Exhibit 4.1
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TERRA INDUSTRIES INC.
and
FIRST TRUST NATIONAL ASSOCIATION,
Trustee
INDENTURE
Dated as of June 22, 1995
10 1/2% Senior Notes due 2005
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CROSS-REFERENCE TABLE
---------------------
TIA SECTIONS INDENTURE SECTIONS
- ------------ ------------------
(S) 310 (a)(1)..................................... 7.09
(a)(2)..................................... 7.09
(b)........................................ 7.07; 10.02
(S) 311 ........................................... 7.04
(S) 313 (a)........................................ 7.05
(S) 314 (a)........................................ 4.18; 10.02
(a)(4)..................................... 4.17
(c)(1)..................................... 10.03
(c)(2)..................................... 10.03
(e)........................................ 10.04
(S) 315 (a)........................................ 7.01
(S) 316 (a) (last sentence)........................ 2.07
(a)(1)(A).................................. 6.05
(a)(1)(B).................................. 6.04
(b)........................................ 6.07
(S) 317 (a)(1)..................................... 6.08
(a)(2)..................................... 6.09
(S) 318 (a)........................................ 10.01
(c)........................................ 10.01
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
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PARTIES..................................................................... 1
RECITALS.................................................................... 1
ARTICLE 1 Definitions and Incorporation by Reference....................... 1
SECTION 1.01 Definitions................................... 1
SECTION 1.02 Incorporation by Reference of Trust Indenture
Act........................................... 22
SECTION 1.03 Rules of Construction......................... 23
ARTICLE 2 The Securities................................................... 23
SECTION 2.01 Form and Dating............................... 23
SECTION 2.02 Execution, Authentication and Denominations... 24
SECTION 2.03 Registrar and Paying Agent.................... 25
SECTION 2.04 Paying Agent to Hold Money in Trust........... 25
SECTION 2.05 Transfer and Exchange......................... 26
SECTION 2.06 Replacement Securities........................ 29
SECTION 2.07 Outstanding Securities........................ 29
SECTION 2.08 Temporary Securities.......................... 29
SECTION 2.09 Cancellation.................................. 30
SECTION 2.10 CUSIP Numbers................................. 30
SECTION 2.11 Defaulted Interest............................ 30
SECTION 2.12 Form of Legend on Restricted Securities....... 30
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SECTION 2.13 Form of Legend for Book-Entry Securities...... 31
ARTICLE 3 Redemption..................................................... . 32
SECTION 3.01 Right of Redemption........................... 32
SECTION 3.02 Notices to Trustee............................ 32
SECTION 3.03 Selection of Securities to Be Redeemed........ 32
SECTION 3.04 Notice of Redemption.......................... 33
SECTION 3.05 Effect of Notice of Redemption................ 34
SECTION 3.06 Deposit of Redemption Price................... 34
SECTION 3.07 Payment of Securities Called for Redemption... 34
SECTION 3.08 Securities Redeemed in Part................... 34
ARTICLE 4 Covenants........................................................ 35
SECTION 4.01 Payment of Securities......................... 35
SECTION 4.02 Maintenance of Office or Agency............... 36
SECTION 4.03 Limitation on Indebtedness.................... 36
SECTION 4.04 Limitation on Restricted Payments............. 40
SECTION 4.05 Limitation on Dividend and Other
Payment Restrictions Affecting
Restricted Subsidiaries....................... 44
SECTION 4.06 Limitation on the Issuance of Capital
Stock of Restricted Subsidiaries.............. 45
SECTION 4.07 Limitation on Transactions with
Shareholders and Affiliates................... 46
SECTION 4.08 Limitation on Liens........................... 47
SECTION 4.09 Limitation on Sale-Leaseback
Transactions.................................. 48
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SECTION 4.10 Limitation on Asset Sales..................... 49
SECTION 4.11 Repurchase of Securities upon Change of
Control....................................... 52
SECTION 4.12 Corporate Existence........................... 53
SECTION 4.13 Payment of Taxes and Other Claims............. 53
SECTION 4.14 Notice of Defaults and Other Events........... 54
SECTION 4.15 Maintenance of Properties and Insurance....... 54
SECTION 4.16 Amendments to Limited Partnership
Agreements.................................... 54
SECTION 4.17 Compliance Certificates....................... 55
SECTION 4.18 Commission Reports and Reports to
Holders....................................... 55
SECTION 4.19 Waiver of Stay, Extension or Usury
Laws.......................................... 56
ARTICLE 5 Successor Corporation............................................ 56
SECTION 5.01 When Company May Merge, Etc................... 56
SECTION 5.02 Successor Corporation Substituted............. 57
ARTICLE 6 Default and Remedies............................................. 58
SECTION 6.01 Events of Default............................. 58
SECTION 6.02 Acceleration.................................. 60
SECTION 6.03 Other Remedies................................ 60
SECTION 6.04 Waiver of Past Defaults....................... 61
SECTION 6.05 Control by Majority........................... 61
SECTION 6.06 Limitation on Suits........................... 61
SECTION 6.07 Rights of Holders to Receive Payment.......... 62
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SECTION 6.08 Collection Suit by Trustee.................... 62
SECTION 6.09 Trustee May File Proofs of Claim.............. 62
SECTION 6.10 Priorities.................................... 63
SECTION 6.11 Undertaking for Costs......................... 63
SECTION 6.12 Restoration of Rights and Remedies............ 64
SECTION 6.13 Rights and Remedies Cumulative................ 64
SECTION 6.14 Delay or Omission Not Waiver.................. 64
ARTICLE 7 Trustee.......................................................... 64
SECTION 7.01 Rights and Duties of Trustee.................. 64
SECTION 7.02 Individual Rights of Trustee.................. 66
SECTION 7.03 Trustee's Disclaimer.......................... 66
SECTION 7.04 Notice of Default............................. 66
SECTION 7.05 Reports by Trustee to Holders................. 66
SECTION 7.06 Compensation and Indemnity.................... 66
SECTION 7.07 Replacement of Trustee........................ 67
SECTION 7.08 Successor Trustee by Merger, Etc.............. 68
SECTION 7.09 Eligibility................................... 68
ARTICLE 8 Discharge of Indenture........................................... 69
SECTION 8.01 Termination of Company's Obligations.......... 69
SECTION 8.02 Defeasance and Discharge of Indenture......... 70
SECTION 8.03 Defeasance of Certain Obligations............. 72
SECTION 8.04 Application of Trust Money.................... 74
SECTION 8.05 Repayment to Company.......................... 74
SECTION 8.06 Reinstatement................................. 75
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ARTICLE 9 Amendments, Supplements and Waivers.............................. 75
SECTION 9.01 Without Consent of Holders.................... 75
SECTION 9.02 With Consent of Holders....................... 76
SECTION 9.03 Revocation and Effect of Consent.............. 77
SECTION 9.04 Notation on or Exchange of Securities......... 77
SECTION 9.05 Trustee to Sign Amendments, Etc............... 77
SECTION 9.06 Conformity with Trust Indenture Act........... 78
ARTICLE 10 Miscellaneous.................................................... 78
SECTION 10.01 Trust Indenture Act of 1939................... 78
SECTION 10.02 Notices....................................... 78
SECTION 10.03. Certificate and Opinion as to Conditions
Precedent..................................... 79
SECTION 10.04 Statements Required in Certificate or
Opinion....................................... 79
SECTION 10.05 Rules by Trustee, Paying Agent or
Registrar..................................... 80
SECTION 10.06 Payment Date Other Than a Business
Day........................................... 80
SECTION 10.07 GOVERNING LAW................................. 80
SECTION 10.08 No Adverse Interpretation of Other
Agreements.................................... 80
SECTION 10.09 No Recourse Against Others.................... 80
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SECTION 10.10 Successors....................................... 80
SECTION 10.11 Duplicate Originals.............................. 81
SECTION 10.12 Separability..................................... 81
SECTION 10.13 Table of Contents, Headings, Etc................. 81
EXHIBIT A
APPENDIX I
vi
INDENTURE dated as of June 22, 1995, between TERRA INDUSTRIES INC., a
Maryland corporation (the "Company"), and FIRST TRUST NATIONAL ASSOCIATION, a
national banking association, Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 10 1/2%
Senior Notes due 2005, Series A (the "Series A Securities"), and an issue of
10 1/2% Senior Notes due 2005, Series B (the "Series B Securities," and together
with the Series A Securities, the "Securities"), in the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture (each of the Series A Securities
and the Series B Securities shall sometimes be referred to hereinafter as a
"series"). The outstanding principal amount of the Series A Securities and
Series B Securities, in the aggregate, shall not exceed $200 million taken as a
whole.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done and the Company has done
all things necessary to make the Securities, when executed by the Company and
authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company as hereinafter provided.
This Indenture is subject, and shall be governed by, the provisions of
the Trust Indenture Act of 1939, as amended, that are required to be a part of
and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders, as follows.
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions.
"Acceleration Notice" has the meaning provided in Section 6.02 of this
Indenture.
1
"Acquired Indebtedness" is defined to mean Indebtedness of a Person
existing at the time such Person became a Subsidiary and not Incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary.
"Additional Interest" has the meaning provided in Section 4.01 of this
Indenture.
"Adjusted Consolidated Net Income" is defined to mean, for any period,
the aggregate net income (or loss) of any Person and its consolidated
Subsidiaries for such period determined in conformity with GAAP; provided,
however, that the following items shall be excluded in computing Adjusted
Consolidated Net Income (without duplication): (a) the net income (or loss) of
such Person (other than net income (or loss) attributable to a Subsidiary of
such Person) in which any other Person (other than such Person or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to such Person or any of its
Subsidiaries by such other Person during such period; (b) solely for the
purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (iii) of the first paragraph of Section 4.04 of this
Indenture (and in such case, except to the extent includable pursuant to the
foregoing clause (a)), the net income (or loss) of such Person accrued prior to
the date it becomes a Subsidiary of any other Person or is merged into or
consolidated with such other Person or any of its Subsidiaries or all or
substantially all the property and assets of such Person are acquired by such
other Person or any of its Subsidiaries; (c) the net income (or loss) of any
Subsidiary of any Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary of such net income is not
at the time permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Subsidiary; (d) any gains or losses (on an after-
tax basis) attributable to Asset Sales; (e) except for the purposes of
calculating the amount of Restricted Payments that may be made pursuant to
clause (iii) of the first paragraph of Section 4.04 of this Indenture, any
amounts paid or accrued as dividends on Preferred Stock of such Person or
Preferred Stock of any Subsidiary (other than the Partnerships) of such Person
owned by Persons other than such Person or any of its Subsidiaries; (f) all
extraordinary gains and extraordinary losses; and (g) all noncash charges
reducing net income of such Person that relate to stock options or stock
appreciation rights and all cash payments reducing net income of such Person
that relate to stock options or stock appreciation rights; provided, however,
that, solely for the purpose of calculating the Interest Coverage Ratio (and in
such case, except to the extent includable pursuant to clause (a) above),
"Adjusted Consolidated Net Income" of such Person shall include the amount of
all cash dividends or other cash distributions received by such Person or any
Subsidiary of such Person from an Unrestricted Subsidiary.
2
"Affiliate" is defined to mean, as applied to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person, is
defined to mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" is defined to mean any Registrar, Paying Agent, authenticating
agent or co-registrar.
"Asset Acquisition" is defined to mean (a) an investment by the
Company or any of its Subsidiaries in any other Person pursuant to which such
Person shall become a Subsidiary of the Company or any of its Subsidiaries or
shall be merged or consolidated with the Company or any of its Subsidiaries; or
(b) an acquisition by the Company or any of its Subsidiaries of the assets of
any Person other than the Company or any of its Subsidiaries that constitutes
substantially all of a division or line of business of such Person.
"Asset Disposition" is defined to mean the sale or other disposition
by the Company or any of its Subsidiaries (other than to the Company or another
Subsidiary of the Company) of (a) all or substantially all the Capital Stock of
any Subsidiary of the Company or (b) all or substantially all the assets that
constitute a division or line of business of the Company or any of its
Subsidiaries.
"Asset Sale" is defined to mean, with respect to any Person, any sale,
transfer or other disposition (including by way of merger, consolidation or
sale-leaseback transaction) in one transaction or a series of related
transactions by such Person or any of its Subsidiaries to any Person other than
the Company or any of its Subsidiaries of (a) all or any of the Capital Stock of
any Subsidiary of such Person; (b) all or substantially all the assets of an
operating unit or business of such Person or any of its Subsidiaries; or (c) any
other assets of such Person or any of its Subsidiaries outside the ordinary
course of business of such Person or such Subsidiary and, in each case, that is
not governed by the provisions of Article 5 of this Indenture; provided,
however, that, for purposes of determining the restrictions under Section 4.10
of this Indenture, sales, transfers or other dispositions of inventory,
receivables and other current assets shall not be included within the meaning of
"Asset Sale."
"Attributable Indebtedness" is defined to mean, when used in
connection with a sale-leaseback transaction referred to in Section 4.09 of this
Indenture, at any date of determination, the product of (a) the net proceeds
from such sale-leaseback transaction, and (b) a fraction, the numerator of which
is the number of full years of the term of the
3
lease relating to the property involved in such sale-leaseback transaction
(without regard to any options to renew or extend such term) remaining at the
date of the making of such computation, and the denominator of which is the
number of full years of the term of such lease (without regard to any options to
renew or extend such term) measured from the first day of such term.
"Average Life" is defined to mean, at any date of determination with
respect to any debt security, the quotient obtained by dividing (a) the sum of
the product of (i) the number of years from such date of determination to the
dates of each successive scheduled principal payment of such debt security
multiplied by (ii) the amount of such principal payment, by (b) the sum of all
such principal payments.
"Board of Directors" is defined to mean the Board of Directors of the
Company or any committee of such Board of Directors duly authorized to act under
this Indenture.
"Board Resolution" is defined to mean a copy of a resolution,
certified by the Secretary or an Assistant Secretary of the Company, to have
been duly adopted by the Board of Directors and to be in full force and effect
on the date of such certification, and delivered to the Trustee.
"Book-Entry Security" is defined to mean a Security represented by a
Global Security.
"Business Day" is defined to mean any day except a Saturday, Sunday or
other day on which commercial banks in The City of New York, or in the city of
the Corporate Trust Office of the Trustee, are authorized or obligated by law to
be closed.
"Canadian Credit Agreement" is defined to mean the Revolving Term
Credit Facility dated as of April 2, 1993, as amended, between Terra Canada and
The Bank of Nova Scotia (or any successors thereto), together with all the other
documents related thereto (including, without limitation, any Guarantees and
security documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented, extended, renewed,
replaced or otherwise modified from time to time, including, without limitation,
any agreement increasing the amount thereof in accordance with the limitations
in this Indenture and any agreement extending the maturity of, refinancing or
otherwise restructuring (including, but not limited to, the inclusion of
additional borrowers or Guarantors thereunder that are Subsidiaries of the
Company) all or any portion of the Indebtedness under such agreements or any
successor agreements.
"Capital Stock" is defined to mean, with respect to any Person, any
and all shares, interests, participations or other equivalents (however
designated, whether voting
4
or nonvoting) of such Person's capital stock or equity interests in a
partnership, joint venture, limited liability company or other equity that is
outstanding or issued on or after the date of this Indenture, including, without
limitation, all Common Stock and Preferred Stock.
"Capitalized Lease" is defined to mean, as applied to any Person, any
lease of any property (whether real, personal or mixed) the discounted present
value of the rental obligations of such Person as lessee of which, in conformity
with GAAP, is required to be capitalized on the balance sheet of such Person;
and "Capitalized Lease Obligation" is defined to mean the rental obligations, as
aforesaid, under such lease.
"Change of Control" is defined to mean such time as (a) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
other than Minorco or any of its Affiliates, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than fifty percent (50%)
of the total voting power of the then outstanding Voting Stock of the Company;
or (b) individuals who at the beginning of any period of two consecutive
calendar years constituted the board of directors of the Company (together with
any new directors whose election by the board of directors of the Company or
whose nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds of the members of the board of directors of the
Company then still in office who either were members of the board of directors
of the Company 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 members of the board of directors of the Company then in office.
"Change of Control Offer" has the meaning provided in Section 4.11 of
this Indenture.
"Change of Control Payment" has the meaning provided in Section 4.11
of this Indenture.
"Change of Control Payment Date" has the meaning provided in Section
4.11 of this Indenture.
"Closing Date" is defined to mean the date on which the Series A
Securities are originally issued under 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 TIA, then the body performing
such duties at such time.
5
"Common Stock" is defined to mean, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or nonvoting) of such Person's common stock, whether now
outstanding or issued after the date of this Indenture, or common equity
interests in a partnership, including, without limitation, all series and
classes of such common stock, all the Common Units and the general partnership
interests in the Partnerships.
"Common Unit" is defined to mean a Common Unit as defined in the TNCLP
Limited Partnership Agreement.
"Company" is defined to mean Terra Industries Inc., a Maryland
corporation, and its successors.
"Consolidated EBITDA" is defined to mean, with respect to any Person
for any period, the sum of the amounts for such period of (a) Adjusted
Consolidated Net Income, (b) Consolidated Interest Expense, (c) income taxes
(other than income taxes (either positive or negative) attributable to
extraordinary and nonrecurring gains or losses or sales of assets), (d)
depreciation expense, (e) amortization expense, (f) minority interest and (g)
all other noncash items reducing Adjusted Consolidated Net Income, less all
noncash items increasing Adjusted Consolidated Net Income, all as determined on
a consolidated basis for such Person and its Subsidiaries in conformity with
GAAP; provided, however, that, if a Person has any Subsidiary (other than the
Partnerships) that is not a Wholly Owned Subsidiary of such Person, Consolidated
EBITDA of such Person shall be reduced (to the extent not otherwise excluded by
the definition of Adjusted Consolidated Net Income) by an amount equal to (i)
the Adjusted Consolidated Net Income of such Subsidiary multiplied by (ii) the
quotient of (A) the number of shares of outstanding Common Stock of such
Subsidiary not owned on the last day of such period by such Person or any
Subsidiary of such Person divided by (B) the total number of shares of
outstanding Common Stock of such Subsidiary on the last day of such period; and
provided further, however, that Consolidated EBITDA of such Person shall be
reduced by amounts paid as distributions on limited partnership interests of
either Partnership owned by Persons other than the Company or any of its
Subsidiaries.
"Consolidated Interest Expense" is defined to mean, with respect to
any Person for any period, the aggregate amount of interest in respect of
Indebtedness (including amortization of original issue discount on any
Indebtedness and the interest portion of any deferred payment obligation
(excluding, without limitation, amounts deferred by trade creditors until the
occurrence of certain events) calculated in accordance with the effective
interest method of accounting; all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed by such Person) and all but the principal
component of rentals in respect of
6
Capitalized Lease Obligations paid, accrued or scheduled to be paid or to be
accrued by such Person and its consolidated Subsidiaries during such period;
excluding, however, (a) any amount of such interest of any Subsidiary of such
Person if the net income (or loss) of such Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income for such Person pursuant to
clause (c) of the proviso in the definition thereof (but only in the same
proportion as the net income (or loss) of such Subsidiary is excluded from the
calculation of Adjusted Consolidated Net Income for such Person pursuant to
clause (c) of the proviso in the definition thereof) and (b) any premiums, fees
and expenses (and any amortization thereof) payable in connection with the
recapitalization of the Company consummated in 1994, the Company's proposal to
acquire all of the outstanding Senior Preference Units which was terminated in
May 1995 and the Company's open market purchase program for up to five million
Senior Preference Units approved in May 1995, all as determined on a
consolidated basis in conformity with GAAP.
"Consolidated Net Tangible Assets" is defined to mean the total amount
of assets of the Company and its Subsidiaries (less applicable depreciation,
amortization and other valuation reserves), except to the extent resulting from
write-ups of capital assets (excluding write-ups in connection with accounting
for acquisitions in conformity with GAAP), after deducting therefrom (a) all
current liabilities of the Company and its consolidated Subsidiaries (excluding
intercompany items) and (b) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recently available quarterly or year-end consolidated balance
sheet of the Company and its consolidated Subsidiaries, prepared in conformity
with GAAP.
"Consolidated Net Worth" is defined to mean, at any date of
determination, shareholders' equity as set forth on the most recently available
quarterly or year-end consolidated balance sheet of the Company and its
consolidated Subsidiaries, less any amounts attributable to Redeemable Stock or
any equity security convertible into or exchangeable for Indebtedness, the cost
of treasury stock and the principal amount of any promissory notes receivable
from the sale of Capital Stock of the Company or any Subsidiary of the Company,
each item to be determined in accordance with GAAP (excluding the effects of
foreign currency exchange adjustments under Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 52).
"Corporate Trust Office" is defined to mean the office of the Trustee
at which the corporate trust business of the Trustee shall, at any particular
time, be principally administered, which office is, at the date of this
Indenture, located at 180 East Fifth Street, St. Paul, Minnesota, 55101,
Attention: Corporate Finance.
7
"Credit Agreements" is defined to mean the Terra Credit Agreement and
the Canadian Credit Agreement.
"Currency Agreement" is defined to mean any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company or any of its Subsidiaries against fluctuations in currency
values to or under which the Company or any of its Subsidiaries is a party or a
beneficiary on the date of this Indenture or becomes a party or a beneficiary
thereafter.
"Default" is defined to mean any event that, after the giving of
notice or the passage of time or both, would constitute an Event of Default.
"Depository" is defined to mean, with respect to the Securities issued
in the form of one or more Book-Entry Securities, The Depository Trust Company
("DTC") or another Person designated as Depository by the Company, which must be
a clearing agency registered under the Exchange Act.
"Event of Default" has the meaning provided in Section 6.01 of this
Indenture.
"Excess Proceeds" has the meaning provided in Section 4.10 of this
Indenture.
"Excess Proceeds Offer" has the meaning provided in Section 4.10 of
this Indenture.
"Excess Proceeds Payment" has the meaning provided in Section 4.10 of
this Indenture.
"Excess Proceeds Payment Date" has the meaning provided in Section
4.10 of this Indenture.
"Exchange Act" is defined to mean the Securities Exchange Act of 1934,
as amended.
"Exchange Offer Registration Statement" is defined to mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, filed pursuant to the Securities Act pursuant to which the Series A
Securities are exchanged for Series B Securities as provided in the Registration
Rights Agreement.
"GAAP" is defined to mean generally accepted accounting principles in
the United States of America as in effect as of the date of this Indenture,
including, without limitation, those set forth in the opinions and
pronouncements of the Accounting
8
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. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP, except
that calculations made for purposes of determining compliance with the terms of
the covenants set forth in Articles 4 and 5 and with other provisions of this
Indenture shall be made without giving effect to (a) the amortization of any
expenses incurred in connection with the recapitalization of the Company
consummated in 1994, the Company's proposal to acquire all of the outstanding
Senior Preference Units which was terminated in May 1995 and the Company's open
market purchase program for up to five million Senior Preference Units approved
in May 1995; and (b) except as otherwise provided, the amortization of any
amounts required or permitted by Accounting Principles Board Opinion Nos. 16 and
17.
"Global Securities" is defined to mean a Security evidencing all or a
part of the Securities to be issued as Book-Entry Securities issued to the
Depository in accordance with Section 2.05.
"Guarantee" is defined to mean any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Holder" or "Securityholder" is defined to mean the registered holder
of any Security.
"Incur" is defined to mean, with respect to any Indebtedness, to
incur, create, issue, assume, Guarantee or otherwise become liable for or with
respect to, or become responsible for, the payment of, contingently or
otherwise, such Indebtedness; provided, however, that neither the accrual of
interest (whether such interest is payable in cash or in kind) nor the accretion
of original issue discount shall be considered an Incurrence of Indebtedness.
9
"Indebtedness" is defined to mean, with respect to any Person at any
date of determination (without duplication), (a) all indebtedness of such Person
for borrowed money; (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) all obligations of such
Person in respect of letters of credit, banker's acceptances, or other similar
instruments (including reimbursement obligations with respect thereto); (d) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables; (e) all obligations of
such Person as lessee under Capitalized Leases; (f) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided, however, that the amount of
such Indebtedness shall be the lesser of (i) the fair market value of such asset
at such date of determination and (ii) the amount of such Indebtedness; (g) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person; (h) all obligations in respect of
borrowed money under the Credit Agreements and any Guarantees thereof; (i) to
the extent not otherwise included in this definition, obligations under Currency
Agreements and Interest Rate Agreements; and (j) any Redeemable Stock. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability determined by such Person's board of directors, in good faith,
as reasonably likely to occur, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; provided,
however, that the amount outstanding at any time of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness less the
remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP; and provided
further, however, that Indebtedness shall not include (x) any liability for
Federal, state, local or other taxes, (y) obligations of the Company or any of
its Restricted Subsidiaries pursuant to Receivables Programs, or (z) obligations
of the Company or any of its Restricted Subsidiaries pursuant to contracts for,
or options, puts or similar arrangements relating to, the purchase of raw
materials or the sale of inventory at a time in the future.
"Indenture" is defined to mean this Indenture as originally executed
or as it may be amended, supplemented or otherwise modified from time to time
pursuant to the applicable provisions of this Indenture.
"Initial Purchasers" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Citicorp Securities, Inc.
"Interest Coverage Ratio" is defined to mean, with respect to any
Person on any Transaction Date, the ratio of (x) the aggregate amount of
Consolidated EBITDA of such Person for the four fiscal quarters for which
financial statements in respect thereof
10
are available immediately prior to such Transaction Date to (y) the aggregate
Consolidated Interest Expense of such Person during such four fiscal quarters.
In making the foregoing calculation (which shall be made without duplication),
(a) pro forma effect shall be given to (i) any Indebtedness Incurred subsequent
to the end of the four-fiscal-quarter period referred to in clause (x) and prior
to the Transaction Date (other than Indebtedness Incurred under a revolving
credit or similar arrangement to the extent of the commitment thereunder (or
under any predecessor revolving credit or similar arrangement) on the last day
of such period), (ii) any Indebtedness Incurred during such period to the extent
such Indebtedness is outstanding at the Transaction Date (with Indebtedness
Incurred under a revolving credit or similar arrangement calculated as described
in clause (c) below), and (iii) any Indebtedness to be Incurred on the
Transaction Date (excluding Indebtedness to be Incurred under a revolving credit
or similar arrangement in connection with an acquisition to the extent that
Indebtedness under a revolving credit or similar arrangement was theretofore
repaid with the proceeds of an offering of Capital Stock (other than Redeemable
Stock) in which it was contemplated that the amount of such repayment would
later be Incurred in connection with such acquisition), in each case as if such
Indebtedness had been Incurred on the first day of such four-fiscal-quarter
period and after giving pro forma effect to the application of the proceeds
thereof as if such application had occurred on such first day; (b) Consolidated
Interest Expense attributable to interest on any Indebtedness (whether existing
or being Incurred) computed on a pro forma basis and bearing a floating interest
rate shall be computed as if the average borrowing rate in effect during such
four-fiscal-quarter period (taking into account any Interest Rate Agreement
applicable to such Indebtedness) had been the applicable rate for the entire
period; (c) Consolidated Interest Expense attributable to interest on any
Indebtedness under a revolving credit or similar facility computed on a pro
forma basis shall be computed based upon the average daily balance of such
Indebtedness during the applicable period, as adjusted to eliminate the effects
of any temporary repayment of such Indebtedness from proceeds of an offering of
Capital Stock (other than Redeemable Stock) later applied to an acquisition as
described in clause (a)(iii) above; (d) there shall be excluded on a pro forma
basis from Consolidated Interest Expense any Consolidated Interest Expense
related to any amount of Indebtedness that was outstanding during such four-
fiscal-quarter period or thereafter but that is not outstanding or is to be
repaid on the Transaction Date, except for Consolidated Interest Expense accrued
(as adjusted pursuant to clause (b)) during such four-fiscal-quarter period
under a revolving credit or similar arrangement to the extent of the commitment
thereunder (or under any successor revolving credit or similar arrangement) on
the Transaction Date; (e) pro forma effect shall be given to Asset Dispositions
and Asset Acquisitions (including giving pro forma effect to the application of
proceeds of any Asset Disposition) that occur during such four-fiscal-quarter
period or thereafter and prior to the Transaction Date as if they had occurred
and such proceeds had been applied on the first day of such four-fiscal-quarter
period; (f) with respect to any
11
such four-fiscal-quarter period commencing prior to the Closing Date, the
Closing Date shall be deemed to have taken place on the first day of such
period; and (g) pro forma effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving pro forma effect to the application of proceeds
of any asset disposition) that have been made by any Person that has become a
Subsidiary of the Company or has been merged with or into the Company or any
Subsidiary of the Company during the four-fiscal-quarter period referred to
above or subsequent to such period and prior to the Transaction Date and that
would have been Asset Dispositions or Asset Acquisitions had such transactions
occurred when such Person was a Subsidiary of the Company as if such asset
dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions
that occurred on the first day of such period; provided, however, that, to the
extent that clause (e) or (g) of this sentence requires that pro forma effect be
given to an Asset Acquisition or an Asset Disposition, such pro forma
calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired for which financial statements are available.
"Interest Payment Date" is defined to mean each semiannual interest
payment date on June 15 and December 15 of each year, commencing December 15,
1995.
"Interest Rate Agreement" is defined to mean any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement designed to protect the Company or any of its Subsidiaries
against fluctuations in interest rates to or under which the Company or any of
its Subsidiaries is a party or a beneficiary on the date of this Indenture or
becomes a party or a beneficiary hereafter.
"Interest Rate Increase" has the meaning provided in Exhibit A to this
Indenture.
"Investment" is defined to mean, with respect to any Person, any
direct or indirect advance, loan (other than advances to customers in the
ordinary course of business that are recorded as accounts receivable on the
balance sheet of such Person or its Subsidiaries) or other extension of credit
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, any other Person. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.04 of this
Indenture, (a) the designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be deemed an "Investment" by the Company in such newly
designated Unrestricted Subsidiary in an amount (the "Investment Amount") equal
to the fair market value of the
12
assets of such Subsidiary that are required to be reflected on such Subsidiary's
balance sheet in accordance with GAAP, less the total liabilities of such
Subsidiary that are required to be reflected on such Subsidiary's balance sheet
in accordance with GAAP, in each case on a consolidated basis, at the time that
such Subsidiary is designated an Unrestricted Subsidiary, (b) the designation of
an Unrestricted Subsidiary as a Restricted Subsidiary shall be deemed a
reduction of Investments by the Company in Unrestricted Subsidiaries in an
amount equal to the Investment Amount with respect to such Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary of the Company and (c) any property, other than cash or
services, transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, with such value to be
determined by the Board of Directors in good faith (whose determination shall be
conclusive and evidenced by a Board Resolution) in any case in which the value
of the properties transferred individually or in a series of related
transactions exceeds $10 million.
"Junior Preference Unit" is defined to mean a Junior Preference Unit
as defined in the TNCLP Limited Partnership Agreement.
"Lien" is defined to mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof, any sale with recourse against the seller or any Affiliate of the
seller, or any agreement to give any security interest).
"Limited Partnership Agreement" is defined to mean either the TNCLP
Limited Partnership Agreement or the TNLP Limited Partnership Agreement.
"Minorco" is defined to mean Minorco, a company incorporated under the
laws of Luxembourg as a societe anonyme.
"Net Cash Proceeds" is defined to mean, with respect to any Asset
Sale, the proceeds of such Asset Sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any Subsidiary
of the Company) and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of (a) brokerage commissions and
other fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale; (b) provisions for all taxes (whether or
not such taxes will actually be paid or are payable) as a result of such Asset
Sale without regard to the consolidated results of operations of the Company and
its Subsidiaries, taken as a whole; (c) payments made to repay unsubordinated
Indebtedness of the Company or
13
Indebtedness of any Restricted Subsidiary outstanding at the time of such Asset
Sale that either (i) is secured by a Lien on the property or assets sold or (ii)
is required to be paid as a result of such sale; and (d) appropriate amounts to
be provided by the Company or any Subsidiary of the Company as a reserve against
any liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP.
"Officer" is defined to mean, with respect to the Company, the
Chairman of the Board, the President, any Vice President, the Chief Financial
Officer, the Treasurer or any Assistant Treasurer, or the Secretary or any
Assistant Secretary.
"Officers' Certificate" is defined to mean a certificate signed by two
Officers. Each Officers' Certificate (other than certificates provided pursuant
to Section 4.17 of this Indenture) shall include the statements provided for in
Section 10.04 of this Indenture.
"Operating Lease" is defined to mean, as applied to any Person, any
lease of any property (whether real, personal or mixed) that is not a
Capitalized Lease.
"Opinion of Counsel" is defined to mean a written opinion signed by
legal counsel who is acceptable to the Trustee. Such counsel may be an employee
of or counsel to the Company or the Trustee. Each such Opinion of Counsel shall
include the statements provided for in Section 10.04 of this Indenture.
"Partnership" is defined to mean either TNCLP or TNLP.
"Paying Agent" has the meaning provided in Section 2.03, except that,
for the purposes of Article 8, the Paying Agent shall not be the Company or a
Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Permitted Distribution" is defined to mean (a) the declaration and
payment of any dividend or distribution by either Partnership on any of the
Capital Stock of either thereof pursuant to the terms of either Limited
Partnership Agreement; or (b) the purchase, redemption, retirement or other
acquisition for value of outstanding Senior Preference Units, Junior Preference
Units or Common Units (or any successor equity interest of either Partnership or
any successor limited partnership, including any such equity interest received
upon conversion or exchange of any Senior Preference Unit, Junior Preference
Unit or Common Unit).
"Permitted Investment" is defined to mean (a) the making of an
Investment by the Company or any Restricted Subsidiary (other than the general
partner of the
14
Partnerships) in a Restricted Subsidiary that is not a Wholly Owned Subsidiary
of the Company, so long as such Investment is for a valid business purpose and
not for the primary purpose of making distributions on the Senior Preference
Units from the proceeds of such Investment to any Person other than the Company
or any of its Restricted Subsidiaries (as determined in good faith by the Board
of Directors, whose determination shall be conclusive and evidenced by a Board
Resolution); (b) the making of an Investment by the general partner of either
Partnership in either thereof; or (c) the making of an Investment by one
Partnership in the other Partnership.
"Permitted Liens" is defined to mean (a) Liens for taxes, assessments,
governmental charges or claims that are being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; (b) statutory Liens of landlords
and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or
other similar Liens arising in the ordinary course of business and with respect
to amounts not yet delinquent or being contested in good faith by appropriate
legal proceedings promptly instituted and diligently conducted and for which a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; (c) Liens incurred or deposits made
in the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (d) Liens incurred or
deposits made to secure the performance of tenders, bids, leases, statutory or
regulatory obligations, bankers' acceptances, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (e) easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of its
Subsidiaries; (f) Liens (including extensions and renewals thereof) upon real
or tangible personal property acquired after the Closing Date; provided,
however, that (i) such Lien is created solely for the purpose of securing
Indebtedness Incurred (A) to finance the cost (including the cost of improvement
or construction) of the item of property or assets subject thereto and such Lien
is created prior to, at the time of or within 12 months after the later of the
acquisition, the completion of construction or the commencement of full
operation of such property or (B) to refinance any Indebtedness previously so
secured, (ii) the principal amount of the Indebtedness secured by such Lien does
not exceed 100% of such cost and (iii) any such Lien shall not extend to or
cover any property or assets other than such item of property or assets and any
improvements on such item; (g) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the Company or any
of its Subsidiaries; (h) Liens encumbering property or assets under construction
arising from progress or partial payments by a customer of the Company of any of
its
15
Subsidiaries relating to such property or assets; (i) any interest or title of a
lessor in the property subject to any Capitalized Lease or Operating Lease;
provided, however, that any sale-leaseback transaction related thereto complies
with Section 4.09 of this Indenture; (j) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (k) Liens on property of,
or on Capital Stock or Indebtedness of, any entity existing at the time such
entity becomes, or becomes a part of, any Restricted Subsidiary; (l) Liens in
favor of the Company or any Restricted Subsidiary; (m) Liens securing any real
property or other assets of the Company or any Subsidiary of the Company in
favor of the United States of America or any State, or any department, agency,
instrumentality or political subdivision thereof, in connection with the
financing of industrial revenue bond facilities or of any equipment or other
property designed primarily for the purpose of air or water pollution control;
provided, however, that any such Lien on such facilities, equipment or other
property shall not apply to any other assets of the Company or such Subsidiary
of the Company; (n) Liens arising from the rendering of a final judgment or
order against the Company or any Subsidiary of the Company that does not give
rise to an Event of Default; (o) Liens securing reimbursement obligations with
respect to letters of credit that encumber documents and other property relating
to such letters of credit and the products and proceeds thereof; (p) Liens in
favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods; (q) Liens
encumbering customary initial deposits and margin deposits, and other Liens that
are either within the general parameters customary in the industry and incurred
in the ordinary course of business or otherwise permitted under the terms of the
Credit Agreements, in each case securing Indebtedness under Interest Rate
Agreements and Currency Agreements and forward contracts, options, futures
contracts, futures options or similar agreements or arrangements designed to
protect the Company or any of its Subsidiaries from fluctuations in the price of
commodities; (r) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by the
Company or any of its Subsidiaries in the ordinary course of business in
accordance with the past practices of the Company and its Subsidiaries prior to
the Closing Date; and (s) Liens on or sales of receivables and other Liens
reasonably related to a Receivables Program.
"Person" is defined to mean an individual, a corporation, a
partnership, a limited liability company, an association, a trust or any other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.
"Plan" is defined to mean any employee benefit plan, pension plan,
management equity plan, stock option plan or similar plan or arrangement of the
Company or any Subsidiary of the Company, or any successor plan thereof.
16
"Preferred Stock" is defined to mean, with respect to any Person, any
and all shares, interests, participations or other equivalents (however
designated, whether voting or nonvoting) of such Person's preferred or
preference stock, or preference equity interests in a partnership, whether now
outstanding or issued after the date of this Indenture, including, without
limitation, all series and classes of such preferred or preference stock, all
the Senior Preference Units and all the Junior Preference Units.
"Principal" of a debt security, including the Securities, is defined
to mean the principal amount due on the Stated Maturity as shown on such debt
security.
"Principal Property" is defined to mean any real property (including
related fixtures), plant or equipment owned or leased by the Company or any
Restricted Subsidiary, other than real property, plant or equipment that, in the
good faith determination of the Board of Directors (whose determination shall be
conclusive and evidenced by a Board Resolution), is not of material importance
to the respective businesses conducted by the Company or any Restricted
Subsidiary as of the date of such determination; provided, however, that, unless
otherwise specified by the Board of Directors, any real property (including
related fixtures), plant or equipment with a fair market value of less than $5
million shall not be a "Principal Property."
"Qualified Institutional Buyer" or "QIB" have the meanings provided in
Rule 144A under the Securities Act.
"Receivables Program" is defined to mean, with respect to any Person,
obligations of such Person or its Subsidiaries pursuant to accounts or notes
receivable securitization programs and any extension, renewal, modification or
replacement of such programs, including, without limitation, any agreement
increasing the amount of, extending the maturity of, refinancing or otherwise
restructuring all or any portion of the obligations under such programs or any
successor agreement or agreements.
"Redeemable Stock" is defined to mean any class or series of Capital
Stock of any Person that by its terms or otherwise is (a) required to be
redeemed prior to the Stated Maturity of the Securities, (b) redeemable at the
option of the holder of such class or series of Capital Stock at any time prior
to the Stated Maturity of the Securities or (c) convertible into or exchangeable
for Capital Stock referred to in clause (a) or (b) above or Indebtedness having
a scheduled maturity prior to the Stated Maturity of the Securities.
"Redemption Date," when used with respect to any Security to be
redeemed, is defined to mean the date fixed for such redemption by or pursuant
to this Indenture.
17
"Redemption Price," when used with respect to any Security to be
redeemed, is defined to mean the price at which such Security is to be redeemed
pursuant to this Indenture.
"Registered Exchange Offer" is defined to mean the exchange offer
which may be effected pursuant to the Registration Rights Agreement.
"Registrar" has the meaning provided in Section 2.03 of this
Indenture.
"Registration Rights Agreement" is defined to mean the agreement
between the Company and the Initial Purchasers, dated as of June 22, 1995.
"Regular Record Date" for the interest payable on any Interest Payment
Date is defined to mean the June 1 or December 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Responsible Officer," when used with respect to the Trustee, is
defined to mean the chairman or any vice-chairman of the board of directors of
the Trustee, the chairman or any vice-chairman of the executive committee of the
board of directors of the Trustee, the chairman of the trust committee, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above-designated
officers and also is defined to mean, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Payments" has the meaning specified in Section 4.04 of
this Indenture.
"Restricted Security" has the meaning provided in Section 2.12 of this
Indenture.
"Restricted Subsidiary" is defined to mean any Subsidiary of the
Company other than an Unrestricted Subsidiary.
"Securities" is defined to mean, collectively, the Series A Securities
and the Series B Securities.
"Securities Act" is defined to mean the Securities Act of 1933, as
amended.
"Security Register" has the meaning provided in Section 2.03 of this
Indenture.
18
"Senior Preference Units" is defined to mean a Senior Preference Unit
as defined in the TNCLP Limited Partnership Agreement.
"Series A Securities" is defined to mean the 10 1/2% Senior Notes due
2005, Series A of the Company, that are authenticated and delivered under this
Indenture.
"Series B Securities" is defined to mean the 10 1/2% Senior Notes due
2005, Series B of the Company, that are authenticated and delivered under this
Indenture.
"Shelf Registration Statement" is defined to mean a registration
statement filed pursuant to the Securities Act and Rule 415 thereunder (or any
successor rule) pursuant to which the Series A Securities are registered for
resale as provided in the Registration Rights Agreement.
"Significant Subsidiary" is defined to mean, at any date of
determination, any Subsidiary of the Company that, together with its
Subsidiaries, (a) for the most recent fiscal year of the Company, accounted for
more than 10% of the consolidated revenues of the Company; or (b) as of the end
of such fiscal year, was the owner of more than 10% of the consolidated assets
of the Company, in each case as reflected on the most recently available
quarterly or year-end consolidated financial statements of the Company for such
fiscal year.
"Stated Maturity" is defined to mean, (a) with respect to any debt
security, the date specified in such debt security as the fixed date on which
the final installment of principal of such debt security is due and payable and
(b) with respect to any scheduled installment of principal or interest on any
debt security, the date specified in such security as the fixed date on which
such installment of principal or interest is due and payable.
"Subsidiary" is defined to mean, with respect to any Person, any
corporation of which more than 50% of the outstanding Voting Stock is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries of
the Company, or by such Person and one or more other Subsidiaries of such
Person, and any partnership, association, joint venture, limited liability
company or other entity in which the Company or one or more other Subsidiaries
of the Company, or such Person and one or more other Subsidiaries of such
Person, owns a general partnership interest or more than 50% of the equity
interests; provided, however, that, except as the term "Subsidiary" is used in
the definitions of "Significant Subsidiary" and "Unrestricted Subsidiary", an
Unrestricted Subsidiary shall not be deemed to be a direct or indirect
Subsidiary of the Company for purposes of this Indenture.
"Terra Canada" is defined to mean Terra International (Canada) Inc.,
an Ontario corporation, and its successors.
19
"Terra Capital" is defined to mean Terra Capital, Inc., a Delaware
corporation, and its successors.
"Terra Credit Agreement" is defined to mean the Amended and Restated
Credit Agreement dated as of May 12, 1995, among Terra Capital, TNLP, certain
guarantors, the issuing banks and the lenders and the agent named therein (or
any successors thereto), together with all the other documents related thereto
(including, without limitation, any Guarantees and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented, extended, renewed, replaced or otherwise modified from
time to time, including, without limitation, any agreement increasing the amount
thereof in accordance with the limitations of the Indenture and any agreement
extending the maturity of, refinancing or otherwise restructuring (including,
but not limited to, the inclusion of additional borrowers or Guarantors
thereunder that are Subsidiaries of the Company and whose obligations are
Guaranteed by the Company thereunder) all or any portion of the Indebtedness
under such agreements or any successor agreements.
"TIA" or "Trust Indenture Act" is defined to mean the Trust Indenture
Act of 1939, as amended (15 U.S. Code 77aaa-77bbb).
"TNC" is defined to mean Terra Nitrogen Corporation, a Delaware
corporation, and its successors.
"TNCLP" is defined to mean Terra Nitrogen Company, L.P., a Delaware
limited partnership, and its successors.
"TNCLP Limited Partnership Agreement" is defined to mean the Agreement
of Limited Partnership of Terra Nitrogen Company, L.P. (formerly Agricultural
Minerals Company, L.P.), dated as of December 4, 1991, among TNC, the Company
and any other persons who become partners in TNCLP as provided therein, as such
agreement may be amended, supplemented, or otherwise modified from time to time
as permitted by this Indenture.
"TNLP" is defined to mean Terra Nitrogen, Limited Partnership, a
Delaware limited partnership, and its successors.
"TNLP Limited Partnership Agreement" is defined to mean the Agreement
of Limited Partnership of Terra Nitrogen, Limited Partnership, dated as of
December 4, 1991, among TNC, the Company and TNCLP (formerly Agricultural
Minerals Company, L.P.), as such agreement may be amended, supplemented or
otherwise modified from time to time as permitted by the Indenture.
20
"Trade Payables" is defined to mean, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation to trade
creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services and shall specifically include amounts owed to
but deferred by trade creditors until the occurrence of certain events.
"Transaction Date" is defined to mean, with respect to the Incurrence
of any Indebtedness by the Company or any of its Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trustee" is defined to mean the party named as such in the first
paragraph of this Indenture until a successor replaces it in accordance with the
provisions of Article 7 of this Indenture and thereafter is defined to mean such
successor.
"United States Bankruptcy Code" is defined to mean Title 11 of the
United States Code, as amended from time to time hereafter, or any successor
federal bankruptcy law.
"Unrestricted Subsidiary" is defined to mean (a) any Subsidiary of the
Company that, at the time of determination, shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below; and (b) any
Subsidiary of an Unrestricted Subsidiary; provided that, in case of clauses (a)
and (b), neither the Company nor any of its other Subsidiaries (other than
another Unrestricted Subsidiary) (i) provides credit support for, or Guarantees
of, any Indebtedness of such Subsidiary or any Subsidiary of such Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness) or (ii) is directly or indirectly liable for any Indebtedness of
such Subsidiary or any Subsidiary of such Subsidiary, except to the extent that
the Company and its Restricted Subsidiaries would otherwise, in each case, be
permitted to make a Restricted Payment pursuant to, or an Investment in such
Subsidiary permitted by, Section 4.04 of this Indenture. The Board of Directors
may designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary, unless
such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any
property of, the Company or any other Subsidiary of the Company that is not a
Subsidiary of the Subsidiary to be so designated; provided, however, that either
(i) the Subsidiary to be so designated has total assets of $1,000 or less at the
time of designation or (ii) if such Subsidiary has assets greater than $1,000 at
the time of designation, that such designation would be permitted under Section
4.04 of this Indenture. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary of the Company; provided, however, that
immediately after giving effect to such designation (x) the Company could Incur
$1.00 of
21
additional Indebtedness under the first paragraph of Section 4.03(a) of this
Indenture and (y) no Default or Event of Default shall have occurred and be
continuing. All such designations by the Board of Directors shall be evidenced
to the Trustee by promptly filing with the Trustee a copy of the Board
Resolution giving effect to such designation and an Officer's Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Government Obligations" is defined to mean 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,
are not callable or redeemable at the option of the issuer thereof at any time
prior to the Stated Maturity of the Securities, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt; provided, however, that (except
as required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
"Voting Stock" is defined to mean, with respect to any Person, Capital
Stock of any class or kind ordinarily having the power to vote for the election
of directors or other governing body of such Person, or any general partnership
interest in any partnership.
"Wholly Owned Subsidiary" is defined to mean, with respect to any
Person, any Subsidiary of such Person if all the Common Stock or other similar
equity ownership interests (but not including Preferred Stock) in such
Subsidiary (other than any director's qualifying shares or Investments by
foreign nationals mandated by applicable law) is owned directly or indirectly by
such Person.
SECTION 1.02 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder or a Securityholder;
22
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03 Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and words in the plural
include the singular;
(e) provisions apply to successive events and transactions;
(f) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision;
(g) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set
forth above; and
(h) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE 2
The Securities
SECTION 2.01 Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the applicable form
annexed hereto as Exhibit A. The Securities may have notations, legends or
endorsements required by law,
23
stock exchange agreements to which the Company is subject or usage, including as
set forth in Sections 2.12 and 2.13 of this Indenture. The Company shall approve
the form of the Securities and any notation, legend or endorsement on the
Securities. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The definitive Securities shall be printed, lithographed, engraved or
produced by any combination of these methods on a steel engraved border or steel
engraved borders or may be produced in any other manner, all as determined by
the Officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 2.02 Execution, Authentication and Denominations. Two
Officers shall execute the Securities for the Company by facsimile or manual
signature in the name and on behalf of the Company.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee or authenticating agent authenticates the
Security, the Security shall be valid nevertheless.
A Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee or an authenticating agent shall authenticate for original
issue Series A Securities or Series B Securities, as the case may be, in the
aggregate principal amount of up to $200 million, upon a written order of the
Company signed by at least one Officer; provided, however, that the Trustee
shall be entitled to receive an Officers' Certificate and an Opinion of Counsel
of the Company, as contemplated by Section 10.04, that it may reasonably request
in connection with such authentication of Securities. Such order shall specify
the amount of Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $200 million except as
provided in Sections 2.06 and 2.07 of this Indenture.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication
24
by such authenticating agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 in original principal amount and any
integral multiple thereof.
SECTION 2.03 Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar"), an office or agency where Securities may be
presented for payment (the "Paying Agent") and an office or agency where notices
and demands to or upon the Company in respect of the securities and this
Indenture may be served. The Company shall cause the Registrar to keep a
register of the Securities and of their transfer and exchange (the "Security
Register"). The Company may have one or more co-registrars and one or more
additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. The Company may remove any Agent upon written notice to
such Agent and the Trustee; provided, however, that no such removal shall become
effective until (a) the acceptance of an appointment by a successor Agent to
such Agent as evidenced by an appropriate agency agreement entered into by the
Company and such successor Agent and delivered to the Trustee or (b)
notification to the Trustee that the Trustee shall serve as such Agent until the
appointment of a successor Agent in accordance with clause (a) of this proviso.
The Company, any Subsidiary of the Company, or any Affiliate of any of them may
act as Paying Agent, Registrar or coregistrar, and/or agent for service of
notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notice and demands. If, at any time, the Trustee is
not the Registrar, the Registrar shall make available to the Trustee on or
before each Interest Payment Date and at such other times as the Trustee may
reasonably request the names and addresses of the Holders as they appear in the
Security Register.
SECTION 2.04 Paying Agent to Hold Money in Trust. No later than each
due date of the principal of, premium, if any, and interest on any Securities,
the Company shall deposit with the Paying Agent money sufficient to pay such
principal, premium, if any, and interest so becoming due. The Company shall
require each Paying Agent other
25
than the Trustee to agree in writing that such Paying Agent shall hold in trust
for the benefit of the Holders or the Trustee all money held by the Paying Agent
for the payment of principal of, premium, if any, and interest on the Securities
(whether such money has been paid to it by the Company or any other obligor on
the Securities), and such Paying Agent shall promptly notify the Trustee of any
default by the Company (or any other obligor on the Securities) in making any
such payment. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed, and the
Trustee may at any time during the continuance of any payment default, upon
written request to a Paying Agent, require such Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed. Upon doing so,
the Paying Agent shall have no further liability for the money so paid over to
the Trustee. If the Company or any Subsidiary of the Company or any Affiliate of
any of them acts as Paying Agent, it will, on or before each due date of any
principal of, premium, if any, or interest on the Securities, segregate and hold
in a separate trust fund for the benefit of the Holders a sum sufficient to pay
such principal of, premium, if any, or interest so becoming due until such sums
shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee of such action or failure to so
act.
SECTION 2.05 Transfer and Exchange. When Securities are presented to
the Registrar or a co-registrar with a request to register the transfer or to
exchange them for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange of the
Securities, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge payable
upon exchanges pursuant to Section 2.08, 3.08 or 9.04 of this Indenture).
The Registrar need not register the transfer or exchange of Securities
for a period of fifteen (15) days before a selection of Securities to be
redeemed.
If a Series A Security is a Restricted Security in certificated form,
then as provided in this Indenture and subject to the limitations herein set
forth, the Holder, provided it is a Qualified Institutional Buyer, may exchange
such Security for a Book-Entry Security by instructing the Trustee (by
completing the Transferee Certificate attached to the Security, the form of
which is attached to this Indenture as Appendix I) to arrange for such Series A
Security to be represented by a beneficial interest in a Global Security in
accordance with the customary procedures of the Depository, unless the Company
has elected not to issue a Global Security.
26
The Company may at any time determine not to have Securities (other
than Restricted Securities) represented in certificated form, in which event the
Holder of a Security (other than Restricted Securities) in certificated form may
be required to exchange such Security for a Book-Entry Security.
Upon any exchange provided for in the preceding paragraph, the Company
shall execute and the Trustee shall authenticate and deliver to the Person
specified by the Depository a new Security or Securities registered in such
names and in such authorized denominations as the Depository, pursuant to the
instructions of the beneficial owner of the Securities requesting the exchange,
shall instruct the Trustee. Thereupon, the beneficial ownership of such Global
Security shown on the records maintained by the Depository or its nominee shall
be reduced by the amounts so exchanged and an appropriate endorsement shall be
made by or on behalf of the Trustee on the Global Security.
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
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing.
Every Restricted Security shall be subject to the restrictions on
transfer provided in the legend required to be set forth on the face of each
Restricted Security pursuant to Exhibit A, Section 2.12 and the restrictions set
forth in this Section 2.05, and the Holder of each Restricted Security, by such
Holder's acceptance thereof (or interest therein), agrees to be bound by such
restrictions on transfer.
The restrictions imposed by this Section 2.05 and Section 2.12 upon
the transferability of any particular Restricted Security shall cease and
terminate on (a) the later of June 22, 1998 or three years after the last date
on which the Company or any Affiliate of the Company was the owner of such
Restricted Security (or any predecessor of such Restricted Security) or (b) (if
earlier) if and when such Restricted Security has been sold pursuant to an
effective registration statement under the Securities Act or transferred
pursuant to Rule 144 or Rule 904 under the Securities Act (or any successor
provision), unless the Holder thereof is an affiliate of the Company within the
meaning of Rule 144 (or such successor provisions). Any Restricted Security as
to which such restrictions on transfer shall have
expired in accordance with
their terms or shall have
27
terminated may, upon surrender of such Restricted Security for exchange to the
Registrar in accordance with the provision of this Section 2.05 (accompanied, in
the event that such restrictions on transfer have terminated pursuant to Rule
144 or Rule 904 (or any successor provision), by an Opinion of Counsel
satisfactory to the Company and the Trustee, to the effect that the transfer of
such Restricted Security has been made in compliance with Rule 144 or Rule 904
(or any such successor provision)), be exchanged for a new Series A Security, of
like tenor and aggregate principal amount, which shall not bear the restrictive
legend required by Section 2.12. The Company shall inform the Trustee of the
effective date of any Registration Statement registering the Series A Securities
under the Securities Act no later than two Business Days after such effective
date.
Notwithstanding any other provision of this Section 2.05, unless and
until it is exchanged in whole or in part for Series A Securities in
certificated registered form, a Global Security representing Book-Entry
Securities may not be transferred, except as a whole by the Depository to a
nominee of the Depository or by another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.
Notwithstanding the foregoing, no Global Security shall be registered
for transfer or exchange, or authenticated and delivered, whether pursuant to
this Section, Section 2.06, 2.08, 3.08, 4.10, 4.11 or 9.04 or otherwise, in the
name of a Person other than the Depository for such Global Security or its
nominee until (i) the Depository notifies the Company that it is unwilling or
unable to continue as Depository for such Global Security or if at any time the
Depository ceases to be a clearing agency registered under the Exchange Act, and
a successor Depository is not appointed by the Company within 30 days, (ii) the
Company executes and delivers to the Trustee a Company order that all such
Global Securities shall be exchangeable or (iii) there shall have occurred and
be continuing an Event of Default. Upon the occurrence in respect of any Global
Security representing the Securities of any one or more of the conditions
specified in clauses (i), (ii), and (iii) of the preceding sentence, such Global
Security may be registered for transfer or exchange for Series A Securities in
certificated form registered in the names of, authenticated and delivered to,
such Persons as the Trustee or the Depository, as the case may be, shall direct.
In addition, in accordance with the provisions of this Indenture and subject to
certain limitations herein set forth, an owner of a beneficial interest in a
Global Security which is a Series A Security may request a Security in
certificated form in exchange in whole or in part, as the case may be, for such
beneficial owner's interest in the Global Security.
Except as provided above, any Security authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, any Global
Security, whether
28
pursuant to this Section, Sections 2.06, 2.08, 3.08, 4.10, 4.11 or 9.04 or
otherwise, shall also be a Global Security and bear the legend specified in
Section 2.13
SECTION 2.06 Replacement Securities. If a mutilated Security is
surrendered to the Trustee or if the Holder claims that the Security has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Security of like tenor and principal amount. If
required by the Trustee or the Company, an indemnity bond must be furnished that
is sufficient in the judgment of both the Trustee and the Company to protect the
Company, the Trustee or any Agent from any loss that any of them may suffer if a
Security is replaced. The Company may charge such Holder for its expenses in
replacing a Security. In case any such mutilated, lost, destroyed or wrongfully
taken Security has become or is about to become due and payable, the Company in
its discretion may pay such Security instead of issuing a new Security in
replacement thereof.
Every replacement Security is an additional obligation of the Company
and shall be entitled to the benefits of this Indenture.
SECTION 2.07 Outstanding Securities. Securities outstanding at any
time are all Securities that have been authenticated by the Trustee except for
those canceled by it, those delivered to it for cancellation and those described
in this Section 2.07 as not outstanding. A Security does not cease to be
outstanding because the Company or one of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.06, it ceases to be
outstanding unless and until the Trustee receives proof satisfactory to it that
such replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on a maturity date money sufficient to pay Securities payable on
that date, then on and after that date such Securities cease to be outstanding
and interest on them shall cease to accrue.
SECTION 2.08 Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have insertions, substitutions, omissions and
other variations determined to be appropriate by the Officers executing the
temporary Securities, as evidenced by their execution of such temporary
Securities. Without unreasonable delay, but in no event later than the date that
the Registered Exchange Offer is consummated or a Shelf Registration Statement
is declared effective, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
29
Until so exchanged, the temporary Securities shall be entitled to the same
benefits under this Indenture as definitive Securities.
SECTION 2.09 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any securities surrendered to them for transfer,
exchange or payment. The Trustee shall cancel all Securities surrendered for
transfer, exchange, payment or cancellation and shall destroy them in accordance
with its normal procedure. The Company may not issue new Securities to replace
Securities it has paid in full or delivered to the Trustee for cancellation. The
Series A Securities surrendered to the Trustee for exchange pursuant to the
Registered Exchange Offer shall be cancelled and not reissued thereafter.
SECTION 2.10 CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and the Company, or the Trustee
on behalf of the Company, shall use CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that any such notice
shall state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice or redemption
or exchange and that reliance may be placed only on the other identification
numbers printed on the Securities; and provided further, however, that failure
to use CUSIP numbers in any notice of redemption or exchange shall not affect
the validity or sufficiency of such notice.
SECTION 2.11 Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, it shall pay, or shall deposit with the Paying
Agent money in immediately available funds sufficient to pay, the defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted
interest in any lawful manner. The Company may pay the defaulted interest to the
Persons who are Holders on a subsequent special record date. A special record
date, as used in this Section 2.11 with respect to the payment of any defaulted
interest, shall mean the fifteenth (15th) day next preceding the date fixed by
the Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least fifteen (15) days before the subsequent special record
date, the Company shall mail to each Holder and to the Trustee a notice that
states the subsequent special record date, the payment date and the amount of
defaulted interest to be paid.
SECTION 2.12 Form of Legend on Restricted Securities. A Series A
Security shall be deemed a "Restricted Security" until the later of three years
after (a) the Closing Date and (b) the last date on which the Company or any
Affiliate of the Company was the owner of a Series A Security (or any
predecessor Security) and any Restricted Security, as the case may be, and any
Series A Security issued upon registration of transfer of, or in exchange for,
or in lieu of, such Restricted Security shall be subject to
30
the restrictions on transfer provided in the legend set forth on the face of the
form of Series A Security in Exhibit A; provided, however, that the term
"Restricted Security" shall not include (a) any Series A Security which is
issued upon transfer of, or in exchange for, any Series A Security which is not
a Restricted Security or (b) any Series A Security as to which such restrictions
on transfer have been terminated in accordance with Section 2.05. Any Restricted
Security shall bear the legend set forth on the face of the Form of Series A
Security in Exhibit A hereto.
SECTION 2.13 Form of Legend for Book-Entry Securities. Any Global
Security authenticated and delivered hereunder shall bear a legend (which would
be in addition to any other legends required in the case of a Restricted
Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
31
ARTICLE 3
Redemption
SECTION 3.01 Right of Redemption. The Company may redeem all the
Securities at any time or any portion of the Securities from time to time, on or
after June 15, 2000, at the following Redemption Prices (expressed as
percentages of the principal amount) if redeemed during the 12-month period
beginning June 15 of the years indicated:
Year Redemption Price
---- ----------------
2000.................. 105.250%
2001.................. 102.625%
2002 and thereafter... 100.000%
of the principal amount, plus accrued and unpaid interest (if any) to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date).
SECTION 3.02 Notices to Trustee. The Company shall notify the
Trustee of the listing of the Securities on a national securities exchange
within one Business Day after such listing.
If the Company elects to redeem Securities pursuant to Section 3.01 of
this Indenture and paragraph 6 of the Securities, it shall notify the Trustee in
writing of the Redemption Date and the principal amount of Securities to be
redeemed.
The Company shall give each notice provided for in this Section 3.02
in an Officers' Certificate at least forty-five (45) days before the Redemption
Date (unless a shorter period shall be satisfactory to the Trustee).
SECTION 3.03 Selection of Securities to Be Redeemed. If less than
all the Securities are to be redeemed at any time, the Trustee shall select the
Securities to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Securities are listed or, if
the Securities are not listed on a national securities exchange, on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem fair and appropriate; provided, however, that no Securities of $1,000
in original principal amount or less shall be redeemed in part.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption. Securities in denominations of $1,000
in original principal amount may only be redeemed in whole. The Trustee may
select for redemption portions (equal to $1,000 in original principal amount or
any integral multiple
32
thereof) of the principal of Securities that have denominations larger than
$1,000 in original principal amount. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company and the Registrar promptly in
writing of the Securities or portions of Securities to be called for redemption.
SECTION 3.04 Notice of Redemption. At least thirty (30) days but
not more than sixty (60) days before a Redemption Date, the Company shall mail a
notice of redemption by first class mail to each Holder whose Securities are to
be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) The name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(e) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Securities to the Paying Agent;
(f) that, if any Security is being redeemed in part, the portion of
the principal amount (equal to $1,000 in original principal amount or any
integral multiple thereof) of such Security to be redeemed and that, on and
after the Redemption Date, upon surrender of such Security, a new Security
or Securities in principal amount equal to the unredeemed portion thereof
will be reissued; and
(g) that, if any Security contains a CUSIP number as provided in
Section 2.10 of this Indenture, no representation is being made as to the
correctness of the CUSIP number either as printed on the Securities or as
contained in the notice of redemption and that reliance may be placed only
on the other identification numbers printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the name and at the expense of the Company. Concurrently with the
giving of such notice by the Company to the Holders, the Company shall deliver
to the Trustee an Officers' Certificate stating that such notice has been given.
33
SECTION 3.05 Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price. Upon surrender of any
Securities to the Paying Agent, such Securities shall be paid at the Redemption
Price, plus accrued interest through the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether
or not the Holder receives the notice. In any event, failure to give such
notice, or any defect therein, shall not affect the validity of the proceedings
for the redemption of the Securities.
SECTION 3.06 Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Paying Agent (or, if the
Company is acting as its own Paying Agent, shall segregate and hold in trust as
provided in Section 2.04 of this Indenture) money sufficient to pay the
Redemption Price of and accrued interest on all Securities to be redeemed on
that date other than Securities or portions thereof called for redemption on
that date that have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.07 Payment of Securities Called for Redemption. If notice of
redemption has been given in the manner provided above, the Securities or
portion of Securities specified in such notice to be redeemed shall become due
and payable on the Redemption Date at the Redemption Price stated therein,
together with accrued interest to such Redemption Date, and from such date
(unless the Company shall default in the payment of such Securities at the
Redemption Price and accrued interest to the Redemption Date, in which case the
principal, until paid, shall bear interest from the Redemption Date at the rate
prescribed in the Securities), such Securities shall cease to accrue interest.
Upon surrender of any Security for redemption in accordance with a notice of
redemption, such Security shall be paid and redeemed by the Company at the
Redemption Price, together with accrued interest 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 registered as such
at the close of business on the relevant Record Date.
SECTION 3.08 Securities Redeemed in Part. Upon surrender of any
Security that is redeemed in part, the Trustee shall authenticate for the Holder
a new Security equal in principal amount to the unredeemed portion of such
surrendered Security.
34
ARTICLE 4
Covenants
SECTION 4.01 Payment of Securities. The Company shall pay the
principal of, premium, if any, and interest on the Securities on the dates and
in the manner provided in the Securities and this Indenture. An installment of
principal, premium, if any, or interest shall be considered paid on the date due
if the Trustee or Paying Agent (other than the Company, a Subsidiary of the
Company, or any Affiliate of any of them) holds on that date money designated
for and sufficient to pay the installment. If the Company, any Subsidiary of the
Company, or any Affiliate of any of them acts as Paying Agent, an installment of
principal, premium, if any, or interest shall be considered paid on the due date
if the entity acting as Paying Agent complies with the last sentence of Section
2.04 of this Indenture.
The principal of, premium, if any, and interest on Book-Entry
Securities represented by any Global Security shall be payable to the Depository
or its nominee, as the case may be, as the sole registered owner and the sole
holder of the Book-Entry Securities represented thereby. The principal of,
premium, if any, and interest on the Securities, if they are not Book-Entry
Securities represented by a Global Security, shall be payable at the office or
agency of the Company maintained for such purpose in The City of New York, or at
such other office or agency of the Company as may be 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 Company shall notify the Trustee within one Business Day after the
occurrence of any event resulting in an Interest Rate Increase. The Company
shall pay the additional interest arising from an Interest Rate Increase (such
interest being called the "Additional Interest") by depositing with the Trustee,
in trust, for the benefit of the Holders thereof, on or before the applicable
Interest Payment Date, immediately available funds in sums sufficient to pay the
Additional Interest then due. The Additional Interest due on any Series A
Security shall be payable on each applicable Interest Payment Date to the Person
in whose name that Series A Security or the Series B Security for which such
Series A Security has been exchanged (or one or more predecessor Securities) is
registered at the close of business on the Regular Record Date for the payment
of interest due on such Interest Payment Date as set forth in this Indenture.
The Company shall notify the Trustee within one Business Day of the occurrence
of an event which would result in the termination of the Interest Rate Increase.
35
The Company shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum borne by the Securities.
SECTION 4.02 Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, the City of New York a Registrar and a
Paying Agent and an office or agency where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
SECTION 4.03 Limitation on Indebtedness. (a) The Company will not,
and will not permit any Restricted Subsidiary to, Incur any Indebtedness;
provided, however, that the Company and its Restricted Subsidiaries may Incur
Indebtedness if, after giving effect to the Incurrence of such Indebtedness and
the receipt and application of the proceeds therefrom, the Interest Coverage
Ratio of the Company would be greater than 2:1x.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary may Incur each and all of the following:
(i) (A) Indebtedness outstanding at any time under any term loan
portion of the Credit Agreements; provided, however, that the aggregate
principal amount of such Indebtedness outstanding at any time under this
clause (i)(A) shall not exceed $300 million, (B) Indebtedness outstanding
at any time under any revolving credit facility under the Credit
Agreements or under any other revolving credit or similar arrangements;
provided, however, that the aggregate principal amount of such
Indebtedness outstanding at any time under this clause (i)(B) shall not
exceed the greater of (x) $250 million and (y) the sum of 75% of the
Company's and its Restricted Subsidiaries' accounts and notes receivables
and 40% of the Company's and its Restricted Subsidiaries' inventory
(based on the average accounts and notes receivables (excluding, without
duplication, accounts and notes receivables subject to a Receivables
Program) and inventory over the last twelve months preceding the date of
incurrence), and (C) additional Indebtedness outstanding at any time in
an aggregate principal amount not to exceed $50 million;
36
(ii) Indebtedness of the Company to any of its Restricted
Subsidiaries, or of a Restricted Subsidiary to the Company or to any
other Restricted Subsidiary;
(iii) Indebtedness the net proceeds of which are used to refinance
outstanding Indebtedness of the Company or any of its Restricted
Subsidiaries, other than Indebtedness Incurred under clause (i), (iv) or
(v) of this Section 4.03(a) and any refinancings thereof, in an amount
(or, if such new Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, with an original issue price) not to exceed the
amount so refinanced (plus premiums, accrued interest, fees and
expenses); provided, however, that Indebtedness the proceeds of which are
used to refinance the Securities or other Indebtedness of the Company
that is subordinated in right of payment to the Securities shall only be
permitted under this clause (iii) if (A) in case the Securities are
refinanced in part, such Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such Indebtedness is
issued, is expressly made pari passu with, or subordinate in right of
payment to, the Securities, (B) in case the Indebtedness to be refinanced
is subordinated in right of payment to the Securities, such Indebtedness,
by its terms or by the terms of any agreement or instrument pursuant to
which such Indebtedness is issued, is expressly made subordinate in right
of payment to the Securities, at least to the extent that the
Indebtedness to be refinanced is subordinated to the Securities, and (C)
in case the Securities are refinanced in part or the Indebtedness to be
refinanced is subordinated in right of payment to the Securities, such
Indebtedness, determined as of the date of Incurrence of such new
Indebtedness, does not mature prior to six months after the Stated
Maturity of the Securities and the Average Life of such Indebtedness is
six months greater than the remaining time before the Stated Maturity of
the Securities; and provided further, however, that in no event may
Indebtedness of the Company that is pari passu with, or subordinated in
right of payment to, the Securities be refinanced by means of
Indebtedness of any Restricted Subsidiary of the Company pursuant to this
clause (iii);
(iv) Indebtedness directly or indirectly Incurred to finance capital
expenditures of the Company or any of its Restricted Subsidiaries in an
aggregate principal amount not to exceed $10 million in any fiscal year
of the Company, and any refinancing of any such Indebtedness; provided,
however, that the amount of Indebtedness that may be Incurred in any
fiscal year of the Company pursuant to this clause (iv) shall be
increased by the amount of Indebtedness that could have been Incurred in
the prior fiscal year (including
37
by reason of this proviso) of the Company pursuant to this clause (iv)
but was not so Incurred;
(v) Indebtedness of the Company outstanding at any time in an
aggregate amount not to exceed $20 million; provided, however, that such
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such Indebtedness is issued, (A) is expressly made
subordinate in right of payment to the Securities and (B) provides that
no payments of principal of such Indebtedness by way of sinking fund,
mandatory redemption or otherwise (including defeasance) may be made by
the Company (including, without limitation, at the option of the holder
thereof, other than an option given to such holder pursuant to an "asset
sale" or "change of control" provision that is no more favorable (except
with respect to any premium payable) to the holders of such Indebtedness
than the provisions contained in Sections 4.10 and 4.11 of this Indenture
and such Indebtedness specifically provides that the Company will not
repurchase or redeem such Indebtedness pursuant to such provisions prior
to the Company's repurchase of the Securities required to be repurchased
by the Company under Sections 4.10 and 4.11 of this Indenture) at any
time prior to the Stated Maturity of the Securities;
(vi) Indebtedness Incurred by the Company in connection with the
purchase, redemption, acquisition, cancellation or other retirement for
value of shares of Capital Stock of the Company, options on any such
shares or related stock appreciation rights or similar securities, or the
satisfaction of put, call, liquidity or other similar rights with respect
to any such securities, held by officers, directors or employees or
former officers, directors or employees (or their estates or
beneficiaries under their estates or their permitted transferees) or by
any Plan, upon death, disability, retirement, termination of employment
or pursuant to the terms of such Plan or any other agreement under which
such shares of stock or related rights were issued or otherwise exist;
provided, however, that (A) such Indebtedness, by its terms or by the
terms of any agreement or instrument pursuant to which such Indebtedness
is issued, is expressly made subordinate in right of payment to the
Securities, (B) such Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such Indebtedness is issued,
provides that no payments of principal of such Indebtedness by way of
sinking fund, mandatory redemption or otherwise (including defeasance)
may be made by the Company at any time prior to the Stated Maturity of
the Securities, and (C) the scheduled maturity of all principal of such
Indebtedness is after the Stated Maturity of the Securities; and provided
further, however, that any such Indebtedness may provide for payment or
prepayment of principal and interest which when aggregated with all
principal and interest payable or prepayable on all other such
Indebtedness
38
(plus all cash payments permitted to be made under clause (c) of the
second paragraph of Section 4.04 of this Indenture) does not exceed $10
million in any fiscal year;
(vii) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided in the
ordinary course of business, (B) under Currency Agreements and Interest
Rate Agreements; provided, however, that, in the case of Currency
Agreements that relate to other Indebtedness, such Currency Agreements do
not increase the Indebtedness of the Company outstanding at any time
other than as a result of fluctuations in foreign currency exchange rates
or by reason of fees, indemnities and compensation payable thereunder,
and (C) arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, or from Guarantees or letters
of credit, surety bonds or performance bonds securing any obligations of
the Company or any Subsidiary of the Company pursuant to such agreements,
in any case Incurred in connection with the acquisition or disposition of
any business, assets or Subsidiary of the Company, other than Guarantees
of Indebtedness Incurred by any Person acquiring all or any portion of
such business, assets or Subsidiary of the Company for the purpose of
financing such acquisition;
(viii) Indebtedness under Guarantees Incurred by the Company or any
of its Restricted Subsidiaries in respect of obligations of Unrestricted
Subsidiaries outstanding at any time in an aggregate amount not to exceed
$5 million;
(ix) Indebtedness of the Company or any of its Restricted
Subsidiaries the net proceeds of which are used to pay Federal, state or
local taxes arising as a result of any recharacterization of either
Partnership as an association taxable as a corporation;
(x) Acquired Indebtedness; provided, however, that, at the time of
the Incurrence thereof, after giving pro forma effect to such Incurrence,
the Company could Incur at least $1.00 of Indebtedness under the first
paragraph of this Section 4.03(a), and refinancings of any thereof;
provided, however, that such refinancing Indebtedness may not be Incurred
by any Person other than the Company or the Restricted Subsidiary that is
the obligor on such Acquired Indebtedness; and
(xi) Indebtedness outstanding or as to which commitments are in place
on the date of this Indenture other than Indebtedness described in clause
(i)(A) or (B) above.
39
(b) Notwithstanding any other provision of this Section 4.03, (i) the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded due
solely to the result of fluctuations in the exchange rates of currencies; (ii)
the Company shall not Incur any Indebtedness that is expressly subordinated to
any other Indebtedness of the Company, unless such Indebtedness, by its terms or
the terms of any agreement or instrument pursuant to which such Indebtedness is
issued, is also expressly made subordinate to the Securities at least to the
extent it is subordinated to such other Indebtedness; and (iii) upon any
refinancing of any Indebtedness permitted to be Incurred under clause (iii) or
(x) of the second paragraph of Section 4.03(a) of this Indenture, the amount of
Indebtedness permitted to be Incurred pursuant to such clause shall be increased
by the amount of premiums, fees and expenses incurred in connection with such
refinancing and by the amount of accrued interest on such Indebtedness at the
time of such refinancing.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, the following amounts shall not be included: (1)
Guarantees of, contingent obligations (including obligations of a general
partner for liabilities of a partnership) with respect to, or obligations with
respect to letters of credit supporting, Indebtedness otherwise included in the
determination of such particular amount; and (2) any Liens granted pursuant to
the equal and ratable provisions referred to in the first paragraph of Section
4.08 of this Indenture. For purposes of determining compliance with this
Section 4.03, (x) in the event that an item of Indebtedness meets the criteria
of more than one of the types of Indebtedness described in the above clauses,
the Company, in its sole discretion, shall classify such item of Indebtedness
and only be required to include the amount and type of such Indebtedness in one
of such clauses; (y) Indebtedness permitted under this Section 4.03 need not be
permitted solely by reference to one provision permitting such Indebtedness but
may be permitted in part by reference to one such provision and in part by
reference to one or more other provisions of this Section 4.03 permitting such
Indebtedness; and (z) the amount of Indebtedness issued at a price that is less
than the principal amount thereof shall be equal to the amount of the liability
in respect thereof determined in conformity with GAAP.
SECTION 4.04 Limitation on Restricted Payments. The Company will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
(a) declare or pay any dividend or make any distribution on its Capital Stock
(other than (i) on the Capital Stock of Restricted Subsidiaries that are Wholly
Owned Subsidiaries of the Company and (ii) dividends or distributions payable
solely in shares of its, or any Restricted Subsidiary's, Capital Stock (other
than Redeemable Stock) of the same class held by such holders or in options,
warrants or other rights to acquire such shares of Capital Stock) held by
Persons other than the Company or another Restricted Subsidiary, (b) purchase,
redeem, retire or otherwise acquire for value any shares of Capital Stock of
40
the Company, any Restricted Subsidiary or any Unrestricted Subsidiary (including
options, warrants or other rights to acquire such shares of Capital Stock) held
by Persons other than the Company or another Restricted Subsidiary, (c) make any
voluntary or optional principal payment, or voluntary or optional redemption,
repurchase, defeasance, or other acquisition or retirement for value, of
Indebtedness of the Company that is subordinated in right of payment to the
Securities, (d) make any Investment in any Restricted Subsidiary that is not a
Wholly Owned Subsidiary of the Company, other than a Permitted Investment, or
(e) make any Investment in any Unrestricted Subsidiary (such payments or other
actions described in clauses (a) through (e) being collectively "Restricted
Payments") if, at the time of, and after giving effect to, the proposed
Restricted Payment: (i) a Default or Event of Default shall have occurred and be
continuing, (ii) the Company could not Incur at least $1.00 of Indebtedness
under the first paragraph of Section 4.03(a) of this Indenture, or (iii) the
aggregate amount expended for all Restricted Payments (the amount so expended,
if other than in cash, to be determined in good faith by the Board of Directors,
whose determination shall be conclusive and evidenced by a Board Resolution)
after the Closing Date shall exceed the sum of (A) 50% of the aggregate amount
of the Adjusted Consolidated Net Income (or, if the Adjusted Consolidated Net
Income is a loss, minus 100% of such amount) of the Company (determined by
excluding income resulting from the transfers of assets received by the Company
or a Restricted Subsidiary from an Unrestricted Subsidiary) accrued on a
cumulative basis during the period (taken as one accounting period) beginning on
January 1, 1995 and ending on the last day of the last fiscal quarter preceding
the Transaction Date, plus (B) the aggregate net proceeds (including the fair
market value of noncash proceeds as determined in good faith by the Board of
Directors) received by the Company or any of its Restricted Subsidiaries from
any issuance and sale permitted by this Indenture of its Capital Stock (not
including Redeemable Stock) to a Person that is not a Subsidiary of the Company,
including an issuance or sale permitted by this Indenture for cash or other
property upon the conversion of any Indebtedness of the Company or any of its
Restricted Subsidiaries subsequent to the Closing Date, or from the issuance of
any options, warrants or other rights to acquire Capital Stock of the Company or
any of its Restricted Subsidiaries (in each case, exclusive of any Redeemable
Stock or any options, warrants or other rights that are redeemable at the option
of the holder, or are required to be redeemed, prior to the Stated Maturity of
the Securities), plus (C) an amount equal to the net reduction in Investments in
Unrestricted Subsidiaries (other than Unrestricted Subsidiaries so designated
pursuant to clause (g) of the second paragraph of this Section 4.04 and other
than Investments made in Unrestricted Subsidiaries pursuant to such clause (g))
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to the Company or
any Restricted Subsidiary from Unrestricted Subsidiaries or from redesignations
of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investments"), not to exceed in the case of any
Unrestricted Subsidiary
41
the amount of Investments previously made by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary, plus (D) $25 million.
The foregoing provision shall not take into account, and shall not be
violated by reason of:
(a) the payment of any dividend within 120 days after the date of
declaration thereof if, at such date of declaration, such payment would
comply with the foregoing provision;
(b) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to the Securities, including premium, if any, and accrued and
unpaid interest, with the proceeds of Indebtedness Incurred under the first
paragraph of Section 4.03(a) of this Indenture or clause (iii) or (v) of
the second paragraph of such Section 4.03(a);
(c) the repurchase, redemption, acquisition, cancellation or other
retirement for value of shares of Capital Stock of the Company, any
Restricted Subsidiary or any Unrestricted Subsidiary, options on any such
shares or related stock appreciation rights or similar securities, or the
satisfaction of put, call, liquidity or other similar rights with respect
to any such securities, held by officers, directors or employees or former
officers, directors or employees (or their estates or beneficiaries under
their estates or their permitted transferees) or by any Plan, upon death,
disability, retirement, termination of employment or pursuant to the terms
of such Plan or any other agreement under which such shares of stock or
related rights were issued or otherwise exist; provided, however, that the
aggregate cash payment made for all such repurchases, redemptions,
acquisitions, cancellations, retirements or other satisfactions of or with
respect to such shares, options or other rights after the Closing Date
(plus payments or prepayments of principal and interest permitted on
Indebtedness Incurred under clause (vi) of the second paragraph of Section
4.03(a) of this Indenture) does not exceed $10 million in any fiscal year
and that any consideration in excess of such $10 million is in the form of
Indebtedness that would be permitted to be Incurred under clause (vi) of
the second paragraph of Section 4.03(a) of this Indenture;
(d) the repurchase, redemption or other acquisition of Capital Stock
of the Company in exchange for, or out of the proceeds of a substantially
concurrent offering of, shares of Capital Stock of the Company (other than
Redeemable Stock);
(e) the repurchase, redemption, retirement or other acquisition of
Indebtedness of the Company that is subordinated in right of payment to the
42
Securities in exchange for, or out of the net proceeds of a substantially
concurrent offering of, shares of Capital Stock of the Company (other than
Redeemable Stock);
(f) payments or distributions pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions of Article 5 of this Indenture;
(g) the making of (i) up to $10 million of Investments in Unrestricted
Subsidiaries plus the amount of any reduction in such Investments in such
Unrestricted Subsidiaries made pursuant to this clause (g) resulting from
payments of interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of assets, in each case to the Company or any
Restricted Subsidiary from Unrestricted Subsidiaries, or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investments"), not
to exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments previously made by the Company or any Restricted Subsidiary in
such Unrestricted Subsidiary pursuant to this clause (g), (ii) Investments
in the Company, Unrestricted Subsidiaries or Restricted Subsidiaries with
the proceeds of any sale of Capital Stock of the Company or (in the case of
Investments in the Company or any Restricted Subsidiaries) of any
Restricted Subsidiary permitted by this Indenture, and (iii) Investments in
Unrestricted Subsidiaries in the form of loans or advances from the Company
or any Restricted Subsidiary representing capitalized labor costs for
services performed by the Company or any Restricted Subsidiary to such
Unrestricted Subsidiaries in the ordinary course of business;
(h) the purchase, redemption, acquisition, cancellation or other
retirement for a nominal value per right of any rights granted to all the
holders of Common Stock of the Company pursuant to any shareholders' rights
plan adopted for the purpose of protecting shareholders from unfair
takeover tactics; provided, however, that any such purchase, redemption,
acquisition, cancellation or other retirement of such rights shall not be
for the purpose of evading the limitations of this Section 4.04 (all as
determined in good faith by the Board of Directors);
(i) any Permitted Distribution;
(j) payments by the Company or any Restricted Subsidiary in respect of
Indebtedness of the Company or any Restricted Subsidiary owed to the
Company or another Restricted Subsidiary;
43
(k) the application of proceeds as provided in Section 4.10 of this
Indenture; or
(l) the application of proceeds as provided in clause (c) of Section
4.06 of this Indenture;
provided, however, that, in the case of clauses (b), (c) (except with respect to
the Incurrence of Indebtedness complying with the first proviso of clause (vi)
of the second paragraph of Section 4.03(a) of this Indenture), (d), (e), (f)
(other that with respect to either Partnership), or (g) (other than Investments
in Unrestricted Subsidiaries any of the Capital Stock of which is held by either
Partnership, the general partner of either thereof or any Unrestricted
Subsidiary of either Partnership), no Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence thereof.
SECTION 4.05 Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and will not permit
any Restricted Subsidiary to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary;
(b) pay any Indebtedness owed to the Company or any other Restricted Subsidiary;
(c) make loans or advances to the Company or any other Restricted Subsidiary;
or (d) transfer any of its property or assets to the Company or any other
Restricted Subsidiary.
The foregoing provision shall not restrict or prohibit any
encumbrances or restrictions existing:
(a) in the Credit Agreements or in any other agreements in effect on
the Closing Date, including extensions, refinancings, renewals or
replacements thereof; provided, however, that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements
are no less favorable in any material respect to the Holders than those
encumbrances or restrictions that are then in effect and that are being
extended, refinanced, renewed or replaced;
(b) under any Receivables Program or any other agreement providing for
the Incurrence of Indebtedness; provided, however, that the encumbrances
and restrictions in any such agreement are no less favorable in any
material respect to the Holders than those encumbrances and restrictions
contained in the agreement referred to in clause (a) above that is least
favorable to the Holders as of the Closing Date;
(c) under or by reason of applicable law;
44
(d) with respect to any Person or the property or assets of such
Person acquired by the Company or any Restricted Subsidiary that existed at
the time of such acquisition and were not created in connection with or in
contemplation of such acquisition, so long as such encumbrances or
restrictions are not applicable to any Person or the property or assets of
any Person other than such Person or the property or assets of such Person
so acquired;
(e) in the case of clause (d) of the first paragraph of this Section
4.05, (i) that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset, (ii) by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture, or (iii) arising or agreed to in
the ordinary course of business and that do not, individually or in the
aggregate, materially detract from the value of property or assets of the
Company or any Restricted Subsidiary;
(f) with respect to a Restricted Subsidiary and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all the Capital Stock of, or property and assets of, such
Restricted Subsidiary; or
(g) in either Limited Partnership Agreement.
Nothing contained in this Section 4.05 shall prevent the Company or
any Restricted Subsidiary from (x) entering into any agreement permitting the
incurrence of Liens otherwise permitted in Section 4.08 of this Indenture or (y)
restricting the sale or other disposition of property or assets of the Company
or any of its Restricted Subsidiaries that secure Indebtedness of the Company or
any of its Restricted Subsidiaries.
SECTION 4.06 Limitation on the Issuance of Capital Stock of
Restricted Subsidiaries. The Company will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell any shares of its Capital Stock
(including options, warrants or other rights to purchase shares of such Capital
Stock) except:
(a) to the Company or another Restricted Subsidiary that is a Wholly
Owned Subsidiary of the Company;
(b) if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary;
45
(c) if the Net Cash Proceeds from such issuance or sale are applied,
to the extent required to be applied, pursuant to Section 4.10 of this
Indenture;
(d) in the case of TNLP, to TNCLP; or
(e) in the case of either Partnership, as otherwise permitted by
either Limited Partnership Agreement, so long as any such issuance or sale
is for a valid business purpose and not for the primary purpose of making
distributions on the Senior Preference Units from the Net Cash Proceeds of
such issuance or sale to any Person other than the Company or any of its
Restricted Subsidiaries (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a Board
Resolution).
SECTION 4.07 Limitation on Transactions with Shareholders and
Affiliates. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any holder
(or any Affiliate of such holder) of 5% or more of any class of Capital Stock of
the Company or any Restricted Subsidiary or with any Affiliate of the Company or
any Restricted Subsidiary, except upon fair and reasonable terms no less
favorable to the Company or such Restricted Subsidiary than could be obtained in
a comparable arm's-length transaction with a Person that is not such a holder or
an Affiliate of such a holder.
The foregoing limitation does not limit, and shall not apply to:
(a) any transaction or series of related transactions (i) approved by
a majority of the disinterested members of the Board of Directors or (ii)
for which the Company or Restricted Subsidiary delivers to the Trustee a
written opinion of a nationally recognized investment banking firm stating
that the transaction is fair to the Company or such Restricted Subsidiary
from a financial point of view;
(b) any transaction between the Company and any Restricted Subsidiary
or between Restricted Subsidiaries;
(c) the payment of reasonable and customary regular fees to directors
of the Company who are not employees of the Company;
(d) any Restricted Payments not prohibited by Section 4.04 of this
Indenture;
(e) any payments or other transactions pursuant to any tax sharing
agreement between the Company or any Restricted Subsidiary and any other
46
Person with which the Company or such Restricted Subsidiary is required or
permitted to file a consolidated tax return or with which the Company or
such Restricted Subsidiary is or could be part of a consolidated group for
tax purposes;
(f) any transaction between the Company or any Restricted Subsidiary
and any holder of any Senior Preference Units (or any Affiliate thereof)
that would be restricted by this Section 4.07 as a result of such holder's
ownership of Senior Preference Units, Junior Preference Units or Common
Units; or,
(g) the provision of management, financial and operational services by
the Company and its Subsidiaries to Affiliates of the Company in which the
Company or its Subsidiaries have Investments and the payment of
compensation for such services; provided, however, that the Board of
Directors has determined that the provision of such services is in the best
interests of the Company and its Subsidiaries.
Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this Section 4.07, the aggregate
amount of which does not exceed $3 million in value, need not be approved in the
manner provided for in clause (a) above.
SECTION 4.08 Limitation on Liens. The Company will not, and will
not permit any Restricted Subsidiary to, create, incur, assume or suffer to
exist any Lien on any Principal Property, or any shares of Capital Stock or
Indebtedness of any Restricted Subsidiary, without making effective provision
for all the Securities and all other amounts due under this Indenture to be
directly secured equally and ratably with (or prior to) the obligation or
liability secured by such Lien unless, after giving effect thereto, the
aggregate amount of any Indebtedness so secured, plus the Attributable
Indebtedness for all sale-leaseback transactions restricted as described in
Section 4.09 of this Indenture, does not exceed 10% of Consolidated Net Tangible
Assets.
The foregoing limitation does not apply to, and any computation of
Indebtedness secured under such limitation shall exclude:
(a) Liens securing obligations under the Credit Agreements up to the
amount of Indebtedness permitted to be Incurred under clause (i) of the
second paragraph of Section 4.03(a) of this Indenture;
(b) other Liens existing on the Closing Date;
(c) Liens securing Indebtedness of Restricted Subsidiaries (other than
Acquired Indebtedness and refinancings thereof);
47
(d) Receivables Programs;
(e) Liens securing Indebtedness (other than subordinated Indebtedness)
Incurred under clause (vii) of the second paragraph of Section 4.03(a) of
this Indenture;
(f) Liens granted in connection with the extension, renewal or
refinancing, in whole or in part, of any Indebtedness described in clauses
(a) through (e) above; provided, however, that the amount of Indebtedness
secured by such Lien is not increased thereby (except to the extent that
Indebtedness under clause (a) above is increased to the maximum amount
permitted to be outstanding under clause (i) of the second paragraph of
Section 4.03(a) of this Indenture); and provided further, however, that the
extension, renewal or refinancing of Indebtedness of the Company may not be
secured by Liens on assets of any Restricted Subsidiary other than to the
extent the Indebtedness being extended, renewed or refinanced was at any
time previously secured by Liens on assets of such Restricted Subsidiary;
(g) Liens with respect to Acquired Indebtedness and refinancings
thereof permitted under clause (x) of the second paragraph of Section
4.03(a) of this Indenture; provided, however, that such Liens do not extend
to or cover any property or assets of the Company or any Restricted
Subsidiary other than the property or assets of the Subsidiary acquired; or
(h) Permitted Liens.
SECTION 4.09 Limitation on Sale-Leaseback Transactions. The Company
will not, and will not permit any Restricted Subsidiary to, enter into any sale-
leaseback transaction involving any Principal Property, unless the aggregate
amount of all Attributable Indebtedness with respect to such transactions, plus
all Indebtedness secured by Liens on Principal Properties (excluding secured
Indebtedness that is excluded as described in Section 4.08 of this Indenture),
does not exceed 10% of Consolidated Net Tangible Assets.
The foregoing restriction does not apply to, and any computation of
Attributable Indebtedness under such limitation shall exclude, any sale-
leaseback transaction if:
(a) the lease is for a period, including renewal rights, of not in
excess of three years;
48
(b) the sale or transfer of the Principal Property is entered into
prior to, at the time of, or within 12 months after the later of the
acquisition of the Principal Property or the completion of construction
thereof;
(c) the lease secures or relates to industrial revenue or pollution
control bonds;
(d) the transaction is between the Company and any Restricted
Subsidiary or between Restricted Subsidiaries; or
(e) the Company or such Restricted Subsidiary, within 12 months (24
months in the case of sales of plants or facilities) after the sale of any
Principal Property is completed, applies an amount not less than the net
proceeds received from such sale to the retirement of unsubordinated
Indebtedness, to Indebtedness of a Restricted Subsidiary, or to the
purchase of other property that will constitute a Principal Property or
improvements thereto, or, in the case of either Partnership, to such
investment, reinvestment or other use as shall be permitted or required by
either Limited Partnership Agreement.
SECTION 4.10 Limitation on Asset Sales. In the event and to the
extent that the Net Cash Proceeds received by the Company or any of its
Restricted Subsidiaries from one or more Asset Sales occurring on or after the
Closing Date in any period of 12 consecutive months (other than Asset Sales by
the Company or any Restricted Subsidiary to the Company or another Restricted
Subsidiary) exceed 10% of Consolidated Net Tangible Assets in any one fiscal
year (determined as of the date closest to the commencement of such 12-month
period for which a balance sheet of the Company and its Subsidiaries has been
prepared), then the Company will, or will cause such Restricted Subsidiary to,
(a) within 12 months (or, in the case of Asset Sales of plants or facilities, 24
months) after the date Net Cash Proceeds so received exceed 10% of Consolidated
Net Tangible Assets in any one fiscal year (determined as of the date closest to
the commencement of such 12-month period for which a balance sheet of the
Company and its Subsidiaries has been prepared) (i) apply an amount equal to
such excess Net Cash Proceeds, or the amount not applied pursuant to clause (ii)
or (iii) , to repay unsubordinated Indebtedness of the Company or Indebtedness
of any Restricted Subsidiary, in each case owing to a Person other than the
Company or any of its Subsidiaries; (ii) invest an equal amount, or the amount
not so applied pursuant to clause (i) or (iii) (or enter into a definitive
agreement committing to so invest within 12 months after the date of such
agreement), in property or assets that are of a nature or type or are used in a
business (or in a company having property and assets of a nature or type, or
engaged in a business) similar or related to the nature or type of the property
and assets of, or the business of, the Company and its Subsidiaries existing on
the date thereof (as determined in good faith by the Board of Directors, whose
determination shall be
49
conclusive and evidenced by a Board Resolution); or (iii) in the case of either
Partnership, apply an equal amount, or the amount not applied pursuant to clause
(i) or (ii), to such investment, reinvestment or other use as shall be permitted
or required by either Limited Partnership Agreement, and (b) apply such excess
Net Cash Proceeds (to the extent not applied pursuant to clause (a)) as provided
in the following paragraphs of this Section 4.10. The amount of such excess Net
Cash Proceeds required to be applied (or to be committed to be applied) during
such 12-month period or 24-month period, as the case may be, as set forth in
clause (i), (ii) or (iii) of the next preceding sentence and not applied as so
required by the end of such period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Excess Proceeds Offer (as defined
below) totals at least $10 million, the Company must, not later than the
fifteenth Business Day of such month, make an offer (an "Excess Proceeds Offer")
to purchase from the Holders on a pro rata basis an aggregate principal amount
of Securities equal to the Excess Proceeds on such date, at a purchase price
equal to 101% of the principal amount thereof, plus accrued interest (if any) to
the date of purchase (the "Excess Proceeds Payment").
The Company will commence an Excess Proceeds Offer by mailing a notice
to the Trustee and each Holder stating:
(a) that the Excess Proceeds Offer is being made pursuant to this
Section 4.10 and that all Securities validly tendered will be accepted for
payment on a pro rata basis;
(b) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 40 days from the date
such notice is mailed) (the "Excess Proceeds Payment Date");
(c) that any Security not tendered will continue to accrue interest
pursuant to its terms;
(d) that, unless there shall be a default in the payment of the Excess
Proceeds Payment, any Security accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest on the Excess Proceeds
Payment Date;
(e) that Holders electing to have a Security purchased pursuant to the
Excess Proceeds Offer will be required to surrender the Security, together
with the form entitled "Option of the Holder to Elect Purchase" on the
reverse side of the Security or comparable form completed, to the Paying
Agent at the address specified in the notice prior to the close of business
on the Business Day immediately preceding the Excess Proceeds Payment Date;
50
(f) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Excess Proceeds Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Securities delivered for purchase and
a statement that such Holder is withdrawing his election to have such
Securities purchased; and
(g) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; provided, however, that each
security purchased and each new Security issued shall be in an original
principal amount of $1,000 or integral multiples thereof.
On the Excess Proceeds Payment Date, the Company will:
(a) accept for payment on a pro rata basis Securities or portions
thereof tendered pursuant to the Excess Proceeds Offer;
(b) deposit with the Paying Agent money sufficient to pay the purchase
price of all Securities or portions thereof so accepted; and
(c) deliver, or cause to be delivered, to the Trustee all Securities
or portions thereof so accepted together with an Officers' Certificate
specifying the Securities or portions thereof accepted for payment by the
Company.
The Paying Agent will promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price, and the Trustee will
promptly (i) authenticate and mail to such Holders a new certificated Security
equal in principal amount to any unpurchased portion of any certificated
Security surrendered and (ii) make arrangements with the Depository, to reflect
on such Depository's records Book-Entry Securities equal in principal amount to
any unpurchased portion of any Global Security; provided that each Security
purchased and each new Security issued shall be in an original principal amount
of $1,000 or integral multiples thereof.
The Company will publicly announce the results of the Excess Proceeds
Offer as soon as practicable after the Excess Proceeds Payment Date. For
purposes of this Section 4.10, the Trustee shall act as the Paying Agent.
The Company will comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder, to the extent such laws and
regulations are applicable, in the event that such Excess Proceeds are received
by the Company under this Section 4.10 and the Company is required to repurchase
Securities as described above. The Company may modify any of the foregoing
provisions of this
51
Section 4.10 to the extent it is advised by independent counsel that such
modification is necessary or appropriate in order to ensure such compliance.
SECTION 4.11 Repurchase of Securities upon Change of Control. (a)
Upon the occurrence of a Change of Control, each Holder shall have the right to
require the repurchase of its Securities by the Company in cash pursuant to the
offer described below (the "Change of Control Offer") at a purchase price equal
to 101% of the principal amount thereof, plus accrued interest (if any) to the
date of purchase (the "Change of Control Payment").
(b) Within 45 days following any Change of Control, the Company shall
mail a notice to the Trustee and each Holder stating: (i) that a Change of
Control has occurred, that the Change of Control Offer is being made pursuant to
this Section 4.11 and that all Securities validly tendered will be accepted for
payment; (ii) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed) (the "Change of Control Payment Date"); (iii) that any
Security not tendered will continue to accrue interest pursuant to its terms;
(iv) that, unless there shall be a default in the payment of the Change of
Control Payment, any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest on the Change of Control Payment
Date; (v) that Holders electing to have any Security or portion thereof
purchased pursuant to the Change of Control Offer will be required to surrender
such Security, together with the form entitled "Option of the Holder to Elect
Purchase" on the reverse side of such Security or comparable form completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the Business Day immediately preceding the Change of Control Payment
Date; (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Securities delivered for purchase and a
statement that such Holder is withdrawing his election to have such Securities
purchased; and (vii) that Holders whose Securities are being purchased only in
part will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; provided, however, that each Security
purchased and each new Security issued shall be in an original principal amount
of $1,000 or integral multiples thereof.
(c) On the Change of Control Payment Date, the Company will: (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer; (ii) deposit with the Paying Agent money sufficient to
pay the purchase price of all Securities or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee all Securities or
portions thereof so accepted together with an Officers' Certificate specifying
the Securities or portions thereof accepted for payment by
52
the Company. The Paying Agent will promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price, and the Trustee will
promptly (i) authenticate and mail to such Holders a new certificated Security
equal in principal amount to any unpurchased portion of any certificated
Security surrendered and (ii) make arrangements with the Depository, to reflect
on such Depository's records Book-Entry Securities equal in principal amount to
any unpurchased portion of any Global Security; provided, however, that each
Security purchased and each new Security issued shall be in an original
principal amount of $1,000 or integral multiples thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. For purposes of this
Section 4.11, the Trustee shall act as Paying Agent.
(d) The Company will comply with Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder, to the extent such laws
and regulations are applicable, in the event that a Change of Control occurs
under this Section 4.11 and the Company is required to repurchase Securities as
described above. The Company may modify any of the foregoing provisions of this
Section 4.11 to the extent it is advised by independent counsel that such
modification is necessary or appropriate in order to ensure such compliance.
SECTION 4.12 Corporate Existence. Subject to Articles 4 and 5 of
this Indenture, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate existence of each Subsidiary in accordance with the respective
organizational documents of the Company and of each Subsidiary of the Company
and the rights (charter and statutory), licenses and franchises of the Company
and its Subsidiaries; 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, if the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries
taken as a whole; and provided further, however, that any Subsidiary of the
Company may consolidate with, merge into, or sell, convey, transfer, lease or
otherwise dispose of all or part of its property and assets to the Company or
any Wholly Owned Subsidiary of the Company.
SECTION 4.13 Payment of Taxes and Other Claims. The Company will
pay or discharge, or cause to be paid or discharged before any penalty accrues
thereon, (i) all material taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary of the Company or upon the income,
profits or property of the Company or any Subsidiary of the Company and (ii) all
material lawful claims for labor, materials and supplies that, if unpaid, might
by law become a Lien upon the property of the Company or any Subsidiary of the
Company; provided, however, that the Company shall not be required to pay or
discharge, or cause to be paid or discharged, any
53
such tax, assessment, charge or claim the amount, applicability or validity of
which is being contested in good faith by appropriate proceedings and for which
adequate reserves have been made.
SECTION 4.14 Notice of Defaults and Other Events. In the event that
any Indebtedness of the Company or any Subsidiary of the Company having an
outstanding principal amount of $10,000,000 or more has been or could be
declared due and payable before its maturity because of the occurrence of any
event of default (i.e., following any required notice or passage of time or
both) under such Indebtedness (including, without limitation, any Default or
Event of Default under this Indenture), the Company, promptly after it becomes
aware thereof, will give written notice thereof to the Trustee.
SECTION 4.15 Maintenance of Properties and Insurance. The Company
will cause all properties used or useful in the conduct of its business or the
business of any Subsidiary of the Company and material to the Company and its
Subsidiaries taken as a whole to be maintained and kept in normal condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section 4.15 shall prevent the Company or any Subsidiary of the Company from
discontinuing the use, operation or maintenance of any of such properties or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Board of Directors or the board of directors of such Subsidiary of the
Company having managerial responsibility for any such property, desirable in the
conduct of the business of the Company or such Subsidiary of the Company.
The Company will provide or cause to be provided, for itself and its
Subsidiaries, insurance (including appropriate self-insurance) against loss or
damage of the kinds customarily insured against by corporations similarly
situated and owning like properties, including but not limited to, products
liability insurance and public liability insurance with reputable insurers or
with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry.
SECTION 4.16 Amendments to Limited Partnership Agreements. The
Company will not permit the general partner of either Partnership to make or
propose any amendment, supplement or other modification to either Limited
Partnership Agreement that would have a material adverse effect on the interests
of the Holders, except as shall be required by either Limited Partnership
Agreement.
54
SECTION 4.17 Compliance Certificates. (a) The Company shall deliver
to the Trustee not more than 90 days after the end of each fiscal year an
Officers' Certificate stating that a review has been conducted of the activities
of the Company and its subsidiaries and the Company's performance under this
Indenture and that the Company has fulfilled all obligations under this
Indenture. For purposes of this Section 4.17, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture. If there has been a default in the fulfillment of
any such obligation, the certificate shall describe any such default and the
nature and status thereof.
(b) The Company shall deliver to the Trustee, within 90 days after the
end of the Company's fiscal year, a certificate signed by the Company's
independent certified public accountants stating (i) that their audit
examination has included a review of the terms of this Indenture and the
Securities as they relate to accounting matters, (ii) that they have read the
most recent Officers' Certificate delivered to the Trustee pursuant to paragraph
(a) of this Section 4.17, and (iii) whether, in connection with their audit
examination, anything came to their attention that caused them to believe that
the company was not in compliance with any of the terms, covenants, provisions
or conditions of Article 4 and Section 5.01 of this Indenture as they pertain to
accounting matters and, if any Default or Event of Default has come to their
attention, specifying the nature and period of existence thereof; provided,
however, that such independent certified public accountants shall not be liable
in respect of such statement by reason of any failure to obtain knowledge of any
such Default or Event of Default that would not be disclosed in the course of an
audit examination conducted in accordance with generally accepted auditing
standards in effect at the date of such examination.
SECTION 4.18 Commission Reports and Reports to Holders. Regardless
of whether the Company is subject to the periodic reporting and informational
requirements of Sections 13 and 15(d) of the Exchange Act, the Company will, to
the extent permitted under the Exchange Act, file with the Commission the
annual, quarterly and other reports required by Section 13 or 15(d) of the
Exchange Act, and shall provide such reports to the Trustee within 15 days of
the date it would have been required to file such reports with the Commission
had it been subject to such Sections. The Company shall also furnish all such
reports to Holders of the Securities or to the Trustee for forewarding to each
Holder of Securities at the expense of the Company. The Company also shall
comply with the other provisions of TIA Section 314(a). The Trustee has no duty
to review these financials or other reports for purposes of determining
compliance with this or any other provision of the Indenture. If filing such
reports by the Company with the Commission is not permitted under the Exchange
Act, the Company will promptly, upon written request and payment of the
reasonable cost of duplication and delivery, supply copies of such reports to
any person the Company reasonably believes is a prospective holder of
Securities.
55
SECTION 4.19 Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE 5
Successor Corporation
SECTION 5.01 When Company May Merge, Etc. The Company will not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all its property and assets (as an
entirety or substantially as an entirety in one transaction or a series of
related transactions) to, any Person (other than a Restricted Subsidiary that is
a Wholly Owned Subsidiary of the Company with a positive net worth; provided,
however, that, in connection with any merger of the Company with a Restricted
Subsidiary that is a Wholly Owned Subsidiary of the Company, no consideration
(other than Common Stock in the surviving Person or the Company) shall be issued
or distributed to the shareholders of the Company), or permit any Person to
merge with or into the Company, unless:
(a) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of
the Company shall be a corporation organized and validly existing under the
laws of the United States of America or any jurisdiction thereof and shall
expressly assume, by supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the
Company on all of the Securities and under this Indenture;
(b) immediately after giving effect to such transaction, no Event of
Default and no Default shall have occurred and be continuing;
(c) immediately after giving effect to such transaction on a pro forma
basis, the Interest Coverage Ratio of the Company (or any Person becoming
the successor obligor of the Securities) is at least 1.10:1, or, if less,
at least equal to the
56
Interest Coverage Ratio of the Company immediately prior to such
transaction; provided, however, that, if the Interest Coverage Ratio of the
Company before giving effect to such transaction is within the range set
forth in column (A) below, then the pro forma Interest Coverage Ratio of
the Company (or any Person becoming the successor obligor of the
Securities) shall be at least equal to the lesser of (i) the ratio
determined by multiplying the percentage set forth in column (B) below by
the Interest Coverage Ratio of the Company prior to such transaction and
(ii) the ratio set forth in column (C) below:
(A) (B) (C)
--- --- ---
1.11:1 to 1.99:1 90% 1.6:1
2.00:1 to 2.99:1 80% 2.1:1
3.00:1 to 3.99:1 70% 2.4:1
4.00:1 or more 60% 2.5:1
and provided further, however, that, if the pro forma Interest Coverage Ratio of
the Company (or any Person becoming the successor obligor of the Securities) is
3:1 or more, the calculation in the next preceding proviso shall be inapplicable
and such transaction shall be deemed to have complied with the requirements of
this clause (c);
(d) immediately after giving effect to such transaction on a pro forma
basis, the Company (or any Person that becomes the successor obligor of the
Securities) shall have a Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately prior to such
transaction; and
(e) the Company delivers to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate compliance with
clauses (c) and (d)) and an Opinion of Counsel, in each case stating that
such consolidation, merger or transfer and such supplemental indenture
comply with this Section 5.01 and that all conditions precedent provided
for herein relating to such transaction have been complied with; provided,
however, that clauses (c) and (d) above do not apply if, in the good faith
determination of the Board of Directors, whose determination shall be
evidenced by a Board Resolution, the principal purpose of such transaction
is to change the state of incorporation of the Company; and provided
further, however, that any such transaction shall not have as one of its
purposes the evasion of the limitations of this Section 5.01.
SECTION 5.02 Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, conveyance, transfer, lease or other
disposition of all
57
or substantially all of the property and assets of the Company in accordance
with Section 5.01 of this Indenture, the successor corporation formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein.
ARTICLE 6
Default and Remedies
SECTION 6.01 Events of Default. An "Event of Default" occurs with
respect to the Securities if:
(a) the Company defaults in the payment of the principal of, or
premium, if any, on, any Security when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise;
(b) the Company defaults in the payment of interest on any Security
when the same is due and payable, and such default continues for a period
of 30 days;
(c) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in this Indenture or under the
Securities and such default or breach continues for a period of 30
consecutive days after written notice to the Company by the Trustee or the
Holders of 25% or more in aggregate principal amount of the Securities;
(d) there occurs with respect to any issue or issues of Indebtedness
of the Company and/or one or more Significant Subsidiaries having an
outstanding principal amount of $10 million or more in the aggregate,
whether such Indebtedness now exists or shall hereafter be created, an
event of default that has caused the holder or holders thereof, or
representatives of such holder or holders, to declare such Indebtedness to
be due and payable prior to its Stated Maturity and such Indebtedness has
not been discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration;
(e) any final judgment or order (not covered by insurance) for the
payment of money in excess of $10 million in the aggregate for all such
final judgments or orders (treating any deductibles, self-insurance or
retention as not so covered) shall be rendered against the Company or any
Significant Subsidiary and shall not be discharged, and there shall be any
period of 30 consecutive days
58
following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding against all such
Persons to exceed $10 million during which a stay of enforcement of such
final judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect;
(f) a court having jurisdiction in the premises enters a decree or
order for (i) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (ii)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all the property and assets of the
Company or any Significant Subsidiary or (iii) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary
and, in each case, such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days;
(g) the Company or any Significant Subsidiary (i) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (ii) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all the property and
assets of the Company or any Significant Subsidiary or (iii) effects any
general assignment for the benefit of creditors;
(h) the Company and/or one or more Significant Subsidiaries fails to
make (i) at the final (but not any interim) fixed maturity of any issue of
Indebtedness a principal payment of $10 million or more or (ii) at the
final (but not any interim) fixed maturity of more than one issue of such
Indebtedness principal payments aggregating $10 million or more and, in the
case of clause (i), such defaulted payment shall not have been made, waived
or extended within 30 days of the payment default and, in the case of
clause (ii), all such defaulted payments shall not have been made, waived
or extended within 30 days of the payment default that causes the amount
described in clause (ii) to exceed $10 million; or
(i) the nonpayment of any two or more items of Indebtedness that would
constitute at the time of such nonpayments, but for the individual amounts
of such Indebtedness, an Event of Default under clause (d) or clause (h)
above, or both, and which items of Indebtedness aggregate $10 million or
more.
The notice required under clause (c) must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default." Such
notice shall be
59
given by the Trustee if so requested in writing by the Holders of 25% of the
aggregate principal amount of the Securities then outstanding.
SECTION 6.02 Acceleration. If an Event of Default (other than an Event
of Default specified in clause (f) or (g) of Section 6.01 of this Indenture that
occurs with respect to the Company) occurs and is continuing under this
Indenture, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding, by written notice to the Company (and
to the Trustee if such notice is given by the Holders (the "Acceleration
Notice")), may, and the Trustee at the request of the Holders will, declare the
entire unpaid principal of, premium, if any, and accrued interest on, the
Securities to be immediately due and payable, as specified below. Upon a
declaration of acceleration, such principal, premium, if any, and accrued
interest shall become and be immediately due and payable without presentment,
demand, protest or further notice or act (all of which are expressly waived by
the Company). In the event of a declaration of acceleration because an Event of
Default set forth in clause (d) or (h) of Section 6.01 of this Indenture has
occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to clause (d) or (h) shall be remedied, cured by the
Company and/or such Significant Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration with
respect thereto. If an Event of Default specified in clause (f) or (g) of
Section 6.01 of this Indenture occurs with respect to the Company, all unpaid
principal of, premium, if any, and accrued interest on, the Securities then
outstanding shall become and be immediately due and payable automatically,
without any declaration, presentment, demand, protest, notice or other act on
the part of the Trustee or any Holder (all of which are expressly waived by the
Company). The Holders of at least a majority in principal amount of the
outstanding Securities, by written notice to the Company and to the Trustee, may
waive all past defaults or Defaults and rescind and annul a declaration of
acceleration and its consequences if (a) all existing Events of Default, other
than the nonpayment of the principal of, premium, if any, and accrued interest
on the Securities that have become due solely by such declaration of
acceleration, have been cured or waived and (b) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction.
SECTION 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if any, or interest
on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding.
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The Holders and the Trustee may exercise their rights and remedies
under this Indenture and under the Securities against the capital stock of TNC
or the assets of TNC and its subsidiaries only in a manner consistent with the
fiduciary obligations of TNC and the Company associated without the general
partnership interests in the Partnerships (including, without limitation, the
interests of the Partnerships and the partners thereof); provided that the
foregoing shall not require the Holders or the Trustee to take any action with
respect to any other assets of the Company.
SECTION 6.04 Waiver of Past Defaults. Subject to Sections 6.02, 6.07
and 9.02 of this Indenture, the Holders of at least a majority in aggregate
principal amount of the outstanding Securities, by notice to the Trustee, may
waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of, premium, if any, or interest on any
Security as specified in clause (a) or (b) of Section 6.01 of this Indenture.
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 Event of Default or impair any right consequent thereto.
SECTION 6.05 Control by Majority. The Holders of at least a majority
in aggregate principal amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders not joining in the giving of such direction.
SECTION 6.06 Limitation on Suits. A Holder may not pursue any remedy
with respect to this Indenture or the Securities unless:
(a) the Holder gives the Trustee written notice of a continuing Event
of Default;
(b) the Holders of at least 25% in aggregate principal amount of
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer the Trustee indemnity satisfactory to
the Trustee against any costs, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
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(e) during such 60-day period, the Holders of a majority in aggregate
principal amount of the outstanding Securities do not give the Trustee a
direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
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 or any
other obligor upon the Securities or any Affiliate of the Company 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 any obligor upon the Securities or any Affiliate of the
Company or such other obligor.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over any such other Holder.
SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of the principal of, premium, if any, or interest on, such
Holder's Security or to bring suit for the enforcement of any such payment, on
or after the respective due dates expressed in the Securities, shall not be
impaired or affected without the consent of the Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default in
payment of principal, premium, if any, or interest specified in clause (a) or
(b) of Section 6.01 of this Indenture occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor of the Securities for the whole amount of
principal, premium, if any, and accrued interest, if any, remaining unpaid,
together with interest on overdue principal, premium, if any, and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate borne by the Securities, and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the trustee, its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim. The Trustee may 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
62
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.06 of this
Indenture) and the Holders allowed in any judicial proceedings relative to the
Company (or any other obligor of the Securities), its creditors or its property
and shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any custodian in any judicial proceedings 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 agent and counsel, and any other
amounts due the Trustee under Section 7.06 of this Indenture. To the extent that
such payment of reasonable compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel out of the estate in any such judicial
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 dividends, distributions,
monies, securities and other property that the Holders may be entitled to
receive in such judicial proceedings, whether in liquidation or under any plan
of reorganization, arrangement or otherwise. Nothing herein contained shall be
deemed to empower 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 6.10 Priorities. If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.06 of this
Indenture;
Second: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal, premium, if any, and interest,
respectively; and
Third: to the Company or any other obligors of the Securities, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any
63
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 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 of this Indenture, or a suit by Holders of more than
10% in principal amount of the outstanding Securities.
SECTION 6.12 Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 6.13 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Securities in Section 2.06 of this Indenture, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14 Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article 6 or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient by the
Trustee or by the Holders, as the case may be.
ARTICLE 7
Trustee
SECTION 7.01 Rights and Duties of Trustee . Subject to TIA Sections
315(a) through (d):
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested
in it by this
64
Indenture and use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of its own
affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture which are adverse to
the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture;
(c) the Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document;
(d) before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or any Opinion of Counsel, which shall conform to
Section 10.04 of this Indenture. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on any such
certificate or opinion;
(e) the Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with
due care;
(f) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders, unless such Holders shall have offered to the
Trustee security or indemnity reasonably acceptable to the Trustee against
the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(g) the Trustee or Paying Agent shall not be liable for interest on
any money recovered by it except as the Trustee or Paying Agent may agree
in writing with the Company. Money held in trust by the Trustee or Paying
Agent need not be segregated from other funds except to the extent required
by law and except under Article 8 of this Indenture; and
(h) the Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers;
65
provided, however, that the Trustee's conduct does not constitute
negligence or bad faith.
SECTION 7.02 Individual Rights of Trustee. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.03 Trustee's Disclaimer. The Trustee (a) makes no
representation as to the validity or adequacy of this Indenture or the
Securities, (b) shall not be accountable for the Company's use of the proceeds
from the Securities and (c) shall not be responsible for any statement in the
Securities other than its certificate of authentication.
SECTION 7.04 Notice of Default. If any Default or any Event of Default
occurs and is continuing and if such Default of Event of Default is known to the
Trustee, the Trustee shall mail to each Holder in the manner and to the extent
provided in TIA Section 313(c) notice of the Default or Event of Default within
30 days after it occurs, unless such Default or Event of Default has been cured;
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 the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
The Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (a) any Event of Default occurring pursuant to clause
(a) or (b) of Section 6.01 of this Indenture if the Trustee is then acting as
Paying Agent or (b) any Default or Event of Default of which the Trustee shall
have received written notification or obtained actual knowledge, and such
notification shall not be deemed to include receipt of information obtained in
any report or other documents furnished under Section 4.18 of this Indenture,
which reports and documents the Trustee shall have no duty to examine.
SECTION 7.05 Reports by Trustee to Holders. Within 60 days after each
May 15, beginning with the first May 15 after the Closing Date, the Trustee
shall mail to each Holder as provided in TIA Section 313(c) a brief report dated
as of such May 15, in accordance with and to the extent required by TIA Section
313(a).
SECTION 7.06 Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for it services.
The compensation of the Trustee shall not be limited by any law on compensation
of a trustee
66
of an express trust. The Company shall reimburse the Trustee upon request for
all reasonable out-of-pocket expenses and advances incurred or made by it. Such
expenses shall include the reasonable compensation and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability or expense incurred by it without negligence or
bad faith on its part in connection with the administration of this Indenture
and its duties under this Indenture and the Securities, including the costs and
expenses of defending itself against any claim or liability and of complying
with any process served upon it or any of its officers in connection with the
exercise or performance of any of its powers or duties under this Indenture and
the Securities. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee
may have separate counsel and the Company shall pay reasonable fees and expenses
of such counsel. The Company need not pay for any settlements made without its
consent; provided, however, that such consent shall not be unreasonably
withheld. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in clause (f) or (g) of Section 6.01
of this Indenture, the expenses and the compensation for the services will be
intended to constitute expenses of the administration under the United States
Bankruptcy Code or any applicable federal or state law for the relief of
debtors.
SECTION 7.07 Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.07.
The Trustee may resign by so notifying the Company in writing at least
30 Business Days prior to the date of the proposed resignation. The Holders of
a majority in principal amount of the outstanding Securities may remove the
Trustee by so notifying the Trustee in writing and may appoint a successor
Trustee with the consent of the Company. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.09 of this Indenture;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee or
its property; or
67
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of the Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the outstanding Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company. If the successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.06 of this Indenture, (a) the retiring Trustee shall transfer all property
held by it as Trustee to the successor Trustee, (b) the resignation or removal
of the retiring Trustee shall become effective and (c) the successor Trustee
shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If the Trustee fails to comply with Section 7.09 of this Indenture,
any Holder who satisfies the requirements of TIA Section 310(b) may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.07, the Company's obligations under Section 7.06 of this Indenture shall
continue for the benefit of the retiring Trustee.
SECTION 7.08 Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.09 Eligibility. This Indenture shall always have a Trustee
who satisfies the requirement of TIA Section 310(a)(1). The Trustee shall have a
combined capital and surplus (which shall include without duplication the
combined capital and surplus of the holding company of the Trustee) of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
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ARTICLE 8
Discharge of Indenture
SECTION 8.01 Termination of Company's Obligations. Except as
otherwise provided in this Section 8.01, the Company may terminate its
obligations under the Securities and this Indenture if:
(a) all Securities previously authenticated and delivered (other than
destroyed, lost or stolen Securities that have been replaced or Securities
that are paid pursuant to Section 4.01 of this Indenture or Securities for
whose payment money or securities have theretofore been held in trust and
thereafter repaid to the Company, as provided in Section 8.05 of this
Indenture) have been delivered to the Trustee for cancellation and the
Company has paid all sums payable by it hereunder; or
(b) (i) the Securities mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption, (ii) the Company
irrevocably deposits in trust with the Trustee during such one-year period,
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds solely for the benefit of the
Holders for that purpose, money or U.S. Government Obligations sufficient
(in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee), without consideration of any reinvestment of any interest
thereon, to pay principal and interest on the Securities to maturity or
redemption, as the case may be, and to pay all other sums payable by it
hereunder, (iii) no Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit, (iv) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound and (v)
the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, in each case stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with.
With respect to the foregoing clause (a), the Company's obligations
under Section 7.06 shall survive. With respect to the foregoing clause (b), the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.11, 4.01,
4.02, 7.06, 7.07, 8.04, 8.05 and 8.06 of this Indenture shall survive until the
Securities are no longer outstanding. Thereafter, only the Company's
obligations in Section 7.06 and 8.06 of this Indenture shall survive. After any
such irrevocable deposit, the Trustee upon request shall
69
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
SECTION 8.02 Defeasance and Discharge of Indenture. The Company will
be deemed to have paid and will be discharged from any and all obligations in
respect of the Securities and the provisions of this Indenture will no longer be
in effect with respect to the Securities on the one hundred twenty-third day
after the deposit referred to in clause (i) of this Section 8.02, and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same, except as to (a) rights of registration of transfer and
exchange, (b) substitution of apparently mutilated, defaced, destroyed, lost or
stolen Securities, (c) rights of Holders to receive payments of principal
thereof and interest thereon, (d) the Company's obligations under Section 4.02,
(e) the rights, obligations and immunities of the Trustee hereunder and (f) the
rights of the Holders as beneficiaries of this Indenture with respect to the
property so deposited with the Trustee payable to all or any of them; provided,
however, that the following conditions shall have been satisfied:
(i) with reference to this Section 8.02, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 7.09) and conveyed
all right, title and interest for the benefit of the Holders, under the
terms of an irrevocable trust agreement in form and substance satisfactory
to the Trustee as trust funds in trust, specifically pledged to the Trustee
for the benefit of the Holders as security for payment of the principal of,
premium, if any, and interest, if any, on the Securities, and dedicated
solely to, the benefit of the Holders, in and to (A) money in an amount,
(B) U.S. Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide,
not later than one day before the due date of any payment referred to in
this clause (i), an amount or (C) a combination thereof in an amount,
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge, without consideration of the
reinvestment of such interest and after payment of all federal, state and
local taxes or other charges and assessments in respect thereof payable by
the Trustee, the principal of, premium, if any, and accrued interest on the
outstanding Securities on the Stated Maturity of such principal or
interest; provided, however, that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of principal, premium, if any, and interest with
respect to the Securities;
(ii) the Company shall have delivered to the Trustee (A) either (1) an
Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of the Company's
exercise of its
70
option under this Section 8.02 and will be subject to Federal income tax on
the same amount and in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge had not occurred,
which Opinion of Counsel must be accompanied by a ruling of the Internal
Revenue Service to the same effect unless there has been a change in
applicable Federal income tax law after the date of this Indenture such
that a ruling from the Internal Revenue Service is no longer required or
(2) a ruling directed to the Company or the Trustee received from the
Internal Revenue Service to the same effect as the aforementioned Opinion
of Counsel and (B) an Opinion of Counsel to the effect that (1) the
creation of the defeasance trust does not violate the Investment Company
Act of 1940 and (2) after the passage of 123 days following the deposit
(except, with respect to any trust funds for the account of any Holder who
may be deemed to be an "insider" for purposes of the United States
Bankruptcy Code, after one year following the deposit), the trust fund will
not be subject to the effect of Section 547 of the United States Bankruptcy
Code or Section 15 of the New York Debtor and Creditor Law in a case
commenced by or against the Company under either such statute, and either
(x) the trust funds will no longer remain the property of the Company (and
therefore will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally) or (y) if a court were to the rule under any such law in any
case or proceeding that the trust funds remained property of the Company,
(I) assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the
Trustee will hold, for the benefit of the Holders, a valid and perfected
security interest in such trust funds that is not avoidable in bankruptcy
or otherwise except for the effect of Section 552(b) of the United States
Bankruptcy Code on interest on the trust funds accruing after the
commencement of a case under such statute and (II) the Holders will be
entitled to receive adequate protection of their interests in such trust
funds if such trust funds are used in such case of proceeding;
(iii) immediately after giving effect to such deposit on a pro forma
basis, no Event of Default or Default shall have occurred and be continuing
on the date of such deposit or during the period ending on the one hundred
twenty-third day after such date of deposit;
(iv) such deposit shall not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which the Company is
bound;
(v) if at such time the Securities are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to
the
71
effect that the Securities will not be delisted as a result of such
deposit, defeasance and discharge; and
(vi) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 8.02 have been complied with.
Notwithstanding the foregoing clause (i), prior to the end of the 123-
day period referred to in clause (ii)(B)(2) above, none of the Company's
obligations under this Indenture shall be discharged. Subsequent to the end of
such 123-day period with respect to this Section 8.02, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.11, 4.01, 4.02, 7.06, 7.07, 8.05 and
8.06 of this Indenture shall survive until the Securities are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.06, 8.05
and 8.06 of this Indenture shall survive. If and when a ruling from the
Internal Revenue Service or an Opinion of Counsel referred to in clause (ii)(A)
above is able to be provided specifically without regard to, and not in reliance
upon, the continuance of the Company's obligations under Section 4.01 of this
Indenture, then the Company's obligations under such Section 4.01 of this
Indenture shall cease upon delivery to the Trustee of such ruling or Opinion of
Counsel and compliance with the other conditions precedent provided for herein
relating to the defeasance contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request, shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03 Defeasance of Certain Obligations. The Company may omit
to comply with any term, provision or condition set forth in clauses (c) and (d)
of Section 5.01 and Sections 4.03 through 4.17 of this Indenture and clause (c)
of Section 6.01 of this Indenture (with respect to Sections 4.03 through 4.17 of
this Indenture and clauses (c) and (d) of Section 5.01 of this Indenture) and
clauses (d), (e), (h) and (i) of Section 6.01 of this Indenture shall be deemed
not to be Events of Default, in each case with respect to the outstanding
Securities if:
(a) with reference to this Section 8.03, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee (or
another trustee satisfying the requirements of Section 7.09 of this
Indenture) and conveyed in and to all right, title and interest to the
Trustee for the benefit of the Holders, under the terms of an irrevocable
trust agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee as security for
72
payment of the principal of, premium, if any, and interest, if any, on the
Securities for, and dedicated solely to, the benefit of the Holders, in and
to (i) money in an amount, (ii) U.S. Government Obligations that, through
the payment of interest and principal in respect thereof in accordance with
their terms, will provide, not later than one day before the due date of
any payment referred to in this clause (a), money in an amount or (iii) a
combination thereof in an amount, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and accrued interest on, the outstanding Securities on the
Stated Maturity of such principal or interest; provided, however, that the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of such
principal, premium, if any, and interest with respect to the Securities;
(b) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that (i) the creation of the defeasance trust does not violate
the Investment Company Act of 1940, (ii) the Holders have a valid first-
priority security interest in the trust funds, (iii) the Holders will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance of certain covenants and Events of Default
and will be subject to Federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred and (iv) after the passage of 123
days following the deposit (except, with respect to any trust funds for the
account of any Holder who may be deemed to be an "insider" for purposes of
the United States Bankruptcy Code, after one year following the deposit),
the trust fund will not be subject to the effect of Section 547 of the
United States Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law in a case commenced by or against the Company under either
such statute, and either (A) the trust funds will no longer remain the
property of the Company (and therefore will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors rights generally) or (B) if a court were to rule under
any such law in any case or proceeding that the trust funds remained
property of the Company, (1) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the extent not paid
to the Holders, the Trustee will hold, for the benefit of the Holders, a
valid and perfected security interest in such trust funds that is not
avoidable in bankruptcy or otherwise except for the effect of Section
552(b) of the United States Bankruptcy Code on interest on the trust funds
accruing after the commencement of a case under such
73
statute and (2) the Holders will be entitled to receive adequate protection
of their interests in such trust funds if such trust funds are used in such
case or proceeding;
(c) immediately after giving effect to such deposit on a pro forma
basis, no Event of Default or Default shall have occurred and be continuing
on the date of such deposit or during the period ending on the one hundred
twenty-third day after the date of such deposit;
(d) such deposit shall not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which the Company is
bound;
(e) if at such time the Securities are listed in a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Securities will not be delisted as a result
of such deposit, defeasance and discharge; and
(f) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 8.03 have been complied with.
SECTION 8.04 Application of Trust Money. Subject to Sections 8.05 and
8.06 of this Indenture, the Trustee or Paying Agent shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to Section 8.01, 8.02 or
8.03 of this Indenture, as the case may be, and shall apply the deposited money
and the money from U.S. Government Obligations in accordance with the Securities
and this Indenture to the payment of principal of, premium if any, and interest
on the Securities; but such money need not be segregated from other funds except
to the extent required by law.
SECTION 8.05 Repayment to Company . Subject to Sections 7.06, 8.01,
8.02 and 8.03 of this Indenture, the Trustee and the Paying Agent shall promptly
pay to the Company upon request set forth in an Officers' Certificate any excess
money held by them at any time and thereupon shall be relieved from all
liability with respect to such money. The Trustee and the Paying Agent shall pay
to the Company upon request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years; provided,
however, that the Trustee or such Paying Agent before being required to make any
payment may, in its discretion, cause to be published at the expense of the
Company once in a newspaper of general circulation in the City of New York or
mail to each holder entitled to such money at such Holder's address (as set
forth in the Security Register) notice that such money remains unclaimed and
that after a date specified therein (which shall be at least 30 days from the
date of
74
such publication or mailing) any unclaimed balance of such money then remaining
will be repaid to the Company; and provided further, however, that the Trustee
may comply with any applicable escheat or abandoned property law. After payment
to the Company, Holders entitled to such money must look to the Company for
payment as general creditors unless an applicable law designates another Person,
and all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
SECTION 8.06 Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Section
8.01, 8.02 or 8.03 of this Indenture, as the case may be, by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02 or
8.03 of this Indenture, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with Section 8.01, 8.02 or 8.03 of this Indenture, as the case may
be; provided, however, that, if the Company has made any payment of principal
of, premium, if any, or interest on any Securities because of the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments, Supplements and Waivers
SECTION 9.01 Without Consent of Holders. The Company, when authorized
by a resolution of the Board of Directors, and the Trustee may amend or
supplement this Indenture or the Securities without notice to or the consent of
any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article 5 of this Indenture;
(c) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(d) to provide for uncertified Securities in addition to or in place
of certificated Securities; or
(e) to make any change that does not adversely affect the rights of
any Holder.
75
SECTION 9.02 With Consent of Holders. Subject to Sections 6.04 and
6.07 of this Indenture and without prior notice to the Holders, the Company,
when authorized by the Board of Directors (as evidenced by a Board Resolution),
and the Trustee may amend this Indenture and the Securities with the written
consent of the Holders of not less than a majority in aggregate principal amount
of the Securities then outstanding, and the Holders of not less than a majority
in aggregate principal amount of the Securities then outstanding by written
notice to the Trustee may waive future compliance by the Company with any
provision of this Indenture or the Securities.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount of, or
premium, if any, or interest on, any Security, or adversely affect any
right of repayment at the option of any Holder of any Security, or change
the place or currency of payment of principal of, premium, if any, or
interest on, any Security, or impair the right to institute suit for the
enforcement of any payment on or after the Stated Maturity (or in the case
of a redemption, on or after the Redemption Date) of any Security;
(b) reduce the percentage in principal amount of the outstanding
Securities required for any such supplemental indenture, for any waiver of
compliance with certain provisions of this Indenture or certain defaults
and their consequences provided for in this Indenture;
(c) waive a default in the payment of principal of, premium, if any,
or interest on, any Security; or
(d) modify any of the provisions of this Section 9.02, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Holders upon request. Any failure of the
Company to mail
76
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such amendment, supplemental indenture or waiver.
SECTION 9.03 Revocation and Effect of Consent. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the security of the
consenting Holder; even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to its
Security or portion of its Security. Such revocation shall be effective only if
the Trustee receives the notice of revocation before the date such amendment,
supplement or waiver becomes effective. An amendment, supplement or waiver shall
become effective on receipt by the Trustee of written consents from the Holders
of the requisite percentage in principal amount of the outstanding Securities.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies) and only those
Persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (a)
through (d) of Section 9.02 of this Indenture. In case of an amendment or
waiver of the type described in clauses (a) through (d) of Section 9.02 of this
Indenture, the amendment or waiver shall bind each Holder who has consented to
it and every subsequent Holder of a Security that evidences the same
indebtedness as the Security of the consenting Holder.
SECTION 9.04 Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security about the change terms and return it to the Holder and
the Trustee may place an appropriate notation on any Security thereafter
authenticated. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
SECTION 9.05 Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to
77
this Article 9 is authorized or permitted by this Indenture. Subject to the
preceding sentence, the Trustee shall sign such amendment, supplement or waiver
if the same does not adversely affect the rights of the Trustee. The Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 9.06 Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article 9 shall conform to the requirements
of the TIA as then in effect.
ARTICLE 10
Miscellaneous
SECTION 10.01 Trust Indenture Act of 1939. This Indenture is subject
to the provisions of the TIA that are required to be a part of this Indenture
and shall, to the extent applicable, be governed by such provisions.
SECTION 10.02 Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person or mailed by first class mail addressed as follows:
if to the Company:
Terra Industries Inc.
600 Fourth Street
Terra Centre
Sioux City, Iowa 51101
Attention: Chief Financial Officer
if to the Trustee:
First Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Finance
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to such
Holder at its address as it appears on the Security Register by first class mail
and shall be sufficiently given if so mailed within the time prescribed. Copies
of any such
78
communication or notice to a Holder shall also be mailed to the Trustee and each
Agent at the same time.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
SECTION 10.03. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 10.04 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in the Indenture shall include:
(a) a statement that the person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(c) a statement that, in the opinion of such person, 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 or not, in the opinion of such person,
such condition or covenant has been complied with, and such other opinions
as the Trustee may reasonably request; provided, however, that, with
respect to matters of fact, an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
79
SECTION 10.05 Rules by Trustee, Paying Agent or Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 10.06 Payment Date Other Than a Business Day. If an Interest
Payment Date, Redemption Date, Stated Maturity or date of maturity of any
Security shall not be a Business Day at any place of payment, then payment of
principal of, premium, if any, or interest on such Security, as the case may be,
need not be made on such date, but may be made on the next succeeding Business
Day at such place of payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity or date of
maturity of such Security; provided, however, that no interest shall accrue for
the period from and after such Interest Payment Date, Redemption Date, Stated
Maturity or date of maturity, as the case may be, to the next succeeding
Business Day.
SECTION 10.07 GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE SECURITIES. THE TRUSTEE, THE COMPANY AND THE
HOLDERS AGREE TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OF
THE SECURITIES.
SECTION 10.08 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.09 No Recourse Against Others. No recourse for the payment
of the principal of, premium, if any, or interest on, any of the Securities or
for any claim based thereon or otherwise in respect thereof or by reason
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any of the Securities or because of the
creation of any Indebtedness represented thereby, shall be had against any
incorporator, shareholder, officer, director, employee or controlling person,
past, present or future, of the Company or any successor Person thereof. Each
Holder, by accepting such Securities (or interest therein), waives and releases
all such liability.
SECTION 10.10 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successor.
80
SECTION 10.11 Duplicate Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
SECTION 10.12 Separability. 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 10.13 Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table, and headings of the Articles and Sections of
this Indenture have been included for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
* * *
81
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
TERRA INDUSTRIES INC.
BY: /s/ Francis G. Meyer
---------------------------------
Name: Francis G. Meyer
Title: Vice President &
Chief Financial Officer
FIRST TRUST NATIONAL ASSOCIATION
BY: /s/ Scott Strodthoff
---------------------------------
Name: Scott Strodthoff
Title: Vice President
STATE OF IOWA )
) SS:
COUNTY OF WOODBURY )
On this 22nd day of June, 1995, before me personally came Francis G.
Meyer, to me known, who, being by me duly sworn, did depose and say that he
resides in Sioux City, Iowa, that he is Vice President and Chief Financial
Officer of TERRA INDUSTRIES INC., one of the corporations described in and that
executed the above instrument; and that he signed his name thereto by authority
of the Board of Directors of said corporation.
/s/ Jane A. Rice
-------------------------------
Notary Public
(Notarial Seal)
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 22nd day of June, 1995, before me personally came Scott
Strodthoff, to me known, who by me duly sworn, did depose and say that he
resides in Arden Hills, Minnesota; that he is Vice President of FIRST TRUST
NATIONAL ASSOCIATION, one of the entities described in and that executed the
above instrument; and that he signed his name thereto by authority of the
by-laws of said trust company.
/s/ Lisa Hochstadt
---------------------------------
Notary Public
(Notarial Seal)
EXHIBIT A
---------
(FACE OF SERIES A SECURITY)
[Legend if Security is deemed a Restricted Security]
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1), (a)(2),
(a)(3) OR (a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
[Legend if Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-2
TERRA INDUSTRIES INC.
10 1/2% Senior Note due 2005, Series A
NO. CUSIP NO. [880915 AC7]
[880915 AD5]
TERRA INDUSTRIES INC., a Maryland corporation (the "Company," which
term includes any successor corporation) under the Indenture hereinafter
referred to, for value received, promises to pay to ________________, or its
registered assigns, the principal sum of ______________ ($_________), in United
States dollars on June 15, 2005, at the office or agency of the Company referred
to below, and to pay interest thereon from June 22, 1995, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semiannually on June 15 and December 15, in each year, commencing December
15, 1995 at the rate of 10 1/2% per annum, in United States dollars, until the
principal hereof is paid or duly provided for. In addition, in the event that
either (a) an Exchange Offer Registration Statement is not filed by the Company
with the Commission in connection with a Registered Exchange Offer on or prior
to July 22, 1995, (b) such Exchange Offer Registration Statement is not declared
effective by the Commission on or prior to September 20, 1995, or (c) (i) the
Registered Exchange Offer is not consummated on or prior to October 20, 1995 or
(ii) a Shelf Registration Statement has not been declared effective on or prior
to October 20, 1995 in the event the Registered Exchange Offer is not
consummated or a Shelf Registration has been requested by the Initial
Purchasers, the interest rate borne by the Series A Securities shall be
increased (an "Interest Rate Increase") by one quarter of one percent per annum;
commencing July 22, 1995 in the case of (a) above, commencing September 20, 1995
in the case of (b) above, commencing October 20, 1995 in the case of (c) above;
provided that the aggregate increase in such interest rate from the original
interest rate will in no event exceed one percent per annum; provided, further,
that upon the filing of an Exchange Offer Registration Statement in the case of
(a) above, the effectiveness of the Exchange Offer Registration Statement in the
case of (b) above, or the effectiveness of the Shelf Registration Statement or
the day before the date of the consummation of the Registered Exchange Offer, as
the case may be, in the case of (c) above, the interest rate borne by the
Securities shall from the date of such filing, effectiveness or day before the
date of consummation, as the case may be, be reduced by the full amount of any
such Interest Rate Increase.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be June 1 or December 1 (whether or not a Business Day),
as the case may be, next preceding such Interest
A-3
Payment Date. Any such interest paid or duly provided for within 30 days after
the Interest Payment Date on which such interest payment was due will, as
provided in such Indenture, be paid to such Person, together with interest on
such past due interest payment at the interest rate borne by the Series A
Securities, to the extent lawful. Any such interest not so paid, or duly
provided for, and interest on such defaulted interest at the interest rate borne
by the Series A Securities, to the extent lawful, shall forthwith cease to be
payable to the Holder on such Regular Record Date, and shall 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 which shall be the fifteenth day next preceding the date
fixed by the Company for the payment of default interest, notice whereof shall
be given to Holders of Securities not less than 15 days prior to such special
record date.
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.
A-4
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
TERRA INDUSTRIES INC.
By:
------------------------------------
Title:
---------------------------------
By:
------------------------------------
Title:
---------------------------------
A-5
(Form of Trustee's Certificate of Authentication)
This is one of the 10 1/2% Senior Notes due 2005, Series A described
in the within-mentioned Indenture.
Dated: __________, ____
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------
Authorized Signature
A-6
(REVERSE SIDE OF SERIES A SECURITY)
TERRA INDUSTRIES INC.
10 1/2% Senior Note due 2005, Series A
1. Principal and Interest.
----------------------
The Company will pay the principal of this 10 1/2% Senior Note due
2005, Series A (a "Series A Security") on June 15, 2005.
The Company promises to pay interest on the principal amount of this
Security on each Interest Payment Date, as set forth below, at the rate per
annum shown above.
Interest will be payable semiannually (to the holders of record of the
Securities at the close of business on June 1 or December 1 immediately
preceding the applicable Interest Payment Date) on each Interest Payment Date,
commencing December 15, 1995. Interest on the Securities will accrue from the
most recent date to which interest has been paid, or, if no interest has been
paid, from June 22, 1995; provided, however, that, if there is no existing
default in the payment of interest and if this Security is authenticated between
a Regular Record Date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such Interest Payment Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
the rate of 10 1/2% per annum.
2. Method of Payment.
-----------------
The Company will pay interest (except defaulted interest) on the
principal amount of the Securities on each June 15 and December 15, commencing
December 15, 1995, to the persons who are Holders (as reflected in the Security
Register) at the close of business on the June 1 or December 1 immediately
preceding the applicable Interest Payment Date, in each case, even if the
Security is canceled on registration of transfer or registration of exchange
after such payment date; provided, however, that, with respect to the payment of
principal, the Company will make payment to the Holder that surrenders this
Security to a Paying Agent on or after June 15, 2005. The Company will pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
However, with respect to Securities in certificated form, the Company may pay
interest by check mailed to the address of the Person entitled thereto as such
address shall appear on the Security
A-7
Register. If a payment date is a date other than a Business Day at a place of
payment, payment may be made at that place on the next succeeding day that is a
Business Day and no interest shall accrue for the intervening period.
3. Paying Agent and Registrar.
--------------------------
Initially, the Trustee will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice. The Company,
any Subsidiary of the Company, or any Affiliate of any of them may act as Paying
Agent, Registrar or co-registrar.
4. Registration Rights.
-------------------
The Holder of this Series A Security is entitled to the benefits of
the Registration Rights Agreement between the Company and the Initial
Purchasers, dated June 22, 1995, pursuant to which, subject to the terms and
conditions thereof, the Company is obligated to consummate the Registered
Exchange Offer pursuant to which the Holder of this Security shall have the
right to exchange this Security for 10 1/2% Senior Notes due 2005, Series B
(herein called the "Series B Securities") in like principal amount as provided
therein. The Series A Securities and the Series B Securities are together
referred to as the "Securities." The Series A Securities rank pari passu in
right of payment with the Series B Securities.
5. Indenture; Limitations.
----------------------
The Company issued the Series A Securities under an Indenture dated as
of June 22, 1995 (the "Indenture"), between the Company and First Trust National
Association (the "Trustee"). Capitalized terms herein are used as defined in
the Indenture unless otherwise indicated. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act. The Securities are subject to all such terms, and
Holders are referred to the Indenture and the Trust Indenture Act for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Security and the terms of
the Indenture, the terms of the Indenture shall control.
The Securities are general obligations of the Company. The Indenture
limits the original aggregate principal amount of the Series A Securities to
$200,000,000.
6. Optional Redemption.
-------------------
The Company may redeem all the Securities or any portion of the
Securities from time to time, on or after June 15, 2000, at the following
Redemption Prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period beginning June 15 of the years indicated:
A-8
Year Redemption Price
---- ----------------
2000........................ 105.250%
2001........................ 102.625%
2002 and thereafter......... 100.000%
of the principal amount, plus accrued and unpaid interest (if any) to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date).
7. Notice of Redemption.
--------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder to be redeemed at such
Holder's last address as it appears in the Security Register. Securities in
original denominations larger than $1,000 may be redeemed in part. On the
Redemption Date, interest ceases to accrue on Securities or portions of
Securities called for redemption, unless the Company defaults in the payment of
the Redemption Price.
8. Denominations; Transfer; Exchange.
---------------------------------
If this Series A Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the transfer
of this Series A Security is registrable on the Security Register of the
Company, upon surrender of this Series A Security for registration of transfer
at the office or agency of the Company maintained for such purpose in The City
of New York or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the Holder hereof or its attorney duly authorized in writing,
and thereupon one or more new Series A Securities, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferree or transferees.
If this Series A Securities is a Restricted Security in certificated
form, then as provided in the Indenture and subject to certain limitations
therein set forth, the Holder, provided it is a Qualified Institutional Buyer,
may exchange this Series A Security for a Book-Entry Security by instructing the
Trustee (by completing the Transferee Certificate in the form attached to this
Security) to arrange for such Series A Security to be represented by a
beneficial interest in a Global Security in accordance with the customary
procedures of the Depository, unless the Company has elected not to issue a
Global Security.
If this Series A Security is a Global Security, it is exchangeable for
a Series A Security in certificated form only if (x) the Depository is at any
time unwilling or
A-9
unable to continue as depository and a successor depository is not appointed by
the Company within 30 days or (y) there shall have occurred and be continuing an
Event of Default or (z) the Company may at any time determine not to have Series
A Securities represented by a Global Security. In addition, in accordance with
the provisions of the Indenture and subject to certain limitations therein set
forth, an owner of a beneficial interest in a Global Security which is a Series
A Security may request a Series A Security in certificated form, in exchange in
whole or in part, as the case may be, for such beneficial owner's interest in
the Global Security. In any such instance, an owner of a beneficial interest in
a Global Security will be entitled to physical delivery in certificated form of
Series A Securities in authorized denominations equal in aggregate principal
amount to such beneficial interest and to have such Series A Securities
registered in its name.
Series A Securities in certificated form 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 Series A Securities are exchangeable for a
like aggregate principal amount of Securities of a differing 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 Series A Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
9. Rule 144A Information.
---------------------
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Series A Security,
the Company will promptly furnish or cause to be furnished such information as
is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) to such Holder or to a prospective purchaser of
such Series A Security who such Holder informs the Company is reasonably
believed to be a "Qualified Institutional Buyer" within the meaning of Rule 144A
under the Securities Act, as the case may be, in order to permit compliance by
such Holder with Rule 144A under the Securities Act.
10. Persons Deemed Owners.
---------------------
A Holder may be treated as the owner of a Security for all purposes.
11. Unclaimed Money.
---------------
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the
A-10
Company for payment, unless an abandoned property law
designates another person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Securities (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Securities, except in
certain circumstances for certain sections thereof, and (b) to the Stated
Maturity, the Company will be discharged from certain covenants set forth in the
Indenture.
13. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities then outstanding, and any
existing default or compliance with any provision may be waived with the consent
of the Holders of a majority in aggregate principal amount of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Securities in addition to or in place of certificated Securities and make any
change that does not adversely affect the rights of any Holder.
14. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to pay dividends, create Liens, enter into sale-
leaseback transactions, sell assets, engage in transactions with Affiliates or
incur Indebtedness. At the end of each fiscal year, the Company must report to
the Trustee on compliance with such limitations.
15. Successor Corporations.
----------------------
When a successor person or other entity assumes all the obligations of
its predecessor under the Securities and the Indenture, the predecessor person
will be released from those obligations.
16. Defaults and Remedies.
---------------------
An Event of Default is: a default in payment of principal of or
premium, if any, on the Securities; default in the payment of interest on the
Securities for 30 days; failure by the Company for 30 days after notice to it to
comply with any of its other agreements in the Indenture; certain events of
bankruptcy or insolvency; certain final
A-11
judgments which remain undischarged; and certain events of default on other
Indebtedness of the Company and/or one or more of its Significant Subsidiaries.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable. If a
bankruptcy or insolvency default with respect to the Company occurs and is
continuing, the Securities automatically become due and payable. Holders may
not enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of at
least a majority in principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power.
17. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
--------------------------
No stockholder, director, officer, employee or incorporator as such,
past, present or future, of the Company or any successor corporation shall have
any liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
19. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
20. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Terra
Industries Inc., 600 Fourth Street, Terra Centre, Sioux City, Iowa 51101,
Attention: Chief Financial Officer.
A-12
I or we assign and transfer this Security to:
- --------------------------------------------
Please insert social security or other identifying number of assignee
- ---------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Print or type name, address and zip code of assignee and irrevocably
appoint
---------------------------------------------------------------------
[Agent], to transfer this Security on the books of the Company. The Agent may
substitute another to act for him.
Dated Signed
----------------------------- -----------------------------
- ----------------------------------------------------------------------------
(Sign exactly as name appears on the other side of this Security)
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 4.10 or Section 4.11, as applicable, of the Indenture, check the
Box: [_].
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 4.10 or Section 4.11 as applicable, of the
Indenture, state the amount (in original principal amount):
$ .
---------------
Date: Your Signature:
---------------------- ---------------------------
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:
-----------------------------------------------
A-14
(FACE OF SERIES B SECURITY)
[Legend if Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TERRA INDUSTRIES INC.
10 1/2% Senior Note due 2005, Series B
NO. CUSIP NO. 880915 -- --
TERRA INDUSTRIES INC., a Maryland corporation (the "Company," which
term includes any successor corporation) under the Indenture hereinafter
referred to, for value received, promises to pay to ________________ or
registered assigns, the principal sum of ______________ ($_________) in United
States dollars on June 15, 2005, at the office or agency of the Company referred
to below, and to pay interest thereon from June 22, 1995, or from the most
recent Interest Payment Date to which
A-15
interest has been paid or duly provided for, semiannually on June 15 and
December 15, in each year, commencing December 15, 1995 at the rate of 10 1/2%
per annum, in United States dollars, until the principal hereof is paid or duly
provided for; provided that to the extent interest has been paid or duly
provided for with respect to the Series A Security exchanged for this Series B
Security, interest on this Series B Security shall accrue from the most recent
Interest Payment Date to which such interest on the Series A Security has been
paid or duly provided for. In addition, for any period in which the Series A
Security exchanged for this Series B Security was outstanding, in the event that
either (a) an Exchange Offer Registration Statement is not filed by the Company
with the Commission in connection with a Registered Exchange Offer on or prior
to July 22, 1995, (b) such Exchange Offer Registration Statement is not declared
effective by the Commission on or prior to September 20, 1995, or (c) (i) the
Registered Exchange Offer is not consummated on or prior to October 20, 1995 or
(ii) a Shelf Registration Statement has not been declared effective on or prior
to October 20, 1995 in the event the Registered Exchange Offer is not
consummated or a Shelf Registration has been requested by the Initial
Purchasers, the interest rate borne by the Securities shall be increased (an
"Interest Rate Increase") by one-quarter of one percent per annum; commencing
July 22, 1995 in the case of (a) above, commencing September 20, 1995 in the
case of (b) above, commencing October 20, 1995 in the case of (c) above;
provided that the aggregate increase in such interest rate from the original
interest rate will in no event exceed one percent per annum; provided, further,
that upon the filing of an Exchange Offer Registration Statement, in the case of
(a) above, the effectiveness of the Exchange Offer Registration Statement in the
case of (b) above, or the effectiveness of the Shelf Registration Statement or
the day before the date of the consummation of the Registered Exchange Offer, as
the case may be, in the case of (c) above, the interest rate borne by the
Securities shall from the date of such filing, effectiveness or day before the
date of consummation, as the case may be, be reduced by the full amount of any
such Interest Rate Increase; and provided, further, that to the extent interest
at such increased interest rate has been paid or duly provided for with respect
to the Series A Security exchanged for this Series B Security, interest at such
increased interest rate, if any, on this Series B Security shall accrue from the
most recent Interest Payment Date to which such interest on the Series A
Security has been paid or duly provided for.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be June 1 or December 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such
interest paid or duly provided for within 30 days after the Interest Payment
Date on which such interest payment was due will, as provided in such
Indenture, be paid to such Person, together with interest on such past due
interest payment at the interest rate borne by the Series B Securities, to the
extent lawful. Any
A-16
such interest not so paid, or duly provided for, and interest on such defaulted
interest at the interest rate borne by the Series B Securities, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular Record
Date, and shall 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 which shall be the
fifteenth day next preceding the date fixed by the Company for the payment of
default interest, notice whereof shall be given to Holders of Securities not
less than 15 days prior to such special record date.
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.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
TERRA INDUSTRIES INC.
By: _________________________________
Title: ______________________________
By: _________________________________
Title: ______________________________
A-17
(Form of Trustee's Certificate of Authentication)
This is one of the 10 1/2% Senior Notes due 2005, Series B described
in the within-mentioned Indenture.
Dated: __________, ____
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: ______________________________
Authorized Signature
A-18
(REVERSE SIDE OF SERIES B SECURITY)
TERRA INDUSTRIES INC.
10 1/2% Senior Note due 2005, Series B
1. Principal and Interest.
----------------------
The Company will pay the principal of this 10 1/2% Senior Note due
2005, Series B (a "Series B Security") on June 15, 2005.
The Company promises to pay interest on the principal amount of this
Security on each Interest Payment Date, as set forth below, at the rate per
annum shown above.
Interest will be payable semiannually (to the holders of record of the
Securities at the close of business on June 1 or December 1 immediately
preceding the applicable Interest Payment Date) on each Interest Payment Date,
commencing December 15, 1995; provided that to the extent interest has been paid
or duly provided for with respect to the Series A Security exchanged for this
Series B Security, interest on this Series B Security shall accrue from the most
recent Interest Payment Date to which such interest on the Series A Security has
been paid or duly provided for. Interest on the Securities will accrue from the
most recent date to which interest has been paid, or, if no interest has been
paid, from June 22, 1995; provided, however, that, if there is no existing
default in the payment of interest and if this Security is authenticated between
a Regular Record Date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such Interest Payment Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
the rate of 10 1/2% per annum.
2. Method of Payment.
-----------------
The Company will pay interest (except defaulted interest) on the
principal amount of the Securities on each June 15 and December 15, commencing
December 15, 1995, to the persons who are Holders (as reflected in the Security
Register) at the close of business on the June 1 or December 1 immediately
preceding the applicable Interest Payment Date, in each case, even if the
Security is cancelled on registration of transfer or registration of exchange
after such payment date; provided, however, that, with respect to the payment of
principal, the Company will make payment to the Holder that surrenders this
Security to a Paying Agent on or after June 15, 2005. The Company will pay
principal, premium, if any, and interest in money of the United States that at
the time of
A-19
payment is legal tender for payment of public and private debts. However, with
respect to Securities in certificated form, the Company may pay interest by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register. If a payment date is a date other than a
Business Day at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. Paying Agent and Registrar.
--------------------------
Initially, the Trustee will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice. The Company,
any Subsidiary of the Company, or any Affiliate of any of them may act as Paying
Agent, Registrar or co-registrar.
4. Registration Rights.
-------------------
The Series B Securities were issued pursuant to the Registered
Exchange Offer pursuant to which the 10 1/2% Senior Notes due 2005, Series A
(herein called the "Series A Securities") in like principal amount were
exchanged for the Series B Securities. The Series A Securities and the Series B
Securities are together referred to as the "Securities." The Series B
Securities rank pari passu in right of payment with the Series A Securities.
5. Indenture; Limitations.
----------------------
The Company issued the Series B Securities under an Indenture dated as
of June 22, 1995 (the "Indenture"), between the Company and First Trust National
Association (the "Trustee"). Capitalized terms herein are used as defined in
the Indenture unless otherwise indicated. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act. The Securities are subject to all such terms, and
Holders are referred to the Indenture and the Trust Indenture Act for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Security and the terms of
the Indenture, the terms of the Indenture shall control.
The Securities are general obligations of the Company. The Indenture
limits the original aggregate principal amount of the Series B Securities to
$200,000,000.
6. Optional Redemption.
-------------------
The Company may redeem all the Securities or any portion of the
Securities from time to time, on or after June 15, 2000, at the following
Redemption Prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period beginning June 15 of the years indicated:
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Year Redemption Price
---- ----------------
2000......................... 105.250%
2001......................... 102.625%
2002 and thereafter.......... 100.000%
of the principal amount, plus accrued and unpaid interest (if any) to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date).
7. Notice of Redemption.
--------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder to be redeemed at such
Holder's last address as it appears in the Security Register. Securities in
original denominations larger than $1,000 may be redeemed in part. On the
Redemption Date, interest ceases to accrue on Securities or portions of
Securities called for redemption, unless the Company defaults in the payment of
the Redemption Price.
8. Denominations; Transfer; Exchange.
---------------------------------
If this Series B Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the transfer
of this Series B Security is registrable on the Security Register of the
Company, upon surrender of this Series B Security for registration of transfer
at the office or agency of the Company maintained for such purpose in The City
of New York or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the Holder hereof or its attorney duly authorized in writing,
and thereupon one or more new Series B Securities, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
In addition, the Company may at any time determine not to have Series
B Securities represented in certificated form, in which event the Holder of a
Series B Security in certificated form may be required to exchange this Series B
Security for a Book-Entry Security.
If this Series B Security is a Global Security, it is exchangeable for
a Series B Security in certificated form only if (x) the Depository is at any
time unwilling or unable to continue as depository and a successor depository is
not appointed by the Company within 30 days or (y) there shall have occurred and
be continuing an Event of Default or (z) the Company may at any time determine
not to have Series B Securities represented by a Global Security. In addition,
in accordance with the provisions of the
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Indenture and subject to certain limitations therein set forth, an owner of a
beneficial interest in a Global Security which is a Series B Security may
request a Series B Security in certificated form, in exchange in whole or in
part, as the case may be, for such beneficial owner's interest in the Global
Security. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery in certificated form of Series B
Securities in authorized denominations equal in aggregate principal amount to
such beneficial interest and to have such Series B Securities registered in its
name.
Series B Securities in certificated form 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 foth, the Series B 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 Series B Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
9. Rule 144A Information.
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the written request of a Holders of a Series B Security,
the Company will promptly furnish or cause to be furnished such information as
is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) to such Holder or to a prospective purchaser of
such Series B Security who such Holder informs the Company is reasonably
believed to be a "Qualified Institutional Buyer" within the meaning of Rule 144A
under the Securities Act designated by such Holders, as the case may be, in
order to permit compliance by such Holder with Rule 144A under the Securities
Act.
10. Persons Deemed Owners.
A Holder may be treated as the owner of a Security for all purposes.
11. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
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12. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Securities (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Securities, except in
certain circumstances for certain sections thereof, and (b) to the Stated
Maturity, the Company will be discharged from certain covenants set forth in the
Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities then outstanding, and any
existing default or compliance with any provision may be waived with the consent
of the Holders of a majority in aggregate principal amount of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Securities in addition to or in place of certificated Securities and make any
change that does not adversely affect the rights of any Holder.
14. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to pay dividends, create Liens, enter into sale-
leaseback transactions, sell assets, engage in transactions with Affiliates or
incur Indebtedness. At the end of each fiscal year, the Company must report to
the Trustee on compliance with such limitations.
15. Successor Corporations.
When a successor person or other entity assumes all the obligations of
its predecessor under the Securities and the Indenture, the predecessor person
will be released from those obligations.
16. Defaults and Remedies.
An Event of Default is: a default in payment of principal of or
premium, if any, on the Securities; default in the payment of interest on the
Securities for 30 days; failure by the Company for 30 days after notice to it to
comply with any of its other agreements in the Indenture; certain events of
bankruptcy or insolvency; certain final judgments which remain undischarged; and
certain events of default on other Indebtedness of the Company and/or one or
more of its Significant Subsidiaries.
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If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable. If a
bankruptcy or insolvency default with respect to the Company occurs and is
continuing, the Securities automatically become due and payable. Holders may
not enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of at
least a majority in principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator as such,
past, present or future, of the Company or any successor corporation shall have
any liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
20. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Terra
Industries Inc., 600 Fourth Street, Terra Centre, Sioux City, Iowa 51101,
Attention: Chief Financial Officer.
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I or we assign and transfer this Security to:
- --------------------------------------------
Please insert social security or other identifying number of assignee
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Print or type name, address and zip code of assignee and irrevocably
appoint________________________________________________________________
[Agent], to transfer this Security on the books of the Company. The Agent may
substitute another to act for him.
Dated ____________________ Signed ______________________
________________________________________________________________________
(Sign exactly as name appears on the other side of this Security)
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OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 4.10 or Section 4.11, as applicable, of the Indenture, check the Box:
[ ].
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 4.10 or Section 4.11 as applicable, of the
Indenture, state the amount (in original principal amount):
$ _______________.
Date: ___________________ Your Signature: _____________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: __________________________________
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APPENDIX I
FORM OF TRANSFEREE CERTIFICATE
Date:
------------------
TERRA INDUSTRIES INC.
c/o First National Trust Assocition
First Trust Center
180 East 5th Street, Suite 200
St. Paul, MN 55101
Dear Sirs:
I. We hereby request that $ aggregate principal amount of
10 1/2% Senior Notes due 2005, Series A (the "Notes") of Terra Industries Inc.
(the "Company"), be registered in the name set forth below and confirm that
either:
A. For Transfers Other Than to Qualified Institutional Buyers:
[Check One]
[_] (1) each person in whose name the Notes are to be registered
upon transfer (or, in the case of a transfer to a nominee, each
beneficial owner of such Notes) has been advised that such Notes have
been sold or transferred to it in reliance upon Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and the
address of the person in whose name the Notes are to be registered
upon transfer is an address outside the United States (as defined in
Regulation S) and such person is not a U.S. Person (as defined in
Regulation S).
[_] (2) the new beneficial owner is an institutional investor and
an "accredited investor" (as defined in Regulation D under the
Securities Act) that is acquiring the Notes for investment purposes
and not for distribution; it has such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of its investment in the Notes, and it and any
accounts for which it is acting are each able to bear the economic
risk or its investment; and it is acquiring the Notes purchased by its
for its own account or for one or more accounts as to each of which it
exercises sole investment discretion.
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If this letter is being completed by a prospective purchaser, the
undersigned purchaser confirms that the Notes will only be transferred in
accordance with the provisions of the Indenture, dated as of , 1995,
between Terra Industries Inc. and First Trust National Association, as Trustee,
pursuant to which the Notes were issued, and the legend on the Notes, and
further, that it understands that, in connection with any such transfer, the
Company and the Trustee may request, and if so requested the undersigned
purchaser will furnish, such certificates and other information as may be
required to confirm that any such transfer complies with the restrictions set
forth therein.
B. For Transfers to Qualified Institutional Buyers:
[_] The Notes are being transferred to a "Qualified Institutional Buyer" (as
defined in Rule 144A under the Securities Act), which person has been advised
that the Notes have been sold or transferred to it in reliance upon Rule 144A,
and such person wishes the Trustee to arrange for such Notes to be represented
by a beneficial interest in a global security and held in book-entry form in
accordance with the customary procedures of The Depository Trust Company.
II. The Notes should be registered as follows (unless the box under
I.B above is checked):
Name:
Address:
Tax Identification Number:
Physical Location of Notes (including address):
Contact:
III. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
By:
-----------------------------------
Title:
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