Board of Directors then in
office; (iii) a majority of the Company's and its Restricted
Subsidiaries' assets are sold, leased, exchanged or otherwise transferred to
any Person or group of Persons acting in concert; (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation; (v) prior to the
occurrence of a Public Market, the Management Group ceases in the aggregate to
beneficially own, directly or indirectly, at least 50% in the aggregate of the
total voting power of the Voting Shares of the Company; or (vi) at any time
prior to the occurrence of a Change of Control pursuant to clauses (i) to
(v) of this definition as a result of which a Change of Control Offer was made,
(A) the failure of the Company for a period of greater than 90 days in any
12 month period to continuously maintain (following the 6 month anniversary of
the Offering) on its Board of Directors at least two Outside Directors,
(B) the failure of the Company for a period of greater than 90 days in any
12 month period to continuously maintain an audit committee of its Board of
Direc-
5
tors consisting solely of Outside Directors or (C) the Board of Directors
consists of greater than seven members; PROVIDED, HOWEVER, that upon the
occurrence of any of the events in this item (vi) the Company shall notify the
Trustee of such occurrence.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means the collateral securing the Obligations of the
Company hereunder as defined in the Pledge Agreement.
"COLLATERAL ACCOUNT" means an account subject to a first priority
perfected Lien in favor of the Trustee, the funds of which shall be invested in
Temporary Cash Investments.
"COLLATERAL AGENT" means Shawmut Bank Connecticut, National
Association, as provided for in the Pledge Agreement until a successor replaces
it and thereafter means the successor.
"COMPANY" means the party named as such in the Indenture until a
successor replaces it pursuant to the terms and conditions of the Indenture and
thereafter means the successor.
"CONSOLIDATED COVERAGE RATIO" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters to (ii) the Consolidated Interest
Expense for such four fiscal quarters; PROVIDED, HOWEVER, that if the Company
or any Restricted Subsidiary has Incurred any Indebtedness since the beginning
of such period that remains outstanding or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, or both, both EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to (x) such
new Indebtedness as if such Indebtedness had been Incurred on the first day of
such period and (y) the repayment, redemption, repurchase, defeasance or
discharge of any Indebtedness repaid, redeemed, repurchased, defeased or
discharged with the proceeds of such new Indebtedness as if such repayment,
redemption, repurchase, defeasance or discharge had been
6
made on the first day of such period; PROVIDED, FURTHER, that if within the
period during which EBITDA or Consolidated Interest Expense is measured, the
Company or any of its Consolidated Restricted Subsidiaries shall have made any
Asset Sales, (x) the EBITDA for such period shall be reduced by an amount equal
to the EBITDA (if positive) directly attributable to the assets or Capital
Stock which are the subject of such Asset Sales for such period, or increased
by an amount equal to the EBITDA (if negative), directly attributable thereto
for such period and (y) the Consolidated Interest Expense for such period shall
be reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness for which neither the Company nor any
Consolidated Restricted Subsidiary shall continue to be liable as a result of
any such Asset Sale or which is repaid, redeemed, defeased, discharged or
otherwise retired in connection with or with the proceeds of the assets or
Capital Stock which are the subject of such Asset Sales for such period; and
PROVIDED, FURTHER, that if the Company or any Consolidated Restricted
Subsidiary shall have made any acquisition of assets or Capital Stock
(occurring by merger or otherwise) since the beginning of such period
(including any acquisition of assets or Capital Stock occurring in connection
with a transaction causing a calculation to be made hereunder) the EBITDA and
Consolidated Interest Expense for such period shall be calculated, after giving
pro forma effect thereto (and without regard to clause (iv) of the proviso to
the definition of "Consolidated Net Income"), as if such acquisition of assets
or Capital Stock took place on the first day of such period. For all purposes
of this definition, if the date of determination occurs prior to the completion
of the first four full fiscal quarters following the Issue Date, then "EBITDA"
and "Consolidated Interest Expense" shall be calculated after giving effect on
a pro forma basis to the Offering as if the Offering occurred on the first day
of the four full fiscal quarters that were completed preceding such date of
determination.
"CONSOLIDATED CURRENT LIABILITIES," as of the date of determination,
means the aggregate amount of liabilities of the Company and its Consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), after eliminating (i) all inter-company
items be-
7
tween the Company and any Subsidiary and (ii) all current maturities of long-
term Indebtedness, all as determined in accordance with GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" means, for any period, as applied
to the Company, the provision for local, state, federal or foreign income taxes
on a Consolidated basis for such period determined in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, as applied to
the Company, the sum of (a) the total interest expense of the Company and its
Consolidated Restricted Subsidiaries for such period as determined in
accordance with GAAP, including, without limitation, (i) amortization of
original issue discount on any Indebtedness and the interest portion of
any deferred payment obligation, calculated in accordance with the
effective interest method of accounting, and amortization of debt issuance
costs (other than issuance costs with regard to the Offering, the
execution of the New Credit Facility and the related transactions
occurring simultaneously therewith), (ii) accrued interest,
(iii) noncash interest payments, (iv) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, (v) interest actually paid by the Company or any such Subsidiary
under any guarantee of Indebtedness or other obligation of any other Person and
(vi) net costs associated with Interest Rate Agreements (including amortization
of discounts) and Currency Agreements, plus (b) all but the principal component
of rentals in respect of Capitalized Lease Obligations paid, accrued, or
scheduled to be paid or accrued by the Company or its Consolidated Restricted
Subsidiaries, plus (c) one-third of all Operating Lease Obligations paid,
accrued and/or scheduled to be paid by the Company and its Consolidated
Restricted Subsidiaries, plus (d) amortization of capitalized interest,
plus (e) dividends paid in respect of Preferred Stock of the Company or any
Consolidated Restricted Subsidiary held by Persons other than the Company
or a Wholly Owned Subsidiary, plus (f) cash contributions to any employee
stock ownership plan to the extent such contributions are used by such
employee stock ownership plan to pay interest or fees to any person (other
than the Company or a Restricted Subsidiary) in connection with loans
incurred by such employee stock ownership plan to purchase Capital Stock
8
of the Company.
"CONSOLIDATED NET INCOME (LOSS)" means, for any period, as applied to
the Company, the Consolidated net income (loss) of the Company and its
Consolidated Restricted Subsidiaries for such period, determined in accordance
with GAAP, adjusted by excluding (without duplication), to the extent included
in such net income (loss), the following: (i) all extraordinary gains or
losses; (ii) any net income of any Person if such Person is not a Restricted
Subsidiary, except that (A) the Company's equity in the net income of any such
Person for such period shall be included in Consolidated Net Income (Loss) up
to the aggregate amount of cash actually distributed by such Person during such
period to the Company or a Restricted Subsidiary as a dividend or other
distribution and (B) the equity of the Company or a Restricted Subsidiary in a
net loss of any such Person for such period shall be included in determining
Consolidated Net Income (Loss); (iii) the net income of any Restricted
Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Restricted Subsidiary of such income is not at
the time thereof permitted, directly or indirectly, by operation of the terms
of its charter or by-laws or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such Restricted
Subsidiary or its stockholders; (iv) any net income (or loss) of any Person
combined with the Company or any of its Restricted Subsidiaries on a "pooling
of interests" basis attributable to any period prior to the date of such
combination; (v) any gain or loss realized upon the sale or other disposition
of any property, plant or equipment of the Company or its Restricted
Subsidiaries (including pursuant to any sale/leaseback arrangement) which
is not sold or otherwise disposed of in the ordinary course of business and
any gain (but not loss) realized upon the sale or other disposition by the
Company or any Restricted Subsidiary of any Capital Stock of any Person;
and (vi) the cumulative effect of a change in accounting principles; and
further adjusted by subtracting from such net income the tax liability
of any parent of the Company to the extent of payments made to such
parent by the Company pursuant to any tax sharing agreement or other
arrangement for such period.
9
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of
determination, as applied to the Company, the total amount of assets (less
accumulated depreciation or amortization, allowances for doubtful receivables,
other applicable reserves and other properly deductible items) which would
appear on a Consolidated balance sheet of the Company and its Consolidated
Restricted Subsidiaries, determined on a Consolidated basis in accordance with
GAAP, and after giving effect to purchase accounting and after deducting
therefrom, to the extent otherwise included, the amounts of: (i) Consolidated
Current Liabilities; (ii) minority interests in Consolidated Subsidiaries held
by Persons other than the Company or a Restricted Subsidiary; (iii) excess of
cost over fair value of assets of businesses acquired, as determined in good
faith by the Board of Directors; (iv) any revaluation or other write-up in
value of assets subsequent to December 31, 1993 as a result of a change in the
method of valuation in accordance with GAAP; (v) unamortized debt discount and
expenses and other unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, licenses, organization or developmental
expenses and other intangible items; (vi) treasury stock; and (vii) any cash
set apart and held in a sinking or other analogous fund established for the
purpose of redemption or other retirement of Capital Stock to the extent such
obligation is not reflected in Consolidated Current Liabilities.
"CONSOLIDATED NET WORTH" means, at any date of determination, as
applied to the Company, stockholders' equity as set forth on the most recently
available Consolidated balance sheet of the Company and its Consolidated
Restricted Subsidiaries (which shall be as of a date no more than 60 days prior
to the date of such computation), less any amounts attributable to Redeemable
Stock or Exchangeable Stock, the cost of treasury stock and the principal
amount of any promissory notes receivable from the sale of Capital Stock
of the Company or any Subsidiary.
"CONSOLIDATION" means, with respect to any Person, the consolidation
of accounts of such Person and each of its subsidiaries if and to the extent
the accounts of such Person and such subsidiaries are consolidated in
accordance with GAAP. The term "Consolidated" shall have a correlative
meaning.
10
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
the Company or any Restricted Subsidiary against fluctuations in currency
values to or under which the Company or any Restricted Subsidiary is a party
or a beneficiary on the Issue Date or becomes a party or beneficiary
thereafter.
"DEFAULT" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"DEPOSITARY" means The Depositary Trust Company, its nominees, and
their respective successors until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder.
"DEFAULTED INTEREST" means any interest on any Security which is
payable, but is not punctually paid or duly provided for on any Interest
Payment Date.
"EBITDA" means, for any period, as applied to the Company, the sum of
Consolidated Net Income (Loss) (but without giving effect to adjustments,
accruals, deductions or entries resulting from purchase accounting,
extraordinary losses or gains and any gains or losses from any Asset Sales),
plus the following to the extent included in calculating Consolidated Net
Income Loss): (a) Consolidated Income Tax Expense, (b) Consolidated Interest
Expense, (c) depreciation expense and (d) amortization expense, in each case
for such period; PROVIDED that, if the Company has any Subsidiary that is
not a Wholly Owned Subsidiary, EBITDA shall be reduced (to the extent not
otherwise reduced by GAAP) by an amount equal to (A) the consolidated net
income (loss) of such Subsidiary (to the extent included in Consolidated
Net Income (Loss)) multiplied by (B) the quotient of (1) the number of
shares of outstanding common stock of such Subsidiary not owned on
the last day of such period by the Company or any Wholly Owned
Subsidiary of the Company divided by (2) the total number of shares
of outstanding common stock of such Subsidiary on the last day of such period.
11
"ENERGY" means Empire Energy Corporation, a Missouri corporation.
"EXCESS PAYMENTS" means any amounts paid in respect of salary, bonus,
insurance or annuity premiums (other than premiums for "key man" insurance the
sole beneficiary of which is the Company), or other payments or contributions
to any employee benefit, severance, retirement, stock ownership or stock
purchase plan or program or any similar plan or arrangement, to, or for
the benefit of, a Lindsey Entity in excess of the lesser of (A) the
aggregate scheduled amounts of any such payments as set forth in the
Employment Agreements between each of Paul Lindsey and Kristen Lindsey,
on the one hand, and the Company on the other hand, each
dated as of _______, 1994, as they may be amended from time to time
and (B) an aggregate of $1,000,000.
"EXCHANGEABLE STOCK" means any Capital Stock which by its terms is
exchangeable or convertible at the option of any Person other than the Company
into another security (other than Capital Stock of the Company which is neither
Exchangeable Stock nor Redeemable Stock).
"FAIR VALUE" of any property shall mean its fair value as of a date
not more than 90 days prior to the date of the certificate relating thereto,
such Fair Value to be determined in any case as if such property were free of
Liens securing Indebtedness, if any.
"FOREIGN ASSET SALE" means an Asset Sale in respect of the Capital
Stock or assets of a Foreign Subsidiary or a Restricted Subsidiary of the type
described in Section 936 of the Code to the extent that the proceeds of such
Asset Sale are received by a Person subject in respect of such proceeds to the
tax laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"FOREIGN SUBSIDIARY" means a Restricted Subsidiary that is
incorporated in a jurisdiction other than the United States of America or a
State thereof or the District of Columbia.
"FULLY DILUTED BASIS" means after giving effect to the exercise of
any outstanding options, warrants or rights to purchase Voting Shares and the
conversion or
12
exchange of any securities convertible into or exchangeable for Voting Shares.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect and, to the extent optional, adopted by the
Company on the Issue Date, consistently applied, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board.
"GUARANTEE" means, as applied to any obligation, contingent or
otherwise, of any Person, (i) a guarantee, direct or indirect, in any manner,
of any part or all of such obligation (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) and (ii) an
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to insure in any way the payment or performance (or payment of damages
in the event of nonperformance) of any part or all of such obligation,
including the payment of amounts drawn down under letters of credit.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name a
Security is registered on the Registrar's books.
"INCUR" means, as applied to any obligation, to create, incur, issue,
assume, guarantee or in any other manner become liable with respect to,
contingently or otherwise, such obligation, and "INCURRED," "INCURRENCE" and
"INCURRING" shall each have a correlative meaning; PROVIDED, HOWEVER, that any
Indebtedness or Capital Stock of a Person existing at the time such Person
becomes (after the Issue Date) a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at
the time it becomes a Subsidiary; and PROVIDED, FURTHER, that any amendment,
modification or waiver of any provision of any document pursuant to which
Indebtedness was previously Incurred shall not be deemed to be an Incurrence of
Indebtedness as long as (i) such amendment, modification or waiver does not (A)
increase the principal or premium thereof or interest rate thereon, (B) change
to an earlier date the
13
Stated Maturity thereof or the date of any scheduled or required principal
payment thereon or the time or circumstances under which such Indebtedness may
or shall be redeemed, (C) if such Indebtedness is contractually subordinated in
right of payment to the Securities, modify or affect, in any manner adverse to
the Holders, such subordination, (D) if the Company is the obligor thereon,
provide that a Restricted Subsidiary shall be an obligor, or (E) violate, or
cause the Indebtedness to violate, the provisions of Sections 3.5 or 3.7 and
(ii) such Indebtedness would, after giving effect to such amendment,
modification or waiver as if it were an Incurrence, comply with clause (i) of
the first proviso to the definition of "Refinancing Indebtedness."
"INDEBTEDNESS" of any Person means, without duplication, (i) the
principal of and premium (if any such premium is then due and owing) in respect
of (A) indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable; (ii) all Capitalized
Lease Obligations of such Person; (iii) all obligations of such Person Incurred
as the deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement; (iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other- than obligations with respect to letters of credit securing
obligations (other than obligations described in (i) through (iii) above)
entered into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the tenth Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit); (v) the amount of all obligations of such Person with
respect to the scheduled redemption, repayment or other repurchase of any
Redeemable Stock and, in the case of any Subsidiary, with respect to any
Preferred Stock (but excluding in each case any accrued dividends);
(vi) all obligations of other Persons and all dividends of other Persons
for the payment of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise,
including by means of any guarantee; (vii) all liabilities or other
14
obligations, contingent or otherwise, purchased, assumed or with respect to
which such Person shall otherwise become liable or responsible in connection
with the purchase, acquisition or assumption of property, services or business
operations to the extent reflected on the balance sheet of such Person in
accordance with GAAP; (viii) contractual obligations to repurchase goods sold
or distributed; (ix) all obligations of such Person in respect of Interest Rate
Agreements and Currency Agreements; and (x) all obligations of the type
referred to in clauses (i) through (ix) of other Persons secured by any Lien
on any property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the
obligation so secured; PROVIDED, HOWEVER, that Indebtedness shall not
include trade accounts payable arising in the ordinary course of business.
The amount of Indebtedness of any Person at any date shall be,
with respect to unconditional obligations, the outstanding balance at such
date of all such obligations as described above and,
with respect to any contingent obligations (other than pursuant to clause (vii)
above, which shall be included to the extent reflected on the balance sheet of
such Person in accordance with GAAP) at such date, the maximum liability
determined by such Person's board of directors, in good faith, as, in light of
the facts and circumstances existing at the time, reasonably likely to be
Incurred upon the occurrence of the contingency giving rise to such obligation.
"INTERCOMPANY NOTES" means the notes issued to the Company by its
Subsidiaries pursuant to the Master Revolving Credit Note, dated as of
June ___, 1994, among the Company and each of the Subsidiaries pursuant to
which the Company shall make certain loans to finance the working capital
needs of the Subsidiaries with the proceeds of the Indebtedness incurred
pursuant to the New Credit Facility, or any substantially similar master
intercompany note pursuant to any credit facility, Incurred pursuant
to Section 3.4(b)(iv) refinancing the New Credit Facility, as such
Intercompany Notes may be amended or otherwise modified from time to time.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment
of interest on the Securities.
"INTEREST RATE AGREEMENT" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap
15
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement or other similar agreement or arrangement
designed to protect against fluctuations in interest rates to or under which
the Company or any of its Restricted Subsidiaries is a party or beneficiary on
the Issue Date or becomes a party or beneficiary thereafter.
"INVESTMENT" means, with respect to any Person, any direct or
indirect advance, loan (other than advances to customers who are not
Affiliates in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such Person or its Subsidiaries)
or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for
property or services for the account or use of
others), or any other investment in any other Person, or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities or assets issued or owned by any other Person (whether by
merger, consolidation, amalgamation, sale of assets or otherwise). For
purposes of the definition of "Unrestricted Subsidiary" and the
provisions set forth in Section 3.3, (i) "Investment" shall include the
portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the
net assets of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary and shall exclude the fair
market value of the net assets of any Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
by the Board of Directors in good faith.
"ISSUE DATE" means the date on which the Securities are originally
issued under the Indenture.
"LIEN" means any mortgage, lien, pledge, charge, hypothecation,
assignment, claim, option, priority, preferential arrangement of any kind or
nature or other security interest or encumbrance of any kind or nature
(including any conditional sale or other title retention agreement and any
lease in the nature thereof).
16
"LINDSEY ENTITY" means Paul S. Lindsey, Jr., Kristen L. Lindsey, any
member of their family and any Person of which any of the foregoing Persons are
Affiliates.
"LINE OF BUSINESS" means the sale and distribution of propane gas and
operations related thereto.
"MANAGEMENT GROUP" means, collectively, those individuals who
beneficially own, directly or indirectly, Voting Shares of the Company or any
successor thereto immediately following the consummation of the Offering and
the transactions related thereto and are members of management of the Company
or any Subsidiaries of the Company (or the estate or any beneficiary of any
such individual or any immediate family member of any such individual or any
trust established for the benefit of any such individual or immediate family
member).
"NET AVAILABLE CASH" means, with respect to any Asset Sale or
Collateral Sale, the cash or cash equivalent payments received by the Company
or a Subsidiary in connection with such Asset Sale or Collateral Sale
(including any cash received by way of deferred payment of principal pursuant
to a note or installment receivable or otherwise, but only as or when received
and also including the proceeds of other property received when converted to
cash or cash equivalents) net of the sum of, without duplication, (i) all
reasonable legal, title and recording tax expenses, reasonable commissions,
and other reasonable fees and expenses incurred directly relating to such
Asset Sale or Collateral Sale, (ii) provision for all local, state, federal
and foreign taxes expected to be paid (whether or not such taxes are actually
paid or payable) as a consequence of such Asset Sale or Collateral Sale,
without regard to the consolidated results of the Company and its Subsidiaries,
(iii) payments made to repay Indebtedness which is secured by any assets
subject to such Asset Sale or Collateral Sale in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or by applicable law, be repaid out of the
proceeds from such Asset Sale or Collateral Sale, and (iv) reasonable amounts
reserved by the Company or any Subsidiary of the Company receiving proceeds of
such Asset Sale or Collateral Sale against any liabilities associated with such
Asset Sale or Collateral Sale,
17
including without limitation, indemnification obligations PROVIDED that, such
amounts shall be applied as described in Section 3.12 or Section 10.4, as the
case may be, no later than the fifth anniversary of such Asset Sale or
Collateral Sale if not previously paid to satisfy such liabilities and PROVIDED
FURTHER that such amounts shall not exceed 10% of the payments received by the
Company or a Subsidiary in connection with such Asset Sale or Collateral Sale.
"NET CASH PROCEEDS" means, with respect to any issuance or sale of
Capital Stock by any Person, the cash proceeds to such Person of such issuance
or sale net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultancy and other
fees actually incurred by such Person in connection with such issuance or sale
and net of taxes paid or payable by such Person as a result thereof.
"NEW CREDIT FACILITY" means the credit facility provided pursuant to
the credit agreement, dated as of June ___, 1994, as it may be amended or
otherwise modified from time to time, between the Company and Continental Bank,
N.A. and its successors and assigns.
"NON-CONVERTIBLE CAPITAL STOCK" means, with respect to any
corporation, any Capital Stock of such corporation which is not convertible
into another security other than non-convertible common stock of such
corporation; PROVIDED, HOWEVER, that Non-Convertible Capital Stock shall not
include any Redeemable Stock or Exchangeable Stock.
"OBLIGATIONS" means for any Person all principal, premium, interest,
penalties, expenses, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness of such
Person.
"OFFERING" means the public offering and sale of the Securities.
"OFFICER" means the Chairman, the President, any Vice President, the
Chief Operating Officer, the Chief Financial Officer, the Treasurer, the
Secretary,
18
any Assistant Treasurer, any Assistant Secretary or the Controller of the
Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers,
one of whom must be the President, the Treasurer or a Vice President of the
Company. Each Officers' Certificate (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include the statements provided for in TIA
Section 314(e).
"OPERATING LEASE OBLIGATIONS" means any obligation of the Company and
its Restricted Subsidiaries on a Consolidated basis incurred or assumed under
or in connection with any lease of real or personal property which, in
accordance with GAAP, is not required to be classified and accounted for as a
capital lease.
"OPINION OF COUNSEL" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel, if so acceptable, may be an
employee of or counsel to the Company or the Trustee. Each such Opinion of
Counsel shall include the statements provided for in TIA Section 314(e).
"OUTSIDE DIRECTOR" means any Person who is a member of the Board of
Directors who is not (i) an employee or Affiliate of the Company, any
Subsidiary of the Company or Energy, (ii) an employee or Affiliate of Holding
Capital Group, Inc. (iii) a Plaster Entity or a Lindsey Entity, or (iv) a
Person who has engaged in a transaction with the Company or any Subsidiary of
the Company that would be required to be disclosed under Item 13 of Form 10-K
if such Person were a director of a registrant under the Securities Exchange
Act of 1934, as amended.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"PLASTER ENTITY" means Robert W. Plaster, Stephen R. Plaster, any
member of each such individual's
19
family, and any Person of which any of the foregoing Persons are Affiliates.
"PLEDGE AGREEMENT" means that certain Pledge Agreement, dated as of
the date hereof, by the Company in favor of the Trustee, in the form attached
hereto as EXHIBIT D, as amended, supplemented and/or restated.
"PREFERRED STOCK", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"PRINCIPAL" means, with respect to the Securities, the Accreted Value
of the Securities.
"PUBLIC EQUITY OFFERING" means an underwritten primary public
offering of equity securities of the Company pursuant to an effective
registration statement under the Securities Act.
"PUBLIC MARKET" shall be deemed to have occurred if (x) a Public
Equity Offering has been consummated and (y) at least 25% (for purposes of the
definition of "Change of Control") or 20% (for purposes of paragraph 5 of the
Securities attached hereto) of the total issued and outstanding common stock of
the Company has been distributed by means of an effective registration
statement under the Securities Act or sales pursuant to Rule 144 under the
Securities Act.
"REDEEMABLE STOCK" means any class or series of Capital Stock of any
Person that (a) by its terms, by the terms of any security into which it is
convertible or exchangeable or otherwise is, or upon the happening of an event
or passage of time would be, required to be redeemed (in whole or in part) on
or prior to the first anniversary of the Stated Maturity of the Securities,
(b) is redeemable at the option of the holder thereof at any time on or prior
to the first anniversary of the Stated Maturity of the Securities or (c) is
convertible into or exchangeable for Capital Stock referred to in clause
(a) or clause (b) above or debt securities at any time prior
20
to the first anniversary of the Stated Maturity of the Securities.
"REFINANCING INDEBTEDNESS" means Indebtedness that refunds,
refinances, replaces, renews, repays or extends (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances," and
"refinanced" shall have a correlative meaning) any Indebtedness of the Company
or a Restricted Subsidiary existing on the Issue Date or Incurred in compliance
with the Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary)
including Indebtedness that refinances Refinancing Indebtedness; PROVIDED,
HOWEVER, that (i) the Refinancing Indebtedness shall be contractually
subordinated in right of payment to the Securities on terms at least as
favorable to the Holders of the Securities as the terms set forth in the form
of subordinated provisions attached hereto as Exhibit C, (ii) the Refinancing
Indebtedness shall be scheduled to mature either (a) no earlier than the
Indebtedness being refinanced or (b) after the Stated Maturity of the
Securities, (iii) the Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Indebtedness being refinanced and (iv) such Refinancing
Indebtedness shall have an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is equal to or less
than the aggregate principal amount (or if issued with original issue discount,
the aggregate accreted value) then outstanding (plus fees and expenses,
including any premium and defeasance costs) under the Indebtedness being
refinanced; and PROVIDED, FURTHER, that Refinancing Indebtedness shall not
include (x) Indebtedness of a Subsidiary of the Company that refinances
Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is
not designated an Unrestricted Subsidiary by the Board of Directors.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating to
property now owned or hereafter acquired
21
whereby the Company or a Subsidiary transfers such property to a Person and
leases it back from such Person, other than leases for a term of not more than
36 months or between the Company and a Wholly Owned Subsidiary or between
Wholly Owned Subsidiaries.
"SEASONAL OVERADVANCE" has the meaning ascribed to it in that certain
Credit Agreement, dated as of the date hereof, between the Company and
Continental Bank, N.A., which such Seasonal Overadvance shall not exceed
$3,000,000.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means all series of the Senior Secured Notes Due 2004
that are issued under and pursuant to the terms of this Indenture, as amended
or supplemented from time to time.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SENIOR INDEBTEDNESS" means (i) all obligations consisting of the
principal of and premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not post-filing interest is
allowed in such proceeding), whether existing on the Issue Date or thereafter
Incurred, in respect of (A) Indebtedness of the Company for money borrowed and
(B) Indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which the Company is responsible or liable; (ii)
all Capitalized Lease Obligations of the Company; (iii) all obligations of the
Company (A) for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (B) under Interest Rate
Agreements and Currency Agreements entered into in respect of any obligations
described in clauses (i) and (ii) or (C) issued or assumed as the deferred
purchase price of property, and all conditional sale obligations of the Company
and all obligations of the Company under any title retention agreement;
(iv) all guarantees of the Company with respect to obligations of other persons
of the type referred to in clauses (ii) and (iii) and with respect to the
payment of dividends of
22
other Persons; and (v) all obligations of the Company consisting of
modifications, renewals, extensions, replacements and refundings of any
obligations described in clauses (i), (ii), (iii) or (iv); unless, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are subordinated in right of
payment to the Securities, or any other Indebtedness or obligation of the
Company; PROVIDED, HOWEVER, that Senior Indebtedness shall not be deemed to
include (1) any obligation of the Company to any Subsidiary, (2) any liability
for Federal, state, local or other taxes or (3) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities).
"SIGNIFICANT SUBSIDIARY" means any Subsidiary (other than an
Unrestricted Subsidiary) that would be a "Significant Subsidiary" of the
Company within the meaning of Rule 1-02 under Regulations S-X promulgated by
the SEC.
"STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency).
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
contractually subordinated or junior in right of payment to the Securities or
any other Indebtedness of the Company.
"SUBSIDIARY" means, as applied to any Person, (i) a corporation, at
least a majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect a majority of the board of directors of such
corporation is at the time, directly or indirectly, owned or controlled by
such Person, by a Subsidiary or Subsidiaries of such Person, or by such Person
and a Subsidiary or
Subsidiaries of such Person or (ii) any other Person (other than a corporation)
in which such Person, a Subsidiary or Subsidiaries of such Person, or such
Person and a Subsidiary or Subsidiaries of such Person, directly
23
or indirectly, at the date of determination, has at least a majority ownership
interest. As of the date of this Indenture, the Subsidiaries of the Company
include, without limitation, PSNC Propane Corporation.
"SUBSIDIARY GUARANTEES" means the unconditional guarantees by the
respective Subsidiary Guarantors of the due and punctual payment of principal,
premium, if any, and interest on the Securities when and as the same shall
become due and payable and in the coin or currency in which the same are
payable, whether at Stated Maturity, by declaration of acceleration, call for
redemption, purchase or otherwise.
"SUBSIDIARY GUARANTOR" means each of the Persons listed on Schedule I
attached hereto, each Person that becomes a Restricted Subsidiary of the
Company after the Issue Date and each other Person that becomes a Subsidiary
Guarantor under this Indenture by executing a supplement to this Indenture
pursuant to which such Person jointly and severally unconditionally guarantees
the Securities on a senior basis.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. 77aaa-
77bbbb) as in effect on the date first above written.
"TEMPORARY CASH INVESTMENTS" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, in each case, maturing within 360 days of the date of acquisition
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company (including the Trustee) which is
organized under the laws of the United States of America, any state thereof or
any foreign country recognized by the United States having capital, surplus and
undivided profits aggregating in excess of $250,000,000 and whose debt is rated
"A" (or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by an registered broker
dealer or mutual fund distributor,(iii) repurchase obligations with a term of
not more than 30 days for
24
underlying securities of the types described in clause (i) above entered into
with a bank meeting the qualifications described in clause (ii) above, (iv)
investments in commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate or Subsidiary
of the Company) organized and in existence under the laws of the United States
of America or any foreign country recognized by the United States of America
with a rating at the time as of which any investment therein is made of "P-2"
(or higher) according to Moody's Investors Service, Inc. or "A-2" (or higher)
according to Standard and Poor's Corporation, (v) securities with maturities or
six months or less from the date of acquisition backed by standby or direct pay
letters of credit issued by any bank satisfying the requirements of clause (ii)
above and (vi) securities with maturities of six months or less from the date
of acquisition issued or fully Guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by Standard and Poor's
Corporation or "A" by Moody's Investors Service, Inc.
"TRUSTEE" means the party named as such above until a successor
replaces it and thereafter means the successor.
"TRUST OFFICER" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters or to whom any corporate
trust matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code
as in effect from time to time.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that at the time
of determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below and (ii) any subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any
25
other Subsidiary that is not a Subsidiary of the Subsidiary to be so
designated; PROVIDED, that either (A) the Subsidiary to be so designated has
total assets of $1,000 or less or (B) if such Subsidiary has assets greater
than $1,000, that such designation would be permitted pursuant to Section 3.3.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary of the Company; PROVIDED, HOWEVER, that immediately
after giving effect to such designation (x) the Company could Incur $1.00 of
additional Indebtedness pursuant to Section 3.4(a) and (y) no Default or Event
of Default shall have occurred and be continuing. Any such designation by the
Board of Directors shall be evidenced to the respective Trustee by promptly
filing with the respective Trustee a copy of the board resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or redeemable before the maturity
thereof.
"VOTING SHARES," with respect to any corporation, means the Capital
Stock having the general voting power under ordinary circumstances to elect at
least a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).
"WHOLLY OWNED SUBSIDIARY" means a Subsidiary (other than an
Unrestricted Subsidiary) all the Capital Stock of which (other than directors'
qualifying shares) is owned by the Company or another Wholly Owned Subsidiary.
26
SECTION 1.2 OTHER DEFINITIONS.
TERM DEFINED IN SECTION
"Application Period" . . . . . . . . . . . . . . . . . . . . . . . 3.12
"Asset Sale Offer" . . . . . . . . . . . . . . . . . . . . . . . . 3.12
"Asset Sale Offer Amount" . . . . . . . . . . . . . . . . . . . . . 3.12
"Asset Sale Purchase Date" . . . . . . . . . . . . . . . . . . . . 3.12
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . . 5.1
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . . . 3.8
"Change of Control Purchase Date" . . . . . . . . . . . . . . . . . 3.8
"Collateral Application Period" . . . . . . . . . . . . . . . . . . 10.4
"Collateral Offer Period" . . . . . . . . . . . . . . . . . . . . . 10.5
"Collateral Sale" . . . . . . . . . . . . . . . . . . . . . . . . . 10.4
"Collateral Sale Offer" . . . . . . . . . . . . . . . . . . . . . . 10.5
"Collateral Sale Offer Amount" . . . . . . . . . . . . . . . . . . 10.5
"Collateral Sale Purchase Date" . . . . . . . . . . . . . . . . . . 10.5
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . 5.1
"Global Securities" . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . . 11.7
"Offer Period" . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Restricted Payment" . . . . . . . . . . . . . . . . . . . . . . 3.3
"Successor Corporation" . . . . . . . . . . . . . . . . . . . . . . 4.1
SECTION 1.3 INCORPORATION BY REFERENCE OF
TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"COMMISSION" means the SEC;
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Holder or Securityholder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
27
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the indenture securities means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "generally accepted accounting principles" means, and any
accounting term not otherwise defined has the meaning assigned to it and shall
be construed in accordance with, GAAP;
(c) "OR" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions;
(f) "including" means including, without limitation;
(g) unsecured debt shall not be deemed to be subordinate or junior
to secured debt merely by virtue of its nature as unsecured debt;
(h) the principal amount of any non-interest bearing or other
discount security (other than the Securities) at any date shall be the
principal amount thereof that would be shown on a balance sheet of the issuer
dated such date prepared in accordance with generally accepted accounting
principles and accretion of principal on such security shall be deemed to be
the Incurrence of Indebtedness; and
28
(i) the principal amount (if any) of any Preferred Stock shall be
the greatest of (i) the stated value, (ii) the redemption price or (iii) the
liquidation preference of such Preferred Stock.
29
ARTICLE II
THE SECURITIES
SECTION 2.1 FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A annexed hereto, which is part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage and shall have endorsed thereon the
Subsidiary Guarantee executed by the Subsidiary Guarantors as provided in
Article XII. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the form of Security annexed
hereto as Exhibit A shall constitute, and are expressly made, a part of this
Indenture. To the extent applicable, the Company, each Subsidiary Guarantor
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.
The Securities shall be issued initially in the form of one or more
permanent global Securities in registered form (the "Global Securities"),
deposited with, or on behalf of, the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. Each Global Security
shall bear such legend as may be required or reasonably requested by the
Depositary. Each Global Security shall have endorsed thereon the Subsidiary
Guarantee executed by the Subsidiary Guarantors.
The definitive Securities shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
30
SECTION 2.2 EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities
and the Subsidiary Guarantee of the Subsidiary Guarantors shall be endorsed
thereon.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue up to
the aggregate principal amount stated in paragraph 4 of Exhibit A upon a
written order of the Company signed by two Officers. Such order shall specify
the amount of the Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed that amount except
as provided in Section 2.7.
The Trustee shall initially act as authenticating agent and may
subsequently appoint another Person acceptable to the Company as authenticating
agent to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the
Company. Provided that the authentication agent has entered into an agreement
with the Company concerning the authentication agent's duties, the Trustee
shall not be liable for any act or any failure of the authenticating agent to
perform any duty either required herein or authorized herein to be performed
by such person in accordance with this Indenture.
31
The Securities shall be issued only in registered form without
coupons and only in denominations of $1,000 and integral multiples thereof.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Securities may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture. The
agreement shall implement the provisions of this Indenture that relate to such
Agent. The Company shall promptly notify the Trustee of the name and address
of any such Agent and any change in the address of such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
6.7.
The Company or any Subsidiary or Affiliate of the Company may act as Paying
Agent, Registrar, co-registrar or transfer agent; provided, however, that the
Company shall not act as Paying Agent during such time as an Event of Default
shall have occurred and be continuing.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to 1:00 p.m. on each due date of the principal and
interest on any Security (including any redemption date fixed under the terms
of such Security or this Indenture) the Company shall deposit with the Paying
Agent a sum of money sufficient to pay such principal and interest in funds
available when such becomes due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall
32
hold in trust for the benefit of Securityholders or the Trustee all money held
by the Paying Agent for the payment of principal of or interest on the
Securities (whether such money has been paid to it by the Company or any other
obligor on the Securities, including any Subsidiary Guarantor) and shall notify
the Trustee of any default by the Company (or any other obligor on the
Securities, including any Subsidiary Guarantor) in making any such payment. If
the Company or a Subsidiary or an affiliate of the Company acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund for the benefit of the Securityholders. If the Company
defaults in its obligation to deposit funds for the payment of principal and
interest the Trustee may, during the continuation of such default, require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed by it. Upon doing so, the Paying Agent
(other than the Company or a Subsidiary or Affiliate of the Company) shall have
no further liability for the money delivered to the Trustee.
SECTION 2.5 SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least five Business Days before each interest
payment date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of the Securityholders, and the Company shall
otherwise comply with TIA Section 312(a).
SECTION 2.6 TRANSFER AND EXCHANGE.
The Securities shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register the transfer as requested if the requirements of
Section 8-401(1) of the Uniform Commercial Code are met and, if so required
by the Trustee, the Company or any Subsidiary Guarantor, if the Security
presented is accompanied by a written instrument of
33
transfer in form satisfactory to the Trustee, the Company and each of the
Subsidiary Guarantors, duly executed by the registered owner or by his or her
attorney duly authorized in writing. When Securities are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities endorsed thereon with the Subsidiary
Guarantee of the Subsidiary Guarantors at the Registrar's or co-registrar's
request. No service charge shall be made for any registration of transfer or
exchange of the Securities, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange pursuant to Section 2.10 or 8.5 of
this Indenture).
The Company shall not be required to make and the Registrar need not register
transfers or exchanges of Securities selected for redemption (except, in the
case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
Prior to the due presentation for registration of transfer of any
Security, the Company, each of the Subsidiary Guarantors, the Trustee, the
Paying Agent, the Registrar or any co-registrar may deem and treat the person
in whose name a Security is registered as the absolute owner of such Security
for the purpose of receiving payment of principal of and interest on such
Security and for all other purposes whatsoever, whether or not such Security
is overdue,
and none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
Notwithstanding any other provisions of this Section 2.6, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a portion of the
Securities may not be transferred except as a whole by the Depositary to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another
34
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
If the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for the Global Securities or if at any time the
Depositary shall no longer be eligible under the next sentence of this
paragraph, the Company shall appoint a successor Depositary with respect to the
Securities. Each Depositary appointed pursuant to this Section 2.6 must, at the
time of its appointment and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation. The Company will execute, and the Trustee will
authenticate and deliver upon a written order of the Company signed by two
Officers, Securities in definitive registered form with the Subsidiary Guarantee
of the Subsidiary Guarantors endorsed thereon in any authorized denominations
representing such Securities in exchange for such Global Security or Securities
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue or unable to continue as Depositary for the Global Securities or if at
any time the Depositary shall no longer be eligible to serve as Depositary and a
successor Depositary for the Securities is not appointed by the Company within
60 days after the Company receives such notice or becomes aware of such
ineligibility or (ii) an Event of Default has occurred and is continuing.
The Company may at any time and in its sole discretion determine that
the Securities shall no longer be represented by a Global Security or
Securities. In such event the Company will execute, and the Trustee will
authenticate and deliver upon a written order of the Company signed by two
Officers, Securities with the Subsidiary Guarantee of the Subsidiary Guarantors
endorsed thereon in exchange for such Global Security or Securities.
Upon the exchange of a Global Security for Securities in definitive
registered form without coupons, in authorized denominations, such Global
Security shall be cancelled by the Trustee. Securities in definitive registered
form issued in exchange for a Global Security pursuant to this Section 2.6 shall
be registered in such names and in such authorized denominations as the Deposi-
35
tary for such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to or as directed by the Persons in whose names
such Securities are so registered.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.7 REPLACEMENT SECURITIES.
If a mutilated security is surrendered to the Registrar or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken and the Holder furnishes to the Company, each Subsidiary
Guarantor and the Trustee evidence to their satisfaction of such loss,
destruction or wrongful taking, the Company shall issue and the Trustee shall,
in the absence of notice to the Company or the Trustee that such Security has
been acquired by a BONA FIDE purchaser, authenticate a replacement Security with
the Subsidiary Guarantee of the Subsidiary Guarantors endorsed thereon if the
requirements of Section 8-405 of the Uniform Commercial Code are met and if
there is delivered to the Company, each Subsidiary Guarantor and the Trustee
such security or indemnity as may be required to save each of them harmless,
satisfactory to the Company or the Trustee, as the case may be. The Company,
each Subsidiary Guarantor and the Trustee may charge the Holder for their
expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to the benefits of this Indenture.
SECTION 2.8 OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, and those described in this Section as not outstanding.
36
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a BONA FIDE purchaser.
If all the principal and interest on any Securities are considered
paid under Section 3.1, such Securities cease to be outstanding under this
Indenture and interest on such Securities shall cease to accrue.
If the Paying Agent (other than the Company or a Subsidiary or an
Affiliate of the Company) holds in accordance with this Indenture on a
redemption date or maturity date money sufficient to pay all principal and
interest due on that date then on and after that date such Securities cease to
be outstanding and interest on them ceases to accrue (unless there shall be a
default in such payment).
If a Security is called for redemption, the Company and the Trustee
need not treat the Security as outstanding in determining whether Holders of the
required principal amount of Securities have concurred in any direction, waiver
or consent.
Subject to Section 2.9, a Security does not cease to be outstanding
because the Company or an Affiliate thereof holds the Security.
SECTION 2.9 DETERMINATION OF HOLDERS' ACTION.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, waiver or consent,
Securities owned by or pledged to the Company, any Subsidiary Guarantor, any
other obligor upon the Securities or any Affiliate of the Company, any
Subsidiary Guarantor or such other obligor shall be disregarded and deemed not
to be outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities which the Trustee knows are so owned or pledged shall be so
disregarded.
SECTION 2.10 TEMPORARY SECURITIES.
37
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities having endorsed
thereon temporary Subsidiary Guarantees executed by the Subsidiary Guarantors.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities and having duly endorsed thereon the Subsidiary Guarantees
which shall be substantially in the form of definitive Subsidiary Guarantees
but which may have variations that the Company believes appropriate for
temporary securities. Without unreasonable delay, the Company shall prepare
and the Trustee, upon the written order of the Company signed by two Officers,
shall authenticate definitive Securities in exchange for temporary Securities.
Until such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration
of transfer, exchange, payment or cancellation and shall destroy the same or
otherwise dispose of canceled Securities as the Company directs by written order
signed by two Officers. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities, it
shall pay defaulted interest, plus any interest payable on the defaulted
interest to the extent permitted by law, in any lawful manner. It may pay the
defaulted interest to the Persons who are Securityholders on a subsequent
special record date which date shall be at least five Business Days prior to the
payment date. The Company shall fix the special record date and payment date.
At least 15 days before the special record date, the Company (or the Trustee, in
the name of and at the expense of the Company) shall mail to
38
Securityholders a notice that states the special record date, payment date and
amount of interest to be paid.
ARTICLE III
COVENANTS
SECTION 3.1 PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities. The Company shall
pay interest on overdue principal at the rate borne by the Securities; it shall
pay interest on overdue installments of interest at the rate borne by the
Securities to the extent lawful. Principal and interest shall be considered
paid on the date due (including a redemption date) if the Trustee or the Paying
Agent (other than the Company or a Subsidiary or an Affiliate of the Company)
has received from or on behalf of the Company on or prior to 1:00 p.m. on that
date money sufficient to pay all principal and interest then due.
SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company or any Subsidiary Guarantor in
respect of the Securities any Subsidiary Guarantee endorsed thereon and this
Indenture may be served. The Company and the Subsidiary Guarantors will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company or any
Subsidiary Guarantor shall fail to maintain any such required office or agency
or to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.2 of this Indenture.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation
39
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, the City of New York,
for such purposes. The Company will give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.
The Company hereby initially designates the office of Shawmut Trust
Company in the Borough of Manhattan, the City of New York, as such office of the
Company in accordance with Section 2.3.
SECTION 3.3 LIMITATION ON RESTRICTED PAYMENTS.
(a) So long as any of the Securities are outstanding, the Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, (i) declare or pay any dividend on or make any distribution or
similar payment of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving the Company)
to the direct or indirect holders of its Capital Stock (other than dividends or
distributions payable solely in its Non-Convertible Capital Stock or rights to
acquire its Non-Convertible Capital Stock and dividends or distributions
payable solely to the Company or a Restricted Subsidiary), (ii) purchase,
redeem, defease or otherwise acquire or retire for value any Capital Stock of
the Company or of any direct or indirect parent of the Company or, with respect
to the Company, exercise any option to exchange any Capital Stock that by its
terms is exchangeable solely at the option of the Company (other than into
Capital Stock of the Company which is neither Exchangeable Stock nor Redeemable
Stock), (iii) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity or scheduled repayment thereof or
scheduled sinking fund payment thereon, any Subordinated Indebtedness (other
than the purchase, repurchase, or other acquisition of Subordinated
Indebtedness purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of
the date of acquisition) or (iv) make any Investment in any Unrestricted
Subsidiary or any Affiliate of the Company other than a Restricted Subsidiary
or a Person which will become a Restricted Subsidiary as a result of any such
40
Investment (each such payment described in clauses (i)-(iv) of this paragraph, a
"Restricted Payment"), unless at the time of and after giving effect to the
proposed Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing (or would result therefrom);
(2) the Company would be permitted to Incur an additional $1 of
Indebtedness pursuant to the provisions of Section 3.4(a); and
(3) the aggregate amount of all such Restricted Payments
subsequent to the Issue Date shall not exceed the sum of:
(A) 50% of aggregate Consolidated Net Income (or if such
Consolidated Net Income is a deficit, minus 100% of such deficit), and
minus 100% of the amount of any write-downs, write-offs, other
negative reevaluations and other negative extraordinary charges not
otherwise reflected in Consolidated Net Income during such period;
(B) the aggregate Net Cash Proceeds received by the Company
after the Issue Date from a sale by the Company of Capital Stock
(other than Redeemable Stock or Exchangeable Stock) of the Company or
from the issuance of any options or warrants or other rights to
acquire Capital Stock (other than Redeemable Stock or Exchangeable
Stock);
(C) the amount by which the principal amount of Indebtedness
of the Company or its Restricted Subsidiaries is reduced on the
Company's Consolidated balance sheet upon the conversion or exchange
(other than by a Subsidiary) subsequent to the Issue Date of any
Indebtedness of the Company or any Restricted Subsidiary converted or
exchanged for Capital Stock (other than Redeemable Stock or
Exchangeable Stock) of the Company (less the amount of any cash, or
the value of any other property,
41
distributed by the Company or any Restricted Subsidiary upon such
conversion or exchange);
(D) an amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from payments of interest on
Indebtedness, dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries, or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each
case as provided in the definition of "Investments"), not to exceed in
the case of any Unrestricted Subsidiary the amount of Investments
previously made by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary; and
(E) $1,000,000, less the aggregate of all Excess Payments
made during such period.
(b) The failure to satisfy the conditions set forth in clauses (2) and
(3) of Section 3.3(a) shall not prohibit any of the following as long as the
condition set forth in Section 3.3(a)(1) is satisfied (except as set forth
below):
(i) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 3.3(a);
(ii) any purchase, redemption, defeasance, or other acquisition
or retirement for value of Capital Stock or Subordinated Indebtedness of
the Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other than
Redeemable Stock or Exchangeable Stock and other than stock issued or sold
to a Subsidiary or to an employee stock ownership plan), PROVIDED,
HOWEVER, that notwithstanding Section 3.3(a)(1), the occurrence or
existence of a Default or Event of Default shall not prohibit the making
of such purchase, redemption, defeasance or other acquisition or
retirement, and PROVIDED, FURTHER, such purchase, redemption, defeasance
or other acquisition or retirement shall not be included in
42
the calculation of Restricted Payments made for purposes of Section
3.3(a)(3) and PROVIDED, FURTHER, that the Net Cash Proceeds from such sale
shall be excluded from Section 3.3(a)(3)(B);
(iii) any purchase, redemption, defeasance or other acquisition
or retirement for value of Subordinated Indebtedness of the Company made by
exchange for, or out of the proceeds of the substantially concurrent
Incurrence of for cash (other than to a Subsidiary), new Indebtedness of
the Company, PROVIDED, HOWEVER, that (A) such new Indebtedness shall be
contractually subordinated in right of payment to the Securities on terms
at least as favorable to the Security holders as the terms set forth in the
form of subordination provisions attached hereto as Exhibit B, (B) such new
Indebtedness has a Stated Maturity either (1) no earlier than the Stated
Maturity of the Indebtedness redeemed, repurchased, defeased, acquired or
retired or (2) after the Stated Maturity of the Securities and (C) such
Indebtedness has an Average Life equal to or greater than the Average Life
of the Indebtedness redeemed, repurchased, defeased, acquired or retired,
and PROVIDED, FURTHER, that such purchase, redemption, defeasance or other
acquisition or retirement shall not be included in the calculation of
Restricted Payments made for purposes of Section 3.3(a)(3);
(iv) any purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness upon a Change of Control
or an Asset Sale to the extent required by the indenture or other agreement
pursuant to which such Subordinated Indebtedness was issued, but only if
the Company (A) in the case of a Change of Control, has made an offer to
repurchase the Securities as described under Section 3.8 or (B) in the case
of an Asset Sale, has applied the Net Available Cash from such Asset Sale
in accordance with Section 3.12 and Section 10.4 (if applicable);
(v) pro rata dividends paid by a Subsidiary with respect to a
series or class of its Capital Stock the majority of which is held by the
Company or a Wholly Owned Subsidiary;
43
(vi) the payment of dividends on the Capital Stock of the Company
following an initial Public Equity Offering of such Capital Stock of up to
an amount per annum of 6% of the Net Cash Proceeds received by the Company
in such Public Equity Offering;
(vii) the purchase, redemption, acquisition, cancellation, or
other retirement for value of shares of Capital Stock of the Company,
options on any such shares or related phantom stock, or stock appreciation
rights or similar securities held by officers or employees or former
officers or employees (or their estates or beneficiaries under their
estates), upon the death, disability, retirement or termination of
employment of such employee or former employee, pursuant to the terms of
an employee benefit plan or any other agreement under which such shares of
stock or related rights were issued, provided that the aggregate cash
consideration paid, or distributions made, pursuant to this clause (vii)
after the date of this Indenture does not exceed an aggregate amount of
$1,000,000 plus the cash proceeds received by or contributed to the
Company from any reissuance of Capital Stock by the Company to members of
management and employees of the Company and its Subsidiaries; and
(viii) Investments in Unrestricted Subsidiaries of up to
$3,000,000 at any one time outstanding.
SECTION 3.4 LIMITATION ON INCURRENCE OF INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness, except that the
Company may Incur Indebtedness if, after giving effect thereto, the Consolidated
Coverage Ratio would be greater than 1.75:1 if such Incurrence takes place on or
prior to __________, 1998, or 2.0:1, if such Incurrence takes place thereafter.
(b) Notwithstanding the foregoing, this Section shall not limit the
ability of the Company or any Restricted Subsidiary to Incur the following
Indebtedness:
44
(i) Refinancing Indebtedness (except with respect to
Indebtedness referred to in clauses (ii), (iii) or (iv) below);
(ii) Acquisition Indebtedness at any one time outstanding in an
aggregate principal amount not to exceed $15,000,000, PROVIDED that not
more than an aggregate of $6,000,000 of such Acquisition Indebtedness may
be incurred in any twelve month period;
(iii) Indebtedness of the Company which is owed to and held by a
Wholly Owned Subsidiary and Indebtedness of a Wholly Owned Subsidiary
which is owed to and held by the Company or a Wholly Owned Subsidiary,
including, without limitation, the Indebtedness evidenced by the
Intercompany Notes; PROVIDED, HOWEVER, that any subsequent issuance or
transfer of any Capital Stock which results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any transfer of such
Indebtedness (other than to the Company or a Wholly Owned Subsidiary)
shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the Company or by a Wholly Owned Subsidiary, as the case
may be;
(iv) Indebtedness of the Company (whether under the New Credit
Facility or otherwise) Incurred for the purpose of financing the working
capital needs of the Company and its Restricted Subsidiaries, PROVIDED,
HOWEVER, that after giving effect to the Incurrence of such Indebtedness
and any substantially simultaneous use of the proceeds thereof, the
aggregate principal amount of all such Indebtedness Incurred pursuant to
this clause (iv) and then outstanding immediately after such Incurrence and
such use of proceeds shall not exceed the sum of 60% of the book value of
the inventory and 90% of the book value of the receivables of the Company
and the Restricted Subsidiaries on a consolidated basis at such time plus
the amount of the Seasonal Overadvance and, PROVIDED, FURTHER, that such
aggregate principal amount outstanding shall not exceed $15,000,000 at any
time prior to __________, 1997 and PROVIDED FURTHER, that the Company's
Subsidiaries shall be permitted to guaran-
45
tee Indebtedness Incurred by the Company pursuant to the New Credit
Facility or pursuant to a credit facility Incurred pursuant to this
Section 3.4(b)(iv) refinancing the New Credit Facility;
(v) Acquired Indebtedness; PROVIDED, HOWEVER, that the Company
would have been able to Incur such Indebtedness at the time of the
Incurrence thereof pursuant to Section 3.4(a); and
(vi) Indebtedness of the Company or a Restricted Subsidiary
outstanding on the Issue Date (other than Indebtedness referred to in
clause (iv) above and Indebtedness being repaid or retired with the
proceeds of the Offering).
(c) Notwithstanding Sections 3.4(a) and (b), the Company shall not
Incur any Indebtedness if the proceeds thereof are used, directly or
indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any
Subordinated Indebtedness unless such repayment, prepayment, redemption,
defeasance, retirement, refunding or refinancing is not prohibited by Section
3.3 or unless such Indebtedness shall be contractually subordinated to the
Securities at least to the same extent as such Subordinated Indebtedness.
SECTION 3.5 LIMITATION ON PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any Subsidiary, to create
or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to (i)
pay dividends to or make any other distributions on its Capital Stock, or pay
any Indebtedness or other obligations owed to the Company or any other
Restricted Subsidiary, (ii) make any Investments in the Company or any other
Restricted Subsidiary or (iii) transfer any of its property or assets to the
Company or any other Restricted Subsidiary; PROVIDED, HOWEVER, that the
foregoing shall not apply to:
(a) any encumbrance or restriction existing pursuant to this Indenture
or any other agreement or instrument as in effect or entered into on the Issue
Date (including the New Credit Facility as in effect on the Issue Date);
46
(b) any encumbrance or restriction with respect to a Subsidiary
pursuant to an agreement relating to any Acquired Indebtedness; PROVIDED,
HOWEVER, that such encumbrance or restriction was not Incurred in connection
with or in contemplation of such Subsidiary becoming a Subsidiary;
(c) any encumbrance or restriction pursuant to an agreement effecting
a refinancing, renewal, extension or replacement of Indebtedness referred to in
clause (a) or (b) above or contained in any amendment or modification with
respect to such Indebtedness; PROVIDED, HOWEVER, that the encumbrances and
restrictions contained in any such agreement, amendment or modification are no
less favorable in any material respect with respect to the matters referred to
in clauses (i), (ii) and (iii) above than the encumbrances and restrictions
with respect to the Indebtedness being refinanced, renewed, extended, replaced,
amended or modified;
(d) in the case of clause (c)(iii) above, customary non-assignment
provisions of any leases governing a leasehold interest or of any supply,
license or other agreement entered into in the ordinary course of business of
the Company or any Subsidiary;
(e) any restrictions with respect to a Subsidiary imposed pursuant to
an agreement entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary pending the closing of
such sale or disposition; or
(f) any encumbrance or restriction existing by reason of applicable
law.
Nothing contained in this Section 3.5 shall prohibit the sale of
assets that secure Indebtedness of the Company or its Subsidiaries.
SECTION 3.6 LIMITATION ON SALE/LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, enter into any Sale/Leaseback Transaction unless (i) the Company or such
Subsidiary would be entitled to create a Lien on such property securing
Indebtedness in an amount equal to the Attributable Debt with respect to such
transaction without equal-
47
ly and ratably securing the Securities pursuant to Section 3.7 or (ii) the net
proceeds of such sale are at least equal to the fair value (as determined by the
Board of Directors) of such property and the Company or such Subsidiary shall
apply or cause to be applied an amount in cash equal to the net proceeds of such
sale to the retirement, within 30 days of the effective date of any such
arrangement, of Senior Indebtedness or Indebtedness of a Restricted Subsidiary,
PROVIDED, HOWEVER, that the Company or any Restricted Subsidiary may enter into
a Sale/Leaseback Transaction as long as the sum of (x) the Attributable Debt
with respect to such Sale/Leaseback Transaction and all other Sale/Leaseback
Transactions entered into pursuant to this proviso, plus (y) the amount of
outstanding Indebtedness secured by Liens Incurred pursuant to the final proviso
of Section 3.7, does not exceed 5% of Consolidated Net Tangible Assets as
determined based on the consolidated balance sheet of the Company as of the end
of the most recent fiscal quarter for which financial statements are available.
SECTION 3.7 LIMITATION ON LIENS.
Except as provided for under Article X, the Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, incur or
permit to exist any Lien of any nature whatsoever on any of its properties
(including, without limitation, Capital Stock), whether owned at the date of
such Indenture or thereafter acquired, other than:
(a) pledges or deposits made by such Person under workers'
compensation, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
statutory or regulatory obligations of such Person or deposits of cash of United
States Government bonds to secure surety, appeal or performance bonds to which
such Person is a party, or deposits as security for contested taxes or import
duties or for the payment of rent, in each case Incurred in the ordinary course
of business;
(b) Liens imposed by law such as carriers', warehousemen's and
mechanics' Liens, in each case, arising in the ordinary course of business and
with respect
48
to amounts not yet due or being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; or other Liens arising out of judgments or awards
against such Person with respect to which such Person shall then be diligently
prosecuting appeal or other proceedings for review;
(c) Liens for property taxes not yet subject to penalties for non-
payment or which are being contested in good faith and by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made;
(d) Liens in favor of issuers or surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; PROVIDED, HOWEVER, that such letters of credit
may not constitute Indebtedness;
(e) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or liens incidental to the conduct
of the business of such Person or to the ownership of its properties which were
not Incurred in connection with Indebtedness or other extensions of credit and
which do not in the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of the business of
such Person;
(f) Liens securing Indebtedness Incurred to finance the construction
of, purchase of, or repairs, improvements or additions to, property (including
Acquisition Indebtedness Incurred pursuant to Section 3.4(b)(ii)); PROVIDED,
HOWEVER, that the Lien may not extend to any other property owned by the Company
or any Restricted Subsidiary at the time the Lien is incurred, and the
Indebtedness secured by the Lien may not be issued more than 180 days after the
later of the acquisition, completion of construction, repair, improvement,
addition or commencement of full operation of the property subject to the Lien;
49
(g) Liens existing on the Issue Date (other than Liens relating to
Indebtedness or other obligations being repaid or Liens that are otherwise
extinguished with the proceeds of the Offering);
(h) Liens on property (excluding Capital Stock) of a Person at the
time such Person becomes a Subsidiary; PROVIDED, HOWEVER, that any such Lien may
not extend to any other property owned by the Company or any Restricted
Subsidiary;
(i) Liens on property at the time the Company or a Subsidiary acquires
the property, including any acquisition by means of a merger or consolidation
with or into the Company or a Subsidiary; PROVIDED, HOWEVER, that such Liens are
not incurred in connection with, or in contemplation of, such merger or
consolidation; and PROVIDED, FURTHER, that the Lien may not extend to any other
property owned by the Company or any Restricted Subsidiary;
(j) Liens securing Indebtedness or other obligations of a Subsidiary
owing to the Company or a Wholly Owned Subsidiary, including, without
limitation, the Indebtedness Incurred under Intercompany Notes; PROVIDED, that
any such Lien securing Indebtedness pursuant to any Intercompany Note shall be
limited to the inventory and accounts receivable of the Subsidiary of the
Company issuing such Intercompany Note;
(k) Liens incurred by a Person other than the Company or any
Subsidiary on assets that are the subject of a Capitalized Lease Obligation to
which the Company or a Subsidiary is a party; PROVIDED, HOWEVER, that any such
Lien may not secure Indebtedness of the Company or any Subsidiary (except by
virtue of clause (x) of the definition of "Indebtedness") and may not extend to
any other property owned by the Company or any Restricted Subsidiary;
(l) Liens on inventory and accounts receivable of the Company and its
Subsidiaries and Liens on Intercompany Notes, in any case securing
Indebtedness permitted to be incurred pursuant to Section 3.4(b)(iv);
(m) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive
50
refinancings, refundings, extensions, renewals or replacements) as a whole, or
in part, of any Indebtedness secured by any Lien referred to in the foregoing
clauses (f), (g), (h) and (i), PROVIDED, HOWEVER, that (x) such new Lien shall
be limited to all or part of the same property that secured the original Lien
(plus improvements on such property) and (y) the Indebtedness secured by such
Lien at such time is not increased (other than by an amount necessary to pay
fees and expenses, including premiums, related to the refinancing, refunding,
extension, renewal or replacement of such Indebtedness); and
(n) Liens by which the Securities are secured equally and ratably with
other Indebtedness of the Company pursuant to this Section 3.7;
without effectively providing that the Securities shall be secured equally and
ratably with (or prior to) the obligations so secured for so long as such
obligations are so secured; PROVIDED, HOWEVER, that the Company may incur other
Liens other than on the Collateral to secure Indebtedness as long as the sum of
(x) the amount of outstanding Indebtedness secured by Liens incurred pursuant to
this proviso plus (y) the Attributable Debt with respect to all outstanding
leases in connection with Sale/Leaseback Transactions entered into pursuant to
the proviso to Section 3.6 does not exceed 5% of Consolidated Net Tangible
Assets as determined with respect to the Company as of the end of the most
recent fiscal quarter for which financial statements are available.
SECTION 3.8 CHANGE OF CONTROL.
In the event of a Change of Control, the Company shall make an offer
to purchase (the "Change of Control Offer") the Securities then outstanding at a
purchase price equal to one hundred-one percent (101%) of the Accreted Value
thereof plus accrued interest to the Change of Control Purchase Date (as defined
below) on the terms set forth in this Section. The date on which the Company
shall purchase the Securities pursuant to this Section (the "Change of Control
Purchase Date") shall be no earlier than 30 days, nor later than 60 days, after
the notice referred to below is mailed, unless a longer period shall be
required by law. The Company shall notify the Trustee in writing promptly after
the occurrence of any Change of Control of the Company's obligation to offer to
purchase the Securities.
51
Notice of a Change of Control Offer shall be mailed by the Company to
the Holders of the Securities at their last registered address (with a copy to
the Trustee and the Paying Agent) within thirty (30) days after a Change in
Control has occurred. The Change of Control Offer shall remain open from the
time of mailing until five (5) Business Days before the Change of Control
Purchase Date. The notice shall contain all instructions and materials
necessary to enable such Holders to tender (in whole or in part) the Securities
pursuant to the Change of Control Offer. The notice, which shall govern the
terms of the Change of Control Offer, shall state:
(a) that the Change of Control Offer is being made pursuant to this
Section;
(b) the purchase price and the Change of Control Purchase Date;
(c) that any Security not surrendered or accepted for payment will
continue to accrue interest;
(d) that any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Purchase Date if payment is made;
(e) that any Holder electing to have a Security purchased (in whole
or in part) pursuant to a Change of Control Offer will be required to surrender
the Security, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent at the address specified
in the notice (or otherwise make effective delivery of the Security pursuant to
book-entry procedures and the related rules of the applicable depositories) at
least five Business Days before the Change of Control Purchase Date; and
(f) that any Holder will be entitled to withdraw his or her election
if the Paying Agent receives, not later than three Business Days prior to the
Change of Control Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Security the Holder delivered for purchase and a statement that such Holder
52
is withdrawing his or her election to have the Security purchased.
On the Change of Control Purchase Date, the Company shall (i) accept
for payment the Securities, or portions thereof, surrendered and properly
tendered and not withdrawn, pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent money sufficient to pay the purchase price plus
accrued interest of all the Securities or portions thereof, so accepted and
(iii) deliver to the Trustee the Securities so accepted together with an
Officers' Certificate stating that such Securities have been accepted for
payment by the Company. The Paying Agent shall promptly mail or deliver to
Holders of Securities so accepted payment in an amount equal to the purchase
price. Holders whose Securities are purchased only in part will be issued new
Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 3.9 COMPLIANCE CERTIFICATE.
The Company shall, within 120 days after the close of each fiscal year
following the issuance of the Securities, file with the Trustee an Officer's
Certificate, with one of the Officers executing the same being the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company, covering the period from the date of issuance of the
Securities to the end of the fiscal year in which the Securities were issued, in
the case of the first such certificate, and covering the preceding fiscal year
in the case of each subsequent certificate, and stating whether or not, to the
knowledge of each such executing Officer, the Company and each Subsidiary
Guarantor has complied with and performed and fulfilled all
53
conditions and covenants on its part contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions contained in this Indenture, and, if any such signer has obtained
knowledge of any default by the Company in the performance, observance or
fulfillment of any such condition, covenant, term or provision specifying each
such default and the nature thereof. For the purpose of this Section 3.9,
compliance shall be determined without regard to any grace period or requirement
of notice provided pursuant to the terms of this Indenture.
SECTION 3.10 SEC REPORTS.
The Company shall, to the extent required by TIA 314(a), file with
the Trustee, within 15 days after the filing with the SEC, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. In the event the Company is at any
time no longer subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, it shall, for so long as the Securities remain outstanding,
file with the Trustee and the SEC and mail to each Securityholder at such
Securityholder's registered address, within 15 days after the Company would have
been required to file such documents with the SEC, copies of the annual reports
and of the information, documents and other reports which the Company would have
been required to file with the SEC if the Company had continued to be subject to
such Sections 13 or 15(d). The Company also shall comply with the other
provisions of TIA 314(a).
SECTION 3.11 TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into, permit to exist, renew or extend any
transaction or series of transactions (including, without limitation, the sale,
purchase, exchange or lease of any assets or property or the rendering of any
services) with any Affiliate of the Company, any Plaster Entity, any Lindsey
Entity or Energy unless (i) the terms of such transaction or series of
transactions are (A) no less favorable to
54
the Company or such Restricted Subsidiary, as the case may be, than would be
obtainable in a comparable transaction or series of related transactions in
arm's-length dealings with an unrelated third party and, in the case of a
transaction or series of transactions involving payments or consideration in
excess of $100,000 approved by a majority of the Outside Directors, and (B) set
forth in writing if such transaction or series of transactions involves
aggregate payments or consideration in excess of $250,000, and (ii) with respect
to a transaction or series of transactions involving aggregate payments or
consideration in excess of $1,000,000, such transaction or series of
transactions has been determined, in the written opinion of an independent
nationally recognized investment banking firm, to be fair, from a financial
point of view, to the Company or such Restricted Subsidiary. The foregoing
provisions do not prohibit (i) the payment of reasonable fees to directors of
the Company and its subsidiaries, (ii) scheduled payments made pursuant to the
terms of any of the Basic Agreements, as the terms of each such agreement are in
effect on the Issue Date, or (iii) any transaction between the Company and a
Wholly Owned Subsidiary or between Wholly Owned Subsidiaries otherwise permitted
by the terms of the Indenture. Any transaction which has been determined, in
the written opinion of an independent nationally recognized investment banking
firm, to be fair, from a financial point of view, to the Company or the
applicable Restricted Subsidiary shall be deemed to be in compliance with this
Section 3.11.
SECTION 3.12 SALES OF ASSETS.
(a) Neither the Company nor any Restricted Subsidiary shall
consummate any Asset Sale unless (i) the Company or such Restricted Subsidiary
receives consideration at the time of such Asset Sale at least equal to the fair
market value, as determined in good faith by the Board of Directors, of the
shares or assets subject to such Asset Sale, (ii) at least 80% of the
consideration thereof received by the Company or such Restricted Subsidiary is
in the form of Additional Assets or cash or cash equivalents which cash
equivalents are promptly converted into cash by the Person receiving such
payment and (iii) an amount equal to 100% of the Net Available Cash is applied
by the Company (or such Subsidiary, as the case may be) as set forth herein.
The Company shall not
55
permit any Unrestricted Subsidiary to make any Asset Sale unless such
Unrestricted Subsidiary receives consideration at the time of such Asset Sale at
least equal to the fair market value of the shares or assets so disposed of as
determined in good faith by the Board of Directors.
(b) Within three hundred and sixty (360) days (such 360 days being
the "Application Period") following the consummation of an Asset Sale, the
Company or such Restricted Subsidiary shall apply the Net Available Cash from
such Asset Sale as follows: (i) FIRST, to the extent the Company or such
Restricted Subsidiary elects, to reinvest in Additional Assets; (ii) SECOND, to
the extent of the balance of such Net Available Cash after application in
accordance with clause (i), and to the extent the Company or such Restricted
Subsidiary elects (or is required by the terms of any Senior Indebtedness or any
Indebtedness of such Restricted Subsidiary), to prepay, repay or purchase (A)
secured Senior Indebtedness or (B) Indebtedness (other than any Preferred Stock)
of a Restricted Subsidiary, in either case other than Indebtedness owed to the
Company (except to the extent that the proceeds of any such repayment received
by the Company are used to repay secured Senior Indebtedness of the Company or
an Affiliate of the Company); and (iii) THIRD, to the extent of the balance of
such Net Available Cash after application in accordance with clauses (i) and
(ii), to make an offer to purchase the Securities at not less than 100% of their
Accreted Value, plus accrued interest (if any) pursuant to and subject to the
conditions of Section 3.12(c); PROVIDED, HOWEVER, that in connection with any
prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) or
(iii) above, the Company or such restricted Subsidiary shall retire such
Indebtedness and cause the related loan commitment (if any) to be permanently
reduced in an amount equal to the principal amount so prepaid, repaid or
purchased; PROVIDED FURTHER that in the case of any prepayment or repayment of
Indebtedness under the New Credit Facility or Indebtedness Incurred pursuant to
Section 3.4(b) (iv) refinancing the New Credit Facility, such related loan
commitment shall not be required to be permanently reduced. To the extent that
any Net Available Cash remains after the application of such Net Available Cash
in accordance with this paragraph, the Company or such Restricted Subsidiary
shall utilize such remaining Net Available Cash in any manner set forth in
clause (i) or clause (ii) above.
To the extent that any or all of the Net Available Cash of any Foreign
Asset Sale is prohibited or delayed by applicable local law from being
repatriated to the United States, the portion of such Net Available Cash
56
so affected shall not be required to be applied at the time provided above, but
may be retained by the applicable Restricted Subsidiary so long, but only so
long, as the applicable local law will not permit repatriation to the United
States (the Company hereby agreeing to promptly take or cause the applicable
Restricted Subsidiary to promptly take all actions required by the applicable
local law to permit such repatriation). Once such repatriation of any of such
affected Net Available Cash is permitted under the applicable local law, such
repatriation shall be immediately effected and such repatriated Net Available
Cash will be applied in the manner set forth in this Section as if such Asset
Sale had occurred on the date of such repatriation.
To the extent that the Board of Directors determines, in good faith,
that repatriation of any or all of the Net Available Cash of any Foreign Asset
Sale would have a material adverse tax consequence to the Company, the Net
Available Cash so affected may be retained outside of the United States by the
applicable Restricted Subsidiary for so long as such material adverse tax
consequence would continue.
Notwithstanding the foregoing, this Section shall not apply to, or
prevent any sale of assets, property, or Capital Stock of Subsidiaries to the
extent that the fair market value (as determined in good faith by the Board of
Directors) of such asset, property or Capital Stock, together with the fair
market value of all other assets, property, or Capital Stock of Subsidiaries
sold, transferred or otherwise disposed of in Asset Sales during the twelve
month period preceding the date of such sale, does not exceed 5% of Consolidated
Net Tangible Assets as determined as of the end of the most recent fiscal
quarter, and no violation of this Section shall be deemed to have occurred as a
consequence thereof.
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company as an entirety to a Person in a transaction
permitted under Article IV, the Successor Corporation shall be deemed to have
sold the properties and assets of the Company not so transferred for purposes of
Section 3.12, and shall comply with the Section 3.12 with respect to such deemed
sale as if it were an Asset Sale.
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(c) Subject to the last sentence of this paragraph, in the event of
an Asset Sale that requires the purchase of Securities pursuant to clause (iii)
of the first paragraph of Section 3.12(b), the Company will be required to
purchase Securities tendered pursuant to an offer by the Company for the
Securities (the "Asset Sale Offer") at a purchase price of not less than 100% of
their Accreted Value plus accrued interest to the Asset Sale Purchase Date in
accordance with the procedures (including prorationing in the event of
oversubscription) set forth in Section 3.12(d). If the aggregate purchase price
of Securities tendered pursuant to the Asset Sale Offer is less than the Net
Available Cash allotted to the purchase of the Securities, the Company shall
apply the remaining Net Available Cash in accordance with the last sentence of
the first paragraph of Section 3.12(b). The Company shall not be required to
make an Asset Sale Offer for Securities pursuant to this Section if the Net
Available Cash available therefor (after application of the proceeds as provided
in Section 3.12(b)(i) and (ii)) is less than $1,000,000 for any particular Asset
Sale (which lesser amounts shall not be carried forward for purposes of
determining whether an Asset Sale Offer is required with respect to the Net
Available Cash from any subsequent Asset Sale).
(d) (1) Promptly, and in any event prior to the 360th day after the
later of the date of each Asset Sale as to which the Company must make an Asset
Sale Offer or the receipt of Net Available Cash therefrom, the Company shall be
obligated to deliver to the Trustee and send, by first-class mail to each
Holder, a written notice stating that the Holder may elect to have his
Securities purchased by the Company either in whole or in part (subject to
prorationing as hereinafter described in the event the Asset Sale Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days, nor more than 60 days, after the date of such notice (the "Asset
Sale Purchase Date") and shall contain the information required in a notice for
a Change of Control Offer, to the extent applicable.
(2) Not later than the date upon which written notice of an
Asset Sale Offer is delivered to the Trustee as provided in Section 3.12(d)(1),
the Company
58
shall deliver to the Trustee an Officers' Certificate as to (i) the amount of
the Asset Sale Offer (the "Asset Sale Offer Amount"), (ii) the allocation of the
Net Available Cash from the Asset Sales pursuant to which such Asset Sale Offer
is being made and (iii) the compliance of such allocation with Section 3.12(a).
On such date, the Company shall also deposit with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust) funds in
an amount equal to the Asset Sale Offer Amount to be held for payment in
accordance with the provisions of this Section. Upon the expiration of the
period for which the Asset Sale Offer remains open (the "Offer Period"), the
Company shall deliver, or cause to be delivered, to the Trustee the Securities
or portions thereof which have been properly tendered to and are to be accepted
by the Company. The Paying Agent shall, on the Asset Sale Purchase Date, mail
or deliver payment to each tendering Holder in the amount of the purchase price.
In the event that the aggregate purchase price of the Securities delivered, or
caused to be delivered, by the Company to the Trustee is less than the Asset
Sale Offer Amount, the Paying Agent shall deliver the excess to the Company
immediately after the expiration of the Offer Period.
(3) Holders electing to have a Security purchased will be
required to surrender the Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Security duly completed, to the Company or
the Paying Agent, as specified in, and at the address specified in, the notice
at least ten Business Days prior to the Asset Sale Purchase Date. Holders will
be entitled to withdraw their election if the Trustee or the Paying Agent
receives, not later than three Business Days prior to the Asset Sale Purchase
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. If at the expiration of the Offer
Period the aggregate principal amount of Securities surrendered by Holders
exceeds the Asset Sale Offer Amount, the Company shall select the Securities to
be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders
59
whose Securities are purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company will also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section. A
Security shall be deemed to have been accepted for purchase at the time the
Paying Agent, directly or through an agent, mails or delivers payment therefor
to the surrendering Holder.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 3.13 CORPORATE EXISTENCE.
Except as permitted under Article IV, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate existence of each Restricted Subsidiary in
accordance with the respective organizational documents of the Company and of
each Restricted Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and the Restricted Subsidiaries necessary or
appropriate to carry out their businesses; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate existence of any Restricted Subsidiary if the preservation thereof is
no longer desirable in the conduct of the business of the Company and the
Restricted Subsidiaries taken as a whole; and PROVIDED, FURTHER, that any
Restricted Subsidiary may consolidate with, merge into, or sell, convey,
transfer, lease or otherwise dispose of all or part of its property and assets
to the Company or any Wholly Owned Subsidiary to the extent otherwise permitted
under this Indenture.
60
SECTION 3.14 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge, or cause to be paid or discharged,
before any material penalty accrues thereon all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required
to pay or discharge, or cause to be paid or discharged, any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings and for which adequate
reserves, if the same shall be required in accordance with generally accepted
accounting principles, have been made.
SECTION 3.15 NOTICE OF DEFAULTS AND OTHER EVENTS.
In the event that any Indebtedness of the Company or any Significant
Subsidiary having an outstanding principal amount of $1,000,000 or more
individually or $2,000,000 or more in the aggregate has been or could be
declared due and payable before its maturity because of the occurrence of any
event of default under such Indebtedness (including any Default under this
Indenture), the Company, promptly after it becomes aware thereof, will give
written notice thereof to the Trustee.
SECTION 3.16 MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company shall cause all properties used or useful in the conduct
of its business or the business of each Restricted Subsidiary and material to
the Company and the Restricted Subsidiaries taken as a whole to be maintained
and kept in normal condition, repair and working order and supplied with all
necessary equipment; PROVIDED, HOWEVER, that nothing in this Section 3.16 shall
prevent the Company or any Restricted Subsidiary from discontinuing the use,
operation or maintenance of any of such properties or disposing of any of them,
if such discontinuance or disposal is, in the judgment of an Officer (or other
employee of the Company or any Restricted Subsidiary) of the Company or such
Restricted Subsidiary having managerial responsibility for any such property,
appropriate.
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The Company shall provide or cause to be provided, for itself and the
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
product liability insurance and public liability insurance with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality thereof, of such kinds, and in such amounts, with such
deductibles and by such methods as the Company in good faith shall determine to
be reasonable and appropriate in the circumstances.
SECTION 3.17 LIMITATION ON ISSUANCE OF CAPITAL STOCK AND INCURRENCE OF
INDEBTEDNESS OF RESTRICTED SUBSIDIARIES.
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell, and shall not permit any Person other than the
Company or a Wholly Owned Subsidiary to own (except to the extent that any such
Person may own on the Issue Date), any shares of such Restricted Subsidiary's
Capital Stock (including options, warrants or other rights to purchase shares of
Capital Stock) except, to the extent otherwise permitted by this Indenture, (i)
to the Company or another Restricted Subsidiary that is a Wholly Owned
Subsidiary of the Company, or (ii) if, immediately after giving effect to such
issuance and sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary for purposes of this Indenture. The Company shall not
permit any Restricted Subsidiary, directly or indirectly, to Incur Indebtedness
other than pursuant to Section 3.4(b).
SECTION 3.18 LIMITATION ON CHANGES IN THE
NATURE OF THE BUSINESS.
The Company and its Subsidiaries shall not engage in any line of
business other than the business of the sale and distribution of propane gas and
operations related thereto for any period of time in excess of 270 consecutive
days for any such unrelated line of business.
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ARTICLE IV
CONSOLIDATION, MERGER AND SALE
SECTION 4.1 MERGER AND CONSOLIDATION OF COMPANY.
The Company shall not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into any other
corporation or sell, assign, convey, transfer or lease or otherwise dispose of
a majority of its properties and assets to any Person or group of affiliated
Persons unless:
(a) either the Company shall be the continuing Person, or the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or to which the properties and assets of the
Company as an entirety are transferred (the "Successor Corporation"), shall
be a corporation organized and existing under the laws of the United States
or any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto executed and delivered to the
Trustee, in form and substance satisfactory to the Trustee, all the
obligations of the Company under this Indenture and the Securities;
(b) immediately before and immediately after giving effect to
such transaction on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the Company (or the Successor Corporation if the
Company is not the continuing obligor under the Indenture) or any
Restricted Subsidiary as a result of such transaction as having been
Incurred by such Person at the time of such transaction), no Default shall
have occurred and be continuing;
(c) the Company shall have delivered, or caused to be
delivered, to the Trustee an Officers' Certificate and, as to legal
matters, an Opinion of Counsel, each in form and substance satisfactory to
the Trustee, each stating that such consolidation, merger or transfer and
such supplemental indenture comply with this Section and that
63
all conditions precedent herein provided for relating to such transaction
have been complied with;
(d) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness which becomes an obligation of
the Company (or the Successor Corporation if the Company is not the
continuing obligor under this Indenture) or a Restricted Subsidiary in
connection with or as a result of such transaction as having been Incurred
by such Person at the time of such transaction, the Consolidated Coverage
Ratio of the Company (or the Successor Corporation if the Company is not
the continuing obligor under this Indenture) is at least 1:1, PROVIDED
that, if the Consolidated Coverage Ratio before giving effect to such
transaction is within the range set forth in column (A) below, then the pro
forma Consolidated Coverage Ratio of the Company or the Successor
Corporation shall be at least equal to the lesser of (1) the ratio
determined by multiplying the percentage set forth in column (B) below by
the Consolidated Coverage Ratio of the Company prior to such transaction
and (2) the ratio set forth in column (C) below:
(A) (B) (C)
1.11:1 to 1.99:1 90% 1.50:1
2.00:1 to 2.99:1 80% 2.10:1
3.00:1 to 3.99:1 70% 2.40:1
4.00:1 or more 60% 2.50:1;
and
(e) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness which becomes an obligation of
the Company (or the Successor Corporation if the Company is not the
continuing obligor under this Indenture) or a Restricted Subsidiary in
connection with or as a result of such transaction as having been Incurred
by such Person at the time of such transaction), the Company (or the
Successor Corporation if the Company is not the continuing obligor under
this Indenture) shall have Consolidated Net Worth in an amount which is not
less than the Consolidated Net Worth immediately prior to such
transaction.
64
Notwithstanding the foregoing paragraphs (b), (d) and (e), any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company or any Wholly Owned Subsidiary or
Wholly Owned Subsidiaries and no violation of this Section shall be deemed to
have occurred as a consequence thereof, as long as the requirements of
paragraphs (a) and (c) are satisfied in connection therewith.
65
SECTION 4.2 SUCCESSOR SUBSTITUTED.
Upon any such consolidation or merger, or any conveyance,
transfer, or disposition of a majority of the properties or assets
of the Company in accordance with Section 4.1, but not in the case of a
lease, the Successor Corporation shall succeed to and be substituted for the
Company under this Indenture and the Securities, and the Company shall thereupon
be released from all obligations hereunder and under the Securities and the
Company, as the predecessor corporation, may thereupon or at any time thereafter
be dissolved, wound up or liquidated. The Successor Corporation thereupon may
cause to be signed, and may issue either in its own name or in the name of the
Company, all or any of the Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of the Successor Corporation instead of the Company and subject to all the
terms, conditions and limitations prescribed in this Indenture, the Trustee
shall authenticate and shall deliver any Securities which the Successor
Corporation thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
such Securities had been issued at the date of the execution hereof. In the
case of any consolidation, merger or transfer described above, such changes in
form (but not in substance) may be made in the Securities thereafter to be
issued as may be appropriate.
66
ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.
An "Event of Default" means any of the following events:
(a) default in the payment of interest on any Security when the same
becomes due and payable, and such default continues for a period of 30 days;
(b) default in the payment of the principal of any Security when the
same becomes due and payable at maturity or otherwise or a failure to redeem or
purchase Securities when required pursuant to this Indenture or the Securities;
(c) default in performance of any other covenants or agreements in
the Securities, this Indenture or the Pledge Agreement and the default continues
for 30 days after the date on which written notice of such default is given to
the Company by the Trustee or the Collateral Agent or to the Company and the
Trustee by Holders of at least 25% in principal amount of the Securities then
outstanding hereunder; PROVIDED that the failure to commence a Change of Control
Offer following a Change of Control pursuant to clause (vi) of the definition of
"Change of Control" shall not constitute an Event of Default if, during such 30
day period, the Company takes the necessary actions with respect to the Board of
Directors to comply with the requirements of clauses (vi)(A), (vi)(B) and
(vi)(C) of the definition of "Change of Control";
(d) there shall have occurred either (a) a default by the Company or
any Subsidiary under any instrument under which there is or may be secured or
evidenced any Indebtedness of the Company or any Subsidiary of the Company
(other than the Securities) having an
67
outstanding principal amount of $2,000,000 (or its foreign currency equivalent)
or more individually or $5,000,000 (or its foreign currency equivalent) or more
in the aggregate that has caused the holders thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity or (b) a default
by the Company or any Subsidiary in the payment when due of any portion of the
principal under any such instrument, and such unpaid portion exceeds $2,000,000
(or its foreign currency equivalent) individually or $5,000,000 (or its foreign
currency equivalent) in the aggregate and is not paid, or such default is not
cured or waived, within any grace period applicable thereto;
(e) any final judgment or order (not covered by insurance) for the
payment of money shall be rendered against the Company or any Significant
Subsidiary in an amount in excess of $2,000,000 (or its foreign currency
equivalent) individually or $5,000,000 (or its foreign currency equivalent) in
the aggregate for all such final judgments or orders against all such Persons
(treating any deductibles, self-insurance or retention as not so covered) and
shall not be discharged, and there shall be any period of 30 consecutive days
following entry of the final judgment or order in excess of $2,000,000 (or its
foreign currency equivalent) individually or that causes the aggregate amount
for all such final judgments or orders outstanding against all such Persons to
exceed $5,000,000 (or its foreign currency equivalent) during which a stay of
enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;
(f) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
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(v) admits in writing its inability to generally pay its debts
as such debts become due,
or takes any comparable action under any foreign laws relating to insolvency;
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of its property, or
(iii) orders the winding up or liquidation of the Company or any
Significant Subsidiary,
or any similar relief is granted under any foreign laws; and the order or decree
remains unstayed and in effect for 60 days; and
(h) except as permitted by this Indenture, the Trustee fails to have
a first priority perfected security interest in the Collateral; and
(i) except as permitted by the terms hereof and the Securities, the
cessation of effectiveness of any Subsidiary Guarantee as against any Subsidiary
Guarantor, or the finding by any judicial proceeding that any such Subsidiary
Guarantee is, as to any Subsidiary Guarantor, unenforceable or invalid, or the
written denial or disaffirmation by any Subsidiary Guarantor of its obligations
under its Subsidiary Guarantee.
The term "Bankruptcy Law" means Title 11 of the U.S. Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Any notice of Default given by the Trustee or Securityholders under
this Section must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default."
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The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice of any event which with the giving of notice
or the lapse of time or both would become an Event of Default under clause (c),
(d), (e), (g), (h) or (i) hereof.
Subject to the provisions of Section 6.1 and 6.2, the Trustee shall
not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to the Trustee as specified in Section 11.2 by the
Company, the Paying Agent, the Collateral Agent, any Holder or an agent of any
Holder.
SECTION 5.2 ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (f) and (g) of Section 5.1 with respect to the Company) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the Securities by notice to the Company and the Trustee,
may declare the principal of and accrued interest on all the Securities to be
due and payable. Upon such declaration the principal amount at maturity and
interest shall be due and payable immediately. If an Event of Default specified
in clause (f) or (g) of Section 5.1 with respect to the Company occurs, the
principal amount at maturity of and interest on all the Securities shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholders. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of the acceleration. No such rescission shall affect any
subsequent or other Default or Event of Default or impair any consequent right.
SECTION 5.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal amount at
maturity or
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interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 5.4 WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the Securities by
notice to the Trustee may waive an existing Default and its consequences except
(a) a Default in the payment of the principal of or interest on any Security or
(b) a Default in respect of a provision that under Section 8.2 cannot be amended
without the consent of each Securityholder affected. When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any consequent right.
SECTION 5.5 CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the Securities may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on it.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, or, subject to Section 6.1, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders, or would involve the
Trustee in personal liability; PROVIDED, HOWEVER, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification reasonably satisfactory to it against all risk, losses and
expenses caused by taking or not taking such action. Subject to Section 6.1,
the Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of the
Securityholders pursuant to this Indenture, unless such Securityholders shall
have provided to
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the Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities which might be incurred in compliance with such
request or direction.
SECTION 5.6 LIMITATION ON SUITS.
A Securityholder may pursue a remedy with respect to this Indenture or
the Securities only if:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the Securities
make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee security reasonably
satisfactory to it or indemnity against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(e) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during such
60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 5.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder.
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SECTION 5.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 5.1(a) or (b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to the
extent lawful) and the amounts provided for in Section 6.7.
SECTION 5.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents and take such other actions including participating as a member or
otherwise in any committees of creditors appointed in the matter as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the amounts provided in Section 6.7) and the Securityholders allowed
in any judicial proceedings relative to the Company, its creditors or its
property and, unless prohibited by law or applicable regulations, may vote on
behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 6.7. To
the extent that the payment of any such amount due to the Trustee under Section
6.7 out of the estate in any such proceeding shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties which
the Holders of the Securities may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
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SECTION 5.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 6.7;
Second: to Securityholders for amounts due and unpaid on the
Securities for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall give written notice to each Securityholder and the
Trustee of the record date, the payment date and amount to be paid.
SECTION 5.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 5.7, or a suit by Holders of more than 10% in principal
amount of the Securities.
SECTION 5.12 WAIVER OF STAY OR EXTENSION LAWS.
The Company and each Subsidiary Guarantor (to the extent that each of
them may lawfully do so) shall not at any time insist upon, or plead, or in any
manner whatsoever, claim or take the benefit or advantage of,
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any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company and each Subsidiary Guarantor (to the extent that each of them may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VI
TRUSTEE
SECTION 6.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and the Pledge Agreement, and use the same degree of care and skill in
their exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no implied
covenants or obligations shall be read into this Indenture or the Pledge
Agreement against the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture or the
Pledge Agreement. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture or the Pledge Agreement.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent
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failure to act, or its own willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.2, 5.4 or 5.5.
(iv) No provision of this Indenture and the Pledge Agreement
shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, unless it
receives indemnity satisfactory to it against any risk, loss, liability or
expense.
(d) Every provision of this Indenture and the Pledge Agreement that
in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of
this Section.
(e) The Trustee, in its capacity as Trustee and Registrar and Paying
Agent, shall not be liable to the Company, the Securityholders or any other
Person for interest on any money received by it, including, but not limited to,
money with respect to principal of or interest on the Securities, except as the
Trustee may agree with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
SECTION 6.2 RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document reasonably believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee
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need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on any
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers PROVIDED, HOWEVER, that the Trustee's conduct does not constitute wilful
misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or opinion
of such counsel as to matters of law shall be full and complete authorization
and protection from liability in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice of such
counsel.
(f) The Trustee shall not be obligated to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or any other paper or document.
SECTION 6.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
6.10 and 6.11.
SECTION 6.4 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Pledge Agreement, the Subsidiary Guarantees or the
Securities, it
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shall not be accountable for the Company's use of the proceeds from the
Securities, it shall not be responsible for the use or application of any money
received by the Paying Agent (other than the Trustee) and it shall not be
responsible for any statement in the Securities other than its authentication.
SECTION 6.5 NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Securityholders a notice of
the Default or Event of Default within 90 days of notification of such
occurrence. Except in the case of a Default in any payment on any Security, the
Trustee may withhold the notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 6.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after the reporting date stated in Section 11.10, the
Trustee shall mail to Securityholders a brief report dated as of such reporting
date that complies with TIA Section 313(a) if required by that Section. The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall promptly notify the Trustee when the Securities are
listed on any stock exchange and of any delisting thereof.
SECTION 6.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket
disbursements, expenses and advances incurred by it. Such expenses shall
include the
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reasonable compensation and out-of-pocket disbursements and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability and expenses including reasonable attorneys' fees,
disbursements and expenses, incurred by it in connection with the administration
of this trust and the performance of its duties hereunder and under the Pledge
Agreement including the costs and expenses of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder and thereunder. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent;
provided however, that the consent of the Company shall not be required if the
Company has instituted proceedings to be adjudicated a bankrupt or insolvent, or
is otherwise subject to proceedings under Title 11 of the United States
Bankruptcy Code, or has consented to the appointment of a receiver, liquidator,
assignee, trustee or similar official for the Company or of any substantial part
of its property, or has made an assignment for the benefit of creditors, or has
admitted in writing its inability to pay its debts generally as they become due,
or has taken corporate action in furtherance of any such action.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(f) or (g) occurs, the expenses and the
compensation
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for the services are intended to constitute expenses of administration under any
Bankruptcy Law.
The Company's obligations under this Section 6.7 and any Lien arising
hereunder shall survive the resignation or removal of the Trustee, the
satisfaction and discharge of the Company's obligations pursuant to Article VII
of this Indenture or the termination of this Indenture or the Pledge Agreement.
SECTION 6.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the Securities may, by written
notice to the Trustee, remove the Trustee by so notifying the Trustee and the
Company. The Company, by notice to the Trustee, shall remove the Trustee if:
(a) the Trustee fails to comply with Section 6.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the Securities may
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petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 6.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture and the Pledge Agreement. The successor Trustee shall mail
a notice of its succession to Securityholders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the Lien provided for in Section 6.7.
SECTION 6.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 6.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA Section
310(b). Nothing herein shall prevent the Trustee from filing with the SEC the
application referred to in the second-to-last paragraph of TIA Section 310(b).
SECTION 6.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), except with respect
to any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been
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removed is subject to TIA Section 311(a) to the extent indicated.
SECTION 6.12 PAYING AGENTS.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to it and the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 6.12:
(a) that it will hold all sums held by it as agent for the payment of
principal of, or interest on, the Securities (whether such sums have been paid
to it by the Company or by any obligor on the Securities) in trust for the
benefit of Holders of the Securities;
(b) that it will at any time during the continuance of any Event of
Default specified in Section 5.1, upon written request from the Trustee, deliver
to the Trustee all sums so held in trust by it;
(c) that it will give the Trustee written notice within one (1)
Business Day of any failure of the Company (or by any obligor on the Securities)
in the payment of any installment of the principal of, or interest on, the
Securities when the same shall be due and payable; and
(d) that it will comply with the provisions of the TIA applicable to
it.
ARTICLE VII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 7.1 DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
If (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.7) for cancellation or
(ii) all outstanding Securities have become due and payable and the Company or a
Subsidiary Guarantor irrevocably deposits with the Trustee as trust funds
solely for the benefit of the Holders for that purpose funds sufficient to pay
at maturity the principal of and all accrued interest
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on all outstanding Securities (other than Securities replaced pursuant to
Section 2.7), and if in either case the Company or a Subsidiary Guarantor pays
all other sums payable hereunder by the Company, then, subject to Sections 7.2
and 7.7, this Indenture shall cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on written demand of
the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
SECTION 7.2 TERMINATION OF COMPANY'S OBLIGATIONS.
Except as otherwise provided in this Section 7.2, the Company may
terminate its obligations under the Securities and this Indenture if:
(i) the Securities mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for giving the notice of redemption, (ii) the Company irrevocably
deposits in trust with the Trustee or Paying Agent (other than the Company or a
Subsidiary or Affiliate of the Company) during such one-year period, under the
terms of an irrevocable trust agreement in form and substance satisfactory to
the Trustee, as trust funds solely for the benefit of the Holders for that
purpose, money or U.S. Government Obligations sufficient (in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee), without consideration
of any reinvestment of such interest, to pay principal and interest on the
Securities to maturity or redemption, as the case may be, and to pay all other
sums payable by it hereunder, (iii) no Default shall have occurred and be
continuing on the date of such deposit, (iv) such deposit will not result in or
constitute a Default or result in a breach or violation of, or constitute a
default under, any other agreement or instrument to which the Company is a party
or by which it is bound and (v) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with; PROVIDED that the Trustee
or Paying Agent shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Obligations
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to the payment of such principal and interest with respect to the Securities.
With respect to the foregoing, the Company's obligations in Sections
2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.12, 3.1, 3.2, 6.7, 6.8, 7.5, 7.6 and 7.7 shall
survive until the Securities are no longer outstanding. Thereafter, only the
Company's obligations in Sections 6.7, 6.8, 7.6 and 7.7 shall survive. After
any such irrevocable deposit, the Trustee upon request shall acknowledge in
writing the discharge of the Company's obligations under the Securities and
this Indenture except for those surviving obligations specified above.
SECTION 7.3 DEFEASANCE AND DISCHARGE OF INDENTURE.
The Company will be deemed to have paid and will be discharged from
any and all obligations in respect of the Securities on the 123rd day after the
date of the deposit referred to in clause (i) hereof, and the provisions of this
Indenture will no longer be in effect with respect to the Securities, and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same, except as to (a) rights of registration of transfer and
exchange, (b) substitution of mutilated, defaced, destroyed, lost or stolen
Securities pursuant to Section 2.7, (c) rights of Holders to receive payments of
principal thereof and interest thereon, (d) the Company's obligations under
Sections 3.2 and 6.7, (e) the rights, obligations and immunities of the Trustee
hereunder and (f) the rights of the Holders as beneficiaries of this Indenture
with respect to the property so deposited with the Trustee payable to all or any
of them; PROVIDED that the following conditions shall have been satisfied:
(i) with reference to this Section 7.3, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirement of Section 6.10) or
Paying Agent (other than the Company or a Subsidiary or Affiliate of the
Company) and conveyed all right, title and interest for the benefit of the
Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to,
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the benefit of the Holders, in and to, (A) money in an amount, (B) U.S.
Government Obligations that, through the payment of interest and principal
in respect thereof in accordance with their terms, will provide, not later
than one day before the due date of any payment referred to in this clause
(i), money in an amount or (C) a combination thereof in an amount
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge, without consideration of the
reinvestment of such interest and after payment of all federal, state and
local taxes or other fees, charges and assessments in respect thereof
payable by the Trustee or Paying Agent, the principal of and interest on
the outstanding Securities when due; PROVIDED that the Trustee or Paying
Agent shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of such
principal and interest with respect to the Securities;
(ii) such deposit will not result in or constitute a Default or
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company is a party or by which
it is bound;
(iii) no Default shall have occurred and be continuing on the
date of such deposit or during the period ending on the 123rd day after
such date of deposit;
(iv) the Company shall have delivered to the Trustee (A) either
(1) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders will not recognize income, gains or
loss for federal income tax purposes as a result of the Company's exercise
of its option under this Section 7.3 and will be subject to federal income
tax on the same amount and in the same manner and at the same times as
would have been the case if such option had not been exercised or (2) an
Opinion of Counsel (who must not be an employee of the Company) to the same
effect as the ruling described in clause (1) accompanied by a
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ruling to that effect published by the Internal Revenue Service, unless
there has been a change in the applicable federal income tax law since the
date of this Indenture such that a ruling from the Internal Revenue Service
is no longer required and (B) an Opinion of Counsel to the effect that (1)
the creation of the defeasance trust does not violate the Investment
Company Act of 1940, (2) after the passage of 123 days following the
deposit (except, with respect to any trust funds for the account of any
Holder who may be deemed to be an "insider" for purposes of Title 11 of the
United States Bankruptcy Code, after one year following the deposit), the
trust funds will not be subject to the effect of Section 547 of the United
States Bankruptcy Code or Section 15 of the New York Debtor and Creditor
Law in a case commenced by or against the Company under either such
statute, and either (x) the trust funds will no longer remain the property
of the Company (and therefore, will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally) or (y) if a court were to rule under any such
law in any case or proceeding that the trust funds remained property of the
Company, (I) assuming such trust funds remained in the possession of the
Trustee prior to such court ruling to the extent not paid to Holders, the
Trustee will hold, for the benefit of the Holders, a valid and perfected
first priority security interest in such trust funds that is not avoidable
in bankruptcy or otherwise except for the effect of Section 552(b) of
the United States Bankruptcy Code on interest on the trust funds accruing
after the commencement of a case under such statute and (II) the Holders
will be entitled to receive adequate protection of their interests in
such trust funds if such trust funds are used in such case or proceeding;
and
86
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 7.3 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day period
referred to in clause (iv)(B)(2) above, none of the Company's obligations under
this Indenture shall be discharged. Subsequent to the end of such 123-day
period with respect to this Section 7.3, the Company's obligations in Sections
2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.12, 3.1, 3.2, 6.7, 6.8, 7.6 and 7.7 shall
survive until the securities are no longer outstanding. Thereafter, only the
Company's obligations in Sections 6.7, 7.6 and 7.7 shall survive. If and when a
ruling from the Internal Revenue Service or Opinion of Counsel referred to in
clause (iv)(A) above is able to be provided specifically without regard to, and
not in reliance upon, the continuance of the Company's obligations under Section
3.1, then the Company's obligations under such Section 3.1 shall cease upon
delivery to the Trustee of such ruling or Opinion of Counsel and compliance with
the other conditions precedent provided for herein relating to the defeasance
contemplated by this Section 7.3.
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After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 7.4 DEFEASANCE OF CERTAIN OBLIGATIONS.
The Company may omit to comply with any term, provision or condition
set forth in clauses (d) and (e) of Section 4.1 and Sections 3.3 through 3.18,
and clause (c) of Section 5.1 with respect to clauses (d) and (e) of
Section 4.1 and Sections 3.3 through 3.18, and clauses (d) and (e) of Section
5.1 shall be deemed not to be Events of Default, in each case with
respect to the outstanding Securities if:
(i) with reference to this Section 7.4, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 6.10) or
Paying Agent (other than the Company or a Subsidiary or Affiliate of the
Company) and conveyed all right, title and interest for the benefit of the
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Holders, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders, in and to, (A) money in an amount, (B) U.S. Government obligations
that, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide, not later than one day before
the due date of any payment referred to in this clause (i), money in an
amount or (C) a combination thereof in an amount, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, without consideration of the reinvestment of interest
and after payment of all federal, state and local taxes or other fees,
charges and assessments in respect thereof payable by the Trustee or Paying
Agent, the principal of and interest on the outstanding Securities when
due; PROVIDED that the Trustee or Paying Agent shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of such principal and interest with respect to
the Securities;
(ii) such deposit will not result in or constitute a Default or
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company is a party or by which
it is bound;
(iii) no Default shall have occurred and be continuing on the
date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of
Counsel who is not employed by the Company to the effect that (A) the
creation of the defeasance trust does not violate the Investment Company
Act of 1940, (B) the Holders have a valid first-priority security interest
in the trust funds, (C) the Holders will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and defeasance
of certain obligations and will be subject to federal income tax on the
same amount and in the same manner and at the same times as would have been
the case if such deposit
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and defeasance had not occurred and (D) after the passage of 123 days
following the deposit (except, with respect to any trust funds for the
account of any Holder who may be deemed to be an "insider" for purposes of
the United States Bankruptcy Code, after one year following the deposit),
the trust funds will not be subject to the effect of Section 547 of the
United States Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law in a case commenced by or against the Company under either
such statute, and either (1) the trust funds will no longer remain the
property of the Company (and therefore, will not be subject to the effect
of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (2) if a court were to rule
under any such law in any case or proceeding that the trust funds
remained property of the Company, (x) assuming such trust funds remained
in the possession of the Trustee prior to such court ruling to the extent
not paid to Holders, the Trustee will hold, for the benefit of the
Holders, a valid and perfected first priority security interest in such
trust funds that is not avoidable in bankruptcy or otherwise except for
the effect of Section 552(b) of the United States Bankruptcy Code on
interest on the trust funds accruing after the commencement of a case
under such statute and (y) the Holders will be entitled to receive
adequate protection of their interests in such trust funds if such trust
funds are used in such case or proceeding; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 7.4 have been complied with.
SECTION 7.5 APPLICATION OF TRUST MONEY.
Subject to Section 7.7 of this Indenture, the Trustee or Paying Agent
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 7.2, 7.3 or 7.4 of this Indenture, as the case may be, and
shall apply the deposited money and the money from U.S. Government Obligations
in accordance with this
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Indenture to the payment of principal of and interest on the Securities. The
Trustee shall be under no obligation to invest such money or U.S. Government
Obligations except as it may agree with the Company.
SECTION 7.6 REPAYMENT TO COMPANY.
Subject to Sections 6.7, 7.2, 7.3 and 7.4 of this Indenture, the
Trustee and the Paying Agent shall promptly pay to the Company upon written
request any excess money held by them at any time and thereupon shall be
relieved from all liability with respect to such money. The Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years; PROVIDED, HOWEVER, that the Company shall, if requested by the Trustee or
the Paying Agent, give the Trustee or such Paying Agent indemnification
reasonably satisfactory to it against any and all liability which may be
incurred by it by reason of such payment; and PROVIDED, FURTHER, that the
Trustee or such Paying Agent before being required to make any payment may cause
to be published at the expense of the Company once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money at such Holder's address as set forth in the Security Register notice that
such money remains unclaimed and that after a date specified therein (which
shall be at least 30 days from the date of such publication or mailing) any
unclaimed balance of such money then remaining will be repaid to the Company.
After payment to the Company, Holders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 7.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 7.2, 7.3 or 7.4 of this
Indenture, as the case may be, by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Securities shall be revived
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and reinstated as though no deposit had occurred pursuant to Section 7.2, 7.3 or
7.4 of this Indenture, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with Section 7.2, 7.3 or 7.4 of this Indenture, as the case may
be; PROVIDED that, if the Company has made any payment of principal of or
interest on any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE VIII
AMENDMENTS AND SUPPLEMENTS
SECTION 8.1 WITHOUT CONSENT OF HOLDERS.
The Company, the Subsidiary Guarantors and the Trustee may amend or
supplement this Indenture, the Pledge Agreement or the Securities without notice
to or the consent of any Securityholder:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to comply with Article IV;
(c) to provide for uncertificated Securities in addition to
certificated Securities; PROVIDED, HOWEVER, that the uncertificated Securities
are issued in registered form for purposes of Section 163(f) of the Internal
Revenue Code of 1986, as amended, or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(d) to add additional guarantees with respect to the Securities or to
secure the Securities;
(e) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the Company;
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(f) to comply with the requirements of the SEC in connection with
qualification of the Indenture under the TIA;
(g) to make any change that does not adversely affect the rights of
any Securityholder;
(h) to provide for certain amendments to the Pledge Agreement
expressly called for therein and to add Collateral thereto; or
(i) to increase the aggregate principal amount at maturity of
Securities that may be issued by the Company pursuant to this Indenture;
PROVIDED, HOWEVER, that any such additional Indebtedness Incurred is otherwise
permitted to be Incurred by the Company pursuant to the terms of this Indenture.
After an amendment or supplement under this Section becomes effective,
the Company shall mail to Securityholders a notice briefly describing such
amendment or supplement. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment or supplement under this Section.
SECTION 8.2 WITH CONSENT OF HOLDERS.
The Company, the Subsidiary Guarantors and the Trustee may amend or
supplement this Indenture, the Pledge Agreement or the Securities with the
written consent of the Holders of a majority in principal amount of the
Securities. However, without the consent of each Securityholder affected, an
amendment or supplement under this Section may not:
(a) reduce the amount of Securities the Holders of which must consent
to an amendment or supplement;
(b) reduce the rate of or change the time for payment of interest on
any Security;
(c) reduce the principal of or change the Stated Maturity of any
Security;
(d) reduce the premium payable upon the redemption of any Security or
change the time at which any
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Security may or shall be redeemed in accordance with Article IX;
(e) make any Security payable in currency or consideration other than
that stated in the Security;
(f) make any change in Section 5.4, 5.7 or 8.2 (second sentence);
(g) directly or indirectly release Liens on all or substantially all
of the Collateral; or
(h) modify or affect in any manner adverse to the Holders the terms
and conditions of the obligation of any Guarantor for the due and punctual
payment of the principal of, premium, if any, or interest on the Securities.
It shall not be necessary for the consent of the Holders under this
Section 8.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment or supplement under this Section becomes effective,
the Company shall mail to Securityholders a notice briefly describing such
amendment or supplement. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment or supplement under this Section.
SECTION 8.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities
shall be set forth in a supplemental indenture that complies with the TIA as
then in effect.
SECTION 8.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or supplement under this Article or a waiver under
Article V becomes effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. Howev-
94
er, any such Holder or subsequent Holder may revoke the consent as to his
Security or portion of a Security if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
After an amendment or supplement becomes effective, it shall bind
every Securityholder.
SECTION 8.5 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment changes the terms of a Security, the Trustee may
require the Holder of the Security to deliver it to the Trustee. The Trustee
may place an appropriate notation on the Security regarding the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 8.6 TRUSTEE TO SIGN AMENDMENTS.
The Trustee shall sign any supplemental indenture which sets forth an
amendment or supplement authorized pursuant to this Article if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing such supplemental indenture the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such supplemental
indenture is authorized or permitted by this Indenture.
SECTION 8.7 FIXING OF RECORD DATES.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to take any action under this
Indenture by vote or consent. Except as provided herein, such record date shall
be the later of 30 days prior to the first solicitation of such consent or vote
or the date of the most recent list of Securityholders furnished to the Trustee
pursuant to Section 2.5 prior to such solicita-
95
tion. If a record date is fixed, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to take such action by vote or consent or to revoke any vote or consent
previously given, whether or not such Persons continue to be Holders after such
record date; PROVIDED, HOWEVER, that unless such vote or consent is obtained
from the Holders (or their duly designated proxies) of the requisite principal
amount of outstanding Securities prior to the date which is the 120th day after
such record date, any such vote or consent previously given shall automatically
and without further action by any Holder be canceled and of no further effect.
ARTICLE IX
REDEMPTION
SECTION 9.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to paragraph 5 of
the Securities it shall notify the Trustee in writing of the redemption date and
the principal amount (not including any premium in respect thereof) of
Securities to be redeemed and the paragraph of the Securities pursuant to which
the redemption will occur.
The Company shall give the notices provided for in this Section at
least 40 days before the redemption date (unless a shorter period shall be
satisfactory to the Trustee). Such notice shall be accompanied by an Officers'
Certificate to the effect that such redemption will comply with the conditions
herein. If fewer than all the Securities are to be redeemed, the record date
relating to such redemption shall be selected by the Company and given to the
Trustee, which record date shall be not less than 15 days after the date of
notice to the Trustee.
SECTION 9.2 SELECTION OF SECURITIES TO BE REDEEMED.
If fewer than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by any other method
that complies with applicable legal and securities exchange
96
requirements, if any, and that the Trustee considers, in its sole discretion,
fair and appropriate and in accordance with methods generally used at the time
of selection by fiduciaries in similar circumstances. The Trustee shall make
the selection not more than 75 days before the redemption date from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000 in original principal amount at maturity. Securities and
portions of them selected by the Trustee shall be in amounts of $1,000 or whole
multiples of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption.
SECTION 9.3 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder whose Securities
are to be redeemed at the address set forth for such Holder on the register
referred to in Section 2.3.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(e) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(f) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on and
after the redemption date; and
97
(g) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Securities.
At the Company's written request, made at least 45 days before a
redemption date, unless a shorter period shall be satisfactory to the Trustee,
the Trustee shall give the notice of redemption provided for in this Section in
the Company's name and at its expense.
SECTION 9.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date at the redemption price. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued and unpaid interest to the redemption
date.
SECTION 9.5 DEPOSIT OF REDEMPTION PRICE.
Prior to the redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of and
accrued and unpaid interest on all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption which have been
delivered by the Company to the Trustee for cancellation.
SECTION 9.6 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder (at the
Company's expense) a new Security equal in principal amount to the unredeemed
portion of the Security surrendered.
ARTICLE X
SECURITY AND PLEDGE OF COLLATERAL
SECTION 10.1 COLLATERAL DOCUMENTS.
The due and punctual payment of the principal of, premium, if any, and
interest on the Securities when
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and as the same shall be due and payable, whether on an interest payment date,
at maturity, by acceleration, repurchase, redemption or otherwise, and interest
on the overdue principal of, premium and interest (to the extent permitted by
law), if any, on the Securities and performance of all other Obligations of the
Company to the Holders or the Trustee under this Indenture and the Securities,
according to the terms hereunder and thereunder, shall be secured as provided in
the Pledge Agreement. Each Holder, by its acceptance of a Security, consents
and agrees to the terms of the Pledge Agreement (including, without limitation,
the provisions providing for foreclosure and release of Collateral) as the same
may be in effect or may be amended from time to time in accordance with the
terms thereof and hereof and authorizes and directs the Trustee to enter into
the Pledge Agreement and to perform its Obligations and exercise its rights
thereunder in accordance therewith. The Company will do or cause to be done all
such acts and things as may be necessary or proper, or as may be required by the
provisions of the Pledge Agreement, to assure and confirm to the Trustee the
security interest in the Collateral contemplated hereby and by the Pledge
Agreement, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture and of the Securities secured
hereby, according to the intent and purposes herein expressed. The Company
shall take, upon request of the Trustee, any and all actions required to cause
the Pledge Agreement to create and maintain, as security for the Obligations of
the Company under this Indenture and the Securities, valid and enforceable,
perfected (except as expressly provided therein), Liens in and on all the
Collateral, in favor of the Trustee, superior to and prior to the rights of all
third Persons, and subject to no other Liens, other than as provided herein and
therein.
SECTION 10.2 RECORDING AND OPINIONS.
The Company shall furnish to the Trustee within 5 days after the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, the Pledge
Agreement, financing statements or other instruments necessary to make effective
the first priority Lien intended to be created by the Pledge Agreement, and
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reciting the details of such action, or (ii) stating that, in the opinion of
such counsel, no such action is necessary to make such Lien effective. To
the extent required by the TIA, the Company shall also furnish to the Trustee
at least annually an Opinion of Counsel either (i) stating that in the opinion
of such counsel such action has been taken with respect to the recording,
filing, re-recording and refiling of this Indenture, the Pledge Agreement,
financing statements or other instruments necessary to make effective the
Lien intended to be created by the Pledge Agreement and reciting the details
of such action or (ii) stating that, in the opinion of such counsel, no such
action is necessary to maintain such Lien.
SECTION 10.3 REMEDIES UPON AN EVENT OF DEFAULT.
Upon the occurrence of an Event of Default, then or at any time
during the continuance of such occurrence, the Trustee is hereby authorized and
empowered, at its election, in accordance with its rights hereunder and under
the Pledge Agreement (i) to transfer and register in its name or in the
names of any of its nominees the whole or any part of the Collateral,
(ii) to exercise all voting rights with
respect thereto, (iii) to demand, sue for, collect, receive and give acquittance
for any and all cash dividends or other distributions or monies due or to become
due upon or by virtue thereof, and to settle, prosecute or defend any action or
proceeding with respect thereto, (iv) to exchange
certificates or instruments representing or evidencing the Collateral
for certificates or instruments of different denominations, (v) to sell in one
or more sales the whole or any part of the Collateral or otherwise to transfer
or assign the same, applying the proceeds therefrom to the payment of the
Securities in accordance with Section 5.10, and (vi) otherwise to act with
respect to the Collateral or the proceeds thereof as though the Trustee were the
outright owner thereof.
SECTION 10.4. RELEASE OF THE COLLATERAL.
(a) As long as no Event of Default shall have occurred and be
continuing, at the sole cost and expense of the Company, the Company shall be
entitled at any time and from time to time to request the Trustee to release a
portion of the Collateral and the Trustee shall release such portion of the
Collateral upon:
(i) payment in full of all obligations under this Indenture and
the termination thereof; or
(ii) the sale or other disposition of the Collateral (the
"Collateral Sale") if (A) the Company or a Subsidiary receives
consideration at the time of the Collateral Sale at least equal to the
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fair market value, as determined in good faith by the Board of Directors
and by an independent engineer, appraiser or other expert, to
the extent required by the TIA, of the Collateral subject
to the sale or disposition, (B) at least 80% of the consideration
thereof received by the Company or a Subsidiary is in the
form of Additional Assets or cash or cash equivalents which cash
equivalents are promptly converted into cash by the Company (or a
Subsidiary, as the case may be), (C) an amount equal to 100% of the Net
Available Cash is immediately deposited in the Collateral Account to be
used in accordance with Section 10.4(b), (D) the non-cash proceeds from
such Collateral Sale (including securities or other Additional Assets)
received by the Company or a Subsidiary immediately become subject to a
first priority perfected Lien in favor of the Trustee, and (E) the Company
(or a Subsidiary, as the case may be) complies with all the requirements
of Section 10.6,
PROVIDED, that the Trustee shall not release any Lien on any Collateral pursuant
to this Section 10.4 unless and until it shall have received from the Company an
Officers' Certificate and an Opinion of Counsel certifying that all
conditions precedent hereunder have been met, to the extent required by the
TIA, an Opinion of Counsel that the release of such Lien complies
with the TIA and such other documents required by Section 10.6 hereof. Upon
compliance with the above provisions, the Trustee shall execute, deliver or
acknowledge any necessary or proper instruments of termination, satisfaction or
release to evidence the release of any Collateral permitted to be released
pursuant to this Indenture.
(b) Within three hundred and sixty (360) days (such 360 days being
the "Collateral Application Period") following the sale or disposition of the
Collateral, the Company or such Subsidiary shall apply the Net Available Cash
from such Collateral Sale as follows: (i) FIRST, if the Collateral Sale results
in the Person sold no longer being a Subsidiary, then to the extent required by
the agreement governing the New Credit Facility (or the agreement
governing Indebtedness Incurred pursuant to Section 3.4(b)(iv)
refinancing the New Credit Facility) and not otherwise satisfied in
connection with such Collateral Sale, to outstanding Indebtedness Incurred under
the New Credit Facility in an amount equal to (A) the outstanding principal
amount of Indebtedness to the Company of the Subsidiary subject to such
Collateral Sale as evidenced by the applicable Intercompany Note, plus (B) an
additional amount, if any, necessary to prevent the aggregate outstanding
Indebtedness Incurred pursuant to the New Credit Facility to exceed the amount
of Indebtedness then
101
permitted to be outstanding pursuant to the borrowing formulae contained in the
agreement evidencing such Indebtedness plus the Seasonal Overadvance to
the extent applicable; (ii) SECOND, to the extent that the balance
of such Net Available Cash after application in accordance with
clause (i), and to the extent the Company or the Subsidiary elects, to
reinvest in Additional Assets, provided, however, that,
when acquired, (A) if such Additional Assets are stock of a Subsidiary, then
such Additional Assets shall be subject to a first priority perfected Lien in
favor of the Trustee, and (B) if such Additional Assets are other than stock of
a Subsidiary, accounts receivable or inventory, then such Additional Assets
shall be unencumbered by any Lien; (iii) THIRD, to the extent of the balance of
such Net Available Cash after application in accordance with clauses (i) and
(ii), and to the extent the Company or such Subsidiary elects, to make an offer
to purchase the Securities at not less than 100% of their Accreted Value, plus
accrued interest (if any) pursuant to and subject to the conditions of Section
10.5(a); and (iv) FOURTH, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (i), (ii) and (iii), and to
the extent the Company or such Subsidiary elects, to acquire or form a
Subsidiary which, when acquired or formed, the Capital Stock of such Subsidiary
shall be subject to a first priority perfected Lien in favor of the Trustee. To
the extent that any Net Available Cash remains after the application of the Net
Available Cash in accordance with the previous sentence, such Net Available Cash
will remain in the Collateral Account and will not be released until the
obligations of the Company under this Indenture and the Securities have been
discharged.
SECTION 10.5. PURCHASE OF SECURITIES WITH NET AVAILABLE CASH.
(a) In the event of a purchase of Securities pursuant to clause (ii)
of Section 10.4(b), the Company will purchase Securities tendered pursuant to an
offer by the Company for the Securities (the "Collateral Sale Offer") at a
purchase price of not less than 100% of their Accreted Value plus accrued
interest to the Collateral Sale Purchase Date in accordance with the procedures
(including prorationing in the event of oversubscription) set forth below. If
the aggregate purchase price of Securities tendered pursuant to the Collateral
Sale Offer is less than the Net Available Cash allotted
102
to the purchase of the Securities, the Company shall apply the remaining Net
Available Cash in accordance with Section 10.4(b).
(b) Promptly, and in any event prior to the 360th day after the later
of the date of each Collateral Sale as to which the Company makes a Collateral
Sale Offer or the receipt of Net Available Cash therefrom, the Company shall be
obligated to deliver to the Trustee and send, by first-class mail to each
Holder, a written notice stating that the Holder may elect to have his
Securities purchased by the Company either in whole or in part (subject to
prorationing as hereinafter described in the event the Collateral Sale Offer is
oversubscribed) in integral multiples of $1,000 of principal amount at maturity,
at the applicable purchase price. The notice shall specify a purchase date not
less than 30 days, nor more than 60 days, after the date of such notice (the
"Collateral Sale Purchase Date") and shall contain the information required in a
notice for a Change of Control Offer as described in Section 3.8, to the extent
applicable.
(c) Not later than the date upon which written notice of a Collateral
Sale Offer is delivered to the Trustee as provided below, the Company shall
deliver to the Trustee an Officers' Certificate as to (i) the amount of the
Collateral Sale Offer (the "Collateral Sale Offer Amount"), (ii) the allocation
of the Net Available Cash from the Collateral Sale pursuant to which such
Collateral Sale Offer is being made and (iii) the compliance of such allocation
with Section 10.4(a). On such date, the Trustee shall also deposit with a
Paying Agent other than the Company or a Subsidiary or an Affiliate of the
Company funds in an amount equal to the Collateral Sale Offer Amount to be held
for payment in accordance with the provisions of Section 10.4. Upon the
expiration of the period for which the Collateral Sale Offer remains open (the
"Collateral Offer Period"), the Company shall deliver, or cause to be delivered,
to the Trustee the Securities or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Paying Agent shall, on
the Collateral Sale Purchase Date, mail or deliver payment to each tendering
Holder in the amount of the purchase price. In the event that the aggregate
purchase price of the Securities delivered, or caused to be delivered, by the
Company to the Trustee is
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less than the Collateral Sale Offer Amount, the Paying Agent shall deliver the
excess to the Trustee immediately after the expiration of the Collateral Offer
Period and the Trustee shall place such funds in the Collateral Account.
(d) Holders electing to have a Security purchased will be required to
surrender the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security duly completed, to the Company or the
Paying Agent, as specified in, and at the address specified in, the notice at
least ten Business Days prior to the Collateral Sale Purchase Date. Holders
will be entitled to withdraw their election if the Trustee or the Paying Agent
receives, not later than three Business Days prior to the Collateral Sale
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. If at the expiration of the
Collateral Offer Period the aggregate principal amount of Securities surrendered
by Holders exceeds the Collateral Sale Offer Amount, the Company shall select
the Securities to be purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Company so that only Securities in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part will be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.
(e) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company will also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Paying Agent,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant
104
to clause (ii) of Section 10.4(b). To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section by
virtue thereof.
SECTION 10.6. CERTIFICATES OF COMPANY.
(a) The Company will furnish to the Trustee prior to each proposed
release of Collateral pursuant to Section 10.4 all documents required by
Sections 314(c) and 314(d) of the TIA. The Trustee may, to the extent permitted
by Sections 6.1 and 6.2 hereof, accept as conclusive evidence of compliance with
the foregoing provisions the appropriate statements contained in such
instruments. Any certificate or opinion required by Sections 314(c) and 314(d)
of the TIA may be made by an Officer of the Company, except in cases where TIA
Sections 314(c) and 314(d) require that such certificate or opinion be made by
an independent engineer, appraiser or other expert within the meaning of
Sections 314(c) and 314(d) of the TIA.
SECTION 10.7 AUTHORIZATION OF ACTIONS TO BE TAKEN UNDER THE PLEDGE AGREEMENT.
The Trustee may, in its sole discretion and without the consent of the
Holders, on behalf of the Holders, take all actions its deems necessary or
appropriate in order to (a) enforce any of the terms of the Pledge Agreement and
(b) collect and receive any and all amounts payable in respect of the
Obligations of the Company hereunder. The Trustee shall have the power to
institute and to maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Collateral by any acts that may be unlawful or in
violation of the Pledge Agreement or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and interests of the Holders in the Collateral (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of,
105
or compliance with, such enactment, rule or order would impair the security
interest hereunder or be prejudicial to the interests of the Holders or of the
Trustee).
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of TIA Sections 310 to 317, inclusive, through
operation of TIA Section 318(c), such imposed duties shall control.
SECTION 11.2 NOTICES.
Any notice or communication shall be in writing and delivered in
person, or mailed by first-class mail (certified, return receipt requested),
addressed as follows:
if to the Company or the Subsidiary Guarantors:
Empire Gas Corporation
1700 South Jefferson Street
P.O. Box 303
Lebanon, Missouri 65536
Attention: Secretary
if to the Trustee:
Shawmut Bank Connecticut,
National Association
777 Main Street - MSN 238
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
The Company, any Subsidiary Guarantor or the Trustee by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
106
Any notice or communication to a Securityholder shall be mailed by
first-class mail to the Securityholder's address shown on the register kept by
the Registrar. Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company or any Subsidiary Guarantor mails a notice or
communication to Securityholders, it shall mail a copy to the Trustee and each
Agent at the same time.
SECTION 11.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Subsidiary Guarantors, the Trustee, the Registrar
and anyone else shall have the protection of TIA Section 312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company
shall, if requested by the Trustee, furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent (including any covenants compliance with which constitutes
a condition precedent), if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel (which
may rely upon an Officers' Certificate as to factual matters), all such
conditions precedent have been complied with.
107
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture other than certificates
provided pursuant to Section 3.9 shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 11.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 11.7 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York, the State of
Connecticut or the State in which the principal office of the Paying Agent is
located. If a payment date is a Legal Holiday, payment may be made at that
place on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the regular record date shall not be affected.
108
SECTION 11.8 SUCCESSORS; NO RECOURSE AGAINST OTHERS.
(a) All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
(b) All liability of the Company or any Subsidiary Guarantor
described in the Securities insofar as it relates to any director, officer,
employee or stockholder, as such, of the Company is waived and released by each
Securityholder.
SECTION 11.9 DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 11.10 OTHER PROVISIONS.
The first certificate pursuant to Section 3.9 shall be for the fiscal
year ending on June 30, 1994. The reporting date for Section 6.6 is May 15th of
each year. The first reporting date is May 15, 1995.
SECTION 11.11 GOVERNING LAW.
The laws of the State of New York govern this Indenture and the
Securities, without regard to the conflicts of laws rules thereof.
ARTICLE XII
SUBSIDIARY GUARANTEES
SECTION 12.1 SUBSIDIARY GUARANTEES.
Each of the Subsidiary Guarantors hereby jointly and severally
unconditionally guarantees to each Holder of a Security authenticated
and delivered by the Trustee, and to the Trustee on behalf of such Holder, the
due and punctual payment of the principal of (and premium, if any) and interest
on such Security when and as the same shall become due and payable,
109
whether at the Stated Maturity, by acceleration, call for redemption, purchase
or otherwise, in accordance with the terms of such Security and of
this Indenture; provided, however, that the liability of a Subsidiary Guarantor
hereunder shall not exceed at any time the maximum amount of Indebtedness
permitted at the time of the grant of such Subsidiary Guarantee or, if
greater, at the time payment is required under such Subsidiary Guarantee, to
be incurred in compliance with any applicable fraudulent conveyance or similar
law. In case of the failure of the Company punctually to make any
such payment, each of the Subsidiary Guarantors hereby jointly and severally
agrees to cause such payment to be made punctually when and as the same shall
become due and payable, whether at the Stated Maturity or by acceleration,
call for redemption, purchase or otherwise, and as if such payment were made
by the Company.
Each of the Subsidiary Guarantors hereby jointly and severally agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of such Security or this Indenture,
the absence of any action to enforce the same, any exchange, release
or non-perfection of any Lien on any collateral for, or any release or amendment
or waiver of any term of any other guarantee of, or any consent to departure
from any requirement of any other guarantee of all or any of the Securities, the
election by the Trustee or any of the Holders in any proceeding under Chapter
11 of the Bankruptcy Law of the application of Section 1111(b)(2) of the
Bankruptcy Law, any borrowing or grant of a security interest by the Company,
as debtor-in-possession, under Section 364 of the Bankruptcy Law, the
disallowance, under Section 502 of the Bankruptcy Law, of all or any portion of
the claims of the Trustee or any of the Holders for payment of any of the
Securities, any waiver or consent by the Holder of such Security or by the
Trustee with respect to any provisions thereof or of this Indenture, the
obtaining of any judgment against the Company or any action to enforce the same
or any other circumstances which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each of the Subsidiary Guarantors hereby
waives the benefits of diligence, presentment, demand of payment, any
requirement that the Trustee or any of the Holders protect, secure, perfect or
insure any security interest in or other Lien on any property subject thereto
or exhaust any right or take any action against the Company or any other Person
or any Collateral, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Security or the Indebtedness
evidenced thereby and all demands whatsoever, and covenants, that this
110
Subsidiary Guarantee will not be discharged in respect of such Security except
by complete performance of the obligations contained in such Security and in
this Subsidiary Guarantee. Each of the Subsidiary Guarantors hereby agrees
that, in the event of a default in payment of principal
(or premium, if any) or interest on such Security, whether at their
Stated Maturity, by acceleration, call for redemption, purchase or otherwise,
legal proceedings may be instituted by the Trustee on behalf of, or by, the
Holder of such Security, subject to the terms and conditions set
forth in this Indenture, directly against each of the Subsidiary Guarantors to
enforce this Subsidiary Guarantee without first proceeding against the Company.
Each Subsidiary Guarantor agrees that if, after the occurrence and during the
continuance of an Event of Default, the Trustee or any of the Holders are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on the
Securities, or to enforce or exercise any other right or remedy with
respect to the Securities, or the Trustee or the Holders are prevented
from taking any action to realize on the Collateral, such Subsidiary Guarantor
agrees to pay to the Trustee for the account of the Holders, upon demand
therefor, the amount that would otherwise have been due and payable had such
rights and remedies been permitted to be exercised by the Trustee or any of the
Holders.
Each Subsidiary Guarantor shall be subrogated to all rights of the
Holders of the Securities upon which its guarantee is endorsed against
the Company in respect of any amounts paid by such Subsidiary Guarantor on
account of such Securities pursuant to the provisions of its Subsidiary
Guarantee or this Indenture; PROVIDED, HOWEVER, that no Subsidiary Guarantor
shall be entitled to enforce or to receive any payments arising out of, or based
upon, such right of subrogation until the principal of (and premium, if any) and
interest on all Securities issued hereunder shall have been paid in
full.
Each Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors
111
or should a receiver or trustee be appointed for all or any significant part of
the Company's assets, and shall, to the fullest extent permitted by law,
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Securities, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee on the Securities, whether as a "voidable preference,"
"fraudulent transfer," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Securities shall, to the
fullest extent permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
SECTION 12.2 EXECUTION AND DELIVERY OF SUBSIDIARY
GUARANTEES.
The Subsidiary Guarantees to be endorsed on the Securities
shall include the terms of the Subsidiary Guarantee set forth in Section 12.1
and any other terms that may be set forth in the form established pursuant to
Exhibit B annexed hereto, which is part of this Indenture. Each of the
Subsidiary Guarantors hereby agrees to execute its Subsidiary Guarantee, in a
form established pursuant to Exhibit B, to be endorsed on each Security
authenticated and delivered by the Trustee.
The Subsidiary Guarantee shall be executed on behalf of each
respective Subsidiary Guarantor by any one of such Subsidiary Guarantor's
Chairman of the Board, Vice Chairman of the Board, President or Vice Presidents,
attested by its Secretary or Assistant Secretary. The signature of any or all
of these officers on the Subsidiary Guarantee may be manual or facsimile.
A Subsidiary Guarantee bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of a Subsidiary Guarantor
shall bind such Subsidiary Guarantor, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of the Security on which such Subsidiary Guarantee is endorsed or did
not hold such offices at the date of such Subsidiary Guarantee.
112
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee endorsed thereon on behalf of the Subsidiary Guarantors.
Each of the Subsidiary Guarantors hereby jointly and severally agrees that its
Subsidiary Guarantee set forth in Section 12.1 shall remain in full force and
effect notwithstanding any failure to endorse a Subsidiary Guarantee on any
Security.
SECTION 12.3 SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as set forth in Section 12.4 and in Articles III and IV hereof,
nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of a Subsidiary Guarantor with or into the
Company or a Subsidiary Guarantor or shall prevent any sale or conveyance of the
property of a Subsidiary Guarantor as an entirety of substantially as an
entirety to the Company or a Subsidiary Guarantor.
SECTION 12.4 RELEASE OF SUBSIDIARY GUARANTORS.
(a) Concurrently with any consolidation or merger of a Subsidiary
Guarantor or any sale or conveyance of the property of a Subsidiary Guarantor as
an entirety or substantially as an entirety, in each case as permitted by
Section 12.3 hereof, and upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such
consolidation, merger, sale or conveyance was made in accordance with Section
12.3 hereof, the Trustee shall execute any documents reasonably required in
order to evidence the release of such Subsidiary Guarantor from its obligations
under its Subsidiary Guarantees endorsed on the Securities and under
this Article XII. Any Subsidiary Guarantor not released from its obligations
under its Subsidiary Guarantees endorsed on the Securities and under
this Article XII shall remain liable for the full amount of principal of and
interest on the Securities and for the other obligations of a
Subsidiary Guarantor under its Subsidiary Guarantees endorsed on the
Securities and under this Article XII.
113
(b) Concurrently with the defeasance of the Securities under
Section 7.2 hereof, the Subsidiary Guarantors shall be released from all
of their obligations under their Subsidiary Guarantees endorsed on the
Securities and under this Article XII subject to reinstatement if the
obligations under the Securities are reinstated pursuant to Section 7.7.
(c) Upon the sale or disposition (by merger or otherwise) of any
Subsidiary Guarantor by the Company or any Restricted Subsidiary of the Company
to any entity that is not the Company or a Subsidiary or Affiliate thereof and
which sale or disposition is otherwise in compliance with the terms of this
Indenture, such Subsidiary Guarantor shall automatically be released from all
obligations under its Subsidiary Guarantees endorsed on the Senior Secured Notes
and under this Article XII, PROVIDED THAT such Subsidiary Guarantor is sold or
disposed of for fair market value (evidenced by a Board Resolution and set forth
in an Officers' Certificate delivered to the Trustee and by an independent
engineer, appraiser or other expert, to the extent required by the TIA).
(d) Upon the redesignation by the Company of a Subsidiary Guarantor
from Restricted Subsidiary to an Unrestricted Subsidiary in compliance with the
provisions of this Indenture, such Subsidiary shall cease to be a Subsidiary
Guarantor and shall be released from all of the obligations of a Subsidiary
Guarantor under its Subsidiary Guarantees endorsed on the Securities
and under this Article XII.
SECTION 12.5 ADDITIONAL SUBSIDIARY GUARANTORS.
(a) The Company shall cause any Person that becomes a Restricted
Subsidiary after the date of this Indenture to become a Subsidiary Guarantor
with respect to the Securities. Any such Person shall become a
Subsidiary Guarantor by executing and delivering to the Trustee (a) a
supplemental indenture, in form and substance satisfactory to the Trustee, which
subjects such Person to the provisions (including the representations and
warranties) of this Indenture as a Subsidiary Guarantor and (b) an Opinion of
Counsel to the effect that such supplemental indenture has been duly authorized
and executed by such Person and constitutes the legal, valid, binding and
enforceable obligation of such Person (subject to such customary exceptions
concerning credi-
114
tors' rights and equitable principles as may be reasonably acceptable to the
Trustee in its discretion).
(b) The Company will cause any Subsidiary of the Company that is or
becomes a borrower under or guarantor of the Company's obligations under the
New Credit Facility to become a Subsidiary Guarantor with respect to the
Securities.
115
SIGNATURES
Dated: , 199_
EMPIRE GAS CORPORATION
By_______________________
Name:
Title:
Attest: By_______________________
Name:
Title:
_________________________
Each of the SUBSIDIARY GUARANTORS listed on
Schedule I attached hereto
By_______________________
Name:
Title:
Attest:
_________________________
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, as
Trustee
By_______________________
Name:
Title:
[SEAL]
Attest:
_________________________
116
SCHEDULE I
Empire Tank Leasing Corporation
Empiregas Equipment Corporation
Empire Underground Storage, Inc.
Empire Industrial Sales Corporation
Utility Collection Corporation
Empiregas Transports, Inc. (Missouri)
Empiregas Aviation Corporation
Empiregas Transports, Inc. - OR
Empiregas Inc. of Clinton (Missouri)
Empiregas Inc. of Kansas City
Empiregas Inc. of Albany
Empiregas Inc. of Aiken
Empiregas of Arma, Inc.
Empiregas Inc. of Arnauldville
Empiregas Inc. of Auburn
Empiregas Inc. of Big Rapids
Empiregas Inc. of Bolivar
Empiregas Inc. of Boise
Empiregas Inc. of Boulder
Empiregas Inc. of Bowling Green
Empiregas Inc. of Brandon
Empiregas Inc. of Bremerton
Empiregas of Bristow, Inc.
Empiregas Inc. of Buffalo
Empiregas Inc. of Adrian
Empiregas Inc. of Camdenton
Empiregas Inc. of Canon City
Empiregas Inc. of Canton
Empiregas Inc. of Carthage
Empiregas Inc. of Castle Rock
Empiregas Inc. of Centerville
Empiregas Inc. of Charlotte
Empiregas Inc. of Chassel
Empiregas Inc. of Chehalis
Empiregas Inc. of Clinton, Illinois
Empiregas of Colcord, Inc.
Empiregas Inc. of Cole Camp
Empiregas Inc. of Coleman
Empiregas Inc. of Colorado Springs
Empiregas Inc. of Coquille
Empiregas Inc. of Cuba
1
Empiregas Inc. of Chetek
Empiregas Inc. of Denver
Empiregas Inc. of Dover
Empiregas Inc. of Durand
Empiregas Inc. of El Dorado Springs
Empiregas Inc. of Elsberry
Empiregas Inc. of Elsinore
Empiregas Inc. of Escondido
Empiregas Inc. of Eunice
Empiregas Inc. of Evergreen
Salgas Inc. of Fairplay
Empiregas Inc. of Eau Claire
Empiregas Inc. of Fort Collins
Empiregas Inc. of Fowler
Empiregas Inc. of Mid-Missouri
Empiregas Inc. of Galveston
Empiregas Inc. of Galva
Empiregas Inc. of Gaylord
Empiregas Inc. of Globe
Empiregas Inc. of Goose Creek
Empiregas Inc. of Greeley
Empiregas Inc. of Grand Junction
Empiregas of Grove, Inc.
Empiregas Inc. of Hermiston
Empiregas Inc. of Hermitage
Empiregas Inc. of Hiawassee
Empiregas Inc. of Higginsville
Empiregas of Hitichita, Inc.
Empiregas Inc. of Hoopeston
Empiregas Inc. of Hornick
Empiregas Inc. of Humansville
Empiregas Inc. of Jacksonville
Empiregas Inc. of Jackson, MI
Empiregas Inc. of Kalamazoo
Empiregas Inc. of Kirksville
Empiregas Inc. of Lafayette
Empiregas Inc. of Lake Charles
Empiregas Inc. of Lake Providence
Empiregas Inc. of Laurie
Empiregas of Le Sueur, Inc.
Empiregas Inc. of Lincoln
Empiregas Inc. of Longmont
Empiregas Inc. of Los Angeles
Empiregas Inc. of Loveland
Empiregas Inc. of Marquette
Empiregas Inc. of Marshall
Empiregas Inc. of Medford
2
Empiregas Inc. of Menomonie
Empiregas Inc. of Merillan
Empiregas Inc. of Miller
Empiregas Inc. of Modesto
Empiregas Inc. of Monte Vista
Empiregas Inc. of Mount Vernon
Empiregas Inc. of Munising
Empiregas Inc. of Murphy
Thrif-T-Gas Inc. of Blackwater
Empiregas Inc. of North Bend
Empiregas Inc. of North Myrtle Beach, Inc.
Empiregas Inc. of Oak Grove
Empiregas Inc. of Onawa
Empiregas Inc. of Orangeburg
Empiregas Inc. of Owensville
Empiregas Inc. of Santa Paula
Empiregas Inc. of Paducah
Empiregas Inc. of Palmyra
Empiregas Inc. of Placerville
Empiregas Inc. of Pomona
Empiregas Inc. of Potosi
Empiregas Inc. of Pueblo
Empiregas Inc. of Reedsport
Empiregas Inc. of Richland
Empiregas Inc. of Rolla
Empiregas Inc. of Sacramento
Empiregas Inc. of Sandy
Empiregas Inc. of Shell Lake
Empiregas Inc. of Siloam Springs
Empiregas of Stigler, Inc.
Empiregas Inc. of Susanville
Empiregas Inc. of Sunnyside
Empiregas Inc. of Rocky Mount
Empiregas Inc. of the Dalles
Empiregas Inc. of Tipton (Iowa)
Empiregas Inc. of Traverse City
Empiregas Inc. of Vandalia
Empiregas Inc. of Vassar
Empiregas Inc. of Vinita, Inc.
Empiregas Inc. of Warren
Empiregas Inc. of Warsaw (Missouri)
Empiregas Inc. of Washington
Empiregas Inc. of Waukon
Empiregas Inc. of Waynesville
Empiregas Inc. of Waynesville, NC
Empiregas Inc. of Wenatchee
Empiregas Inc. of Wentzville
3
Empiregas of Westville, Inc.
Empiregas Inc. of Wills Point
Empiregas Inc. of Wilmington
Empiregas Inc. of Wilson
Empiregas Inc. of Woodland Park
Empiregas Inc. of Yakima
Empiregas Inc. of Yucca Valley
Empiregas Inc. of Zebulon
Empiregas Inc. of Columbiana
Empiregas of Zumbro Falls, Inc.
Ginco Gas Company, Inc.
Empiregas Inc. of Orange County
Empiregas Inc. of Morgan County
Empiregas Inc. of Lake Ozark
Empiregas Inc. of Waco
Empiregas Inc. of Paris, TX
Empiregas Inc. of Dallas, TX
Empiregas Inc. of Kemp
Empiregas Inc. of San Antonio
Thrift-T-Gas Co., Inc.
Empiregas Inc. of Paris, MO
Salida Gas Co., Inc.
Salgas Inc. of Gunnison
Empiregas Inc. of Toledo
Empiregas Inc. of Wilkesboro
Empiregas Inc. of Hendersonville
Empiregas Inc. of North Carolina
Empiregas Inc. of Creedmoor
Empiregas Inc. of Apex
Empiregas Inc. of Durham
Empiregas Inc. of Warrenton
4
EXHIBIT A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Form of Face of Security)
Unless this certificate is presented by an authorized representative
of The Depositary Trust Company, a New York corporation ("DTC"), to the Company
(as defined below) or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co., or
such other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co., or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this certificate may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
EMPIRE GAS CORPORATION
% SENIOR SECURED NOTE DUE 2004
No. $
Empire Gas Corporation, a Missouri corporation, promises to pay to
, or registered assigns, the principal sum of Dollars on ,
2004.
Interest Payment Dates:
Record Dates:
Additional provisions of this Security are set forth on the reverse
hereof.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Date:
EMPIRE GAS CORPORATION
By_______________________
Name:
Title:
By_______________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION:
Shawmut Bank Connecticut,
National Association, as Trustee,
certifies that this is one
of the Securities referred
to in the Indenture. (SEAL)
By: _________________________
Authorized Signature
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-2
(Form of Back of Security)
EMPIRE GAS CORPORATION
% SENIOR SECURED NOTE DUE 2004
(1) INTEREST. Empire Gas Corporation, a Missouri corporation (such
corporation, and its successors and assigns under the Indenture referred to
below, being herein called the "Company"), promises to pay interest on the
principal amount at maturity of this Security at the rate of [____]% per annum
until [______], 1999 and at the rate of [__]% per annum from and including
[________], 1999 until maturity.
Interest will be payable semiannually (to the holders of record of the
Securities at the close of business on the [_____] or [_____] immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
[___________], 1994.
Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from [_____],
1994; PROVIDED that, if there is no existing default in the payment of interest
and if this Security is authenticated between a Regular Record Date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such Interest Payment Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum that is 2% in excess of the rate otherwise payable.
(2) METHOD OF PAYMENT. The Company will pay interest on the
Securities (except defaulted interest) to the persons who are registered Holders
of Securities at the close of business on the record date next preceding the
interest payment date even though Securities are canceled after the record date
and on or before the interest payment date. Holders must surrender Securities
to a Paying Agent to collect principal payments. The Company will pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal and
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interest by check payable in such money. It may mail an interest check to a
Holder's registered address.
(3) PAYING AGENT, REGISTRAR. Initially, Shawmut Bank Connecticut,
National Association, a National Banking Association (the "Trustee"), will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without notice. The Company may act as Paying Agent,
Registrar or co-registrar.
(4) INDENTURE. The Company issued the Securities under an Indenture
dated as of , 1994 (the "Indenture") between the Company, the
Subsidiary Guarantors (as defined therein) and the Trustee. The Securities are
general obligations of the Company limited to $ aggregate principal
amount at maturity, subject to increase pursuant to the terms of the Indenture.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code Sections 77aaa-77bbbb) (the "TIA"). Capitalized terms used herein but not
defined herein are used as defined in the Indenture, and references to the
principal amount of any Security refer to the Accreted Value of such Security as
determined pursuant to the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the TIA for a
statement of such terms.
(5) OPTIONAL REDEMPTION. Except as set forth in the following
paragraph, the Company may not redeem the Securities prior to _____, 1999. On
and after such date, the Company may redeem the Securities at any time as a
whole, or from time to time in part, at the following redemption prices
(expressed in percentages of Accreted Value), plus accrued interest to the
redemption date, if redeemed during the 12-month period beginning _____,
YEAR %
1999 . . . . . . . . . .
2000 . . . . . . . . . .
2001, and thereafter . .
The Company may redeem up to $ principal amount at maturity
of Securities with the proceeds of one or more Public Equity Offerings following
which there is a Public Market, at any time in whole or from time to time in
part, at a price (expressed as a percentage of Accreted
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Value), plus accrued interest to the redemption date, of % if redeemed at
any time prior to , 1997.
(6) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at the address set forth for such Holder on
the register referred to in Section 2.3 of the Indenture. Unless the Company
shall default in payment of the redemption price plus accrued interest, on and
after the redemption date interest ceases to accrue on such Securities or
portions of them called for redemption. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000.
(7) "ACCRETED VALUE" means as of any date (the "specified date") with
respect to each $1,000 face amount of Securities, the following amount:
(i) if the specified date is one of the following dates (each an
"accrual date"), the amount set forth opposite such date below:
ACCRUAL DATE ACCRETED VALUE
______, 1994 . . . . . . . . . . . . ______
______, 1994 . . . . . . . . . . . . ______
______, 1995 . . . . . . . . . . . . ______
______, 1995 . . . . . . . . . . . . ______
______, 1996 . . . . . . . . . . . . ______
______, 1996 . . . . . . . . . . . . ______
______, 1997 . . . . . . . . . . . . ______
______, 1997 . . . . . . . . . . . . ______
______, 1998 . . . . . . . . . . . . ______
______, 1998 . . . . . . . . . . . . ______
______, 1999 . . . . . . . . . . . . $1,000;
(ii) if the specified date occurs between two accrual dates, the
sum of (A) the accreted value for the accrual date immediately preceding
the specified date and (B) an amount equal to the product of (i) the
accreted value for the immediately following accrual date less the accreted
value for the immediately preceding accrual date and (ii) a fraction, the
numerator of which is the number of days (not to exceed 180 days) from the
immediately preceding accrual date to the specified date, using a 360-day
year of twelve 30-
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day months, and the denominator of which is 180 (or, if the immediately
following accrual date is _________, 1999, ___); and
(iii) if the specified date occurs after _____ __, 1999, $1,000.
(8) DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 in face amount and
whole multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not exchange or register the transfer of any
Security or portion of a Security selected for redemption (except, in the case
of a Security to be redeemed in part, the portion thereof not to be redeemed) or
any Securities for a period of 15 days before a selection of Securities to be
redeemed, or 15 days before an interest payment date.
(9) PUT PROVISIONS. Upon a Change of Control, any Holder of
Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a repurchase price equal to 101% of the
principal amount of the Securities to be repurchased plus accrued interest to
the date of repurchase as provided in, and subject to the terms of, the
Indenture.
(10) DEFEASANCE. Subject to certain conditions, the Company at any
time may terminate some or all of its obligations under the Securities and the
Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
(11) SECURITY. As provided in the Indenture and the Pledge
Agreement, and subject to certain limitations set forth therein, the Obligations
of the Company under the Indenture and the Pledge Agreement are secured by the
Collateral as provided in the Indenture and the Pledge Agreement. Each Holder,
by accepting a Security, agrees to be bound by all terms and provisions of the
Pledge Agreement, as the same may be amended form time to time. The Liens
created under the Indenture and the Pledge Agreement shall
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be released upon the terms and subject to the conditions set forth in the
Indenture and Pledge Agreement.
(12) PERSONS DEEMED OWNERS. The registered Holder of a Security may
be treated as its owner for all purposes, except that interest (other than
defaulted interest) will be paid to the person that was the registered Holder on
the relevant record date for such payment of interest.
(13) AMENDMENTS AND WAIVERS. Subject to certain exceptions, (i) the
Indenture or the Securities may be amended or supplemented with the consent of
the Holders of a majority in principal amount of the Securities; and (ii) any
existing default may be waived with the consent of the Holders of a majority in
principal amount of the Securities. Without the consent of any Securityholder,
the Indenture or the Securities may be amended or supplemented to cure any
ambiguity, omission, defect or inconsistency, to provide for assumption of
Company obligations to Securityholders or to provide for uncertificated
Securities in addition to or in place of certificated Securities, to provide for
guarantees with respect to, or security for, the Securities, or to comply with
the TIA or to add additional covenants or surrender Company rights, to make
certain amendments to the Pledge Agreement called for therein to add Collateral
or to make any change that does not adversely affect the Rights of any
Securityholder.
(14) REMEDIES. If an Event of Default occurs and is continuing, the
Trustee or Holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and payable immediately. Securityholders
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require an indemnity before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
(15) TRUSTEE DEALINGS WITH COMPANY. Subject to the provisions of the
TIA, the Trustee under the Indenture,
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in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee. The Trustee
will initially be Shawmut Bank Connecticut, National Association.
(16) NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company or a Subsidiary Guarantor shall not have
any liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
(17) AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of an authorized signatory of the Trustee
or an authenticating agent.
(18) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
(19) SUBSIDIARY GUARANTEE. The payment of principal of, premium, if
any and interest on the Securities is guaranteed on a senior basis by the
Guarantors pursuant to Article XII of the Indenture.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE A COPY OF THE INDENTURE AND THE PLEDGE AGREEMENT, WHICH
INDENTURE HAS IN IT THE
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TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO: SECRETARY,
EMPIRE GAS CORPORATION, 1700 SOUTH JEFFERSON STREET, P.O. BOX 303, LEBANON,
MISSOURI, 65536 ATTENTION: SECRETARY.
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Insert assignee's soc. sec or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
____________________________________________________________
Dated: ________________ Signed: ____________________
____________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee: _______________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPTION OF HOLDER TO ELECT PURCHASE FORM
If you wish to elect to have this Security purchased by the Company
pursuant to Section 3.8, 3.12 or 10.5 of the Indenture, check this box:
/ /
If you wish to elect to have only part of this Security purchased by the
Company pursuant to Section 3.8, 3.12 or 10.5 of the Indenture, state the
amount: $
*As set forth in the Indenture, any purchase pursuant to Section 3.12 is
subject to proration in the event the offer is oversubscribed.
Dated: ________________ Signed: ____________________
____________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee: _______________________________________
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EXHIBIT B
FORM OF GUARANTEE
GUARANTEE
For value received, each of the Subsidiary Guarantors listed below
hereby jointly and severally unconditionally guarantees to the Holder of the
Security on which this guarantee is endorsed, and to the Trustee on behalf of
such Holder, the due and punctual payment of the principal of (and premium, if
any) and interest on such Security when and as the same shall become due and
payable, whether at the Stated Maturity, by acceleration, call for redemption,
purchase or otherwise, according to the terms thereof and of the Indenture
referred to therein; provided, however, that the liability of a Subsidiary
Guarantor hereunder shall not exceed at any time the maximum amount of
Indebtedness permitted at the time of the grant of such Subsidiary Guarantee
or, if greater, at the time payment is required under such Subsidiary
Guarantee, to be incurred in compliance with any applicable fraudulent
conveyance or similar law. In case of the failure of the Company
punctually to make any such payment, each of the Subsidiary Guarantors hereby
jointly and severally agrees to cause such payment to be made punctually when
and as the same shall become due and payable, whether at the Stated Maturity or
by acceleration, call for redemption, purchase or otherwise, and as if such
payment were made by the Company.
Each of the Subsidiary Guarantors hereby jointly and severally agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of such Security or the Indenture, the
absence of any action to enforce the same, or any release or amendment or
waiver of any term of any other guarantee of, or any consent to departure from
any requirement of any other guarantee of all or of any of the Securities, the
election by the Trustee or any of the Holders in any proceeding under
Chapter 11 of the Bankruptcy Code, 11 U.S.C. Sections 101-13330, as amended
(the "Bankruptcy Law") of the application of Section 1111(b)(2) of the
Bankruptcy Law, any borrowing or grant of a security interest by the Company,
as debtor-in-possession, under Section 364 of the Bankruptcy Law, the
disallowance, under Section 502 of the Bankruptcy Law, of all or any portion
of the claims of the Trustee or any of the Holders for payment of any of the
Securities, any waiver or consent by the Holder of such Security or by the
Trustee or either of them with respect to any provisions thereof or of the
Indenture, the obtaining of any judgment against the Company or any action
to enforce
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the same or any other circumstances which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each of the Subsidiary
Guarantors hereby waives the benefits of diligence, presentment, demand of
payment, any requirement that the Trustee or any of the Holders protect,
secure, perfect or insure any security interest in or other Lien on any
property subject thereto or exhaust any right or take any action against the
Company or any other Person, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest or notice with respect to such Security or
the Debt evidenced thereby and all demands whatsoever, and covenants that this
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in such Security and in this Subsidiary Guarantee.
Each of the Subsidiary Guarantors hereby agrees that, in the event of a
default in payment of principal (or premium, if any) or interest on such
Security, whether at its Stated Maturity, by acceleration, call for redemption
purchase or otherwise, legal proceedings may be instituted by the Trustee on
behalf of, or by, the Holder of such Security, subject to the terms and
conditions set forth in the Indenture, directly against each of the Subsidiary
Guarantors to enforce this Subsidiary Guarantee without first proceeding
against the Company. Each Subsidiary Guarantor agrees that if, after the
occurrence and during the continuance of an Event of Default, the Trustee or
any of the Holders are prevented by applicable law from exercising their
respective rights to accelerate the maturity of the Securities, to collect
interest on the Securities, or to enforce or exercise any other right or remedy
with respect to the Securities, such Subsidiary Guarantor agrees to pay to
the Trustee for the account of the Holders, upon demand therefor, the amount
that would otherwise have been due and payable had such rights and remedies
been permitted to be exercised by the Trustee or any of the Holders.
No reference herein to the Indenture and no provision of this
Subsidiary Guarantee or of the Indenture shall alter or impair the Subsidiary
Guarantee of any Subsidiary Guarantor, which is absolute and unconditional, of
the due and punctual payment of the principal (and premium, if any) and interest
on the Security upon which this Subsidiary Guarantee is endorsed.
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Each Subsidiary Guarantor shall be subrogated to all rights of the
Holder of this Security against the Company in respect of any amounts paid by
such Subsidiary Guarantor on account of this Security pursuant to the
provisions of this Subsidiary Guarantee or the Indenture; PROVIDED, HOWEVER,
that such Subsidiary Guarantor shall not be entitled to enforce or to receive
any payments arising out of, or based upon, such right of subrogation until the
principal of (and premium, if any) and interest on this Security and all other
Securities issued under the Indenture shall have been paid in full.
This Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall,
to the fullest extent permitted by law, continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Securities, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee on the Securities
whether as a "voidable preference," "fraudulent transfer," or otherwise,
all as though such payment or performance had not been made. In the event
that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Securities shall, to the fullest extent permitted by
law, be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
The Subsidiary Guarantors shall have the right to seek contribution
from any non-paying Subsidiary Guarantor so long as the exercise of such right
does not impair the rights of the Holders under this Subsidiary Guarantee.
The Subsidiary Guarantors or any particular Subsidiary Guarantor shall
be released from this Subsidiary Guarantee upon the terms and subject to certain
conditions provided in the Indenture.
By delivery of a Supplemental Indenture to the Trustee in accordance
with the terms of the Indenture, each Person that become a Subsidiary Guarantor
after the date of the Indenture will be deemed to have executed and delivered
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this Subsidiary Guarantee for the benefit of the Holder of this Security with
the same effect as if such Subsidiary Guarantor was named below.
All terms used in this Subsidiary Guarantee which are defined in the
Indenture referred to in the Security upon which this Subsidiary Guarantee is
endorsed shall have the meanings assigned to them in such Indenture.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this Subsidiary Guarantee is endorsed shall have been executed by the Trustee
under the Indenture by manual signature.
Reference is made to Article Twelve of the Indenture for further
provisions with respect to this Subsidiary Guarantee.
THIS SUBSIDIARY GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, each of the Subsidiary Guarantors has caused this
Subsidiary Guarantee to be duly executed.
Each of the SUBSIDIARY GUARANTORS listed on Schedule I
attached hereto
Each as Subsidiary Guarantor
By
Title:
Attest:
___________________________
Title:
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EXHIBIT C
FORM OF SUBORDINATION PROVISIONS
[THE TERM "SECURITIES" IN THIS FORM
REFERS TO THE SUBORDINATED SECURITIES
REFERRED TO IN THE DEFINITION OF
"REFINANCING INDEBTEDNESS" AND SECTION 3.4(B)
TO WHICH THESE PROVISIONS WOULD APPLY.]
ARTICLE __
SUBORDINATION
SECTION ____ AGREEMENT TO SUBORDINATE.
The Company agrees, and each Securityholder by accepting a Security agrees,
that the indebtedness evidenced by the Securities is subordinated in right of
payment, to the extent and in the matter provided herein, to the prior payment
in full of all Senior Debt, and that the subordination is for the benefit of the
holders of Senior Debt.
SECTION ____ CERTAIN DEFINITIONS.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Debt.
"SENIOR DEBT" means (a) the principal of and accrued and unpaid interest
(including interest accruing on or after filing of any petition in bankruptcy or
for reorganization relating to the Company whether or not a claim for post-
filing interest is allowed in such proceeding) in respect of (1) indebtedness
(other than the Securities) of the Company for money borrowed, including,
without limitation, the Senior Secured Notes Due 2004 of the Company, and for
the reimbursement of amounts paid under letters of credit, (2) express written
guarantees by the Company of indebtedness for money borrowed by any other
Person, (3) indebtedness evidenced by notes, debentures, bonds or other
instruments of indebtedness for the payment of which the Company is responsible
or liable, by guarantees or otherwise, (4) obligations of the Company under any
agreement in respect of any interest rate or currency swap, interest rate cap,
floor or collar, interest rate future, currency exchange or for-
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ward currency transaction, or any similar interest rate or currency hedging
transaction, but only to the extent such obligations relate to other Senior Debt
(exclusive of Senior Debt consisting of obligations referred to in this clause
(4)) and (5) obligations of the Company under any agreement to lease, or any
lease of, any real or personal property which, in accordance with generally
accepted accounting principles, is classified upon the Company's balance sheet
as a liability, irrespective of whether in any case referred to in the foregoing
(1) through (5) such indebtedness, guarantee or obligation is outstanding on the
date of execution of this Indenture or thereafter created, incurred or assumed,
and (b) modifications, renewals, extensions and refundings of any such
indebtedness, guarantee or obligation; unless, in any case referred to in the
foregoing clauses (a) and (b), in the instrument creating or evidencing the
indebtedness, guarantee or obligation or pursuant to which the same is
outstanding, it is provide that such indebtedness, guarantee or obligation, or
such modification, renewal, extension or refunding thereof, is not superior in
right of payment to the Securities; PROVIDED, HOWEVER, that Senior Debt shall
not be deemed to include (i) any obligation of the Company to any Subsidiary and
(ii) any other indebtedness, guarantee or obligation of the Company of the type
set forth in clauses (a) or (b) above which is subordinate or junior in ranking
in any respect to any other indebtedness, guarantee or obligation of the
Company.
SECTION ____ LIQUIDATION, DISSOLUTION, BANKRUPTCY.
Upon any payment or distribution of assets of the Company to creditors upon
a liquidation or total or partial dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
(1) holders of Senior Debt shall be entitled to receive payment in
full of the Senior Debt before Securityholders shall be entitled to
received any payment of principal of, or interest on, the Securities; and
(2) until Senior Debt shall received payment in full, any
distribution to which Securityholders would be entitled but for this
Article shall be made to holders of Senior Debt as their interests may
appear, except that Securityholders may receive securities that
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are subordinated to Senior Debt to at least the same extent as the
Securities.
For purposes of this Section "payment in full", as used with respect to Senior
Debt, means the receipt of cash or securities (taken at their fair value at the
time of receipt, determined as hereinafter provided) equal to the principal of
and interest on the Senior Debt to the date of payment. "Fair value" means (i)
if the securities are quoted on a nationally recognized securities exchange, the
closing price on the day such securities are received or, if there are no sales
reported on that day, the reported closing bid price on that day, and (ii) if
the securities are not so quoted, a price determined by a nationally recognized
investment banking house selected by the Trustee or the Holders of a majority in
principal amount of the Securities and the Representative or the holders of
Senior Debt receiving such securities, such price to be determined as of the
date of receipt of such securities by the holders of Senior Debt.
SECTION ____ DEFAULT ON SENIOR DEBT.
(a) The Company may not pay principal of or interest on the Securities and
may not (and may not permit any Subsidiary to) acquire any Securities for cash
or property, other than capital stock of the Company, if:
(i) a default in the payment of any principal of or interest on any
Senior Debt occurs and is continuing, whether at maturity or at a date
fixed for redemption or by declaration or otherwise; or
(ii) a default on Senior Debt (other than as described in clause
(a)(i) of this Section) occurs and is continuing that permits holders of
such Senior Debt to accelerate its maturity, and the default is the subject
of judicial proceedings or the Company receives a notice of the default
from a Person who may give it pursuant to Section .12 (if the Company
receives any such notice, a similar notice received within nine months
thereafter relating to the same default on the same issue of Senior Debt
shall not be effective for purposes of this Section).
(b) The Company may resume payment on the Securities and the Company or a
Subsidiary may acquire them when:
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(i) the default is cured or waived, or
(ii) in the case of clause (a)(ii) of this Section, 180 days pass
after the notice is given if the default is not the subject of judicial
proceedings,
if this Article otherwise permits the payment or acquisition at that time.
SECTION ____ ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify holders of Senior Debt and
their Representative of the acceleration. The Company may not pay principal of
or interest on the Securities until after 180 days following the acceleration
and only if this Article permits the payment at that time.
SECTION ____ WHEN PAYMENT OR DISTRIBUTION MUST BE PAID OVER.
If a payment or distribution is made to Securityholders that because of
this Article should not have been made to them, the Securityholders who receive
the payment or distribution shall hold it in trust for holders of Senior Debt
and pay it over to them or their Representative, if any, as their interests may
appear promptly after receipt thereof.
SECTION ____ NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of principal of or
interest on the Securities to violate this Article.
SECTION ____ SUBROGATION.
After all Senior Debt is paid in full and until the Securities are paid in
full, Securityholders shall be subrogated to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Securityholders have been applied to the
payment of Senior Debt. A distribution made under this Article to holders of
Senior Debt which otherwise would have been made to Securityholders is not, as
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between the Company and Securityholders, a payment by the Company on Senior
Debt.
SECTION ____ RELATIVE RIGHTS.
This Article defines the relative rights of Securityholders and holders of
Senior Debt. Nothing in this Indenture shall:
(a) impair, as between the Company and Securityholders, the obligation of
the Company, which is absolute and unconditional, to pay principal of and
interest on the Securities in accordance with their terms;
(b) affect the relative rights of Securityholders and creditors of the
Company other than holders of Senior Debt; or
(c) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of Senior
Debt to receive distribution otherwise payable to Securityholders.
SECTION ____ SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of the
indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION ____ DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
SECTION ____ RIGHTS OF TRUSTEE AND PAYING AGENT.
The Trustee or Paying Agent may continue to make payments on the Securities
until it receives notice of facts that would cause a payment of principal of or
interest on the Securities to violate this Article. The Company, the Registrar,
the Paying Agent, a Representative or a holder of an issue of Senior Debt that
has no Representative may give the notice.
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The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with the like rights.
SECTION ____ TRUSTEE AND SECURITYHOLDERS ENTITLED TO RELY.
In connection with any payment or distribution pursuant to this Article,
the Trustee and the Securityholders shall be entitled to rely (i) upon any order
or decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section .03 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Securityholders or (iii) upon the Representative, if any, of the holders
of Senior Debt for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payment thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any Person as a
holder of Senior Debt to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment.
SECTION ____ ARTICLE [ ] NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO
ACCELERATE.
The failure to make a payment pursuant to the Securities by reason of any
provision in this Article shall not be construed as preventing the occurrence of
a Default or an Event of Default. Nothing in this Article shall have any effect
on the right of the Securityholders to accelerate the maturity of the
Securities.
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SECTION ____ TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Securityholder by accepting a Security authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and the
holders of Senior Debt as provided in this Article and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION ____ TRUSTEE NOT CHARGED WITH KNOWLEDGE OF PROHIBITION.
Notwithstanding the provisions of this Article or any other provision of
this Indenture, but subject to the provisions under "Duties of Trustee" and
"Rights of Trustee", the Trustee and any Paying Agent shall not be charged with
knowledge of the existence of any Senior Debt, or of any default in the payment
of the principal of, or interest on, any Senior Debt, or of any facts which
would prohibit the making of any payment of money to or by the Trustee or any
such Paying Agent, unless and until the Trustee or such Paying Agent shall have
received at least three business days prior to the date set for payment under
the terms of this Indenture written notice thereof from the Company or a holder
of any kind or category of any Senior Debt or the Representative or such holder;
nor shall the Trustee or any such Paying Agent be charged with knowledge of the
curing of any such default or of the elimination of the fact or condition
preventing any such payment, unless and until the Trustee or such Paying Agent
shall have received an Officers' Certificate to such effect. Nothing contained
in this Section shall limit the rights of holders of Senior Debt to recover
payments pursuant to Section .06.
SECTION ____ TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt and shall not be liable to any such holders if it shall mistakenly
pay over or distribute to Securityholders or the Company or any other Person,
money or assets to which any holders of Senior Debt shall be entitled by virtue
of this Article or otherwise.
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SECTION ____ ARTICLE APPLYING TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee.
SECTION ____ RELIANCE BY HOLDERS OF SENIOR DEBT ON SUBORDINATION PROVISIONS.
Each Securityholder by accepting a Security acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt, whether such
Senior Debt was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Debt and such holder of Senior Debt shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.
SECTION ____ ENFORCEMENT BY HOLDERS OF SENIOR DEBT.
Each Securityholder by accepting a Security appoints each holder of Senior
Debt and each such holder's Representative as such Securityholder's agent and
attorney-in-fact to make and enforce any matured claim of such Securityholder
against the Company for payment on the Securities in the event that the Trustee
or such Securityholder does not make and enforce such a claim within 60 days
after receipt by the Trustee of a written demand for such enforcement made by a
holder of Senior Debt or such holder's Representative. Each Securityholder
authorizes such holder or Representative to take all action and to execute all
documents on behalf of such Securityholder or the Trustee to make and enforce
such a claim in such event.
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