1
EXHIBIT 4.1
PCI CHEMICALS CANADA INC.
as Issuer,
PIONEER AMERICAS ACQUISITION CORP.,
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.,
PCI CAROLINA, INC.,
PIONEER LICENSING, INC.,
as Guarantors
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Collateral Agent
INDENTURE
Dated as of October 30, 1997
----------------------------
$175,000,000
9 1/4% Senior Secured Notes due 2007
2
TABLE OF CONTENTS
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
All-Pure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Asset Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Asset Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Attributable Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Black Mountain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Canadian Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Capitalized Lease Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Collateral Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Company Request" or "Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Cash Flow Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Contingent Payment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Eligible Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Equity Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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Equity Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Excess Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Offer Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Execution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Existing Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Existing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Existing Senior Secured Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Existing Senior Secured Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Existing Term Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Hedging Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ICI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ICI Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ICI Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Imperial West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
incur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Indenture Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Independent Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Initial Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Intercreditor Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Kemwater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Liquidated Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Majority Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Moody's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Mortgaged Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Net Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Net Cash Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Net Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
New Credit Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Offering Memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Opinion of Independent Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
PAAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
PAI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PCAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PCI Carolina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Permitted Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Permitted Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Permitted Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Pioneer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Private Placement Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
QIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Quebec Mortgage and Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Redeemable Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Related Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Resale Restriction Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Restricted Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Revolving Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
St. Gabriel Pipeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
St. Gabriel Pipeline Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
S&P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Sale and Leaseback Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Secured Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Security Register" and "Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Seller Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Shelf Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Substantial Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Tax Sharing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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Term Loan Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Term Loan Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Term Loan Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Trust Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Unrestricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Wholly-Owned Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 102. Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 103. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 104. Form of Documents Delivered to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 105. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 106. Notices, etc., to Trustee, the Company and any Guarantor. . . . . . . . . . . . . . . . . . 36
Section 107. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 108. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 109. Effect of Headings and Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 110. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 111. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 112. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 113. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 114. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 115. Schedules and Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 116. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 117. Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 118. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 202. Restrictive Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 203. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 204. Form of Reverse of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 205. Form of Trustee's Certificate of Authentication. . . . . . . . . . . . . . . . . . . . . . 51
Section 206. Form of Guarantee of Each of the Guarantors. . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(iv)
6
Page
----
Section 303. Execution, Authentication, Delivery and Dating. . . . . . . . . . . . . . . . . . . . . . . 56
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 305. Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 306. Book-Entry Provisions for U.S. Global Security . . . . . . . . . . . . . . . . . . . . . . 59
Section 307. Special Transfer Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 308. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . 63
Section 309. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . 64
Section 310. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 311. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 312. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 313. Deposit of Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 314. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 315. Interest Under Criminal Code (Canada) . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . 67
Section 402. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 403. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 404. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . 69
Section 405. Deposited Money and U.S. Government Obligations to Be Held in Trust; Other
Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 406. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 407. Repayment of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE FIVE
REMEDIES
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 502. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 503. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 504. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 505. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 506. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 507. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 508. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 509. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 510. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 511. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 512. Waiver of Stay, Extension or Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 81
(v)
7
ARTICLE SIX
THE TRUSTE
Page
----
Section 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 603. Trustee Not Responsible for Recitals, Dispositions of Securities or Application of
Proceeds Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 604. Trustee and Agents May Hold Securities; Collections; etc. . . . . . . . . . . . . . . . . . 84
Section 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 606. Compensation and Indemnification of Trustee and Its Prior Claim . . . . . . . . . . . . . . 85
Section 607. Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 608. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 609. Resignation and Removal; Appointment of Successor Trustee . . . . . . . . . . . . . . . . . 86
Section 610. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 611. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . 89
Section 612. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . 90
Section 613. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . 90
Section 702. Disclosure of Names and Addresses of Holders . . . . . . . . . . . . . . . . . . . . . . . 91
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 704. Reports by Company and Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. When the Company May Merge, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of Holders . . . . . . . . . . . . . 95
(vi)
8
Page
----
Section 902. Supplemental Indentures and Agreements with Consent of Holders . . . . . . . . . . . . . . 96
Section 903. Execution of Supplemental Indentures and Agreements . . . . . . . . . . . . . . . . . . . . 98
Section 904. Revocation Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 98
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 99
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 1003. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 1004. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 1005. Jurisdiction, Service of Process and Venue; Immunity; Judgement Currency. . . . . . . . . . 101
Section 1006. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 1007. Limitations on Payment Restrictions Affecting Restricted Subsidiaries . . . . . . . . . . . 107
Section 1008. Limitations on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 1009. Limitations on Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Section 1010. Limitation on Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . 112
Section 1011. Limitation on Transactions With Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 113
Section 1012. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Section 1013. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 1014. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Section 1015. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Section 1016. Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 1017. Stock Pledge Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 1018. Money for Security Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 121
Section 1019. Certain Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Section 1020. Limitation on Ownership of Wholly-Owned Restricted Subsidiary Stock . . . . . . . . . . . . 124
Section 1021. Impairment of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Section 1022. Amendment to Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Section 1023. Limitation on Applicability of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . 125
Section 1024. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Section 1025. Pension Transfer Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
(vii)
9
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Page
----
Section 1101. Rights of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Section 1102. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Section 1103. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Section 1104. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . 129
Section 1105. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Section 1106. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 1107. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 1108. Securities Redeemed or Purchased in Part . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 1109. Asset Sale Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Section 1202. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
ARTICLE THIRTEEN
GUARANTEE
Section 1301. Guarantors' Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Section 1302. Continuing Guarantee; No Right of Set-Off; Independent Obligation . . . . . . . . . . . . . 137
Section 1303. Guarantee Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
Section 1304. Right to Demand Full Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Section 1305. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Section 1306. The Guarantors Remain Obligated in Event the Company Is No Longer Obligated to
Discharge Indenture Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Section 1307. Fraudulent Conveyance; Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Section 1308. Guarantee Is in Addition to Other Security . . . . . . . . . . . . . . . . . . . . . . . . 142
Section 1309. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Section 1310. No Bar to Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Section 1311. Failure to Exercise Rights Shall Not Operate as a Waiver . . . . . . . . . . . . . . . . . 143
Section 1312. Trustee's Duties; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Section 1313. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Section 1314. Release of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Section 1315. Execution of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Section 1316. Payment Permitted by Each of the Guarantors if No Default . . . . . . . . . . . . . . . . . 144
(viii)
10
Page
----
Section 1317. Notice to Trustee by Each of the Guarantors . . . . . . . . . . . . . . . . . . . . . . . . 144
Section 1318. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Section 1319. No Suspension of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
ARTICLE FOURTEEN
SECURITY
Section 1401. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Section 1402. Recording; Priority; Opinions, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Section 1403. Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Section 1404. Trust Indenture Act Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Section 1405. Suits to Protect Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Section 1406. Determinations Relating to Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Section 1407. Trust Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Section 1408. Power of Attorney for Collateral in Quebec . . . . . . . . . . . . . . . . . . . . . . . . 151
SCHEDULE 1 Existing Affiliate Agreements
SCHEDULE 2 Existing Indebtedness
(ix)
11
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of October 30, 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.
12
INDENTURE, dated as of October 30, 1997, (the "Indenture")
among PCI CHEMICALS CANADA INC., a New Brunswick, Canada corporation (the
"Company"), PIONEER AMERICAS ACQUISITION CORP. ("PAAC"), 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, PCI
CAROLINA, INC., a Delaware corporation, PIONEER LICENSING, INC., a Delaware
corporation (collectively, the "Guarantors"), and UNITED STATES TRUST COMPANY
OF NEW YORK, as trustee (the "Trustee") and as collateral agent (the
"Collateral Agent").
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 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 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 Guarantors and authenticated
and delivered hereunder, the valid obligation of each of the Guarantors and
(iii) this Indenture a valid agreement of the Company and each of the
Guarantors in accordance with the terms of this Indenture.
13
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.
"Acquisition" means the acquisition by Pioneer and its
subsidiaries of substantially all the assets and properties used by ICI Canada
and ICI Americas, subsidiaries of ICI, in their North American chlor-alkali
business pursuant to the Asset Purchase Agreement.
"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
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14
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 September 22, 1997, as amended, among the Company, PCI Carolina,
Pioneer, ICI Canada, ICI Americas and ICI, and their successors and assigns.
"Asset Sale" means, with respect to the Company, PAAC 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, PAAC or
a Wholly-Owned Restricted Subsidiary of PAAC of any of the Company's or PAAC'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, PAAC 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 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, PAAC and the
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, PAAC 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
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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.
"Bankruptcy Law" means the Bankruptcy and Insolvency Act
(Canada), the Companies Creditors Arrangement Act (Canada), the Winding-Up and
Restructuring Act (Canada), Chapter 11 of Title 11 of the United States Code,
as amended, or any other Canadian federal, Canadian provincial, United States
Federal or United States state law or the law of any other jurisdiction
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.
"Black Mountain" means Black Mountain Power Company, a Texas
corporation, and any successor thereto.
"Board of Directors" means the Board of Directors of the
Company and/or PAAC 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,
PAAC and the Restricted Subsidiaries as of such date, (b) 50% of the net book
value of all inventory owned by the Company, PAAC and the 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
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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 of the Company, PAAC or the Restricted Subsidiaries 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 Montreal,
Quebec, 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.
"Canadian Pension Plan" means a pension plan that is required
to be registered under any Canadian federal laws, regulations, rules or other
requirements of any Canadian province.
"Capital Stock" means, with respect to any Person, any common
stock, preferred stock and any other capital stock of such 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
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17
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.
"Cash Flow" for any period means the Consolidated Net Income
of PAAC, the Company and the 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.
"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 PAAC, (ii) the adoption
of a plan relating to the liquidation or dissolution of Pioneer or PAAC, (iii)
the merger, amalgamation or consolidation of Pioneer or PAAC with or into
another corporation with the effect that the stockholders of Pioneer or PAAC
immediately prior to such merger, amalgamation 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, amalgamation or consolidation or the corporation
resulting from such merger, amalgamation 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,
amalgamation or consolidation, (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 PAAC (together with any new directors whose
election by the board of directors of Pioneer or PAAC, or whose nomination for
election by the shareholders of Pioneer or PAAC, 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 PAAC then in office or (v) the Company ceases to be a
wholly-owned
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direct or indirect subsidiary of Pioneer or PAAC. Notwithstanding the
foregoing, a Change of Control shall not be deemed to have occurred under
clause (v) above solely as a result of a merger, amalgamation, consolidation or
similar arrangement of the Company with or into Pioneer or PAAC provided that
such merger, amalgamation, consolidation or similar arrangement is permitted by
Article Eight of this Indenture.
"Closing Date" means November 5, 1997, 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, collectively, (a) first priority liens on
and security interests in substantially all tangible and intangible property
and assets used in the North American chlor-alkali business of the Company, PCI
Carolina and Pioneer Licensing (other than interests in "Obligor Collateral" as
defined in the Revolving Credit Agreement (which for purposes of this
definition, shall mean the Revolving Credit Agreement as in effect on the date
hereof)) including, but not limited to the Company's interest in owned and
leased facilities (including real property, buildings, fixtures and certain
equipment) at Becancour, Quebec; Dalhousie, New Brunswick; Cornwall, Ontario;
Mississauga, Ontario and Point Tupper, Nova Scotia and any Collateral as
defined in the Intercreditor Agreement and (b) upon the granting thereof by
PCAC to the Collateral Agent in accordance with the provisions of Section
1401(b) hereof, the St. Gabriel Pipeline Lien.
"Collateral Agent" means United States Trust Company of New
York, as collateral agent under this Indenture, the Term Loan Agreement and the
Intercreditor Agreement, and any successor thereto.
"Collateral Proceeds" has the meaning specified in Section
1009 of this 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 PCI Chemicals Canada Inc., a corporation
incorporated under the laws of New Brunswick, until a successor Person shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
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"Company Common Stock" means the common shares, par value $.01
share, of the Company.
"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, PAAC and the Restricted Subsidiaries; provided, however, that (A) if
the Company, PAAC 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, PAAC 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, PAAC or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Company, PAAC and the continuing
Restricted Subsidiaries in connection with any such sale or other disposition
for such period (or, if the Capital Stock of any Subsidiary of the Company or
PAAC is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Subsidiary of the Company or PAAC to
the extent the Company, PAAC and the continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale), (C) if since the
beginning of such period the Company, PAAC 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
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acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made under this
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, PAAC and the 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, PAAC 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 or PAAC held by Persons other than the Company, PAAC or a
Wholly-Owned Restricted Subsidiary of PAAC and (ix) the cash 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 or PAAC) in connection with loans incurred by
such plan or trust to purchase newly issued or treasury shares of the Capital
Stock of the Company or PAAC.
"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 or PAAC, the Unrestricted Subsidiaries) for
such period determined in
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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 or PAAC, the Unrestricted
Subsidiaries), (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 of the Company
or PAAC 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, PAAC or the Wholly-Owned Restricted Subsidiaries of PAAC
shall be included only to the extent of the amount of cash dividends or cash
distributions actually paid by such Subsidiary to the Company, PAAC or a
Wholly-Owned Restricted Subsidiary of PAAC, (v) in the case of the Company or
PAAC, the Net Income attributable to any business, properties or assets
acquired (by way of merger, consolidation, purchase or otherwise) by the
Company, PAAC or any Restricted Subsidiary 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 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 or PAAC the foregoing exclusion shall not apply to cash dividends
or cash distributions paid to PAAC in respect of PAAC'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 or PAAC, the Unrestricted
Subsidiaries), determined on a consolidated basis without duplication in
accordance with GAAP, as of the end of the most recent fiscal quarter of such
Person
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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 Pioneer, PAAC 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, PAAC and/or any Guarantor and the lending institutions party thereto,
including any credit agreement, related notes, guarantees, collateral
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 Canada or the United States of
America or any agency or instrumentality thereof (provided that the full faith
and credit of Canada or 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 to which the Bank Act (Canada) applies 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,
the Existing Term Facility or the Revolving Credit Agreement, (iii) fully
secured repurchase obligations with a term of not more than seven days for
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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 any commercial banking
institution to which the Bank Act (Canada) applies or 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, the Existing Term Facility 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).
"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 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.
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"Exchange Offer Registration Statement" means the registration
statement to be filed by the Company and the 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 Guarantors registered
under the Securities Act with substantially identical terms to the Initial
Securities.
"Execution Date" means October 30, 1997, the date of the
execution of this Indenture, the Intercreditor Agreement and certain of the
Security Documents.
"Existing Affiliate Agreements" means (i) agreements between
PAI or any of its subsidiaries and Saguaro Power Company, a Limited
Partnership, relating to the delivery of steam and other services, existing on
the Execution Date and listed on Schedule 1 hereto, (ii) the Tax Sharing
Agreement and (iii) agreements between PAI 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 Execution Date and
listed on Schedule 1 hereto and (iv) any other agreements with affiliates of
the Company or PAAC, existing on the Execution 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, PAAC or any Restricted Subsidiary existing on the
Execution Date and listed on Schedule 2 hereto.
"Existing Senior Secured Indenture" means the indenture dated
as of June 17, 1997, among PAAC, PAI, PCAC, Imperial West, All-Pure, Black
Mountain, 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. and United States Trust Company of New York, as
trustee, including and together with any and all related notes, guarantees,
instruments and agreements executed in connection therewith, as such indenture
and/or related documents may be amended, restated, supplemented, renewed,
replaced or otherwise modified from time to time.
"Existing Senior Secured Notes" means PAAC's 9 1/4% Senior
Secured Notes due 2007, representing an aggregate principal amount of up to
$200,000,000 issued pursuant to the Existing Senior Secured Indenture, as such
Existing Senior Secured Notes may be exchanged, replaced, amended, restated,
supplemented or otherwise modified from time to time.
"Existing Term Facility" means the loan agreement dated as of
June 17, 1997, among PAAC, the Term Loan Agent and the
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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.
"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 in the
United States of America 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 Guarantor of the
Company's Indenture Obligations pursuant to a guarantee given in accordance
with this Indenture, including, without limitation, the Guarantees by the
Guarantors included in Article Thirteen of this Indenture and any Guarantee
delivered pursuant to Section 1019 hereof.
"Guarantor" means the entities listed as Guarantors in this
Indenture or any other guarantor of the Indenture Obligations.
"Hedging Obligations" means the obligations of any Person or
entity pursuant to any swap or cap agreement, exchange 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 or PAAC's business, as the case may be.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"ICI" means Imperial Chemical Industries PLC, a United Kingdom
corporation, and any successor thereto.
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26
"ICI Americas" means ICI Americas Inc., a Delaware
corporation, and any successor thereto.
"ICI Canada" means ICI Canada, Inc., a Canadian corporation,
and any successor thereto.
"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 the Company, PAAC or any
Restricted Subsidiary that is owing to the Company, PAAC or another Restricted
Subsidiary, any disposition, pledge or transfer of such Indebtedness to any
Person (other than the Company, PAAC or a Wholly-Owned Restricted Subsidiary of
PAAC) shall be deemed to be an incurrence of such Indebtedness and (b) with
respect to any Indebtedness of the Company, PAAC or a Restricted Subsidiary
that is owing to another Restricted Subsidiary, any transaction pursuant to
which a Wholly-Owned Restricted Subsidiary of PAAC to which such Indebtedness
is owing ceases to be a Wholly-Owned Restricted Subsidiary of PAAC 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 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
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27
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 or PAAC 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 this 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 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 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
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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 and/or
PAAC other than a director (i) who (apart from being a director of the Company,
PAAC or any of its Subsidiaries) is an employee, insider, associate or
Affiliate of the Company, PAAC or any of their 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 Guarantors.
"Insurance Proceeds" has the meaning specified in each
Mortgage.
"Intercreditor Agreement" means the Intercreditor and
Collateral Agency Agreement dated as of October 30, 1997 among the Company,
PAAC, PAI, the Trustee, the Term Loan Agent, the Bank of America Trust and
Savings Association, 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, PAAC or any Subsidiary of either sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of either such that,
after giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of either, the Company, PAAC or such Subsidiary
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29
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).
"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, pledge,
debenture, debenture pledge, hypothec or similar security instrument which from
time to time affects any property that secures the Company's obligations in
respect of this Indenture and its guarantee under the Term Loan Agreement, the
obligations of any Guarantor in respect of its Guarantee under this Indenture,
or the obligations of PAI or any other Guarantor under the Term Loan Agreement
and Term Loan Notes and guarantees thereof issued under or in connection with
the Term Loan Agreement, as such instruments may be amended, supplemented or
otherwise modified from time to time.
"Mortgaged Property" means the Collateral 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
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30
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 or PAAC, the Unrestricted Subsidiaries) determined in accordance
with GAAP.
"Net Proceeds" means the aggregate cash proceeds received by
the Company, PAAC or any of the 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, PAAC 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 this 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 of the Company or PAAC 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 October 22, 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
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31
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company or any Guarantor, as the case may be, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, any of the 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 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;
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 Guarantor,
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32
or any other obligor upon the Securities or any Affiliate of the Company, any
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 Guarantor or
such other obligor.
"PAAC" means Pioneer Americas Acquisition Corp., a Delaware
corporation, and any successor thereto.
"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.
"PCI Carolina" means PCI Carolina, 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 Guarantor
evidenced by the Guarantees with respect thereto;
(b) Indebtedness of PAI evidenced by the Term Loan Notes and
Indebtedness of the Company, PAAC or any Restricted Subsidiary
evidenced by the guarantees with respect to the Term Loan Notes.
(c) Indebtedness of the Company, PAAC or any Restricted
Subsidiary constituting Existing Indebtedness and any extension,
deferral, renewal, refinancing or refunding thereof;
(d) Indebtedness of the Company, PAAC or any Restricted
Subsidiary incurred under one or more Credit Facilities in
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33
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, PAAC or any
Restricted Subsidiary and Indebtedness of the Company, PAAC 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,
PAAC and all of the Restricted Subsidiaries does not exceed
$10,000,000 outstanding at any time;
(f) Indebtedness of the Company to PAAC, or of the Company or
PAAC to any Restricted Subsidiary, or of PAAC to the Company or any
Restricted Subsidiary or of any Restricted Subsidiary to the Company,
PAAC or another Restricted Subsidiary (but only so long as such
Indebtedness is held by the Company, PAAC 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, PAAC 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;
(h) Indebtedness in respect of performance, completion,
guarantee, surety and similar bonds, banker's acceptances or letters
of credit provided by the Company, PAAC or any Restricted Subsidiary
in the ordinary course of business;
(i) In addition to any Indebtedness otherwise permitted to be
Incurred under this 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, PAAC or
any Restricted Subsidiary permitted by the initial paragraph of
Section 1008 hereof or described in
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34
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, 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 of PAAC or any Person
which, as a result of such Investment, becomes a Wholly-Owned Restricted
Subsidiary of PAAC; provided that such Wholly-Owned Restricted Subsidiary of
PAAC 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, PAAC or any
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35
Restricted Subsidiary by appropriate proceedings promptly instituted
and diligently conducted and against which the Company or PAAC 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, PAAC or any of the Restricted
Subsidiaries by appropriate proceedings promptly instituted and
diligently conducted and against which the Company or PAAC has
established appropriate reserves in accordance with GAAP and which
does not have a material adverse effect on the ability of the Company,
PAAC and the 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 obligations of the
Company, PAAC or any Restricted Subsidiary, or to secure surety or
appeal bonds to which the Company, PAAC or any Restricted Subsidiary
is a party, (ii) imposed by law dealing with materialmen's,
supplier'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, PAAC or any Restricted
Subsidiary by appropriate proceedings promptly instituted and
diligently conducted and against which the Company or PAAC 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, PAAC 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, PAAC 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
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36
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; and
(g) provisos, restrictions, limitations and reservations
contained in any original grants from the Government of Canada, and
any statutory limitations, exceptions, reservations and qualifications
which will not in the aggregate materially adversely impair the use of
the subject property by the Company, PAAC or a Restricted Subsidiary.
"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.
"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.
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37
"Quebec Mortgage and Security Agreement" means a deed of
hypothec executed by an authorized representative of the Company in respect of
the Collateral located in Quebec, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"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, PAAC, any Subsidiary of either the Company or PAAC 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.
"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 November 5, 1997, by and among the
Company, the 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 April 1 or October 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
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38
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 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 Guarantor which is a
Subsidiary of PAAC, (ii) any Subsidiary of PAAC in existence on the Closing
Date to which any line of business or division (and the assets associated
therewith) of the Company or any Guarantor are transferred after the Closing
Date, (iii) any Subsidiary of the Company or PAAC 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 this Indenture to the
contrary, each Guarantor shall be a Restricted Subsidiary.
"Revolving Credit Agreement" means the Loan and Security
Agreement dated as of June 17, 1997, among PAAC and Bank of America Trust and
Savings Association, as agent and a lender,
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and the other lenders named therein, as amended, supplemented or amended and
restated from time to time.
"Rule 144A" means Rule 144A under the Securities Act.
"St. Gabriel Pipeline" means the approximately seven-mile
liquid chlorine pipeline which PCAC intends to construct from its plant in St.
Gabriel, Louisiana to Geismar, Louisiana, including all leak and excavation
detection systems and all other equipment, fixtures, improvements, licenses,
permits, approvals, warranties, contract rights, leases, access agreements and
other real property interests owned or acquired by PCAC in connection therewith
(not including any "Mortgaged Property" as such term is defined in the Existing
Senior Secured Indenture), together with all insurance proceeds and
condemnation awards related thereto and all rents, issues, profits and proceeds
thereof.
"St. Gabriel Pipeline Lien" has the meaning specified in
Section 1401(b) of this Indenture.
"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 Documents" means (i) each Mortgage, (ii) the
Intercreditor Agreement, (iii) the documentation relating to the Intercreditor
Collateral Account, and (iv) all security agreements, mortgages, deeds of
trust, hypothecs, debentures,
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debenture pledges, bonds, bond pledges, pledge agreements, collateral
assignments or any other instrument, including without limitation, the Pipeline
Security Documents, evidencing or creating any security interest or lien in
favor of the Collateral Agent for its own account and for the account of the
Trustee and Holders in all or any portion of the Collateral, as the case may
be, 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.
"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, PAAC or the 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,
PAAC or the 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, PAAC or
any Restricted Subsidiary from time to time owed to the lenders (or their
agents) under the New Credit Facilities, the Existing Term Facility and the
Existing Senior Secured Indenture, as the case may be. 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
United States Federal, state or local, Canadian federal, provincial or local or
other taxes owed or owing by the Company, PAAC or any Restricted Subsidiary to
the extent that such liability constitutes Indebtedness, (iii) Indebtedness of
the Company to PAAC or any Restricted Subsidiary or of any Restricted
Subsidiary to the Company, PAAC or another Restricted Subsidiary, (iv) that
portion of any Indebtedness which at the time of issuance is issued in
violation of this 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 Guarantors with the
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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.
"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.
"Subordinated Indebtedness" means Indebtedness of the Company,
PAAC or any Guarantor subordinated in right of payment to the Securities or any
Guarantee, as the case may be.
"Subsidiary" means, with respect to any Person, (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 such Person, by
such Person and one or more of its Subsidiaries or by one or more of such
Person'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 such Person, by such Person and one or more
of its Subsidiaries or by one or more of such Person's Subsidiaries.
"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.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated
as of April 20, 1995 among Pioneer and its subsidiaries.
"Taxes" means any present or future tax, duty, levy, impost,
assessment or other governmental charge (including penalties, interest and
other liabilities related thereto) imposed or levied by or on behalf of the
government of Canada or of any province or territory thereof or by any
authority or agency therein or thereof having power to tax.
"Term Loan Agent" means Bank of America National Trust and
Savings Association as administrative agent for the lenders under the Term Loan
Agreement and any successor thereto.
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"Term Loan Agreement" means the loan agreement dated as of
October 30, 1997, among PAI, PAAC, the Term Loan Agent, DLJ Capital Funding,
Inc., Salomon Brothers Holding Company Inc and the lenders named therein,
including and together with any and all related notes, bonds, 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 PAI 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 U.S. 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 (e) for
application under this Indenture as provided in this Indenture or any Security
Document, or whose disposition is not otherwise specifically provided for in
this 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.
"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 or PAAC organized or acquired after the Closing Date
designated as an Unrestricted Subsidiary by the Board of Directors in which all
investments by the Company, PAAC or any Restricted Subsidiary are made only
from funds available for the making of Restricted
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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 or PAAC (including any newly acquired or newly formed Subsidiary of
the Company or PAAC) 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 or PAAC which is not a Subsidiary of such
Subsidiary to be so designated; provided that (w) each Subsidiary of the
Company or PAAC 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, PAAC or any of the 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,
PAAC and the Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary of the Company or PAAC 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 (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
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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 Amounts" 1024
"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
"covenant defeasance" 403
"Custodian" 501
"Defaulted Interest" 309
"defeasance" 402
"Defeasance Redemption Date" 404
"Defeased Securities" 401
"Excess Proceeds" 1009
"Funding Guarantor" 1309
"judgment currency" 1005
"New Indebtedness" 1017
"Physical Securities" 201
"Pipeline Security Documents" 1401
"Pledgor Subsidiary" or "Pledgor
Subsidiaries" 1017
"Power of Attorney" 1408
"Refinancing" 101*
"Refinancing Indebtedness" 101*
"Required Filing Date" 704
"Restricted Payment" 1006
"Stock Pledge Agreements" 1017
"U.S. Global Security" 201
"U.S. Process Agent" 1005
- -----------------
* See "Permitted Indebtedness", paragraph (j) of Section 101
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45
Section 103. Compliance Certificates and Opinions.
Upon any application or request by the Company or any
Guarantor to the Trustee to take any action under any provision of this
Indenture, the Company, any 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.
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
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46
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
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 factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company, any 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 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
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sufficient in accordance with such reasonable rules as the Trustee may
determine.
(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 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 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
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48
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 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
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 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 Guarantor or any
other obligor of the Securities by the Trustee; or
(b) the Company or any 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 Guarantor
addressed to it at 4300 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.
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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.
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.
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Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
and the 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.
Section 113. Governing Law.
This Indenture, the Securities, the Guarantees and the
Intercreditor Agreement will be governed by, and construed in accordance with,
the laws of the State of New York. The Security Documents will be governed by,
and construed in accordance with, the laws of the province in Canada in which
the particular Collateral secured thereby is situated and the federal laws of
Canada applicable therein.
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.
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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 Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of Trust Indenture Act
Section 312(c).
Section 118. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company, the Guarantors and any Subsidiaries of the Company or any of the
Guarantors, shall not have any liability for any obligations of the Company
under the Securities or this Indenture for any obligation of the 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 this 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.
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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.
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:
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (2) AGREES THAT IT WILL
NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
COMPANY OR ANY OF THE GUARANTORS, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (C) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
- 41 -
53
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (E) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.
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 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.
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:
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54
PCI CHEMICALS CANADA INC.
---------------------------
9 1/4% SENIOR SECURED NOTES DUE 2007
CUSIP No:
No.__________ $___________
PCI CHEMICALS CANADA INC., a New Brunswick, Canada 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 October 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 April 15, and
October 15, in each year, commencing April 15, 1998 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 April 1, or October 1 (whether or not a
Business 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
- 43 -
55
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 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 Guarantor, and shall rank pari
passu with all existing and future Senior Indebtedness of such Guarantor and
senior to all Subordinated Indebtedness of such Guarantor. 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 Guarantors.
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: PCI CHEMICALS CANADA INC.
By
--------------------------
Attest:
[SEAL]
- --------------------------------
Secretary
- 44 -
56
Section 204. Form of Reverse of Securities.
(a) The form of the reverse of the Securities shall be
substantially as follows:
The Holder, by becoming holder of this Security, shall be
bound by the terms and conditions of the Indenture and shall be automatically
deemed to have ratified and consented to the granting by the Trustee and the
Holders to the Collateral Agent of the irrevocable Power of Attorney
constituted in the Indenture.
The Holder agrees (i) with the Trustee and the other Holders
that it will not, without the prior consent of the Trustee and the other
Holders, take or obtain any Lien on any property of the Company to secure the
obligations of the Company hereunder, except for the benefit of the Collateral
Agent or as may otherwise be required by law; and (ii) that, notwithstanding
the provisions of Section 32 of the Special Corporate Powers Act (Quebec), the
Collateral Agent may, as the person holding the Power of Attorney of the
Trustee and the Holders, acquire any title to indebtedness secured by any
hypothec in its favor related to this Security or the Indenture or any other
document contemplated thereunder.
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 up to $175,000,000,
which may be issued under an indenture (herein called the "Indenture") dated as
of October 30, 1997, among the Company, the Guarantors and United States Trust
Company of New York, as trustee and as collateral agent (herein 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 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 secured obligations of the
Company, and shall rank pari passu with all existing and
- 45 -
57
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 October 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 October 15 in the year indicated below:
Year Redemption
---- ----------
2002 104.625%
2003 103.084%
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
October 15, 2000, the Company may redeem, in part, up to $61,250,000 in
aggregate principal amount of the 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 or
PAAC, but only to the extent that Pioneer or PAAC contributes such net proceeds
to the Company as a capital contribution; provided that at least $113,750,000
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.
- 46 -
58
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 of the Company, PAAC or PAI then
outstanding or to an investment in the Company, PAAC 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.
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 Guarantors and the rights of the Holders
under the Indenture and the Guarantees at any time by the Company, the
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 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
- 47 -
59
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 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.
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 Guarantors have entered into an Exchange
and Registration Rights Agreement dated as of November 5, 1997 (the
"Registration Rights Agreement") with the Initial Purchasers described therein.
Pursuant to the Registration Rights Agreement, the Company and the 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.
- 48 -
60
Reference is hereby made to the Registration Rights Agreement
for a statement of the respective rights, duties and obligations thereunder of
the Company, the Guarantors and the Holders of the Securities.1]
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 the Indenture and the Securities, the Company
has 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.
- ----------------------------
1 To be included in each Security prior to expiration of the
obligations of the Company and the Guarantors under the
Registration Rights Agreement.
- 49 -
61
[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
- 50 -
62
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.
Dated:
-------------------------- --------------------------
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: [ ].
- 51 -
63
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 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, 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
- 52 -
64
effective until the Trustee duly manually executes the certificate of
authentication on this Security.
PIONEER AMERICAS ACQUISITION
CORP.
Attest By
--------------------------- --------------------------------
Name: Name:
Title: Title:
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:
ALL-PURE CHEMICAL CO.
Attest By
--------------------------- --------------------------------
Name: Name:
Title: Title:
BLACK MOUNTAIN POWER COMPANY
Attest By
--------------------------- --------------------------------
Name: Name:
Title: Title:
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65
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:
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:
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66
PCI CAROLINA, INC.
Attest By
--------------------------- --------------------------------
Name: Name:
Title: Title:
PIONEER LICENSING, INC.
Attest By
--------------------------- --------------------------------
Name: Name:
Title: Title:
- 55 -
67
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 $175,000,000 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 October 15, 2007, and the
Securities shall each bear interest at the rate of 9 1/4% per annum 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 April 15, 1998 and semiannually
thereafter on October 15, and April 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.
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.
- 56 -
68
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 $175,000,000 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 Guarantors on substantially identical terms as the Initial Securities.
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 Guarantor, pursuant to Article
Eight, shall be consolidated, merged with or into any other Person or shall
sell, assign, convey, transfer or lease
- 57 -
69
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 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.
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
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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 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
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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.
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 Security or the
nominee of such Depositary, (ii) be delivered to
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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 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
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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 (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 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 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
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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.
(b) 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 or (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 statement, 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.
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(c) 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 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 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 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
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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 Guarantors, whether or
not the destroyed, lost or stolen Security shall be at any time 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
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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 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.
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Section 310. Persons Deemed Owners.
The Company, any 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 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 Guarantor, the Trustee nor any agent of the Company, any 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
Guarantor may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
or such 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. For purposes of the Interest Act
(Canada), (i) the rate of interest on the Securities expressed as an annual
rate will be the yearly rate of interest which would otherwise be applicable on
the basis of a 360 day year multiplied by a fraction, the numerator of which is
the number of days in the applicable calendar year (being the calendar year in
which the period for which such interest is calculated ends) and the
denominator of which is 360; (ii) the principle of deemed reinvestment of
interest shall not apply to any interest calculation under the Securities; and
(iii) the rates of interest stipulated in the Securities are intended to be
nominal rates and not effective rates or yields.
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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.
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.
Section 315. Interest Under Criminal Code (Canada).
Notwithstanding any provision to the contrary contained in
this Indenture or the Securities, in no event shall the aggregate "interest"
(as defined in Section 347 of the Criminal Code (Canada), as the same may be
amended, replaced or re-enacted from time to time) payable under this Indenture
or the Securities exceed the maximum amount of interest on the "credit
advanced" (as defined in that section) under this Indenture and the Securities
lawfully permitted under that section and, if any payment, collection or demand
pursuant to this Indenture and the Securities in respect of "interest" (as
defined in that section) is determined to be contrary to the provisions of that
section, such payment, collection or demand shall be deemed to have been made
by mutual mistake, and the amount of such payment or collection shall be
refunded to the Company. For purposes of this Indenture and the Securities, the
effective annual rate of interest shall be determined in accordance with
generally accepted actuarial practices and principles over the term that the
Securities are outstanding on the basis of annual compounding of the lawfully
permitted rate of interest and, in the event of dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by the Trustee will be
conclusive for the purposes of such determination.
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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 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 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.
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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 Guarantor shall be
released from its obligations under any covenant or provision contained or
referred to in Sections 1003, 1004, 1006, 1007, 1008, 1009, 1010, 1011, 1012,
1014, 1015, 1016, 1019, 1020, 1021, 1022 and 1025 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 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.
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
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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.
(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 and from
Revenue Canada 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
and a ruling from Revenue Canada has been published, 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
U.S. Federal income tax and Canadian federal or provincial income tax
as a result of such defeasance and will be subject to U.S. Federal
income tax and Canadian federal or provincial 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 U.S. Federal income tax, Canadian federal or provincial income tax
or certain other tax purposes as a result of such covenant defeasance
and will be subject to U.S. Federal income tax, Canadian federal or
provincial 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.
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(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 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.
(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 Guarantor
with the intent of defeating, hindering, delaying or defrauding
creditors of the Company, any 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
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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 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 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
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the Holders of such Securities to receive such payment from the money held by
the Trustee or Paying Agent.
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 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.
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
or Additional Amounts 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 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 Guarantor fails to observe or
perform any covenant, condition or agreement on the part of the
Company or such Guarantor to be observed or performed
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pursuant to Section 1006, 1008, 1009, 1010, 1012, 1014, 1019, 1020 or
Article Eight hereof;
(4) the Company or any Guarantor fails to observe or
perform any other covenant or agreement in this Indenture, the
Securities, the Guarantees 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 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 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 this Indenture and any such
Guarantee;
(7) a default occurs under any Indebtedness of the
Company, PAAC or any of the Restricted 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;
(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, PAAC or any of the 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 of the Security Documents ceases to be in full
force and effect (other than in accordance with their respective
terms), or any of the Security Documents ceases
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to give the Collateral Agent the Liens, rights, powers and privileges
purported to be created thereby (other than in accordance with their
respective terms), or any Security Document or any Collateral becomes
subject to any Lien other than the Liens created or permitted by this
Indenture or the Security Documents;
(10) the Company, PAAC, any Guarantor or any other
Restricted Subsidiary pursuant to or under 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,
(d) makes a general assignment for the benefit of
its creditors,
(e) admits in writing its inability to pay debts
as the same become due,
(f) becomes insolvent or generally does not pay
its debts as such debts become due,
(g) admits in writing its inability to pay its
debts generally or makes a general assignment for the benefit
of creditors,
(h) files a notice of intention to file a
proposal under any Bankruptcy Law,
(i) institutes or has instituted against it any
proceeding seeking:
(A) to adjudicate it a bankrupt or
insolvent,
(B) any liquidation, winding-up,
reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any
Bankruptcy Law, or
(C) the entry of an order for relief or
appointment of a receiver, interim receiver, receiver
and manager, assignee, liquidator, sequestrator,
trustee or other similar official
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for it or for any substantial part of its property,
and in the case of any such proceeding instituted against it
(but not instituted by it), it shall not be actively and
diligently contesting such proceeding in good faith by
appropriate legal proceedings or any of the actions sought in
such proceeding (including the entry of an order for relief
against it or the appointment of a receiver, trustee,
custodian or other similar official for it or for any
substantial part of its Real Property) shall occur, or
(j) takes any corporate action to authorize any
of the foregoing actions; 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
Guarantor or any other Restricted Subsidiary in an involuntary
case in which it is a debtor,
(b) appoints a Custodian of the Company, any
Guarantor or any other Restricted Subsidiary or for all or
substantially all of their property,
(c) orders the liquidation of the Company, any
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.
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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
(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.
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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 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.
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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.
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
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
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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 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
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 Guarantor or any other obligor upon the
Securities, wherever situated.
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
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 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 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
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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 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.
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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 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
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 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.
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
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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;
(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;
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(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;
(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.
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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.
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.
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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 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.
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Section 607. Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b)
of the Trust Indenture Act.
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 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
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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 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
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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 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
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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 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.
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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.
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
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(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
(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.
Section 704. Reports by Company and Guarantors.
(a) Whether or not PAAC is subject to Section 13(a) or
15(d) of the Exchange Act, PAAC shall, to the extent permitted under the
Exchange Act, file with the Commission the annual
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reports, quarterly reports and other documents which PAAC would have been
required to file with the Commission pursuant to such Section 13(a) or 15(d) if
PAAC were so subject, such documents to be filed with the Commission on or
prior to the respective dates (the "Required Filing Dates") by which PAAC would
have been required so to file such documents if PAAC were so subject. PAAC
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 PAAC would have been required to file with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act if PAAC were subject to
such Sections and (y) if filing such documents by PAAC 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 PAAC's cost. Any financial
statements contained in each of such reports or other documents will be
prepared in accordance with GAAP.
(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.
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. When the Company May Merge, Etc.
(a) The Company shall not amalgamate with, consolidate
with or merge into, or sell, assign, convey, lease or transfer
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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 Canada, any province thereof, 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 Guarantor, to the extent applicable, shall by
supplemental indenture confirm that its Guarantee shall apply to such
Person's obligations under the Securities;
(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 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; and
(vii) the Company shall have received an Opinion of
Independent Counsel in Canada to the effect that (A) any payment of
interest or principal on the Securities by the Company to a Holder
will, after the amalgamation, consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition of assets, be exempt
from Canadian withholding tax if the Holder is or is deemed to be a
non-resident of Canada, deals at arm's length with the resulting,
surviving or transferee Person for purposes of the Income Tax Act
(Canada) at the time of making the payment and (B) no other taxes on
income (including taxable capital gains) will be payable under the
Income Tax Act (Canada) by a Holder of the Securities who is or who is
deemed to be a non-resident of Canada in respect of the
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acquisition, ownership or disposition of the Securities, including the
receipt of interest, principal or premium thereon, provided that such
Holder does not use or hold, and is not deemed to use or hold, the
Securities in carrying on a business in Canada for purposes of the
Income Tax Act (Canada) and, in the case of a Holder of Securities who
carries on an insurance business in Canada and elsewhere, the
Securities are not effectively connected with its Canadian insurance
business.
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 and the Opinion of Independent Counsel
referred to in clause (vii) above. The Trustee shall be entitled to
conclusively rely upon such Officers' Certificate and Opinions of Counsel which
opinions shall also comply with Section 903 hereof.
(b) No Guarantor shall, and the Company and PAAC shall
not permit a Guarantor to, in a single transaction or series of related
transactions, amalgamate, merge or consolidate with or into any other
corporation (other than the Company or any other 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 Guarantor) unless at the time and giving effect thereto:
(i) either (1) such Guarantor shall be the continuing
corporation or (2) the entity (if other than such Guarantor) formed by
such amalgamation, consolidation or into which such Guarantor is
merged or the entity which acquires by sale, assignment, conveyance,
transfer, lease or disposition the properties and assets of such
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 or of Canada or any province thereof 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 Guarantor under the Securities and this
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.
Such Guarantor shall deliver to the Trustee prior to the
consummation of the proposed transaction, in form and
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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 Guarantor if the Guarantee of such 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 Guarantor in accordance with
Section 801 hereof, the successor Person formed by such consolidation or into
which the Company or such 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 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
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.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements
without Consent of Holders.
Without the consent of any Holders, the Company and the
Guarantors, when authorized by a Board Resolution, and the
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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 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 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, and in connection therewith, to modify covenants, to
provide additional indemnity to the Trustee, and to modify 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, PAAC, any
other 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, PAAC, any other Guarantor or any other
obligor upon the Securities, as applicable, herein, in the Securities
or in any Guarantee.
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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 Guarantor and the Trustee, the Company
and each 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 Security Documents, 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 of this Indenture, the
Security Documents, the Securities or the Guarantees;
(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 the
provisions relating to redemption for changes in Canadian withholding
or other taxes that would result in the payment of Additional Amounts
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);
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(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 this Indenture or the Security
Documents;
(x) make any change in Section 1024 hereof that adversely
affects the rights of any Holder, or amend the terms of the Securities
or this Indenture in a way that would result in the loss of an
exemption from any of the Taxes; or
(xi) make any change in the provisions of this Section
902.
Upon the written request of the Company and each 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
to Section 903 hereof, join with the Company and each 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
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
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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.
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 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.
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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 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).
(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
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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.
Section 1004. Taxes.
Each of the Company and PAAC 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.
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Section 1005. Jurisdiction, Service of Process and Venue;
Immunity; Judgement Currency.
(a) Each of the Company and the Guarantors agrees that
any suit, action or proceeding with respect to this Indenture, the Securities,
the Guarantees, the Registration Rights Agreement or the Security Documents or
any judgment entered by any court in respect thereof may be brought in the
United States District Court for the Southern District of New York, in the
Supreme Court of the State of New York sitting in New York County (including
its Appellate Division), or in any other appellate court in the State of New
York, as the party commencing such suit, action or proceeding may elect in its
sole discretion; and each of the Company and the Guarantors hereby irrevocably
submits to the non-exclusive jurisdiction of such courts for the purpose of any
such suit, action, proceeding or judgment. Each of the Company and the
Guarantors further submits, for the purpose of any suit, action, proceeding or
judgment brought or rendered against it, to the appropriate courts of the
jurisdiction of its domicile, and for the purpose of any such suit, action,
proceeding or judgment brought or rendered against any Collateral or other
property, to the appropriate courts of the jurisdiction where such Collateral
or other property may be found.
(b) Each of the Company and the Guarantors agrees that
service of all writs, process and summonses in any such suit, action or
proceeding brought in any Federal or state court located in The City of New
York may be made upon CT Corporation, presently located at 1633 Broadway, New
York, New York 10019, U.S.A. (the "U.S. Process Agent"), and each of the
Company and the Guarantors hereby confirms and agrees that the U.S. Process
Agent has been duly and irrevocably appointed as its agent and true and lawful
attorney-in-fact in its name, place and stead to accept such service of any and
all such writs, process and summonses, and agrees that the failure of the U.S.
Process Agent to give any notice of any such service of process to the Company
or the applicable Guarantor shall not impair or affect the validity of such
service or of any judgment based thereon. Each of the Company and the
Guarantors hereby further irrevocably consents to the service of process in any
suit, action or proceeding in such courts by the mailing thereof by registered
or certified mail, postage prepaid, at its address set forth in Section 106
hereof or by personal service within or without the jurisdiction of its
domicile.
(c) Nothing herein shall in any way be deemed to limit
the ability of the Trustee or the Holders to serve any such writs, process or
summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the Company or any Guarantor in such other jurisdictions, and
in such manner, as may be permitted by applicable law.
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(d) Each of the Company and the Guarantors hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of the venue of any
suit, action or proceeding arising out of or relating to this Indenture, the
Securities, the Guarantees, the Registration Rights Agreement or the Security
Documents brought in the Supreme Court of the State of New York, County of New
York, in the United States District Court for the Southern District of New York
or in the courts of the jurisdiction of its domicile or in the courts of the
jurisdiction where any Collateral or other property of such Person may be
found, and hereby further irrevocably waives, to the fullest extent permitted
by applicable law, any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
(e) To the extent that the Company or any Guarantor may
be or become entitled, in any jurisdiction in which judicial proceedings may at
any time be commenced with respect to this Indenture, the Securities, the
Guarantees, the Registration Rights Agreement or the Security Documents, to
claim for itself or the Collateral or its other property or revenues any
immunity from suit, court jurisdiction, attachment prior to judgment,
attachment in aid of execution of a judgment, execution of a judgment or from
any other legal process or remedy relating to its obligations under this
Indenture, the Securities, the Guarantees, the Registration Rights Agreement or
the Security Documents, and to the extent that in any such jurisdiction there
may be attributed such an immunity (whether or not claimed), the Company or
such Guarantor, as the case may be, hereby irrevocably agrees not to claim and
hereby irrevocably waives such immunity to the fullest extent permitted by the
laws of such jurisdiction.
(f) This is an international debt transaction in which
the specification of United States dollars and payment in New York City is of
the essence, and the obligations of the Company and the Guarantors under this
Indenture, the Securities and the Guarantees to make payment to (or for the
account of) the Trustee and the Holders in dollars shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any other currency or in another place except to the extent that
such tender or recovery results in the effective receipt by the Trustee and the
Holders in New York City of the full amount of dollars payable to the Trustee
and the Holders under this Indenture, the Securities and the Guarantees. If for
the purpose of obtaining judgment in any court it is necessary to convert a sum
due hereunder in dollars into another currency (in this Section 1005 called the
"judgment currency"), the rate of exchange that shall be applied shall be that
at which in accordance with normal banking procedures dollars could be
purchased in New York City with the judgment currency on the
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Business Day next preceding the day on which such judgment is rendered. The
obligation of each of the Company and the Guarantors in respect of any such sum
due from it to the Trustee and the Holders under this Indenture, the Securities
or any Guarantee shall, notwithstanding the rate of exchange actually applied
in rendering such judgment, be discharged only to the extent that on the
Business Day following receipt by the Trustee or the Holders, as the case may
be, of any sum adjudged to be due under this Indenture, the Securities or any
Guarantee, as the case may be, in the judgment currency the Trustee or the
Holders, as the case may be, may in accordance with normal banking procedures
purchase and transfer dollars to New York City with the amount of the judgment
currency so adjudged to be due; and each of the Company and the Guarantors
hereby, as a separate obligation and notwithstanding any such judgment, agrees
to indemnify the Trustee and the Holders against, and to pay the Trustee and
the Holders on demand, in dollars, the amount (if any) by which the sum
originally due to the Trustee or the Holders, as the case may be, in dollars
under this Indenture, the Securities or any Guarantee exceeds the amount of the
dollars so purchased and transferred.
Section 1006. Limitation on Restricted Payments.
Subject to the other provisions of this Section 1006, each of
the Company and PAAC shall not, nor shall either 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, PAAC or such Restricted Subsidiary (other than dividends or
distributions payable or paid by PAAC or a Wholly-Owned Restricted Subsidiary
of PAAC on account of its Equity Interests held by the Company, PAAC or another
Restricted Subsidiary or payable or paid in shares of Capital Stock of the
Company or PAAC 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, PAAC 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 other payment or
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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, PAAC 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 PAAC for the period
subsequent to October 1, 1997 to and including the last day of PAAC'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 PAAC during the Computation Period), (ii) the aggregate Net Cash
Proceeds of the issuance or sale or the exercise (other than to PAAC
or a Subsidiary of PAAC or an employee stock ownership plan or other
trust established by the Company, PAAC or any of PAAC's Subsidiaries
for the benefit of their respective employees) of the Company's or
PAAC'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 PAAC or a Subsidiary of PAAC) of any
debt securities of the Company or PAAC, respectively, that have been
converted into or exchanged for Equity Interests (other than
Redeemable Stock) of the Company or PAAC, respectively, to the extent
such debt securities were originally issued or sold for cash, plus the
aggregate Net Cash Proceeds received by the Company or PAAC,
respectively, at the time of such conversion or exchange, in each case
subsequent to the Closing Date, (iv) cash contributions to the
Company's or PAAC's capital subsequent to the Closing Date and (v)
$5,000,000.
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
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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 or PAAC
(other than Redeemable Stock and other than Equity Interests issued or sold to
PAAC or a Subsidiary of PAAC 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 or
PAAC made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Subordinated Indebtedness of the Company, PAAC 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, PAAC or Pioneer held by management or other
employees of the Company, PAAC, Pioneer or any Subsidiary of PAAC 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 thereunder do not exceed the amount of PAAC and
its consolidated subsidiaries' share of U.S. Federal and state and Canadian
federal and provincial 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
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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,
PAAC 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, PAAC 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, PAAC or such
Restricted Subsidiary authorizing such Restricted Payment; and (c) a
distribution to holders of the Company's or PAAC's Equity Interests of (i)
shares of Capital Stock or other Equity Interests of any Restricted Subsidiary
or (ii) other assets of the Company or PAAC, 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 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
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 and PAAC 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 PAAC or any Restricted Subsidiary to (i) pay
dividends or make any other distribution to the Company, PAAC or the Restricted
Subsidiaries on its Equity Interests, (ii) pay any Indebtedness owed to the
Company, PAAC or any other Restricted Subsidiary, (iii) make loans or advances
to the Company, PAAC or any other Restricted Subsidiary or (iv) transfer any of
its property or
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assets to the Company, PAAC 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 this Indenture, (C) any restriction, with respect to a
Restricted Subsidiary of the Company or PAAC that is not a Subsidiary of the
Company or PAAC on the Closing Date, in existence at the time such entity
becomes a Restricted Subsidiary of the Company or PAAC; provided that such
encumbrance or restriction is not created in anticipation of or in connection
with such entity becoming a Subsidiary of the Company or PAAC and is not
applicable to any Person or the properties or assets of any Person other than a
Person that becomes a Subsidiary of the Company or PAAC, (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
those provided for in the Indebtedness referred to in clauses (A), (B) 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
this 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 and PAAC shall not, and shall not permit any of
the 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, PAAC or a Restricted
Subsidiary may incur Indebtedness if at the time of such incurrence and after
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giving pro forma effect thereto, the 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
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, PAAC's and its
subsidiaries' predecessors.
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, PAAC and the Restricted Subsidiaries each may guarantee Indebtedness
of the Company, PAAC 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. Limitations on Asset Sales.
(a) The Company and PAAC shall not, and shall not permit
any Restricted Subsidiary to, make any Asset Sale (other than to the Company,
PAAC or any Restricted Subsidiary) unless (i) the Company, PAAC 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, PAAC 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, PAAC or of any Restricted Subsidiary; provided, however, that the
amount of any cash equivalent or note or other obligation received by the
Company, PAAC or such Restricted Subsidiary from the transferee in any such
transaction that is converted within 90 days by the Company, PAAC 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, PAAC or such Restricted Subsidiary in
respect of such Asset Sale which are allocated to the Collateral,
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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,
PAAC or any of the Restricted Subsidiaries and shall otherwise comply with the
Intercreditor Agreement and Article Fourteen hereof applicable 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, PAAC 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, PAAC or PAI 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 (or in the case of Insurance Proceeds or Net Awards, 365 days
after receipt by the Collateral Agent of such Insurance Proceeds or Net
Awards), invest the Net Proceeds in the Company, PAAC 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
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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.
(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, PAAC and the Subsidiaries of
PAAC and invested in cash or Eligible Investments, except that the Company,
PAAC 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 Sections 1109 and 1014 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 in an Asset Sale, 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 title opinions confirming that the Liens of the Collateral Agent
or the remaining Collateral continue unimpaired as perfected first priority
liens.
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).
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(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 and PAAC shall not, and shall not permit
any of the 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, PAAC 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 Agreement, 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 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, PAAC or a
Restricted Subsidiary, as the case may be, to the Collateral Agent
contemporaneously with receipt by the Company, PAAC or such Restricted
Subsidiary and be deposited into the Intercreditor Collateral Account and
applied in accordance
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with the applicable provisions of the Intercreditor Agreement. Insurance
Proceeds and Net Awards so deposited that may be applied by the Company, PAAC
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 and PAAC 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, PAAC 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, PAAC 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.
Section 1011. Limitation on Transactions With Affiliates.
(a) The Company, PAAC and the 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, PAAC or any Restricted Subsidiary,
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
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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, PAAC 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, PAAC 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 an investment banking firm of national standing in the United States
of America, 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, PAAC 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,
PAAC or its Subsidiaries, as the case may be, and (y) all such transactions
referred to in clauses (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, PAAC or any of their Subsidiaries, as
determined by the board of
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directors of the Company, PAAC or any of their 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 and PAAC 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;
(c) Liens on assets or properties of the Company, or on
assets or properties of PAAC or the Restricted Subsidiaries, 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, PAAC or any of the 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 such Liens;
(d) Liens on the assets or property acquired by the
Company, PAAC or any Restricted Subsidiary after the Closing Date;
provided, however, that (i) such Liens existed on the date such assets
or property were 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
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any assets or property of the Company, PAAC or any of the Restricted
Subsidiaries other than the assets or property so acquired;
(e) Liens securing Indebtedness which is incurred to
refinance Indebtedness which has been secured by a Lien permitted
under this Indenture and which shall be permitted to be refinanced
under this Indenture; provided, however, that such Liens shall not
extend to or cover any property or assets of the Company, PAAC or any
of the Restricted Subsidiaries not securing the Indebtedness so
refinanced;
(f) Liens on assets or property of the Company, PAAC or
any Restricted Subsidiary that shall be subject to a Sale and
Leaseback Transaction, provided, however, 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 Subsidiary;
provided, however, that such Liens were not created, incurred or
assumed in contemplation of the acquisition thereof by the Company,
PAAC or a Restricted Subsidiary; provided further, that such Liens
shall not extend to any other property owned by the Company, PAAC or a
Restricted Subsidiary;
(h) Liens securing Indebtedness of a Restricted
Subsidiary owing to the Company, PAAC or a Wholly-Owned Restricted
Subsidiary of PAAC;
(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" as defined in
the Existing Senior Secured Indenture and the Existing Term Facility
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, and (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
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(k) Liens on assets or property of the Company, or on
assets or property of PAAC or the Restricted Subsidiaries, acquired or
constructed after the date of this Indenture other than in the
ordinary course of business and other than assets or properties
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 this
Indenture, and (iii) such Liens do not encumber the Collateral.
Section 1013. Corporate Existence.
Subject to Article Eight, each of the Company and PAAC 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 of
the Company and PAAC, 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 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 Change of Control Payment Date.
Substantially simultaneously with mailing of the notice, the
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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 (5) 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 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;
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(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, 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 all other applicable U.S. Federal and
state and Canadian federal and provincial securities laws and regulations in
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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 and PAAC shall not, and shall not permit
any of the 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 and PAAC shall, and shall cause the Restricted
Subsidiaries to, maintain their respective (a) existing properties and assets
in normal working order and condition as on the Execution Date and (b)
properties and assets acquired after the date hereof in normal working order
and condition as of the date of such acquisition (in each case, reasonable wear
and tear excepted) and make all repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonably necessary for the
proper conduct of the business of the Company, PAAC and the Restricted
Subsidiaries taken as a whole, provided that nothing herein shall prevent the
Company, PAAC or any of the Restricted Subsidiaries from discontinuing any
maintenance of any such properties if such discontinuance is desirable in the
conduct of the business of the Company, PAAC and the Restricted Subsidiaries
taken as a whole.
Section 1016. Maintenance of Insurance.
The Company and PAAC shall, and shall cause the 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, PAAC and the Restricted Subsidiaries
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operate (which may include self-insurance in comparable form to that maintained
by such responsible companies).
Section 1017. Stock Pledge Agreements.
(a) The Company and PAAC shall, and shall cause the
applicable Subsidiary or Subsidiaries of PAAC (the "Pledgor Subsidiary" or
"Pledgor Subsidiaries") to execute and deliver to the Collateral Agent one or
more stock pledge agreements substantially in the form of the stock pledge
agreement attached as an exhibit to the Existing Senior Secured Indenture
("Stock Pledge Agreements") providing for the pledge to the Collateral Agent
for the benefit of itself and the Trustee, for itself and the Holders, and the
Term Loan Agent, for itself and the other lenders under the Term Loan
Agreement, of all the Capital Stock of the Company and each of the Restricted
Subsidiaries that (A) is engaged in any business activity other than the
holding of the Capital Stock of one or more Subsidiaries of PAAC (or in the
case of Imperial West, engaging in any business activity other than the holding
of its Investment in Kemwater) and (B) has assets equal to or greater than 5%
of PAAC's total assets determined on a consolidated basis as of the time of
determination, together with delivery to the Collateral Agent of stock
certificates evidencing such Capital Stock (together with undated stock powers
executed in blank), in each case at such time as (i) such Capital Stock is not
pledged for the benefit of the lenders under the Existing Term Facility and
subject to the rights therein of the holders of the Existing Senior Secured
Notes and (ii) such pledge shall not constitute a default or breach under the
Existing Term Facility or the Existing Senior Secured Indenture. Upon any such
pledge, such Capital Stock shall become "Collateral" for purposes of the
Intercreditor Agreement.
(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 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
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to comply with this Section 1017 shall not constitute a Default or Event of
Default with respect to the Securities, 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 of the Company shall incur such Indebtedness
without directly securing the Securities with such pledge of Capital Stock on
an equal and ratable basis (or prior to in the case of Indebtedness
subordinated to the Securities 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 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
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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 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.
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
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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. Certain Guarantees.
(a) If (i) any Subsidiary of PAAC becomes a Restricted
Subsidiary after the Closing Date, (ii) the Company, PAAC or any Subsidiary of
PAAC that is a 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 PAAC's and
its Subsidiaries' total assets determined on a consolidated basis as of the
time of transfer to any Subsidiary or Subsidiaries of PAAC that is not the
Company or a Guarantor or are not Guarantors, (iii) any Subsidiary of PAAC
which has a value equal to or greater than 5% of PAAC'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 PAAC, or (iv) any Subsidiary of
PAAC becomes a guarantor of the Existing Senior Secured Notes, the Term Loan
Notes or the loans under the Existing Term Facility after the Closing Date, the
Company shall cause such Subsidiary or Subsidiaries of PAAC to execute and
deliver to the Trustee a supplemental indenture pursuant to which such
Subsidiary or Subsidiaries or PAAC shall unconditionally guarantee, in
accordance with Article Thirteen hereof, all of the Company's obligations under
this Indenture and the Securities on the same terms as the other Guarantors,
which Guarantee shall rank pari passu with any Senior Indebtedness of such
Subsidiary; provided, that clause (i) of this Section 1019(a) shall not apply
to any newly acquired or created Subsidiary of PAAC organized outside of the
United States of America and conducting the majority of its business outside of
the United States of America for so long as the issuance of a guarantee by such
Subsidiary would result in a material increase in the aggregate amount of
income tax payable by PAAC on a consolidated basis and the Company shall
deliver to the Trustee an Officers' Certificate so stating.
(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 "Guarantor." Notwithstanding
the foregoing, any Guarantee by a Subsidiary of PAAC 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, PAAC's or a Restricted Subsidiary's
Equity Interest in (or if such Subsidiary is owned by a Restricted Subsidiary,
of all of such Restricted
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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 and PAAC (a) shall not, and shall not permit any
Wholly-Owned Restricted Subsidiary of PAAC to, transfer, convey, sell or
otherwise dispose of any Capital Stock of any Wholly-Owned Restricted
Subsidiary of PAAC (other than All-Pure and its subsidiaries) to any Person
(other than the Company, PAAC or a Wholly-Owned Restricted Subsidiary of PAAC),
unless (i) such transfer, conveyance, sale or other disposition is of all the
Capital Stock of such Wholly-Owned Restricted Subsidiary of PAAC 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 PAAC (other than All-Pure and its
subsidiaries) to issue any of its Equity 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,
PAAC or a Wholly-Owned Restricted Subsidiary of PAAC.
Section 1021. Impairment of Security Interest.
The Company and PAAC shall not, and shall not cause or permit
any Restricted Subsidiary 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 its own account and for
the benefit of the Trustee and 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 this Indenture,
the Term Loan Agreement or the Security Documents. The Company and PAAC shall
not, and shall not permit PCAC to, grant a security interest in, or permit any
Lien to exist on, the St. Gabriel Pipeline other than Permitted Liens or a Lien
in favor of the Collateral Agent pursuant to a Security Document. The Company
and PAAC shall not, and shall not cause or permit any Restricted Subsidiary 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 this Indenture or the Term Loan Agreement. A release of any of
the Collateral strictly in accordance with the terms and conditions of this
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Indenture and the Security Documents will not be deemed for any purpose to be
an impairment of security under this Indenture.
Subject to the provisions of this Indenture, the Existing Term
Facility, the Existing Senior Secured Indenture and the Intercreditor
Agreement, the Company and PAAC will not, and will not cause or permit any of
the Restricted Subsidiaries to, enter into any agreement or instrument that by
its terms requires that the Company, PAAC or any such Restricted Subsidiary
pledge the Capital Stock of (i) the Company and (ii) any Restricted Subsidiary
that (A) is engaged in any business activity other than the holding of the
Capital Stock of one or more Subsidiaries of PAAC (or in the case of Imperial
West, engaging in any business activity other than the holding of its
Investment in Kemwater) and (B) has assets equal to or greater than 5% of
PAAC's total assets determined on a consolidated basis as of the time of
determination.
Section 1022. Amendment to Security Documents.
The Company and PAAC 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 this Indenture
and the Security Documents may be amended, modified or supplemented in
accordance with Article Nine hereof.
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, PAAC or a
Restricted Subsidiary, (ii) any assets or property transferred by the Company,
PAAC or a Restricted Subsidiary, (iii) the application of any proceeds received
by the Company, PAAC 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, PAAC or a Restricted
Subsidiary, (v) any Investment of such escrowed or segregated moneys by the
Company, PAAC or a Restricted Subsidiary or any other Investment under the
Contingent Payment Agreement, (vi) any obligation of the Company, PAAC 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, PAAC or
a Restricted Subsidiary that is non-recourse to
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the assets of the Company, PAAC or 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
none of the Company, PAAC 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, PAAC or any Restricted Subsidiary in
connection with Indebtedness described in clause (vii) above that does not
extend to assets of the Company, PAAC 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.
Section 1024. Additional Amounts.
If the Company is required to withhold or deduct any amount
for or on account of Taxes from any payment made under or with respect to the
Securities, the Company shall pay such additional amounts ("Additional
Amounts") as may be necessary so that the net amount received by each Holder
(including Additional Amounts) after such withholding or deduction will not be
less than the amount the Holder would have received if such Taxes had not been
withheld or deducted; provided that no Additional Amounts shall be payable with
respect to a payment made to a Holder to the extent solely attributable to (i)
such Holder not being treated as dealing at arm's length with the Company
within the meaning of the Income Tax Act (Canada) at the time of making such
payment, or (ii) such Holder's being connected with Canada or any province or
territory thereof otherwise than solely by reason of the Holder's activity in
connection with purchasing the Securities, by the mere holding of Securities or
by reason of the receipt of payments thereunder. The Company will also (i) make
such withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law. The
Company shall furnish to the Holders, within 30 calendar days after the date
the payment of any Taxes is due pursuant to applicable law, certified copies of
tax receipts evidencing such payment by the Company. The Company shall upon
written request of each Holder (other than an Excluded Holder), reimburse each
such Holder for the amount of (i) any Taxes so levied or imposed and paid by
such Holder as a result of payments made under or with respect to the
Securities, and (ii) any Taxes so levied or imposed with respect to any
reimbursement under the foregoing clause (i) so that the net amount received by
such Holder (net of payments made under or with respect to the Securities)
after such reimbursement will not be less than the net amount the Holder would
have received if Taxes on such reimbursement had not been imposed; provided,
however, no reimbursement shall be made in respect of Taxes for which no
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Additional Amounts would be payable by reason of clause (i) or (ii) of the
second preceding sentence.
At least 30 calendar days prior to each date on which any
payment under or with respect to the Securities is due and payable, if the
Company will be obligated to pay Additional Amounts with respect to such
payment, the Company will deliver to the Trustee an Officers' Certificate
stating the fact that such Additional Amounts will be payable and the amounts
so payable and will set forth such other information necessary to enable the
Trustee to pay such Additional Amounts to Holders on the payment date. Whenever
in this Indenture there is mentioned, in any context, the payment of principal,
interest, if any, or any other amount payable under or with respect to any
Securities, such mention shall be deemed to include mention of the payment of
Additional Amounts to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof. The Holders, by acceptance of a
Note, and the Company agree that the payment of any Additional Amounts by the
Company shall be treated as payments of interest.
Section 1025. Pension Transfer Agreement.
The Company shall fulfill all of its obligations under the
Pension Transfer Agreement dated October 31, 1997 between the Company and ICI
Canada, in accordance with the terms thereof that relate to the establishment,
funding, maintenance and operation of each Canadian Pension Plan to be
established in connection therewith.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.
The Securities shall not be redeemable at the option of the
Company prior to October 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 October 15 in the year indicated below:
Year Redemption
---- ----------
2002 104.625%
2003 103.084%
2004 101.542%
2005 100.000%
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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
October 15, 2000, the Company may redeem, in part, up to $61,250,000 in
aggregate principal amount of the 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 or
PAAC, but only to the extent that Pioneer or PAAC contributes such net proceeds
to the Company as a capital contribution; provided that at least $113,750,000
aggregate principal amount of the Securities must remain outstanding after such
redemption.
If, as a result of any change in, or amendment to, the laws
(including any regulations promulgated thereunder) of Canada (or any political
subdivision or taxing authority thereof or therein) or any change in, or
amendment to, any official position regarding the application or interpretation
of such laws or regulations, which change is announced or becomes effective on
or after the Closing Date, the Company has become or would be obligated to pay,
on any date on which any amount would be payable with respect to the
Securities, any Additional Amounts to a U.S. Holder in accordance with Section
1025 hereof, then the Company may, at its option, redeem the Securities, as a
whole but not in part, at a redemption price equal to 100% of their aggregate
principal amount on the date of such redemption, together with accrued and
unpaid interest and Liquidated Damages, if any, to the date fixed for
redemption.
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
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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.
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;
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(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
(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
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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, 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.
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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 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
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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;
(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
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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 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 U.S. Federal and state and
Canadian federal and provincial securities laws and regulations.
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.
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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 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;
(b) the Company or any Guarantor has paid or caused to be
paid all other sums payable hereunder by the Company or any 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
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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 Guarantor is a party or by which the Company or any 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.
ARTICLE THIRTEEN
GUARANTEE
Section 1301. Guarantors' Guarantee.
For value received, each of the 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
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,
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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 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 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 Guarantor, jointly and severally, hereby
guarantees that the Indenture Obligations shall be paid to 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 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 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 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
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relative thereto which is not embodied herein; and it is specifically
acknowledged and agreed that this Guarantee has been delivered by each
Guarantor free of any conditions whatsoever and that no representations,
warranties or promises have been made to any 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 Guarantor.
Section 1303. Guarantee Absolute.
The obligations of the 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 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 Guarantors hereunder is irrevocable, absolute and
unconditional and (to the extent permitted by law) the liability and
obligations of the Guarantors hereunder shall not be released, discharged,
mitigated, waived, impaired or affected in whole or in part by:
(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 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
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 Guarantor hereunder;
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(e) the abstention from taking security from the Company,
any 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
Guarantor or any other Person, and including any other guarantees
received by the Trustee;
(g) any other dealings with the Company, any Guarantor or
any other Person, or with any security;
(h) the Trustee's or the Holder's acceptance of
compositions from the Company or any 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 Guarantor or any other Person on account of any indebtedness and
liabilities owing by the Company or any 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
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
Guarantor hereunder;
(k) any change in the name, business, capital structure
or governing instrument of the Company or any Guarantor or any
refinancing or restructuring of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business
or any part thereof;
(m) subject to Section 1314 hereof, any merger or
consolidation, arrangement or reorganization of the Company, any
Guarantor, any Person resulting from the merger or consolidation of
the Company or any 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 Guarantor;
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(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 Guarantor or the
loss of corporate existence;
(o) subject to Section 1314 hereof, any arrangement or
plan of reorganization affecting the Company or any 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 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 Guarantors.
Section 1304. Right to Demand Full Performance.
In the event of any demand for payment or performance by the
Trustee from any 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 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 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 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
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provisions of this Indenture or the Securities or any other notice whatsoever
to or upon the Company or such Guarantor with respect to the Indenture
Obligations. Each 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 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 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 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 Guarantor
under this Guarantee.
Section 1306. The 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 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 Guarantors contained in this
Article Thirteen shall nevertheless be binding upon the Guarantors, as
principal debtor, until such time as all such Indenture Obligations have been
paid in full to the 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 Guarantors shall be
responsible for the payment thereof to the Trustee or the Holders upon demand.
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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 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 U.S. 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 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 Guarantors, the Guarantors agree, inter se, that in the event any payment
or distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the "Adjusted Net Assets" (as
defined below) of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company's obligations with respect to the Securities or any
other Guarantor's obligation with respect to its Guarantee. "Adjusted Net
Assets" means, with respect to any Guarantor, at any date, the lesser of the
amount by which (x) the fair value of the property of such 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 Guarantor at such date and (y) the present fair salable
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value of assets of such Guarantor at such date exceeds the amount that shall be
required to pay the probable liability of such 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.
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 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 Guarantor or the officers,
directors or agents acting or purporting to act on their respective behalf.
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Section 1313. Successors and Assigns.
All terms, agreements and conditions of this Article Thirteen
shall extend to and be binding upon each 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 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 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
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 the obligations of the 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 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 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 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 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
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Security on which a Guarantee is endorsed, such Guarantee shall be valid
nevertheless.
Section 1316. Payment Permitted by Each of the 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 Guarantor to
make, or prevent any Guarantor from making at any time, payments pursuant to
the Securities.
Section 1317. Notice to Trustee by Each of the Guarantors.
Each Guarantor shall give prompt written notice to the Trustee
of any fact known to such 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 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 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
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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.
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, the Company has entered into the respective Security Documents to
which it 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.
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(d) Within 90 days after substantial completion thereof
by PCAC, the Company and PAAC shall cause PCAC to use all commercially
reasonable efforts (x) to grant to the Collateral Agent, for the pari passu
benefit of the Secured Parties (as defined in the Intercreditor Agreement) and
as additional security for the Indenture Obligations and the Term Loan
Obligations (as defined in the Intercreditor Agreement) a perfected first
priority Lien (the "St. Gabriel Pipeline Lien") on the St. Gabriel Pipeline and
(y) to deliver the following to the Collateral Agent:
(i) mortgages, security agreements, fixture filings and
financing statements (collectively, the "Pipeline
Security Documents") executed by PCAC and in form and
substance acceptable to the Trustee and the
Collateral Agent, sufficient to create the St.
Gabriel Pipeline Lien, together with evidence
satisfactory to the Trustee and the Collateral Agent
that all of such documents have been recorded and
filed, as necessary, to perfect such Lien and that
all fees, taxes and other expenses associated
therewith have been paid;
(ii) lien, title and Uniform Commercial Code financing
statement searches showing no Liens on the St.
Gabriel Pipeline prior to the St. Gabriel Pipeline
Lien, other than Permitted Liens and any other Liens
that are acceptable to the Trustee and the Collateral
Agent;
(iii) a complete set of as-built site plans, surveys or
engineering drawings, certified as true and correct
by PCAC, and showing all material components of the
St. Gabriel Pipeline and the respective locations
thereof;
(iv) an opinion of local counsel to PCAC in Louisiana with
respect to the form and enforceability of the
Pipeline Security Documents and such other matters as
the Trustee, the Collateral Agent and their
respective counsel may reasonably require;
(v) an opinion of counsel to PCAC with respect to the due
authorization, execution and delivery of the Pipeline
Security Documents and such other matters as the
Trustee, the Collateral Agent and their respective
counsel may reasonably require;
(vi) certificates of insurance with respect to the
insurance coverages required to be maintained by PCAC
with respect to the St. Gabriel Pipeline,
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naming the Collateral Agent as loss payee and naming
the Collateral Agent and the Trustee as additional
insureds, as applicable;
(vii) such other approvals, consents, opinions or documents
as the Collateral Agent, the Trustee or their
respective counsel may reasonably request in
connection with the Pipeline Security Documents and
any matter related thereto.
(e) Each of the Company and PAAC shall cause PCAC to use
all commercially reasonable efforts to complete the St. Gabriel Pipeline in a
timely manner.
Section 1402. Recording; Priority; Opinions, Etc.
(a) The Company shall at its sole cost and expense
perform any and all acts and execute any and all documents (including, without
limitation, the execution, amendment or supplementation of any financing
statement, application for registration and continuation statement or other
statement) for filing under the provisions of the UCC and the rules and
regulations thereunder, the Civil Code of Quebec and any rules or regulations
thereunder, or any other statute, rule or regulation of any applicable federal,
state, provincial or local jurisdiction, including any filings in local real
estate land record or registry 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,
maintain, register, record, renew, file, perfect, protect and preserve valid
and perfected Liens on the Collateral in favor of the Collateral Agent for its
own account and for the account of the Trustee and the Holders 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 Agent, and to fully preserve and protect the rights of
the Trustee and the Holders under this Indenture.
The Company shall from time to time promptly pay and satisfy
all mortgage and financing and continuation statement recording, registration
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 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:
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(i) Opinions 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,
renewals, registrations and filings are the only recordings, renewals,
registrations and filings necessary to give notice thereof and that no
re-recordings, re-registrations or refilings or other renewals 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
(ii) on each anniversary of the Closing Date beginning in
the year 1998, an Opinion of Counsel or Opinions 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, renewals, re-recordings, re-registerings and
refilings of all financing statements, continuation statements,
applications for registration 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
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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 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, 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 Agreement, the
Trustee or the Collateral Agent, acting at the written direction of the
Holders, shall have power to institute and to maintain, or the Trustee, acting
at the written direction of the Holders, shall have the power to 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 under any Security Document for consent or approval with
respect to any matter or thing relating to any Collateral or the Company'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 of any covenant or any breach of any
representation or warranty of the Company 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
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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.
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, at the direction of
the Trustee, upon a Company Order to reimburse the Company 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
Agreement.
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
Officers' Certificate certifying compliance with this Indenture, (c)
instruments granting the Collateral Agent, first priority liens, for the
benefit of (i) the Trustee, for itself and the Holders, and (ii) 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
this Indenture, to
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redeem or repurchase Securities, including without limitation pursuant to a
Change of Control Offer or (to the extent such Trust Moneys constitute proceeds
from Asset Sales involving Collateral) an Asset Sale Offer, or (z) at the
direction of the Company 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 the Collateral Agent shall
receive (a) resolutions of the boards of directors of the Company 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 the 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 Agreement.
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.
Section 1408. Power of Attorney for Collateral in Quebec.
For the purposes of constituting security on the Collateral located in Quebec
as security for the due and punctual payment of and interest on the Securities
when and as 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, each of the Trustee and the Holders hereby
irrevocably grants to the Collateral Agent, for the purposes of holding, on
behalf of and for the benefit of all present and future Trustees and Holders,
the security constituted by the Company under the Quebec Mortgage and Security
Agreement, a power of attorney within the meaning of the Civil Code of Quebec
("Power of Attorney") for all present and future Trustees and Holders. The
Collateral Agent hereby accepts such Power of Attorney for the purposes of
holding security created under the Quebec Mortgage and Security Agreement on
behalf of and for the benefit of all present and future Trustees and Holders.
To the extent that any Person becomes a Trustee under this Indenture or a
Holder by accepting, purchasing or acquiring a Security becomes bound by the
terms and conditions of this Indenture, whether by assignment or otherwise,
such Person shall be automatically
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167
deemed to have ratified and consented to the irrevocable granting by the
Trustee and the Holders to the Collateral Agent of the Power of Attorney
constituted hereunder. Each Holder agrees (i) with the other Holders that it
will not, without the prior consent of the Trustee and the other Holders, take
or obtain any Lien on any property of the Company to secure the Indenture
Obligations of the Company hereunder or under the Securities, except for the
benefit of the Collateral Agent for and on behalf of, the Trustee and the
Holders, or as may otherwise be required by law; and (ii) that, notwithstanding
the provisions of Section 32 of the Special Corporate Powers Act (Quebec), the
Collateral Agent may, as a Person holding the Power of Attorney of the Trustee
and the Holders, acquire any title to indebtedness secured by any hypothec in
its favor related to this Indenture or the Securities or any other document
contemplated hereunder.
[signature pages follow]
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168
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
PCI CHEMICALS CANADA INC.
Attest /s/ KENT R. STEPHENSON By /s/ PHILIP J. ABLOVE
------------------------------ -------------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
PIONEER AMERICAS, INC.
Attest /s/ KENT R. STEPHENSON By /s/ PHILIP J. ABLOVE
------------------------------ -------------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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169
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
PIONEER (EAST), INC.
Attest /s/ KENT R. STEPHENSON By /s/ PHILIP J. ABLOVE
------------------------------ -------------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: President and Secretary 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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
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170
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, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
PCI CAROLINA, INC.
INC.
Attest /s/ KENT R. STEPHENSON By /s/ PHILIP J. ABLOVE
------------------------------- -------------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: Vice President, General Title: Vice President and
Counsel and Secretary Chief Financial Officer
PIONEER LICENSING, INC.
Attest /s/ KENT R. STEPHENSON By /s/ PHILIP J. ABLOVE
------------------------------- -------------------------------
Name: Kent R. Stephenson Name: Philip J. Ablove
Title: President and Secretary Title: Vice President
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
Attest /s/ MARGARET M. CIESMELEWSKI By /s/ PATRICIA STERMER
------------------------------- -------------------------------
Name: Margaret M. Ciesmelewski Name: Patricia Stermer
Title: Asst. Vice President Title: Asst. Vice President
UNITED STATES TRUST COMPANY OF
NEW YORK, as Collateral Agent
Attest /s/ MARGARET M. CIESMELEWSKI By /s/ PATRICIA STERMER
------------------------------- -------------------------------
Name: Margaret M. Ciesmelewski Name: Patricia Stermer
Title: Asst. Vice President Title: Asst. Vice President
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