EXHIBIT 4.6
EQUISTAR CHEMICALS, LP
EQUISTAR FUNDING CORPORATION,
as Issuers
and
THE BANK OF NEW YORK,
as Trustee
______________
INDENTURE
Dated as of August 24, 2001
______________
10 1/8% Senior Notes Due 2008
ARTICLE I Definitions and Other Provisions of General Application........................................ 1
Section 1. Definitions.................................................................................. 1
Section 2. Other Definitions............................................................................ 27
Section 3. Rules of Construction........................................................................ 28
Section 4. Incorporation by Reference of TIA............................................................ 29
Section 5. Conflict with TIA............................................................................ 29
Section 6. Compliance Certificates and Opinions......................................................... 30
Section 7. Form of Documents Delivered to Trustee....................................................... 30
Section 8. Acts of Noteholders; Record Dates............................................................ 31
Section 9. Notices, Etc., to Trustee and Issuers........................................................ 33
Section 10. Notices to Holders; Waivers.................................................................. 33
Section 11. Effect of Headings and Table of Contents..................................................... 33
Section 12. Successors and Assigns....................................................................... 33
Section 13. Separability Clause.......................................................................... 34
Section 14. Benefits of Indenture........................................................................ 34
Section 15. Governing Law................................................................................ 34
Section 16. Legal Holidays............................................................................... 34
Section 17. No Personal Liability of Directors, Officers, Employees, Stockholders and Partners........... 34
Section 18. Exhibits..................................................................................... 34
Section 19. Counterparts................................................................................. 34
ARTICLE II Note Forms...................................................................................... 35
Section 1. Forms Generally.............................................................................. 35
Section 2. Form of Trustee' Certificate of Authentication............................................... 36
Section 3. Restrictive Legends.......................................................................... 37
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ARTICLE III The Notes..................................................................................... 39
Section 1. Title and Terms.............................................................................. 39
Section 2. Denominations................................................................................ 40
Section 3. Execution, Authentication and Delivery and Dating............................................ 40
Section 4. Temporary Notes.............................................................................. 41
Section 5. Registration, Registration of Transfer and Exchange.......................................... 41
Section 6. Mutilated, Destroyed, Lost and Stolen Notes.................................................. 42
Section 7. Payment of Interest Rights Preserved......................................................... 43
Section 8. Persons Deemed Owners........................................................................ 44
Section 9. Cancellation................................................................................. 44
Section 10. Computation of Interest...................................................................... 44
Section 11. Payment of Liquidated Damages................................................................ 44
Section 12. CUSIP Numbers................................................................................ 44
Section 13. Book-entry Provisions for Global Notes....................................................... 45
Section 14. Transfer Provisions.......................................................................... 46
ARTICLE IV Covenants........................................................................................ 52
Section 1. Payment of Principal, Premium and Interest................................................... 52
Section 2. Maintenance of Office or Agency.............................................................. 52
Section 3. Money for Payments to Be Held in Trust....................................................... 52
Section 4. SEC Reports.................................................................................. 53
Section 5. Certificates to Trustee...................................................................... 54
Section 6. Limitation on Indebtedness................................................................... 54
Section 7. Limitation on Restricted Payments............................................................ 58
Section 8. Additional Interest upon Payment of Permitted Dividends...................................... 62
Section 9. Limitation on Dividend and other Payment Restrictions affecting Restricted Subsidiaries...... 62
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Section 10. Limitation on Sales of Assets................................................................ 64
Section 11. Limitation on Affiliate Transactions......................................................... 65
Section 12. Limitation on Liens.......................................................................... 67
Section 13. Repurchase of Notes upon a Change in Control................................................. 67
Section 14. Limitation on Sale and Leaseback Transactions................................................ 68
Section 15. Limitation on Line of Business............................................................... 68
Section 16. Limitation on Accounts Receivable Facilities................................................. 68
Section 17. Limitation on Business Activities by Equistar Funding........................................ 68
Section 18. Limited Applicability of Covenants when Notes are rated Investment-Grade..................... 69
Section 19. Existence.................................................................................... 69
Section 20. Payment of Taxes and Other Claims............................................................ 69
Section 21. Maintenance of Properties and Insurance...................................................... 69
Section 22. Limitation on Issuance of Guarantees by Restricted Subsidiaries.............................. 70
Section 23. Payments for Consents........................................................................ 70
ARTICLE V Consolidation, Merger or Sale of Assets......................................................... 70
Section 1. Consolidation, Merger or Sale of Assets by the Company....................................... 70
Section 2. Successor Company Substituted................................................................ 71
Section 3. Consolidation, Merger or Sale of Assets by Equistar Funding.................................. 72
Section 4. Opinion of Counsel to Trustee................................................................ 72
ARTICLE VI Remedies....................................................................................... 72
Section 1. Events of Default............................................................................ 72
Section 2. Acceleration................................................................................. 74
Section 3. Other Remedies............................................................................... 74
Section 4. Waiver of Past Defaults...................................................................... 74
Section 5. Control by Majority.......................................................................... 74
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Section 6. Limitation on Suits.......................................................................... 75
Section 7. Rights of Holders to Receive Payment......................................................... 75
Section 8. Collection Suit by Trustee................................................................... 75
Section 9. Trustee May File Proofs of Claim............................................................. 75
Section 10. Priorities................................................................................... 76
Section 11. Undertaking for Costs........................................................................ 76
Section 12. Restoration of Rights and Remedies........................................................... 76
Section 13. Rights and Remedies Cumulative............................................................... 77
Section 14. Waiver of Stay, Extension or Usury Laws...................................................... 77
ARTICLE VII The Trustee................................................................................... 77
Section 1. Certain Duties and Responsibilities.......................................................... 77
Section 2. Notice of Defaults........................................................................... 78
Section 3. Certain Rights of Trustees................................................................... 78
Section 4. Not Responsible for Recitals or Issuance of Notes............................................ 79
Section 5. Trustee's Disclaimer......................................................................... 80
Section 6. May Hold Notes............................................................................... 80
Section 7. Money Held in Trust.......................................................................... 80
Section 8. Compensation and Reimbursement............................................................... 80
Section 9. Conflicting Interests........................................................................ 81
Section 10. Corporate Trustee Required; Eligibility...................................................... 81
Section 11. Resignation and Removal; Appointment of Successor............................................ 81
Section 12. Acceptance of Appointment by Successor....................................................... 82
Section 13. Merger, Conversion, Consolidation or Succession to Business.................................. 83
Section 14. Preferential Collection of Claims Against the Issuers........................................ 83
Section 15. Appointment of Authenticating Agent.......................................................... 83
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ARTICLE VIII Holders' List and Reports by Trustee and the Issuers......................................... 83
Section 1. The Issuers to Furnish Trustee Names and Addresses of Holders; Stock Exchange Listing........ 83
Section 2. Preservation of Information; Communications to Holders....................................... 84
Section 3. Reports by Trustee........................................................................... 84
ARTICLE IX Amendment, Supplement or Waiver................................................................ 84
Section 1. Without Consent of the Holders............................................................... 84
Section 2. With Consent of Holders...................................................................... 85
Section 3. Execution of Amendments, Supplements or Waivers.............................................. 86
Section 4. Revocation and Effect of Consents............................................................ 87
Section 5. Conformity with TIA.......................................................................... 87
Section 6. Notation on or Exchange of Notes............................................................. 87
ARTICLE X Redemption of Notes............................................................................. 87
Section 1. Right of Redemption.......................................................................... 87
Section 2. Applicability of Article..................................................................... 87
Section 3. Election to Redeem; Notice to Trustee........................................................ 88
Section 4. Selection by Trustee of Notes to Be Redeemed................................................. 88
Section 5. Notice of Redemption......................................................................... 88
Section 6. Deposit of Redemption Price.................................................................. 89
Section 7. Notes Payable on Redemption Date............................................................. 89
Section 8. Notes Redeemed in Part....................................................................... 90
ARTICLE XI Satisfaction and Discharge..................................................................... 90
Section 1. Satisfaction and Discharges of Indenture..................................................... 90
Section 2. Application of Trust Money................................................................... 91
ARTICLE XII Defeasance and Covenant Defeasance............................................................ 91
Section 1. Option of the Issuers to Effect Defeasance or Covenant Defeasance............................ 91
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Section 2. Legal Defeasance and Discharge............................................................... 91
Section 3. Covenant Defeasance.......................................................................... 92
Section 4. Conditions to Legal or Covenant Defeasance................................................... 92
Section 5. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous
Provisions.................................................................................. 94
Section 6. Repayment to Issuers......................................................................... 94
Section 7. Reinstatement................................................................................ 94
ARTICLE XIII Subsidiary Guarantees........................................................................ 95
Section 1. The Guarantees............................................................................... 95
Section 2. Guarantee Unconditional...................................................................... 95
Section 3. Discharge; Reinstatement..................................................................... 96
Section 4. Waiver by the Subsidiary Guarantors.......................................................... 96
Section 5. Subrogation and Contribution................................................................. 96
Section 6. Stay of Acceleration......................................................................... 96
Section 7. Limits of Guarantees......................................................................... 96
Section 8. Execution and Delivery of Subsidiary Guarantee............................................... 97
Section 9. Release of Guarantee......................................................................... 97
Section 10. Consolidation, Merger or Sale of Assets by a Subsidiary Guarantor............................ 97
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INDENTURE, dated as of August 24, 2001 (as amended, supplemented or
otherwise modified from time to time, the "Indenture"), among EQUISTAR
CHEMICALS, LP, a Delaware limited partnership (as further defined below, the
"Company"), EQUISTAR FUNDING CORPORATION, a Delaware corporation (as further
defined below, "Equistar Funding") and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company and Equistar Funding (collectively, the "Issuers") have duly
authorized the execution and delivery of this Indenture to provide for the
issuance of (i) initially, $700,000,000 aggregate principal amount of 10 1/8%
Senior Notes due 2008 of the Company (together with any Additional Dividend
Notes (as defined herein) issued in respect thereof and as further defined
below, the "Initial Notes" and, together with any Exchange Notes (as defined
herein) issued in respect thereof (and any Additional Dividend Notes issued in
respect thereof), the "Original Notes"), (ii) if and when issued, additional
10 1/8% Senior Notes due 2008 of the Company (together with any Additional
Dividend Notes issued in respect thereof and as further defined below, the
"Initial Additional Notes" and, together with any Exchange Notes issued in
respect thereof (and any Additional Dividend Notes issued in respect thereof),
the "Additional Notes") issuable as provided in this Indenture. All things
necessary to make the Original Notes, when duly issued, executed and delivered
by each Issuer and authenticated and delivered by the Trustee hereunder, the
valid obligation of each Issuer, and to make this Indenture a valid agreement of
each Issuer as of the date hereof, in accordance with the terms of the Original
Notes and this Indenture, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
(as defined herein) by the Holders (as defined herein) thereof, it is mutually
agreed, for the equal and ratable benefit of all Holders, as follows:
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions.
"Accounts Receivable Subsidiary" means any Wholly Owned Subsidiary of
the Company (i) which is formed solely for the purpose of, and which engages in
no activities other than activities in connection with, financing accounts
receivable of the Company and/or its Restricted Subsidiaries, (ii) which is
designated by the Company as an Accounts Receivables Subsidiary pursuant to an
Officers' Certificate delivered to the Trustee, (iii) no portion of Indebtedness
or any other obligation (contingent or otherwise) of which is at any time
recourse to or obligates the Company or any Restricted Subsidiary in any way, or
subjects any property or asset of the Company or any Restricted Subsidiary,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to (1) representations, warranties and covenants (or, any
indemnity with respect to such representations, warranties and covenants)
entered into in the ordinary course of business in connection with the sale
(including a sale in
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exchange for a promissory note of or Equity Interest in such Accounts Receivable
Subsidiary) of accounts receivable to such Accounts Receivable Subsidiary or (2)
any Guarantee of any such accounts receivable financing by the Company or any
Restricted Subsidiary that is permitted to be incurred pursuant to Section 4.06
and Section 4.07, (iv) with which neither the Company nor any Restricted
Subsidiary of the Company has any contract, agreement, arrangement or
understanding other than contracts, agreements, arrangements and understandings
entered into in the ordinary course of business in connection with the sale
(including a sale in exchange for a promissory note of or Equity Interest in
such Accounts Receivable Subsidiary) of accounts receivable in accordance with
Section 4.16 and fees payable in the ordinary course of business in connection
with servicing accounts receivable and (v) with respect to which neither the
Company nor any Restricted Subsidiary of the Company has any obligation (a) to
subscribe for additional shares of Capital Stock or other Equity Interests
therein or make any additional capital contribution or similar payment or
transfer thereto other than in connection with the sale (including a sale in
exchange for a promissory note of or Equity Interest in such Accounts Receivable
Subsidiary) of accounts receivable to such Accounts Receivable Subsidiary in
accordance with Section 4.16 or (b) to maintain or preserve the solvency, any
balance sheet term, financial condition, level of income or results of
operations thereof.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquired Disqualified Stock" means, with respect to any specified
Person, Disqualified Stock of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Disqualified Stock incurred in connection with,
or in contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Acquired Preferred Stock" means, with respect to any specified Person,
Preferred Stock of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Preferred Stock incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person.
"Additional Assets" means (a) 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 from any Person other than the
Company or an Affiliate of the Company, (b) any controlling interest or joint
venture interest in another business or (c) any other asset (other than
securities, cash, Cash Equivalents, or other current assets) to be owned by the
Company or any Restricted Subsidiary.
"Additional Notes" means any notes issued under this Indenture in
addition to the Original Notes, including any Exchange Notes issued in exchange
therefor, having the same terms in all respects (except (i) that such Notes need
not provide for payment of interest
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scheduled and paid prior to the date of issuance of such notes and (ii)
provisions relating to Liquidated Damages thereon) as the Initial Notes,
together with any Additional Dividend Notes issued in respect thereof.
"Additional Interest Amount" means an amount, to be paid on the
applicable Dividend Payment Date to each Holder of record on the applicable
Notice Date, equal to the amount of interest that would be paid on the aggregate
principal amount of the Notes held by such Holder for a period of 90 days at a
rate of 3.0% per annum, calculated on the basis of a 360-day year (without any
compounding of such interest).
"Affiliate" of any specified Person means any other Person directly or
indirectly, through one or more intermediaries, controlling or controlled by or
under direct or indirect common control with such specified Person. For the
purpose of this definition, "control" when used with respect to any specified
Person means the possession, direct or indirect, of the power to manage or
direct or cause the direction of the management and policies of such Person
directly or indirectly, whether through the ownership of voting stock, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
(other than the creation of a Lien) of any assets (other than the disposition of
inventory or equipment in the ordinary course of business consistent with
industry practices or the disposition of Cash Equivalents) (provided that the
sale, conveyance or other disposition of all or substantially all the assets of
the Company and its Restricted Subsidiaries taken as a whole will be governed by
Section 4.13 and/or Section 5.01 and not by the provisions of Section 4.10),
(ii) the sale by the Company or any of its Restricted Subsidiaries of Equity
Interests of any of the Company's Restricted Subsidiaries, Unrestricted
Subsidiaries or Joint Ventures and (iii) the issuance by any of the Company's
Restricted Subsidiaries of Equity Interests of such Restricted Subsidiary, in
the case of clauses (i), (ii) or (iii), whether in a single transaction or a
series of related transactions (a) that have a fair market value in excess of
$25 million or (b) for Net Proceeds in excess of $25 million.
Notwithstanding the foregoing:
(a) a transfer of assets by the Company to a Restricted
Subsidiary or by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary;
(b) an issuance of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;
(c) an issuance of Preferred Stock by a Finance Subsidiary
that is permitted by Section 4.06;
(d) sales (including a sale in exchange for a promissory
note of or Equity Interest in such Accounts Receivable Subsidiary) of
accounts receivable, related assets to an Accounts Receivable Subsidiary
in connection with any Receivables Facility;
(e) Sale and Lease-Back Transactions; and
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(f) Restricted Payments (and Permitted Dividends payable in
cash) permitted by Section 4.07 and Permitted Investments
will not be deemed to be an Asset Sale.
"Attributable Debt" in respect of a Sale and Lease-Back Transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such Sale and Lease-Back Transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 7.15 to act on behalf of the Trustee to authenticate Notes
of one or more series.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the board of directors (or any committee thereof)
of such Person (or, in the case of the Company, the Partnership Governance
Committee) and to be in full force and effect on the date of such certification,
and delivered to the Trustee. Unless the context otherwise requires, "Board
Resolution" refers to a Board Resolution of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized by law to close.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) United States dollars, (b) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (c) demand deposits, time
deposits and certificates of deposit with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year from the date of acquisition and overnight bank deposits, in each case with
any bank or trust company organized or licensed under the laws of the United
States or any State thereof having capital, surplus and undivided profits in
excess of $250 million, (d) repurchase obligations with a term of not more than
seven days for underlying securities of the type described in clauses (b) and
(c) above entered into with any financial institution meeting the qualifications
specified in clause (c) above, (e) commercial paper rated as least P-1 or A-1 by
Moody's or S&P, respectively, (f) investments in any U.S. dollar-denominated
money market fund as defined by Rule 2a-7 of
4
the General Rules and Regulations promulgated under the Investment Company Act
of 1940 and (g) in the case of a Foreign Subsidiary, substantially similar
investments denominated in foreign currencies (including similarly capitalized
foreign banks).
"Change of Control" means the occurrence of any of the following:
(i) the sale, transfer, conveyance or other disposition, in
one or a series of related transactions, of all or substantially all the
assets of the Company and its Subsidiaries taken as a whole to any
person or group (as such terms are used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) other than to one or more Permitted
Holders;
(ii) the acquisition by any person or group (as defined
above), other than one or more Permitted Holders, of a direct or
indirect interest in more than 50% of the Capital Stock of the Company
and the right to exercise a substantial portion of the powers of (a)
Lyondell to act on behalf of the Partnership Governance Committee and
(b) the representatives of Lyondell on the Partnership Governance
Committee (in each case as in effect on the Issue Date), by way of
merger or consolidation or otherwise;
(iii) any person or group (as defined above), other than one
or more Permitted Holders (or their representatives on the Partnership
Governance Committee), acquires the right, directly or indirectly, to
exercise, without the need for the consent of any Permitted Holder (or
their representatives on the Partnership Governance Committee), a
substantial portion of the rights and powers of the Partnership
Governance Committee with respect to matters that require unanimous
consent under the partnership agreement as in effect on the Issue Date;
or
(iv) the adoption of a plan for the liquidation or
dissolution of one or both of the Issuers, except in connection with a
sale, conveyance, transfer or other disposition of all or substantially
all of such Issuer's assets or an acquisition of Capital Stock of the
Company that would not otherwise constitute a Change of Control pursuant
to clauses (i) through (iii).
"Clearstream" means Clearstream Banking SA and its successors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Equistar Chemicals, LP, a Delaware limited partnership,
or any successor obligor under the Indenture and the Notes pursuant to Section
5.01.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period, plus in each
case, without duplication:
(i) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period (including any
provision for taxes on the Net Income of any Joint Venture that is a
pass-through entity for federal income tax purposes, to the extent such
taxes are paid or payable by such Person or any of its Restricted
5
Subsidiaries), to the extent that such provision for taxes was included
in computing such Consolidated Net Income;
(ii) the Fixed Charges of such Person and its Restricted
Subsidiaries for such period, to the extent that such Fixed Charges were
deducted in computing such Consolidated Net Income;
(iii) depreciation and amortization (including amortization
of goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such
depreciation and amortization were deducted in computing such
Consolidated Net Income; and
(iv) any non-cash charges reducing Consolidated Net Income
for such period (excluding any such non-cash charge to the extent that
it represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period); minus
(v) any non-cash items increasing Consolidated Net Income
for such period; minus
(vi) the lesser of (x) the aggregate amount of all
Investments made by the Company or any of its Restricted Subsidiaries in
any Joint Venture during the period under clause (f) of the second
paragraph of Section 4.07 and (y) the aggregate amount of Net Income
(but not loss) of any such Joint Venture referred to in clause (x) of
this clause (vi) included in calculating the Company's Consolidated Net
Income during such period;
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(i) the Net Income of any Person that is not a Restricted
Subsidiary shall be included only to the extent of the lesser of (x) the
amount of dividends or distributions paid in cash (but not by means of a
loan) to the referent Person or a Restricted Subsidiary thereof or (y)
the referent Person's (or, subject to clause (ii), a Restricted
Subsidiary of the referent Person's) proportionate share of the Net
Income of such other Person;
(ii) the Net Income (but not loss) of any Restricted
Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar
6
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders;
(iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded; and
(iv) the cumulative effect of a change in accounting
principles shall be excluded.
"Consolidated Net Tangible Assets" shall mean the total amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed), and (b) all goodwill, trade names, trademarks, patents, purchased
technology, unamortized debt discount and other like intangible assets, all as
set forth on the most recent financial statements of the Company and its
consolidated Subsidiaries filed with the SEC pursuant to Section 4.04 and
computed in accordance with GAAP.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum, without duplication, of:
(i) the consolidated equity of holders of Capital Stock
(other than Preferred Stock and Disqualified Stock) of such Person and
its consolidated Restricted Subsidiaries as of such date; plus
(ii) the respective amounts reported on such Person's balance
sheet as of such date with respect to any series of Preferred Stock
(other than Disqualified Stock) less
(iii) all write-ups (other than write-ups resulting from
foreign currency translations and write-ups of tangible assets of a
going concern business made in accordance with GAAP as a result of the
acquisition of such business) subsequent to the Issue Date in the book
value of any asset owned by such Person or a consolidated Restricted
Subsidiary of such Person; and excluding
(iv) the cumulative effect of a change in accounting
principles; all as determined in accordance with GAAP.
"Corporate Trust Office" means the principal office of the Trustee, at
which at any particular time its corporate trust business shall be administered,
which office on the Issue Date is located at 101 Barclay Street, Floor 21 West,
New York, New York 10286.
"Credit Facility" means that certain Amended and Restated Credit
Agreement dated as of the Issue Date by and among the Company, the lenders party
thereto and Bank of America, N.A. and The Chase Manhattan Bank, as
administrative agents, including any related Notes, instruments, and agreements
executed in connection therewith, as amended, restated, modified,
7
extended, renewed, refunded, replaced or refinanced, in whole or in part, from
time to time, whether or not with the same lenders or agents.
"Default" means any event that is, or with the giving of notice or lapse
of time, or both, would constitute an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the Notes mature; provided that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
date on which the Notes mature shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than Section 4.10 and
Section 4.13 and such Capital Stock specifically provides that such Person will
not repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required pursuant to such covenants.
The "liquidation preference" of any Disqualified Stock shall be the amount
payable thereon upon liquidation prior to any payment to holders of common stock
or, if none, the amount payable by the issuer thereof upon maturity or mandatory
redemption.
"Equistar Funding" means Equistar Funding Corporation, a Delaware
corporation, or any successor obligor under the Indenture and the Notes pursuant
to Section 5.03.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear Bank S.A./N.V., and its successors or
assigns, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the debt securities of the Issuers issued
pursuant to this Indenture in exchange for, and in an aggregate principal amount
equal to, the Initial Notes or any Initial Additional Notes in compliance with
the terms of a Registration Rights Agreement and containing terms substantially
identical to the Initial Notes or any Initial Additional Notes (except that (i)
such Exchange Notes shall not contain terms with respect to transfer
restrictions and shall be registered under the Securities Act and (ii) certain
provisions relating to Liquidated Damages thereon shall be eliminated).
"Exchange Offer" means an offer by the Company to the Holders of the
Initial Notes or Initial Additional Notes to exchange Outstanding Notes for
Exchange Notes, as provided for in a Registration Rights Agreement.
8
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in a Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence, and considered Indebtedness of the Company
or any of its Restricted Subsidiaries, on the Issue Date, until such amounts are
repaid, including all reimbursement obligations with respect to letters of
credit outstanding as of the date of the Indenture.
"Finance Subsidiary" means a Restricted Subsidiary of the Company, all
the Capital Stock of which (other than Preferred Stock) is owned by the Company
and/or one or more Wholly-Owned Restricted Subsidiaries thereof that does not
engage in any activity other than:
(i) holding of Indebtedness of the Company and/or one or more
Wholly-Owned Restricted Subsidiaries thereof;
(ii) the issuance of Capital Stock; and
(iii) any activity necessary, incidental or related to the
foregoing.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries or any other applicable Person
incurs, assumes or redeems any Indebtedness (other than revolving credit
borrowings) or issues or redeems Disqualified Stock or Preferred Stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption or redemption of Indebtedness or such issuance or
redemption of Disqualified Stock or Preferred Stock as if the same had occurred
at the beginning of the applicable four-quarter reference period.
In addition, for purposes of making the computation referred to above:
(i) acquisitions that have been made by the Company or any
of its Restricted Subsidiaries or any other applicable Person, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date shall be
deemed to have occurred on the first day of the four-quarter reference
period;
(ii) the Consolidated Cash Flow and Fixed Charges
attributable to operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but, in the case of such Fixed
Charges, only to the extent that the obligations giving rise to such
Fixed Charges will not be obligations of the referent Person or any of
its Restricted Subsidiaries following the Calculation Date; and
(iii) if since the beginning of the four-quarter reference
period any Person was designated as an Unrestricted Subsidiary or
redesignated as or otherwise became a
9
Restricted Subsidiary, such event shall be deemed to have occurred on
the first day of the four-quarter reference period.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of:
(i) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
determined in accordance with GAAP;
(ii) all commissions, discounts and other fees and charges
incurred in respect of letters of credit or bankers' acceptance
financings, determined in accordance with GAAP, and net payments or
receipts (if any) pursuant to Hedging Obligations of the types described
in clauses (i) through (iii) of the definition thereof to the extent
such Hedging Obligations relate to Indebtedness that is not itself a
Hedging Obligation;
(iii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period;
(iv) any interest expense on Indebtedness of another Person
(other than Non-Recourse Indebtedness of a Joint Venture that is not a
Restricted Subsidiary or Unrestricted Subsidiary secured by a Limited-
Recourse Stock Pledge) that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or
one of its Restricted Subsidiaries (whether or not such Guarantee or
Lien is called upon);
(v) amortization or write-off of debt discount in connection
with any Indebtedness of the Company and its Restricted Subsidiaries, on
a consolidated basis in accordance with GAAP, other than amortization of
deferred financing costs incurred on or prior to the Issue Date; and
(vi) the product of (a) all dividend payments (other than any
payments to the referent Person or any of its Restricted Subsidiaries
and any dividends payable in the form of Qualified Equity Interests) on
any series of Preferred Stock or Disqualified Stock of such Person and
its Restricted Subsidiaries, times (b) (x) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP or (y) if the dividends are deductible by such
Person for income tax purposes, one;
provided that interest payments on Indebtedness of a Joint Venture shall, in
each case, not be deemed Fixed Charges of the Company or any Restricted
Subsidiary as of any date of determination when such Indebtedness is not
considered Indebtedness of the Company or any Restricted Subsidiary of the
Company shall not be deemed Fixed Charges of the Company or any Restricted
Subsidiary.
"Foreign Subsidiary" means any Restricted Subsidiary that is not
organized under the laws of the United States, any State thereof or the District
of Columbia.
10
"GAAP" means generally accepted accounting principles 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 or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, as in effect on the Issue Date.
"General Partner" means a Restricted Subsidiary of the Company or any of
its Restricted Subsidiaries that has no assets and conducts no operations other
than its ownership of a general partnership interest in a Joint Venture.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or Disqualified Stock of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or Disqualified Stock of such other Person (including those arising
by virtue of partnership arrangements (other than with respect to the
obligations of a Joint Venture, solely by virtue of a Restricted Subsidiary of
the Company being the General Partner of such Joint Venture if, as of the date
of determination, no payment on such Indebtedness or obligation has been made by
such General Partner of such Joint Venture and such arrangement would not be
classified and accounted for, in accordance with GAAP, as a liability on a
consolidated balance sheet of the Company)) or (ii) entered into for the purpose
of assuring in any other manner the obligee of such Indebtedness or Disqualified
Stock of the payment thereof or to protect such obligee against loss in respect
thereof in whole or in part (including by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, to maintain financial
statement conditions or otherwise); provided that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) forward foreign exchange
contracts or currency swap agreements, (iii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency values and (iv) commodity price protection agreements or commodity
price hedging agreements designed to manage fluctuations in prices or costs in
raw materials, manufactured products or related commodities.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"incur" means, with respect to any Indebtedness, to incur, create,
issue, assume or Guarantee such Indebtedness. If any Person becomes a Restricted
Subsidiary on any date after the Issue Date (including by redesignation of an
Unrestricted Subsidiary), the Indebtedness and Capital Stock of such Person
outstanding on such date will be deemed to have been incurred by such Person on
such date for purposes of Section 4.06 but will not be considered the sale or
issuance of Equity Interests for purposes of Section 4.10. The accretion of
original issue discount or payment of interest in kind will not be considered an
incurrence of Indebtedness.
11
"Indebtedness" means, with respect to any Person,
(i) any indebtedness of such Person, whether or not
contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments;
(ii) letters of credit (or reimbursement agreements in
respect thereof) or banker's acceptances;
(iii) Capital Lease Obligations and Attributable Debt in
respect of Sale and Lease-Back Transactions;
(iv) the balance deferred and unpaid of the purchase price
of any property, except any such balance that constitutes an accrued
expense or trade payable; and
(v) net Hedging Obligations,
if and to the extent any of the foregoing indebtedness (other than
letters of credit and Hedging Obligations) would appear as a liability
on a balance sheet of such Person prepared in accordance with GAAP, as
well as
(x) all indebtedness of others secured by a Lien on any
asset of such Person whether or not such indebtedness is assumed by such
Person; provided that, for purposes of determining the amount of any
Indebtedness of the type described in this clause, if recourse with
respect to such Indebtedness is limited to such asset, the amount of
such Indebtedness shall be limited to the lesser of the fair market
value of such asset or the amount of such Indebtedness; and
(y) to the extent not otherwise included, the Guarantee by
such Person of any indebtedness of the types described above of any
other Person.
The amount of any Indebtedness outstanding as of any date shall be (i)
the accreted value thereof, in the case of any Indebtedness that does not
require current payments of interest and (ii) the principal amount thereof,
together with any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness.
Notwithstanding the foregoing, a Limited Recourse Stock Pledge shall not
be considered Indebtedness of the Company or any of its Restricted Subsidiaries.
"Initial Additional Notes" means Additional Notes issued in an offering
not registered under the Securities Act and any Additional Dividend Notes issued
in respect thereof (and any Notes issued in respect thereof pursuant to Section
3.04, 3.05, 3.06, 3.13, 3.14 or 10.08), but not including any Exchange Notes
issued in exchange therefor.
"Initial Notes" means the Issuers' 10 1/8% Senior Notes due 2008, issued
on the Issue Date and any Additional Dividend Notes issued in respect thereof
(and any Notes issued in respect thereof pursuant to Section 3.04, 3.05, 3.06,
3.13, 3.14 or 10.08), but not including any Exchange Notes issued in exchange
therefor.
12
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means, when used with respect to any Note and
any installment of interest thereon, the date specified in such Note as the
fixed date on which such installment of interest is due and payable, as set
forth in such Note.
"Investment Grade" means a rating of BBB- or higher by S&P and Baa3 or
higher by Moody's or the equivalent of such ratings by S&P or Moody's. In the
event that the Company shall select any other Rating Agency pursuant to the
provisions of the definition thereof, the equivalent of such ratings by such
Rating Agency shall be used.
"Investments" means, with respect to any Person, all investments by such
Person in another Person (including an Affiliate of such Person) in the form of
direct or indirect loans, advances or extensions of credit to such other Person
(including any Guarantee by such Person of the Indebtedness or Disqualified
Stock of such other Person) or capital contributions or purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities of such other Person, together with all items that are or would be
classified as investments of such investing Person on a balance sheet prepared
in accordance with GAAP; provided that:
(x) trade credit and accounts receivable in the ordinary
course of business;
(y) commissions, loans, advances, fees and compensation paid
in the ordinary course of business to officers, directors and employees;
and
(z) reimbursement obligations in respect of letters of
credit and tender, bid, performance, government contract, surety and
appeal bonds,
in each case solely with respect to obligations of the Company or any of its
Restricted Subsidiaries shall not be considered Investments.
If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the first paragraph of Section 4.07.
"Issue Date" means the date on which the Initial Notes (other than
Initial Notes that are Additional Dividend Notes) are originally issued.
"Issuer Request" and "Issuer Order" mean, respectively, a written
request or order signed in the name of an Issuer by an Officer of such Issuer.
13
"Joint Venture" means any joint venture between the Company or any
Restricted Subsidiary and any other Person, whether or not such joint venture is
a Subsidiary of the Company or any Restricted Subsidiary.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, and any
lease in the nature thereof) or the assignment or conveyance of any right to
receive income therefrom.
"Limited Recourse Stock Pledge" means the pledge of Equity Interests in
any Joint Venture (that is not a Restricted Subsidiary) or any Unrestricted
Subsidiary to secure Non-Recourse Debt of such Joint Venture or Unrestricted
Subsidiary, which pledge is made by a Restricted Subsidiary of the Company, the
activities of which are limited to making and managing Investments, and owning
Equity Interests, in such Joint Venture or Unrestricted Subsidiary, but only for
so long as its activities are so limited.
"Liquidated Damages" means liquidated damages owed to the Holders
pursuant to a Registration Rights Agreement.
"Lyondell" means Lyondell Chemical Company, any successor of Lyondell
that is a Permitted Holder or any Subsidiary of Lyondell.
"Make-Whole Amount" shall mean, in connection with any optional
redemption of any Note, the excess, if any, of:
(1) the aggregate present value as of the Redemption Date
of each dollar of principal being redeemed and the amount of interest
(exclusive of interest accrued to the Redemption Date) that would have
been payable in respect of such dollar if such prepayment had not been
made, determined by discounting, on a semiannual basis, such principal
and interest at the Treasury Rate (determined on the business day
preceding the Redemption Date) plus 0.5%, from the respective dates on
which such principal and interest would have been payable if such
payment had not been made; over
(2) the principal amount of the Note being redeemed.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however,
(i) any gain or loss, together with any related provision
for taxes on such gain or loss, realized in connection with
(a) any Asset Sale or any disposition pursuant to a
Sale and LeaseBack Transaction or
14
(b) the disposition of any securities by such Person or any of
its Restricted Subsidiaries or the extinguishment of any Indebtedness
of such Person or any of its Restricted Subsidiaries; and
(ii) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate cash proceeds (excluding any proceeds
deemed to be "cash" pursuant to Section 4.10) received by the Company or any of
its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of (i) the direct costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions) and any relocation expenses
incurred as a result thereof, (ii) taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), (iii) amounts required to be paid to holders of minority
interests in Restricted Subsidiaries or Joint Ventures as a result of such Asset
Sale, (iv) amounts required to be applied to the repayment of Indebtedness
(other than Indebtedness under the Credit Facility) secured by a Lien on any
asset sold in such Asset Sale, or which must by the terms of such Lien or by
applicable law be repaid out of the proceeds of such Asset Sale, (v) all
payments made with respect to liabilities directly associated with the assets
which are the subject of the Asset Sale, including, without limitation, trade
payables and other accrued liabilities, and (vi) any reserves for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP and any reserve for future liabilities established in accordance with GAAP;
provided that the reversal of any such reserve that reduced Net Proceeds when
issued shall be deemed a receipt of Net Proceeds in the amount of such proceeds
on such day.
"Non-Recourse Indebtedness" means Indebtedness as to which (i) the lenders
have been notified in writing that they will not have any recourse to the stock
or assets of the Company or any of its Restricted Subsidiaries, other than the
Equity Interests of a Joint Venture that is not a Restricted Subsidiary or
Unrestricted Subsidiary pledged by the Company or any of its Restricted
Subsidiaries as a Limited Recourse Stock Pledge and (ii) no default thereunder
would, as such, constitute a default under any Indebtedness of the Company or
any Restricted Subsidiary or give any rights to or in other assets of the
Company or its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined in
Regulation S.
"Notes" means the Initial Notes, any Additional Notes and the Exchange
Notes and any Additional Dividend Notes issued in respect thereof.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
15
"Officer" means, with respect to any Issuer or any other obligor on the
Notes, the Chief Executive Officer, the Chief Financial Officer, the Principal
Financial Officer, the Secretary, the Treasurer, any Assistant Secretary or
Assistant Treasurer or any Vice President of such Person.
"Officers' Certificate" means, with respect to the Company, Equistar
Funding or any other obligor on the Notes, a certificate signed by two Officers
of such Person.
"Opinion of Counsel" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to either Issuer.
"Original Notes" means the Initial Notes and any Exchange Notes issued in
exchange therefor, together with any Additional Dividend Notes issued in respect
thereof.
"Outstanding" when used with respect to Notes means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
in trust for the Holders of such Notes, provided that, if such Notes are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor reasonably satisfactory to the Trustee has
been made;
(iii) Notes paid pursuant to Section 3.06; and
(iv) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture.
A Note does not cease to be Outstanding because an Issuer or any Affiliate
of an Issuer holds the Note, provided that in determining whether the Holders of
the requisite amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by an
Issuer or any Affiliate of an Issuer shall be disregarded and deemed not to be
Outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee actually knows are so owned shall be so disregarded. Notes so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the reasonable satisfaction of the Trustee the pledgee's
right to act with respect to such Notes and that the pledgee is not an Issuer or
an Affiliate of any Issuer.
"Partner" means any Person owning Equity Interests in the Company and
having the right to select at least one member of the Partnership Governance
Committee.
"Partnership Governance Committee" means the Company's Partnership
Governance Committee, together with any successor or substitute committee or
board exercising similar power and authority.
16
"Paying Agent" means any Person authorized by the Issuers to pay the
principal of (and premium, if any) or interest and Liquidated Damages, if any,
on any Notes on behalf of the Issuers.
"Payment Default" means any failure to pay any scheduled installment of
interest or principal on any Indebtedness within the grace period provided for
such payment in the documentation governing such Indebtedness.
"Permitted Business" means the petrochemical, chemical and petroleum
refining businesses and any business reasonably related, incidental,
complementary or ancillary thereto.
"Permitted Dividends" means (i) dividends and distributions by the Company
on any class of its Equity Interests; provided that a portion of such class is
held by any Permitted Holder or (ii) any payment of principal on, or purchase,
redemption, defeasance or other acquisition for value of Subordinated Debt owed
to Lyondell except for a payment of principal or interest at Stated Maturity.
"Permitted Holders" means Lyondell Chemical Company, Millennium Chemical
Company, Occidental Petroleum Company, the successor of any Permitted Holder
(including any entity that is a party to any merger or business combination
transaction to which such Permitted Holder shall be a party; provided that
immediately after such transaction Equity Interests having a majority of the
voting power of such entity's outstanding Equity Interests shall be held by
holders of Equity Interests of such Permitted Holder immediately prior to such
transaction), and the respective Subsidiaries of any of the foregoing.
"Permitted Investments" means:
(a) any Investment in the Company or in a Restricted Subsidiary of
the Company that is engaged in a Permitted Business;
(b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Subsidiary of the Company in
a Person, if as a result of such Investment; (i) such Person becomes a
Restricted Subsidiary of the Company engaged in a Permitted Business or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all its assets to, or is liquidated
into, the Company or a Restricted Subsidiary of the Company engaged in a
Permitted Business;
(d) any non-cash consideration received as consideration in an Asset
Sale that was made pursuant to and in compliance with Section 4.10 (other
than a joint venture interest received in full or partial satisfaction of
the 75% requirement in clause (ii) of the first paragraph of Section 4.10);
(e) any acquisition of assets or Equity Interests solely in exchange
for, or out of the net cash proceeds of a substantially concurrent,
issuance of Equity Interests (other than Disqualified Stock) of the
Company;
17
(f) Hedging Obligations entered into in the ordinary course of
business and otherwise permitted under the Indenture;
(g) Investments in an Accounts Receivable Subsidiary that, as
conclusively determined by the Partnership Governance Committee, are
necessary or advisable to effect a Receivables Facility;
(h) Investments in Unrestricted Subsidiaries and Joint Ventures in an
aggregate amount, taken together with all other Investments made in
reliance on this clause (h), not to exceed at any time outstanding $75
million (after giving effect to any reductions in the aggregate amount of
such Investments as a result of the disposition thereof, including through
liquidation, repayment or other reduction, including by way of dividend or
distribution, for cash, the aggregate amount of such reductions not to
exceed the aggregate amount of such Investments outstanding and previously
made pursuant to this clause (h));
(i) any Investment received by the Company or any Restricted
Subsidiary as consideration for the settlement of any litigation,
arbitration or claim in bankruptcy or in partial or full satisfaction of
accounts receivable owed by a financially troubled Person to the extent
reasonably necessary in order to prevent or limit any loss by the Company
or any of its Restricted Subsidiaries in connection with such accounts
receivable;
(j) loans to Lyondell; provided that such loans are made in
compliance with Section 4.11; and
(k) Limited Recourse Stock Pledges.
"Permitted Liens" means:
(1) Liens in favor of the Company or any Subsidiary Guarantor;
(2) Liens securing the Notes and the Subsidiary Guarantees;
(3) Limited Recourse Stock Pledges;
(4) Liens on property of a Person existing at the time it becomes a
Subsidiary or at the time it is merged into or consolidated with the
Company or a Subsidiary; provided that such Liens were in existence prior
to the contemplation of such merger, consolidation or acquisition and do
not extend to any assets of the Company or its Restricted Subsidiaries
other than those of the Person merged into or consolidated with the Company
or that becomes a Restricted Subsidiary of the Company;
(5) Liens on property (together with general intangibles and proceeds
related to such property) existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company; provided that such
Liens were in existence prior to the contemplation of such acquisition;
18
(6) Liens (including the interest of a lessor under a capital lease)
on any asset (together with general intangibles and proceeds related to
such property) existing at the time of acquisition thereof or incurred
within 180 days of the time of acquisition or completion of construction
thereof, whichever is later, to secure or provide for the payment of all or
any part of the purchase price (or construction price) thereof (including
obligations of the lessee under any such capital lease);
(7) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens on the property of the Company or any Restricted
Subsidiary;
(8) easements, building restrictions, rights-of-ways, irregularities
of title, and such other encumbrances or charges not interfering in any
material respect with the ordinary conduct of business of the Company or
any of its Restricted Subsidiaries;
(9) Leases, subleases or licenses by the Company or any of its
Restricted Subsidiaries as lessor, sublessor or licensor in the ordinary
course of business and otherwise permitted by the Indenture;
(10) Liens securing reimbursement obligations with respect to
commercial letters of credit obtained in the ordinary course of business
which encumber documents and other property or assets relating to such
letters of credit and products and proceeds thereof;
(11) Liens in favor of custom and revenue authorities arising as a
matter of law to secure payment of nondelinquent customs duties in
connection with the importation of goods;
(12) Liens encumbering customary initial deposits and margin deposits,
netting provisions and setoff rights, in each case securing Indebtedness
under Hedging Obligations;
(13) Liens incurred in the ordinary course of business to secure
nondelinquent obligations arising from statutory, regulatory, contractual
or warranty requirements of the Company or its Restricted Subsidiaries or
any tender, bid, performance, government contract, surety or appeal bonds
or other obligations of a like nature for which a reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made;
(14) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Company or any Restricted Subsidiary in
the ordinary course of business in accordance with industry practice;
(15) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from federal income taxation
pursuant to Section 103(b) of the Internal Revenue Code;
19
(16) Liens arising by reason of deposits necessary to qualify the
Company or any Restricted Subsidiary to conduct business, maintain self
insurance or comply with any law;
(17) until the Notes are rated Investment Grade, Liens securing
Obligations with respect to Indebtedness under the Credit Facility that is
permitted to be incurred under clause (i) of the second paragraph of
Section 4.06(a) (including any paid-in-kind interest) and Hedging
Obligations owed to any lender thereunder or Affiliate thereof;
(18) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings, prejudgment Liens that are being contested in good
faith by appropriate proceedings and Liens arising out of judgments or
awards against the Company or any Restricted Subsidiary with respect to
which the Company or such Restricted Subsidiary at the time shall be
prosecuting an appeal or proceedings for review and with respect to which
it shall have secured a stay of execution pending such appeal or
proceedings for review; provided that in each case any reserve or other
appropriate provision as shall be required in conformity with GAAP shall
have been made therefor;
(19) Liens securing assets under construction arising from progress or
partial payments by a customer of the Company or its Restricted
Subsidiaries relating to such property or assets;
(20) Liens resulting from the deposit of funds or evidences of
Indebtedness in trust for the purpose of (A) defeasing Indebtedness of the
Company or any of its Restricted Subsidiaries (which defeasance is
otherwise permitted under the Indenture) having an aggregate principal
amount at any one time outstanding not to exceed $25 million or (B)
defeasing Indebtedness ranking pari passu with the Notes; provided that the
Notes are defeased concurrently with such Indebtedness;
(21) customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to any indenture, escrow agreement or similar
agreement establishing a trust or escrow arrangement, and Liens pursuant to
merger agreements, stock purchase agreements, asset sale agreements, option
agreements and similar agreements in respect of the disposition of property
or assets of the Company or any Restricted Subsidiary on the property to be
disposed of, to the extent such dispositions are permitted hereunder;
(22) from and after the first date when the Notes are rated Investment
Grade, Liens on any asset of the Company other than Restricted Property;
(23) Liens on assets (other than Restricted Property) of the Company
or any Restricted Subsidiary arising as a result of a Sale and Lease-Back
Transaction with respect to such assets; provided that the proceeds from
such Sale and Lease-Back Transaction are applied to the repayment of
Indebtedness or acquisition of Additional Assets or the making of capital
expenditures pursuant to Section 4.10;
(24) other Liens on assets of the Company or any Restricted Subsidiary
of the Company securing Indebtedness or other obligations that is permitted
by the terms of the
20
Indenture to be outstanding having an aggregate principal amount at any one
time outstanding not to exceed $50 million;
(25) Liens existing on the Issue Date, other than Liens securing
Indebtedness under the Credit Facility;
(26) Liens on accounts receivable and related property deemed to arise
in connection with any Receivables Facility;
(27) the interest of a lessor or licensor under an operating lease or
license under which the Company or any of its Restricted Subsidiaries are
lessee, sublessee, or licensee, including protective financing statement
filings;
(28) Liens to secure a Permitted Refinancing incurred to refinance
Indebtedness that was secured by a Lien permitted under the Indenture and
that was incurred in accordance with the provisions of the Indenture;
provided that such Liens do not extend to or cover any property or assets
of the Company or any Restricted Subsidiary other than assets or property
securing the Indebtedness so refinanced; and
(29) from and after the first date when the Notes are rated Investment
Grade, Liens upon Restricted Property securing Indebtedness or other
obligations in an aggregate principal amount which, together with the
aggregate outstanding principal amount of all other Indebtedness or other
obligations secured by Restricted Property of the Company and its
Restricted Subsidiaries which would otherwise be subject to the
restrictions set forth in Section 4.12 (not including Indebtedness or other
obligations permitted to be secured under clauses (1) to (28) inclusive
above) and the aggregate Value of the Sale and Lease-Back Transactions of
any Restricted Property in existence at the time of the incurrence of such
Indebtedness or other obligations (not including Sale and Lease-Back
Transactions as to which the proceeds from such Sale and Lease-Back
Transaction are applied to the repayment of Indebtedness or acquisition of
Additional Assets or the making of capital expenditures pursuant to Section
4.10), does not at such time exceed 15% of the Consolidated Net Tangible
Assets of the Company and its consolidated Subsidiaries as shown on the
most recent audited annual consolidated balance sheet delivered at such
time pursuant to Section 4.04.
"Permitted Refinancing" means any Indebtedness of the Company or any of its
Subsidiaries or Preferred Stock of a Finance Subsidiary issued in exchange for,
or the net proceeds of which are used solely to extend, refinance, renew,
replace, defease or refund, other Indebtedness of the Company or any of its
Restricted Subsidiaries; provided that:
(i) the principal amount (or liquidation preference in the case of
Preferred Stock) of such Permitted Refinancing (or if such Permitted
Refinancing is issued at a discount, the initial issuance price of such
Permitted Refinancing) does not exceed the principal amount of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of any premiums paid and reasonable expenses
incurred in connection therewith);
21
(ii) such Permitted Refinancing or, in the case of Preferred Stock of
a Finance Subsidiary, the Indebtedness issued to such Finance Subsidiary,
has a Stated Maturity date later than the Stated Maturity date of, and has
a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(iii) if the Indebtedness being extended, refinanced, renewed,
replaced, or refunded is subordinated by its terms in right of payment to
the Notes or the Subsidiary Guarantees, such Permitted Refinancing, or, in
the case of Preferred Stock, the Indebtedness issued to such Finance
Subsidiary, has a Stated Maturity date later than the Stated Maturity date
of, and is subordinated by it terms in right of payment to, the Notes on
subordination terms at least as favorable to the holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(iv) such Indebtedness is incurred by the Company or a Subsidiary
Guarantor (or such Preferred Stock is issued by a Finance Subsidiary) if
the Company or a Subsidiary Guarantor is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
(v) such Indebtedness is incurred by the Company or a Restricted
Subsidiary (or such Preferred Stock is issued by a Finance Subsidiary) if a
Restricted Subsidiary that is not a Subsidiary Guarantor is the obligor on
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Predecessor Notes" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.06 in lieu of a mutilated,
destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of preferred or preference stock of such Person which is
outstanding or issued on or after the date of the Indenture.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"QIB", or "Qualified Institutional Buyer" means a "qualified institutional
buyer," as the term is defined in Rule 144A under the Securities Act.
"Qualified Equity Interests" shall mean all Equity Interests of a Person
other than Disqualified Stock of such Person.
22
"Rating Agency" means (i) S&P and (ii) Moody's or (iii) if either S&P or
Moody's or both shall no longer exist, a nationally recognized securities rating
agency or agencies, as the case may be, selected by the Company, which shall be
substituted for S&P or Moody's or both, as the case may be.
"Receivables Facility" means one or more receivables financing facilities
or arrangements, as amended from time to time, pursuant to which the Company or
any of its Restricted Subsidiaries sells (including a sale in exchange for a
promissory note of or Equity Interest in an Accounts Receivable Subsidiary) its
accounts receivable, related assets and the provision of billing, collection and
other services in connection therewith, in each case to an Accounts Receivable
Subsidiary.
"Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not the Company or a
Restricted Subsidiary in connection with, any Receivables Facility.
"Redemption Date" when used with respect to any Note to be redeemed or
purchased means the date fixed or such redemption or purchase by or pursuant to
this Indenture and the Notes.
"Redemption Price" when used with respect to any Note to be redeemed or
purchased means the price at which it is to be redeemed or purchased pursuant to
this Indenture and the Notes.
"Registration Rights Agreement" means (i) the Registration Rights Agreement
dated as of August 24, 2001 among the Issuers and Credit Suisse First Boston
Corporation, Salomon Smith Barney Inc., Banc of America Securities LLC and J.P.
Morgan Securities Inc., as Initial Purchasers, as such agreement may be amended
from time to time, and (ii) with respect to any Initial Additional Notes, one or
more registration rights agreements between the Issuers and the other parties
thereto, as such agreement(s) may be amended from time to time, relating to
rights given by the Issuers to the purchasers of Initial Additional Notes to
register or exchange such Initial Additional Notes under the Securities Act.
"Registration Statement" means the Registration Statement as defined in the
Registration Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Resale Restriction Termination Date" means, with respect to any Note, the
date that is two years (or such other period as may hereafter be provided under
Rule 144(k) under the Securities Act or any successor provision thereto as
permitting the resale by non-affiliates of Restricted Securities without
restriction) after the later of the original issue date in respect of such Note
and the last date on which an Issuer or any Affiliate of an Issuer was the owner
of such Note (or any Predecessor Note thereto).
"Responsible Officer" when used with respect to the Trustee means any
officer in the corporate trust department of the Trustee, including any vice
president, assistant vice president,
23
assistant secretary, assistant treasurer, trust officer or any other officer of
the Trustee who customarily performs functions similar to those performed by the
persons who at the time shall be such officers, respectively, and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his or her knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means, with respect to the Initial Notes and any
Initial Additional Notes, the 40-day distribution compliance period as defined
in Regulation S which, in the case of the Initial Notes issued on the Issue
Date, ends October 3, 2001.
"Restricted Property" means:
(a) Any plant for the production of petrochemicals owned by the
Company or a Subsidiary, except (i) related facilities which in the opinion
of the Partnership Governance Committee are transportation or marketing
facilities, and (ii) any plant for the production of petrochemicals which
in the opinion of the Partnership Governance Committee is not a principal
plant of the Company and its Subsidiaries; and
(b) Any shares of Capital Stock or Indebtedness of a Subsidiary
owning Restricted Property owned by the Company or a Subsidiary.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to receive, at its request, and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary. Unless the context otherwise
requires, references to a "Restricted Subsidiary" refer to a Restricted
Subsidiary of the Company.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc., and its successors.
"Sale and Lease-Back Transaction" means any arrangement with any Person
(other than the Company or a Subsidiary), or to which any such Person is a
party, providing for the leasing, pursuant to a capital lease that would at such
time be required to be capitalized on a balance sheet in accordance with GAAP,
to the Company or a Restricted Subsidiary of any property or asset which has
been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person or to any other Person (other than the Company or a
Subsidiary), to which funds have been or are to be advanced by such Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
24
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in a Registration Rights Agreement.
"Significant Subsidiary" means (1) Equistar Funding and (2) any Restricted
Subsidiary of the Company that would be a "significant subsidiary" as defined in
Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities
Act, as such Regulation is in effect on the Issue Date.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness (or any later date established by any amendment to
such original documentation) and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded U.S. government
securities adjusted to constant maturities or, if such statistical release is
not published at the time of any determination, then such other reasonably
comparable index which shall be designated by the Trustee.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) or (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of the
Issuers' obligations with respect to the Notes.
"Subsidiary Guarantor" means any Subsidiary that executes a supplemental
indenture, in the form of Exhibit B hereto, providing for the Guarantee of the
payment of the Notes, in each case until such time as the Subsidiary Guarantee
of such Person is released in accordance with the provisions of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. sections 77aaa-
77bbbb) as in effect on the date of this Indenture, except as provided by
Section 9.05.
"Treasury Rate" means, in connection with the calculation of any Make-Whole
Amount with respect to any Note, the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity, as
compiled by and published in the most recent Statistical Release that has become
publicly available at least two business days prior to the
25
Redemption Date, equal to the then remaining maturity of the Note being prepaid.
If no maturity exactly corresponds to such maturity, yields for the two
published maturities most closely corresponding to such maturity shall be
calculated pursuant to the immediately preceding sentence and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that is
designated by the Partnership Governance Committee of the Company as an
Unrestricted Subsidiary pursuant to a resolution, (ii) any Subsidiary of an
Unrestricted Subsidiary and (iii) any Accounts Receivable Subsidiary. The
Partnership Governance Committee may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity
Interest or Indebtedness of, or holds any Lien on any property of, the Company
or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided that
(a) any Guarantee by the Company or any Restricted Subsidiary of any
Indebtedness of the Subsidiary being so designated or any of its
Subsidiaries shall be deemed an "incurrence" of such Indebtedness and an
"Investment" by the Company or such Restricted Subsidiary (or both, if
applicable) at the time of such designation,
(b) either (1) the Subsidiary to be so designated has total assets of
$1,000 or less or (2) if such Subsidiary has assets greater than $1,000,
such designation would be permitted under Section 4.07, and
(c) if applicable, the Investment and the incurrence of Indebtedness
referred to in clause (a) of this proviso would be permitted under Section
4.06 and Section 4.07.
Any such designation by the Partnership Governance Committee of the Company
pursuant to clause (i) above shall be evidenced to the Trustee by filing with
the Trustee a certified copy of the resolution giving effect to such designation
and an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.06 and Section 4.07.
If at any time the Company or any Restricted Subsidiary Guarantees any
Indebtedness of such Unrestricted Subsidiary or makes any other Investment in
such Unrestricted Subsidiary and such incurrence of Indebtedness or Investment
would not be permitted under Section 4.06 and Section 4.07, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of the Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under the covenant described above
under Section 4.06 the Company shall be in default of such covenant). The
Partnership Governance Committee of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
26
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under Section 4.06 and (ii) no Default or Event of Default would be
in existence following such designation.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Value" means, with respect to a Sale and Lease-Back Transaction, the
amount equal to the greater of (i) the net proceeds of the sale or transfer of
the property leased pursuant to such Sale and Lease-Back Transaction or (ii) the
fair value, in the opinion of the Partnership Governance Committee, of such
property at the time of entering into such Sale and Lease-Back Transaction, in
either case divided first by the number of full years of the term of the lease
and then multiplied by the number of full years of such term remaining at the
time of determination, without regard to any renewal or extension options
contained in the lease.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(i) the sum of the products obtained by multiplying
(a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment, by
(ii) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all the outstanding Equity Interests of which (other
than directors' qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Restricted Subsidiaries of such Person or by such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all the outstanding Equity Interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.
Section 1.02. Other Definitions.
Defined
Term in Section
Act 1.08
----
Additional Dividend Notes 4.08
----
27
Defined
Term in Section
Affiliate Transaction 4.11
----
Agent Members 3.13
----
Asset Sale Offer 4.10
----
Authentication Order 3.03
----
Change of Control Offer 4.13
----
Change of Control Payment 4.13
----
Change of Control Payment Date 4.13
----
Covenant Defeasance 12.03
-----
Defaulted Interest 3.07
----
Dividend Payment Date 4.08
----
DTC 2.03
----
Event of Default 6.01
----
Excess Proceeds 4.10
----
Expiration Date 1.08
----
Global Notes 2.01
----
Guaranteed Indebtedness 4.20
----
Legal Defeasance 12.02
-----
Notice Date 4.08
----
Offshore Global Note 2.01
----
Offshore Note Exchange Date 2.01
----
Offshore Physical Note 2.01
----
Permanent Offshore Global Note 2.01
----
Physical Notes 2.01
----
Place of Payment 3.01
----
Plan Participants 4.07
----
Private Placement Legend 2.03
----
Redemption Amount 10.01
-----
Register 3.05
----
Registrar 3.05
----
Regular Record Date 3.01
----
Restricted Payment 4.07
----
Subordinated Debt 4.07
----
Temporary Offshore Global Note 2.01
----
U.S. Global Notes 2.01
----
U.S. Physical Notes 2.01
----
Section 1.03. Rules of Construction. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Indenture have the meanings
assigned to them in this Indenture;
(b) "or" is not exclusive;
28
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP and, unless expressly
provided otherwise, all determinations and computations made pursuant to
any provision hereof shall be made in accordance with GAAP; provided that
references to any Person and its Restricted Subsidiaries on a consolidated
basis, and any calculations of amounts with respect to any Person and its
Restricted Subsidiaries on a consolidated basis, shall refer to such Person
and all its Restricted Subsidiaries, whether or not such Restricted
Subsidiaries would be accounted for as consolidated subsidiaries on such
Person's financial statements prepared in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to "$" or "dollars" shall refer to the lawful
currency of the United States of America;
(f) the words "include," "included" and "including" as used herein
shall be deemed in each case to be followed by the phrase "without
limitation," if not expressly followed by such phrase or the phrase "but
not limited to";
(g) words in the singular include the plural, and words in the plural
include the singular; and
(h) any reference to a Section or Article refers to such Section or
Article of this Indenture unless otherwise indicated.
Section 1.04. Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture. This Indenture is subject to the mandatory
provisions of the TIA, which are incorporated by reference in and made a part of
this Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by any TIA reference to another statute or defined
by SEC rule under the TIA, have the meanings so assigned to them therein. The
following TIA terms have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or Noteholders.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, Equistar Funding
and any other obligor on the indenture securities.
Section 1.05. Conflict with TIA. If any provision hereof limits, qualifies
or conflicts with a provision of the TIA that is required under the TIA to be a
part of and govern this
29
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the latter provision shall be deemed (a) to apply to this Indenture
as so modified or (b) to be excluded, as the case may be.
Section 1.06. Compliance Certificates and Opinions. Upon any application
or request by an Issuer or by any other obligor upon the Notes to the Trustee to
take any action under any provision of this Indenture, such Issuer or other
obligor upon the Notes, as the case may be, shall furnish to the Trustee such
certificates and opinions as may be required under the TIA. Each such
certificate or opinion shall be given in the form of one or more Officers'
Certificates, if to be given by Officers, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the TIA and any
other requirements set forth in this Indenture. Notwithstanding the foregoing,
in the case of any such request or application as to which the furnishing of any
Officers' Certificate or Opinion of Counsel is specifically required by any
provision of this Indenture relating to such particular request or application,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 4.05) shall include:
----
(a) a statement that the individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 individual, he or she
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, in the opinion of such individual,
such condition or covenant has been complied with.
Section 1.07. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Officer or Officers to the effect that the
information with respect to such
30
factual matters is in the possession of the Issuers, unless such counsel knows
that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.08. Acts of Noteholders; Record Dates. . (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Issuers. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee, the Issuers and any other obligor upon the
Notes, if made in the manner provided in this Section 1.08.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by an officer of a corporation
or a member of a partnership or other entity, on behalf of such corporation
or partnership or other entity, such certificate or affidavit shall also
constitute sufficient proof of such Person's authority. The fact and date
of the execution of any such instrument or writing, or the authority of the
person executing the same, may also be proved in any other manner that the
Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of
every Note issued upon the transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done or suffered to be done by the
Trustee, the Issuers or any other obligor on the Notes in reliance thereon,
whether or not notation of such action is made upon such Note.
(e) (i) The Issuers may set any day as a record date for the purpose
of determining the Holders of Outstanding Notes entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made
or taken by Holders, provided that the Issuers may not set a record date
for, and the provisions of this paragraph shall not apply with respect to,
the giving or making of any notice, declaration, request or direction
referred to in Section 1.08(e)(ii). If any record date is set pursuant to
this paragraph, the Holders of Outstanding Notes on such record date (or
their duly designated proxies), and
31
no other Holders, shall be entitled to take the relevant action, whether or
not such Persons remain Holders after such record date; provided that no
such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Notes on such record date. Nothing in this paragraph shall be
construed to prevent the Issuers from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be canceled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite principal amount of Outstanding Notes on the date
such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Issuers, at their own expense, shall cause notice of
such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder in
the manner set forth in Section 1.10.
(ii) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Notes entitled to join in the giving
or making of (w) any Notice of Default, (x) any declaration of acceleration
referred to in Section 6.02, (y) any request to institute proceedings
referred to in Section 6.06(b) or (z) any direction referred to in Section
6.05, in each case with respect to Notes. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Notes on such record
date, and no other Holders, shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain
Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration
Date by Holders of the requisite principal amount of Outstanding Notes on
such record date. Nothing in this paragraph shall be construed to prevent
the Trustee from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon
the record date previously set shall automatically and with no action by
any Person be canceled and of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Notes on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph,
the Trustee, at the expense of the Issuers, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Issuers in writing and to each Holder in the manner
set forth in Section 1.10.
(iii) With respect to any record date set pursuant to this Section
1.08, the party hereto that sets such record dates may designate any day as
the "Expiration Date" and from time to time may change the Expiration Date
to any earlier or later day; provided that no such change shall be
effective unless notice of the proposed new Expiration Date is given to the
Issuers or the Trustee, whichever such party is not setting a record date
pursuant to this Section 1.08(e), in writing, and to each Holder in the
manner set forth in Section 1.10, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record
date set pursuant to this Section, the party hereto that set such record
date shall be deemed to have initially designated the 180th day after such
record date as the Expiration Date with respect thereto, subject to its
right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the
180th day after the applicable record date.
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(iv) Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Note may do so with
regard to all or any part of the principal amount of such Note or by one or
more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
Section 1.09. Notices, Etc., to Trustee and Issuers. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(a) the Trustee by any Holder or by the Issuers or any other obligor upon
the Notes shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at the Corporate Trust
Office (telephone: (212) 815-6286; facsimile: (212) 815-5915), or at any other
address furnished in writing to the Issuers by the Trustee, or
(b) the Issuers by the Trustee or by any Holder shall be sufficient for
every purpose hereunder if in writing and delivered in person or mailed, first-
class postage prepaid, to the Company at One Houston Center, Suite 700, 1221
McKinney, Houston, Texas 77010, Attention: General Counsel (facsimile: (713)
309-2143), with copies to Baker & Botts LLP at 900 Louisiana, Houston, Texas
77002, Attention: Stephen Massad, Esq. (facsimile: (713) 229-1522), or at any
other address previously furnished in writing to the Trustee by the Issuers.
Section 1.10. Notices to Holders; Waivers. Where this Indenture provides
for notice to Holders of any event, such notice shall be deemed to have been
given upon the mailing by first class mail, postage prepaid, of such notices to
Holders at their registered addresses as recorded in the Register, not later
than the latest date, and not earlier than the earliest date, prescribed herein
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail notice of any event as
required by any provision of this Indenture, then such notification as shall be
made with the approval of the Trustee (such approval not to be unreasonably
withheld) shall constitute a sufficient notification for every purpose
hereunder.
Section 1.11. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.12. Successors and Assigns. All covenants and agreements in this
Indenture by each Issuer shall bind its respective successors and assigns,
whether so expressed or not.
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Section 1.13. Separability Clause. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 1.14. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.15. Governing Law. THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF
LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY. TO THE EXTENT PERMITTED BY LAW, THE TRUSTEE, EACH ISSUER,
ANY OTHER OBLIGORS IN RESPECT OF THE NOTES AND (BY THEIR ACCEPTANCE OF THE
NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE
CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE OR THE NOTES.
Section 1.16. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest and Liquidated Damages, if any, or principal and premium (if any)
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.
Section 1.17. No Personal Liability of Directors, Officers, Employees,
Stockholders and Partners. No director, officer, employee, incorporator,
partner, member of the Partnership Governance Committee or holder of Capital
Stock of either Issuer or any Subsidiary Guarantor, as such, will have any
liability for any obligations of the Issuers and the Subsidiary Guarantors under
the Notes, the Subsidiary Guarantees, or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations. Each holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
Section 1.18. Exhibits. All exhibits attached hereto are by this reference
made a part hereof with the same effect as if herein set forth in full.
Section 1.19. Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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ARTICLE 2
Note Forms
Section 2.01. Forms Generally. The Notes and the Trustee's certificate of
authentication relating thereto shall be in substantially the forms set forth,
or referenced, in Exhibit A annexed hereto and in this Article 2. The Notes may
have such appropriate insertions, omissions, substitutions, notations, legends,
endorsements, identifications and other variations as are required or permitted
by law, stock exchange rule or depository rule or usage, the governing
instruments of either Issuer, agreements to which either Issuer is subject, if
any, or other customary usage, or as may consistently herewith be determined by
the Officers of the Issuers executing such Notes, as evidenced by such execution
(provided always that any such notation, legend, endorsement, identification or
variation is in a form acceptable to the Trustee and the Issuers). Each Note
shall be dated the date of its authentication.
Initial Notes and any Additional Notes offered and sold in reliance on Rule
144A under the Securities Act shall be issued initially in the form of one or
more permanent global Notes in substantially the form set forth in Exhibit A and
shall contain the legends set forth in Section 2.03(a) and (b) (the "U.S. Global
Notes"), registered in the name of the nominee of the Depositary, deposited with
the Trustee, as custodian for the Depositary or its nominee, duly executed by
each Issuer and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as provided in Sections 3.13 and
3.14.
Initial Notes and any Initial Additional Notes offered and sold in offshore
transactions in reliance on Regulation S under the Securities Act shall be
issued initially in the form of a single temporary global Note in substantially
the form set forth in Exhibit A and containing each of the legends set forth in
Section 2.03 (the "Temporary Offshore Global Note"), registered in the name of
the nominee of the Depositary, deposited with the Trustee, as custodian for the
Depositary or its nominee, duly executed by each Issuer and authenticated by the
Trustee as hereinafter provided. At any time following termination of the
Restricted Period (the "Offshore Note Exchange Date"), upon receipt by the
Trustee and the Issuers of a certificate substantially in the form set forth in
Exhibit C hereto, a single permanent global Note substantially in the form of
Exhibit A hereto and containing the legend set forth in Section 2.03(b) (the
"Permanent Offshore Global Note," and together with the Temporary Offshore
Global Note, the "Offshore Global Note") duly executed by each Issuer and
authenticated by the Trustee as hereinafter provided shall be deposited with the
Trustee, as custodian for the Depositary, and the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of the
Temporary Offshore Global Note in an amount equal to the principal amount of the
beneficial interest in the Temporary Offshore Global Note transferred. Prior to
the Offshore Note Exchange Date and receipt of the certificate referred to
above, beneficial interests in a Temporary Offshore Global Note may be held only
through Euroclear or Clearstream. The aggregate principal amount of the Offshore
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary for the Offshore
Global Note as provided in Sections 3.13 and 3.14.
35
Initial Notes and any Initial Additional Notes issued in exchange for or
upon transfer of beneficial interests in the U.S. Global Note or the Permanent
Offshore Global Note pursuant to Section 3.13 shall be in the form of permanent
certificated Notes in substantially the form set forth in Exhibit A containing
the Private Placement Legend as set forth in Section 2.03 (the "U.S. Physical
Notes"), or in the form of permanent certificated Notes substantially in the
form set forth in Exhibit A (the "Offshore Physical Notes"), respectively, as
hereinafter provided. No Offshore Physical Notes may be issued until expiration
of the applicable Restricted Period and receipt by the Issuers and the Trustee
from the (x) proposed transferor of a certificate substantially in the form set
forth in Exhibit D or (y) holder of a beneficial interest being exchanged, of
certification that such holder is a non-U.S. person (within the meaning of
Regulation S under the Securities Act) or a U.S. person who acquired such
interest in a transaction exempt from the registration requirements of the
Securities Act (in which case a U.S. Physical Note shall be issued).
Initial Additional Notes offered and sold in reliance on any exemption
under the Securities Act other than Regulation S and Rule 144A thereunder shall
be issued in the form of U.S. Physical Notes and shall contain the Private
Placement Legend as set forth in Section 2.03.
The Offshore Physical Notes and the U.S. Physical Notes, together with any
other certificated notes in registered form, are sometimes collectively herein
referred to as the "Physical Notes." The U.S. Global Note and the Offshore
Global Note, together with any other certificated notes in registered global
form, are sometimes collectively referred to as the "Global Notes."
Exchange Notes shall be issued substantially in the form set forth in
Exhibit A and, subject to Section 3.13, shall be in the form of one or more
Global Notes.
Additional Dividend Notes issued in respect of any Notes shall be issued
substantially in the form set forth in Exhibit A and shall be issued in the same
form as the Notes in respect of which they are issued. Additional Dividend Notes
shall bear the same legends, including the Private Placement Legend, as the
Notes in respect of which such Additional Dividend Notes are issued. The Issuers
shall take all required steps to ensure that any Additional Dividend Notes
issued in respect of Notes that are not Restricted Securities or required by
applicable law to bear the Private Placement Legend shall not, and shall not be
required by applicable law to, be Restricted Securities or bear the Private
Placement Legend (including without limitation through the maintenance of an
effective shelf registration statement, if required).
Section 2.02. Form of Trustee' Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: __________ By: __________________________
36
Authorized Signatory
If an appointment of an Authenticating Agent is made pursuant to Section
7.15, the Notes may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternative certificate of authentication in the following
form:
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
As Trustee
By _____________________________
As Authenticating Agent
By _____________________________
Authorized Signatory
Dated:
Section 2.03. Restrictive Legends. (a) Except as set forth in Section
3.14(l), unless and until (i) an Initial Note or any Initial Additional Note is
sold pursuant to an effective registration statement, whether pursuant to the
Registration Rights Agreement or otherwise or (ii) an Initial Note or any
Initial Additional Note is exchanged for an Exchange Note in an Exchange Offer
pursuant to an effective Exchange Offer Registration Statement, each U.S. Global
Note and U.S. Physical Note and each Temporary Offshore Global Note shall bear
the following legend set forth below (the "Private Placement Legend") on the
face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER
(1) REPRESENTS THAT
(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED
INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH
SUCH ACCOUNT,
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE MEANING
OF RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT) AND
37
(2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT
IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND ONLY
(A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE
UNDER THE SECURITIES ACT,
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT,
(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT,
(E) IN A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000, TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO
THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY
BE OBTAINED FROM THE TRUSTEE) RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS NOTE, OR
(F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR
(2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE
REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR (F) ABOVE, THE COMPANY
RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE
AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
(b) Each Global Note, whether or not an Initial Note or Additional Note,
shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS
38
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 3.13 AND 3.14 OF THE INDENTURE.
(c) Each Temporary Offshore Global Note shall bear the following legend on
the face thereof:
THIS NOTE IS A TEMPORARY GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE
RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD
BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON WHO
PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") PURSUANT TO RULE 144A
THEREUNDER. BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR PHYSICAL NOTES
OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE
INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE
SECURITIES ACT.
ARTICLE 3
The Notes
Section 3.01. Title and Terms. The aggregate principal amount of Notes
that may be authenticated and delivered and Outstanding under this Indenture is
initially limited to $700,000,000 (plus any Additional Dividend Notes issued in
respect thereof pursuant to Section 4.08), but may be increased, subject to
compliance with the covenants contained in Article 4 below and the conditions
set forth in Section 3.03. The Initial Notes will be issued in an aggregate
principal amount of $700,000,000 plus the aggregate amount of any Additional
Dividend Notes issued in respect thereof. All the Original Notes shall vote and
consent together on all matters as one class, and none of the Original Notes
will have the right to vote or consent as a class separate from one another on
any matter. Subject to the covenants contained in Article 4 below, the Issuers
may issue Additional Notes hereunder and the Issuers may be required to issue
Additional Dividend Notes from time to time. Initial Additional Notes (including
any Exchange Notes issued in exchange therefor) and Additional Dividend Notes
(including any Exchange Notes issued in exchange therefor) shall vote (or
consent) as a class with the other Notes and otherwise be treated as Notes for
all purposes of this Indenture.
39
The Notes shall be known and designated as the "10 1/8% Senior Notes Due
2008" of the Issuers. The final Stated Maturity of the Notes shall be September
1, 2008. Interest on the Outstanding principal amount of Notes will accrue,
subject to Section 3.11, at the rate of 10 1/8% per annum and will be payable
semiannually in arrears on March 1 and September 1 in each year, commencing on
March 1, 2002, to Holders of record at the close of business on the immediately
preceding February 15, and August 15, respectively (each such February 15 and
August 15, a "Regular Record Date"). Interest on the Original Notes will accrue
from the most recent date to which interest has been paid or duly provided for
or, if no interest has been paid, from August 24, 2001, and interest on any
Additional Notes and Additional Dividend Notes (and Exchange Notes issued in
exchange therefor) will accrue from the most recent date to which interest has
been paid or duly provided for or, if no interest has been paid, from August 24,
2001; provided that if any Note is surrendered for exchange on or after a record
date for an Interest Payment Date that will occur on or after the date of such
exchange, interest on the Note received in exchange thereof will accrue from the
date of such Interest Payment Date. The Issuers will pay interest on overdue
principal and, to the extent lawful, on overdue installments of interest
(including interest to be paid in the form of Additional Dividend Notes) and
overdue amounts of Liquidated Damages, if any, at a rate of 1% per annum in
excess of the interest rate referred to above.
The principal of, and premium, if any, and interest and Liquidated Damages,
if any, on the Notes shall be payable at the Corporate Trust Office or at such
other office or agency of the Issuers maintained for that purpose (each, a
"Place of Payment") in the manner provided in Section 4.01(b); provided,
however, that, under the circumstances set forth in Section 4.01(b), payment of
interest and Liquidated Damages on a Note may be made by wire transfer of
immediately available funds to the account specified by the Holder of a Global
Note or by check mailed to the address of the Person entitled thereto as such
address shall appear in the Register.
Section 3.02. Denominations. The Notes shall be issuable only in
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 3.03. Execution, Authentication and Delivery and Dating. The Notes
shall be executed on behalf of each Issuer by two Officers of such Issuer. The
signature of such Officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of an individual who was at
any time a proper Officer of an Issuer shall bind such Issuer, notwithstanding
that such individual has ceased to hold such office prior to the authentication
and delivery of such Notes or did not hold such office at the date of such
Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Issuers may deliver Notes executed by the Issuers to the Trustee
for authentication; and the Trustee shall authenticate and deliver (i) Initial
Notes (other than Additional Dividend Notes) for original issue in the aggregate
principal amount not to exceed $700,000,000 and (ii) Additional Notes (other
than Additional Dividend Notes) from time to time for original issue in
aggregate principal amounts specified by the Issuers, (iii) Exchange Notes from
time to time for issue in exchange for a like principal amount of Initial Notes
or Initial Additional Notes (including Additional Dividend Notes), and (iv) to
the extent required by Section 4.08, Additional Dividend
40
Notes in respect thereof from time to time for original issue in an aggregate
principal amount specified by the Issuers, in each case specified in clauses (i)
through (iv) above, upon a written order of the Issuers in the form of an
Officers' Certificate executed by two Officers of each Issuer (an
"Authentication Order"), and in the case of clause (ii), upon receipt by the
Trustee of an Opinion of Counsel confirming that the Holders of the Outstanding
Notes will be subject to federal income tax in the same amounts, in the same
manner and at the same times as would have been the case if such Additional
Notes were not issued. Such Officers' Certificates shall specify the amount of
Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Additional Notes,
Exchange Notes and/or Additional Dividend Notes, that, in the case of Additional
Notes, the issuance of such Notes does not contravene any provision of Article 4
of this Indenture, whether the Notes are to be issued as one or more Global
Notes or Physical Notes, the name or names of the Initial Holder or Holders and
such other information as the Issuers may include or the Trustee may reasonably
request.
All Notes shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 3.04. Temporary Notes. Until definitive Notes are ready for
delivery, the Issuers may prepare and upon receipt of an Authentication Order
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Issuers consider appropriate for temporary Notes. If temporary Notes are issued,
the Issuers will cause definitive Notes to be prepared without unreasonable
delay. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency of the Issuers in a Place of Payment, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Issuers shall execute and upon receipt of an Authentication Order the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Notes of the same series and tenor.
Section 3.05. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Issuers in a Place of Payment being herein sometimes collectively
referred to as the "Register") in which, subject to such reasonable regulations
as it may prescribe, the Issuers shall provide for the registration of Notes and
of transfers of Notes. The Trustee is hereby appointed "Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided.
Upon surrender for transfer of any Note at the office or agency of the
Issuers in a Place of Payment, in compliance with all applicable requirements of
this Indenture and applicable law,
41
the Issuers shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Notes, of
any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes, of any
authorized denominations and of a like tenor and aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Issuers shall execute, and the
Trustee shall authenticate and deliver, the Notes that the Holder making the
exchange is entitled to receive; provided that no exchange of Initial Notes or
Initial Additional Notes for Exchange Notes shall occur until an Exchange Offer
Registration Statement shall have been declared effective by the SEC and the
Trustee shall have received an Officers' Certificate confirming that the
Exchange Offer Registration Statement has been declared effective by the SEC and
an Exchange Offer thereunder has been consummated. The Initial Notes or
Additional Notes to be exchanged for the Exchange Notes shall be canceled by the
Trustee.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuers, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuers or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Issuers and the Registrar duly executed, by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Issuers may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes under this
Section 3.05.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Notes. If (a) any
mutilated Note is surrendered to the Trustee, or the Issuers and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Note, and (b) there is delivered to the Issuers and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Issuers or the Trustee that such Note has been acquired
by a bona fide purchaser, the Issuers shall execute and upon receipt of an
Authentication Order the Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of
like tenor and principal amount, bearing a number not contemporaneously
Outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Issuers in their discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 3.06, the Issuers may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed
42
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith.
Every new Note issued pursuant to this Section 3.06 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of each Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and ratably with
any and all other Notes duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.07. Payment of Interest Rights Preserved. Interest and
Liquidated Damages on any Note that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest and Liquidated Damages
specified in Section 3.01; provided that interest payable in the form of
Additional Dividend Notes shall be paid to the Person in whose name that Note
(or one or more Predecessor Notes) is registered at the close of business on the
Notice Date for such interest specified in Section 4.08.
Any interest and Liquidated Damages on any Note that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder; and such Defaulted Interest shall be paid by the Issuers, as
provided in 3.07(a) or 3.07(b) below:
(a) The Issuers may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Issuers shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Issuers shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
reasonably satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as provided
in this Section 3.07(a). Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more
than 15 nor less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Issuers of such
Special Record Date and, in the name and at the expense of the Issuers,
shall cause notice of the proposed payment of such Defaulted Interest, the
amount thereof and the Special Record Date and payment date therefor to be
mailed, first class postage prepaid, to each Holder at such Holder's
address as it appears in the Register, not less than 10 days prior to such
Special Record Date. Notice of the
43
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered on such Special Record Date and shall no longer be
payable pursuant to the following 3.07(b).
(b) The Issuers may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Issuers
to the Trustee of the proposed payment pursuant to this clause (b), such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.07, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest (including
any Liquidated Damages) accrued and unpaid, and to accrue, that were carried by
such other Note.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a Note
for registration of transfer, the Issuers, the Trustee and any agent of any
Issuer or the Trustee may treat the Person in whose name such Note is registered
as the owner of such Note for the purpose of receiving payment of principal of
(and premium, if any, on) and (subject to Section 3.07) interest and Liquidated
Damages, if any, on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Issuers, the Trustee or any agent of
any of them shall be affected by notice to the contrary.
Section 3.09. Cancellation. All Notes surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and, if not already canceled,
shall be promptly canceled by it. The Issuers may at any time deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder that the Issuers may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section 3.09, except as expressly permitted by this Indenture. All canceled
Notes held by the Trustee shall be disposed of in accordance with the Trustee's
customary procedures.
Section 3.10. Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 3.11. Payment of Liquidated Damages. (a) Under certain
circumstances the Issuers will be obligated to pay certain Liquidated Damages to
the Holders of certain Initial Notes, as more particularly set forth in such
Initial Notes.
(b) Under certain circumstances the Issuers may be obligated to pay
certain Liquidated Damages to the Holders of certain Initial Additional Notes,
as may be more particularly set forth in such Initial Additional Notes.
Section 3.12. CUSIP Numbers. The Issuers in issuing the Notes may use
"CUSIP" or "CINS" numbers (if then generally in use) in addition to serial
numbers, and, if so, the Trustee shall use such "CUSIP" or "CINS" numbers in
addition to serial numbers in notices of
44
redemption, repurchase or other notices to Holders as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such "CUSIP" or "CINS" numbers either as printed on the Notes or
as contained in any notice of a redemption or repurchase and that reliance may
be placed only on the serial or other identification numbers printed on the
Notes, and any such redemption or repurchase shall not be affected by any defect
in or omission of such numbers. The Issuers will promptly notify the Trustee of
any change in the "CUSIP" or "CINS" numbers.
Section 3.13. Book-entry Provisions for Global Notes.
(a) Each Global Note initially shall (i) be registered in the name of the
Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) to the
extent relevant thereto, bear legends as set forth in Section 2.03. Neither
Issuer nor any of their agents shall have any responsibility or liability for
any aspect of the records relating to, or payments made on account of beneficial
ownership interests of, a Global Note, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Issuers, the Trustee and any agent of the
Issuers or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
beneficial owner of any Note. The registered Holder of a Global Note may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Notes.
(b) Interests of beneficial owners in a Global Note may be transferred in
accordance with the applicable rules and procedures of the Depositary and the
provisions of Section 3.14. Transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees, except (i) as required in connection
with transfers of interests therein pursuant to Section 3.14(b) or 3.14(g) or as
may be required by the Issuers or the Trustee in connection with transfers
pursuant to Section 3.14(i), and (ii) that U.S. Physical Notes or, subject to
Section 3.14(h), Offshore Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in the U.S. Global Note or the
Offshore Global Note, respectively, in the event that (A) the Depositary
notifies the Issuers that it is unwilling or unable to continue as Depositary
for the applicable Global Note and a successor depositary is not appointed by
the Issuers within 90 days or (B) an Event of Default has occurred and is
continuing and the Registrar has received a request from the Depositary. In
addition, beneficial interests in a Global Note may be exchanged for Physical
Notes upon request but only upon at least 20 days' prior written notice given to
the Trustee by or on behalf of the Depository in accordance with customary
procedures. In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners for Physical Notes
pursuant to this Section 3.13(b), the Registrar shall record on its books and
45
records (and make a notation on the Global Note of) the date and a decrease in
the principal amount of such Global Note in an amount equal to the beneficial
interest in the Global Note being transferred, and the Issuers shall execute,
and the Trustee shall authenticate and deliver, one or more Physical Notes of
like tenor and principal amount of authorized denominations. In connection with
a transfer of an entire Global Note to beneficial owners pursuant to this
paragraph (b), the applicable Global Note shall be deemed to be surrendered to
the Trustee for cancellation, and the Issuers shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in the applicable Global
Note, an equal aggregate principal amount at maturity of U.S. Physical Notes (in
the case of the U.S. Global Note) or Offshore Physical Notes (in the case of the
Offshore Global Note), as the case may be, of authorized denominations.
(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) Each Issuer, any other obligor upon the Notes and the Trustee, in the
discretion of any of them, may treat as the Act of a Holder any instrument or
writing of any Person that is identified by the Depositary as the owner of a
beneficial interest in the Global Note; provided that the fact and date of the
execution of such instrument or writing is proved in accordance with Section
1.08(b).
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(e) Any U.S. Physical Note delivered in exchange for an interest in the
U.S. Global Note pursuant to paragraph (b) of this Section shall, except as
otherwise provided in Section 3.14, bear the Private Placement Legend.
----
Section 3.14. Transfer Provisions. Unless and until (i) an Initial Note or
any Initial Additional Note is sold pursuant to an effective registration
statement, whether pursuant to the Registration Rights Agreement or otherwise,
(ii) an Initial Note or any Initial Additional Note is exchanged for an Exchange
Note in the Exchange Offer pursuant to an effective Registration Statement, or
(iii) the Resale Restriction Termination Date has occurred with respect to an
Initial Note or any Initial Additional Note and such Note is not then held by an
Affiliate of either Issuer, the following provisions shall apply with respect to
such Initial Note or Initial Additional Note:
(a) General. The provisions of this Section 3.14 shall apply to all
transfers involving any Physical Note and any beneficial interest in any Global
Note. A Note that is a Restricted Security may not be transferred other than as
provided in this Section 3.14. A beneficial interest in a Global Note that is a
Restricted Security may not be exchanged for a beneficial interest in another
Global Note other than through a transfer in compliance with this Section 3.14.
(b) Transfers to Non-QIB Institutional Accredited Investors. With respect
to the registration of any proposed transfer of a Note that is a Restricted
Security to any Institutional Accredited Investor that is not a QIB,
46
(I) the Registrar shall register such transfer
(i) if it complies with all other applicable requirements of this
Indenture (including Section 3.05 and Section 3.13); and
---- ----
(ii) the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit E, and such transfer is in
respect of an aggregate principal amount of Notes of not less than
$100,000; and
(iii) if the proposed transferor is or is acting through an Agent
Member holding a beneficial interest in a Global Note, upon receipt by the
Registrar of written instructions given in accordance with the Depositary's
and the Registrar's procedures; and
(II) the Registrar shall (x) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and a decrease in the
principal amount of the relevant Global Note in an amount equal to the principal
amount of the beneficial interest in the relevant Global Note to be transferred
or (y) cancel the Physical Note so transferred, and the Registrar shall deliver
to the transferee one or more Physical Notes of like tenor and amount.
Each of the Issuers and the Trustee may require additional opinions,
certifications or other evidence as may be reasonably required to confirm that
any such proposed transfer is being made in compliance with the Securities Act
and applicable state securities laws.
(c) Transfers to QIBs. With respect to the registration of any proposed
transfer of a Note that is a Restricted Security to a QIB,
(I) the Registrar shall register such transfer:
(i) if it complies with all other applicable requirements of this
Indenture (including Section 3.05 and Section 3.13); and
(ii) the proposed transferor has checked the box provided for on the
form of such Note stating, or has otherwise certified to the Issuers and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of such Note stating, or has
otherwise certified to the Issuers and the Registrar in writing, that it is
purchasing such Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Issuers as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A; and
(iii) if the proposed transferor or transferee is or is acting through
an Agent Member, upon receipt by the Registrar of written instructions
given in accordance with the Depositary's and the Registrar's procedures;
and
47
(II) the Registrar shall (a) cancel the Physical Note so transferred or (b)
reflect on its books and records (and make a notation on the relevant Global
Note of) the date and a decrease in the principal amount of such transferor
Global Note, as the case may be, and the Registrar shall (x) reflect on its
books and records (and make a notation on the relevant Global Note of) the date
and an increase in the principal amount of the transferee Global Note or (y)
deliver Physical Notes of like tenor and amount.
(d) Transfers of Interests in the Temporary Offshore Global Notes. With
respect to registration of any proposed transfer of interests in any Temporary
Offshore Global Note,
(I) the Registrar shall register the transfer of any interest in such Note
only
(i) if the proposed transferee is a Non-U.S. Person and the proposed
transferor has delivered to the Registrar a certificate substantially in
the form of Exhibit D hereto and will take delivery in the form of an
interest in the Temporary Offshore Global Note; or
(ii) if the proposed transferee is a QIB and the proposed transferor
has checked the box provided for on the form of Note stating, or has
otherwise certified to the Issuers and the Registrar in writing, that the
sale has been made in compliance with provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Note stating, or has otherwise advised the Issuers and the Registrar in
writing, that it is purchasing the Note for its own account or an account
with respect to which it exercises sole investment discretion and that it
and any such account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Issuers as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A; and
(iii) upon receipt by the Registrar of written instructions given in
accordance with the Depositary's and the Registrar's procedures; and
(II) the Registrar shall reflect on its books and records (and make a
notation on the relevant Global Note of) the date and an increase in the
principal amount of the transferee Global Note, in an amount equal to the
principal amount of the Temporary Offshore Global Note to be transferred, and
the Registrar shall reflect on its books and records (and make a notation on the
relevant Global Note of) the date and a decrease in the principal amount of the
transferor Temporary Offshore Global Note.
(b) Transfers to Non-U.S. Persons. With respect to the registration of any
proposed transfer of a Note that is a Restricted Security to a Non-U.S. Person
(except for any transfer referred to in Section 3.14(d))
(I) the Registrar shall register such transfer:
48
if it complies with all other applicable requirements of this Indenture
(including Section 3.05 and Section 3.13); and
(i) if the proposed transfer is to be made prior to the end of the
Restricted Period, upon receipt of a certificate substantially in the form
of Exhibit D hereto from the proposed transferor; and
(ii) if the proposed transfer is to be made after the end of the
Restricted Period and the Note to be transferred is a U.S. Certificated
Note or an interest in the U.S. Global Note, only upon receipt of a
certificate substantially in the form of Exhibit D from the proposed
transferor; and
(iii) if the proposed transferor or transferee is or is acting through
an Agent Member, upon receipt by the Registrar of written instructions in
accordance with the Depositary's and the Registrar's procedures; and
(II) the Registrar shall (a) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and a decrease in the
principal amount of the transferor Global Note in an amount equal to the
principal amount to be transferred or (b) cancel the Physical Notes so
transferred, as the case may be, and the Registrar shall (x) reflect on its
books and records (and make a notation on the relevant Global Note of) the date
and an increase in the principal amount of the transferee Offshore Global Note
or (y) deliver one or more Physical Notes of like tenor and amount.
(b) Transfers pursuant to Rule 144. With respect to the registration of
any proposed transfer of a Note that is a Restricted Security pursuant to the
exemption from registration under the Securities Act provided by Rule 144
thereunder,
(I) the Registrar shall register such transfer
(i) if it complies with all other requirements of this Indenture
(including Section 3.05 and Section 3.13); and
(ii) if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of such Note stating, or has
otherwise certified to the Issuers and the Registrar in writing, that the
sale has been made in compliance with the provisions of Rule 144; and
(iii) if the proposed transferor or transferee is or is acting through
an Agent Member, upon receipt by the Registrar of written instructions
given in accordance with the Depositary's and the Registrar's procedures;
and
(II) the Registrar shall (a) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and a decrease in the
principal amount of such transferor Global Note in an amount equal to the
principal amount to be transferred or (b) cancel the Physical Note so
transferred and the Registrar shall (x) reflect on its books and records (and
make a notation on the relevant Global Note of) the date and an increase in the
principal amount
49
of the transferee Global Note or (y) the Registrar shall deliver Physical Notes
in like tenor and amount.
Each of the Issuers and the Trustee may require additional opinions,
certifications or other evidence as may be reasonably required to confirm that
any such proposed transfer is being made in compliance with the Securities Act
and applicable state securities laws.
(b) Transfers to the Company. With respect to the registration of any
proposed transfer of a Note to the Company,
(I) the Registrar shall register such transfer
(i) if it complies with all other requirements of this Indenture
(including Section 3.05 and Section 3.13); and
---- ----
(ii) if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of such Note stating, or has
otherwise certified to the Issuers and the Registrar in writing, that the
sale has been made to the Company; and
(iii) if the proposed transferor is or is acting through an Agent
Member, upon receipt by the Registrar of written instructions given in
accordance with the Depositary's and the Registrar's procedures; and
(II) the Registrar shall (x) reflect on its books and records (and make a
notation on the relevant Global Note of) the date and a decrease in the
principal amount of such transferor Global Note in an amount equal to the
principal amount to be transferred or (y) cancel the Physical Note so
transferred, as the case may be and the Registrar shall deliver Physical Notes
to the Company in like tenor and amount.
(h) Interests in the Offshore Global Note prior to the Offshore Note
Exchange Date. Notwithstanding anything to the contrary contained in this
Indenture, until the Offshore Note Exchange Date occurs and appropriate
certification substantially in the form of Exhibit C is made as provided in
Section 2.01, beneficial interests in the Offshore Global Note may be held only
in or through accounts maintained at the Depositary by Euroclear or Clearstream,
and no person shall be entitled to effect any transfer or exchange that would
result in any such interest being held otherwise than in or through such an
account, and no Physical Notes may be issued in exchange therefor.
(i) Other Transfers. The Registrar shall effect and register, upon receipt
of a written request from the Issuers to do so, a transfer not otherwise
permitted by this Section 3.14, such registration to be done in accordance with
----
the otherwise applicable provisions of this Section 3.14, upon the furnishing by
----
the proposed transferor or transferee of a written opinion of counsel (which
opinion and counsel are satisfactory to the Issuers and the Trustee) to the
effect that, and such other certifications or evidence as the Issuers may
require to confirm that, the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and otherwise in compliance with applicable
state securities laws.
50
(j) Limitation on Issuance of Physical Notes. No Physical Note shall be
exchanged for a beneficial interest in any Global Note, except in accordance
with Section 3.13 and this Section 3.14.
---- ----
(k) Execution, Authentication and Delivery of Physical Notes. In any case
in which the Registrar is required to deliver a Physical Note to a transferee or
transferor, the Issuers shall execute, and the Trustee shall authenticate and
make available for delivery, such Physical Note.
(l) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Notes bearing the Private Placement Legend, the Registrar
shall deliver only Notes that bear the Private Placement Legend, unless (i) the
requested transfer is after the relevant Resale Restriction Termination Date
with respect to such Notes, (ii) upon written request of the Issuers after there
is delivered to the Registrar an opinion of counsel (which opinion and counsel
are satisfactory to the Issuers and the Trustee) to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act, (iii) with
respect to an Offshore Global Note, with the agreement of the Issuers on or
after the Offshore Note Exchange Date with respect to such Note, (iv) such Notes
are sold or exchanged pursuant to an effective registration statement under the
Securities Act or (v) such Notes are sold pursuant to Section 3.14(f).
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(m) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 3.13 or this Section 3.14 (including
all Notes received for transfer pursuant to this Section 3.14). Each Issuer
shall have the right to require the Registrar to deliver to such Issuer, at such
Issuer's expense, copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
In connection with any transfer of any Note, the Trustee, the Registrar and
the Issuers shall be entitled to receive, shall be under no duty to inquire
into, may conclusively presume the correctness of, and shall be fully protected
in relying upon the certificates, opinions and other information referred to
herein (or in the forms provided herein, attached hereto or to the Notes, or
otherwise) received from any Holder and any transferee of any Note regarding the
validity, legality and due authorization of any such transfer, the eligibility
of the transferee to receive such Note and any other facts and circumstances
related to such transfer.
(n) Certain Additional Terms Applicable to Physical Notes. Any transferee
entitled to receive a Physical Note may request that the principal amount
thereof be evidenced by one or more Physical Notes in any authorized
denomination or denominations and the Registrar shall comply with such request
if all other transfer restrictions are satisfied.
51
ARTICLE 4
Covenants
Section 4.01. Payment of Principal, Premium and Interest. (a) The Issuers
will duly and punctually pay the principal of (and premium, if any) and interest
and Liquidated Damages, if any, on the Notes in accordance with the terms of the
Notes and this Indenture. An installment of principal (and premium, if any) or
interest and Liquidated Damages shall be considered paid on the date it is due
if the Trustee or Paying Agent or Paying Agents hold on that date money (or,
with respect to interest required to be paid pursuant to Section 4.08,
Additional Dividend Notes in the requisite principal amount, duly issued,
authenticated and delivered in accordance with this Indenture) designated for
and sufficient to pay the installment.
(b) Other than payments in the form of Additional Dividend Notes, payments
(including principal, premium, if any, interest and Liquidated Damages, if any)
in respect of the Notes represented by the Global Notes, the Holder of which has
given wire transfer instructions on or prior to the relevant record date, shall
be made by wire transfer of immediately available funds to the accounts
specified by the Global Note Holder. With respect to Physical Notes, the Issuers
will make all payments of principal, premium, if any, interest and Liquidated
Damages, if any, at the office or agency maintained by the Issuers referred to
in Section 4.02 or, at the option of the Issuers, by mailing a check to each
such Holder's registered address. Additional Dividend Notes shall be issued and
delivered to each Holder at the Issuers' expense.
Section 4.02. Maintenance of Office or Agency. The Issuers will maintain
an office or agency in the United States where Notes may be presented or
surrendered for payment, where Notes may be surrendered for transfer or exchange
and where notices and demands to or upon the Issuers in respect of the Notes and
this Indenture may be served. The Issuers will give prompt written notice to the
Trustee of the location, and of any change in the location, of such office or
agency. If at any time the Issuers shall fail to maintain such office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee. The Issuers hereby designates the
Corporate Trust Office as an initial Place of Payment and as such office of the
Issuers, and appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands so long as such Corporate Trust
Office remains a Place of Payment.
Section 4.03. Money for Payments to Be Held in Trust. If either Issuer
shall at any time act as the Paying Agent, the Issuers will, on or before each
due date of the principal of (and premium, if any) or interest and Liquidated
Damages, if any, on, any of the Notes, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest and Liquidated Damages, if any, so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of their action or failure
so to act.
If neither Issuer is acting as the Paying Agent, the Issuers will, prior to
each due date of the principal of (and premium, if any) or interest and
Liquidated Damages, if any, on, any Notes, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest and Liquidated
Damages, if any, so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest and Liquidated
Damages,
52
and (unless such Paying Agent is the Trustee) the Issuers will promptly notify
the Trustee of their action or failure so to act.
If neither Issuer is acting as the Paying Agent, the Issuers will cause any
Paying Agent other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section 4.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of principal of
(and premium, if any) or interest and Liquidated Damages, if any, on Notes
in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Issuers (or
any other obligor upon the Notes) in the making of any such payment of
principal (and premium, if any) or interest and Liquidated Damages, if any;
(c) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with
the provisions of this Indenture and TIA relating to the duties, rights and
liabilities of such Paying Agent.
The Issuers may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Issuer
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
an Issuer or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by such Issuer or Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
either Issuer, in trust for the payment of the principal of (and premium, if
any) or interest and Liquidated Damages, if any, on any Note and remaining
unclaimed for two years after such principal (and premium, if any) or interest
and Liquidated Damages, if any, has become due and payable shall be paid in the
appropriate proportion to the Issuers upon an Issuer Request, or (if then held
by an Issuer) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Issuers for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuers as trustee
thereof, shall thereupon cease.
Section 4.04. SEC Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Notes issued hereunder are outstanding,
the Company will furnish to each Trustee and the Holders of Notes (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information
53
only, a report thereon by the Company's certified independent accountants and
(ii) all current reports that would be required to be filed with the SEC on Form
8-K if the Company were required to file such reports. In addition, whether or
not required by the rules and regulations of the SEC, the Company will file a
copy of all such information and reports with the SEC for public availability
and make such information available to securities analysts and prospective
investors upon request.
(b) For so long as any Notes remain outstanding, the Issuers will furnish
to the Holders and to securities analysts and prospective investors, upon their
request, the information, if any, required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
(c) All obligors on the Notes will comply with Section 314(a) of the TIA.
(d) Each Issuer shall promptly mail copies of all such annual reports,
information, documents and other reports provided to the Trustee pursuant to
clauses (a) and (c) hereof to the Holders at their addresses appearing in the
Register maintained by the Registrar.
(e) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuers'
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.05. Certificates to Trustee. (a) Each Issuer will deliver to the
Trustee within 120 days after the end of each fiscal year of the Company a
certificate from the principal executive, financial or accounting officer of
such Issuer stating that such officer has conducted or supervised a review of
the activities of the Company and its Restricted Subsidiaries and the Company's
and its Restricted Subsidiaries' performance under this Indenture and that,
based upon such review, to the best of such officers' knowledge, the Issuers
have fulfilled all obligations thereunder or, if there has been a default in the
fulfillment of any such obligation (determined without regard to any period of
grace or requirement of notice provided in this Indenture), specifying each such
default and the nature and status thereof.
(b) Each Issuer will deliver to the Trustee, as soon as possible and in
any event within 30 days after such Issuer becomes aware of an Event of Default
or a Default, an Officers' Certificate setting forth the details of such Event
of Default or Default, and the action which such Issuer proposes to take or has
taken with respect thereto.
(c) Each Issuer will deliver to the Trustee within 120 days after the end
of each fiscal year of the Company a written statement by such Issuer's
independent public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate to
accounting matters, and (ii) whether, in connection with their audit
examination, any Default has come to their attention and, if such a Default has
come to their attention, specifying the nature and period of the existence
thereof.
Section 4.06. Limitation on Indebtedness. (a) On and after the Issue Date,
(x) the Company will not, and will not permit any of its Restricted Subsidiaries
to incur any Indebtedness (including Acquired Debt); (y) the Company will not,
and will not permit any of its
54
Restricted Subsidiaries to, issue any Disqualified Stock (including Acquired
Disqualified Stock); and (z) the Company will not permit any of its Restricted
Subsidiaries that are not Subsidiary Guarantors to issue any shares of Preferred
Stock (including Acquired Preferred Stock); provided, however, that the Company
and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt)
and the Company and the Subsidiary Guarantors may issue shares of Disqualified
Stock (including Acquired Disqualified Stock) if the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for which
financial statements have been filed with the SEC pursuant to Section 4.04
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 2.0 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Stock or Preferred Stock had been issued, as the case may be, at
the beginning of such four-quarter period, with any letters of credit and
bankers' acceptances being deemed to have an aggregate principal amount of
Indebtedness equal to the maximum amount available thereunder.
The foregoing provisions will not apply to:
(i) the incurrence by the Company of Indebtedness pursuant to the
Credit Facility in an aggregate principal amount at any time outstanding
not to exceed an amount equal to $800.0 million less the aggregate
principal amount of all mandatory repayments (other than mandatory
prepayments triggered solely by the issuance of Indebtedness or Preferred
Stock of a Finance Subsidiary to refinance the Credit Facility) applied to
(a) repay loans (other than revolving credit loans) outstanding thereunder
or (b) permanently reduce the revolving credit commitments thereunder (and
the incurrence by its Subsidiaries of Guarantees thereof); provided that,
if the aggregate principal amount of Indebtedness pursuant to the Credit
Facility permitted to be incurred hereby is reduced as a result of any
mandatory repayment made in connection with the Company's entry into a
Receivables Facility, then such aggregate principal amount permitted to be
incurred shall be increased by the amount of such previous reduction if and
when such Receivables Facility is terminated;
(ii) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the Notes (including any Additional Dividend
Notes but not any Additional Notes), and Subsidiary Guarantees thereof;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness (other than Indebtedness of the type described in
clauses (i), (ii), (v) through (xii) or (xiv) of this covenant);
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of any Permitted Refinancing in exchange for, or the Net
Proceeds of which are used to extend, refinance, renew, replace, defease or
refund, Indebtedness that was permitted to be incurred under the Fixed
Charge Coverage Ratio test set forth above or clauses (ii) or (iii) above
or (xiii) below or this clause (iv);
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that (1) if the
Company or any Subsidiary Guarantor is
55
the obligor on such Indebtedness, such Indebtedness is expressly
subordinated by its terms to the prior payment in full in cash of all
Obligations with respect to the Notes or the Subsidiary Guarantee, as the
case may be, and (2)(A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary and (B) any sale or other
transfer of any such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(vi) the incurrence by the Company or any Restricted Subsidiary of
Hedging Obligations that are incurred for the purpose of (A) fixing or
hedging interest rate or currency risk with respect to any fixed or
floating rate Indebtedness that is permitted by the Indenture to be
outstanding or any receivable or liability the payment of which is
determined by reference to a foreign currency; provided that the notional
principal amount of any such Hedging Obligation does not exceed the
principal amount of the Indebtedness or any receivable or liability to
which such Hedging Obligation relates or (B) managing fluctuations in the
price or cost of raw materials, manufactured products or related
commodities; provided that such obligations are entered into in the
ordinary course of business to hedge or mitigate risks to which the Company
or any Restricted Subsidiary is exposed in the conduct of its business or
the management of its liabilities (as determined by the Company's or such
Restricted Subsidiary's principal financial officer in the exercise of his
or her good faith business judgment);
(vii) the issuance by any of the Company's Restricted Subsidiaries of
shares of Preferred Stock to the Company or a Wholly Owned Restricted
Subsidiary; provided that (A) any subsequent issuance or transfer of Equity
Interests that results in such Preferred Stock being held by a Person other
than the Company or a Wholly Owned Restricted Subsidiary or (B) the
transfer or other disposition by the Company or a Wholly Owned Restricted
Subsidiary of any such shares to a Person other than the Company or a
Wholly Owned Restricted Subsidiary shall be deemed, in each case, to
constitute an issuance of such Preferred Stock by such Subsidiary on such
date that is not permitted by this clause (vii);
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by tender, bid, performance,
government contract, surety or appeal bonds, standby letters of credit and
warranty and contractual service obligations of like nature, trade letters
of credit or documentary letters of credit, in each case to the extent
incurred in the ordinary course of business of the Company or such
Restricted Subsidiary;
(ix) the incurrence by any Restricted Subsidiary of the Company of
Indebtedness or the issuance by any Restricted Subsidiary of Preferred
Stock, the aggregate principal amount (or accreted value, as applicable) or
liquidation preference of which, together with all other Indebtedness and
Preferred Stock of the Company's Restricted Subsidiaries at the time
outstanding and incurred or issued in reliance upon this clause (ix), does
not exceed $25 million;
56
(x) the issuance by any Finance Subsidiary of Preferred Stock with
an aggregate liquidation preference not exceeding the amount of
Indebtedness of the Company held by such Finance Subsidiary; provided that
the Fixed Charge Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which financial statements have been filed with
the SEC pursuant to Section 4.04 immediately preceding the date on which
such Preferred Stock is issued would have been at least 2.0 to 1,
determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom) as if such Preferred Stock had been issued at the
beginning of such four-quarter period;
(xi) the incurrence of Indebtedness by Foreign Subsidiaries in the
aggregate principal amount (or accreted value, as applicable) of which,
together with all other Indebtedness at the time outstanding and incurred
in reliance upon this clause (xi), does not exceed $10 million;
(xii) the Guarantee by the Company or any Restricted Subsidiary of
Indebtedness of the Company or a Restricted Subsidiary that was permitted
to be incurred by another provision of this covenant;
(xiii) Acquired Debt or Acquired Disqualified Stock; provided that
such Indebtedness or Disqualified Stock was not incurred in connection with
or in contemplation of such Person becoming a Restricted Subsidiary; and
provided further that immediately after giving effect to such incurrence,
the Fixed Charge Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which financial statements have been filed with
the SEC pursuant to Section 4.04 immediately preceding the date of such
incurrence would have been at least 2.0 to 1, determined on a pro forma
basis (including giving pro forma effect to the applicable transaction
related thereto);
(xiv) the incurrence by Equistar Funding of Indebtedness as a co-
issuer of Indebtedness of the Company that was permitted to be incurred by
another provision of this covenant;
(xv) the incurrence of Indebtedness represented by industrial
revenue bonds to finance capital expenditures incurred to reduce NOx
emissions in the Houston/Galveston region pursuant to a Texas Natural
Resource Conservation Commission plan; and
(xvi) the incurrence by the Company or any Subsidiary Guarantor of
Indebtedness or the incurrence of Disqualified Stock, the aggregate
principal amount (or accreted value, as applicable) or liquidation
preference of which, together with all other Indebtedness and Disqualified
Stock at the time outstanding and incurred in reliance on this clause
(xvi), does not exceed $100 million.
(b) For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness or Preferred Stock meets the criteria of more
than one of the categories of permitted Indebtedness described in clauses (i)
through (xvi) above or is entitled to be incurred pursuant to the first
paragraph of this covenant, the Company shall, in its sole discretion, classify
such item of Indebtedness or Preferred Stock in any matter that complies with
this covenant and such Indebtedness or Preferred Stock will be treated as having
been incurred pursuant to the clauses or the first paragraph hereof, as the case
may be, designated by the Company. The
57
amount of Indebtedness issued at a price which is less than the principal amount
thereof shall be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.
(c) The amount of Indebtedness outstanding under the Credit Facility for
purposes of clause (i) of the second paragraph of Section 4.06(a) shall exclude
-------
any amounts paid as interest-in-kind in connection with a Permitted Dividend.
Section 4.07. Limitation on Restricted Payments. The Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests,
other than :
(x) dividends or distributions payable in Qualified Equity Interests
of the Company,
(y) dividends or distributions payable to the Company or any
Restricted Subsidiary of the Company, and
(z) Permitted Dividends;
(2) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company or any Affiliate of the Company that controls
the Company, other than any such Equity Interests owned by the Company
or any of its Restricted Subsidiaries;
(3) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness ("Subordinated
Debt") of the Company or any Restricted Subsidiary that is subordinated
by its terms to the Notes or the Subsidiary Guarantees, as applicable,
other than Indebtedness owed to the Company or any Restricted
Subsidiary or to Lyondell, except, in each case, payment of interest or
principal at Stated Maturity; or
(4) make any Restricted Investment;
(all such payments and other actions set forth in clauses (1) through (4) above
being collectively referred to as "Restricted Payments"), unless, at the time of
and after giving effect to such Restricted Payment (the amount of any such
Restricted Payment, if other than cash, shall be the fair market value (as
conclusively evidenced by a resolution of the Partnership Governance Committee)
of the asset(s) proposed to be transferred by the Company or such Restricted
Subsidiary, as the case may be, pursuant to such Restricted Payment):
(a) no Default or Event of Default shall have occurred and be
continuing after giving effect thereto; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the most recently ended four full fiscal
quarters for which financial statements have been filed with the SEC
pursuant to Section 4.04 immediately preceding the date of such Restricted
Payment, have been permitted to incur at least $1.00 of additional
58
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
the first paragraph of Section 4.06(a) and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments and Permitted Dividends made by the Company and its
Restricted Subsidiaries on or after the Issue Date (excluding Restricted
Payments permitted by clauses (b) (to the extent paid to the Company or any
of its Restricted Subsidiaries or to the extent such distributions are
deducted as a minority interest in calculating Consolidated Net Income),
(c), (d), (e), (g) and (h) of the next succeeding paragraph) and 50% of any
Restricted Payments permitted by clause (f) of the next succeeding
paragraph, is less than the sum, without duplication, of:
(i) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing on October 1, 2001, to the end of the
Company's most recently ended fiscal quarter for which financial
statements have been filed with the SEC pursuant to Section 4.04 at
the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the
Company or any of its Restricted Subsidiaries from the issue or sale
(other than to a Subsidiary or Joint Venture of the Company or if the
proceeds are used to make a Permitted Investment of the type described
in clause (e) of the definition thereof) after the Issue Date of
Qualified Equity Interests of the Company or of debt securities of the
Company or any of its Restricted Subsidiaries that have been converted
into or exchanged for such Qualified Equity Interests of the Company,
plus
(iii) to the extent that any Restricted Investment, other than a
Restricted Investment permitted to be made pursuant to clause (f) or
(i) below, that was made after the Issue Date is sold for cash or
otherwise liquidated, repaid or otherwise reduced, including by way of
dividend or distribution (to the extent not included in calculating
Consolidated Net Income), for cash, the lesser of (A) the cash return
with respect to such Restricted Investment (less the cost of
disposition, if any) and (B) the initial amount of such Restricted
Investment, plus
(iv) an amount equal to the sum of (A) the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or other transfers of assets (to the extent not
included in calculating Consolidated Net Income), in each case to the
Company or any Restricted Subsidiary from Unrestricted Subsidiaries
and (B) the portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of an
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary; provided, however, that the
foregoing sum shall not exceed, in the case of any Unrestricted
Subsidiary, the amount of Restricted Investments, other than a
Restricted Investment permitted to be made pursuant to
59
clause (f) or (i) below, previously made after the Issue Date by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary.
The foregoing provisions will not prohibit the following Restricted Payments
set forth below:
(a) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture;
(b) dividends or distributions by any Restricted Subsidiary of the
Company payable (x) to all holders of a class of Capital Stock of such
Restricted Subsidiary on a pro rata basis or on a basis that is more
favorable to the Company; provided that at least 50% of such class of
Capital Stock is held by the Company and/or one or more of its Restricted
Subsidiaries or (y) to all holders of a class of Preferred Stock of a
Restricted Subsidiary that is not a Subsidiary Guarantor issued after the
Issue Date in compliance with Section 4.06;
(c) the payment of cash dividends on any series of Disqualified
Stock issued after the Issue Date in an aggregate amount not to exceed the
cash received by the Company since the Issue Date upon issuance of such
Disqualified Stock;
(d) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company, any Affiliate of the Company, or any
Joint Venture (or the acquisition of any outstanding Equity Interests of
any Person the majority of whose assets are Equity Interests in the Company
or a Joint Venture), in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary or Joint
Venture of the Company) of, Qualified Equity Interests of the Company;
provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement or other acquisition shall
be excluded from clause (c)(ii) of the preceding paragraph;
(e) the defeasance, redemption or repurchase of Subordinated Debt
with the net cash proceeds from an incurrence of Permitted Refinancing or
in exchange for or out of the net cash proceeds from the substantially
concurrent sale (other than to a Subsidiary or Joint Venture of the
Company) of Qualified Equity Interests of the Company; provided that the
amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded
from clause (c)(ii) of the preceding paragraph;
(f) Restricted Investments in any Joint Venture made during any
fiscal year of the Company or within 45 days after the end of such fiscal
year in amounts that, together with all other Restricted Investments made
in such Joint Venture in respect of such fiscal year in reliance on this
clause (f) during such fiscal year or within 45 days after the end of such
fiscal year, do not exceed the amount of dividends or distributions
previously paid in respect of such fiscal year to the Company or any
Restricted Subsidiary by such Joint Venture; provided that no Default or
Event of Default shall have occurred and be continuing after giving effect
to such Restricted Payment;
60
(g) distributions or payments of Receivables Fees;
(h) distributions by any Restricted Subsidiary or Joint Venture of
chemicals to a holder of Capital Stock of such Restricted Subsidiary or
Joint Venture if such distributions are made pursuant to a provision in a
joint venture agreement or other arrangement entered into a connection with
the establishment of such Joint Venture or Restricted Subsidiary that
requires such holder to pay a price for such chemicals equal to that which
would be paid in a comparable transaction negotiated on an arms-length
basis (or pursuant to a provision that imposes a substantially equivalent
requirement);
(i) any other Restricted Payment which, together with all other
Restricted Payments made pursuant to this clause (i) on or after the Issue
Date, does not exceed $25 million (after giving effect to any reductions in
the aggregate amount of such Investments made pursuant to this clause (i)
as a result of the disposition thereof, including through liquidation,
repayment or other reduction, including by way of dividend or distribution,
for cash, as set forth in clause (c)(iii) above, the aggregate amount of
such reductions not to exceed the aggregate amount of such Investments
outstanding and previously made pursuant to this clause (i)), provided that
no Default or Event of Default shall have occurred and be continuing after
giving effect to such Restricted Payment; and
(j) the repurchase of any Subordinated Debt at a purchase price not
greater than 101% of the principal amount thereof in the event of (x) a
change of control pursuant to a provision no more favorable to the holders
thereof than Section 4.13 or (y) an Asset Sale (pursuant to a provision no
----
more favorable to the holders thereof than Section 4.10); provided that,
----
(1) in each case, prior to such repurchase the Company has made a Change of
Control Offer or Asset Sale Offer, as applicable, and repurchased all Notes
that were validly tendered for payment in connection with such Change of
Control Offer or Asset Sale Offer and (2) no Default or Event of Default
shall have occurred and be continuing after giving effect to such
Restricted Payment.
The Partnership Governance Committee of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would
not cause a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments under
the first paragraph of this covenant (except to the extent such Investments were
repaid in cash). All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation, as conclusively determined by the Partnership
Governance Committee. Such designation will only be permitted if any such
Restricted Payment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. In the
case of any designation by the Company of a Person as an Unrestricted Subsidiary
on the first day that such Person is a Subsidiary of the Company in accordance
with the provisions of the Indenture, such designation shall be deemed to have
occurred for all purposes of the Indenture simultaneously with, and
automatically upon, such Person becoming a Subsidiary.
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Section 4.08. Additional Interest upon Payment of Permitted Dividends. (a)
The Company shall provide public notice of its intent to pay a Permitted
Dividend which would require the issuance of Additional Dividend Notes by means
of a press release on a date that is not more than twenty-one days or less than
fourteen days prior to the date of any scheduled payment of any such Permitted
Dividend (a "Notice Date"). Such notice shall provide the date of the Permitted
Dividend and the amount of additional interest that will be paid on such date
pursuant to clause (b) below.
(b) If the Company makes a Permitted Dividend and the Company's Fixed
Charge Coverage Ratio calculated (on a pro forma basis as described in the
following sentence) on the Dividend Payment Date would have been less than 1.75
to 1, then the Issuers shall, on the date when the Company makes such Permitted
Dividend (the "Dividend Payment Date"), pay each Holder of record on the Notice
Date immediately prior to the date of such payment, as additional interest, an
amount equal to the Additional Interest Amount. For this purpose, the
calculation shall give pro forma effect to any Indebtedness, Disqualified Stock
or Preferred Stock incurred or contemplated to be incurred or any asset sold or
contemplated to be sold, in each case to finance such Permitted Dividend as if
such incurrence or sale had been made at the beginning of the most recently
ended four full fiscal quarters for which financial statements have been filed
with the SEC pursuant to Section 4.04 immediately preceding the Dividend Payment
Date.
(c) Notwithstanding the foregoing, the Issuers shall not be required to
make any additional interest payment with respect to a Permitted Dividend made
on any Dividend Payment Date (the "current date") if the Company has made an
additional interest payment with respect to another Permitted Dividend on a
Dividend Payment Date that occurred within 90 days prior to the current date.
(d) Any such interest payable pursuant to this Section shall be paid by
the Issuers in the form of additional Notes ("Additional Dividend Notes") that
are identical in all respects to the Notes with respect to which such Additional
Dividend Notes are issued. Interest on such Additional Dividend Notes shall
accrue from the most recent interest payment date prior to the Dividend Payment
Date or, if no interest has been paid on the Notes, from the Issue Date. The
Additional Dividend Notes shall be issued in an aggregate principal amount that,
together with accrued interest thereon through the Dividend Payment Date, as
determined pursuant to the foregoing sentence, will be equal to the Additional
Interest Amount required to be paid on the applicable Dividend Payment Date as
set out in clause (b) above; provided that the Issuers shall, to the extent
necessary, round up the principal amount of any Additional Dividend Note so that
the principal amount of each such Note is $1,000 or a higher $1,000 increment
thereof.
Section 4.09. Limitation on Dividend and other Payment Restrictions
affecting Restricted Subsidiaries. The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any restriction on the ability of
any Restricted Subsidiary to:
(i) (a) pay dividends or make any other distributions to the Company or any of
its Restricted Subsidiaries:
(1) on its Capital Stock, or
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(2) with respect to any other interest or participation in, or
measured by, its profits, or
(b) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries;
except for such restrictions existing under or by reason of:
(a) existing agreements as in effect on the Issue Date;
(b) Indebtedness permitted by the Indenture to be incurred containing
restrictions on the ability of Restricted Subsidiaries to consummate
transactions of the types described in clauses (i), (ii) or (iii) above not
materially more restrictive than those contained in the Indenture;
(c) the Indenture;
(d) applicable law;
(e) existing restrictions with respect to a Person acquired by the
Company or any of its Restricted Subsidiaries (except to the extent such
restrictions were put in place in connection with or in contemplation of such
acquisition), which restrictions are not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or
assets of the Person, so acquired;
(f) customary non-assignment provisions in leases and other agreements
entered into in the ordinary course of business;
(g) construction loans and purchase money obligations (including Capital
Lease Obligations) for property acquired in the ordinary course of business
that impose restrictions of the nature described in clause (iii) above on the
property so constructed or acquired;
(h) in the case of clause (iii) above, restrictions contained in security
agreements or mortgages securing Indebtedness of a Restricted Subsidiary to
the extent such restrictions restrict the transfer of the property subject to
such security agreements or mortgages;
(i) a Permitted Refinancing, provided that the restrictions contained in
the agreements governing such Permitted Refinancing are not materially more
restrictive, taken as a whole, than those contained in the agreements
governing the Indebtedness being refinanced (as conclusively evidenced by a
resolution of the Partnership Governance Committee);
(j) customary restrictions on a Finance Subsidiary imposed in such
Finance Subsidiary's organizational documents or by the terms of its Preferred
Stock;
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(k) any restriction with respect to shares of Capital Stock of a
Restricted Subsidiary imposed pursuant to an agreement entered into for the
sale or disposition of such shares of Capital Stock or any restriction with
respect to the assets of a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of such assets or all or
substantially all the Capital Stock of such Restricted Subsidiary pending the
closing of such sale or disposition;
(l) in the case of any Restricted Subsidiary that is a Joint Venture,
customary restrictions on such Restricted Subsidiary contained in its joint
venture agreement, which restrictions are consistent with the past practice of
the Company and its Restricted Subsidiaries (as conclusively evidenced by a
resolution of the Partnership Governance Committee); and
(m) the Credit Facility and related documentation as the same is in
effect on the Issue Date and as amended, modified, extended, renewed,
refunded, refinanced, restated or replaced from time to time; provided that
the Credit Facility and related documentation as so amended, modified,
extended, reviewed, refunded, refinanced, restated or replaced is not
materially more restrictive, taken as a whole, as to the matters enumerated
above than the Credit Facility and related documentation as in effect on the
Issue Date (as conclusively evidenced by a resolution of the Partnership
Governance Committee).
For purposes of determining compliance with this covenant, in the event that a
restriction meets the criteria of more than one of the categories of permitted
restrictions described in clauses (a) through (m) above, the Company shall, in
its sole discretion, classify such restriction in any matter that complies with
this covenant and such restriction will be treated as existing pursuant to the
clauses designated by the Company.
Section 4.10. Limitation on Sales of Assets. The Company will not, and will
not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless (i) the Company and/or the Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the fair
market value (as conclusively evidenced by a resolution of the Partnership
Governance Committee of the Company set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of; and (ii) at least 75% of the consideration therefor
received by the Company and/or such Restricted Subsidiary is in the form of cash
or Cash Equivalents, or a controlling interest or a joint venture interest (to
the extent otherwise permitted by the Indenture) in a business engaged in a
Permitted Business or long-term property or assets that are used or useful in a
Permitted Business; provided that the amount of (x) any liabilities (as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet) of the
Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) any securities, notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee to the extent they are promptly converted or monetized by the Company
or such Restricted Subsidiary into cash (to the extent of the cash received),
shall be deemed to be cash for purposes of this provision.
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Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the
Company may apply such Net Proceeds, at its option, (a) to permanently repay
Indebtedness outstanding on the Issue Date (other than Indebtedness subordinated
by its terms to the Notes) with a Stated Maturity prior to the maturity of the
Notes (and to correspondingly reduce commitments with respect thereto in the
case of revolving borrowings) of the Company or any Restricted Subsidiary that
is a Subsidiary Guarantor or Indebtedness (and to correspondingly reduce
commitments with respect thereto in the case of revolving borrowings) of any
Restricted Subsidiary that is not a Subsidiary Guarantor; or (b) to the
acquisition of Additional Assets (to the extent otherwise permitted by the
Indenture) or the making of a capital expenditure, in each case, in a Permitted
Business (or enter into a binding commitment for any such acquisition or
expenditure); provided that such binding commitment shall be treated as a
permitted application of Net Proceeds from the date of such commitment until and
only until the earlier of (x) the date on which such expenditure or acquisition
is consummated and (y) the 180th day following the expiration of the
aforementioned 360 day period. If the acquisition or expenditure contemplated by
such binding commitment is not consummated on or before such 180th day and the
Company shall not have applied such Net Proceeds pursuant to clause (a) above on
or before such 180th day, such commitment shall be deemed not to have been a
permitted application of Net Proceeds at any time.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce the revolving Indebtedness under the Credit Facility or
otherwise invest such Net Proceeds in any manner that is not prohibited by the
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds under the
Indenture exceeds $25 million, the Issuers will be required to make an offer to
all holders of Notes issued under the Indenture (an "Asset Sale Offer") to
purchase the maximum principal amount of Notes and, if the Issuers are required
to do so under the terms of any other Indebtedness ranking pari passu with such
Notes, such other Indebtedness on a pro rata basis with the Notes, that may be
purchased out of the Excess Proceeds, at a purchase price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon, to the date of purchase in accordance
with the procedures set out in the Indenture. To the extent that the aggregate
amount of Notes (and any other pari passu Indebtedness subject to such Asset
Sale Offer) tendered pursuant to such Asset Sale Offers is less than the Excess
Proceeds, the Issuers may, subject to the other terms of the Indenture, use any
remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount of Notes surrendered by holders thereof in connection with any
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of the offer to
purchase made under the Indenture, the amount of Excess Proceeds under the
Indenture shall be reset at zero.
Section 4.11. Limitation on Affiliate Transactions. The Company will not,
and will not permit any of its Restricted Subsidiaries to, sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate, any Partner or any Affiliate of any Partner (each of the foregoing,
an "Affiliate Transaction"), unless (1) the terms of such Affiliate Transaction
are no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than those that could be obtained in
65
a comparable arm's-length transaction with a Person that is not an Affiliate of
the Company and (2) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction involving aggregate consideration in excess of $10
million, a resolution of the Partnership Governance Committee set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (1) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Partnership Governance Committee
and (b) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $25 million, an opinion as to the fairness to the
Company or such Restricted Subsidiary of such Affiliate Transaction from a
financial point of view issued by an investment banking firm of national
standing; provided that:
(i) transactions or payments pursuant to any employment arrangements
or employee, officer or director benefit plans or arrangements entered into
by the Company or any of its Restricted Subsidiaries in the ordinary course
of business;
(ii) transactions between or among the Company and/or its Restricted
Subsidiaries;
(iii) customary loans, advances, fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or
consultants of the Company or any of its Restricted Subsidiaries;
(iv) transactions in the ordinary course of business between the
Company or any of its Restricted Subsidiaries and any Partner or Affiliate
of any Partner, provided that, with respect to any such Affiliate
Transaction involving aggregate consideration in excess of $25 million,
such Affiliate Transaction complies with clause (1) above and has been
approved by the Partnership Governance Committee, including a majority of
the disinterested members (if any);
(v) sales (including a sale in exchange for a promissory Note of or
equity interest in such Accounts Receivable Subsidiary) of accounts
receivable, related assets and the provision of billing, collection and
other services in connection therewith, in each case, to an Accounts
Receivable Subsidiary in connection with any Receivables Facility;
(vi) transactions pursuant to any contract or agreement in effect on
the Issue Date, as the same may be amended, modified or replaced from time
to time, so long as any such contract or agreement as so amended, modified
or replaced is, taken as a whole, no less favorable to the Company and its
Restricted Subsidiaries in any material respect than the contract or
agreement as in effect on the Issue Date (as conclusively evidenced by a
resolution of the Partnership Governance Committee);
(vii) any transaction or series of transactions between the Company or
any Restricted Subsidiary and any of their Joint Ventures, provided that
(i) such transaction or series of transactions is in the ordinary course of
business between the Company or such Restricted Subsidiary and such Joint
Venture, and (ii) with respect to any such Affiliate Transaction involving
aggregate consideration in excess of $25 million, such Affiliate
Transaction complies with clause (1) above and such Affiliate Transaction
has been
66
approved by the Partnership Governance Committee, including a majority of
the disinterested members (if any); and
(viii) any Restricted Payment of the type described in clause (1) or
(2) of the first paragraph of Section 4.07 and any Permitted Dividend;
in each case, shall not be deemed to be Affiliate Transactions and therefore
(except as otherwise specified in such clauses) not subject to the requirements
of clauses (1) and (2) of the initial paragraph above.
Section 4.12. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien, except Permitted Liens, on any asset
now owned or hereafter acquired, or any income or profits therefrom, unless all
payments due under the Indenture and the Notes are secured on an equal and
ratable basis with the obligations so secured (or, if such obligations are
subordinated by their terms to the Notes or the Subsidiary Guarantees, prior to
the obligations so secured) until such time as such obligations are no longer
secured by a Lien.
Section 4.13. Repurchase of Notes upon a Change in Control. (a) Upon the
occurrence of a Change of Control, each Holder will have the right to require
the Issuers to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Notes pursuant to the offer described below
(the "Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment") on a date that is not more than 90 days after the occurrence
of such Change of Control (the "Change of Control Payment Date"). Within 30 days
following any Change of Control, the Issuers will mail, or at the Issuers'
request the Trustee will mail, a notice to each Holder offering to repurchase
the Notes held by such Holder pursuant to the procedures specified in such
notice.
(b) The Issuers will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control.
(c) On the Change of Control Payment Date, the Issuers will, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered and not withdrawn pursuant to the Change of Control Offer, (2) deposit
with the applicable Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered, and (3) deliver
or cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Issuers.
The Paying Agent will promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a Note equal in principal amount to any
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unpurchased portion of the Notes surrendered, if any; provided that each such
Note will be in a principal amount of $1,000 or an integral multiple thereof.
(d) The Issuers will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer at
the same or a higher purchase price, at the same times and otherwise in
substantial compliance with the requirements applicable to a Change of Control
Offer otherwise required to be made by the Issuers and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
Section 4.14. Limitation on Sale and Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any Sale and Lease-Back Transaction; provided that the Company or any Restricted
Subsidiary may enter into a Sale and Lease-Back Transaction if:
(a) the Company or such Restricted Subsidiary, as the case may be,
could have:
(i) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such Sale and Lease-Back Transaction
pursuant to Section 4.06 (whether or not such covenant has ceased to
be otherwise in effect pursuant to Section 4.18), and
(ii) incurred a Lien to secure such Indebtedness pursuant to
Section 4.12 without securing the Notes; and
(b) the gross cash proceeds of such Sale and Lease-Back Transaction
are at least equal to the fair market value (as conclusively determined by
the Partnership Governance Committee) of the property that is the subject
of such Sale and Lease-Back Transaction.
Section 4.15. Limitation on Line of Business. The Company will not, and
will not permit any of its Restricted Subsidiaries to, engage in any business
other than Permitted Businesses, except to such extent as would not be material
to the Company and its Subsidiaries taken as a whole.
Section 4.16. Limitation on Accounts Receivable Facilities. The Company
may, and any of its Restricted Subsidiaries may, sell (including a sale in
exchange for a promissory note of or Equity Interest in such Accounts Receivable
Subsidiary) at any time and from time to time, accounts receivable and related
assets to any Accounts Receivable Subsidiary; provided that the aggregate
consideration received in each such sale is at least equal to the aggregate fair
market value of the receivables sold.
Section 4.17. Limitation on Business Activities by Equistar Funding.
Equistar Funding may not hold any assets, become liable for any obligations or
engage in any business activities; provided that it may be a co-obligor with
respect to the Notes or any other Indebtedness issued by the Company, and may
engage in any activities directly related thereto or necessary in connection
therewith. Equistar Funding shall be a Wholly Owned Restricted Subsidiary of the
Company at all times.
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Section 4.18. Limited Applicability of Covenants when Notes are rated
Investment-Grade. Notwithstanding the foregoing, the Company's and its
Restricted Subsidiaries' obligations to comply with the provisions of Sections
4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.15, 4.16 and 4.22 will terminate and cease
to have any further effect from and after the first date when the Notes are
rated Investment Grade.
Section 4.19. Existence. Subject to Articles 4 and 5 of this Indenture, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its existence and the existence of each of its Restricted
Subsidiaries in accordance with the respective organizational documents of each
such Subsidiary and the rights (whether pursuant to charter, partnership
certificate, agreement, statute or otherwise), material licenses and franchises
of the Company and each such Subsidiary; provided that the Company shall not be
required by this Section 4.19 to preserve any such right, license or franchise,
or the existence of any Restricted Subsidiary (other than Equistar Funding), if
the Company shall determine that the maintenance or preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole.
Section 4.20. Payment of Taxes and Other Claims. The Company will pay or
discharge and shall cause each of its Restricted Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (a) all material taxes, assessments and governmental charges levied
or imposed upon (i) the Company or any such Subsidiary, (ii) the income or
profits of any such Subsidiary which is a corporation or (iii) the property of
the Company or any such Subsidiary and (b) all material lawful claims for labor
materials and supplies that, if unpaid, might by law become a lien upon the
property of the Company or any such Subsidiary; provided 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 have been established in accordance with GAAP.
Section 4.21. Maintenance of Properties and Insurance. The Company will
cause all material assets necessary in the conduct of its business or the
business of any of its Restricted Subsidiaries, to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted) and
will cause to be made all necessary repairs, renewals and replacements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided that nothing in this Section 4.21 shall prevent the Company or any such
Subsidiary from discontinuing the use, operation or maintenance of any of such
assets or disposing or abandoning of any of them, if such discontinuance,
disposal or abandonment is, in the judgment of the Company, desirable in the
conduct of the business of the Company or such Subsidiary.
The Company will maintain, and will cause each of its Restricted Subsidiaries
to maintain (either in the Company's name or in such Subsidiary's own name)
insurance on all their respective properties consistent with the insurance
maintained on the Issue Date or otherwise in at least such amounts (with no
materially greater risk retention) and against at least such risks as are
usually maintained, retained or insured against in the same general area by
companies of established repute owning similar properties in such area and
engaged in the same or a similar
69
business, in either case, to the extent available to the Company and its
Restricted Subsidiaries on commercially reasonable terms.
Section 4.22. Limitation on Issuance of Guarantees by Restricted
Subsidiaries. (a) The Company will not permit any Restricted Subsidiary that is
not a Subsidiary Guarantor, directly or indirectly, to Guarantee or secure the
payment of any other Indebtedness ("Guaranteed Indebtedness") of the Company or
any of its Restricted Subsidiaries (except Indebtedness of such Restricted
Subsidiary or a Restricted Subsidiary of such Restricted Subsidiary) unless (i)
such Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture in the form of Exhibit B hereto providing for the Guarantee of the
payment of the Notes by such Restricted Subsidiary and shall deliver an Opinion
of Counsel to the Trustee pursuant to paragraph (b) below; provided that this
paragraph shall not be applicable to (x) any Guarantee of any Restricted
Subsidiary that existed at the time such Person became a Restricted Subsidiary
and was not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary, (y) Guarantees of Indebtedness of a Restricted
Subsidiary that is a Foreign Subsidiary by a Restricted Subsidiary that is a
Foreign Subsidiary or (z) Equistar Funding. If the Guaranteed Indebtedness is
subordinated in right of payment to the Notes or any Subsidiary Guarantee, as
applicable, pursuant to a written agreement to that effect, the Guarantee of
such Guaranteed Indebtedness must be subordinated in right of payment to the
Subsidiary Guarantee to at least the extent that the Guaranteed Indebtedness is
subordinated to the Notes.
(b) The Opinion of Counsel described above shall be to the effect that
such supplemental indenture has been duly authorized, executed and delivered by
such Subsidiary and constitutes a valid and binding obligation of such
Subsidiary, enforceable against such Subsidiary in accordance with its terms
(subject to customary exceptions).
Section 4.23. Payments for Consents. Neither the Company nor any of its
Subsidiaries or Affiliates will, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
of any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the
Notes that consent, waive or agree to amend such term or provision in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
ARTICLE 5
Consolidation, Merger or Sale of Assets
Section 5.01. Consolidation, Merger or Sale of Assets by the Company. (a)
The Company may not consolidate with or merge into, or sell, assign, transfer,
convey or otherwise dispose of all or substantially all of its assets in one or
more related transactions to, any Person, or permit any Person to merge with or
into it unless each of the following conditions is satisfied:
(i) Immediately after giving effect to such transaction and any
related incurrence of Indebtedness or issuance of Disqualified Stock, no
Default or Event of Default shall have occurred and be continuing;
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(ii) Either (A) the Company shall be the continuing Person, or (ii)
the entity formed by such consolidation or into which the Company is
merged, or the Person to which such properties and assets will have been
conveyed or transferred, assumes the Company's obligation as to the due and
punctual payment of the principal of (and premium, if any, on) and
interest, if any, on the Notes and the performance and observance of every
covenant to be performed by the Company under the Indenture, the Notes and
the Registration Rights Agreement; any such entity will be organized under
the laws of the United States, one of the States thereof or the District of
Columbia; and
(iii) the Company or the entity or the Person formed by or surviving
any such consolidation or merger (if other than the Company), or to which
such sale, assignment, transfer, conveyance or other disposition shall have
been made,
(A) except in the case of a merger or consolidation with, or a
sale, assignment, transfer, conveyance or other disposition to, a
Permitted Holder, will have a Consolidated Net Worth immediately after
the transaction equal to or greater than the Consolidated Net Worth of
the Company immediately preceding the transaction; and
(B) except with respect to a consolidation or merger of the
Company with or into a Person that has no outstanding Indebtedness,
will, at the time of such transaction and after giving pro forma
effect thereto as if such transaction had occurred at the beginning of
the applicable four-quarter period, (i) have a Fixed Charge Coverage
Ratio of at least 2.0 to 1 or (ii) have a greater Fixed Charge
Coverage Ratio than the Company's Fixed Charge Coverage Ratio
immediately before the transaction; and
(iv) each of the Issuers has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel stating that the transaction complies
with these conditions.
(b) The foregoing shall not prohibit the merger or consolidation of a
Wholly Owned Restricted Subsidiary with the Company; provided that, in
connection with any such merger or consolidation, no consideration, other than
Qualified Equity Interests in the surviving Person or the Company, shall be
issued or distributed to the holders of Equity Interests of the Company.
(c) The Company will not lease all or substantially all its assets in one
or more related transactions to another Person.
Section 5.02. Successor Company Substituted. (a) Except as provided in
Section 5.02(b), upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all the assets
of the Company in accordance with Section 5.01 hereof, the successor Person
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, assignment, transfer, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor Person), and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
71
Person had been named as the Company herein, and the predecessor Company shall
be released from all its obligations hereunder and under the Notes.
(b) The sale, assignment, transfer, lease, conveyance or other disposition
by the Company of all or substantially all its property or assets taken as a
whole to one or more of the Company's Subsidiaries shall not relieve the Company
from its obligations under the Indenture and the Notes.
Section 5.03. Consolidation, Merger or Sale of Assets by Equistar Funding.
(a) Equistar Funding shall not consolidate with, merge into, sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of its
property and assets to, any Person, or permit any Person to merge with or into
Equistar Funding unless:
(i) concurrently therewith, a corporate Wholly Owned Restricted
Subsidiary of Equistar organized and validly existing under the laws of the
United States of America or any jurisdiction thereof (which may be the
continuing Person as a result of such transaction) shall expressly assume,
by a supplemental Indenture, executed and delivered to the Trustee and in
form and substance satisfactory to the Trustee, all of the obligations of
an Issuer under the Notes, the Indenture and the Registration Rights
Agreement; or
(ii) after giving effect thereto, at least one obligor on the Notes
shall be a corporation organized and validly existing under the laws of the
United States of America or any jurisdiction thereof; and
(iii) immediately after such transaction, no Default or Event of
Default will have occurred and be continuing.
(b) Upon any assumption of the obligations of Equistar Funding by any
successors as set forth above, the successor shall succeed to, and be
substituted for (so that from and after the date of such assumption, the
provisions of this Indenture referring to "Equistar Funding" shall refer instead
to the successor corporation), and may exercise every right and power of,
Equistar Funding under this Indenture with the same effect as if such successor
Person had been named as Equistar Funding herein, and the predecessor Equistar
Funding shall be released from all its obligations hereunder and under the
Notes. If, as a result of any such transaction, the Company becomes the
successor to Equistar Funding pursuant to Section 5.03(a)(ii), Section 4.17
shall cease to be in effect with respect to the Company, but Section 5.03(a)
shall continue to remain in effect with respect to the Company.
Section 5.04. Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 7.01 and 7.03, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, conveyance, sale,
transfer, lease, exchange or other disposition referred to in Section 5.01 or
5.03 complies with the applicable provisions of this Indenture.
ARTICLE 6
Remedies
Section 6.01. Events of Default. Each of the following constitutes an
"Event of Default":
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(1) default for 30 days in the payment when due of interest
(including the issuance of Additional Dividend Notes) or Liquidated Damages
on the Notes;
(2) default in payment when due of the principal of or premium, if
any, on the Notes at maturity or otherwise;
(3) failure by the Issuers to comply with Section 4.10, 4.13 or
Article 5;
(4) failure by the Issuers for 60 days after notice by the Trustee or
Holders of at least 25% in principal amount of the then outstanding Notes
issued thereunder to comply with any of the other agreements in the
Indenture or the Notes;
(5) any default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Significant Subsidiaries (or any Indebtedness for money borrowed Guaranteed
by the Company or any of its Significant Subsidiaries if the Company or a
Significant Subsidiary does not perform its payment obligations under such
Guarantee within any grace period provided for in the documentation
governing such Guarantee), whether such Indebtedness or Guarantee exists on
the Issue Date or is thereafter created, which default (a) constitutes a
Payment Default or (b) results in the acceleration of such Indebtedness
prior to its Stated Maturity, and in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or that has been
so accelerated, aggregates $50 million or more;
(6) failure by the Company or any of its Significant Subsidiaries to
pay a final judgment or final judgments aggregating in excess of $50
million, which judgment or judgments are not paid, discharged or stayed,
for a period of 60 days;
(7) a court having jurisdiction in the premises enters a decree or
order for relief (i) in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (ii)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all the property and assets of the
Company or any Significant Subsidiary or (iii) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary
and, in each case, such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days;
(8) the Company or any Significant Subsidiary (i) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (ii) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all the property and
assets of the Company or any Significant Subsidiary or (iii) effects any
general assignment for the benefit of creditors; and
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(9) except as permitted by the Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Subsidiary
Guarantor, or any Person acting on behalf of any Subsidiary Guarantor,
shall deny or disaffirm its obligations under the Subsidiary Guarantees.
Section 6.02. Acceleration. If an Event of Default (other than an Event of
Default specified in clause (7) or (8) of Section 6.01 that occurs with respect
----
to any Issuer or Subsidiary Guarantor) occurs and is continuing under this
Indenture, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then Outstanding, by written notice to the Issuers (and to
the Trustee if such notice is given by the Holders) may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued but unpaid interest and Liquidated Damages, if any, on all the Notes to
be due and payable. Upon a declaration of acceleration, such principal, premium,
if any, and accrued interest and Liquidated Damages, if any, shall be
immediately due and payable. If an Event of Default specified in clause (7) or
(8) of Section 6.01 occurs with respect to any Issuer or any Subsidiary
Guarantor, the principal of, premium, if any, accrued interest and Liquidated
Damages, if any, on the Notes then Outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
Section 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal or interest and Liquidated Damages on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder 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 6.04. Waiver of Past Defaults. The Holders of at least a majority
in principal amount of the Outstanding Notes, by written notice to the Issuers
and to the Trustee, may waive all past defaults and rescind and annul a
declaration of acceleration and its consequences under the Notes, if (i) all
existing Events of Default, other than the nonpayment of the principal of and
premium, if any, and interest and Liquidated Damages, if any, on such Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05. Control by Majority. The Holders of at least a majority in
aggregate principal amount of the Outstanding Notes 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 the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
that may involve the Trustee in personal liability, or that the Trustee
74
determines in good faith may be unduly prejudicial to the rights of Holders not
joining in the giving of such direction and may take any other action it deems
proper that is not inconsistent with any such direction received from the
Holders.
Section 6.06. Limitation on Suits. A Holder may not pursue any remedy with
respect to this Indenture or the Notes unless:
(a) the Holder gives the Trustee written notice of a continuing Event
of Default;
(b) the Holders of at least 25% in aggregate principal amount of
Outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer the Trustee security or indemnity
satisfactory to it against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt thereof and the offer of security or indemnity; and
(e) during such 60 day period, the Holders of at least a majority in
aggregate principal amount of the Outstanding Notes do not give the Trustee
a direction inconsistent with the request.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal, premium, if any, interest and Liquidated Damages, if any, on the
Note, on or after the respective due dates expressed in the Note, 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.
Section 6.08. Collection Suit by Trustee. If an Event of Default specified
in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is
----
authorized to recover judgment in its own name and as trustee of an express
trust against the Issuers or any other obligor for the whole amount of
principal, premium, if any, and interest and Liquidated Damages, if any,
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and Liquidated Damages, if any, and such further amount
as shall be sufficient to cover amounts due the Trustee under Section 7.08,
----
including the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09. Trustee May File Proofs of Claim. The Trustee is authorized
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Issuers (or any other obligor upon the Notes), its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
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Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.08. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.08 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 may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. 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, its agents and attorneys for amounts due under
Section 7.08, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts due and unpaid on the Notes for principal,
premium, if any, interest and Liquidated Damages, if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any, interest and Liquidated Damages,
respectively; and
Third: to the Issuers or to such party as a court of competent jurisdiction
shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10 upon five Business Days prior notice to
the Issuers.
Section 6.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a 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 and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.06, or a suit by
Holders of more than 10% in aggregate principal amount of the then Outstanding
Notes.
Section 6.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture or any Note and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case each Issuer, any other obligor upon the Notes, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
76
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 6.13. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.14. Waiver of Stay, Extension or Usury Laws. Each Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other similar
law wherever enacted, now or at any time hereafter in force, that would prohibit
or forgive such Issuer from paying all or any portion of the principal of (or
premium, if any), interest or Liquidated Damages, if any, on the Notes
contemplated herein or in the Notes or that may affect the covenants or the
performance of this Indenture; and such Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenant that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7
The Trustee
Section 7.01. Certain Duties and Responsibilities. (a) 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 against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(b) In case 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 use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
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(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that (i) this
paragraph does not limit the effect of Section 7.01(a); (ii) the Trustee
-------
shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and (iii) the Trustee shall not be liable
with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.06.
----
(d) The Trustee may refuse to perform any duty or exercise any
right or power or expend or risk its own funds or otherwise incur any
financial liability unless it receives indemnity satisfactory to it against
any loss, liability or expense.
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of Sections 7.01 and 7.03.
Section 7.02. Notice of Defaults. (a) Within 90 days after the occurrence
of any Default, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Register, notice of such Default hereunder
actually known to the Trustee unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium (if any) or interest and Liquidated Damages, if
any, on, any Note, the Trustee may withhold such notice if and so long as the
board of directors, the executive committee or a trust committee of Responsible
Officers of the Trustee determines that the withholding of such notice is not
opposed to the interests of the Holders.
(b) The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any event or of any Default (except default in the
payment of monies to the Trustee which are required to be paid to the Trustee on
or before a specified date or within a specified time after receipt by the
Trustee of a notice or a certificate which was in fact received), unless the
Trustee shall receive from either Issuer or a Holder a notice stating that the
same has occurred and is continuing, and specifying the same, and in the absence
of such notice the Trustee may conclusively assume that the same does not exist,
except as aforesaid.
Section 7.03. Certain Rights of Trustees. Subject to the provisions of
Section 7.01:
----
(i) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) any request or direction of either Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or an Issuer Order
thereof, and any resolution of any Person's board of directors (or any
committee thereof) shall be sufficiently evidenced if certified by an
Officer of such Person as having been duly adopted and being in full force
and effect on the date of such certificate;
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(iii) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon the Officers' Certificates of the Issuers;
(iv) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(v) in case an Event of Default occurs and is continuing, the
Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to it against any
loss, liability or expense which might be incurred by it in compliance with
such request or direction;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of each
Issuer, personally or by agent or attorney at the sole cost of such Issuer
and shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(viii) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and to each agent, custodian and other
Person employed to act hereunder; and
(ix) the Trustee may request that each Issuer deliver an
Officers' Certificate setting forth the names of the individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate may be signed by
any person authorized to sign an Officers' Certificate, including any
person as so authorized in any such certificate previously delivered and
not superseded.
Section 7.04. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuers, and neither the
Trustee nor any Authenticating Agent assumes any
79
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Notes, except that the
Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Notes and perform its obligations hereunder and that
the statements made by it in a Statement of Eligibility on Form T-1 supplied to
the Issuers in connection with the registration of any Notes issued hereunder
will be true and accurate subject to the qualifications set forth therein.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Issuers of the Notes or the proceeds thereof.
Section 7.05. Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes, it shall not be
responsible for any statement in the offering memorandum for the Notes or in the
Indenture or the Notes (other than its certificate of authentication), the acts
of a prior Trustee hereunder, or the determination as to which beneficial owners
are entitled to receive any notices hereunder.
Section 7.06. May Hold Notes. The Trustee, any Authenticating Agent, any
Paying Agent, any Registrar or any other agent of the Issuers, in its individual
or any other capacity, may become the owner or pledgee of Notes and, subject to
Section 7.09 and Section 7.14, may otherwise deal with the Issuers and their
Affiliates with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Registrar or such other agent.
Section 7.07. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Issuers.
Section 7.08. Compensation and Reimbursement. Each Issuer, jointly and
severally, agrees:
(a) to pay to the Trustee from time to time such compensation as
the Issuers and the Trustee shall from time to time agree in writing for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, damage, claims, liability or
expense (including taxes, other than taxes based on the income of the
Trustee) incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust,
including the reasonable costs and expenses of defending itself against any
claim
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(whether asserted by either Issuer, a Holder or any other person) or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The Issuers' payment obligations pursuant to this Section 7.08 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or 6.01(8), the
---- ----
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall have a lien prior to the Notes as to all property and
funds held by it hereunder for any amount owing it or any predecessor Trustee
pursuant to this Section 7.08, except with respect to funds held in trust for
the benefit of the Holders of particular Notes.
Section 7.09. Conflicting Interests. If the Trustee has or shall acquire a
conflicting interest within the meaning of the TIA, within 90 days the Trustee
shall either eliminate such conflicting interest, apply to the SEC for
permission to continue as Trustee with such conflicting interest, or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
TIA and this Indenture. To the extent permitted by such Act, the Trustee shall
not be deemed to have a conflicting interest by virtue of being a trustee under
this Indenture with respect to Original Notes and Additional Notes, or a trustee
under any other indenture between any Issuer and the Trustee.
Section 7.10. Corporate Trustee Required; Eligibility. (a) There shall at
all times be one (and only one) Trustee hereunder. The Trustee shall be a Person
that is eligible pursuant to the TIA to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 7.10
----
and to the extent permitted by the TIA, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.10, it shall resign immediately in the manner and with the effect hereinafter
----
specified in this Article.
Section 7.11. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 7.12.
----
(a) The Trustee may resign at any time by giving written notice
thereof to the Issuers. If the instrument of acceptance by a successor
Trustee required by Section 7.12 shall not have been delivered to the
----
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(b) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Notes, delivered to
the Trustee and to the Issuers. If the instrument of acceptance by a
successor Trustee required by Section 7.12 shall not have been delivered to
----
the Trustee within 30 days after the giving of such notice
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of removal, the Trustee being removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time:
(i) the Trustee shall fail to comply with Section 7.09 after
written request therefor by the Issuers or by any Holder who has been a
bona fide Holder for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 7.10
and shall fail to resign after written request therefor by the Issuers or
by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Issuers may remove the Trustee, or (B) subject
to Section 6.11, any Holder who has been a bona fide Holder for at least six
----
months may, on behalf of itself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee or Trustees.
(d) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Issuers
shall promptly appoint a successor Trustee and shall comply with the applicable
requirements of Section 7.12. If, within one year after such resignation,
----
removal or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Notes delivered to the Issuers and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 7.12,
----
become the successor Trustee and to that extent supersede the successor Trustee
appointed by the Issuers. If no successor Trustee shall have been so appointed
by the Issuers or the Holders and accepted appointment in the manner required by
Section 7.12, then, subject to Section 6.11, any Holder who has been a bona fide
---- ----
Holder for at least six months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) The Issuers shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.10. Each notice shall include the name of the
----
successor Trustee and the address of its Corporate Trust Office.
Section 7.12. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Issuers and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Issuers or the successor Trustee, such retiring
Trustee shall, upon payment of its charges,
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execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Issuers shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to above.
(c) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article 7.
Section 7.13. Merger, Conversion, Consolidation or Succession to Business.
(a) Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article 7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
Section 7.14. Preferential Collection of Claims Against the Issuers. (a)
If and when the Trustee shall be or become a creditor of either Issuer (or any
other obligor upon the Notes), the Trustee shall be subject to the provisions of
the TIA regarding the collection of claims against such Issuer (or any such
other obligor).
Section 7.15. Appointment of Authenticating Agent. The Trustee may appoint
an Authenticating Agent acceptable to the Issuers to authenticate the Notes. Any
such appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer, a copy of which instrument shall be promptly furnished to
the Issuers. Unless limited by the terms of such appointment, an Authenticating
Agent may authenticate Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication (or execution of a certificate of
authentication) by the Trustee includes authentication (or execution of a
certificate of authentication) by such Authenticating Agent. An Authenticating
Agent has the same rights as any Registrar, Paying Agent or agent for service of
notices and demands.
ARTICLE 8
Holders' List and Reports by Trustee and the Issuers
Section 8.01. The Issuers to Furnish Trustee Names and Addresses of
Holders; Stock Exchange Listing. (a) The Issuers will furnish or cause to be
furnished to the Trustee
(i) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders as of such Regular Record Date, and
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(ii) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Issuers of any such request, a list
of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Registrar, no
such list need be furnished pursuant to this Section 8.01.
(b) The Issuers will promptly notify the Trustee when any Notes are listed
on any stock exchange and of any delisting thereof.
Section 8.02. Preservation of Information; Communications to Holders. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list, if any,
furnished to the Trustee as provided in Section 8.01 and the names and addresses
----
of Holders received by the Trustee in its capacity as Registrar; provided,
however, that if and so long as the Trustee shall be the Registrar, the Register
shall satisfy the requirements relating to such list. None of the Issuers, the
Trustee or any other Person shall be under any responsibility with regard to the
accuracy of such list. The Trustee may destroy any list furnished to it as
provided in Section 8.01 upon receipt of a new list so furnished.
----
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Notes, and the corresponding
rights and privileges of the Trustee, shall be as provided by the TIA.
(c) Every Holder, by receiving and holding the same, agrees with the
Issuers and the Trustee that neither the Issuers nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the TIA.
Section 8.03. Reports by Trustee. The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the TIA at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the TIA, the Trustee shall, within 60
days after each May 15, following the date of this Indenture deliver to Holders
a brief report, dated as of such May 15, which complies with the provisions of
such Section 313(a). A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange, if
any, upon which any Notes are listed, with the SEC and with the Issuers.
ARTICLE 9
Amendment, Supplement or Waiver
Section 9.01. Without Consent of the Holders. (a) Without the consent of
any Holder, the Issuers and the Trustee may enter into one or more indentures
supplemental hereto, for any of the following purposes:
(i) to cure any ambiguity, omission, defect or inconsistency in
the Indenture,
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(ii) to provide for the assumption by a successor of an Issuer of
the obligations of such Issuer under this Indenture,
(iii) to provide for uncertificated Notes in addition to or in place
of certificated Notes; provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of
the Code,
(iv) to add Subsidiary Guarantees with respect to the Notes, to
grant a Lien under this Indenture to the Trustee as security for the Notes,
to confirm and evidence the release, termination or discharge of any
Subsidiary Guarantee or any such Lien with respect to or securing the Notes
when such release, termination or discharge is permitted under this
Indenture,
(v) to add to the covenants of the Issuers for the benefit of the
Holders or to surrender any right or power conferred upon the Issuers,
(vi) to provide for or confirm the issuance of Additional Notes or
Additional Dividend Notes in accordance with the terms of the Indenture,
(vii) to make any change that does not adversely affect the rights of
any Holder under the Notes or this Indenture, or
(viii) to comply with any requirement of the SEC in connection with
the qualification of this Indenture under the TIA or otherwise.
Section 9.02. With Consent of Holders. (a) Subject to Section 6.07, the
----
Issuers and the Trustee may amend or supplement this Indenture or the Notes with
the written consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes, and any past Default or compliance
with any provisions may also be waived with the written consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Notes.
(b) Notwithstanding the provisions of this Section 9.02, without the
----
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not (with respect to any Notes held by a non-
----
consenting Holder):
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note (including any modification of Section
4.08 with respect to Additional Dividend Notes),
(ii) reduce the principal amount of or premium, if any, or
interest or Liquidated Damages, if any, on any Note (including any
modification of Section 4.08 with respect to Additional Dividend Notes),
(iii) reduce any amount payable on redemption of the Notes or upon
the occurrence of an Event of Default or reduce the Change of Control
Payment or the amount to be paid in connection with an Asset Sale Offer,
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(iv) change the place or currency of payment of principal of or
premium, if any, or interest or Liquidated Damages, if any, on any Note,
(v) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of a
redemption, on or after the Redemption Date) of any Note,
(vi) reduce the above-stated percentage of outstanding Notes the
consent of whose Holders is necessary to modify or amend the Indenture,
(vii) waive a default in the payment of principal of or premium,
if any, or interest or Liquidated Damages, if any, on the Notes (except as
set forth in Section 6.04),
(viii) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver of
compliance with provisions of the Indenture or for waiver of Defaults,
(ix) modify or change any provision of the Indenture affecting
the ranking of the Notes or the Subsidiary Guarantees in a manner adverse
to the Holders of the Notes, or
(x) release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guarantee or the Indenture other than in accordance
with the provisions of the Indenture, or amend or modify any provision
relating to such release.
(c) It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
----
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
(d) After an amendment, supplement or waiver under this Section 9.02
----
becomes effective, the Issuers shall mail to the Holders of each Note affected
thereby, with a copy to the Trustee, a notice briefly describing the amendment,
supplement or waiver. Any failure of the Issuers to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any supplemental indenture or the effectiveness of any such amendment,
supplement or waiver.
Section 9.03. Execution of Amendments, Supplements or Waivers. The Trustee
shall sign any amendment, supplement or waiver authorized pursuant to this
Article 9 if the amendment, supplement or waiver 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 or refusing to sign such
amendment, supplement or waiver, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel to the effect that the execution of such amendment,
supplement or waiver has been duly authorized, executed and delivered by each
Issuer and that such amendment, supplement or waiver is a valid and binding
agreement of each Issuer, enforceable against it in accordance with its terms
(subject to customary exceptions).
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Section 9.04. Revocation and Effect of Consents. (a) Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of that Note or any
Note that evidences all or any part of the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. Subject to the
following paragraph of this Section 9.04, any such Holder or subsequent Holder
----
may revoke the consent as to such Holder's Note by notice to the Trustee or the
Issuers received by the Trustee or the Issuers, as the case may be, before the
date on which the Trustee receives an Officers' Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. The
Issuers may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver as set forth in Section 1.08.
(b) After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (i)
through (x) of Section 9.02(b). In that case, the amendment, supplement or
----
waiver shall bind each Holder of a Note who has consented to it and every
subsequent Holder of such Note or any Note that evidences all or any part of the
same debt as the consenting Holder's Note.
Section 9.05. Conformity with TIA. Every amendment or supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.
Section 9.06. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee shall (if required
by the Issuers and in accordance with the specific direction of the Issuers)
request the Holder to deliver its Note to the Trustee. The Trustee shall (if
required by the Issuers and in accordance with the specific written direction of
the Issuers) place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Issuers or the Trustee so
determine, the Issuers in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
ARTICLE 10
Redemption of Notes
Section 10.01. Right of Redemption. The Notes will be redeemable, in whole,
at any time, or in part, from time to time, at the option of the Issuers upon
not less than 30 nor more than 60 days' notice at a redemption price equal to
the sum of:
(1) 100% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the redemption
date; plus
(2) the Make-Whole Amount, if any.
Section 10.02. Applicability of Article. Redemption or purchase of Notes as
permitted by Section 10.01 shall be made in accordance with this Article 10.
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Section 10.03. Election to Redeem; Notice to Trustee. In case of any
redemption at the election of the Issuers of the Notes, the Issuers shall, at
least 45 days prior to the Redemption Date initially fixed by the Issuers
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Notes to be
redeemed.
Section 10.04. Selection by Trustee of Notes to Be Redeemed. In the case of
any partial redemption, selection of the Notes for redemption will be made not
more than 60 days prior to the Redemption Date by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the applicable Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part.
(a) The Trustee shall promptly notify the Issuers in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the portion of the principal amount thereof to be
redeemed. On and after the Redemption Date, interest and Liquidated Damages
will cease to accrue on Notes or portions thereof called for redemption.
(b) For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Notes
shall relate, in the case of any Note redeemed or to be redeemed only in
part, to the portion of the principal of such Note that has been or is to
be redeemed.
Section 10.05. Notice of Redemption. (a) Notice of redemption or purchase
as provided in Section 10.01 shall be deemed to have been given upon the mailing
by first class mail, postage prepaid, of such notice to each Holder of Notes to
be redeemed, at its registered address as recorded in the Register, not later
than 30 nor more than 60 days prior to the Redemption Date.
Any such notice shall state:
(i) the expected Redemption Date,
(ii) the Redemption Price,
(iii) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the respective principal
amounts) of the particular Notes to be redeemed,
(iv) that on the Redemption Date the Redemption Price will become
due and payable upon each such Note to be redeemed, and that, unless the
Issuers default in making such redemption payment or any Paying Agent is
prohibited from making such payment pursuant to the terms of this
Indenture, interest and Liquidated Damages thereon shall cease to accrue
from and after said date,
(v) the place or places where such Notes are to be surrendered
for payment of the Redemption Price and the name and address of the Paying
Agent or Paying Agents,
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(vi) the CUSIP and other security identification numbers, if any,
subject to Section 3.12 hereof, and
(vii) the section of this Indenture pursuant to which the Notes
are to be redeemed.
Notices of redemption may not be conditional.
(b) Notice of such redemption or purchase of Notes to be so
redeemed or purchased at the election of the Issuers shall be given by the
Issuers or, at the written request of the Issuers delivered at least five
Business Days prior to the date proposed for the mailing of such notice, by
the Trustee in the name and at the expense of the Issuers; provided that
such notice to the Trustee may be revoked by the Issuers by written notice
delivered to the Trustee prior to the date proposed for the mailing of the
notice of such redemption to the Holders.
(c) The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder
receives such notice. In any case, failure to give such notice by mail or
any defect in the notice to the Holder of any Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Note.
Section 10.06. Deposit of Redemption Price. (a) On or prior to 10:00 a.m.,
New York City time on any Redemption Date, the Issuers shall deposit with the
Trustee or with a Paying Agent (or, if an Issuer is acting as the Paying Agent,
such Issuer shall segregate and hold in trust as provided in Section 4.03) an
amount of money sufficient to pay the Redemption Price of, and any accrued and
unpaid interest and Liquidated Damages, if any, on, all the Notes or portions
thereof which are to be redeemed on that date.
Section 10.07. Notes Payable on Redemption Date. (a) Notice of redemption
having been given as provided in this Article 10, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
herein specified and from and after such date (unless the Issuers shall default
in the payment of the Redemption Price or any Paying Agent is prohibited from
paying the Redemption Price pursuant to the terms of this Indenture) such Notes
shall cease to bear interest and Liquidated Damages. Upon surrender of such
Notes for redemption in accordance with such notice, such Notes shall be paid by
the Issuers at the Redemption Price. Installments of interest and Liquidated
Damages, if any, whose Interest Payment Date is on or prior to the Redemption
Date shall be payable to the Holders of such Notes registered as such on the
relevant Regular Record Dates according to their terms and the provisions of
Section 3.07.
(b) On and after any Redemption Date, if money sufficient to pay the
Redemption Price of and any accrued and unpaid interest and Liquidated Damages
on Notes called for redemption shall have been made available in accordance with
Section 10.06, the Notes (or the portions thereof) called for redemption will
cease to accrue interest and Liquidated Damages and the only right of the
Holders of such Notes (or portions thereof) will be to receive payment of the
Redemption Price of, and subject to the last sentence of Section 10.07(a), any
accrued and
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unpaid interest and Liquidated Damages, if any, on such Notes (or portions
thereof) to the Redemption Date. If any Note (or portion thereof) called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal (and premium, if any) shall, until paid, bear interest and Liquidated
Damages from the Redemption Date at the rate borne by the Note (or portion
thereof).
Section 10.08. Notes Redeemed in Part. Any Note that is to be redeemed only
in part shall be surrendered at a Place of Payment (with, if the Issuers or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Issuers and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and each Issuer
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Note so
surrendered.
ARTICLE 11
Satisfaction and Discharge
Section 11.01. Satisfaction and Discharges of Indenture. (a) This Indenture
shall cease to be of further effect (except as to any surviving rights of
transfer or exchange of Notes herein provided for), and the Trustee, on demand
of and at the expense of the Issuers, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, and each Subsidiary
Guarantor's obligations under its Subsidiary Guarantee will terminate when
(i) either
(A) all Notes theretofore authenticated and delivered
(other than (x) Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 3.06, and (y)
Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by an Issuer and thereafter repaid to
such Issuer or discharged from such trust, as provided in Section
4.03) have been delivered to the Trustee canceled or for cancellation;
or
(B) all such Notes not theretofore delivered to the Trustee
canceled or for cancellation
(x) have become due and payable, or
(y) will become due and payable
(z) are to be called for redemption within one year
under arrangements reasonably satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Issuers,
(ii) the Issuers have irrevocably deposited or caused to be deposited with
the Trustee an amount in United States dollars, U.S. Government Obligations, or
a combination thereof, sufficient to pay and discharge the entire Indebtedness
on such Notes not theretofore delivered to
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the Trustee canceled or for cancellation, for principal (and premium, if any)
and interest and Liquidated Damages to the date of such deposit (in the case of
Notes that have become due and payable), or to the Stated Maturity or Redemption
Date, as the case may be;
(iii) the Issuers have paid or caused to be paid all other sums then
payable hereunder by the Issuers; and
(iv) each Issuer has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each to the effect that all conditions precedent provided
for in this Section 11.01 relating to the satisfaction and discharge of this
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Indenture have been complied with; provided that any such counsel may rely on
any Officers' Certificate as to matters of fact (including as to compliance with
the foregoing clauses (i), (ii) and (iii)).
(b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuers to the Trustee under Section 7.08 and, if money shall
----
have been deposited with the Trustee pursuant to clause (ii) of Section
11.01(a), the obligations of the Trustee under Section 11.02, shall survive.
----- -----
Section 11.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 4.03, all money deposited with the Trustee pursuant to
Section 11.01 shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including either Issuer acting as Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest and Liquidated Damages on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
ARTICLE 12
Defeasance and Covenant Defeasance
Section 12.01. Option of the Issuers to Effect Defeasance or Covenant
Defeasance. The Issuers may at their option by a Board Resolution adopted by
each Issuer, at any time, elect to have either Section 12.02 or Section 12.03
----- -----
applied to the Outstanding Notes upon compliance with the conditions set forth
below in this Article 12.
--
Section 12.02. Legal Defeasance and Discharge. Upon the exercise by the
Issuers under Section 12.01 of the option applicable to this Section 12.02, the
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Issuers shall be deemed to have been discharged from any and all Obligations
with respect to all Outstanding Notes (and any Subsidiary Guarantor will be
discharged from any and all Obligations in respect of its Subsidiary Guarantee)
on the date which is the 123rd day after the deposit referred to in Section
12.04(a); provided that all of the conditions set forth below are satisfied
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(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Issuers shall be deemed to have paid and discharged the entire
Indebtedness represented by the Outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 12.05 hereof and the
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other Sections of this Indenture referred to in clauses (i) and (ii) of this
Section 12.02, and to have satisfied all its other obligations under such Notes
-----
and this Indenture (and the Trustee, on demand of and at the expense of the
Issuers, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
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discharged hereunder: (i) the rights of Holders of Outstanding Notes to receive
solely from the trust fund described in Section 12.04 hereof, and as more fully
-----
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest and Liquidated Damages on such Notes when such payments are
due, (ii) the obligations of the Issuers with respect to such Notes under
Sections 1.06, 2.03, 3.03, 3.04, 3.05, 3.06, 3.13, 3.14, 4.01, 4.02, 4.03 and
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
12.05 hereof, (iii) the rights, powers, trusts, duties and immunities of the
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Trustee hereunder, including, without limitation, the Trustee's rights under
Section 7.08 hereof, and the obligations of the Issuers in connection therewith
and with this Article 12. Subject to compliance with this Article 12, the
-- --
Issuers may exercise their option under this Section 12.02 notwithstanding the
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prior exercise of their option under Section 12.03 hereof with respect to the
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Notes.
Section 12.03. Covenant Defeasance. Upon the exercise by the Issuers under
Section 12.01 of the option applicable to this Section 12.03, the Issuers shall
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be released from their obligations under the covenants contained in Sections
4.06 through Section 4.17, Section 4.22 and Section 5.01(a)(iii) hereof with
---- ---- ---- ----
respect to the Outstanding Notes, no Default under Section 6.01(5), (6) and (9)
----
shall thereafter constitute a Default or Event of Default and each Subsidiary
Guarantor's obligations under its Subsidiary Guarantee will terminate on the
date which is the 123rd day after the deposit referred to in Section 12.04(a);
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provided that all of the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not Outstanding
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed Outstanding for all other purposes hereunder.
For this purpose, such Covenant Defeasance means that, with respect to the
Outstanding Notes, the Issuers may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
6.01(3) or (4), but, except as specified above, the remainder of this Indenture
----
and such Notes shall be unaffected thereby.
Section 12.04. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to application of either Section 12.02 or Section 12.03
----- -----
to the Outstanding Notes:
(a) the Issuers have deposited with the Trustee, in trust, money
and/or U.S. Government Obligations that through the payment of interest and
principal in respect thereof in accordance with their terms will provide
money 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 (i) the principal of, premium, if
any, and accrued interest and Liquidated Damages, if any, on the Notes when
such payments are due in accordance with the terms of this Indenture and
the Notes or (ii) in the case of Legal Defeasance, accrued interest and
Liquidated Damages, if any, on the Notes through a scheduled redemption
date and the principal of, and premium on the Notes on such redemption
date; provided that, at the time of deposit, the Issuers irrevocably
authorize the Trustee to issue a timely notice of redemption and to take
such other steps reasonably requested by the Trustee to ensure that such
redemption will be effectuated;
92
(b) in the case of an election under Section 12.02, each Issuer
will have delivered to the Trustee (i) either (x) an Opinion of Counsel to
the effect that Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of the exercise by the Issuers of its
option under this Article 12 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, defeasance and discharge had not occurred,
which Opinion of Counsel must be based upon (and accompanied by a copy of)
a ruling of the Internal Revenue Service to the same effect unless there
has been a change in applicable Federal income tax law after the date of
this Indenture such that a ruling is no longer required or (y) a ruling
directed to the Trustee received from the Internal Revenue Service to the
same effect as the aforementioned Opinion of Counsel and (ii) an Opinion of
Counsel to the effect that, as a result of the creation of the defeasance
trust, such Issuer will not be required to register under the Investment
Company Act of 1940 and after the passage of 123 days following the
deposit, the trust fund 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 or any comparable provision of applicable law;
(c) in the case of an election under Section 12.03, the delivery
by each Issuer to the Trustee of (i) an Opinion of Counsel to the effect
that, among other things, the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposit and
defeasance and will be subject to Federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred and (ii) an Opinion of Counsel
to the effect that, as a result of the creation of the defeasance trust,
such Issuer will not be required to register under the Investment Company
Act of 1940 and after the passage of 123 days following the deposit, the
trust fund 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 or any comparable provision of applicable law;
(d) immediately after giving effect to such deposit on a pro
forma basis, no Event of Default, or event that after the giving of notice
or lapse of time or both would become an Event of Default, shall have
occurred and be continuing on the date of such deposit or during the period
ending on the 123rd day after the date of such deposit, and such deposit
shall not result in a breach or violation of, or constitute a default
under, any other agreement or instrument to which either Issuer is a party
or by which either Issuer is bound;
(e) if at such time the Notes are listed on a national
securities exchange, the Issuers have delivered to the Trustee an Opinion
of Counsel to the effect that the Notes will not be delisted as a result of
such deposit, defeasance and discharge;
(f) each Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Issuers pursuant to their
election under Sections 12.02 or 12.03 was not made by the Issuers with the
----- -----
intent of preferring the Holders over the other creditors of either Issuer
with the intent of defeating, hindering, delaying or defrauding creditors
of either Issuer or others; and
93
(g) each Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance under
Section 12.02 or the Covenant Defeasance under Section 12.03 (as the case
----- -----
may be) have been complied with as contemplated by this Section 12.04.
-----
Section 12.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 12.06, all money and
-----
U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 12.04 in respect of the Outstanding Notes shall be
-----
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including either Issuer acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal of, premium, if any, and interest and Liquidated
Damages, but such money need not be segregated from other funds except to the
extent required by law.
The Issuers shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 12.04 hereof or the principal and
-----
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding Notes.
Anything in this Article 12 to the contrary notwithstanding, the Trustee
--
shall deliver or pay to the Issuers from time to time upon the request of the
Issuers any money or U.S. Government Obligations held by it as provided in
Section 12.04 hereof which, in the opinion of a nationally recognized firm of
-----
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
12.04(a) hereof), are in excess of the amount thereof which would then be
-----
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 12.06. Repayment to Issuers. Any money deposited with the Trustee
or any Paying Agent, or then held by either Issuer, in trust for the payment of
the principal of, premium, if any, or interest and Liquidated Damages on any
Note and remaining unclaimed for two years after such principal, premium, if
any, or interest and Liquidated Damages has become due and payable shall be paid
to the Issuers on its written request or (if then held by either Issuer) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Issuers for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of either Issuer as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Issuers cause
to be published once, in The New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Issuers.
Section 12.07. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 12.02
-----
or 12.03, as the case may be, by reason of any order or judgment of any court or
-----
governmental authority enjoining,
94
restraining or otherwise prohibiting such application, then the obligations of
the Issuers under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 12.02 or 12.03 until such
----- -----
time as the Trustee or Paying Agent is permitted to apply all such amounts in
accordance with Section 12.02 or 12.03 hereof, as the case may be; provided,
----- -----
however, that, if either Issuer makes any payment of principal of, premium, if
any, or interest and Liquidated Damages on any Note following the reinstatement
of its Obligations, such Issuer shall be subrogated to the rights of the Holder
of such Note to receive such payment from the amounts held by the Trustee or
Paying Agent.
ARTICLE 13
Subsidiary Guarantees
Section 13.01. The Guarantees. Subject to the provisions of this Article
13, each Subsidiary Guarantor by execution of a supplemental indenture in the
form of Exhibit B hereto hereby irrevocably and unconditionally guarantees,
jointly and severally, the full and punctual payment (whether at Stated
Maturity, upon acceleration, optional redemption, upon repurchase following a
Change of Control Offer or an Asset Sale Offer or otherwise) of the principal of
and premium, if any, and interest and Liquidated Damages, if any, on, and all
other amounts payable under, each Note provided for under this Indenture, and
the full and punctual payment of all other amounts payable by the Issuers under
this Indenture. Upon failure by the Issuers to pay punctually any such amount,
each Subsidiary Guarantor shall forthwith on demand pay the amount not so paid
at the place and in the manner specified in this Indenture.
Section 13.02. Guarantee Unconditional. The obligations of the Subsidiary
Guarantors hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall, to the fullest extent permitted by law,
not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Issuers under this Indenture or
any Note, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Indenture or any Note;
(c) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of any Issuer or any
Subsidiary Guarantor hereunder;
(d) any change in the corporate existence, structure or
ownership of either Issuers, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting either Issuer or its assets or any
resulting release or discharge of any obligation of either Issuer contained
in this Indenture or any Note;
(e) the existence of any claim, set-off or other rights which
the Subsidiary Guarantors may have at any time against either Issuer, the
Trustee or any other Person, whether in connection with this Indenture or
any unrelated transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
95
(f) any invalidity or unenforceability relating to or against
either Issuer for any reason of this Indenture or any Note, or any
provision of applicable law or regulation purporting to prohibit the
payment by either Issuer of the principal of or interest and Liquidated
Damages on any Note or any other amount payable by either Issuer under this
Indenture; or
(g) any other act or omission to act or delay of any kind by
either Issuer, the Trustee or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of or defense to such Subsidiary
Guarantor's obligations hereunder.
Section 13.03. Discharge; Reinstatement. The Subsidiary Guarantors'
obligations hereunder shall remain in full force and effect until the principal
of, premium, if any, and interest and Liquidated Damages, if any, on the Notes
and all other amounts payable by the Issuers under this Indenture shall have
been paid in full. If at any time any payment of the principal of, premium, if
any, or interest and Liquidated Damages, if any, on any Note or any other amount
payable by the Issuers under this Indenture is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of either
Issuer or otherwise, the Subsidiary Guarantors' obligations hereunder with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time.
Section 13.04. Waiver by the Subsidiary Guarantors. The Subsidiary
Guarantors irrevocably waive acceptance hereof, presentment, demand, protest and
any notice not provided for herein, as well as any requirement that at any time
any action be taken by any Person against either Issuer or any other Person.
Section 13.05. Subrogation and Contribution. Upon making any payment with
respect to any obligation of the Issuers under this Article 13, the Subsidiary
--
Guarantor making such payment shall be subrogated to the rights of the payee
against the Issuers with respect to such obligation; provided that such
Subsidiary Guarantor shall not enforce either (i) any right to receive payment
by way of subrogation against the Issuers or against any direct or indirect
security for such obligation, or any other right to be reimbursed, indemnified
or exonerated by or for the account of the Issuers in respect thereof or (ii)
any right to receive payment, in the nature of contribution or for any other
reason, from any other Subsidiary Guarantor with respect to such payment, in
each case so long as any amount payable by the Issuers hereunder or under the
Notes remains unpaid.
Section 13.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by either Issuer under this Indenture or the Notes
is stayed upon the insolvency, bankruptcy or reorganization of such Issuer, all
such amounts otherwise subject to acceleration under the terms of this Indenture
shall nonetheless be payable by the other Issuer and the Subsidiary Guarantors
hereunder forthwith on demand by the Trustee or the Holders.
Section 13.07. Limits of Guarantees. Notwithstanding anything to the
contrary in this Article 13, each Subsidiary Guarantor, and by its acceptance of
--
Notes, each Holder, hereby confirms that it is the intention of all such parties
that the Subsidiary Guarantee of such Guarantor not constitute a fraudulent
conveyance under applicable fraudulent conveyance
96
provisions of the United States Bankruptcy Code or any comparable provision of
state law. To effectuate the foregoing intention, the Trustee, the Holders and
the Subsidiary Guarantors hereby irrevocably agree that the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee and this Article 13 shall be
--
limited to the maximum amount that would not render such Subsidiary Guarantor's
obligations subject to avoidance under applicable fraudulent conveyance
provisions of the United States Bankruptcy Code or any comparable provision of
state law.
Section 13.08. Execution and Delivery of Subsidiary Guarantee. To evidence
its Subsidiary Guarantee set forth in Section 13.01, each Subsidiary Guarantor
-----
hereby agrees that a supplemental indenture in the form of Exhibit B hereto
shall be executed on behalf of such Subsidiary Guarantor by one of its Officers.
The signature of an Officer of a Subsidiary Guarantor on such supplemental
indenture shall bind such Subsidiary Guarantor, notwithstanding that such
individual has ceased to hold such office prior to the authentication and
delivery of any Note or did not hold such office at the date of such Note.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.
Section 13.09. Release of Guarantee. The Subsidiary Guarantee of a
Subsidiary Guarantor will terminate upon
(1) a sale or other disposition (including by way of
consolidation or merger) of the Subsidiary Guarantor or the sale or
disposition of all or substantially all the assets of the Subsidiary
Guarantor (in each case other than to the Company or a Restricted
Subsidiary) otherwise permitted by the Indenture,
(2) the cessation of the circumstances requiring the Subsidiary
Guarantee,
(3) the designation in accordance with the Indenture of the
Subsidiary Guarantor as an Unrestricted Subsidiary, or
(4) defeasance or discharge of the Notes, as provided in Article
11 or Article 12.
-- --
Upon delivery by the Issuers to the Trustee of an Officers' Certificate and
an Opinion of Counsel to the foregoing effect, the Trustee will execute any
documents reasonably required in order to evidence the release of the Subsidiary
Guarantor from its obligations under its Subsidiary Guarantee.
Section 13.10. Consolidation, Merger or Sale of Assets by a Subsidiary
Guarantor. No Subsidiary Guarantor may
(i) consolidate with or merge with or into any Person, or
97
(ii) sell, convey, transfer or dispose of, all or substantially
all its assets as an entirety or substantially as an entirety, in one
transaction or a series of related transactions, to any Person, or
(iii) permit any Person to merge with or into the Subsidiary
Guarantor unless
(A) the other Person is the Company or any Wholly
Owned Restricted Subsidiary of the Company that is a
Subsidiary Guarantor or becomes a Subsidiary Guarantor
concurrently with the transaction; or
(B) (1) either (x) the Subsidiary Guarantor is the
continuing Person or (y) the resulting, surviving or
transferee Person expressly assumes by supplemental
indenture all of the obligations of the Subsidiary Guarantor
under its Subsidiary Guarantee; and
(2) immediately after giving effect to the
transaction, no Default has occurred and is continuing; or
(C) the transaction constitutes a sale or other
disposition (including by way of consolidation or merger) of
the Subsidiary Guarantor or the sale or disposition of all
or substantially all the assets of the Subsidiary Guarantor
(in each case other than to the Company or a Restricted
Subsidiary) otherwise permitted by the Indenture.
98
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
EQUISTAR CHEMICALS, LP
By: /s/ GERALD A. O'BRIEN
-----------------------------------------
Name: Gerald A. O'Brien
Title: Vice President, General Counsel
and Secretary
EQUISTAR FUNDING CORPORATION
By: /s/ GERALD A. O'BRIEN
-----------------------------------------
Name: Gerald A. O'Brien
Title: Vice President, General Counsel
and Secretary
THE BANK OF NEW YORK,
as Trustee
By: /s/ VAN K. BROWN
-----------------------------------------
Name: Van K. Brown
Title: Vice President
99
EXHIBIT A
[FORM OF NOTE]
EQUISTAR CHEMICALS, LP.
EQUISTAR FUNDING CORPORATION
10 1/8% Senior Note due 2008
No.________ CUSIP No. __________
$ __________
EQUISTAR CHEMICALS, LP, a Delaware limited partnership (the "Company",
which term includes any successor Persons under the Indenture hereinafter
referred to) and EQUISTAR FUNDING CORPORATION, a Delaware corporation ("Equistar
Funding", which term includes any successor Persons under the Indenture, and,
together with the Company, the "Issuers"), for value received jointly and
severally promise to pay to ___________, or its registered assigns, the
principal sum of __________________________________ Dollars ($___________) [or
such other amount as indicated on the Schedule of Exchanges of Securities
attached hereto]/1/, on September 1, 2008.
Interest Rate: 10 1/8% per annum.
Interest Payment Dates: March 1 and September 1 of each year commencing
March 1, 2002.
Regular Record Dates: February 15 and August 15 of each year.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
__________________
/1/To be included in any Global Note
A-1
IN WITNESS WHEREOF, each Issuer has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
EQUISTAR CHEMICALS, LP
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
EQUISTAR FUNDING CORPORATION
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
A-2
(Form of Trustee's Certificate of Authentication)
This is one of the 10 1/8% Senior Notes due 2008 referred to in the within-
mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: ______________ By:_________________________
Authorized Signatory
A-3
[REVERSE SIDE OF NOTE]
EQUISTAR CHEMICALS, LP
EQUISTAR FUNDING CORPORATION
10 1/8% Senior Note due 2008
(1) Principal and Interest. The Issuers, jointly and severally, agree to
pay the principal of this Note on September 1, 2008.
The Issuers jointly and severally agree to pay interest on the principal
amount of this Note on each Interest Payment Date, as set forth below, at the
rate of 10 1/8% per annum.
Interest will be payable semi-annually (to the Holders of record of the
Notes (or any predecessor Notes) at the close of business on the Regular Record
Date immediately preceding the Interest Payment Date) on each Interest Payment
Date, commencing March 1, 2002.
[The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement, dated August 24, 2001, among the Issuers and the Initial
Purchasers named therein (the "Registration Rights Agreement"). In the event
that (i) the Issuers fail to file an Exchange Offer Registration Statement with
the SEC on or prior to the 90th day after the Issue Date, (ii) if the Exchange
Offer Registration Statement is not declared effective by the SEC on or prior to
the 210th day after the Issue Date, (iii) if the Exchange Offer is not
consummated on or before the 30th business day after the Exchange Offer
Registration Statement is declared effective, (iv) the Issuers are obligated to
file the Shelf Registration Statement and fail to file the Shelf Registration
Statement with the SEC on or prior to the 30th day after such filing obligation
arises, (v) the Issuers are obligated to file a Shelf Registration Statement and
the Shelf Registration Statement is not declared effective on or prior to the
60th day after the obligation to file a Shelf Registration Statement arises, or
(vi) if the Exchange Offer Registration Statement or the Shelf Registration
Statement, as the case may be, is declared effective but thereafter ceases to be
effective or useable in connection with resales of the Notes during the periods
specified in the Registration Rights Agreement, for such time of non-
effectiveness or non-usability (each, a "Registration Default"), the Issuers
agree to pay to the Holder of this Note, if affected thereby, liquidated damages
("Liquidated Damages") in an amount equal to $0.05 per week per $1,000 in
principal amount of this Note for each week or portion thereof that the
Registration Default continues for the first 90 day period immediately following
the occurrence of such Registration Default. The amount of the Liquidated
Damages shall increase by an additional $0.05 per week per $1,000 in principal
amount of Notes with respect to each subsequent 90 day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $0.25 per week per $1,000 in principal amount of Notes. The Issuers
shall not be required to pay Liquidated Damages for more than one Registration
Default at any given time. Following the cure of all Registration Defaults, the
accrual of Liquidated Damages will cease. All Liquidated Damages shall be paid
in the same manner and at the same time as the payment of interest thereon]./2/
____________________
/2/ Include only for Initial Note (and Additional Dividend Notes issued in
respect thereof).
A-4
Interest on this Note will accrue from the most recent date to which
interest has been paid on this Note [or the Note surrendered in exchange
herefor] or, if no interest has been paid, from August 24, 2001; provided that,
if there is no existing default in the payment of interest and if this Note 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.
Under certain circumstances set forth in the Indenture, if the Company
makes any Permitted Dividend, the Issuers will be required to pay additional
interest on this Note to the holder of record on the applicable Notice Date.
Such interest shall be payable on the date of such Permitted Dividend and in an
amount equal to the Additional Interest Amount, and shall be payable in the form
of an additional note (an "Additional Dividend Note") that is identical in all
respects to this Note.
The Issuers shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest (including interest paid in the
form of Additional Dividend Notes) and Liquidated Damages, to the extent lawful,
at a rate per annum equal to 1% per annum in excess of the rate of interest
applicable to the Notes.
(2) Method of Payment. The Issuers will pay interest (except defaulted
interest) on the principal amount of the Notes on each March 1 and September 1
to the Persons who are Holders (as reflected in the Register at the close of
business on the February 15 and August 15 immediately preceding the Interest
Payment Date), in each case, even if the Note is canceled on registration of
transfer or registration of exchange after such Regular Record Date; provided
that, with respect to the payment of principal, the Issuers will make payment to
the Holder that surrenders this Note to any Paying Agent on or after September
1, 2008.
The Issuers will pay principal, premium, if any, and interest and
Liquidated Damages, if any, in money of the United States that at the time of
payment is legal tender for payment of public and private debts (other than
interest payable in the form of Additional Dividend Notes). Payments (including
principal, premium, if any, and interest and Liquidated Damages, if any) in
respect of the Notes represented by the Global Notes, the Holders of which have
given wire transfer instructions on or prior to the relevant record date, shall
be made by wire transfer of immediately available funds to the accounts
specified by the Global Note Holder. With respect to Physical Notes, the Issuers
will make all payments of principal, premium, if any, and interest and
Liquidated Damages, if any, at the office or agency maintained by the Issuers
for such purposes in The City of New York or, at the Issuers's option, by
mailing a check to each such Holder's registered address. If a payment date is a
date other than a Business Day, payment may be made at that place on the next
succeeding day that is a Business Day and no interest shall accrue on such
accrued interest for the intervening period.
(3) Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent or Registrar upon
written notice thereto. The Company, Equistar Funding or any Affiliate of any of
them may act as Paying Agent, Registrar or co-registrar.
(4) Indenture; Limitations. The Issuers issued the Notes under an
Indenture dated as of August 24, 2001 (the "Indenture"), among the Issuers and
The Bank of New York, as trustee
A-5
(the "Trustee"). Capitalized terms herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (the "TIA"). The Notes are subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of all such
terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
The Notes are senior unsecured obligations of the Issuers. The Indenture
limits the initial aggregate principal amount of the Notes to $700,000,000 but
permits the issuance of Additional Notes and Additional Dividend Notes subject
to compliance with the covenants contained in the Indenture.
(5) Optional Redemption. The Notes will be redeemable, in whole, at any
time, or in part, from time to time, at the option of the Issuers upon not less
than 30 nor more than 60 days' notice at a redemption price equal to the sum of
100% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date and the Make-Whole
Amount (as defined in the Indenture).
If less than all the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate; provided that
no Notes of $1,000 or less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each Holder of Notes to be
redeemed at its registered address. Notices of redemption may not be
conditional. If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest and
Liquidated Damages, if any, cease to accrue on Notes or portions of them called
for redemption (unless the Issuers fail to redeem such Notes).
(6) Repurchase upon a Change in Control and Sale of Assets. Upon the
occurrence of (a) a Change in Control, each Holder shall have the right to
require that the Issuers repurchase such Holder's Notes at a purchase price in
cash equal to 101% of the principal amount thereof on the date of purchase, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase and (b) an Asset Sale, the Issuers may be obligated to make an offer to
purchase on a pro rata basis from the Holders the Notes with the Excess Proceeds
of such Asset Sales at a purchase price equal to 100% of the principal amount of
such Notes plus accrued interest and Liquidated Damages, if any, to the date of
purchase.
(7) Denominations; Transfer; Exchange. The Notes are in fully registered
form without coupons, in denominations of $1,000 and any integral multiples of
$1,000. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar
A-6
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.
(8) Persons Deemed Owners. A Holder may be treated as the owner of a Note
for all purposes.
(9) Unclaimed Money. If money for the payment of principal, premium, if
any, or interest and Liquidated Damages, if any, remains unclaimed for two
years, the Trustee and the Paying Agent will pay the money back to the Issuers
at their written request. After that, Holders entitled to the money must look to
the Issuers for payment, unless an abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
(10) Discharge Prior to Redemption or Maturity. If either Issuer
irrevocably deposits, or causes to be deposited, with the Trustee money or U.S.
Government Obligations sufficient to pay the then outstanding principal of and
premium, if any, and accrued interest and Liquidated Damages on the Notes (a) to
redemption or maturity, the Issuers will be discharged from the Indenture and
the Notes, except in certain circumstances for certain sections thereof, or (b)
to redemption or maturity, the Issuers will be discharged from certain covenants
set forth in the Indenture.
(11) Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
Outstanding, and any existing Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then Outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend the Indenture or the Notes to the extent
set forth in the Indenture.
(12) Restrictive Covenants. The Indenture contains certain restrictive
covenants. Within 120 days after the end of each fiscal year, the Issuers must
report to the Trustee on compliance with such limitations.
(13) Events of Default. If an Event of Default, as defined in the
Indenture, occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the Notes may declare all the Notes to be due and
payable. If a bankruptcy or insolvency default with respect to either Issuer or
any Significant Subsidiary that is a Subsidiary Guarantor occurs and is
continuing, the Notes automatically become due and payable. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of a majority in
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of remedies.
(14) Additional Subsidiary Guarantees. If any of the Company's Restricted
Subsidiaries shall Guarantee or secure the payment of any other Indebtedness of
the Company or any of its Restricted Subsidiaries, then, subject to certain
exceptions specified in the Indenture, such Restricted Subsidiary shall become a
Subsidiary Guarantor by executing a supplemental
A-7
indenture. Each Subsidiary Guarantor will irrevocably and unconditionally
guarantee, jointly and severally, on a senior basis, the full and punctual
payment (whether at Stated Maturity, upon acceleration, optional redemption,
upon repurchase following a Change of Control Offer or an Asset Sale Offer or
otherwise) of the principal of, premium, if any, and interest and Liquidated
Damages, if any, on, and all other amounts payable under, this Note provided for
under this Indenture, and the full and punctual payment of all other amounts
payable by the Issuers under the Indenture; provided that, notwithstanding
anything to the contrary herein, the aggregate amount of the Obligations
guaranteed under the Indenture by any Subsidiary Guarantor shall be limited in
amount to the maximum amount that would not render such Subsidiary Guarantor's
obligations subject to avoidance under the applicable fraudulent conveyance
provisions of the United States Bankruptcy Code or any comparable provision of
any applicable state law.
(15) Trustee Dealings with Issuer. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may make loans to, accept deposits from, perform services for, and otherwise
deal with, each Issuer and its Affiliates as if it were not the Trustee.
(16) Authentication. This Note shall not be valid until the Trustee signs
the certificate of authentication on this Note.
(17) Abbreviations. Customary abbreviations may be used in the name of a
Holder 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).
(18) Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to any principles of conflict of laws to the extent that the application
of the law of another jurisdiction is required thereby.
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to the Issuers, One Houston
Center, Suite 700, 1221 McKinney, Houston, Texas 77010; Attention: General
Counsel.
A-8
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
___________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
______________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
__________________________________________________________________________
attorney to transfer such Note on the books of the Issuers with full power
of substitution in the premises.
A-9
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES BEARING A PRIVATE PLACEMENT LEGEND]
In connection with any transfer of this Note occurring prior to __________,
the undersigned confirms that without utilizing any general solicitation or
general advertising that:
Check One
(a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144A
thereunder. [_]
(b) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144
thereunder.
(c) this Note is being transferred to the Company.
or
(d) this Note is being transferred other than in accordance with (a), (b)
or (c) above and documents are being furnished which comply with the conditions
of transfer set forth in this Note and the Indenture. [_]
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Sections 3.13 and 3.14 of the Indenture
---- ----
shall have been satisfied.
Date:____________________
------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
Signature Guarantee: _______________________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuers as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:____________________
_ ______________________________________
To be executed by an executive officer
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Issuers pursuant to Section
4.10 or Section 4.13 of the Indenture, check the box: [_]
---- ----
If you wish to have a portion of this Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.13 of the Indenture, state the amount (in
---- ----
original principal amount) below:
$---------------------.
Date:____________
Your Signature:__________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:_____________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-12
SCHEDULE OF EXCHANGES OF SECURITIES
The following exchanges of a part of this Global Note for Physical Notes or a
part of another Global Note have been made:
Principal amount of
this Global Note
Amount of decrease Amount of increase following such Signature of
in principal amount in principal amount decrease (or authorized officer of
Date of Exchange of this Global Note of this Global Note increase) Trustee
A-13
EXHIBIT B
SUPPLEMENTAL INDENTURE
dated as of __________, ____
among
EQUISTAR CHEMICALS, LP,
EQUISTAR FUNDING CORPORATION,
as Issuers
[SUBSIDIARY GUARANTORS]
and
THE BANK OF NEW YORK,
as Trustee
10 1/8% Senior Notes due 2008
B-1
THIS SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), entered into
as of __________, ____, among EQUISTAR CHEMICALS, LP., a Delaware limited
partnership (the "Company"), EQUISTAR FUNDING CORPORATION, a Delaware
Corporation (" Equistar Funding") (collectively, the "Issuers") [INSERT EACH
SUBSIDIARY GUARANTOR EXECUTING THIS SUPPLEMENTAL INDENTURE AND ITS JURISDICTION
OF INCORPORATION] (each an "Undersigned") and THE BANK OF NEW YORK, as trustee
(the "Trustee").
RECITALS
WHEREAS, the Issuers and the Trustee entered into the Indenture, dated as
of August 24, 2001 (the "Indenture"), relating to the Issuers's 10 1/8% Senior
Notes due 2008 (the "Notes");
WHEREAS, as a condition to the Trustee entering into the Indenture and the
purchase of the Notes by the Holders, the Issuers agreed, subject to certain
exceptions, pursuant to Section 4.22 of the Indenture to cause any Restricted
----
Subsidiary that has guaranteed or secured Indebtedness of the Company or any of
its Restricted Subsidiaries to provide Subsidiary Guarantees.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally bound, the parties hereto hereby
agree as follows:
Section 1. Capitalized terms used herein and not otherwise defined herein
are used as defined in the Indenture.
Section 2. Each Undersigned, by its execution of this Supplemental
Indenture, agrees to be a Subsidiary Guarantor under the Indenture and to be
bound by the terms of the Indenture applicable to Subsidiary Guarantors,
including, but not limited to, Article 13 thereof.
Section 3. This Supplemental Indenture shall be governed by and construed
in accordance with the internal laws of the State of New York.
Section 4. This Supplemental Indenture may be signed in various
counterparts which together shall constitute one and the same instrument.
Section 5. This Supplemental Indenture is an amendment supplemental to the
Indenture and said Indenture and this Supplemental Indenture shall henceforth be
read together.
B-2
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Supplemental Indenture or have caused this Supplemental Indenture to be duly
executed on their respective behalf by their respective officers thereunto duly
authorized, as of the day and year first above written.
EQUISTAR CHEMICALS, LP
By:____________________________________
Name:
Title:
EQUISTAR FUNDING CORPORATION
By:____________________________________
Name:
Title:
[SUBSIDIARY GUARANTORS]
THE BANK OF NEW YORK,
as Trustee
By:____________________________________
Name:
Title:
B-3
EXHIBIT C
Form of Certificate of Beneficial Ownership
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: EQUISTAR CHEMICALS, LP and EQUISTAR FUNDING
CORPORATION
10 1/8% Senior Notes due 2008 (the "Notes")
Issued under the Indenture (the "Indenture") dated as
of August 24, 2001 relating to the Notes
----------------------------------------
This is to certify that based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member organizations
("Member Organizations") appearing in our records as persons being entitled to a
portion of the principal amount of Notes represented by the Temporary Offshore
Global Note issued under the above-referenced Indenture, that as of the date
hereof, $____ principal amount of Notes represented by the Regulation S
Temporary Global Note being submitted herewith for exchange is beneficially
owned by persons who are either (i) non-U.S. persons (within the meaning of
Regulation S under the Securities Act of 1933, as amended) or (ii) U.S. persons
who purchased the Notes in a transaction that did not require registration under
the Securities Act of 1933, as amended. We further certify that (i) we are not
submitting herewith for exchange any portion of such Temporary Offshore Global
Note excepted in such Member Organization certifications and (ii) as of the date
hereof we have not received any notification from any Member Organization to the
effect that the statements made by such Member Organization with respect to any
portion of such Temporary Offshore Global Note submitted herewith for exchange
are no longer true and cannot be relied upon as of the date hereof. Accordingly,
you are hereby requested to (i) exchange $______ of such beneficial interest
held by non-U.S. persons in the Temporary Offshore Global Note for an equivalent
beneficial interest in a Permanent Offshore Global Note and (ii) transfer
$________ of such beneficial interest held by U.S. persons in the Temporary
Offshore Global Note into an equivalent beneficial interest in the U.S. Global
Note.
C-1
You and the Issuers are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, Brussels office, as operator of the Euroclear
System]
OR
[CEDEL BANK, societe anonyme]
By:_____________________________
Name:
Title:
Date:________________
C-2
EXHIBIT D
Form of Certificate to be Delivered
in Connection with Transfers
Pursuant to Regulation S
---------, ----
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: EQUISTAR CHEMICALS, LP and EQUISTAR FUNDING CORPORATION
10 1/8% Senior Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act of 1933.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
D-1
By:______________________________
Authorized Signatory
D-2
EXHIBIT E
Form of Accredited Investor Certificate
Transferee Letter of Representation
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of $[ ] aggregate principal
amount of the 101/8% Senior Notes due 2008 (the "Notes") of Equistar Chemicals,
LP (the "Company" and Equistar Funding Corporation (the "Issuers"), we confirm
that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act"), purchasing for our own account or for the
account of such an institutional "accredited investor" as to which we exercise
sole investment discretion, and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Notes, and we and any account for which we are
acting are each able to bear the economic risk of our or its investment.
2. We understand and acknowledge that the Notes have not been registered
under the Securities Act or any other applicable securities law, and that the
Notes may not be offered or sold except as permitted in the following sentence.
We agree, on our own behalf and on behalf of any account for which we are
acting, that if we should sell any Notes within the time period referred to in
Rule 144(k) of the Securities Act, we will do so only (A) to the Company, (B)
pursuant to an effective registration statement under the Securities Act, (C) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (D) in an offshore transaction in accordance with
Rule 904 of Regulation S under the Securities Act, (E) to an institutional
"accredited investor" (as defined above) in an aggregate principal amount of not
less than $100,000 that, prior to such transfer, furnishes to the Trustee under
the Indenture a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Notes (the form of which letter
can be obtained from the Trustee) or (F) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), or
any other available exemption from the registration requirements of the
Securities Act and in each case in compliance with the terms of the Indenture
(which terms require the delivery of such opinions and certifications as the
Issuers and the Trustee may require in connection with transfers pursuant to (E)
and (F)), and we further agree to provide to any person purchasing any of the
Notes from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.
E-1
3. We are acquiring the Notes for investment purposes and not with a
view to distribution thereof or with any present intention of offering or
selling any Notes, except as permitted above.
You and the Issuers are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereto to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN ANY MANDATING THE APPLICATION OF SUCH LAWS).
Very truly yours,
(Name of Purchaser)
By: _____________________________
Name
Title
Date: _____________________________
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
By:_____________________________
Date:___________________________
Taxpayer ID number: ____________
E-2