1
EXHIBIT 4.1
PIONEER AMERICAS ACQUISITION CORP.
as Issuer,
PIONEER AMERICAS, INC.,
PIONEER CHLOR ALKALI COMPANY, INC.,
IMPERIAL WEST CHEMICAL CO.,
ALL-PURE CHEMICAL CO.,
BLACK MOUNTAIN POWER COMPANY,
ALL PURE CHEMICAL NORTHWEST, INC.,
PIONEER CHLOR ALKALI INTERNATIONAL, INC.,
G.O.W. CORPORATION,
PIONEER (EAST), INC.,
T.C. HOLDINGS, INC.,
T.C. PRODUCTS, INC.,
as Subsidiary Guarantors
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
------------------------
INDENTURE
Dated as of June 17, 1997
------------------------
$200,000,000
9 1/4% Senior Secured Notes due 2007
2
TABLE OF CONTENTS
Page
----
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Acquisition Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
All-Pure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Asset Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Asset Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Attributable Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capitalized Lease Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Collateral Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3
PAGE
----
Company Request" or "Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Cash Flow Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Contingent Payment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Eligible Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Equity Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Equity Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Excess Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Offer Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Existing Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Existing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Hedging Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Imperial West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
incur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Indenture Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Independent Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Initial Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Institutional Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Kemwater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(ii)
4
PAGE
----
Liquidated Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Majority Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Moody's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mortgaged Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Net Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Net Cash Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Net Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
New Credit Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Offering Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Opinion of Independent Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
PAI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
PCAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Permitted Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Permitted Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Permitted Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Pioneer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Private Placement Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
QIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Redeemable Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Related Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Resale Restriction Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Restricted Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(iii)
5
PAGE
----
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Revolving Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
S&P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Sale and Leaseback Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Secured Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Security Register" and "Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Seller Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Shelf Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Stock Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Subsidiary Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Substantial Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Tacoma Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Tax Sharing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Term Loan Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Term Loan Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Trust Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Wholly-Owned Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 102. Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 103. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 104. Form of Documents Delivered to
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 105. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 106. Notices, etc., to Trustee, the Company
and any Subsidiary Guarantor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(iv)
6
PAGE
----
Section 107. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 108. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 109. Effect of Headings and Table of
Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 110. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 111. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 112. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 113. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 114. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 115. Schedules and Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 116. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 117. Communication by Holders with Other
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 118. No Recourse Against Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 202. Restrictive Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 203. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 204. Form of Reverse of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 205. Form of Trustee's Certificate of
Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 206. Form of Guarantee of Each of the
Subsidiary Guarantors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 303. Execution, Authentication, Delivery and
Dating. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 305. Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 306. Book-Entry Provisions for U.S. Global
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(v)
7
PAGE
----
Section 307. Special Transfer Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 308. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 309. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 310. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 311. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 312. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 313. Deposit of Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 314. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance
or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 402. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 403. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 404. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 405. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other
Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 406. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 407. Repayment of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE FIVE
REMEDIES
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 502. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 503. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 504. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 505. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 506. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 507. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 508. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(vi)
8
PAGE
----
Section 509. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 510. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 511. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 512. Waiver of Stay, Extension or Usury
Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 603. Trustee Not Responsible for Recitals,
Dispositions of Securities or
Application of Proceeds Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 604. Trustee and Agents May Hold Securities;
Collections; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 606. Compensation and Indemnification of
Trustee and Its Prior Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 607. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 608. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 609. Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 610. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 611. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 612. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 613. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 702. Disclosure of Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
(vii)
9
PAGE
----
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 704. Reports by Company and Subsidiary
Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. When the Company May Merge, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements
without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 902. Supplemental Indentures and Agreements
with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 903. Execution of Supplemental Indentures
and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 904. Revocation Effect of Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 1003. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 1004. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 1005. [Intentionally omitted.] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 1006. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 1007. Limitations on Payment Restrictions
Affecting Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
(viii)
10
PAGE
----
Section 1008. Limitations on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 1009. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 1010. Limitation on Sale and Leaseback
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 1011. Limitation on Transactions With
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Section 1012. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 1013. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Section 1014. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 1015. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Section 1016. Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Section 1017. Stock Pledge Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Section 1018. Money for Security Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Section 1019. Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 1020. Limitation on Ownership of Wholly-Owned
Restricted Subsidiary Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 1021. Impairment of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Section 1022. Amendment to Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Section 1023. Limitation on Applicability of Certain
Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Section 1102. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Section 1103. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Section 1104. Selection by Trustee of Securities to
Be Redeemed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Section 1105. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 1106. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Section 1107. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Section 1108. Securities Redeemed or Purchased in
Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Section 1109. Asset Sale Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
(ix)
11
PAGE
----
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Section 1202. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
ARTICLE THIRTEEN
GUARANTEE
Section 1301. Subsidiary Guarantors' Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Section 1302. Continuing Guarantee; No Right of Set
Off; Independent Obligation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Section 1303. Guarantee Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Section 1304. Right to Demand Full Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Section 1305. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Section 1306. The Subsidiary Guarantors Remain
Obligated in Event the Company Is
No Longer Obligated to Discharge
Indenture Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 1307. Fraudulent Conveyance; Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 1308. Guarantee Is in Addition to Other
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Section 1309. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Section 1310. No Bar to Further Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Section 1311. Failure to Exercise Rights Shall Not
Operate as a Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Section 1312. Trustee's Duties; Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Section 1313. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Section 1314. Release of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Section 1315. Execution of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Section 1316. Payment Permitted by Each of the
Subsidiary Guarantors if No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Section 1317. Notice to Trustee by Each of the
Subsidiary Guarantors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Section 1318. Article Applicable to Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Section 1319. No Suspension of Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
(x)
12
PAGE
----
ARTICLE FOURTEEN
SECURITY
Section 1401. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Section 1402. Recording; Priority; Opinions, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Section 1403. Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Section 1404. Trust Indenture Act Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Section 1405. Suits to Protect Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Section 1406. Determinations Relating to Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Section 1407. Trust Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SCHEDULE 1 Existing Affiliate Agreements
SCHEDULE 2 Existing Indebtedness
EXHIBIT A Form of Certificate to be Delivered in Connection
with Transfers to Non-QIB Accredited Investors
EXHIBIT B Form of Mortgage
EXHIBIT C Form of Intercreditor Agreement
EXHIBIT D Form of Stock Pledge Agreement
(xi)
13
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of June 17, 1997
Trust Indenture Indenture
Act Section Section
- --------------- ---------
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . 608
(a)(2) . . . . . . . . . . . . . . . . . . 608
(a)(3) . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . 607, 609
(c) . . . . . . . . . . . . . . . . . . N.A.
Section 311 (a) . . . . . . . . . . . . . . . . . . 612
(b) . . . . . . . . . . . . . . . . . . 612
(c) . . . . . . . . . . . . . . . . . . N.A.
Section 312 (a) . . . . . . . . . . . . . . . . . . 701
(b) . . . . . . . . . . . . . . . . . . 117
(c) . . . . . . . . . . . . . . . . . . 117
Section 313 (a) . . . . . . . . . . . . . . . . . . 703
(b)(1) . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . 703
(c) . . . . . . . . . . . . . . . . . . 703
(d) . . . . . . . . . . . . . . . . . . 703
Section 314 (a) . . . . . . . . . . . . . . . . . . 704, 1003
(b) . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . 103
(c)(2) . . . . . . . . . . . . . . . . . . 103
(c)(3) . . . . . . . . . . . . . . . . . . 103
(d) . . . . . . . . . . . . . . . . . . 103
(e) . . . . . . . . . . . . . . . . . . 103
(f) . . . . . . . . . . . . . . . . . . N.A.
Section 315 (a) . . . . . . . . . . . . . . . . . . 602, 613, 903
(b) . . . . . . . . . . . . . . . . . . 601, 602, 903
(c) . . . . . . . . . . . . . . . . . . 602, 903
(d) . . . . . . . . . . . . . . . . . . 602, 903
(e) . . . . . . . . . . . . . . . . . . 512
Section 316 (a)(last sentence) . . . . . . . . . . . . . . . . . . 101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . . . 502, 505
(a)(1)(B) . . . . . . . . . . . . . . . . . . 504
(a)(2) . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . 507
(c) . . . . . . . . . . . . . . . . . . 105
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . 508
(a)(2) . . . . . . . . . . . . . . . . . . 509
(b) . . . . . . . . . . . . . . . . . . N.A.
Section 318 (a) . . . . . . . . . . . . . . . . . . 310
N.A. means not applicable.
- ----------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of this Indenture.
14
INDENTURE, dated as of June 17, 1997, (the "Indenture") among
PIONEER AMERICAS ACQUISITION CORP., a Delaware corporation (the "Company"),
PIONEER AMERICAS, INC., PIONEER CHLOR ALKALI COMPANY, INC., each a Delaware
corporation, IMPERIAL WEST CHEMICAL CO., a Nevada corporation, ALL-PURE
CHEMICAL CO., a California corporation, BLACK MOUNTAIN POWER COMPANY, a Texas
corporation, ALL PURE CHEMICAL NORTHWEST, INC., a Washington corporation,
PIONEER CHLOR ALKALI INTERNATIONAL, INC., a Barbados corporation, G.O.W.
CORPORATION, a Nevada corporation, PIONEER (EAST), INC., a Delaware
corporation, T.C. HOLDINGS, INC., a New Mexico corporation, T.C. PRODUCTS,
INC., a Washington corporation (collectively, the "Subsidiary Guarantors"), and
UNITED STATES TRUST COMPANY OF NEW YORK, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
9 1/4% Senior Secured Notes due 2007, Series A (the "Initial Securities") and
9 1/4% Senior Secured Notes due 2007, Series B (the "Exchange Notes" and
together with the Initial Securities, the "Securities"), of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture and the
Securities.
Each Subsidiary Guarantor has duly authorized the issuance of
a guarantee (the "Guarantees") of the Securities, of substantially the tenor
hereinafter set forth, and to provide therefor, each Subsidiary Guarantor has
duly authorized the execution and delivery of this Indenture and the Guarantee.
This Indenture is subject to, and shall be governed by, the
provisions of the Trust Indenture Act that are required to be part of and to
govern indentures qualified under the Trust Indenture Act.
All things necessary have been done to make (i) the
Securities, when executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the Company,
(ii) the Guarantees, when executed by each of the Subsidiary Guarantors and
authenticated and delivered
15
hereunder, the valid obligation of each of the Subsidiary Guarantors and (iii)
this Indenture a valid agreement of the Company and each of the Subsidiary
Guarantors in accordance with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is covenanted and agreed, for the
benefit of each other and for the equal and proportionate benefit of the
Holders of the Securities issued under this Indenture, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as
the singular;
(b) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them 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; and
(e) all references to $, US$, dollars or United States
dollars shall refer to the lawful currency of the United States of
America.
- 2 -
16
"Acquisition" means the acquisition by Pioneer of all the
assets of a chlor-alkali production facility and related businesses located in
Tacoma, Washington pursuant to the Asset Purchase Agreement.
"Acquisition Agreements" means the Asset Purchase Agreement,
the Chlorine Purchase Agreement dated as of June 17, 1997 between PCAC and OCC
Tacoma, Inc., the Chlorine and Caustic Soda Sales Agreement dated as of June
17, 1997 between PCAC and Occidental Chemical Corporation, and the
Environmental Operating Agreement dated as of June 17, 1997 between PCAC and
OCC Tacoma, Inc.
"Affiliate" means, with respect to any party, any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such party including any estate or trust under will of such
party. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, however, that beneficial ownership of 5% or
more of the voting securities of a Person shall be deemed to be control.
"All-Pure" means All-Pure Chemical Co., a California
corporation, and any successor thereto.
"Asset Purchase Agreement" means the Asset Purchase Agreement
dated as of May 14, 1997 between Pioneer and the Seller named therein, and
their successors and assigns.
"Asset Sale" means, with respect to the Company or any
Restricted Subsidiary, the sale, lease, conveyance or other disposition
(including, without limitation, by way of merger or consolidation, and whether
by operation of law or otherwise) to any Person other than the Company or a
Wholly-Owned Restricted Subsidiary of any of the Company's or such Restricted
Subsidiary's assets (including, without limitation, (x) any sale or other
disposition of Equity Interests of any Restricted Subsidiary and (y) any sale
or other disposition of any noncash consideration received by the Company or
such Restricted Subsidiary from any prior transaction or series of related
transactions that constituted an Asset Sale hereunder), whether owned on the
Closing Date or subsequently acquired, in one transaction or a series of
related transactions: provided, however, that the following shall not
constitute Asset Sales: (i) transactions (other than transactions described in
clause (y) above and transactions involving the Collateral as defined in the
Stock Pledge Agreement) in any calendar year with aggregate cash and/or Fair
Market Value of any other
- 3 -
17
consideration received (including, without limitation, the unconditional
assumption of Indebtedness) of less than $1,000,000; (ii) a transaction or
series of related transactions that results in a Change in Control; (iii) any
sale of assets of the Company and its Restricted Subsidiaries or merger
permitted under Article Eight; (iv) any sale or other disposition of inventory,
property (whether real, personal or mixed) or equipment that has become worn
out, obsolete or damaged or otherwise unsuitable or no longer needed for use in
connection with the business of the Company or any Restricted Subsidiary, as
the case may be, in the good faith determination of the Board of Directors; and
(v) any sale of inventory to customers in the ordinary and customary course of
business.
"Attributable Indebtedness" means, with respect to any Sale
and Leaseback Transaction, as at the time of determination, the greater of (i)
the Fair Market Value of the property subject to such transaction and (ii) the
present value (discounted at a rate equivalent to the Company's then current
weighted average cost of funds for borrowed money, compounded on a semi-annual
basis) of the total net obligations of the lessee for rental payments during
the remaining term of the lease included in such arrangement (including any
period for which such lease has been extended). As used in the preceding
sentence, the "total net obligations of the lessee for rental payments" under
any lease for any such period means the sum of rental and other payments
required to be paid with respect to such period by the lessee thereunder
excluding any amounts required to be paid by such lessee on account of
maintenance and repairs, insurance, taxes, assessments, water rates or similar
charges. In the case of any lease which is terminable by the lessee upon
payment of a penalty, such net amount of rent also includes the amount of such
penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
- 4 -
18
"Bankruptcy Law" means chapter 11 of Title 11 of the United
States Code, as amended, or any similar United States federal or state law
relating to bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization or relief of debtors or any amendment to, succession to or
change in any such law.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such
Board.
"Board Resolution" of any corporation means a copy of a
resolution certified by the Secretary or an Assistant Secretary of such
corporation to have been duly adopted by the board of directors of such entity
and to be in full force and effect on the date of such certification and
delivered to the Trustee.
"Borrowing Base" means, as of any date, an amount equal to the
sum of (a) 85% of the net book value of all accounts receivable of the Company
and its Restricted Subsidiaries as of such date, (b) 50% of the net book value
of all inventory owned by the Company and its Restricted Subsidiaries as of
such date, and (c) the lesser of (x) $10,000,000 and (y) 85% of the net book
value of all accounts receivable of Kemwater as of such date plus 50% of the
net book value of all inventory as of such date owned by Kemwater, all
calculated on a consolidated basis and in accordance with GAAP. To the extent
that information is not available as to the amount of accounts receivable or
inventory as of a specific date, the Company may utilize the most recent
available quarterly or annual financial report for purposes of calculating the
Borrowing Base.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The City of New
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close.
"Capital Stock" means, with respect to any Person, any common
stock, preferred stock and any other capital stock of such
- 5 -
19
Person and shares, interest, participations or other ownership interest
(however designated), of any Person and any rights (other than debt securities
convertible into, or exchangeable for, capital stock), warrants or options to
purchase any of the foregoing, including (without limitation) each class of
common stock and preferred stock of such Person if such Person is a corporation
and each general and limited partnership interest of such Person if such Person
is a partnership.
"Capitalized Lease Obligation" means Indebtedness represented
by obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Equivalents" means, (i) any evidence of Indebtedness
with a maturity of one year or less from the date of acquisition issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof); (ii) certificates
of deposit or acceptances with a maturity of one year or less from the date of
acquisition of any financial institution that is a member of the Federal
Reserve System having combined capital and surplus and undivided profits of not
less than $250,000,000; (iii) commercial paper with a maturity of one year or
less from the date of acquisition issued by a corporation that is not an
Affiliate of the Company organized under the laws of any state of the United
States of America or the District of Columbia and rated at least A-1 by S&P or
at least P-1 by Moody's or at least an equivalent rating category of another
nationally recognized securities rating agency; (iv) any money market deposit
accounts issued or offered by a domestic commercial bank having capital and
surplus in excess of $250,000,000; and (v) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of the United States of America or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year from the date
of acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
- 6 -
20
"Cash Flow" for any period means the Consolidated Net Income
of the Company and its Restricted Subsidiaries for such period, plus the
following to the extent included in calculating such Consolidated Net Income:
(i) Consolidated Interest Expense, (ii) income tax expense and (iii)
depreciation, depletion and amortization expense.
A "Change of Control" means the occurrence of any of the
following: (i) a "person" or "group" (as such terms are used in Sections
14(d)(2) and 13(d)(3), respectively, of the Exchange Act), other than
Substantial Shareholders, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding voting
power of the fully diluted Voting Stock of Pioneer or the Company, (ii) the
adoption of a plan relating to the liquidation or dissolution of Pioneer or the
Company, (iii) the merger or consolidation of Pioneer or the Company with or
into another corporation with the effect that the stockholders of Pioneer or
the Company immediately prior to such merger or consolidation cease to be the
"beneficial owners" (as defined in Rule 13d-3 under the Exchange Act) of 50% or
more of the combined voting power of the securities of the surviving
corporation of such merger or the corporation resulting from such merger or
consolidation ordinarily (and apart from rights arising under special
circumstances) having the right to vote in the election of directors
outstanding immediately after such merger or consolidation or (iv) during any
period of two consecutive calendar years individuals who at the beginning of
such period constituted the board of directors of Pioneer or the Company
(together with any new directors whose election by the board of directors of
Pioneer or the Company, or whose nomination for election by the shareholders of
Pioneer or the Company, was approved by a vote of a majority of the directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the directors of Pioneer or the
Company then in office. Notwithstanding the foregoing, a Change of Control
shall not be deemed to have occurred under clause (iii) above solely as a
result of a merger or consolidation of the Company with or into Pioneer
provided that such merger or consolidation is permitted by Article Eight of
this Indenture.
- 7 -
21
"Closing Date" means the date of consummation of the offering
and sale of the Initial Securities.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means (i) a first mortgage lien and security
interest in PCAC's interest in real property, buildings, fixtures, and certain
equipment relating to the Tacoma Facility, (ii) a first priority security
interest in PCAC's interest in the Acquisition Agreements, (iii) first mortgage
liens on PCAC's chlor-alkali production facilities located in Henderson, Nevada
and St. Gabriel, Louisiana (including real property, buildings, fixtures and
certain equipment), and (iv) a pledge of PAI's interest in the Capital Stock of
PCAC and All-Pure, each as further described in the respective Security
Documents with respect thereto.
"Collateral Agent" means United States Trust Company of New
York, as collateral agent under the Intercreditor Agreement, and any successor
thereto.
"Collateral Proceeds" has the meaning specified in Section
1009 of the Indenture.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if at any
time after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means Pioneer Americas Acquisition Corp., a
corporation incorporated under the laws of Delaware, until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Company" shall mean such successor Person.
"Company Common Stock" means the common stock, par value $.01
share, of the Company.
- 8 -
22
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by any one of its Chairman of the
Board of Directors, its President or a Vice President (regardless of vice
presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Cash Flow Coverage Ratio" as of any date of
determination means the ratio of (i) the aggregate amount of Cash Flow for the
period of the most recent four consecutive fiscal quarters for which internal
financial statements are available prior to the date of such determination to
(ii) Consolidated Interest Expense for such four fiscal quarters of the Company
and its Restricted Subsidiaries; provided, however, that (A) if the Company or
any Restricted Subsidiary has incurred any Indebtedness since the beginning of
such period that remains outstanding or if the transaction giving rise to the
need to calculate the Consolidated Cash Flow Coverage Ratio is an incurrence of
Indebtedness, or both, Cash Flow and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been issued on the first day of such
period and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period, (B) if since
the beginning of such period the Company or any Restricted Subsidiary has made
any Asset Sale, the Cash Flow for such period shall be reduced by an amount
equal to the Cash Flow (if positive), directly attributable to the assets which
are the subject of such Asset Sale for such period, or increased by an amount
equal to the Cash Flow (if negative), directly attributable thereto for such
period and Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with any such sale or other disposition
for such period (or, if the Capital Stock of any Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale), (C) if
- 9 -
23
since the beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) has made an Investment in any Restricted Subsidiary (or
any Person which becomes a Restricted Subsidiary) or an acquisition of assets,
including any acquisition of assets occurring in connection with a transaction
causing a calculation to be made under the Indenture, which constitutes all or
substantially all of an operating unit of a business, Cash Flow and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto (including the incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first day of such period and (D)
in making such computation, Consolidated Interest Expense attributable to any
Indebtedness incurred under any revolving credit facility shall be computed
based on the average daily balance of such Indebtedness during such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto, and
the amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith, the pro forma calculations shall be
determined in good faith by a responsible financial or accounting officer of
the Company. If any Indebtedness bears a floating rate of interest and is
being given pro forma effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period.
"Consolidated Interest Expense" means, for any period,
interest expense of the Company and its consolidated Restricted Subsidiaries,
excluding amortization of any deferred financing fees, plus, to the extent not
included in such interest expense, (i) interest expense attributable to
Capitalized Lease Obligations, (ii) amortization of debt discount and debt
issuance cost, (iii) capitalized interest, (iv) non-cash interest expense, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) interest actually paid by the
Company or any such Restricted Subsidiary under any guarantee of Indebtedness
or other obligation of any other Person, (vii) net costs associated with
Hedging Obligations (including amortization of fees), (viii) Preferred Stock
dividends in respect of all Redeemable Stock of the Company held by Persons
other than the Company or a Wholly-Owned Restricted Subsidiary of the Company
and (ix) the cash
- 10 -
24
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than the Company) in connection with loans incurred
by such plan or trust to purchase newly issued or treasury shares of the
Capital Stock of the Company.
"Consolidated Net Income" means, for any period, and as to any
Person, the aggregate Net Income of such Person and its Subsidiaries (other
than, in the case of the Company, the Unrestricted Subsidiaries of the Company)
for such period determined in accordance with GAAP; provided that (i) the Net
Income of any Person which is not a Subsidiary of such Person but which is
consolidated with such Person or is accounted for by such Person by the equity
method of accounting shall be included only to the extent of the amount of cash
dividends or cash distributions paid to such Person or a wholly-owned
Restricted Subsidiary of such Person (other than, in the case of the Company,
the Unrestricted Subsidiaries of the Company), (ii) the Net Income of any
Person acquired by such Person or a Subsidiary of such Person in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded, (iii) the Net Income of any Subsidiary of such Person that
is subject to restrictions, direct or indirect, on the payment of dividends or
the making of distributions to such Person shall be excluded to the extent of
such restrictions, (iv) the Net Income of (A) any Unrestricted Subsidiary and
(B) any Subsidiary less than 80% of whose securities having the right (apart
from the right under special circumstances) to vote in the election of
directors are owned by the Company or its Wholly-Owned Restricted Subsidiaries
shall be included only to the extent of the amount of cash dividends or cash
distributions actually paid by such Subsidiary to the Company or a Wholly-Owned
Restricted Subsidiary of the Company, (v) in the case of the Company, the Net
Income attributable to any business, properties or assets acquired (by way of
merger, consolidation, purchase or otherwise) by the Company or any Restricted
Subsidiary of the Company for any period prior to the date of such acquisition
shall be excluded, (vi) all extraordinary gains and losses, and any gain or
loss realized upon the termination of any employee pension benefit plan, in
respect of dispositions of assets other than in the ordinary course of business
and any one-time increase or decrease to Net Income which is required to be
recorded because of the
- 11 -
25
adoption of new accounting policies, practices or standards required by GAAP
(together, in each case, with any provision for taxes) shall be excluded, and
(vii) all amounts of "other income, net" classified as such on one or more
lines of such Person's statement of operations, in accordance with GAAP, net of
applicable income taxes, shall be excluded from such Person's aggregate Net
Income; provided that in the case of the Company the foregoing exclusion shall
not apply to cash dividends or cash distributions paid to the Company in
respect of the Company's indirect equity interest in Saguaro Power Company, a
Limited Partnership, to the extent included in clause (i) of this definition.
"Consolidated Net Worth" means, for any Person, the total of
the amounts shown on the balance sheet of such Person and its consolidated
Subsidiaries (other than, in the case of the Company, the Unrestricted
Subsidiaries of the Company), determined on a consolidated basis without
duplication in accordance with GAAP, as of the end of the most recent fiscal
quarter of such Person ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the
amount of Capital Stock (other than Redeemable Stock) plus (ii) the amount of
surplus and retained earnings (or, in the case of a surplus or retained
earnings deficit, minus the amount of such deficit).
"Contingent Payment Agreement" means the Contingent Payment
Agreement dated as of April 20, 1995 among the Company, Pioneer and the Sellers
named therein.
"Corporate Trust Office" means the office of the Trustee or an
affiliate or agent thereof at which at any particular time the corporate trust
business for the purposes of this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at 114 West
47th Street, New York, New York 10036-1532, Attention: Corporate Trust
Division.
"Credit Facility" means any revolving credit facility or
similar arrangement that makes credit available entered into by and among the
Company and/or any of its Subsidiaries that is a Guarantor and the lending
institutions party thereto, including any credit agreement, related notes,
guarantees, collateral
- 12 -
26
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.
"Default" means any event which is, or after notice or passage
of any time or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Eligible Investments" means, (i) securities issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof) having maturities
of not more than 90 days from the date of acquisition, (ii) time deposits and
certificates of deposit with maturities of not more than 90 days from the date
of acquisition, of any commercial banking institution that is a member of the
Federal Reserve System having capital and surplus in excess of $500,000,000,
whose debt has a rating at the time of any such investment of at least "A-2" or
the equivalent thereof by S&P or at least "P-2" or the equivalent thereof by
Moody's or any bank or financial institution party to the Term Loan Agreement
or the Revolving Credit Agreement, (iii) fully secured repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) entered into with any bank or financial institution
meeting the qualifications specified in clause (ii) above, (iv) commercial
paper issued by the parent corporation of any commercial banking institution
that is a member of the Federal Reserve System having capital and surplus in
excess of $500,000,000 and commercial paper or master notes of issuers, rated
at the time of any such investment at least "A-2" or the equivalent thereof by
S&P or at least "P-2" or the equivalent thereof by Moody's or any bank or
financial institution party to the Term Loan Agreement or the Revolving Credit
Agreement, and in each case maturing within 270 days after the date of
acquisition, and (v) any shares in an open-end mutual fund organized by a bank
or financial institution having combined capital and surplus of at least
$500,000,000 investing solely in investments permitted by the foregoing clauses
(i), (ii) and (iv).
- 13 -
27
"Equity Interests" means shares, interests, participations or
other equivalents (however designated) of Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security which is convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of Equity Interests (other
than Redeemable Stock) of any Person made on a primary basis by such Person
(including a rights offering to existing stockholders of such Person), which
yields gross proceeds to such Person of $15,000,000 or more.
"Event of Default" has the meaning specified in Article Five
of this Indenture.
"Excess Land" means certain real property adjoining the sites
of PCAC's Henderson, Nevada and St. Gabriel, Louisiana plants and the Mojave,
California property owned by Imperial West that is not used in the business
conducted at such sites, which real property is referred to and defined in the
Contingent Payment Agreement as the "Subject Parcels."
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means Securities issued pursuant to any
Exchange Offer Registration Statement and guaranteed by the Subsidiary
Guarantors.
"Exchange Offer" means the offer which may be made by the
Company pursuant to the Registration Rights Agreement to exchange the Initial
Securities for the Exchange Notes.
"Exchange Offer Registration Statement" means the registration
statement to be filed by the Company and the Subsidiary Guarantors with the
Commission with respect to an offer to exchange the Securities for another
series of senior secured notes of the Company and guarantees by the Subsidiary
Guarantors registered under the Securities Act with substantially identical
terms to the Initial Securities.
"Existing Affiliate Agreements" means (i) agreements between
the Company or any of its subsidiaries and Saguaro Power
- 14 -
28
Company, a Limited Partnership, relating to the delivery of steam and other
services, existing on the Closing Date and listed on Schedule 1 hereto, (ii)
the Tax Sharing Agreement and (iii) agreements between the Company or any of
its subsidiaries and Basic Investments, Inc. relating to the delivery of water
and power, power transmission services, and other services, existing on the
Closing Date and listed on Schedule 1 hereto and (iv) any other agreements with
affiliates of the Company, existing on the Closing Date and listed on Schedule
1 hereto.
"Existing Indebtedness" means all Indebtedness (other than
Indebtedness outstanding under the Term Loan Agreement and the Revolving Credit
Agreement) of the Company or any Restricted Subsidiary existing on the Closing
Date and listed on Schedule 2 hereto.
"Fair Market Value" means, with respect to any asset or
property, the price which could be negotiated in an arm's-length transaction,
for cash, between a willing seller and a willing buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair Market
Value shall be determined by a majority of the members of the Board of
Directors, and a majority of the disinterested members of such Board of
Directors, if any, acting in good faith and shall be evidenced by a duly and
properly adopted resolution of the Board of Directors.
"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 approved by a significant segment of the
accounting profession, which are in effect from time to time.
"Guarantee" means the guarantee by any Subsidiary Guarantor of
the Company's Indenture Obligations pursuant to a guarantee given in accordance
with this Indenture, including, without limitation, the Guarantees by the
Subsidiary Guarantors included in Article Thirteen of this Indenture and any
Guarantee delivered pursuant to Section 1019 hereof.
"Hedging Obligations" means the obligations of any Person or
entity pursuant to any swap or cap agreement, exchange
- 15 -
29
agreement, collar agreement, option, futures or forward hedging contract,
derivative instrument or other similar agreement or arrangement designed to
protect such Person or entity against fluctuations in interest rates or foreign
exchange rates or the price of raw materials and other chemical products used
or produced in the Company's business, as the case may be.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Imperial West" means Imperial West Chemical Co., a Nevada
corporation, and any successor thereto.
"incur" has the meaning ascribed in Section 1008 hereof;
provided that (a) with respect to any Indebtedness of any Restricted Subsidiary
of the Company that is owing to the Company or another Restricted Subsidiary of
the Company, any disposition, pledge or transfer of such Indebtedness to any
Person (other than the Company or a Wholly-Owned Restricted Subsidiary) shall
be deemed to be an incurrence of such Indebtedness and (b) with respect to any
Indebtedness of the Company or a Restricted Subsidiary that is owing to another
Restricted Subsidiary, any transaction pursuant to which a Wholly-Owned
Restricted Subsidiary to which such Indebtedness is owing ceases to be a
Wholly-Owned Restricted Subsidiary shall be deemed to be an incurrence of such
Indebtedness, and provided, further that any Indebtedness of a Person existing
at the time such Person becomes a Restricted Subsidiary shall be deemed to be
incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary. The term "incurrence" has a corresponding meaning.
"Indebtedness" of any Person means, without duplication, all
liabilities with respect to (i) indebtedness for money borrowed or which is
evidenced by a bond, debenture, note or other similar instrument or agreement,
but excluding trade credit evidenced by any such instrument or agreement; (ii)
reimbursement obligations, letters of credit and bankers' acceptances; (iii)
indebtedness with respect to Hedging Obligations; (iv) Capitalized Lease
Obligations; (v) indebtedness, secured or unsecured, created or arising in
connection with the acquisition or improvement of any property or asset or the
acquisition of any business; (vi) all
- 16 -
30
indebtedness secured by any Lien upon property owned by such Person and all
indebtedness secured in the manner specified in this clause even if such Person
has not assumed or become liable for the payment thereof; (vii) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person or otherwise representing the deferred and unpaid balance of the
purchase price of any such property, including all indebtedness created or
arising in the manner specified in this clause even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property; (viii) guarantees, direct
or indirect, of any indebtedness of other Persons referred to in clauses (i)
through (vii) above, or of dividends or leases, taxes or other obligations of
other Persons, excluding any guarantee arising out of the endorsement of
negotiable instruments for collection in the ordinary course of business; (ix)
contingent obligations in respect of, or to purchase or otherwise acquire or be
responsible or liable for, through the purchase of products or services,
irrespective of whether such products are delivered or such services are
rendered, or otherwise, any such indebtedness referred to in clauses (i)
through (vii) above; (x) any obligation, contingent or otherwise, arising under
any surety, performance or maintenance bond; and (xi) Redeemable Stock of the
Company valued at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued and unpaid dividends; which indebtedness,
Capitalized Lease Obligation, guarantee or contingent or other obligation such
Person has directly or indirectly created, incurred, assumed, guaranteed or
otherwise become liable or responsible for, whether then outstanding or
thereafter created in the case of clauses (i) through (x) above, to the extent
any of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability on the balance sheet of such Person in
accordance with GAAP. For purposes of the foregoing definition, the "maximum
fixed repurchase price" of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were purchased on any date on
which Indebtedness is required to be determined pursuant to the Indenture. As
used herein, Indebtedness with respect to any Hedging Obligation means, with
respect to any specified Person on any date, the net amount (if any) that would
be payable by such specified Person upon the liquidation, close-out or early
termination on such date
- 17 -
31
of such Hedging Obligation. For purposes of the foregoing, any settlement
amount payable upon the liquidation, close-out or early termination of a
Hedging Obligation shall be calculated by the Company in good faith and in a
commercially reasonable manner on the basis that such liquidation, close-out or
early termination results from an event of default or other similar event with
respect to such specified Person. Any reference in this definition to
indebtedness shall be deemed to include any renewals, extensions and refundings
of any such indebtedness or any indebtedness issued in exchange for such
indebtedness.
"Indenture Obligations" means the obligations of the Company
and any other obligor under this Indenture or under the Securities, including
any Subsidiary Guarantor, to pay principal, premium, if any, interest and
Liquidated Damages, if any, when due and payable, and all other amounts due or
to become due under or in connection with this Indenture (including, without
limitation, all sums due to the Trustee pursuant to Section 606 hereof), the
Securities and the performance of all other obligations to the Trustee and the
Holders under this Indenture and the Securities, according to the terms hereof
and thereof.
"Independent Director" means a director of the Company other
than a director (i) who (apart from being a director of the Company or any of
its Subsidiaries) is an employee, insider, associate or Affiliate of the
Company or any of its Subsidiaries or has held any such position during the
previous year or (ii) who is a director, an employee, insider, associate or
Affiliate of another party to the transaction in question.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette
Securities Corporation and Salomon Brothers Inc.
"Initial Securities" means the Securities issued on the
Closing Date and guaranteed by the Subsidiary Guarantors.
"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.
"Insurance Proceeds" has the meaning specified in each
Mortgage.
- 18 -
32
"Intercreditor Agreement" means the Intercreditor and
Collateral Agency Agreement dated as of June 17, 1997 among the Company, PAI,
PCAC, the Trustee, the Term Loan Agent, Bank of America Illinois as agent under
the Revolving Credit Agreement and the Collateral Agent.
"Intercreditor Collateral Account" means the Collateral
Account as defined in the Intercreditor Agreement.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Investment" means any direct or indirect advance, loan, other
extension of credit or capital contribution (by means of any transfer of cash
or other property to others or any payment for property or services for the
account or use of others) to, purchase or acquisition of Equity Interests,
bonds, notes, debentures or other securities of, or purchase or other
acquisition of all or a substantial part of the business, Equity Interests or
other evidence of beneficial ownership of, or any other investment in or
guarantee of any Indebtedness of, any Person or any other item that would be
classified as an investment on a balance sheet prepared in accordance with
GAAP. Investments do not include advances to customers and suppliers in the
ordinary course of business and on commercially reasonable terms. In the event
the Company or any Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Subsidiary of the Company such that,
after giving effect to any such sale or disposition, such Person is no longer a
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 Subsidiary not sold or disposed of
determined as provided in the final paragraph of Section 1006 hereof.
"Kemwater" means Kemwater North America Company, a Delaware
corporation, and any successor thereto.
"Lien" means any mortgage, pledge, lien, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement and any lease in the nature thereof).
- 19 -
33
"Liquidated Damages" means all liquidated damages owing to the
Holders pursuant to the Registration Rights Agreement.
"Majority Holders" has the meaning specified in the
Intercreditor Agreement.
"Maturity" when used with respect to any Security means the
date on which the principal of such Security becomes due and payable as therein
provided or as provided in this Indenture, whether at Stated Maturity, the
Asset Sale Purchase Date, the Change of Control Payment Date, or the Redemption
Date and whether by declaration of acceleration, Change of Control, call for
redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. or any
successor rating agency.
"Mortgage" means each mortgage, deed of trust, or similar
security instrument which from time to time affects any property that secures
PCAC's obligations in respect of its Guarantee under this Indenture and the
Term Loan Agreement, as such instruments may be amended, supplemented or
otherwise modified from time to time.
"Mortgaged Property" has the meaning specified in each
Mortgage.
"Net Award" has the meaning specified in each Mortgage.
"Net Cash Proceeds" means, with respect to any issuance or
sale of Equity Interests or debt securities that have been converted into or
exchanged for Equity Interests, as referred to under Section 1006 hereof, the
proceeds of such issuance or sale in the form of cash or cash equivalents, net
of attorneys' fees, accountants' fees and brokerage, consultation, underwriting
and other fees and expenses actually incurred in connection with such issuance
or sale and net of taxes paid or payable as a result thereof.
"Net Income" of any Person, for any period, means the net
income (loss) of such Person and its subsidiaries (other than, in the case of
the Company, its Unrestricted Subsidiaries) determined in accordance with GAAP.
- 20 -
34
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, the proceeds of insurance paid on account of
the loss of or damage to any property, or compensation or other proceeds for
any property taken by condemnation, eminent domain or similar proceedings, and
any non-cash consideration received by the Company or any Restricted Subsidiary
from any Asset Sale that is converted into or sold or otherwise disposed of for
cash within 90 days after the relevant 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), (ii) any taxes paid or
payable as a result thereof, (iii) all amounts required to be applied to the
repayment of, or representing the amount of permanent reductions in the
commitments relating to, Indebtedness secured by a Lien on the asset or assets
the subject of such Asset Sale which Lien is permitted pursuant to the terms of
the Indenture, (iv) any reserve for adjustment in respect of the sale price of
such asset or assets required by GAAP, (v) all distributions and other payments
required to be made (including any amounts held pending distribution) to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Sale, and (vi) all payments due under Existing Affiliate Agreements
arising out of an Asset Sale. The amount of any taxes required to be accrued
as a liability under GAAP as a consequence of an Asset Sale shall be the amount
thereof as determined in good faith by the Board of Directors.
"New Credit Facilities" means the Term Loan Agreement and the
Revolving Credit Agreement.
"Offering Memorandum" means the offering memorandum of the
Company, dated June 11, 1997, in connection with the offer and sale of the
Initial Securities.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, Vice Chairman, the President or a Vice President
(regardless of vice presidential designation), and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company or
any Subsidiary Guarantor, as the case may be, and delivered to the Trustee.
- 21 -
35
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, any of the Subsidiary Guarantors or the
Trustee, unless an Opinion of Independent Counsel is required pursuant to the
terms of this Indenture, and who shall be reasonably acceptable to the Trustee.
"Opinion of Independent Counsel" means a written opinion of
counsel issued by someone who is not an employee or consultant of the Company
or any Subsidiary Guarantor and who shall be reasonably acceptable to the
Trustee.
"Outstanding" when used with respect to Securities means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders;
provided that if such Securities 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;
(c) Securities, except to the extent provided in Sections
402 and 403 hereof, with respect to which the Company has effected
defeasance or covenant defeasance as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there
shall have been presented to the Trustee proof reasonably satisfactory
to it that such Securities are held by a bona fide purchaser in whose
hands the Securities are valid obligations of the Company;
- 22 -
36
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company, any Subsidiary Guarantor, or any other obligor upon the
Securities or any Affiliate of the Company, any Subsidiary Guarantor, or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which 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 so to act with respect to such Securities and that
the pledgee is not the Company, any guarantor or any other obligor upon the
Securities or any Affiliate of the Company, any Subsidiary Guarantor or such
other obligor.
"PAI" means Pioneer Americas, Inc., a Delaware corporation,
and any successor thereto.
"Paying Agent" means any person authorized by the Company to
pay the principal of, premium, if any, interest or Liquidated Damages, if any,
on any Securities on behalf of the Company.
"PCAC" means Pioneer Chlor Alkali Company, Inc., a Delaware
corporation, and any successor thereto.
"Permitted Indebtedness" means, collectively, the following:
(a) Indebtedness of the Company evidenced by the Initial
Securities, the Exchange Notes and Indebtedness of any Subsidiary
Guarantor evidenced by the Guarantees with respect thereto;
(b) Indebtedness of the Company evidenced by the Term Loan
Notes and Indebtedness of the Restricted Subsidiaries evidenced by the
guarantees with respect to the Term Loan Notes.
- 23 -
37
(c) Indebtedness of the Company or any Restricted Subsidiary
constituting Existing Indebtedness and any extension, deferral,
renewal, refinancing or refunding thereof;
(d) Indebtedness of the Company or any Restricted Subsidiary
incurred under one or more Credit Facilities in an aggregate principal
amount at any one time outstanding not to exceed the Borrowing Base at
the time such Indebtedness was incurred, less the aggregate amount of
all permanent repayments of revolving loans under such Credit
Facilities made in accordance with Section 1009(b)(i) hereof.
(e) Capitalized Lease Obligations of the Company or any
Restricted Subsidiary and Indebtedness of the Company or any
Restricted Subsidiary secured by Liens that secure the payment of all
or part of the purchase price of assets or property acquired or
constructed in the ordinary course of business after the Closing Date;
provided, however, that the aggregate principal amount of such
Capitalized Lease Obligations plus such Indebtedness of the Company
and all of the Restricted Subsidiaries does not exceed $10,000,000
outstanding at any time;
(f) Indebtedness of the Company to any Restricted Subsidiary
or of any Restricted Subsidiary to the Company or another Restricted
Subsidiary (but only so long as such Indebtedness is held by the
Company or a Restricted Subsidiary);
(g) Indebtedness under Hedging Obligations, provided, however,
that, in the case of foreign currency exchange or similar agreements
which relate to other Indebtedness, such agreements do not increase
the Indebtedness of the Company or any Restricted Subsidiary
outstanding other than as a result of fluctuations in foreign currency
exchange rates, and in the case of interest rate protection
agreements, only if the notional principal amount of such interest
rate protection agreement does not exceed the principal amount of the
Indebtedness to which such interest rate protection agreement relates;
- 24 -
38
(h) Indebtedness in respect of performance, completion,
guarantee, surety and similar bonds, banker's acceptances or letters
of credit provided by the Company or any Restricted Subsidiary in the
ordinary course of business;
(i) In addition to any Indebtedness otherwise permitted to be
Incurred under the Indenture, up to $10,000,000 aggregate principal
amount of Indebtedness at any one time outstanding; and
(j) Any refinancing, refunding, deferral, renewal or extension
(each, a "Refinancing") of any Indebtedness of the Company or any
Restricted Subsidiary permitted by the initial paragraph of Section
1008 hereof or described in clauses (a) and (b) of this definition
(the "Refinancing Indebtedness"); provided, however, that (i) such
Refinancing Indebtedness does not exceed the aggregate principal
amount of Indebtedness so refinanced, plus the amount of any premium
required to be paid in connection with such Refinancing in accordance
with the terms of such Indebtedness or the amount of any premium
reasonably determined by the Board of Directors as necessary to
accomplish such Refinancing, plus the amount of reasonable and
customary out-of-pocket fees and expenses payable in connection
therewith, (ii) the Refinancing Indebtedness does not provide for any
mandatory redemption, amortization or sinking fund requirement in an
amount greater than or at a time prior to the amounts and times
specified in the Indebtedness being refinanced, refunded, deferred,
renewed or extended and (iii) if the Indebtedness being refinanced,
refunded, deferred, renewed or extended is subordinated to the
Securities, the Refinancing Indebtedness incurred to refinance,
refund, defer, renew or extend such Indebtedness is subordinated in
right of payment to the Securities on terms at least as favorable to
the Holders as those contained in the documentation governing the
Indebtedness being so refinanced, refunded, deferred, renewed or
extended.
"Permitted Investment" means (i) any Eligible Investment, (ii)
any Investment in the Company, (iii) Investments in existence on the Closing
Date, and any such Investment in Basic Investments, Inc., Basic Land Company,
Basic Management,
- 25 -
39
Inc., Basic Water Company or Victory Valley Land Company, L.P. which has been
reclassified or converted into an alternate form of Investment in the same or a
successor entity, (iv) intercompany notes permitted under clause (f) of the
definition of "Permitted Indebtedness" herein, (v) Investments in any
Wholly-Owned Restricted Subsidiary or any Person which, as a result of such
Investment, becomes a Wholly-Owned Restricted Subsidiary; provided that such
Wholly-Owned Restricted Subsidiary is engaged in a Related Business, and (vi)
other Investments after the Closing Date in joint ventures, corporations,
limited liability companies, partnerships or Unrestricted Subsidiaries engaged
in a Related Business that do not at any one time outstanding exceed $5,000,000
; provided that the amount of Investments pursuant to this clause (vi) shall be
included in the calculation of Restricted Payments pursuant to Section 1006
hereof.
"Permitted Liens" means as of any particular time, any one or
more of the following:
(a) Liens for taxes, rates and assessments not yet past due
or, if past due, the validity of which is being contested in good
faith by the Company or any Restricted Subsidiary by appropriate
proceedings promptly instituted and diligently conducted and against
which the Company has established appropriate reserves in accordance
with GAAP;
(b) the Lien of any judgment rendered which is being contested
in good faith by the Company or any of its Restricted Subsidiaries by
appropriate proceedings promptly instituted and diligently conducted
and against which the Company has established appropriate reserves in
accordance with GAAP and which does not have a material adverse effect
on the ability of the Company and its Restricted Subsidiaries to
operate their business or operations;
(c) other than in connection with Indebtedness, any Lien
arising in the ordinary course of business (i) to secure payments of
workers' compensation, unemployment insurance, pension or other social
security or retirement benefits, or to secure the performance of bids,
tenders, leases, progress payments, contracts (other than for the
payment of money) or to secure public or statutory
- 26 -
40
obligations of the Company, or any Restricted Subsidiary, or to secure
surety or appeal bonds to which the Company or any Restricted
Subsidiary is a party, (ii) imposed by law dealing with materialmen's,
mechanics', workmen's, repairmen's, warehousemen's, landlords',
vendors' or carriers' Liens created by law, or deposits or pledges
which are not yet due or, if due, the validity of which is being
contested in good faith by the Company or any Restricted Subsidiaries
by appropriate proceedings promptly instituted and diligently
conducted and against which the Company has established appropriate
reserves in accordance with GAAP, (iii) rights of financial
institutions to setoff and chargeback arising by operation of law, and
(iv) similar Liens;
(d) servitudes, licenses, easements, encumbrances,
restrictions, rights-of-way and rights in the nature of easements or
similar charges which shall not in the aggregate materially adversely
impair the use of the subject property by the Company or a Restricted
Subsidiary;
(e) zoning and building by-laws and ordinances, municipal
bylaws and regulations, and restrictive covenants, which do not
materially interfere with the use of the subject property by the
Company or a Restricted Subsidiary as such property is used as of the
Closing Date; and
(f) any extension, renewal, substitution or replacement (or
successive extensions, renewals, substitutions or replacements), as a
whole or in part, of any of the Liens referred to in clauses (a)
through (e) of this definition or the Indebtedness secured thereby;
provided that (i) such extension, renewal, substitution or replacement
Lien is limited to that portion of the property or assets, now owned
or hereafter acquired, that secured the Lien prior to such extension,
renewal, substitution or replacement Lien and (ii) the Indebtedness
secured by such Lien (assuming all available amounts were borrowed) at
such time is not increased.
"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.
- 27 -
41
"Pioneer" means Pioneer Companies, Inc., a Delaware
corporation, and any successor thereto.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 308 hereof
in exchange for a mutilated Security or in lieu of a lost, destroyed or stolen
Security shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Security.
"Preferred Stock," as applied to the Equity Interests of any
corporation, means stock of any class or classes (however designated) which is
preferred over shares of stock of any other class of such corporation as to the
distribution of assets on any voluntary or involuntary liquidation or
dissolution of such corporation or as to dividends.
"Private Placement Legend" means the legend initially set
forth on the Securities in the form set forth in the first paragraph of Section
202 hereof.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Real Property" means any interest in any real property or any
portion thereof, whether owned in fee or leased or otherwise owned.
"Redeemable Stock" means any Equity Interest that by its terms
or otherwise (i) is required to be redeemed prior to the maturity of the
Securities, (ii) matures or is redeemable, in whole or in part, at the option
of the Company, any Subsidiary or the holder thereof or pursuant to a mandatory
sinking fund at any time prior to the maturity of the Securities, or (iii) is
convertible into or exchangeable for debt securities which provide for any
scheduled payment of principal prior to the maturity of the Securities at the
option of the issuer at any time prior to the maturity of the Securities, until
the right to so convert or exchange is irrevocably relinquished.
- 28 -
42
"Redemption Date" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the date fixed for
such redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to
be redeemed pursuant to any provision in this Indenture means the price at
which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated as of June 17, 1997, by and among the
Company, the Subsidiary Guarantors and the Initial Purchasers, as the same may
be modified and supplemented and in effect from time to time.
"Registration Statement" means a Registration Statement as
defined and described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the June 1 or December 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Related Business" means any corporation or other entity
engaged in, and any asset utilized in, the manufacture or distribution of
chlorine, caustic soda, bleach, hydrochloric acid, iron and other chlorides and
aluminum sulfate, and in lines of business reasonably related thereto.
"Resale Restriction Termination Date" means the date which is
two years after the later of the date of original issue of the Securities and
the last date on which the Company or any Affiliate of the Company was the
owner of such Securities (or any predecessor thereto).
"Responsible Officer" when used with respect to the Trustee
means any officer assigned to the Corporate Trust Office or the agent of the
Trustee appointed hereunder, including any vice president, assistant vice
president, assistant secretary, or
- 29 -
43
any other officer or assistant officer of the Trustee or the agent of the
Trustee appointed hereunder to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Restoration" has the meaning set forth in each Mortgage.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Subsidiary" means (i) any Subsidiary Guarantor,
(ii) any Subsidiary of the Company in existence on the date hereof to which any
line of business or division (and the assets associated therewith) of any
Subsidiary Guarantor are transferred after the Closing Date, (iii) any
Subsidiary of the Company organized or acquired after the Closing Date, unless
such Subsidiary has been designated as an Unrestricted Subsidiary by a
resolution of the Board of Directors as provided in the definition of
"Unrestricted Subsidiary" and (iv) any Unrestricted Subsidiary which is
designated as a Restricted Subsidiary by the Board of Directors; provided, that
immediately after giving effect to any such designation (A) no Default or Event
of Default has occurred and is continuing and (B) in the case of any
designation referred to in clause (iii) or (iv) hereof, the Company could incur
at least $1.00 of Indebtedness pursuant to the initial paragraph under Section
1008 hereof, on a pro forma basis taking into account such designation. The
Company shall evidence any such designation to the Trustee by promptly filing
with the Trustee an Officers' Certificate certifying that such designation has
been made and complies with the requirements of the immediately preceding
sentence. Notwithstanding any provision of the Indenture to the contrary, each
Subsidiary Guarantor shall be a Restricted Subsidiary.
"Revolving Credit Agreement" means the Loan and Security
Agreement dated as of June 17, 1997, among the Company and Bank of America
Illinois, as agent and a lender, and the other lenders named therein, as
amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act.
- 30 -
44
"S&P" means Standard & Poor's Ratings Group or any successor
rating agency.
"Sale and Leaseback Transaction" with respect to any Person,
means any arrangement with another Person for the leasing of any real or
tangible personal property, which property has been or is to be sold or
transferred by such Person to such other Person in contemplation of such
leasing.
"Secured Indebtedness" means any Senior Indebtedness (other
than the Securities) which by its terms is secured, and by the terms of this
Indenture is permitted to be secured, by Liens on the Collateral.
"Securities" means any of the securities, as defined in the
first paragraph of the recitals hereof, that are authenticated and delivered
under this Indenture. For all purposes of this Indenture, the term
"Securities" shall include any Exchange Notes to be issued and exchanged for
any Initial Securities pursuant to the Registration Rights Agreement and this
Indenture and, for purposes of this Indenture, all Initial Securities and
Exchange Notes shall vote together as one series of securities under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the security agreement dated as of
June 17, 1997 by PCAC, as debtor, to the Collateral Agent, as secured party in
respect of the Acquisition Agreements.
"Security Documents" means (i) each Mortgage, (ii) the
Security Agreement, (iii) the Stock Pledge Agreement, (iv) the Intercreditor
Agreement, (v) the documentation relating to the Intercreditor Collateral
Account, and (vi) all security agreements, mortgages, deeds of trust, pledges,
collateral assignments or any other instrument evidencing or creating any
security interest in favor of the Collateral Agent in all or any portion of the
Collateral, in each case as amended, supplemented or otherwise modified from
time to time.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305 hereof.
- 31 -
45
"Seller Notes" means the subordinated installment notes of
Pioneer issued in connection with the acquisition by Pioneer of PAI.
"Senior Indebtedness" means the principal of, premium, if any,
and interest on any Indebtedness of the Company or its Restricted Subsidiaries,
whether outstanding on the Closing Date or thereafter incurred as permitted
herein, unless, in the case of any particular Indebtedness, the agreement or
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness is junior or subordinated
in right of payment to any item of Indebtedness of the Company or its
Restricted Subsidiaries. Without limiting the generality of the foregoing,
"Senior Indebtedness" includes the principal of, premium, if any, and interest
and all other obligations of every nature of the Company from time to time owed
to the lenders (or their agents) under the New Credit Facilities or any
Refinancing thereof permitted under clause (d) of the definition of Permitted
Indebtedness. Notwithstanding the foregoing, "Senior Indebtedness" does not
include (i) in the case of the obligation of the Company in respect of each
Security, the obligation of the Company in respect of the other Securities,
(ii) any liability for foreign, federal, state, local or other taxes owed or
owing by the Company or any Restricted Subsidiary to the extent that such
liability constitutes Indebtedness, (iii) Indebtedness of the Company to any
Restricted Subsidiary or of any Restricted Subsidiary to the Company or another
Restricted Subsidiary, (iv) that portion of any Indebtedness which at the time
of issuance is issued in violation of the Indenture and (v) Indebtedness and
amounts incurred in connection with obtaining goods, materials or services in
the ordinary course of business (other than such Indebtedness which is owed to
banks and other financial institutions or secured by the goods or materials
which were purchased with such Indebtedness).
"Shelf Registration Statement" means any registration
statement filed by the Company and the Subsidiary Guarantors with the
Commission pursuant to the Registration Rights Agreement, other than an
Exchange Offer Registration Statement.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 309 hereof.
- 32 -
46
"Stated Maturity" when used with respect to any Indebtedness
or any installment of interest thereon, means the date specified in such
Indebtedness as the fixed date on which the principal of such Indebtedness or
such installment of interest is due and payable.
"Stock Pledge Agreement" means the pledge agreement from PAI,
as debtor, to the Collateral Agent, as secured party, in respect of all the
issued and outstanding Capital Stock owned by PAI of PCAC and All-Pure.
"Subordinated Indebtedness" means Indebtedness of the Company
or any Subsidiary Guarantor subordinated in right of payment to the Securities
or any Guarantee, as the case may be.
"Subsidiary" means, with respect to the Company, (i) any
corporation of which the outstanding Capital Stock having at least a majority
of the votes entitled to be cast in the election of directors, under ordinary
circumstances, is at the time owned, directly or indirectly, by the Company, by
the Company and one or more of its Subsidiaries or by one or more of the
Company's Subsidiaries or (ii) any other Person or entity of which at least a
majority of voting interest, under ordinary circumstances, is at the time
owned, directly or indirectly, by the Company, by the Company and one or more
of its Subsidiaries or by one or more of the Company's Subsidiaries.
"Subsidiary Guarantor" means the Subsidiaries listed as
Subsidiary Guarantors in this Indenture or any other guarantor of the Indenture
Obligations.
"Substantial Shareholder" means each of (i) William R. Berkley
and his Affiliates and/or (ii) Interlaken Capital, Inc. and its Affiliates.
"Survey" has the meaning specified in the Intercreditor
Agreement.
"Tacoma Facility" means PCAC's chlor-alkali production
facility in Tacoma, Washington.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated
as of April 20, 1995 among Pioneer and its subsidiaries.
- 33 -
47
"Term Loan Agent" means Bank of America Illinois as
administrative agent under the Term Loan Agreement and any successor thereto.
"Term Loan Agreement" means the loan agreement dated as of
June 17, 1997, among the Company, the Term Loan Agent and the lenders named
therein, including and together with any and all related notes, guarantees,
instruments and agreements executed in connection therewith, as such loan
agreement and/or related documents may be amended, restated, supplemented,
renewed, replaced or otherwise modified from time to time.
"Term Loan Notes" means the notes representing loans in an
initial aggregate principal amount of $100,000,000 made to the Company pursuant
to the Term Loan Agreement, as such notes may be exchanged, replaced, amended,
restated, supplemented or otherwise modified from time to time.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Moneys" means all cash or Eligible Investments received
by the Collateral Agent: (a) in exchange for the release of property from the
Lien of any of the Security Documents; or (b) as compensation for or proceeds
of the sale of all or any part of the Collateral taken by eminent domain or
purchased by, or sold pursuant to any order of, a governmental authority or
otherwise disposed of; or (c) as proceeds of insurance upon any, all or part of
the Collateral (other than any liability insurance proceeds payable to the
Collateral Agent for any loss, liability or expense incurred by it); or (d) as
proceeds of any other sale or other disposition of all or any part of the
Collateral by or on behalf of the Collateral Agent or any collection, recovery,
receipt, appropriation or other realization of or from all or any part of the
Collateral pursuant to the Security Documents or otherwise; or (f) for
application under the Indenture as provided in the Indenture or any Security
Document, or whose disposition is not otherwise specifically provided for in
the Indenture or in any Security Document.
"Trustee" means the Person named as the "trustee" in the first
paragraph of this instrument, until a successor trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor trustee.
- 34 -
48
"Unrestricted Subsidiary" means, until such time as it may be
designated as a Restricted Subsidiary by the Board of Directors as provided in
and in compliance with the definition of "Restricted Subsidiary," (i) any
Subsidiary of the Company organized or acquired after the Closing Date
designated as an Unrestricted Subsidiary by the Board of Directors in which all
investments by the Company or any Restricted Subsidiary are made only from
funds available for the making of Restricted Payments as described under
Section 1006 hereof and (ii) any Subsidiary of an Unrestricted Subsidiary. The
Board of Directors may designate any Subsidiary of the Company (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Equity Interests of, or owns, or holds any Lien
upon, any property of, any Subsidiary of the Company which is not a Subsidiary
of such Subsidiary to be so designated; provided that (w) each Subsidiary to be
so designated and each of its Subsidiaries has not, at the time of designation,
and does not thereafter, directly or indirectly, incur any Indebtedness
pursuant to which the lender has recourse to any of the assets of the Company
or any of its Restricted Subsidiaries, (x) immediately after giving effect to
such designation no Default or Event of Default has occurred and is continuing,
(y) all outstanding Investments by the Company and its Restricted Subsidiaries
(except to the extent repaid in cash) in the Subsidiary so designated shall be
deemed to be Restricted Payments at the time of such designation equal in
amount to the Fair Market Value of such Investments at the time of such
designation and would be Restricted Payments permitted to be paid pursuant to
the provisions of Section 1006 hereof and (z) the amount of such Restricted
Payments shall be included in the calculation of the amount of Restricted
Payments previously made pursuant to Section 1006 hereof. The Company shall
evidence any such designation by promptly filing with the Trustee an Officers'
Certificate certifying that such designation has been made and complies with
the requirements of the immediately preceding sentence.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or
- 35 -
49
(ii) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case under clause (i) or (ii) above,
are not callable or redeemable at the option of the issuer thereof.
"Voting Stock" of any Person means Capital Stock of such
Person which ordinarily has voting power for the election of directors (or
Persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason
of any contingency.
"Wholly-Owned Restricted Subsidiary" means, with respect to
any Person, a Restricted Subsidiary of such Person all of the outstanding
Capital Stock or other ownership interests of which (other than capital stock
constituting directors' qualifying shares or interests held by directors or
shares or interests required to be held by foreign nationals, to the extent
mandated by applicable law) are owned by such Person or by one or more
Wholly-Owned Restricted Subsidiaries of such Person.
Section 102. Other Definitions.
Defined in
Term Section
---- ----------
"Act" 105
"Additional Collateral" 1401
"Adjusted Net Assets" 1309
"Agent Members" 306
"Asset Sale Offer" 1009
"Asset Sale Offer Amount" 1109
"Asset Sale Offer Period" 1109
"Asset Sale Purchase Date" 1109
"Asset Sale Purchase Price" 1009
"Change of Control Date" 1014
"Change of Control Offer" 1014
"Change of Control Payment Date" 1014
"Change of Control Purchase Price" 1014
"Collateral Proceeds" 1009
"Commencement Date" 1109
"Computation Date" 1006
"Computation Period" 1006
- 36 -
50
"covenant defeasance" 403
"Custodian" 501
"Defaulted Interest" 309
"defeasance" 402
"Defeasance Redemption Date" 404
"Defeased Securities" 401
"Excess Proceeds" 1009
"Funding Subsidiary Guarantor" 1309
"New Indebtedness" 1017
"Physical Securities" 201
"Pledgor Subsidiary" or "Pledgor
Subsidiaries" 1017
"Refinancing" 101*
"Refinancing Indebtedness" 101*
"Registration Default" 203
"Required Filing Date" 704
"Restricted Payment" 1006
"Senior Collateral" 204, 1401
"U.S. Global Security" 201
- -----------------
* See "Permitted Indebtedness", paragraph (j) of Section 101
Section 103. Compliance Certificates and Opinions.
Upon any application or request by the Company or any
Subsidiary Guarantor to the Trustee to take any action under any provision of
this Indenture, the Company, any Subsidiary Guarantor and any other obligor on
the Securities shall furnish to the Trustee an Officers' Certificate stating
that all conditions precedent, if any, provided for in this Indenture
(including any covenants compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with, an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that, in the case of any
such application or request as to which the furnishing of such documents,
certificates and/or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
- 37 -
51
Every certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that each 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 opinion
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him 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 each
such individual, such condition or covenant has been complied with.
Section 104. 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 of the Company, any
Subsidiary Guarantor or other obligor of the Securities 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
may be based, insofar as it relates to
- 38 -
52
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company, any Subsidiary Guarantor or other obligor
of the Securities stating that the information with respect to such factual
matters is in the possession of the Company, any Subsidiary Guarantor or other
obligor of the Securities, unless such counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous.
Opinions of Counsel required to be delivered to the Trustee may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
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 105. Acts of Holders.
(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 an 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
Company. 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, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient in accordance with such
reasonable rules as the Trustee may determine.
- 39 -
53
(b) The ownership of Securities shall be proved by the
Security Register.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind every
future Holder of the same Security or the Holder of every Security issued upon
the transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, suffered or omitted to be done by the Trustee, any Paying Agent
or the Company or any Subsidiary Guarantor in reliance thereon, whether or not
notation of such action is made upon such Security.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of such Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so. Notwithstanding
Trust Indenture Act Section 316(c), any such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a date
not more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such solicitation is completed.
In the absence of any such record date fixed by the Company,
regardless as to whether a solicitation of the Holders is occurring on behalf
of the Company or any Holder, the Trustee may, at its option, fix in advance a
record date for the determination of such Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Trustee shall have no obligation to do so. Any such record date
shall be a date not more than 30 days prior to the first solicitation of
Holders generally in connection therewith and no later than a date such
solicitation is completed.
If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close
of business on such record date
- 40 -
54
shall be deemed to be Holders for purposes of determining whether Holders of
the requisite proportion of Securities then outstanding have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for this purpose the Securities then
Outstanding shall be computed as of such record date; provided that no such
request, demand, authorization, direction, notice, consent, waiver or other Act
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
six months after the record date.
(e) If at any time a request, demand, authorization, direction,
notice, consent, waiver or other action to be given or taken by the Majority
Holders is required pursuant to the terms of the Intercreditor Agreement, the
Trustee shall solicit the direction of the Holders as to such request, demand,
authorization, direction, notice, consent, waiver or other action. The Holders
of a majority in principal amount of the Securities then Outstanding may direct
the Trustee's response to such request, demand, authorization, direction,
notice, consent, waiver or other action.
Section 106. Notices, etc., to Trustee, the Company and
any Subsidiary Guarantor.
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 Company or any
Subsidiary Guarantor or any other obligor of the Securities shall be
sufficient for every purpose hereunder if in writing (including
telecopy, with respect to the Company or any Subsidiary Guarantor
only) and mailed, first-class postage prepaid, telecopied, hand
delivered, or delivered by recognized overnight courier, to or with
the Trustee at 114 West 47th Street, New York, New York, 10036-1532,
Attention: Corporate Trust Division, telecopy: 212-852-1625 or at any
other address previously furnished in writing to the Holders, the
Company, any Subsidiary Guarantor or any other obligor of the
Securities by the Trustee; or
- 41 -
55
(b) the Company or any Subsidiary Guarantor shall be
sufficient for every purpose hereunder if in writing (including
telecopy) and mailed, first-class postage prepaid, telecopied, hand
delivered, or delivered by recognized overnight courier, to the
Company or such Subsidiary Guarantor addressed to it at 4200
NationsBank Center, 700 Louisiana Street, Houston, TX 77002,
Attention: Vice President, General Counsel and Secretary, telecopy:
713-225-4426 or at any other address previously furnished in writing
to the Trustee.
Section 107. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, or
delivered by recognized overnight courier, to each Holder affected by such
event, at his address as it appears in the Security Register, not later than
the latest date, and not earlier than the earliest date, prescribed 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. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. 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 impracticable to mail notice of any
event as required by any provision of this Indenture, then any method of giving
such notice as shall be reasonably satisfactory to the Trustee shall be deemed
to be a sufficient giving of such notice.
- 42 -
56
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
any provision of the Trust Indenture Act or another provision which is required
or deemed to be included in this Indenture by any of the provisions of the
Trust Indenture Act, the provision or requirement of the Trust Indenture Act
shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
to be excluded, as the case may be.
Section 109. 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 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
and the Subsidiary Guarantors shall bind their successors and assigns, whether
so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture or in the Securities
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 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities or the
Guarantees, 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.
- 43 -
57
Section 113. Governing Law.
This Indenture and the Securities and the Guarantees shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Section 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest, principal, premium, if any, or Liquidated Damages, 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 and no interest or Liquidated
Damages, if any, shall accrue with respect to such payment for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be, to the next succeeding Business Day.
Section 115. Schedules and Exhibits.
All schedules and exhibits attached hereto are by this
reference made a part hereof with the same effect as if herein set forth in
full.
Section 116. 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.
Section 117. Communication by Holders with Other Holders.
Holders may communicate pursuant to Trust Indenture Act
Section 312(b) with other Holders with respect to their rights under this
Indenture or the Securities. The Company, the Subsidiary Guarantors, the
Trustee, the Registrar and anyone else shall have the protection of Trust
Indenture Act Section 312(c).
- 44 -
58
Section 118. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any of the Subsidiary Guarantors, shall not have any liability for
any obligations of the Company under the Securities or this Indenture for any
obligation of the Subsidiary Guarantors under the Guarantees or this Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Holder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
The Securities, the Guarantees and the Trustee's certificate
of authentication shall be in substantially the forms set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by the Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange, any organizational document or governing instrument or
applicable law or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities.
Any portion of the text of any Security may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Security.
Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Securities
substantially in the form set forth in this Article (the "U.S. Global
Security") deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the U.S. Global Security 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 hereinafter
provided.
- 45 -
59
Securities offered and sold other than as described in the
preceding paragraph shall be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in this
Article (the "Physical Securities").
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
Section 202. Restrictive Legends.
Each U.S. Global Security and Physical Security shall bear the
following legend on the face thereof until after the Resale Restriction
Termination Date, unless and until a Security is exchanged for an Exchange Note
in connection with an effective registration pursuant to the Registration
Rights Agreement or another effective registration and resale of the Securities
occurs pursuant to the Registration Rights Agreement:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE THAT
IS TWO YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE
144(k) AS PERMITTING THE RESALE BY NON-AFFILIATES OF RESTRICTED SECURITIES
WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) (THE "RESALE
RESTRICTION TERMINATION DATE"), EXCEPT (A) TO THE COMPANY; (B) PURSUANT TO A
REGISTRATION
- 46 -
60
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT; (C)
PURSUANT TO RULE 144A, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A; (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) or (7) OF THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT; OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATIONS AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE.
Each U.S. Global Security, whether or not an Exchange 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, TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
- 47 -
61
TRANSFER OF THIS U.S. GLOBAL SECURITY 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 U.S. GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 307 OF THE INDENTURE.
Section 203. Form of Face of Security.
(a) The form of the face of the Securities shall be
substantially as follows:
PIONEER AMERICAS ACQUISITION CORP.
___________________
9 1/4% SENIOR SECURED NOTES DUE 2007
CUSIP No:
No. __________ $___________
PIONEER AMERICAS ACQUISITION CORP., a Delaware corporation
(herein called the "Company", which term includes any successor Person under
the Indenture hereinafter referred to), for value received, hereby promises to
pay to ___________ or registered assigns, the principal sum of __________
United States dollars on June 15, 2007, at the office or agency of the Company
referred to below, and to pay interest thereon from the date of original
issuance, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semiannually on June 15, and December 15, in
each year, commencing December 15, 1997 at the rate of 9 1/4% per annum
(subject to adjustment as provided below), in United States dollars, until the
principal hereof is paid or duly provided for.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date shall, as provided in such Indenture, be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be June 1, or December 1 (whether or not a
Business
- 48 -
62
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Securities, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of, premium, if any, interest and
Liquidated Damages, if any, on this Security shall be made at the office or
agency of the Company maintained for that purpose, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Security Register. Interest shall be computed on the basis of a 360-day year
of twelve 30-day months.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Security is entitled to the benefits of Guarantees by
each of the Subsidiary Guarantors of the punctual payment when due of the
Indenture Obligations made in favor of the Trustee for the benefit of the
Holders. Such Guarantees shall be senior obligations of each Subsidiary
Guarantor, and shall rank pari passu with all existing and future Senior
Indebtedness of such Subsidiary Guarantor and senior to all Subordinated
Indebtedness of such Subsidiary Guarantor. The Guarantees of PCAC and PAI
shall be secured by Collateral. Reference is hereby made to Article Thirteen
of the Indenture for a statement of the respective rights, limitations of
rights, duties and obligations under the Guarantees of each of the Subsidiary
Guarantors.
- 49 -
63
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof or by the
authenticating agent appointed as provided in the Indenture by manual
signature, this Security shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed by the manual or facsimile signature of its authorized
officers and its corporate seal to be affixed or reproduced hereon.
Dated: PIONEER AMERICAS ACQUISITION
CORP.
By
------------------------------------
[SEAL]
Attest:
- ------------------------------------
Secretary
Section 204. Form of Reverse of Securities.
(a) The form of the reverse of the Securities shall be
substantially as follows:
This Security is one of a duly authorized issue of Securities
of the Company designated as its 9 1/4% Senior Secured Notes due 2007 (herein
called the "Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $200,000,000,
which may be issued under an indenture (herein called the "Indenture") dated as
of June 17, 1997, among the Company, the Subsidiary Guarantors and United
States Trust Company of New York, as trustee (herein
- 50 -
64
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, obligations and immunities thereunder of the Company, the
Subsidiary Guarantors, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities and the Guarantees are, and are to be,
authenticated and delivered.
The Indenture contains provisions for defeasance at any time
of (a) the entire Indebtedness on the Securities and (b) certain restrictive
covenants and related Defaults and Events of Default, in each case upon
compliance or noncompliance with certain conditions set forth therein.
The Securities shall be senior obligations of the Company, and
shall rank pari passu with all existing and future Senior Indebtedness of the
Company and senior to all Subordinated Indebtedness of the Company.
The Securities shall not be redeemable at the option of the
Company prior to June 15, 2002. On or after that date, the Securities shall be
redeemable at the option of the Company, in whole or in part from time to time,
on not less than thirty (30) nor more than sixty (60) days' prior notice,
mailed by first-class mail to the Holders' registered addresses, in cash, in
amounts of $1,000 or an integral multiple of $1,000 at the following Redemption
Prices (expressed as percentages of the principal amount), if redeemed in the
12-month period commencing June 15 in the year indicated below:
Year Redemption
---- ----------
2002 104.625%
2003 103.083%
2004 101.542%
2005 and thereafter 100.000%
in each case together with accrued and unpaid interest and Liquidated Damages,
if any, to the Redemption Date (subject to the right of Holders of record on
relevant record dates to receive interest and Liquidated Damages, if any, due
on an Interest Payment Date). If less than all of the Securities are to be
redeemed, the Trustee shall select the Securities to be redeemed pro rata, by
lot or by any other method the Trustee shall deem fair and appropriate.
- 51 -
65
Notwithstanding the foregoing, at any time on or prior to June
15, 2000, the Company may redeem, in part, up to $70,000,000 in aggregate
principal amount of Securities at a purchase price of 109.25% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if
any, to the date fixed for redemption, with the net proceeds of (i) any Equity
Offering by the Company or (ii) any Equity Offering by Pioneer, but only to the
extent that Pioneer contributes such net proceeds to the Company as a capital
contribution; provided that at least $130,000,000 aggregate principal amount of
the Securities must remain outstanding after such redemption.
Upon the occurrence of a Change of Control, each Holder may
require the Company to repurchase all or a portion of such Holder's Securities
in an amount of $1,000 or integral multiples of $1,000, at a purchase price in
cash equal to 101% of the principal amount thereof, together with accrued and
unpaid interest and Liquidated Damages, if any, to the date of repurchase.
Under certain circumstances, in the event the Net Proceeds
received by the Company from one or more Asset Sales, which proceeds are not
applied within 365 days subsequent to the consummation of the Asset Sale to
repay permanently any Senior Indebtedness then outstanding or to an investment
in the Company or in one or more Restricted Subsidiaries in a Related Business,
exceed $10,000,000 the Company shall be required to apply such proceeds to
repurchase the Securities tendered to the Company for purchase at a price equal
to at least 100% of the principal amount thereof, plus accrued interest and
Liquidated Damages, if any, to the date of purchase pursuant to an offer to
purchase made by the Company with respect to the Securities.
In the case of any redemption of Securities, interest
installments whose Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Securities of record as of the close of
business on the relevant record date referred to on the face hereof.
Securities (or portions thereof) for whose redemption and payment provision is
made in accordance with the Indenture shall cease to bear interest from and
after the date of redemption.
- 52 -
66
In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the
principal amount of all the Securities may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including
certain amendments permitted without the consent of any Holders) as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the Subsidiary Guarantors and the rights of the
Holders under the Indenture and the Guarantees at any time by the Company, the
Subsidiary Guarantors and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company and the Subsidiary Guarantors with certain provisions
of the Indenture and the Guarantees and certain past Defaults under the
Indenture and the Guarantees and their consequences. Any such consent or
waiver by or on behalf of the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, any Subsidiary Guarantor or any other obligor upon the Securities (in
the event such other obligor is obligated to make payments in respect of the
Securities), which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Security at the times, place, and rate,
and in the coin or currency, herein prescribed.
- 53 -
67
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any registration of
transfer or exchange or redemption of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to and at the time of due presentment of this Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security
is overdue, and neither the Company, the Trustee nor any agent shall be
affected by notice to the contrary.
[The Company and the Subsidiary Guarantors have entered into
an Exchange and Registration Rights Agreement dated as of June 17, 1997 (the
"Registration Rights Agreement") with the Initial Purchasers described therein.
Pursuant to the Registration Rights Agreement, the Company and the Subsidiary
Guarantors have agreed, among other things, for the benefit of the Holders that
they shall, at their expense, (i) file with the Commission on or prior to 30
days from the Closing Date an Exchange Offer Registration Statement with the
Commission with respect to a registered offer to exchange this Security for an
Exchange Note, and (ii) use their best efforts to cause the Exchange Offer
Registration Statement to be declared effective under the Securities Act on or
prior to 150 days after the Closing Date. The Holders of the Initial
Securities shall be entitled to receive Liquidated Damages in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the Registration Rights Agreement.
Reference is hereby made to the Registration Rights Agreement
for a statement of the respective rights, duties and obligations thereunder of
the Company, the Subsidiary Guarantors and the Holders of the Securities.(1)
- -------------------
(1) To be included in each Security prior to expiration of the
obligations of the Company and the Subsidiary Guarantors under
the Registration Rights Agreement.
- 54 -
68
In order to secure the due and punctual payment of principal
of and interest and Liquidated Damages, if any, on the Securities when and as
the same shall become due and payable, whether on an Interest Payment Date, at
maturity, by acceleration, repurchase, redemption or otherwise, and interest on
the overdue principal of and interest (to the extent permitted by law), if any,
on the Securities, and performance of all other obligations of the Company to
the Holders or the Trustee under this Indenture and the Securities and of all
obligations of PCAC and PAI under their respective Guarantees and under this
Indenture and the Securities, the Company, PCAC and PAI have entered into the
Security Documents with the Collateral Agent. The Securities shall be secured
by Liens on and security interests in the Collateral subject to pari passu
Liens and security interests and other permitted encumbrances as described
further in the Security Documents.
Each Holder, by accepting a Security, agrees to all of the
terms and provisions of the Security Documents as the same may be amended from
time to time pursuant to the respective provisions thereof and of the
Indenture.
Each Holder acknowledges that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
the Security Documents and the terms and provisions of the Indenture will not
be deemed for any purpose to be an impairment of the security under the
Indenture.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and the Security Documents.
All terms used in this Security which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
- 55 -
69
[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 Security and all rights thereunder, hereby irrevocably constituting
and appointing
- -------------------------------------------------------------------------------
attorney to transfer said Security on the books of the Company with full power
of substitution in the premises.
In connection with any transfer of this Security occurring
prior to the date which is the earlier of the date of an effective Registration
or the Resale Restriction Termination Date, the undersigned confirms that
without utilizing any general solicitation or general advertising:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder, or
[ ] (b) this Security is being transferred other than in accordance with
(a)above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until
- 56 -
70
the conditions to any such transfer of registration set forth herein and in
Section 307 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.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security 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 Company 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.
Date:
---------------------------
------------------------------------
NOTICE: To be executed by
an executive officer
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company
pursuant to Section 1014 or 1109 of the Indenture, check the Box: [ ].
- 57 -
71
If you wish to have a portion of this Security purchased by
the Company pursuant to Section 1014 or 1109 of the Indenture, state the amount
(in authorized denominations):
$
--------------
Date:
--------------
Your Signature:
-------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:
-------------------------------------------------
Section 205. Form of Trustee's Certificate of Authentication.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the
within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF
NEW YORK
As Trustee
By
------------------------------------
Authorized Signatory
Section 206. Form of Guarantee of Each of the Subsidiary
Guarantors.
The form of Guarantee shall be set forth on the Securities
substantially as follows:
GUARANTEES
For value received, each of the undersigned hereby
unconditionally guarantees, jointly and severally, to the Holder of this
Security the payment of principal of, premium, if any,
- 58 -
72
interest and Liquidated Damages, if any, on this Security in the amounts and at
the time when due and interest on the overdue principal and interest, if any,
of this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Securities, to the Holder
of this Security and the Trustee, all in accordance with and subject to the
terms and limitations of this Security and Article Thirteen of the Indenture.
This Guarantee shall not become effective until the Trustee duly manually
executes the certificate of authentication on this Security.
PIONEER AMERICAS, INC.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
PIONEER CHLOR ALKALI COMPANY,
INC.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
IMPERIAL WEST CHEMICAL CO.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
- 59 -
73
ALL-PURE CHEMICAL CO.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
BLACK MOUNTAIN POWER COMPANY
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
ALL PURE CHEMICAL NORTHWEST,
INC.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
PIONEER CHLOR ALKALI
INTERNATIONAL, INC.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
G.O.W. CORPORATION
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
- 60 -
74
PIONEER (EAST), INC.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
T.C. HOLDINGS, INC.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
T.C. PRODUCTS, INC.
Attest By
------------------------ ----------------------------
Name: Name:
Title: Title:
- 61 -
75
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $200,000,000 in
principal amount of Securities plus any Exchange Notes which may be issued upon
consummation of an Exchange Offer, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 303, 304, 305, 306, 307, 308, 906, 1009,
1014 or 1108 hereof.
The Securities shall be known and designated as the "9 1/4%
Senior Secured Notes due 2007" of the Company. The Stated Maturity of the
principal amount of the Securities shall be June 15, 2007, and the Securities
shall each bear interest at the rate of 9 1/4% from the Closing Date or from
the most recent Interest Payment Date to which interest has been paid, as the
case may be, payable on December 15, 1997 and semiannually thereafter on June
15, and December 15, in each year, until the principal thereof is paid or duly
provided for.
The principal of, premium, if any, interest and Liquidated
Damages, if any, on the U.S. Global Security shall be payable to the Depositary
or its nominee, as the case may be, as the sole registered owner and the sole
Holder of the U.S. Global Security represented thereby. The principal of,
premium, if any, interest and Liquidated Damages, if any, on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose; provided, however, that at the option of the Company interest may be
paid by check mailed to addresses of the Persons entitled thereto as such
addresses shall appear on the Security Register.
The Securities shall be redeemable as provided in Article
Eleven.
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
- 62 -
76
Section 302. Denominations.
The Securities shall be issuable only in fully registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
Section 303. Execution, Authentication, Delivery and
Dating.
The Securities shall be executed on behalf of the Company by
one of its Chairman of the Board, its President or one of its Vice Presidents
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices on the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities; and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Securities as provided in this Indenture and not otherwise.
Upon a Company Order, the Trustee shall authenticate and
deliver an additional series of notes in an aggregate principal amount not to
exceed $200,000,000 for issuance in exchange for all or a portion of the
Initial Securities previously issued and surrendered for cancellation pursuant
to an exchange offer registered under the Securities Act, in accordance with
the Registration Rights Agreement. The Exchange Notes may have such
distinctive series designation and such changes in the form thereof as are
specified in the Company Order referred to in the preceding sentence, and shall
be guaranteed by the Subsidiary Guarantors on substantially identical terms as
the Initial Securities.
- 63 -
77
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of an
authorized signatory, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.
In case the Company or any Subsidiary Guarantor, pursuant to
Article Eight, shall be consolidated, merged with or into any other Person or
shall sell, assign, convey, transfer or lease substantially all of its
properties and assets to any Person, and the successor Person resulting from
such consolidation, or surviving such merger, or into which the Company or such
Subsidiary Guarantor shall have been merged, or the Person which shall have
received a sale, assignment, conveyance, transfer or lease as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article Eight, any of the Securities authenticated or delivered prior to such
consolidation, merger, sale, assignment, conveyance, transfer or lease may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like
principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Securities as specified in such request
for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer
of any Securities, such successor Person, at the option of the Holders but
without expense to them, shall provide for the exchange of all Securities at
the time Outstanding for Securities authenticated and delivered in such new
name.
- 64 -
78
The Trustee (at the expense of the Company) may appoint an
authenticating agent acceptable to the Company to authenticate Securities on
behalf of the Trustee. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
any Security Registrar or Paying Agent to deal with the Company and its
Affiliates.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities.
After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of
the temporary Securities at the office or agency of the Company designated for
such purpose pursuant to Section 1002 hereof, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as
definitive Securities.
Section 305. Registration of Transfer and Exchange.
All provisions of this Section 305 shall be subject to Section
307 hereof.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee, or such other office as the Trustee
- 65 -
79
may designate, a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 hereof being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as the Security Registrar may prescribe, the Company
shall provide for the registration of Securities and of transfers of
Securities. The Trustee or an agent thereof or of the Company shall initially
be the "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at
the office or agency of the Company designated pursuant to Section 1002 hereof,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Securities of the same series of any authorized denomination or denominations,
of a like aggregate principal amount.
Any Holder of the U.S. Global Security shall, by acceptance of
such U.S. Global Security, agree that transfers of beneficial interests in such
U.S. Global Security, may be effected only through a book-entry system
maintained by the Holder of such U.S. Global Security (or its agent), and that
ownership of a beneficial interest in the Security shall be required to be
reflected in a book entry.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denomination or denominations (including an
exchange of Initial Securities for Exchange Notes), of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities of the same series which the Holder making the exchange is entitled
to receive; provided that no exchanges of Initial Securities for Exchange Notes
shall occur until a Registration Statement shall have been declared effective
by the Commission and that any Initial Securities that are exchanged for
Exchange Notes shall be canceled by the Trustee.
- 66 -
80
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same Indebtedness, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of
transfer, or for exchange or redemption shall (if so required by the Company or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any
registration of transfer or exchange or redemption of Securities, but the
Company may require payment of a sum sufficient to pay all documentary, stamp
or similar issue or transfer taxes or other governmental charges that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges of Initial Securities for Exchange Notes and
exchanges pursuant to Section 303, 304, 305, 306, 307, 308, 906, 1009, 1014 or
1108 hereof not involving any transfer.
The Company shall not be required (a) to issue, register the
transfer of or exchange any Security during a period beginning at the opening
of business (i) 15 days before the date of selection of Securities for
redemption under Section 1104 hereof and ending at the close of business on the
day of such mailing or (ii) 15 days before an Interest Payment Date and ending
on the close of business on the Interest Payment Date, or (b) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of Securities being redeemed in part.
Section 306. Book-Entry Provisions for U.S. Global
Security.
All provisions of this Section 306 shall be subject to Section
307 hereof.
(a) The U.S. Global Security initially shall (i) be
registered in the name of the Depositary for such U.S. Global
- 67 -
81
Security or the nominee of such Depositary, (ii) be delivered to the Trustee as
custodian for such Depositary and (iii) bear legends as set forth in Section
202 hereof.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any U.S.
Global Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under the U.S. Global Security, and the Depositary may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such U.S. Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company 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 Holder of any
Security.
(b) Transfers of the U.S. Global Security shall be limited to
transfers of such U.S. Global Security in whole, but not in part, to the
Depositary, its successors or their respective nominees. Interests of
beneficial owners in the U.S. Global Security may be transferred in accordance
with the rules and procedures of the Depositary and the provisions of Section
307 hereof. Beneficial owners may obtain Physical Securities in exchange for
their beneficial interests in the U.S. Global Security upon request in
accordance with the Depositary's and the Registrar's procedures. In addition,
Physical Securities shall be transferred to all beneficial owners in exchange
for their beneficial interests in the U.S. Global Security if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the U.S. Global Security and a successor depositary is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Security Registrar has received
a request from the Depositary.
(c) In connection with any transfer of a portion of the
beneficial interest in the U.S. Global Security to beneficial owners pursuant
to Subsection (b) of this Section, the Security Registrar shall reflect on its
books and records the date and a decrease in the principal amount of the U.S.
Global Security in
- 68 -
82
an amount equal to the principal amount of the beneficial interest in the U.S.
Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
(d) In connection with the transfer of the entire U.S. Global
Security to beneficial owners pursuant to Subsection (b) of this Section, the
U.S. Global Security shall be surrendered to the Trustee for cancellation, and
the Company 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 U.S. Global Security, an equal aggregate principal
amount of Physical Securities of authorized denominations.
(e) Any Physical Security delivered in exchange for an
interest in the U.S. Global Security pursuant to Subsection (b) or Subsection
(c) of this Section shall, except as otherwise provided by paragraph (a)(i)(x)
and paragraph (d) of Section 307 hereof, bear the applicable legend regarding
transfer restrictions applicable to the Physical Security set forth in Section
202 hereof.
(f) The registered Holder of the U.S. Global Security 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 Securities.
Section 307. Special Transfer Provisions.
Unless and until an Initial Security is exchanged for an
Exchange Note in connection with an effective Exchange Offer Registration
Statement or a Shelf Registration Statement is declared effective with respect
to such Initial Securities and an Initial Security is sold pursuant to the plan
of distribution thereunder, the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors.
The following provisions shall apply with respect to the registration
of any proposed transfer of a Security to any Institutional Accredited
Investor which is not a QIB:
- 69 -
83
(i) The Security Registrar shall register the
transfer of any Security, whether or not such Security bears
the Private Placement Legend, if (x) the requested transfer is
on or after the Resale Restriction Termination Date or (y) the
proposed transferee has delivered to the Security Registrar a
letter containing certain representations and agreements
substantially in the form of Exhibit A hereto.
(ii) If the proposed transferor is an Agent Member
holding a beneficial interest in the U.S. Global Security,
upon receipt by the Security Registrar of (x) the documents,
if any, required by paragraph (i) and (y) instructions given
in accordance with the Depositary's and the Security
Registrar's procedures, the Security Registrar shall reflect
on its books and records the date and a decrease in the
principal amount of the U.S. Global Security in an amount
equal to the principal amount of the beneficial interest in
the U.S. Global Security to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver,
one or more Physical Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a
Security to a QIB:
(i) If the Security to be transferred consists of
Physical Securities, the Security Registrar shall register the
transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of
Security stating, or has otherwise advised the Company and the
Security 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
Security stating, or has otherwise advised the Company
- 70 -
84
and the Security Registrar in writing, that it is purchasing
the Security 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 Company 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.
(ii) If the proposed transferee is an Agent Member, and
the Security to be transferred consists of Physical
Securities, upon receipt by the Security Registrar of
instructions given in accordance with the Depositary's and the
Security Registrar's procedures, the Security Registrar shall
reflect on its books and records the date and an increase in
the principal amount of the U.S. Global Security in an amount
equal to the principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical
Security so transferred.
(c) Private Placement Legend. Any Security authenticated and
issued hereunder shall not be required to bear the legend set forth in
Section 202 hereof, if such Security shall be issued upon:
(i) the transfer or exchange of a Security and
contemporaneously therewith the Company shall have received an
Opinion of Counsel, at its expense, in form and substance
reasonably satisfactory to the Company, to the effect that
such Security to be issued upon such transfer or exchange may
be so issued without such legend because (A) such Security is
being exchanged for an Exchange Note, (B) such Security shall
have been registered under the Securities Act, the
registration statement in connection therewith shall have been
declared effective and such Security shall have been disposed
of pursuant to such effective registration
- 71 -
85
statement, or (C) the circumstances contemplated by paragraph
(a)(i)(x) of this Section 307 exist, and the Company shall
have delivered to the Trustee and the Security Registrar a
copy of such Opinion of Counsel together with an Officers'
Certificate directing the Trustee and the Security Registrar
to deliver an unlegended Security in connection with such
transfer or exchange; such Officers' Certificate and Opinion
of Counsel shall be delivered by the Company as soon as
practicable after its receipt of a written request by a Holder
for such a transfer or exchange; or
(ii) the transfer or exchange of a Security not
bearing such legend.
(d) General.
(i) By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security
acknowledges the restrictions on transfer of such Security set
forth in this Indenture and in the Private Placement Legend
and agrees that it shall transfer such Security only as
provided in this Indenture.
(ii) Prior to any transfer or exchange of a legended
Security for another legended Security, the Company shall have
received an opinion of counsel of the Holder (which may
include in-house counsel of such Holder experienced in matters
of Federal securities law), at its expense, in form and
substance reasonably satisfactory to the Company to the effect
that such transfer does not require registration under the
Securities Act and the Company shall have delivered to the
Trustee and the Security Registrar a copy of such opinion of
counsel of the Holder together with an Officers' Certificate
directing the Trustee and the Security Registrar to transfer
or exchange the legended Security for another legended
Security.
The Trustee and the Security Registrar shall forward copies of
all letters, notices and other written communications
- 72 -
86
received pursuant to Section 306 hereof or this Section 307 to the Company for
approval prior to any transfer or exchange.
Notwithstanding anything to the contrary set forth herein, the
Trustee and the Security Registrar shall have no duty to monitor compliance
with any Federal, state or other securities laws.
Section 308. Mutilated, Destroyed, Lost and Stolen
Securities.
If (a) any mutilated Security is surrendered to the Trustee,
or (b) the Company and the Trustee receive evidence to their satisfaction of
the destruction, loss or theft of any Security, and there is delivered to the
Company, each Subsidiary Guarantor and the Trustee, such security or indemnity,
in each case, as may be required by them to save each of them harmless, then,
in the absence of notice to the Company, any Subsidiary Guarantor or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a replacement Security of
like tenor and principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this
Section, the Company may require the payment of a sum sufficient to pay all
documentary, stamp or similar issue or transfer taxes or other governmental
charges that may be imposed in relation thereof and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company and the Subsidiary Guarantors,
whether or not the destroyed, lost or stolen Security shall be at any time
- 73 -
87
enforceable by anyone, and shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section 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 Securities.
Section 309. Payment of Interest; Interest Rights
Preserved.
Interest on any Security which 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 Security is registered at the close of business on
the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date and interest
on such defaulted interest at the then applicable interest rate borne by the
Securities, to the extent lawful (such defaulted interest and interest thereon
herein collectively called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the Regular Record Date; and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in
Subsection (a) or (b) below:
(a) the Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities 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 Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date
(not less than 30 days after such notice) of the proposed payment, and
at the same time the Company 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 satisfactory to
the Trustee for such deposit on or 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
- 74 -
88
Defaulted Interest as in this Subsection provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not 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 Company in
writing of such Special Record Date. In the name and at the expense
of the Company, the Trustee shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the 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 Securities are registered on such Special Record Date and
shall no longer be payable pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after written
notice given by the Company to the Trustee of the proposed payment
pursuant to this Subsection, such payment shall be deemed practicable
by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security (including any Exchange Security
issued in exchange for an Initial Security) shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 310. Persons Deemed Owners.
The Company, any Subsidiary Guarantor, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of, premium, if any, and (subject to Section 309
hereof) interest and
- 75 -
89
Liquidated Damages, if any, on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and neither the Company,
any Subsidiary Guarantor, the Trustee nor any agent of the Company, any
Subsidiary Guarantor or the Trustee shall be affected by notice to the
contrary.
Section 311. Cancellation.
All Securities surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already canceled, shall be promptly canceled by it. The Company and any
Subsidiary Guarantor may at any time deliver to the Trustee for cancellation
any Securities previously authenticated and delivered hereunder which the
Company or such Subsidiary Guarantor may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be destroyed and certification of their destruction delivered to the Company.
The Trustee shall provide the Company a list of all Securities that have been
canceled from time to time as requested by the Company.
Section 312. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
Section 313. Deposit of Moneys.
Prior to 10:00 a.m., New York City time, on each Interest
Payment Date and at Maturity, the Company shall have deposited with the Trustee
or a Paying Agent in immediately available funds money sufficient to make cash
payments, if any, due on such Interest Payment Date or at Maturity, as the case
may be, in a timely manner which permits the Trustee or such Paying Agent to
remit payment to the Holders on such Interest Payment Date or at Maturity, as
the case may be.
- 76 -
90
Section 314. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP"
number(s), and if so, the Trustee shall use the CUSIP number(s) in notices of
redemption or exchange as a convenience to Holders, provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number(s) printed in the notice or on the Securities and
that reliance may be placed on the other identification numbers printed on the
Securities.
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or
Covenant Defeasance.
The Company may, at its option by Board Resolution, at any
time, with respect to the Securities, elect to have either Section 402 or
Section 403 hereof be applied to all of the Outstanding Securities (the
"Defeased Securities"), upon compliance with the conditions set forth below in
this Article Four.
Section 402. Defeasance and Discharge.
Upon the Company's exercise under Section 401 hereof of the
option applicable to this Section 402, the Company, each of the Subsidiary
Guarantors and any other obligor upon the Securities, if any, shall be deemed
to have been discharged from its obligations with respect to the Defeased
Securities on the date the conditions set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the Defeased Securities, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 405 hereof and the other Section
of this Indenture referred to in (a) and (b) below, and to have satisfied all
its other obligations under such Securities and this Indenture, including
obligations to the Trustee, if any (and the Trustee, at the expense of the
Company, and, upon written request, shall
- 77 -
91
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (a)
the rights of Holders of Defeased Securities to receive, solely from the trust
fund described in Section 404 hereof and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, interest and
Liquidated Damages, if any, on such Securities when such payments are due, (b)
the Company's obligations with respect to such Defeased Securities under
Sections 304, 305, 308, 1002 and 1018 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder including, without limitation,
the Trustee's rights under Section 606 hereof and the Company's obligations in
connection therewith, and (d) this Article Four. Subject to compliance with
this Article Four, the Company may exercise its option under this Section 402
notwithstanding the prior exercise of its option under Section 403 hereof with
respect to the Securities.
Section 403. Covenant Defeasance.
Upon the Company's exercise under Section 401 hereof of the
option applicable to this Section 403, the Company and each Subsidiary
Guarantor shall be released from its obligations under any covenant or
provision contained or referred to in Sections 1003, 1004, 1005, 1006, 1007,
1008, 1009, 1010, 1011, 1012, 1014, 1015, 1016, 1019, 1020, 1021 and 1022
hereof with respect to the Defeased Securities on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Defeased Securities shall thereafter be deemed to be 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 Defeased Securities, the Company and each Subsidiary Guarantor may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section or Article, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
Article or by reason of any reference in any such Section or Article 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 501(3) or
(4) hereof but, except as specified above, the remainder of this Indenture and
such Defeased Securities shall be unaffected thereby.
- 78 -
92
Section 404. Conditions to Defeasance or Covenant
Defeasance.
The following shall be the conditions to application of either
Section 402 or Section 403 hereof to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 608 hereof who shall agree to comply with the
provisions of this Article Four applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (a) United States dollars in an amount, or
(b) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms shall provide, not later than one day before the due date of any
payment, money in an amount, or (c) a combination thereof, sufficient,
in the opinion of a nationally recognized firm of independent public
accountants or a nationally recognized investment banking firm
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge the principal of,
premium, if any, interest and Liquidated Damages, if any, on the
Defeased Securities on the Stated Maturity of such principal or
installment of principal or interest (such date being referred to as
the "Defeasance Redemption Date"), if when exercising under Section
401 hereof either its option applicable to Section 402 hereof or its
option applicable to Section 403 hereof, the Company shall have
delivered to the Trustee an irrevocable notice to redeem all of the
Outstanding Securities on the Defeasance Redemption Date); provided
that the Trustee shall have been irrevocably instructed to apply such
United States dollars or the proceeds of such U.S. Government
Obligations to said payments with respect to the Securities.
- 79 -
93
(2) In the case of an election under Section 402 hereof, the
Company shall have delivered to the Trustee an Opinion of Independent
Counsel in the United States of America stating that (A) the Company
has received from the Internal Revenue Service a ruling or (B) since
the date of this Indenture, there has been a change in the applicable
federal income tax law, including by means of a Revenue Ruling
published by the Internal Revenue Service, in either case to the
effect that, and based thereon such Opinion of Independent Counsel in
the United States of America shall confirm that, the Holders of the
Outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance
had not occurred.
(3) In the case of an election under Section 403 hereof, the
Company shall have delivered to the Trustee an Opinion of Independent
Counsel in the United States of America to the effect that the Holders
of the Outstanding Securities will not recognize income, gain or loss
for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred.
(4) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Subsections
501(10) or (11) hereof are concerned, at any time during the period
ending on the 91st day after the date of deposit.
(5) Such defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a Default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any Subsidiary Guarantor is a party or by which it is
bound.
(6) The Company shall have delivered to the Trustee an
Opinion of Independent Counsel to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally.
- 80 -
94
(7) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of the Securities or
any Guarantee over the other creditors of the Company or any
Subsidiary Guarantor with the intent of defeating, hindering, delaying
or defrauding creditors of the Company, any Subsidiary Guarantor or
others.
(8) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Independent Counsel, each
stating that all conditions precedent provided for relating to either
the defeasance under Section 402 hereof or the covenant defeasance
under Section 403 hereof (as the case may be) have been complied with
as contemplated by this Section 404.
Opinions of Counsel or Opinions of Independent Counsel required to be delivered
under this Section may have qualifications customary for opinions of the type
required and counsel delivering such opinions may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
Section 405. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section
1018 hereof, all United States dollars and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee--collectively for purposes of this Section 405, the
"Trustee") pursuant to Section 404 hereof in respect of the Defeased Securities
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of such Securities
of all sums due and
- 81 -
95
to become due thereon in respect of principal, premium, if any, interest and
Liquidated Damages, if any, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 404 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 Defeased
Securities.
Anything in this Article Four to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations held by it as
provided in Section 404 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect defeasance or covenant
defeasance.
Section 406. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or U.S. Government Obligations in accordance with Section 402 or
403 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and each Subsidiary Guarantor's obligations
under this Indenture and the Securities (including, without limitation, the
provisions of Article Thirteen hereof) shall be revived and reinstated as
though no deposit had occurred pursuant to Section 402 or 403 hereof, as the
case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such United States dollars or U.S. Government Obligations in
accordance with Section 402 or 403 hereof, as the case may be; provided,
however, that if the Company makes any payment to the Trustee or Paying Agent
of principal of, premium, if any, interest or Liquidated Damages, if any, on
any Security following the reinstatement of its obligations, the Trustee or
Paying Agent shall promptly pay any such amount to the Holders of the
Securities and the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
- 82 -
96
Section 407. Repayment of the Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of,
premium, if any, interest or Liquidated Damages, if any, on any Security and
remaining unclaimed for two years after such principal, and premium, if any,
interest or Liquidated Damages, if any, has become due and payable shall be
paid to the Company on its written request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuer as trustee
thereof, shall thereupon cease, provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company 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 thirty (30) days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall promptly be repaid to the
Company.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
An "Event of Default" shall occur if:
(1) there shall be a default in the payment of interest on
any Security when the same becomes due and payable and the Default
continues for a period of thirty (30) days;
(2) there shall be a default in the payment of the principal
of, or premium with respect to, any Security when
- 83 -
97
the same becomes due and payable, at maturity, upon redemption, in
connection with a Change of Control, an Asset Sale or otherwise;
(3) the Company or any Subsidiary Guarantor fails to observe
or perform any covenant, condition or agreement on the part of the
Company or such Subsidiary Guarantor to be observed or performed
pursuant to Section 1006, 1008, 1009, 1010, 1012, 1014, 1019, 1020 or
Article Eight hereof;
(4) the Company or any Subsidiary Guarantor fails to observe
or perform any other covenant, condition or agreement in this
Indenture, the Securities or the Security Documents and such failure
continues for the period and after the notice specified below;
(5) the Company denies or disaffirms its obligations under
this Indenture or the Securities;
(6) a Subsidiary Guarantor denies or disaffirms its
obligations under its Guarantee, or any Guarantee for any reason
ceases to be, or is asserted in writing by any Subsidiary Guarantor or
the Company not to be, in full force and effect and enforceable in
accordance with its terms, except to the extent contemplated by the
Indenture and any such Guarantee;
(7) a default occurs under any Indebtedness of the Company or
any of its Subsidiaries (other than the Securities or the Guarantees),
whether such Indebtedness now exists or is created after the Closing
Date if either (A) such default results from the failure to pay the
final scheduled principal installment in respect of any such
Indebtedness on the stated maturity date thereof (after giving effect
to any grace period) or (B) as a result of such default, the maturity
of such Indebtedness has been accelerated prior to its express
maturity and, in each case, the principal amount of such Indebtedness,
together with the principal amount of all other Indebtedness with
respect to which the principal amount remains unpaid at its final
maturity (after giving effect to any grace period in respect of such
final scheduled principal installment) or the maturity of which has
been so accelerated, aggregates $5,000,000 or more;
- 84 -
98
(8) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Company or any of its Restricted Subsidiaries and such
judgment or judgments remain undischarged, unbonded or unstayed for a
period of sixty (60) days, provided that the aggregate of all such
judgments (other than any judgment as to which and only to the extent,
a reputable insurance company has acknowledged coverage of such claim
in writing) equals or exceeds $5,000,000;
(9) any representation, warranty or certification made or
deemed made in any of the Security Documents is untrue or incorrect in
any material respect when made, any of the Security Documents ceases
to be in full force and effect and valid, binding and enforceable
(other than in accordance with their respective terms), or any of the
Security Documents ceases to give either of the Collateral Agents a
valid and perfected Lien of the priority required thereby or the
rights, powers and privileges purported to be created thereby (other
than in accordance with their respective terms), or any of the
Security Documents is declared null and void, or the Company, PCAC or
PAI denies any of its obligations under any of the Security Documents
or any Collateral becomes subject to any Lien other than the Liens
created or permitted by the Security Documents or the Indenture;
(10) the Company, any Subsidiary Guarantor or any other
Restricted Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief
against it in an involuntary case in which it is a debtor,
(c) consents to the appointment of a Custodian of it
or for all or substantially all of its property,
- 85 -
99
(d) makes a general assignment for the benefit of
its creditors, or
(e) admits in writing its inability to pay debts as
the same become due; or
(11) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company, any
Subsidiary Guarantor or any other Restricted Subsidiary in an
involuntary case in which it is a debtor,
(b) appoints a Custodian of the Company, any
Subsidiary Guarantor or any other Restricted Subsidiary or for
all or substantially all of their property,
(c) orders the liquidation of the Company, any
Subsidiary Guarantor or any other Restricted Subsidiary,
and the order or decree remains unstayed and in effect for sixty (60)
days.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in principal
amount of the Securities then Outstanding notify the Company and the Trustee,
of the Default and the Company does not cure the Default within sixty (60) days
after receipt of such notice. The notice must specify the Default, demand that
it be remedied and state that the notice is a "Notice of Default."
The failure to make any payment on the Securities when due
shall, after the expiration date of any applicable grace period, constitute an
Event of Default under this Indenture.
- 86 -
100
Section 502. Acceleration.
If an Event of Default (other than an Event of Default
specified in clauses (10) and (11) of Section 501 hereof) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least
25% in principal amount of the Securities then Outstanding by written notice to
the Company and the Trustee, may declare the unpaid principal of and any
accrued interest and Liquidated Damages, if any, on all the Securities to be
due and payable. Upon such declaration the principal and interest and
Liquidated Damages, if any, shall be due and payable immediately. If an Event
of Default specified in clause (10) or (11) of Section 501 hereof occurs, such
an amount 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. The
Holders of a majority (or, in the case of the failure to make a Change of
Control Offer pursuant to Section 1014 hereof, two-thirds) in principal amount
of Securities then Outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under
this Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel,
(ii) all overdue interest on all Securities,
(iii) the principal of and premium, if any, and
Liquidated Damages, if any, on any Securities which have
become due otherwise than by such declaration of acceleration
and interest thereon at a rate borne by the Securities, and
(iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by
the Securities; and
- 87 -
101
(b) all Events of Default, other than the non-payment of
principal of the Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 504 hereof. No such rescission shall affect any subsequent
Default or impair any right consequent thereon provided in Section 504
hereof.
Section 503. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy (under this Indenture or otherwise) to collect
the payment of principal, premium, if any, interest or Liquidated Damages, if
any, on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any 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.
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 504. Waiver of Past Defaults.
Holders of a majority (or, in the case of the failure by the
Company to make a Change of Control Offer pursuant to Section 1014 hereof,
two-thirds) in aggregate principal amount of the Securities then Outstanding by
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a continuing Default or Event of Default in the payment of
the principal of or interest on any Security held by a non-consenting Holder.
Upon any such waiver, such Default shall
- 88 -
102
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 505. Control by Majority.
The Holders of a majority in principal amount of the
Securities then Outstanding may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of other Holders, or that
may involve the Trustee in personal liability.
Section 506. Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or
the Securities only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the
Securities then Outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within sixty
(60) days after receipt of the request and the offer and, if
requested, the provision of the indemnity; and
(5) during such sixty (60) day period the Holders of a
majority in principal amount of the Securities then Outstanding do not
give the Trustee a direction inconsistent with the request.
- 89 -
103
A Holder may not use this Indenture to prejudice the rights of another Holder
or to obtain a preference or priority over another Holder.
Section 507. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, but
subject to Article Thirteen the right of any Holder of a Security to receive
payment of principal, premium, if any, and interest on the Security, on or
after the respective due dates expressed in the Security (or, in the case of
redemption or repurchase, on the Redemption Date or repurchase date), 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,
subject to Article Thirteen.
Section 508. Collection Suit by Trustee.
If an Event of Default specified in Section 501(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 Company or any
Subsidiary Guarantor for the whole amount of principal, premium, if any,
interest and Liquidated Damages, if any, remaining unpaid on the Securities and
interest on overdue principal and, to the extent lawful, premium and interest
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, subject to Article
Thirteen.
If the Company or any Subsidiary Guarantor, as the case may
be, fails to pay such amounts forthwith upon such demand, the Trustee, in its
own name and as trustee of an express trust, may institute a judicial
proceeding for the collection of the sums so due and unpaid and may prosecute
such proceeding to judgment or final decree, and may enforce the same against
the Company or any Subsidiary Guarantor or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any Subsidiary
Guarantor or any other obligor upon the Securities, wherever situated.
- 90 -
104
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders under this Indenture or the Guarantees by such appropriate
private or judicial proceedings as the Trustee shall deem most effectual to
protect and enforce such rights, including, seeking recourse against any
Subsidiary Guarantor pursuant to the terms of any Guarantee, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein or therein, or to enforce any other
proper remedy, including, without limitation, seeking recourse against any
Subsidiary Guarantor pursuant to the terms of a Guarantee, or to enforce any
other proper remedy, subject however to Section 505 hereof.
Section 509. 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 Company or
any Subsidiary Guarantor or any other obligor upon the Securities, their
creditors or their property and shall be entitled and empowered, subject to
Article Thirteen, 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 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 606 hereof. 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 606 hereof out
of the estate in any such proceeding shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders of the Securities may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained
- 91 -
105
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 Securities 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 510. Priorities.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to (i) the Trustee, its agents and attorneys for
amounts due under Section 606 hereof, including payment of all
compensation, expenses and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection and (ii)
the Collateral Agent, pursuant to the terms of the Intercreditor
Agreement;
Second: subject to Article Thirteen, to (i) Holders for
amounts due and unpaid on the Securities 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 Securities for principal, premium, if any, interest and
Liquidated Damages, if any, respectively, and (ii) subject to the
Intercreditor Agreement, to the Term Loan Agent for obligations under
the Term Loan Agreement, including amounts of principal of, premium,
if any, and interest on such obligations;
Third: subject to Article Thirteen, without duplication, to
Holders for any other Indenture Obligations owing to the Holders under
this Indenture or the Securities; and
Fourth: subject to Article Thirteen, to the Company 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.
- 92 -
106
Section 511. 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, 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 507 hereof or a suit by Holders of more than 10% in
principal amount of the Securities then Outstanding or to any suit instituted
by any Holder for the enforcement of the payment of the principal of, premium,
if any, interest or Liquidated Damages, if any, on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on or after the Redemption Date or repurchase date).
Section 512. Waiver of Stay, Extension or Usury Laws.
Each of the Company and any Subsidiary Guarantor covenants (to
the extent that it may lawfully do so) that it shall 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 law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
the Company or any Subsidiary Guarantor from paying all or any portion of the
principal of, premium, if any, interest or Liquidated Damages, if any, on the
Securities contemplated herein or in the Securities or which may affect the
covenants or the performance of this Indenture; and each of the Company and any
Subsidiary Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it shall not hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power
as though no such law had been enacted.
- 93 -
107
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults.
Within ninety (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 Security Register, notice of such Default hereunder 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 on any Security, the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders.
Section 602. Certain Rights of Trustee.
Subject to the provisions of Trust Indenture Act Sections
315(a) through 315(d):
(a) the Trustee may 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, debenture, 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;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) the Trustee may consult with counsel and any written
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 or under any Security Document in
good faith and in reliance thereon in accordance with such advice or
Opinion of Counsel;
- 94 -
108
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or any Security
Document 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 the Trustee against the costs,
expenses and liabilities which might be incurred therein or thereby in
compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture or any Security Document other than any liabilities arising
out of the gross negligence of the Trustee;
(f) 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, approval, appraisal, bond, debenture, note, coupon,
security or other paper or document unless requested in writing to do
so by the Holders of not less than a majority in aggregate principal
amount of the Securities then Outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against
such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such investigation shall be paid by the
Company or, if paid by the Trustee or any predecessor Trustee, shall
be repaid by the Company upon demand; provided, further, that the
Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem 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 the Company, personally or by agent or attorney;
- 95 -
109
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder or under any Security
Document 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;
(h) no provision of this Indenture or any Security Document
shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers;
(i) notwithstanding anything to the contrary set forth herein
or in any Security Document, under no circumstances shall the Trustee
be required to take possession of or maintain an action to foreclose
upon any Mortgaged Property; and
(j) no implied covenants or obligations shall be read into
this Indenture or any other Security Document against the Trustee.
Section 603. Trustee Not Responsible for Recitals,
Dispositions of Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Securities and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility on Form T-1, if any,
supplied to the Company are true and accurate subject to the qualifications set
forth therein. The Trustee shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
- 96 -
110
Section 604. Trustee and Agents May Hold Securities;
Collections; etc.
The Trustee, any Paying Agent, Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities, with the same rights it would have if it were
not the Trustee, Paying Agent, Security Registrar or such other agent and,
subject to Trust Indenture Act Sections 310 and 311, may otherwise deal with
the Company and receive, collect, hold and retain collections from the Company
with the same rights it would have if it were not the Trustee, Paying Agent,
Security Registrar or such other agent.
Section 605. Money Held in Trust.
All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Except for funds or securities
deposited with the Trustee pursuant to Article Four, the Trustee may invest all
moneys received by the Trustee, until used or applied as herein provided, in
Cash Equivalents in accordance with the written directions of the Company. The
Trustee shall not be liable for any losses incurred in connection with any
investments made in accordance with Section 605 hereof, unless the Trustee
acted with gross negligence or in bad faith. With respect to any losses on
investments made under this Section 605, the Company is liable for the full
extent of any such loss.
Section 606. Compensation and Indemnification of Trustee
and Its Prior Claim.
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable compensation for
all services rendered by it hereunder (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) and the Company covenants and agrees to pay or reimburse the Trustee and
each predecessor Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this
- 97 -
111
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ), except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against, any
loss, liability, tax, assessment or other governmental charge (other than taxes
applicable to the Trustee's compensation hereunder) or expense incurred without
gross negligence or bad faith on such Trustee's part, arising out of or in
connection with the acceptance or administration of this Indenture or any
Security Document or the trusts hereunder and such Trustee's duties hereunder,
including enforcement of this Section 606 and also including any liability
which the Trustee may incur as a result of failure to withhold, pay or report
any tax, assessment or other governmental charge, and the costs and expenses of
defending itself against or investigating any claim of liability in the
premises. The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture, or the resignation or removal of
any Trustee.
To secure the Company's payment obligations in this Section
606, the Trustee shall have a Lien prior to the Securities on all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay principal of or interest or Liquidated
Damages, if any, on particular Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(9) or (10), the
expenses and the compensation for the services shall be preferred over the
status of Holders in any proceeding under any Bankruptcy Law and are intended
to constitute expenses of administration under any Bankruptcy Law.
Section 607. Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b)
of the Trust Indenture Act.
- 98 -
112
Section 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Trust Indenture Act Section 310(a)(1) and
which shall have a combined capital and surplus of at least $50,000,000 or
which shall be a wholly owned subsidiary of a company that has a combined
capital and surplus of at least $50,000,000, to the extent there is an
institution eligible and willing to serve. If the Trustee does not have an
office in The City of New York, the Trustee may appoint an agent in The City of
New York reasonably acceptable to the Company to conduct any activities which
the Trustee may be required under this Indenture to conduct in The City of New
York. If the Trustee does not have an office in The City of New York or has
not appointed an agent in The City of New York, the Trustee shall be a
participant in the Depository Trust Company and FAST distribution systems. If
such corporation published reports of condition at least annually, pursuant to
law or to the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation 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, the Trustee shall
resign immediately in the manner and with the effect hereinafter specified in
this Article Six.
Section 609. Resignation and Removal; Appointment of
Successor Trustee.
(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 under
Section 610 hereof.
(b) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice thereof to the
Company. Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee by written instrument executed by authority of the
Board of Directors, a copy of which shall be delivered to the resigning
- 99 -
113
Trustee and a copy to the successor trustee. If an instrument of acceptance by
a successor trustee shall not have been delivered to the Trustee within thirty
(30) days after the giving of such notice of resignation, the resigning Trustee
may, or any Holder who has been a bona fide Holder of a Security for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint a successor trustee.
(c) The Trustee may be removed at any time by an Act of the
Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of Trust Indenture Act Section 310(b) after written
request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under
Section 608 hereof and shall fail to resign after written
request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a 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 case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 511 hereof, the Holder of any Security who
has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent
- 100 -
114
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(e) 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 Company, by a Board Resolution, shall promptly appoint a
successor trustee. 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 Securities delivered to the Company and the retiring Trustee, the
successor trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor trustee and supersede the successor trustee
appointed by the Company. If no successor trustee shall have been so appointed
by the Company or the Holders of the Securities and accepted appointment in the
manner hereinafter provided, the Holder of any Security who has been a bona
fide Holder for at least six months may, subject to Section 511 hereof, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor trustee by
mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor trustee and the
address of its Corporate Trust Office or agent hereunder.
Section 610. Acceptance of Appointment by Successor.
Every successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Company 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 as if originally
named as Trustee hereunder; but, nevertheless, on the written request of the
Company or the successor trustee, upon
- 101 -
115
payment of its charges then unpaid, such retiring Trustee shall, pay over to
the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such
successor trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor trustee all
such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain
a prior claim upon all property or funds held or collected by such Trustee or
such successor trustee to secure any amounts then due such Trustee pursuant to
the provisions of Section 606 hereof.
No successor trustee with respect to the Securities shall
accept appointment as provided in this Section 610 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article Six and shall
have a combined capital and surplus of at least $50,000,000 or which shall be a
wholly owned subsidiary of a company that has a combined capital and surplus of
at least $50,000,000 and have a Corporate Trust Office or an agent selected in
accordance with Section 608 hereof.
Upon acceptance of appointment by any successor trustee as
provided in this Section 610, the Company shall give notice thereof to the
Holders of the Securities, by mailing such notice to such Holders at their
addresses as they shall appear on the Security Register. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 609 hereof. If the Company fails to give such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be given at the expense of the
Company.
Section 611. Merger, Conversion, Consolidation or
Succession to Business.
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
- 102 -
116
to all or substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided such corporation
shall be eligible under Trust Indenture Act Section 310(a) and this Article Six
and shall have a combined capital and surplus of at least $50,000,000 or which
shall be a wholly owned subsidiary of a company that has a combined capital and
surplus of at least $50,000,000 and have a Corporate Trust Office or an agent
selected in accordance with Section 608 hereof without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities shall
have been authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor Trustee and
deliver such Securities so authenticated; and, in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor trustee; and in all such cases such certificate
shall have the full force which it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall have; provided
that the right to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 612. Preferential Collection of Claims Against
Company.
If and when the Trustee shall be or become a creditor of the
Company (or other obligor under the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor). A Trustee who has resigned or
been removed shall be subject to the Trust Indenture Act Section 311(a) to the
extent indicated therein.
- 103 -
117
Section 613. Certain Duties and Responsibilities.
(1) Except during the continuance of an Event of Default,
(a) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(b) 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, but 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 be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture but shall not be required to verify the contents
thereof.
(2) 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.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders.
The Company shall furnish or cause to be furnished to the
Trustee
(a) semiannually, not more than ten (10) 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
- 104 -
118
(b) at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any
such request, a list of similar form and content as of a date not more
than fifteen (15) days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
Section 702. Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any information as to the names and addresses of the Holders
in accordance with Trust Indenture Act Section 312, regardless of the source
from which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Trust Indenture Act Section 312.
Section 703. Reports by Trustee.
Within sixty (60) days after May 15 of each year commencing
with the first May 15 after the Closing Date, the Trustee shall transmit by
mail to all Holders, as their names and addresses appear in the Security
Register, as provided in Trust Indenture Act Section 313(c), a brief report
dated as of such May 15 in accordance with and to the extent required by Trust
Indenture Act Section 313(a). The Trustee shall also comply with Trust
Indenture Act Section 313(b).
Commencing at the time this Indenture is qualified under the
Trust Indenture Act, a copy of each report at the time of its mailing to
Holders shall be filed with the Commission and each stock exchange on which the
Securities are listed of which the Company has notified the Trustee in writing.
The Company shall notify the Trustee when Securities are listed on any stock
exchange.
- 105 -
119
Section 704. Reports by Company and Subsidiary Guarantors.
(a) Whether or not the Company is subject to Section 13(a) or
15(d) of the Exchange Act, the Company shall, to the extent permitted under the
Exchange Act, file with the Commission the annual reports, quarterly reports
and other documents which the Company would have been required to file with the
Commission pursuant to such Section 13(a) or 15(d) if the Company were so
subject, such documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which the Company would have
been required so to file such documents if the Company were so subject. The
Company shall also in any event (x) within 15 days of each Required Filing Date
(i) transmit by mail to all Holders of Securities, as their names and addresses
appear in the security register, without cost to such Holders and (ii) file
with the Trustee copies of the annual reports, quarterly reports and other
documents which the Company would have been required to file with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if the
Company were subject to such Sections and (y) if filing such documents by the
Company with the Commission is not permitted under the Exchange Act, promptly
upon written request and payment of the reasonable cost of duplication and
delivery, supply copies of such documents to any prospective Holder of
Securities at the Company's cost.
(b) For so long as any of the Securities remain outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company covenants and agrees that it shall, during any
period in which it is not subject to Section 13(a), 13(c) or 15(d) under the
Exchange Act, make available to any Holder of the Securities in connection with
any sale thereof and any prospective purchaser of the Securities from such
Holder, in each case upon request, the information specified in, and meeting
the requirements of, Rule 144A(d)(4) under the Securities Act.
(c) The Trustee has no duty to review any financial or other
reports for purposes of determining compliance with this or any other
provisions of this Indenture.
- 106 -
120
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. When the Company May Merge, Etc.
(a) The Company shall not consolidate with or merge into,
or sell, assign, convey, lease or transfer all or substantially all of its
assets and those of its Subsidiaries taken as a whole to, any Person, unless
(i) the resulting, surviving or transferee Person expressly
assumes all the obligations of the Company under the Securities and
this Indenture;
(ii) such Person shall be organized and existing under the laws
of the United States of America, a state thereof or the District of
Columbia;
(iii) at the time of the occurrence of such transaction and after
giving effect to such transaction on a pro forma basis, such Person
could incur $1.00 of additional Indebtedness pursuant to the covenant
described in the initial paragraph under Section 1008 (assuming a
market rate of interest with respect to such additional Indebtedness);
(iv) at the time of the occurrence of such transaction and after
giving effect to such transaction on a pro forma basis, the
Consolidated Net Worth of such Person shall be equal to or greater
than the Consolidated Net Worth of the Company immediately prior to
such transaction;
(v) each Subsidiary Guarantor, to the extent applicable, shall
by supplemental indenture confirm that its Guarantee shall apply to
such Person's obligations under the Securities; and
(vi) immediately before and immediately after giving effect to
such transaction and treating any Indebtedness which becomes an
obligation of the Company or any of its Subsidiaries or of such Person
as a result of such transaction as having been incurred by the Company
or such
- 107 -
121
Subsidiary or such Person, as the case may be, at the time of such
transaction, no Default or Event of Default shall have occurred and be
continuing.
The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel, covering clauses (i), (ii), (v) and (vi) above, stating
that the proposed transaction and such supplemental indentures comply with this
Indenture and with Section 903 hereof. The Trustee shall be entitled to
conclusively rely upon such Officers' Certificate and Opinion of Counsel which
opinion shall also comply with Section 903 hereof.
(b) No Subsidiary Guarantor shall, and the Company shall not
permit a Subsidiary Guarantor to, in a single transaction or series of related
transactions merge or consolidate with or into any other corporation (other
than the Company or any other Subsidiary Guarantor) or other entity, or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially
all of its properties and assets to any entity (other than the Company or any
other Subsidiary Guarantor) unless at the time and giving effect thereto:
(i) either (1) such Subsidiary Guarantor shall be the
continuing corporation or (2) the entity (if other than such
Subsidiary Guarantor) formed by such consolidation or into which such
Subsidiary Guarantor is merged or the entity which acquires by sale,
assignment, conveyance, transfer, lease or disposition the properties
and assets of such Subsidiary Guarantor shall be a corporation duly
organized and validly existing under the laws of the United States of
America, any state thereof or the District of Columbia and expressly
assumes by a supplemental indenture, executed and delivered to the
Trustee, in a form reasonably satisfactory to the Trustee, all the
obligations of such Subsidiary Guarantor under the Securities and the
Indenture; and
(ii) immediately before and immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred
and be continuing.
- 108 -
122
Such Subsidiary Guarantor shall deliver to the Trustee prior
to the consummation of the proposed transaction, in form and substance
reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, sale, assignment,
conveyance, transfer, lease or disposition and such supplemental indenture, if
required, comply with this Indenture. The Trustee shall be entitled to
conclusively rely upon such Officers' Certificate and Opinion of Counsel, which
opinion shall also comply with Section 903 hereof.
The provisions of this Section 801(b) shall not apply to any
transaction (including any Asset Sale made in accordance with Section 1009)
with respect to any Subsidiary Guarantor if the Guarantee of such Subsidiary
Guarantor is released in connection with such transaction in accordance with
Section 1019(b).
Section 802. Successor Substituted.
Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer or disposition of all or substantially all of the
properties and assets of the Company or any Subsidiary Guarantor in accordance
with Section 801 hereof, the successor Person formed by such consolidation or
into which the Company or such Subsidiary Guarantor, as the case may be, is
merged or the successor Person to which such sale, assignment, conveyance,
transfer, lease or disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company or such Subsidiary
Guarantor, as the case may be, under this Indenture, the Securities and/or such
Guarantee, as the case may be, with the same effect as if such successor had
been named as the Company or such Subsidiary Guarantor, as the case may be,
herein, in the Securities and/or in such Guarantee, as the case may be. When a
successor assumes all the obligations of its predecessor under this Indenture,
the Securities or a Guarantee, as the case may be, the predecessor shall be
released from those obligations; provided that in the case of a transfer by
lease, the predecessor shall not be released from the payment of principal and
interest on the Securities or a Guarantee, as the case may be.
- 109 -
123
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements
without Consent of Holders.
Without the consent of any Holders, the Company and the
Subsidiary Guarantors, when authorized by a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto or agreements or other instruments with respect to any
Guarantee, in form and substance satisfactory to the Trustee, for any of the
following purposes:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for the assumption pursuant to Article Eight
of the Company's or a Subsidiary Guarantor's obligations to the
Holders in the case of a merger, consolidation or sale of assets;
(iii) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(iv) to make any change that does not adversely affect the
rights hereunder or thereunder of any Holder;
(v) to comply with requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act;
(vi) to add a Subsidiary Guarantor pursuant to the
requirements of Section 1019 hereof;
(vii) to evidence and provide the acceptance of the
appointment of a successor trustee hereunder;
(viii) to provide additional collateral for the Securities or
the Guarantees or other Indebtedness permitted to be secured by the
Collateral, including in connection with the additional Liens referred
to in Section 1012(j) hereof, and in connection therewith, to modify
covenants, to provide additional indemnity to the Trustee, and to
modify
- 110 -
124
other provisions of this Indenture, the Securities or the Guarantees
that relate to such collateral or that will or may be impacted by the
providing of such collateral, and to enter into agreements, documents
or other instruments to effect the foregoing, including, without
limitation, intercreditor and collateral agency agreements relating to
Liens on such collateral on a pari passu basis in favor of the Trustee
for the benefit of the Holders;
(ix) to comply with any requirement of the Commission or
applicable law to effectuate the Exchange Offer; or
(x) to add to the covenants of the Company, any Subsidiary
Guarantor or any other obligor upon the Securities for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company, any Subsidiary Guarantor or any other obligor upon the
Securities, as applicable, herein, in the Securities or in any
Guarantee.
Section 902. Supplemental Indentures and Agreements with
Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said
Holders delivered to the Company, each Subsidiary Guarantor and the Trustee,
the Company and each Subsidiary Guarantor (if a party thereto) when authorized
by a Board Resolution and the Trustee may enter into an indenture or indentures
supplemental hereto or agreements or other instruments with respect to any
Guarantee in form and substance satisfactory to the Trustee for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture, the Securities or any Guarantee; provided,
however, that no such supplemental indenture, agreement or instrument shall,
without the consent of the Holder of each Outstanding Security affected
thereby:
(i) reduce the principal amount of Securities whose Holders
must consent to an amendment or waiver;
- 111 -
125
(ii) reduce the rate of, or change the time for payment of,
interest, including default interest, on any Security;
(iii) reduce the principal of or change the fixed maturity of
any Security, or alter the optional redemption provisions, or alter
the price at which the Company shall offer to purchase such Securities
pursuant to Sections 1014 or 1109 hereof;
(iv) make any Security payable in money other than that
stated in the Security;
(v) make any change in Sections 504 or 507 hereof;
(vi) waive a Default or Event of Default in the payment of
principal of, premium, if any, or interest on the Securities,
including any such obligation arising under Sections 1009 and 1109 or
Section 1014 hereof (except a rescission of acceleration of the
Securities pursuant to Section 502 hereof by the Holders of at least a
majority (or in the case of the failure to make a Change of Control
Offer, two-thirds) in aggregate principal amount of the Securities
then Outstanding and a waiver of the payment default that resulted
from such acceleration);
(vii) waive a purchase payment required to be made under
Section 1009 and 1109 or Section 1014 or a payment under Article
Thirteen hereof with respect to any Security;
(viii) affect the ranking of the Securities;
(ix) release all or substantially all of the Collateral
other than pursuant to the terms of the Indenture or the Security
Documents; or
(x) make any change in the provisions of this Section 902.
Upon the written request of the Company and each Subsidiary
Guarantor, accompanied by a copy of a Board Resolution authorizing the
execution of any such supplemental indenture or Guarantee, and upon the filing
with the Trustee of evidence of the consent of Holders as aforesaid, the
Trustee shall, subject
- 112 -
126
to Section 903 hereof, join with the Company and each Subsidiary Guarantor in
the execution of such supplemental indenture or Guarantee.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture
or Guarantee or agreement or instrument relating to any Guarantee, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures and
Agreements.
In executing, or accepting the additional trusts created by,
any supplemental indenture, agreement or instrument permitted by this Article
or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Trust Indenture Act
Section 315(a) through 315(d) and Section 602 hereof) shall be fully protected
in relying upon, an Opinion of Counsel and an Officers' Certificate stating
that the execution of such supplemental indenture, agreement or instrument is
authorized or permitted by this Indenture, that no consent is required or that
all requisite consents have been received and that such supplemental indenture
constitutes the legal, valid and binding obligation of the Company, such
Subsidiary Guarantor or successor, as the case may be, enforceable against such
entity in accordance with its terms, subject to customary exceptions. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture, agreement or instrument which affects the Trustee's own rights,
duties or immunities under this Indenture, any Guarantee or otherwise.
Section 904. Revocation Effect of Supplemental Indentures.
Until a supplemental indenture, amendment or waiver becomes
effective, a consent to it by a Holder of a Security is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of consent is not made on any Security.
- 113 -
127
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may bear a notation in form
satisfactory to the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities so modified as to
conform to any such supplemental indenture may be prepared and executed by the
Company and each Subsidiary Guarantor and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company shall duly and punctually pay the principal of,
premium, if any, and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain (or cause to be maintained) an
office or agency where Securities may be presented or surrendered for payment.
The Company also shall maintain (or
- 114 -
128
cause to be maintained) in The City of New York an office or agency where
Securities may be surrendered for registration or transfer, redemption or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location and any change in the location of
any such offices or agencies. If at any time the Company shall fail to
maintain (or cause to be maintained) any such required offices or agencies or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the office of the
agent of the Trustee described above and the Company hereby appoints such agent
as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the
Securities may be presented or surrendered for any or all such purposes, and
may from time to time rescind such designation. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and any
change in the location of any such office or agency.
Section 1003. Compliance Certificate.
(i) The Company shall deliver to the Trustee, within one
hundred and twenty (120) days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether each has
kept, observed, performed and fulfilled its Indenture Obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge each has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof or thereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action each is taking or
proposes to take with respect thereto).
- 115 -
129
(ii) The Company shall deliver to the Trustee, within sixty
(60) days after the end of the first three quarters of each fiscal year, an
Officers' Certificate stating that a review of the activities of the Company
and its Subsidiaries during the preceding fiscal quarter has been made under
the supervision of the signing Officers with a view to determining whether each
has kept, observed, performed and fulfilled its Indenture Obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge each has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof or thereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action each is taking or
proposes to take with respect thereto).
(iii) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
financial statements delivered to the Trustee pursuant to Section 704(a) shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation reasonably
satisfactory to the Trustee) that in making the examination necessary for
certification of such financial statements nothing has come to their attention
which would lead them to believe that the Company or any of its Subsidiaries
has violated any provisions of Article Eight or Article Ten hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(iv) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default, Event of Default or other event of default and what action the Company
is taking or propose to take with respect thereto.
- 116 -
130
Section 1004. Taxes.
The Company shall, and shall cause each of its Subsidiaries
to, pay prior to delinquency all material taxes, assessments and governmental
levies except as are being contested in good faith and by appropriate
proceedings diligently conducted and in respect of which appropriate reserves
(in the good faith judgment of management of the Company) are being maintained
in accordance with GAAP.
Section 1005. [Intentionally omitted.]
Section 1006. Limitation on Restricted Payments.
Subject to the other provisions of this Section 1006, the
Company shall not, nor shall it cause, permit or suffer any Restricted
Subsidiary to, (i) declare or pay any dividends or make any other distributions
(including through mergers, liquidations or other transactions commonly known
as leveraged buyouts) on any class of Equity Interests of the Company or such
Restricted Subsidiary (other than dividends or distributions payable or paid by
a Wholly-Owned Restricted Subsidiary of the Company on account of its Equity
Interests held by the Company or another Restricted Subsidiary or payable or
paid in shares of Capital Stock of the Company other than Redeemable Stock),
(ii) make any payment on account of, or set apart money for a sinking or other
analogous fund for, the purchase, redemption or other retirement of such Equity
Interests, (iii) purchase, defease, redeem or otherwise retire any Subordinated
Indebtedness, or (iv) make any Restricted Investment, either directly or
indirectly, whether in cash or property or in obligations of the Company or any
Restricted Subsidiary (all of the foregoing being called "Restricted
Payments"), unless, (x) in the case of a dividend, such dividend is payable not
more than 60 days after the date of declaration and (y) after giving effect to
such proposed Restricted Payment, all the conditions set forth in clauses (1)
through (3) below are satisfied (A) at the date of declaration (in the case of
any dividend), (B) at the date of such setting apart (in the case of any such
fund) or (C) on the date of such
- 117 -
131
other payment or distribution (in the case of any other Restricted Payment)
(each such date being referred to as a "Computation Date"):
(1) no Default or Event of Default shall have occurred and be
continuing or would result from the making of such Restricted Payment;
(2) at the Computation Date for such Restricted Payment and
after giving effect to such Restricted Payment on a pro forma basis,
the Company or such Restricted Subsidiary could incur $1.00 of
additional Indebtedness pursuant to the covenant described in the
initial paragraph under Section 1008 hereof; and
(3) the aggregate amount of Restricted Payments declared,
paid or distributed subsequent to the Closing Date (including the
proposed Restricted Payment) shall not exceed the sum of (i) 50% of
the cumulative Consolidated Net Income of the Company for the period
subsequent to July 1, 1997 to and including the last day of the
Company's last fiscal quarter ending prior to the Computation Date
(each such period to constitute a "Computation Period") (or, if such
aggregate cumulative Consolidated Net Income is a loss, minus 100% of
such loss of the Company during the Computation Period), (ii) the
aggregate Net Cash Proceeds of the issuance or sale or the exercise
(other than to a Subsidiary or an employee stock ownership plan or
other trust established by the Company or any of its Subsidiaries for
the benefit of their employees) of the Company's Equity Interests
(other than Redeemable Stock) subsequent to the Closing Date, (iii)
the aggregate Net Cash Proceeds of the issuance or sale (other than to
a Subsidiary) of any debt securities of the Company that have been
converted into or exchanged for Equity Interests (other than
Redeemable Stock) of the Company to the extent such debt securities
were originally issued or sold for cash, plus the aggregate Net Cash
Proceeds received by the Company at the time of such conversion or
exchange, in each case subsequent to the Closing Date, (iv) cash
contributions to the Company's capital subsequent to the Closing Date
and (v) $5,000,000.
- 118 -
132
If no Default or Event of Default has occurred and is
continuing or would occur as a result thereof, the prohibitions set forth above
are subject to the following exceptions: (a) Restricted Investments in
obligations representing a portion of the proceeds of any Asset Sale
consummated in accordance with Section 1009 hereof, provided, however, that
such Restricted Investments shall be excluded in the calculation of the amount
of Restricted Payments previously made for purposes of clause (3) of the
preceding paragraph; (b) any purchase or redemption of Equity Interests or
Subordinated Indebtedness made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Equity Interests of the Company (other than
Redeemable Stock and other than Equity Interests issued or sold to a Subsidiary
or an employee stock ownership plan), provided, however, that (x) such purchase
or redemption shall be excluded in the calculation of the amount of Restricted
Payments previously made for purposes of clause (3) of the preceding paragraph
and (y) the Net Cash Proceeds from such sale shall be excluded for purposes of
clause 3(ii) of the preceding paragraph to the extent utilized for purposes of
such purchase or redemption; (c) any purchase or redemption of Subordinated
Indebtedness of the Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Indebtedness of the Company or
any Restricted Subsidiary which is permitted to be issued pursuant to the
provisions of Section 1008 hereof, provided, however, that such purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments previously made for purposes of clause (3) of the preceding paragraph;
(d) the repurchase, redemption or other acquisition or retirement for value of
Capital Stock of the Company or Pioneer held by management or other employees
of the Company, Pioneer or any Subsidiary pursuant to any shareholders
agreement, management or employee stock option agreement or management or
employee equity subscription agreement in accordance with the provisions of any
such arrangement, in an amount not greater than $500,000 in any calendar year
plus the portion of any such amounts which remains unused at the end of the two
prior calendar years, but in no event to exceed $1,500,000 in any calendar
year, provided, however, that any such repurchase, redemption, acquisition or
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments previously made for purposes of clause (3) of the preceding
paragraph; (e) payments to Pioneer pursuant to any tax sharing arrangement so
long as payments
- 119 -
133
thereunder do not exceed the amount of the Company and its consolidated
subsidiaries' share of Federal and state income taxes actually paid or to be
paid by Pioneer, provided, however, that such payments shall be excluded in the
calculation of the amount of Restricted Payments previously made for purposes
of clause (3) of the preceding paragraph; (f) payments to Pioneer to perform
accounting, legal, corporate reporting and administrative functions in the
ordinary course of business in an amount not greater than $500,000 in any
calendar year, or to pay required fees in connection with the Acquisition and
related transactions, including the registration under applicable laws and
regulations of its debt or equity securities issued in connection therewith,
provided, however, that such payments shall be excluded in the calculation of
the amount of Restricted Payments previously made for purposes of clause (3) of
the preceding paragraph; and (g) Investments described in clause (vi) of the
definition of Permitted Investments, provided, however, that such Investments
shall be included in the calculation of the amount of Restricted Payments
previously made for purposes of clause (3) of the preceding paragraph.
For purposes of this Section 1006, (a) the amount of any
Restricted Payment declared, paid or distributed in property of the Company or
any Restricted Subsidiary shall be deemed to be the net book value of any such
property that is intangible property and the Fair Market Value (as determined
by and set forth in a resolution of the Board of Directors) of any such
property that is tangible property at the Computation Date, in each case, after
deducting related reserves for depreciation, depletion and amortization; (b)
the amount of any Restricted Payment declared, paid or distributed in
obligations of the Company or any Restricted Subsidiary shall be deemed to be
the principal amount of such obligations as of the date of the adoption of a
resolution by the board of directors of the Company or such Restricted
Subsidiary authorizing such Restricted Payment; and (c) a distribution to
holders of the Company's Equity Interests of (i) shares of Capital Stock or
other Equity Interests of any Restricted Subsidiary of the Company or (ii)
other assets of the Company, without, in either case, the receipt of equivalent
consideration therefor shall be regarded as the equivalent of a cash dividend
equal to the excess of the Fair Market Value of the Equity Interests or other
assets being so distributed at the time of such distribution over the
- 120 -
134
consideration, if any, received therefor. Not later than the date of the
making of any such Restricted Payment, the Company shall deliver to the Trustee
an officers' certificate stating that such Restricted Payment is permitted,
attaching a copy of the applicable resolution of the Company's Board of
Directors pursuant to which the value of the Restricted Payment to be made was
determined and setting forth the basis upon which the calculations required by
this Section 1006 were computed.
Section 1007. Limitations on Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Restricted Subsidiary to (i) pay dividends or make any
other distribution to the Company or its Restricted Subsidiaries on its Equity
Interests, (ii) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (iii) make loans or advances to the Company or any other
Restricted Subsidiary or (iv) transfer any of its property or assets to the
Company or any other Restricted Subsidiary, except (A) consensual encumbrances
or restrictions contained in or created pursuant to the Term Loan Agreement,
the Revolving Credit Agreement, the Intercreditor Agreement, the Security
Documents and other Existing Indebtedness listed on Schedule 2 hereto, (B)
consensual encumbrances or restrictions in the Securities and the Indenture,
(C) any restriction, with respect to a Restricted Subsidiary of the Company
that is not a Subsidiary of the Company on the Closing Date, in existence at
the time such entity becomes a Restricted Subsidiary of the Company; provided
that such encumbrance or restriction is not created in anticipation of or in
connection with such entity becoming a Subsidiary of the Company and is not
applicable to any Person or the properties or assets of any Person other than a
Person that becomes a Subsidiary, (D) any encumbrances or restrictions pursuant
to an agreement effecting a refinancing of Indebtedness referred to in clauses
(A) or (C) of this Section 1007 or contained in any amendment to any agreement
creating such Indebtedness, provided that the encumbrances and restrictions
contained in any such refinancing or amendment are not materially more
restrictive taken as a whole (as determined in good faith by the chief
financial officer of the Company) than those provided for in such Indebtedness
being refinanced or amended, (E) encumbrances or restrictions contained in any
other Indebtedness permitted to be incurred subsequent to the Closing Date
pursuant to the provisions of Section 1008 hereof, provided that any such
encumbrances or restrictions are not materially more restrictive taken as a
whole (as determined in good faith by the chief financial officer of the
Company) than the most restrictive of
- 121 -
135
those provided for in the Indebtedness referred to in clauses (A) or (C) of
this Section 1007, (F) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold interests to
the extent such provisions restrict the transfer of the lease, (G) any
restriction with respect to a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of such Restricted Subsidiary in compliance with
the Indenture pending the closing of such sale or disposition; or (H) any
encumbrance or restriction due to applicable law.
Section 1008. Limitations on Indebtedness.
The Company shall not, and shall not permit its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become liable with respect to or become responsible for
the payment of, contingently or otherwise ("incur"), any Indebtedness;
provided, however, that the Company, or a Restricted Subsidiary of the Company,
may incur Indebtedness if at the time of such incurrence and after giving pro
forma effect thereto, the Company's Consolidated Cash Flow Coverage Ratio for
the most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
Indebtedness is incurred, calculated on a pro forma basis as if such
Indebtedness was incurred on the first day of such four full fiscal quarter
period, would be at least 2.0 to 1.0. For purposes of determining the
Company's Consolidated Cash Flow Coverage Ratio, Cash Flow and Consolidated
Interest Expense for all periods prior to the Closing Date shall be calculated
on a consolidated basis including each of the Company's and its subsidiaries'
predecessors.
- 122 -
136
Notwithstanding the foregoing limitations, the limitations of
this Section 1008 shall not apply to the incurrence of Permitted Indebtedness.
Notwithstanding anything to the contrary contained herein, the
Company and its Restricted Subsidiaries each may guarantee Indebtedness of the
Company or any Restricted Subsidiary that is permitted to be incurred
hereunder; provided, however, that in the event such Indebtedness guaranteed is
subordinated in right of payment to any other Indebtedness of the obligor
thereof, then such guarantee shall be subordinated to Indebtedness of such
guarantor to the same extent.
Section 1009. Asset Sales.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, make any Asset Sale (other than to the Company or
other Restricted Subsidiary) unless (i) the Company or such Restricted
Subsidiary receives consideration at the time of such Asset Sale at least equal
to the Fair Market Value of the assets sold or otherwise disposed of, and at
least 80% of the consideration received by the Company or such Restricted
Subsidiary from such Asset Sale is in the form of cash and no portion thereof
shall consist of inventory or accounts receivable or other property that would
become subject to a Lien held by any other creditor of the Company or of any
Restricted Subsidiary of the Company; provided, however, that the amount of any
cash equivalent or note or other obligation received by the Company or such
Restricted Subsidiary from the transferee in any such transaction that is
converted within 90 days by the Company or such Restricted Subsidiary into cash
shall be deemed upon such conversion to be cash for purposes of this provision;
(ii) to the extent such Asset Sale involves Collateral, (x) the consent of the
Majority Holders shall be obtained prior to the consummation of such sale and
(y) the Company shall cause the aggregate cash proceeds received by the Company
or such Restricted Subsidiary in respect of such Asset Sale which are allocated
to the Collateral, net of the items set forth in clauses (i) through (vi) of
the definition of Net Proceeds (the "Collateral Proceeds") to be deposited with
the Collateral Agent in the Intercreditor Collateral Account as and when
received by the Company or any of its Restricted Subsidiaries and shall
otherwise comply with the Intercreditor Agreements and Article Fourteen hereof
applicable
- 123 -
137
to such sale of Collateral, provided, that no Senior Indebtedness other than
the Securities and any Secured Indebtedness may be permanently repaid or
prepaid out of any Collateral Proceeds; and (iii) the Net Proceeds or the
Collateral Proceeds received by the Company or such Restricted Subsidiary from
any Asset Sale are applied in accordance with the Intercreditor Agreement, as
applicable, and with the following paragraphs.
(b) (i) If all or a portion of the Net Proceeds of any Asset
Sale are not required to be applied to repay permanently any Senior
Indebtedness of the Company then outstanding as required by the terms thereof,
or the Company determines not to apply such Net Proceeds to the permanent
prepayment of any Senior Indebtedness outstanding or if no such Senior
Indebtedness is then outstanding, then the Company may within 365 days of the
Asset Sale, invest the Net Proceeds in the Company, or in one or more
Restricted Subsidiaries in a Related Business. (Any optional prepayment of the
Term Loan Notes with the Net Proceeds of an Asset Sale shall be permitted only
if the amount of such prepayment is limited to the Pro Rata Share (as defined
in the Intercreditor Agreement) with respect to the Term Loan Notes, and the
Pro Rata Share with respect to the Securities is used to make an Asset Sale
Offer (as described below), and any repayment of a revolving credit facility or
similar agreement that makes credit available with the Net Proceeds of an Asset
Sale shall be permitted only if the commitment thereunder is also permanently
reduced by such amount.) The amount of such Net Proceeds neither used to
permanently repay or prepay Senior Indebtedness nor used or invested as set
forth in this paragraph constitutes "Excess Proceeds."
(ii) When the aggregate amount of Excess Proceeds from one or
more Asset Sales equals $10,000,000 or more, the Company shall apply
100% of such Excess Proceeds within 365 days subsequent to the
consummation of the Asset Sale which resulted in the Excess Proceeds
equalling $10,000,000 or more to the purchase of Securities tendered
to the Company for purchase at a price (the "Asset Sale Purchase
Price") equal to 100% of the principal amount thereof, plus accrued
interest and Liquidated Damages, if any, to the date of purchase
pursuant to an offer to purchase made by the Company (an "Asset Sale
Offer") with respect to the Securities. Any Asset Sale Offer may
include a pro rata offer under similar circumstances to purchase other
Senior Indebtedness requiring a similar offer.
- 124 -
138
(c) Until such time as the Net Proceeds from any Asset Sale
are applied in accordance with this covenant, such Net Proceeds shall be
segregated from the other assets of the Company and its Subsidiaries and
invested in cash or Eligible Investments, except that the Company or any
Restricted Subsidiary may use any Net Proceeds pending the utilization thereof
in the manner (and within the time period) described above, to repay revolving
loans (under the Revolving Credit Agreement or otherwise) without a permanent
reduction of the commitment thereunder.
(d) Any Asset Sale Offer shall be made substantially in
accordance with the procedures described under Section 1109 hereof. The
Company shall cause a notice of any Asset Sale Offer to be mailed to the
Trustee and the Holders at their registered addresses not less than 30 days nor
more than 45 days before the purchase date. Such notice shall set forth the
basis of calculation used in determining the amount of Excess Proceeds to be
applied to the purchase of such Securities.
In the case of a sale of Collateral, the notice of Asset Sale
Offer shall contain the following additional information: (i) a description of
the interests to be released, (ii) the Fair Market Value of the released
interests as of a date no later than 60 days before the date of such notice,
and (iii) certification that the purchase price received is not less than the
fair market value of such released interest as of the date of such release.
Such notice to the Trustee shall be accompanied by an Officers' Certificate
setting forth (i) a statement to the effect that (x) the Company has made an
Asset Sale and/or (y) there has occurred a destruction or condemnation in
respect of Collateral resulting in Insurance Proceeds or Net Awards which are
not required to be applied to effect a Restoration of the affected Collateral
under the applicable Security Document. The notice shall also be accompanied
by an Opinion of Counsel as to the Asset Sale Offer, and satisfactory evidence
from a title company that the Liens of the Collateral Agent or the remaining
Collateral continue unimpaired as perfected first priority liens.
- 125 -
139
Upon receiving notice of an Asset Sale Offer, Holders may
elect to tender their Securities in whole or in part in integral multiples of
$1,000 in exchange for cash. To the extent that Holders properly tender
Securities in an amount exceeding the Asset Sale Offer, Securities of tendering
Holders shall be repurchased on a pro rata basis (based on amounts tendered).
(e) In the event the Company is required to make an Asset
Sale Offer at a time when the Company is prohibited from making such Offer, the
Company shall, on or prior to the date that the Company is required to make an
Asset Sale Offer, (i) seek the consent of its lenders to repurchase Securities
pursuant to such Asset Sale Offer or (ii) refinance the Indebtedness that
prohibits such Asset Sale Offer; provided, however, that the failure to make or
consummate the Asset Sale Offer as provided herein shall constitute an Event of
Default.
(f) The Company shall comply, to the extent applicable, with
the requirements of Rule 14e-1 under the Exchange Act, any other tender offer
rules under the Exchange Act and other securities laws or regulations in
connection with any offer to repurchase and the repurchase of the Securities as
described above.
(g) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create or permit to exist or become effective any
consensual restriction (other than restrictions not more restrictive taken as a
whole (as determined in good faith by the chief financial officer of the
Company) than those in effect under Existing Indebtedness, and Indebtedness
under the New Credit Facilities) that would materially impair the ability of
the Company to comply with the provisions of this Section 1009.
(h) If at any time any non-cash consideration (other than any
such consideration consisting of inventory, accounts receivable and certain
related assets securing or permitted to secure the Revolving Credit Agreement)
is received by the Company or any Restricted Subsidiary, as the case may be, in
connection with any Asset Sale of assets which includes Collateral, such
non-cash consideration shall be made subject to the Lien of the Security
Documents in the manner contemplated in the Intercreditor Agreements, as
applicable, to the extent of the purchase price allocated to the Collateral.
If and when any such non-cash consideration received from any Asset Sale
(whether or not relating to Collateral) is converted into or sold or
- 126 -
140
otherwise disposed of for cash, then such conversion or disposition shall be
deemed to constitute an Asset Sale hereunder and the Net Proceeds thereof shall
be applied in accordance with this Section 1009 and this Indenture.
(i) All Insurance Proceeds and all Net Awards required to be
delivered to the Collateral Agent pursuant to any Security Document shall
constitute Trust Moneys and shall be delivered by the Company or a Restricted
Subsidiary, as the case may be, to the Collateral Agent contemporaneously with
receipt by the Company or such Restricted Subsidiary and be deposited into the
appropriate Intercreditor Collateral Account and applied in accordance with the
applicable provisions of the Intercreditor Agreements. Insurance Proceeds and
Net Awards so deposited that may be applied by the Company or a Restricted
Subsidiary to effect a Restoration of the affected Collateral under the
applicable Security Document may be withdrawn from the Intercreditor Collateral
Account only in accordance with the applicable provisions of the Intercreditor
Agreement. Insurance Proceeds and Net Awards so deposited that are not applied
to effect a Restoration of the affected Collateral under the applicable
Security Document may only be withdrawn in accordance with applicable
provisions of the Intercreditor Agreement.
Section 1010. Limitation on Sale and Leaseback Transactions.
The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction unless (i) at the
time of the occurrence of such transaction and after giving effect to such
transaction and (x) in the case of a Sale and Leaseback Transaction which is a
Capitalized Lease Obligation, giving effect to the Indebtedness in respect
thereof, and (y) in the case of any other Sale and Leaseback Transaction,
giving effect to the Attributable Indebtedness in respect thereof, the Company
or such Restricted Subsidiary could incur $1.00 of additional Indebtedness
pursuant to the initial paragraph under Section 1008 hereof, (ii) at the time
of the occurrence of such transaction, the Company or such Restricted
Subsidiary could incur Indebtedness secured by a Lien on property in a
principal amount equal to or exceeding the Attributable Indebtedness in respect
of such Sale and Leaseback Transaction pursuant to Section 1012 hereof, and
(iii) the transfer of assets in such Sale and Leaseback Transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Section 1009 hereof.
- 127 -
141
Section 1011. Limitation on Transactions With Affiliates.
(a) The Company and its Restricted Subsidiaries shall not,
directly or indirectly, enter into any transaction or series of related
transactions with or for the benefit of any of their respective Affiliates
other than with the Company or any Restricted Subsidiaries, except on an
arm's-length basis and if (x)(i) in the case of any such transaction in which
the aggregate rental value, remuneration or other consideration (including the
value of a loan), together with the aggregate rental value, remuneration or
other consideration (including the value of a loan) of all such other
transactions consummated in the year during which such transaction is proposed
to be consummated, exceeds $750,000, the Company delivers Board Resolutions to
the Trustee evidencing that the Board of Directors and the Independent
Directors that are disinterested each have (by a majority vote) determined in
good faith that the aggregate rental value, remuneration or other consideration
(including the value of any loan) inuring to the benefit of such Affiliate from
any such transaction is not greater than that which would be charged to or
extended by the Company or its Subsidiaries, as the case may be, on an
arm's-length basis for similar properties, assets, rights, goods or services by
or to a Person not affiliated with the Company or its Subsidiaries, as the case
may be, and (ii) in the case of any such transaction in which the aggregate
rental value, remuneration or other consideration (including the value of any
loan), together with the aggregate rental value, remuneration or other
consideration (including the value of any loan) of all such other transactions
consummated in the year during which such transactions are proposed to be
consummated, exceeds $7,500,000, the Company delivers to the Trustee Board
Resolutions as described in clause (a)(x)(i) of this Section 1011 and an
opinion of a nationally recognized investment banking firm, unaffiliated with
the Company and the Affiliate which is party to such transaction, to the effect
that the aggregate rental price, remuneration or other consideration (including
the value of a loan) inuring to the benefit of such Affiliate from any such
transaction is not greater than that which would be charged to or extended by
the Company or its Subsidiaries, as the case may be, on an arm's-length basis
for similar properties, assets, rights, goods or services by or to a Person not
affiliated with the Company or its Subsidiaries, as the case may be, and (y)
all such transactions referred to in clauses
- 128 -
142
(a)(x)(i) and (a)(x)(ii) of this Section 1011 are entered into in good faith.
Any transaction required to be approved by Independent Directors pursuant to
the preceding paragraph must be approved by at least one such Independent
Director.
(b) The provisions of the preceding paragraph do not prohibit
(i) any Restricted Payment permitted to be paid pursuant to the provisions of
Section 1006 hereof, (ii) any Investment made in Kemwater during a period of
three years following the Closing Date, provided that such Investment matures
or is required to be redeemed within one year of its being made, (iii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, (iv)
loans or advances to employees in the ordinary course of business consistent
with past practices, not to exceed $500,000 aggregate principal amount
outstanding at any time, (v) the payment of fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any of its Subsidiaries, as determined by the board of
directors of the Company or any of its Subsidiaries in good faith and (vi)
Existing Affiliate Agreements, including amendments thereto entered into after
the Closing Date provided that the terms of any such amendment either (A) are
not, in the aggregate, less favorable to the Company than the terms of such
agreement prior to such amendment, or (B) if such terms are, in the aggregate,
less favorable to the Company, such amendment satisfies the requirements of the
preceding paragraph.
Section 1012. Limitation on Liens.
The Company shall not, and shall not permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Lien upon any of
their respective assets or properties now owned or acquired after the Closing
Date, or any income or profits therefrom, excluding, however, from the
operation of the foregoing any of the following:
(a) Liens existing as of the Closing Date or pursuant to an
agreement in existence on the Closing Date, including the New Credit
Facilities and security documents relating thereto and the Security
Documents;
(b) Permitted Liens;
- 129 -
143
(c) Liens on assets or properties of the Company, or on
assets or properties of Restricted Subsidiaries of the Company, to
secure the payment of all or a part of the purchase price of assets or
property acquired or constructed in the ordinary course of business
after the Closing Date; provided, however, that (i) the aggregate
principal amount of Indebtedness secured by such Liens shall not
exceed the original cost or purchase price of the assets or property
so acquired (including the reasonable and customary costs of
installation of such acquired assets) or constructed, (ii) the
Indebtedness secured by such Liens shall be otherwise permitted to be
incurred hereunder, (iii) such Liens shall not encumber any other
assets or property of the Company or any of its Restricted
Subsidiaries and (iv) the Indebtedness secured by the Lien shall not
be created more than 100 days after the later of the acquisition,
completion of construction, repair, improvement, addition or
commencement of full operation of the property subject to the Lien;
(d) Liens on the assets or property acquired by the Company
or any Restricted Subsidiary after the Closing Date; provided,
however, that (i) such Liens existed on the date such asset or
property was acquired and were not incurred as a result of or in
anticipation of such acquisition and (ii) such Liens shall not extend
to or cover any property or assets of the Company or any of its
Restricted Subsidiaries other than the property or assets so acquired;
(e) Liens securing Indebtedness which is incurred to
refinance Indebtedness which has been secured by a Lien permitted
under the Indenture and which shall be permitted to be refinanced
under the Indenture; provided, however, that such Liens shall not
extend to or cover any property or assets of the Company or any of its
Restricted Subsidiaries not securing the Indebtedness so refinanced;
(f) Liens on assets or property of the Company or any
Restricted Subsidiary that shall be subject to a Sale and Leaseback
Transaction, provided, that the aggregate principal amount of
Attributable Indebtedness in respect of all Sale and Leaseback
Transactions then outstanding shall not at the time such a Lien is
incurred exceed $10,000,000;
(g) Liens on property or shares of Capital Stock of a Person
at the time such Person becomes a Restricted
- 130 -
144
Subsidiary; provided, however, that such Liens were not created,
incurred or assumed in contemplation of the acquisition thereof by the
Company or a Subsidiary; provided further, that such Liens shall not
extend to any other property owned by the Company or a Restricted
Subsidiary;
(h) Liens securing Indebtedness of a Restricted Subsidiary
owing to the Company or a Wholly-Owned Restricted Subsidiary;
(i) Liens on inventory, accounts receivable or related
general intangibles of any Restricted Subsidiary securing the
obligations under clause (d) of the definition of "Permitted
Indebtedness" in Section 101 hereof;
(j) pari passu Liens on the Collateral securing up to
$50,000,000 aggregate principal amount of Indebtedness permitted to be
incurred under the initial paragraph of Section 1008 hereof, provided
that (i) the proceeds of such Indebtedness are used to acquire or
construct additional property, plant and equipment that will be
utilized in one or more Related Businesses, (ii) the aggregate
principal amount of Indebtedness secured by such Liens does not exceed
the original cost or purchase price of the assets or property so
acquired (including the reasonable and customary costs of installation
of such acquired assets) or constructed, and (iii) the assets or
property acquired or constructed with such Indebtedness are pledged to
the Collateral Agent in accordance with the Intercreditor Agreement to
become part of the Collateral securing the Securities and the Term
Loan Notes on a pari passu basis with such Indebtedness, and in
connection therewith (A) the holders of such Indebtedness or any
trustee or other representative thereof becomes party to the
Intercreditor Agreement, as amended, and is authorized to exercise
rights and remedies in accordance therewith, and (B) the Collateral
Agent receives an endorsement to its title insurance policies relating
to the mortgage liens constituting part of the Collateral insuring the
continuing priority of such mortgage liens as set forth in the title
insurance policies; and
(k) Liens on assets or property of the Company, or on assets
or property of Restricted Subsidiaries of the Company, acquired or
constructed after the date of the
- 131 -
145
Indenture other than in the ordinary course of business and other than
assets or property acquired or constructed in replacement, repair or
improvement of any assets or property constituting Collateral;
provided, however, that (i) the aggregate principal amount of
Indebtedness secured by such Liens does not exceed the original cost
or purchase price of the assets or property so acquired (including the
reasonable and customary costs of installation of such acquired
assets) or constructed, (ii) the Indebtedness secured by such Liens is
otherwise permitted to be incurred under the Indenture and (iii) such
Liens do not encumber the Collateral.
Section 1013. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence and the corporate existence of each of its Subsidiaries, in
accordance with their respective organizational documents (as the same may be
amended from time to time) and (ii) its (and its Subsidiaries) rights (charter
and statutory), licenses and franchises; provided, however, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate existence of any Subsidiary, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries taken as a whole and that
the loss thereof is not adverse in any material respect to the Holders.
Section 1014. Change of Control.
(a) In the event of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall notify the
Holders in writing of such occurrence and shall make an irrevocable offer (the
"Change of Control Offer") to purchase on a Business Day (the "Change of
Control Payment Date") not later than 60 days following the Change of Control
Date, all Securities then outstanding at a purchase price (the "Change of
Control Purchase Price") equal to 101% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, to the Change of
Control Payment Date.
(b) Notice of a Change of Control Offer shall be mailed by
the Company to the Holders at their registered addresses not less than 30 days
nor more than 45 days before the
- 132 -
146
Change of Control Payment Date. The Change of Control Offer shall remain open
for at least 20 Business Days and until 5:00 p.m., New York City time, on the
Business Day next preceding the Change of Control Payment Date. Substantially
simultaneously with mailing of the notice, the Company shall cause a copy of
such notice to be published in a newspaper of general circulation in the
Borough of Manhattan, The City of New York.
(c) The notice, which governs the terms of the Change of
Control Offer, shall state:
(i) that the Change of Control Offer is being made pursuant
to this Section 1014 and that all Securities (or portions thereof)
tendered will be accepted for payment;
(ii) the Change of Control Purchase Price and the Change of
Control Payment Date;
(iii) that any Securities not surrendered or accepted for
payment shall continue to accrue interest and Liquidated Damages, if
any;
(iv) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Securities accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
or Liquidated Damages, if any, after the Change of Control Payment
Date;
(v) that any Holder electing to have a Security purchased
(in whole or in part) pursuant to a Change of Control Offer shall be
required to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security completed, to
the Paying Agent at the address specified in the notice (or otherwise
make effective delivery of the Security pursuant to book-entry
procedures and the related rules of the applicable Depositary) at
least five Business Days before the Change of Control Payment Date;
(vi) that any Holder shall be entitled to withdraw its
election if the Paying Agent receives, not later than three (3)
Business Days prior to the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder delivered for
purchase, the
- 133 -
147
certificate number of the Security and a statement that such Holder is
withdrawing his or her election to have such Security purchased;
(vii) that Holders whose Securities are purchased only in
part shall be issued Securities representing the unpurchased portion
of the Securities surrendered, which unpurchased portion must be equal
to $1,000 principal amount or an integral multiple thereof;
(viii) the instructions that Holders must follow in order to
tender their Securities; and
(ix) the circumstances and relevant facts regarding such
Change of Control (including but not limited to information with
respect to pro forma financial information after giving effect to such
Change of Control, and information regarding the Persons acquiring
control).
(d) On the Change of Control Payment Date, the Company
shall:
(i) accept for payment the Securities, or portions thereof,
surrendered and properly tendered and not withdrawn, pursuant to the
Change of Control Offer;
(ii) deposit with the Paying Agent money sufficient to pay
the Change of Control Purchase Price of all the Securities, or
portions thereof, so accepted; and
(iii) deliver to the Trustee the Securities so accepted
together with an Officers' Certificate stating that such Securities
have been accepted for payment by the Company.
The Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the Change of Control Purchase Price and
the Trustee shall promptly authenticate and mail to such Holders a new Security
equal in principal amount to the unpurchased portion of the Security
surrendered.
(e) Subject to applicable escheat laws, as provided in the
Securities, the Trustee and the Paying Agent shall upon the Company's written
request return to the Company any cash that remains unclaimed, together with
interest or dividends, if any,
- 134 -
148
thereon, held by them for the payment of the Change of Control Purchase Price;
provided, however, that (x) to the extent that the aggregate amount of cash
deposited by the Company pursuant to clause (ii) of paragraph (d) above exceeds
the aggregate Change of Control Purchase Price of the Securities or portions
thereof to be purchased, then the Trustee shall hold such excess for the
Company and (y) unless otherwise directed by the Company in writing, promptly
after the Business Day following the Change of Control Payment Date the Trustee
shall return any such excess to the Company together with interest, if any,
thereon.
(f) The Company shall comply, to the extent applicable, with
the requirements of Rule 14e-1 under the Exchange Act, any other tender offer
rules under the Exchange Act and other securities laws or regulations in
connection with the offer to repurchase and the repurchase of the Securities as
described above.
(g) In the event a Change of Control occurs at a time when
the Company is prohibited from purchasing Securities, the Company shall, within
thirty (30) days following a Change of Control (i) seek the consent of its
lenders to the purchase of the Securities or (ii) refinance the Indebtedness
that prohibits such purchase; provided, however, that the failure to make or
consummate the Change of Control Offer shall constitute an Event of Default.
(h) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create or permit to exist or become effective any
restriction (other than restrictions not more restrictive taken as a whole (as
determined in good faith by the chief financial officer of the Company) than
those in effect under Existing Indebtedness and Indebtedness under the New
Credit Facilities) that would materially impair the ability of the Company to
make a Change of Control Offer to purchase the Securities or, if such Change of
Control Offer is made, to pay for the Securities tendered for purchase.
Section 1015. Maintenance of Properties.
The Company shall, and shall cause its Restricted Subsidiaries
to, maintain their respective properties and assets in normal working order and
condition as on the Closing Date (reasonable wear and tear excepted) and make
all repairs, renewals, replacements, additions, betterments and improvements
- 135 -
149
thereto, as shall be reasonably necessary for the proper conduct of the
business of the Company and its Restricted Subsidiaries taken as a whole,
provided that nothing herein shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing any maintenance of any such properties if such
discontinuance is desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole.
Section 1016. Maintenance of Insurance.
The Company shall, and shall cause its Restricted Subsidiaries
to maintain liability, casualty and other insurance (subject to customary
deductibles and retentions) with responsible insurance companies in such
amounts and against such risks as is customarily carried by responsible
companies engaged in similar businesses and owning similar assets in the
general areas in which the Company and its Restricted Subsidiaries operate
(which may include self-insurance in comparable form to that maintained by such
responsible companies).
Section 1017. Stock Pledge Agreements.
(a) If (i) any Restricted Subsidiary of the Company engages in
any business activity other than the holding of the Capital Stock of one or
more Subsidiaries of the Company (or in the case of Imperial West, engages in
any business activity other than the holding of its Investment in Kemwater) and
(ii) such Restricted Subsidiary has a value equal to or greater than 5% of the
Company's total assets determined on a consolidated basis as of the time of
determination, then the Company shall, and shall cause the applicable
Subsidiary or Subsidiaries of the Company (the "Pledgor Subsidiary" or "Pledgor
Subsidiaries") to, execute and deliver to the Trustee and the Collateral Agent
one or more stock pledge agreements substantially in the form of the stock
pledge agreement attached as an exhibit to the Indenture providing for the
pledge to the Collateral Agent for the benefit of (x) the Trustee, for itself
and the Holders, and (y) the Term Loan Agent, for itself and the other lenders
under the Term Loan Agreement, of all the Capital Stock of such Restricted
Subsidiary held by the Company and the Pledgor Subsidiary or Pledgor
Subsidiaries, together with certificates evidencing such Capital Stock, which
Capital Stock shall become "Collateral" for purposes of the Intercreditor
Agreement.
- 136 -
150
(b) If (i) there are no Term Loan Notes outstanding, (ii)
there is no Indebtedness (the "New Indebtedness") outstanding which refinanced
the Term Loan Notes and requires pledges of Capital Stock of one or more
Restricted Subsidiaries of the Company in connection therewith, (iii) all other
amounts due and owing to the lenders under the Term Loan Agreement or the New
Indebtedness lenders under the agreement providing for the issuance of the New
Indebtedness, as the case may be, have been paid in full, (iv) the Term Loan
Agreement or the agreement providing for the issuance of the New Indebtedness,
as the case may be, has been terminated, and (v) the Company has delivered to
the Trustee and the Collateral Agent an officers' certificate stating that the
foregoing requirements have been satisfied (which officers' certificate must
also be signed by the Term Loan Agent or the agent, trustee or other
representative of the New Indebtedness, as the case may be), then (x) the
Company shall be released from its obligations to comply with this Section
1017, (y) the failure to comply with this Section 1017 shall not constitute a
Default or Event of Default with respect to the Notes, and (z) all stock pledge
agreements entered into by the Company and one or more Subsidiaries of the
Company after the Closing Date pursuant to this Section 1017 shall be
terminated, and all certificates evidencing Capital Stock pledged thereunder
shall be released, by the Collateral Agent.
(c) If at any time after the operation of the immediately
preceding paragraph the Company or any Subsidiary of the Company intends to
incur any Indebtedness which requires the pledge of Capital Stock of one or
more Restricted Subsidiaries of the Company in connection therewith, neither
the Company nor such Subsidiary shall incur such Indebtedness without directly
securing the Notes with such pledge of Capital Stock on an equal and ratable
basis (or prior to in the case of Indebtedness subordinated to the Notes or the
Guarantees, as the case may be) and in connection therewith the Company's
obligation to comply with the provisions of this Section 1017 shall be
reinstated if a covenant or agreement similar to this covenant is included in
the agreement providing for the issuance of such Indebtedness.
Section 1018. Money for Security Payments to Be Held in
Trust.
If the Company shall at any time act as its own Paying Agent,
it shall, on or before each due date of the principal of, premium, if any,
interest or Liquidated Damages, if any, on any
- 137 -
151
of the Securities, segregate and hold in trust for the benefit of the Holders
entitled thereto a sum sufficient to pay the principal, premium, if any,
interest or Liquidated Damages, if any, so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided, and shall
promptly notify the Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company
shall, before 10:00 a.m. New York City time on each due date of the principal
of, premium, if any, interest or Liquidated Damages, if any, on any Securities,
deposit with a Paying Agent a sum in same day funds sufficient to pay the
principal, premium, if any, interest or 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, interest or Liquidated Damages, if any, and (unless
such Paying Agent is the Trustee) the Company shall promptly notify the Trustee
of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company
shall cause each 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, that such Paying Agent
shall:
(a) hold all sums held by it for the payment of the principal
of, premium, if any, interest or Liquidated Damages, if any, on
Securities 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 Company or
any Subsidiary Guarantor (or any other obligor upon the Securities) in
the making of any payment of principal, premium, if any, interest or
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 aspects
with the provisions of this Indenture relating to the duties, rights
and disabilities of such Paying Agent.
- 138 -
152
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company 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 the
Company or such 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 the Company, in trust for the payment of the principal of,
premium, if any, interest or Liquidated Damages, if any, on any Security and
remaining unclaimed for two years after such principal and premium, if any,
interest or Liquidated Damages, if any, has become due and payable shall
promptly be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company 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 thirty (30) days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall promptly be repaid to the
Company.
Section 1019. Subsidiary Guarantees.
(a) If (i) any Subsidiary of the Company becomes a Restricted
Subsidiary after the Closing Date, (ii) the Company or any Subsidiary of the
Company that is a Subsidiary Guarantor transfers or causes to be transferred,
in one transaction or a series of related transactions, property or assets
(including, without limitation, businesses, divisions, real property, assets or
equipment) which in the aggregate have a value equal to or greater than 15% of
the Company's and its Subsidiaries' total assets determined on a consolidated
basis as of the time of transfer to any Subsidiary or Subsidiaries of the
Company that is not a Subsidiary Guarantor or are not Subsidiary Guarantors,
- 139 -
153
(iii) any Subsidiary of the Company which has a value equal to or greater than
5% of the Company's and its Subsidiaries' total assets determined on a
consolidated basis as of the time of determination directly or indirectly
guarantees or otherwise becomes obligated with respect to any Senior
Indebtedness of the Company, or (iv) any Subsidiary of the Company becomes a
guarantor of the Term Loan Notes after the Closing Date, the Company shall
cause such Subsidiary or Subsidiaries to execute and deliver to the Trustee a
supplemental indenture pursuant to which such Subsidiary or Subsidiaries shall
unconditionally guarantee, in accordance with Article Thirteen hereof, all of
the Company's obligations under the Indenture and the Securities on the same
terms as the other Subsidiary Guarantors, which Guarantee shall rank pari passu
with any Senior Indebtedness of such Subsidiary.
(b) Each guarantee created pursuant to the provisions
described in the foregoing paragraph is referred to as a "Guarantee" and the
issuer of each such Guarantee is referred to as a "Subsidiary Guarantor."
Notwithstanding the foregoing, any Guarantee by a Subsidiary of the Securities
shall provide by its terms that it shall be automatically and unconditionally
released and discharged upon any sale, exchange, transfer or other disposition
to any Person of all of the Company's Equity Interest in (or if such Subsidiary
is owned by a Restricted Subsidiary, of all of such Restricted Subsidiary's
Equity Interest in), or all or substantially all the assets of, such
Subsidiary, which is in compliance with this Indenture.
Section 1020. Limitation on Ownership of Wholly-Owned
Restricted Subsidiary Stock.
The Company (a) shall not, and shall not permit any
Wholly-Owned Restricted Subsidiary of the Company to, transfer, convey, sell or
otherwise dispose of any Capital Stock of any Wholly-Owned Restricted
Subsidiary of the Company (other than All-Pure and its subsidiaries) to any
Person (other than the Company or a Wholly-Owned Restricted Subsidiary of the
Company), unless (i) such transfer, conveyance, sale or other disposition is of
all the Capital Stock of such Wholly-Owned Restricted Subsidiary and (ii) the
Net Proceeds from such transfer, conveyance, sale, lease or other disposition
are applied in accordance with Section 1009 hereof, and (b) shall not permit
any Wholly-Owned Restricted Subsidiary of the Company (other than All-Pure and
its subsidiaries) to issue any of its Equity
- 140 -
154
Interests (other than, if necessary, Capital Stock constituting directors'
qualifying shares or interests held by directors or shares or interests
required to be held by foreign nationals, to the extent mandated by applicable
law) to any Person other than to the Company or a Wholly-Owned Restricted
Subsidiary of the Company.
Section 1021. Impairment of Security Interest.
The Company shall not, and shall not cause or permit any
Restricted Subsidiaries to, take or omit to take any action which action or
omission might or would have the result of affecting or impairing the Liens and
security interest in favor of the Collateral Agent for the benefit of the
Holders and the holders of Secured Indebtedness with respect to the Collateral
and the Company shall not grant to any Person, or suffer any Person to have any
interest whatsoever in the Collateral, in each case other than as otherwise
permitted by the Indenture, the Term Loan Agreement or the Security Documents.
The Company shall not, and shall not cause or permit any Restricted
Subsidiaries to, enter into any agreement or instrument that by its terms
requires that the proceeds received from any sale of Collateral be applied to
repay, redeem, defease or otherwise acquire or retire any Indebtedness of any
Person, other than pursuant to the Indenture, the Term Loan Agreement or any
instrument governing Indebtedness permitted to be secured by a Lien on the
Collateral pursuant to Section 1012 hereof. A release of any of the Collateral
strictly in accordance with the terms and conditions of the Indenture and the
Security Documents will not be deemed for any purpose to be an impairment of
security under the Indenture.
Section 1022. Amendment to Security Documents.
The Company shall not amend, modify or supplement, or permit
or consent to any amendment, modification or supplement of, the Security
Documents in any manner or to any extent that would constitute an Event of
Default hereunder or under the Security Documents; provided that the Indenture
and the Security Documents may be amended, modified or supplemented in
accordance with Article Nine hereof.
- 141 -
155
Section 1023. Limitation on Applicability of Certain
Covenants.
Notwithstanding anything to the contrary herein, the covenants
set forth in Sections 1006, 1007, 1008, 1009, 1011, and 1012 hereof shall not
apply to transactions effected pursuant to and in accordance with the
Contingent Payment Agreement and amounts related to such transactions shall not
be required to be included in any calculation required by any such covenant.
Such transactions include (i) any payment made by the Company or a Restricted
Subsidiary, (ii) any assets or property transferred by the Company or a
Restricted Subsidiary, (iii) the application of any proceeds received by the
Company or any Restricted Subsidiary in connection with any transfer of assets
or property made by such Person, (iv) any escrow or segregation of moneys to be
paid by the Company or a Restricted Subsidiary, (v) any Investment of such
escrowed or segregated moneys by the Company or a Restricted Subsidiary or any
other Investment under the Contingent Payment Agreement, (vi) any obligation of
the Company or a Restricted Subsidiary to make any such payments or to effect
any such escrow or segregation of moneys, (vii) any Indebtedness incurred by
the Company or a Restricted Subsidiary that is non-recourse to the assets of
the Company, such Restricted Subsidiary or any other Restricted Subsidiary,
other than the borrower's interest in Basic Investments, Inc., Victory Valley
Land Company, L.P., the Excess Land and/or any other assets or funds held under
the Contingent Payment Agreement, and as to which neither the Company nor any
Restricted Subsidiary (other than the borrower) provides credit support or is
directly or indirectly liable, or (viii) any Lien incurred by the Company or
any Restricted Subsidiary in connection with Indebtedness described in clause
(vii) above that does not extend to assets of the Company or any Restricted
Subsidiary other than such Person's interest in Basic Investments, Inc.,
Victory Valley Land Company, L.P., the Excess Land and/or any other assets or
funds held under the Contingent Payment Agreement.
- 142 -
156
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.
The Securities shall not be redeemable at the option of the
Company prior to June 15, 2002. On or after that date, the Securities shall be
redeemable at the option of the Company, in whole or in part from time to time,
on not less than thirty (30) nor more than sixty (60) days' prior notice,
mailed by first-class mail to the Holders' registered addresses, in cash, in
amounts of $1,000 or an integral multiple of $1,000 at the following Redemption
Prices (expressed as percentages of the principal amount), if redeemed in the
12-month period commencing June 15 in the year indicated below:
Year Redemption
---- ----------
2002 104.625%
2003 103.083%
2004 101.542%
2005 and thereafter 100.000%
in each case together with accrued and unpaid interest and Liquidated Damages,
if any, to the Redemption Date (subject to the right of Holders of record on
relevant record dates to receive interest and Liquidated Damages, if any, due
on an Interest Payment Date). If less than all of the Securities are to be
redeemed, the Trustee shall select the Securities to be redeemed pro rata, by
lot or by any other method the Trustee shall deem fair and appropriate.
Notwithstanding the foregoing, at any time on or prior to June
15, 2000, the Company may redeem, in part, up to $70,000,000 in aggregate
principal amount of Securities at a purchase price of 109.25% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if
any, to the date fixed for redemption, with the net proceeds of (i) any Equity
Offering by the Company or (ii) any Equity Offering by Pioneer, but only to the
extent that Pioneer contributes such net proceeds to the Company as a capital
contribution; provided that at least $130,000,000 aggregate principal amount of
the Securities must remain outstanding after such redemption.
- 143 -
157
Securities may be redeemed or repurchased as set forth in
Sections 1009, 1014 and 1109 hereof. Any redemption pursuant to this Section
1101 shall be made pursuant to the provisions of Sections 1102 through 1108
hereof.
Section 1102. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall
be made in accordance with such provision and this Article.
Section 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant
to Section 1101 hereof shall be evidenced by a Company Order and an Officers'
Certificate. In case of any redemption at the election of the Company, the
Company shall, not less than forty-five (45) nor more than sixty (60) days
prior to the Redemption Date fixed by the Company (unless a shorter notice
period shall be satisfactory to the Trustee), notify the Trustee in writing of
such Redemption Date, the Redemption Price and of the principal amount of
Securities to be redeemed.
Section 1104. Selection by Trustee of Securities to Be
Redeemed.
If less than all the Securities are to be redeemed, the
particular Securities or portions hereof to be redeemed shall be selected not
more than thirty (30) days prior to the Redemption Date by the Trustee, from
the Outstanding Securities not previously called for redemption, pro rata, by
lot or such other method as the Trustee shall deem fair and appropriate, and
the amounts to be redeemed may be equal to $1,000 or any integral multiple
thereof.
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount of such Security which has been or is to be
redeemed.
- 144 -
158
Section 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than thirty (30) nor more than sixty (60) days
prior to the Redemption Date, to each Holder of Securities to be redeemed, at
his address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be
redeemed, the identification of the particular Securities to be
redeemed;
(d) in the case of a Security to be redeemed in part, the
principal amount of such Security to be redeemed and that after the
Redemption Date upon surrender of such Security, new Security or
Securities in the aggregate principal amount equal to the unredeemed
portion thereof will be issued;
(e) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security or portion thereof, and
that (unless the Company shall default in payment of the Redemption
Price) interest and Liquidated Damages, if any, thereon shall cease to
accrue on and after said date;
(g) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(h) the paragraph of the Securities and/or Section of this
Indenture pursuant to which the Securities called for redemption are
being redeemed; and
- 145 -
159
(i) the CUSIP number, if any, relating to such Securities (as
to the accuracy of which the Trustee shall make no representation).
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name and at the expense of the Company.
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 mail such notice, or any defect in any
notice so mailed, to any particular Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
Section 1106. Deposit of Redemption Price.
On or prior to 10:00 a.m. New York City time on any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1018 hereof) an amount of money in same day funds
sufficient to pay the Redemption Price of and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest and Liquidated Damages, if
any, on, all the Securities or portions thereof which are to be redeemed on
that date. When the Redemption Date falls on an Interest Payment Date,
payments of interest and Liquidated Damages, if any, due on such date are to be
paid as provided hereunder as if no such redemption were occurring.
Section 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest and Liquidated Damages, if any) such Securities shall cease to
bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price together with accrued interest and Liquidated Damages, if any,
to the Redemption Date; provided,
- 146 -
160
however, that installments of interest whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Regular
Record Dates according to the terms and the provisions of Section 309 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any,
shall, until paid, bear interest from the Redemption Date at the rate borne by
such Security.
Section 1108. Securities Redeemed or Purchased in Part.
Any Security which is to be redeemed or purchased only in part
shall be surrendered to the Paying Agent at the office or agency maintained for
such purpose pursuant to Section 1002 hereof (with, if the Company, the
Security Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar or the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, 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 Security so
surrendered that is not redeemed or purchased.
Section 1109. Asset Sale Offers.
In the event that the Company shall commence an Asset Sale
Offer pursuant to Section 1009 hereof, it shall follow the procedures specified
below.
The Asset Sale Offer shall remain open for twenty (20)
Business Days after the date on which such Asset Sale Offer is commenced (the
"Commencement Date") except to the extent required to be extended pursuant to
applicable law (as so extended, the "Asset Sale Offer Period"). No later than
one Business Day after the termination of the Asset Sale Offer Period (the
"Asset Sale Purchase Date"), the Company shall purchase the principal amount
(the "Asset Sale Offer Amount") of Securities required pursuant to Section 1009
hereof to be purchased in such Asset Sale Offer and other pari passu Senior
Indebtedness that is required by its
- 147 -
161
terms to be purchased in such Asset Sale Offer or, if less than the Asset Sale
Offer Amount has been tendered, all Securities tendered in response to the
Asset Sale Offer.
If the Asset Sale Purchase Date is on or after a Regular
Record Date and on or before the related Interest Payment Date, any accrued
interest or Liquidated Damages, if any, shall be paid to the Person in whose
name a Security is registered at the close of business on such Regular Record
Date, and no additional interest or Liquidated Damages, if any, shall be
payable to Holders who tender Securities pursuant to the Asset Sale Offer.
On the Commencement Date of any Asset Sale Offer, the Company
shall send or cause to be sent, by first class mail, a notice to each of the
Holders, with a copy to the Trustee. Such notice, which shall govern the terms
of the Asset Sale Offer, shall contain all instructions and materials necessary
to enable the Holders to tender Securities pursuant to the Asset Sale Offer and
shall state:
(1) that the Asset Sale Offer is being made pursuant to
Section 1009 hereof and this Section 1109 and the length of time the
Asset Sale Offer shall remain open;
(2) the Asset Sale Offer Amount, the Asset Sale Purchase
Price and the Asset Sale Purchase Date;
(3) that any Security not tendered or accepted for payment
shall continue to accrue interest and Liquidated Damages, if any, in
accordance with this Indenture;
(4) that, unless the Company defaults in the payment of the
Asset Sale Purchase Price, all Securities accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest and
Liquidated Damages, if any, after the Asset Sale Purchase Date;
(5) that Holders electing to have Securities purchased
pursuant to any Asset Sale Offer shall be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice prior to the close of business on the
Business Day preceding the Asset Sale Purchase Date;
- 148 -
162
(6) that Holders shall be entitled to withdraw their election
if the Company, Depositary or Paying Agent, as the case may be,
receives not later than the close of business on the Business Day
preceding the termination of the Asset Sale Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder delivered for
purchase, the certificate number on the Security and a statement that
such Holder is withdrawing his election to have the Security
purchased;
(7) that, if the aggregate principal amount of Securities
surrendered by Holders together with any other pari passu Senior
Indebtedness that is required by its terms to be purchased in such
Asset Sale Offer exceeds the Asset Sale Offer Amount, the Company
shall select the Securities to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(8) that Holders whose Securities are purchased only in part
shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which unpurchased
portion must be equal to $1,000 principal amount or an integral
multiples thereof.
On or before 10:00 a.m. New York City time on each Asset Sale
Purchase Date, the Company shall irrevocably deposit with the Trustee or Paying
Agent in immediately available funds the aggregate Asset Sale Purchase Price
with respect to a principal amount of Securities equal to the Asset Sale Offer
Amount, together with accrued interest and Liquidated Damages, if any, thereon,
to be held for payment in accordance with the terms of this Section 1109. On
the Asset Sale Purchase Date, the Company shall, to the extent lawful, (i)
accept for payment, on a pro rata basis to the extent necessary, an aggregate
principal amount equal to the Asset Sale Offer Amount of Securities tendered
pursuant to the Asset Sale Offer, or if less than the Asset Sale Offer Amount
has been tendered, all Securities or portions thereof tendered, (ii) deliver,
or cause the Paying Agent or depositary, as the case may be, to deliver to the
- 149 -
163
Trustee Securities so accepted and (iii) deliver to the Trustee an Officers'
Certificate stating that such Securities or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 1109. The
Company, a depositary or Paying Agent, as the case may be, shall promptly (but
in any case not later than two (2) Business Days after the Asset Sale Purchase
Date) mail or deliver to each tendering Holder an amount equal to the Asset
Sale Purchase Price with respect to the Securities tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a
new Security, and the Trustee shall authenticate and mail or deliver such new
Security, to such Holder, equal in principal amount to any unpurchased portion
of such Holder's Securities surrendered. Any Security not accepted in the
Asset Sale Offer shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce in a newspaper of general
circulation the results of the Asset Sale Offer on the Asset Sale Purchase
Date.
The Asset Sale Offer shall be made by the Company in
compliance with all applicable laws, including, without limitation, the
requirements of Rule 14e-1 under the Exchange Act, any other tender offer rules
under the Exchange Act and all other applicable federal and state securities
laws.
Subject to applicable escheat laws, as provided in the
Securities, the Trustee and the Paying Agent shall return to the Company any
cash that remains unclaimed, together with interest, if any, thereon, held by
them for the payment of the Asset Sale Purchase Price; provided, however, that
(x) to the extent that the aggregate amount of an Asset Sale Offer exceeds the
aggregate Asset Sale Purchase Price of the Securities or portions thereof to be
purchased, the Trustee shall hold such excess for the Company and (y) unless
otherwise directed by the Company in writing, promptly after the Business Day
following the Asset Sale Purchase Date the Trustee shall return any such excess
to the Company together with interest or dividends, if any, thereon.
Other than as specifically provided in this Section 1109, each
purchase pursuant to this Section 1109 shall be made pursuant to the provisions
of Sections 1101 through 1108 hereof.
- 150 -
164
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as
to surviving rights of registration of transfer or exchange of Securities
herein expressly provided for) and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all the Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 308 hereof or (ii) all Securities for
whose payment United States dollars have theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1018 hereof) have been
delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to
the Trustee for cancellation (x) have become due and payable,
(y) shall become due and payable at their Stated Maturity
within one year, or (z) are to be called for redemption within
one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company, and the Company or any
Subsidiary Guarantor, in the case of (2)(x), (y) or (z) above,
has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount in
United States dollars sufficient to pay and discharge the
entire Indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, for the principal
of, premium, if any, and accrued interest and Liquidated
Damages, if any, at such Stated Maturity or Redemption Date;
- 151 -
165
(b) the Company or any Subsidiary Guarantor has paid or
caused to be paid all other sums payable hereunder by the Company or
any Subsidiary Guarantor; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that (i) all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with and (ii) such
satisfaction and discharge shall not result in a breach or violation
of or constitute a default under, this Indenture or any other material
agreement or instrument to which the Company or any Subsidiary
Guarantor is a party or by which the Company or any Subsidiary
Guarantor is bound.
Opinions of Counsel required to be delivered under this
Section may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 606
hereof and, if United States dollars shall have been deposited with the Trustee
pursuant to subclause (2) of Subsection (a) of this Section, the obligations of
the Trustee under Section 1202 and the last paragraph of Section 1018 hereof
shall survive.
Section 1202. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1018 hereof, all United States dollars deposited with the Trustee pursuant to
Section 1201 hereof shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
its own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal of, premium, if any, interest and Liquidated Damages,
if any, on the Securities for whose payment such United States dollars have
been deposited with the Trustee.
- 152 -
166
ARTICLE THIRTEEN
GUARANTEE
Section 1301. Subsidiary Guarantors' Guarantee.
For value received, each of the Subsidiary Guarantors, in
accordance with this Article Thirteen, hereby absolutely, unconditionally and
irrevocably guarantees, jointly and severally, to the Trustee and the Holders,
as if the Subsidiary Guarantors were the principal debtor, the punctual payment
and performance when due of all Indenture Obligations (which for purposes of
this Guarantee shall also be deemed to include all commissions, fees, charges,
costs and other expenses (including reasonable legal fees and disbursements of
one counsel) arising out of or incurred by the Trustee or the Holders in
connection with the enforcement of this Guarantee).
Section 1302. Continuing Guarantee; No Right of Set-Off;
Independent Obligation.
(a) This Guarantee shall be a continuing guarantee of the
payment and performance for all Indenture Obligations and shall remain in full
force and effect until the payment in full of all of the Indenture Obligations
and shall apply to and secure any ultimate balance due or remaining unpaid to
the Trustee or the Holders; and this Guarantee shall not be considered as
wholly or partially satisfied by the payment or liquidation at any time or from
time to time of any sum of money for the time being due or remaining unpaid to
the Trustee or the Holders. Each Subsidiary Guarantor, jointly and severally,
covenants and agrees to comply with all obligations, covenants, agreements and
provisions applicable to it in this Indenture including those set forth in
Article Eight. Without limiting the generality of the foregoing, each of the
Subsidiary Guarantors' liability shall extend to all amounts which constitute
part of the Indenture Obligations and would be owed by the Company under this
Indenture and the Securities but for the fact that they are unenforceable,
reduced, limited, impaired, suspended or not allowable due to the existence of
a bankruptcy, reorganization or similar proceeding involving the Company.
(b) Each Subsidiary Guarantor, jointly and severally,
hereby guarantees that the Indenture Obligations shall be paid to
- 153 -
167
the Trustee without set-off or counterclaim or other reduction whatsoever
(whether for taxes, withholding or otherwise) in lawful currency of the United
States of America.
(c) Each Subsidiary Guarantor, jointly and severally,
guarantees that the Indenture Obligations shall be paid strictly in accordance
with their terms regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Holders of the Securities.
(d) Each Subsidiary Guarantor's liability to pay or
perform or cause the performance of the Indenture Obligations under this
Guarantee shall arise forthwith after demand for payment or performance by the
Trustee has been given to the Subsidiary Guarantors in the manner prescribed in
Section 106 hereof.
(e) Except as provided herein, the provisions of this
Article Thirteen cover all agreements between the parties hereto relative to
this Guarantee and none of the parties shall be bound by any representation,
warranty or promise made by any Person relative thereto which is not embodied
herein; and it is specifically acknowledged and agreed that this Guarantee has
been delivered by each Subsidiary Guarantor free of any conditions whatsoever
and that no representations, warranties or promises have been made to any
Subsidiary Guarantor affecting its liabilities hereunder, and that the Trustee
shall not be bound by any representations, warranties or promises now or at any
time hereafter made by the Company to any Subsidiary Guarantor.
Section 1303. Guarantee Absolute.
The obligations of the Subsidiary Guarantors hereunder are
independent of the obligations of the Company under the Securities and this
Indenture and a separate action or actions may be brought and prosecuted
against any Subsidiary Guarantor whether or not an action or proceeding is
brought against the Company and whether or not the Company is joined in any
such action or proceeding. The liability of the Subsidiary Guarantors
hereunder is irrevocable, absolute and unconditional and (to the extent
permitted by law) the liability and obligations of the Subsidiary Guarantors
hereunder shall not be released, discharged, mitigated, waived, impaired or
affected in whole or in part by:
- 154 -
168
(a) any defect or lack of validity or enforceability in
respect of any Indebtedness or other obligation of the Company or any
other Person under this Indenture or the Securities, or any agreement
or instrument relating to any of the foregoing;
(b) any grants of time, renewals, extensions, indulgences,
releases, discharges or modifications which the Trustee or the Holders
may extend to, or make with, the Company, any Subsidiary Guarantor or
any other Person, or any change in the time, manner or place of
payment of, or in any other term of, all or any of the Indenture
Obligations, or any other amendment or waiver of, or any consent to or
departure from, this Indenture or the Securities, including any
increase or decrease in the Indenture Obligations;
(c) the taking of security from the Company, any Subsidiary
Guarantor or any other Person, and the release, discharge or
alteration of, or other dealing with, such security;
(d) the occurrence of any change in the laws, rules,
regulations or ordinances of any jurisdiction by any present or future
action of any governmental authority or court amending, varying,
reducing or otherwise affecting, or purporting to amend, vary, reduce
or otherwise affect, any of the Indenture Obligations and the
obligations of any Subsidiary Guarantor hereunder;
(e) the abstention from taking security from the Company, any
Subsidiary Guarantor or any other Person or from perfecting,
continuing to keep perfected or taking advantage of any security;
(f) any loss, diminution of value or lack of enforceability
of any security received from the Company, any Subsidiary Guarantor or
any other Person, and including any other guarantees received by the
Trustee;
(g) any other dealings with the Company, any Subsidiary
Guarantor or any other Person, or with any security;
- 155 -
169
(h) the Trustee's or the Holder's acceptance of compositions
from the Company or any Subsidiary Guarantor;
(i) the application by the Holders or the Trustee of all
monies at any time and from time to time received from the Company,
any Subsidiary Guarantor or any other Person on account of any
indebtedness and liabilities owing by the Company or any Subsidiary
Guarantor to the Trustee or the Holders, in such manner as the Trustee
or the Holders deems best and the changing of such application in
whole or in part and at any time or from time to time, or any manner
of application of collateral, or proceeds thereof, to all or any of
the Indenture Obligations;
(j) the release or discharge of the Company or any Subsidiary
Guarantor of the Securities or of any Person liable directly as surety
or otherwise by operation of law or otherwise for the Securities,
other than an express release in writing given by the Trustee, on
behalf of the Holders, of the liability and obligations of any
Subsidiary Guarantor hereunder;
(k) any change in the name, business, capital structure or
governing instrument of the Company or any Subsidiary Guarantor or any
refinancing or restructuring of any of the Indenture Obligations;
(l) the sale of the Company's or any Subsidiary Guarantor's
business or any part thereof;
(m) subject to Section 1314 hereof, any merger or
consolidation, arrangement or reorganization of the Company, any
Subsidiary Guarantor, any Person resulting from the merger or
consolidation of the Company or any Subsidiary Guarantor with any
other Person or any other successor to such Person or merged or
consolidated Person or any other change in the corporate existence,
structure or ownership of the Company or any Subsidiary Guarantor;
(n) the insolvency, bankruptcy, liquidation, winding-up,
dissolution, receivership or distribution of the assets of the Company
or its assets or any resulting discharge of any obligations of the
Company (whether voluntary or involuntary) or of any Subsidiary
Guarantor or the loss of corporate existence;
- 156 -
170
(o) subject to Section 1314 hereof, any arrangement or plan
of reorganization affecting the Company or any Subsidiary Guarantor;
(p) any other circumstance (including any statute of
limitations) that might otherwise constitute a defense available to,
or discharge of, the Company or any Subsidiary Guarantor; or
(q) any modification, compromise, settlement or release by
the Trustee, or by operation of law or otherwise, of the Indenture
Obligations or the liability of the Company or any other obligor under
the Securities, in whole or in part, and any refusal of payment by the
Trustee, in whole or in part, from any other obligor or other
guarantor in connection with any of the Indenture Obligations, whether
or not with notice to, or further assent by, or any reservation of
rights against, each of the Subsidiary Guarantors.
Section 1304. Right to Demand Full Performance.
In the event of any demand for payment or performance by the
Trustee from any Subsidiary Guarantor hereunder, the Trustee or the Holders
shall have the right to demand its full claim and to receive all payments in
respect thereof until the Indenture Obligations have been paid in full, and the
Subsidiary Guarantors shall continue to be jointly and severally liable
hereunder for any balance which may be owing to the Trustee or the Holders by
the Company under this Indenture and the Securities. The retention by the
Trustee or the Holders of any security, prior to the realization by the Trustee
or the Holders of its rights to such security upon foreclosure thereon, shall
not, as between the Trustee and any Subsidiary Guarantor, be considered as a
purchase of such security, or as payment, satisfaction or reduction of the
Indenture Obligations due to the Trustee or the Holders by the Company or any
part thereof.
Section 1305. Waivers.
(a) Each Subsidiary Guarantor hereby expressly waives (to
the extent permitted by law) notice of the acceptance of this Guarantee and
notice of the existence, renewal, extension or the non-performance,
non-payment, or non-observance on the part of the Company of any of the terms,
covenants, conditions and provisions of this Indenture or the Securities or any
other
- 157 -
171
notice whatsoever to or upon the Company or such Subsidiary Guarantor with
respect to the Indenture Obligations. Each Subsidiary Guarantor hereby
acknowledges communication to it of the terms of this Indenture and the
Securities and all of the provisions therein contained and consents to and
approves the same. Each Subsidiary Guarantor hereby expressly waives (to the
extent permitted by law) diligence, presentment, protest and demand for
payment.
(b) Without prejudice to any of the rights or recourses
which the Trustee or the Holders may have against the Company, each Subsidiary
Guarantor hereby expressly waives (to the extent permitted by law) any right to
require the Trustee or the Holders to:
(i) initiate or exhaust any rights, remedies or recourse
against the Company, any Subsidiary Guarantor or any other Person;
(ii) value, realize upon, or dispose of any security of the
Company or any other Person held by the Trustee or the Holders; or
(iii) initiate or exhaust any other remedy which the Trustee
or the Holders may have in law or equity;
before requiring or becoming entitled to demand payment from such Subsidiary
Guarantor under this Guarantee.
Section 1306. The Subsidiary Guarantors Remain Obligated in
Event the Company Is No Longer Obligated to Discharge Indenture Obligations.
It is the express intention of the Trustee and the Subsidiary
Guarantors that if for any reason the Company has no legal existence, is or
becomes under no legal obligation to discharge the Indenture Obligations owing
to the Trustee or the Holders by the Company or if any of the Indenture
Obligations owing by the Company to the Trustee or the Holders become
irrecoverable from the Company by operation of law or for any reason
whatsoever, this Guarantee and the covenants, agreements and obligations of the
Subsidiary Guarantors contained in this Article Thirteen shall nevertheless be
binding upon the Subsidiary Guarantors, as principal debtor, until such time as
all such Indenture Obligations have been paid in full to the
- 158 -
172
Trustee and all Indenture Obligations owing to the Trustee or the Holders by
the Company have been discharged, or such earlier time as Section 402 hereof
shall apply to the Securities and the Subsidiary Guarantors shall be
responsible for the payment thereof to the Trustee or the Holders upon demand.
Section 1307. Fraudulent Conveyance; Subrogation.
(a) Any term or provision of this Guarantee to the
contrary notwithstanding, the aggregate amount of the Indenture Obligations
guaranteed hereunder shall be reduced to the extent necessary to prevent this
Guarantee from violating or becoming voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
(b) Each Subsidiary Guarantor hereby waives until
repayment in full of the Indenture Obligations and except as provided in
Section 1309, all rights of subrogation or contribution, whether arising by
contract or operation of law (including, without limitation, any such right
arising under federal bankruptcy law) or otherwise by reason of any payment by
it pursuant to the provisions of this Article Thirteen.
Section 1308. Guarantee Is in Addition to Other Security.
This Guarantee shall be in addition to and not in substitution
for any other guarantees or other security which the Trustee may now or
hereafter hold in respect of the Indenture Obligations owing to the Trustee or
the Holders by the Company and (except as may be required by law) the Trustee
shall be under no obligation to marshal in favor of each of the Subsidiary
Guarantors any other guarantees or other security or any moneys or other assets
which the Trustee may be entitled to receive or upon which the Trustee or the
Holders may have a claim.
Section 1309. Contribution.
In order to provide for just and equitable contribution among
the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in
the event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under its Guarantee, such Funding Subsidiary
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors
- 159 -
173
in a pro rata amount based on the "Adjusted Net Assets" (as defined below) of
each Subsidiary Guarantor (including the Funding Subsidiary Guarantor) for all
payments, damages and expenses incurred by that Funding Subsidiary Guarantor in
discharging the Company's obligations with respect to the Securities or any
other Subsidiary Guarantor's obligation with respect to its Guarantee.
"Adjusted Net Assets" means, with respect to any Subsidiary Guarantor, at any
date, the lesser of the amount by which (x) the fair value of the property of
such Subsidiary Guarantor exceeds the total amount of liabilities, including,
without limitation, contingent liabilities (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date), but
excluding liabilities under the Guarantee, of such Subsidiary Guarantor at such
date and (y) the present fair salable value of assets of such Subsidiary
Guarantor at such date exceeds the amount that shall be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on
such date), excluding debt in respect of its Guarantee, as they become absolute
and matured.
Section 1310. No Bar to Further Actions.
Except as provided by law, no action or proceeding brought or
instituted under Article Thirteen and this Guarantee and no recovery or
judgment in pursuance thereof shall be a bar or defense to any further action
or proceeding which may be brought under Article Thirteen and this Guarantee by
reason of any further default or defaults under Article Thirteen and this
Guarantee or in the payment of any of the Indenture Obligations owing by the
Company.
Section 1311. Failure to Exercise Rights Shall Not Operate
as a Waiver.
No failure to exercise and no delay in exercising, on the part
of the Trustee or the Holders, any right, power, privilege or remedy under this
Article Thirteen and this Guarantee shall operate as a waiver thereof, nor
shall any single or partial exercise of any rights, power, privilege or remedy
preclude any other or further exercise thereof, or the exercise of any other
rights, powers, privileges or remedies. The rights and remedies herein
provided for are cumulative and not exclusive of any rights or remedies
provided in law or equity.
- 160 -
174
Section 1312. Trustee's Duties; Notice to Trustee.
(a) Any provision in this Article Thirteen or elsewhere
in this Indenture allowing the Trustee to request any information or to take
any action authorized by, or on behalf of any Subsidiary Guarantor, shall be
subject to Section 602(d) and shall be permissive and shall not be obligatory
on the Trustee except as the Holders may direct in accordance with the
provisions of this Indenture or where the failure of the Trustee to request any
such information or to take any such action arises from the Trustee's gross
negligence, bad faith or willful misconduct.
(b) The Trustee shall not be required to inquire into the
existence, powers or capacities of the Company, any Subsidiary Guarantor or the
officers, directors or agents acting or purporting to act on their respective
behalf.
Section 1313. Successors and Assigns.
All terms, agreements and conditions of this Article Thirteen
shall extend to and be binding upon each Subsidiary Guarantor and its
successors and permitted assigns and shall enure to the benefit of and may be
enforced by the Trustee and its successors and assigns; provided, however, that
the Subsidiary Guarantors may not assign any of their rights or obligations
hereunder other than in accordance with Article Eight.
Section 1314. Release of Guarantee.
Concurrently with the payment in full of all of the Indenture
Obligations, the Subsidiary Guarantors shall be released from and relieved of
their obligations under this Article Thirteen. Upon the delivery by the
Company to the Trustee of an Officers' Certificate and, if requested by the
Trustee, an Opinion of Counsel to the effect that the transaction giving rise
to the release of this Guarantee was made by the Company in accordance with the
provisions of this Indenture and the Securities, the Trustee shall execute any
documents reasonably required in order to evidence the release of the
Subsidiary Guarantors from their obligations under this Guarantee. If any of
the Indenture Obligations are revived and reinstated after the termination of
this Guarantee, then all of
- 161 -
175
the obligations of the Subsidiary Guarantors under this Guarantee shall be
revived and reinstated as if this Guarantee had not been terminated until such
time as the Indenture Obligations are paid in full, and each Subsidiary
Guarantor shall enter into an amendment to this Guarantee, reasonably
satisfactory to the Trustee, evidencing such revival and reinstatement.
This Guarantee shall terminate with respect to each Subsidiary
Guarantor and shall be automatically and unconditionally released and
discharged as provided in Section 1019(b) hereof.
Section 1315. Execution of Guarantee.
To evidence the Guarantee, each Subsidiary Guarantor hereby
agrees to execute the guarantee substantially in the form set forth in Section
205 hereof, to be endorsed on each Security authenticated and delivered by the
Trustee and that this Indenture shall be executed on behalf of each Subsidiary
Guarantor by its Chairman of the Board, its President, or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
If an officer whose signature is on this Indenture no longer
holds that office at the time the Trustee authenticates a Security on which a
Guarantee is endorsed, such Guarantee shall be valid nevertheless.
Section 1316. Payment Permitted by Each of the Subsidiary
Guarantors if No Default.
Nothing contained in this Article, elsewhere in this Indenture
or in any of the Securities shall affect the obligation of any Subsidiary
Guarantor to make, or prevent any Subsidiary Guarantor from making at any time,
payments pursuant to the Securities.
Section 1317. Notice to Trustee by Each of the Subsidiary
Guarantors. Each Subsidiary Guarantor shall give prompt written notice to the
Trustee of any fact known to such Subsidiary Guarantor which would prohibit the
making of any payment to or by the Trustee in respect of the Guarantee.
Notwithstanding the provisions of this Article or any provision
- 162 -
176
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from any Subsidiary Guarantor or any
trustee, fiduciary or agent therefor; and, prior to the receipt of any such
written notice, the Trustee shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least three (3) Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of, premium, if any, interest or Liquidated Damages, if any, on any
Security or any other Indenture Obligations), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it after such date; nor shall the Trustee be charged
with knowledge of the curing of any such default or the elimination of the act
or condition preventing any such payment unless and until the Trustee shall
have received an Officers' Certificate to such effect.
Section 1318. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting under this
Indenture, the term "Trustee" as used in this Article shall in such case
(unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article in addition to or
in place of the Trustee; provided, however, that this Section 1318 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
Section 1319. No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the
Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to the provisions described under Article
Five and as set forth in this Indenture or to pursue any rights or remedies
hereunder or under applicable law.
- 163 -
177
ARTICLE FOURTEEN
SECURITY
Section 1401. Security.
(a) In order to secure the due and punctual payment of
principal of and interest on the Securities when and as the same shall become
due and payable, whether on an Interest Payment Date, at maturity, by
acceleration, repurchase, redemption or otherwise, and interest on the overdue
principal of and interest (to the extent permitted by law) and Liquidated
Damages, if any, on the Securities, and performance of all other obligations of
the Company to the Holders or the Trustee under this Indenture and the
Securities and of all obligations of PCAC and PAI under their respective
Guarantees and under this Indenture and the Securities, the Company, PCAC and
PAI have entered into the respective Security Documents to which each is a
party.
(b) Each Holder, by accepting a Security, consents and agrees
to all of the terms and provisions of the Security Documents, as the same may
be in effect from time to time or may be amended from time to time in
accordance with the provisions of the Security Documents and this Indenture,
and authorizes and directs the Collateral Agent to act as mortgagee or secured
party with respect thereto or to act as collateral agent pursuant to the
Intercreditor Agreement.
(c) As set forth in and governed by the Security Documents,
as among the Holders, the Collateral as now or hereafter constituted shall be
held for the equal and ratable benefit of the Holders without preference,
priority or distinction of any thereof over any other by reason of difference
in time of issuance, sale or otherwise, as security for the Securities.
Section 1402. Recording; Priority; Opinions, Etc.
(a) The Company, PCAC and PAI shall at their sole cost and
expense perform any and all acts and execute any and all documents (including,
without limitation, the execution,
- 164 -
178
amendment or supplementation of any financing statement and continuation
statement or other statement) for filing under the provisions of the UCC and
the rules and regulations thereunder, or any other statute, rule or regulation
of any applicable federal, state or local jurisdiction, including any filings
in local real estate land record offices, which are necessary or advisable and
shall do such other acts and execute such other documents as may be required
under any of the Security Documents, from time to time, in order to grant and
maintain valid and perfected Liens on the Collateral in favor of the Collateral
Agents in the priorities purported to be created by the Security Documents,
subject only to Liens permitted under the Security Documents to be senior or
pari passu to the Liens of the Collateral Agents, and to fully preserve and
protect the rights of the Trustee and the Holders under this Indenture.
The Company, PCAC, and PAI shall from time to time promptly
pay and satisfy all mortgage and financing and continuation statement recording
and/or filing fees, charges and taxes relating to this Indenture and the
Security Documents, any amendments thereto and any other instruments of further
assurance.
(b) The Company, PCAC, and PAI shall, with respect to clause
(i) below, on or prior to the Closing Date, and, with respect to clause (ii)
below, at such times as contemplated therein, furnish to the Trustee:
(i) Opinion(s) of Counsel either (a) to the effect that, in
the opinion of such counsel, this Indenture and the grants of security
interests in the Collateral intended to be made by the Security
Documents and all other instruments of further assurance, have been
properly registered, recorded and filed to the extent necessary to
perfect the Lien on the Collateral created by the Security Documents
and reciting the details of such action, and stating that as to the
Liens created pursuant to the Security Documents, such recordings,
registrations and filings are the only recordings, registrations and
filings necessary to give notice thereof and that no re-recordings,
re-registrations or refilings are necessary to maintain such notice
(other than as stated in such opinion), or (b) to the effect that, in
the opinion of such counsel, no such action is necessary to perfect
such Lien; and
- 165 -
179
(ii) on each anniversary of the Closing Date beginning in the
year 1998, an Opinion of Counsel, dated as of such date, either (a) to
the effect that, in the opinion of such counsel, such action has been
taken with respect to the recordings, registerings, filings,
re-recordings, re-registerings and refilings of all financing
statements, continuation statements or other instruments of further
assurance as is necessary to maintain the Lien of each of the Security
Documents and reciting with respect to such Liens the details of such
action or referencing prior Opinions of Counsel in which such details
are given, and stating that all financing statements and continuation
statements have been executed and filed that are necessary as of such
date and during the succeeding twelve months fully to preserve and
protect the rights of the Collateral Agent, the Holders and the
Trustee hereunder and under each of the Security Documents with
respect to the Liens, or (b) to the effect that, in the opinion of
such counsel, no such action is necessary to maintain such Liens.
Section 1403. Release of Collateral.
The Trustee shall not direct the Collateral Agent to release
Collateral from the Lien of the Security Documents unless such release is in
accordance with the provisions of the Security Documents and Trust Indenture
Act Section 314(d).
Section 1404. Trust Indenture Act Requirements.
The release of any Collateral from any of the Security
Documents or the release of, in whole or in part, the Liens created by any of
the Security Documents, will not be deemed to impair the Lien of the Security
Documents in contravention of the provisions hereof if and to the extent the
Collateral or Liens are released pursuant to the terms of the Security
Documents. The Trustee and each of the Holders acknowledge that a release of
Collateral or Liens strictly in accordance with the terms of the Security
Documents and the terms hereof will not be deemed for any purpose to be an
impairment of the Liens created pursuant to the Security Documents in
contravention of the terms of this Indenture. Without limitation, the Company
and each other obligor on the Securities shall cause Trust Indenture Act
- 166 -
180
Section 314(d) relating to the release of property or securities from the Liens
of the Security Documents to be complied with. Any certificate or opinion
required by Trust Indenture Act Section 314(d) may be made by an Officer of the
Company, PCAC or PAI, as the case may be, except in cases where Trust Indenture
Act Section 314(d) requires that such certificate or opinion be made by an
independent person.
Section 1405. Suits to Protect Collateral.
Subject to the provisions of the Intercreditor Agreements, the
Trustee, acting at the written direction of the Holders, shall have power to
institute and to maintain, or direct each Collateral Agent to institute and
maintain, such suits and proceeds as the Trustee may deem expedient to prevent
any impairment of the Collateral by any acts which may be unlawful or in
violation of any of the Security Documents or this Indenture, and such suits
and proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders in the Collateral (including power
to institute and maintain suits or proceedings to restrain the enforcement of
or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair the Liens of
each Collateral Agent in the Collateral or be prejudicial to the interests of
the Holders or the Trustee).
Section 1406. Determinations Relating to Collateral.
In the event (i) the Trustee shall receive any written request
from the Company, PCAC or PAI under any Security Document for consent or
approval with respect to any matter or thing relating to any Collateral or the
Company's, PCAC's or PAI's obligations with respect thereto or (ii) there shall
be due to or from the Trustee under the provisions of any Security Document any
performance or the delivery of any instrument or (iii) the Trustee shall become
aware of any nonperformance by the Company, PCAC or PAI of any covenant or any
breach of any representation or warranty of the Company, PCAC or PAI set forth
in any Security Document, then, in each such event, the Trustee shall be
entitled, at the expense of the Company and subject to Sections 602(d) and (h)
hereof, to hire experts, consultants, agents and attorneys to advise the
Trustee on the manner in which the Trustee should respond to such request or
render any requested performance or response to such nonperformance or breach.
The Trustee shall be fully protected in the taking of any action recommended or
approved by any such expert, consultant, agent or attorney or agreed to by the
Majority Holders pursuant to Section 505 hereof.
- 167 -
181
Section 1407. Trust Moneys.
To the extent Trust Moneys consist of insurance proceeds or
condemnation or other taking awards, any such moneys which may be used to
effect a restoration of the affected Collateral shall be permitted to be
withdrawn by the Company and paid by the Collateral Agent, upon a Company Order
to reimburse the Company, PCAC or PAI for expenditures made or costs incurred
to repair, rebuild or replace the destroyed, damaged, or taken Collateral, upon
confirmation by the Trustee that it has received the appropriate documentation.
The Company shall deliver (a) an Officers' Certificate certifying as to
expenditures made or costs incurred, the necessity or desirability in the
conduct of the Company's business of the repaired, rebuilt, or replaced
property, and the fair market value of such property as of the date of the
expenditures, (b) an Opinion of Counsel as to the validity and perfection of
the Collateral Agent's lien on the repaired or replaced Collateral and (c) an
architect's certificate as to the costs of such restoration and compliance with
law, all in accordance with the Intercreditor Agreements.
To the extent Trust Moneys consist of Collateral Proceeds, and
the Company intends to reinvest such proceeds in the Company or in one or more
Restricted Subsidiaries in a Related Business, such Trust Moneys shall be
permitted to be withdrawn by the Company upon delivery to the Trustee and the
Collateral Agent of (a) a Company Order regarding such withdrawal, (b) an
officer's certificate certifying compliance with the Indenture, (c) instruments
granting the Collateral Agent first priority liens, for the benefit of (i) the
Trustee, for itself and the Holders, and the Term Loan Agent, for itself and
the other Term Loan Agreement lenders on the real or personal property
interests in which the Company or any Restricted Subsidiary have invested, and
(d) an opinion of counsel as to the instruments governing such Liens and
security interests, all in accordance with the Intercreditor Agreement.
Trust Moneys shall be permitted to be applied from time to
time (x) to the payment of principal, premium, if any, interest and Liquidated
Damages, if any, on the Securities, or (y) to the extent otherwise permitted by
the Indenture, to redeem or repurchase Securities, including without limitation
pursuant
- 168 -
182
to a Change of Control Offer or (to the extent such Trust Moneys constitute
proceeds from Asset Sales) an Asset Sale Offer, or (z) at the direction of the
Company, PCAC and PAI to pay any other Senior Indebtedness secured by liens in
the Collateral (but only to the extent such Trust Moneys constitute Collateral
Proceeds). In each case the Trustee and each Collateral Agent shall receive
(a) resolutions of the boards of directors of the Company, PCAC and PAI
directing such application, (b) an Officers' Certificate, and (c) an Opinion of
Counsel, and the Collateral Agent shall receive cash equaling the accrued
interest, if any, required to be paid in connection with such payment or
purchase. Trust Moneys received by each Collateral Agent or the Trustee
pursuant to an Asset Sale Offer remaining after the completion of such Asset
Sale Offer shall be permitted to be withdrawn by the Company upon request of
the Company and delivery of an Officers' Certificate and an Opinion of Counsel,
all in accordance with the Intercreditor Agreements.
Any release of Collateral, including Trust Moneys, will be
subject to the provisions of Section 314(d) of the Trust Indenture Act relating
to, among other things, the delivery of a certificate or an opinion of an
engineer, appraiser or other expert as to the fair value of Collateral being
released from the Liens of the Security Documents.
[signature pages follow]
- 169 -
183
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
PIONEER AMERICAS ACQUISITION
CORP.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
PIONEER AMERICAS, INC.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
PIONEER CHLOR ALKALI COMPANY,
INC.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
IMPERIAL WEST CHEMICAL CO.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
ALL-PURE CHEMICAL CO.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
184
BLACK MOUNTAIN POWER COMPANY
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
ALL PURE CHEMICAL NORTHWEST, INC.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
PIONEER CHLOR ALKALI
INTERNATIONAL, INC.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President Title: Vice President
G.O.W. CORPORATION
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
PIONEER (EAST), INC.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: President Title: Vice President
T.C. HOLDINGS, INC.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
185
T.C. PRODUCTS, INC.
Attest /s/ Kent R. Stephenson By /s/ Philip J. Ablove
------------------------ ----------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, Title: Vice President and Chief
General Counsel Financial Officer
and Secretary
UNITED STATES TRUST COMPANY OF
NEW YORK
Attest /s/ James J. McGinley By /s/ Gerard F. Ganey
------------------------ ----------------------------
Name: James J. McGinley Name: Gerard F. Ganey
Title: Vice President Title: Senior Vice President