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TABLE OF CONTENTS Exhibit 4.1
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions............................................6
ARTICLE TWO
THE SECURITIES
SECTION 2.01 Form and Dating.......................................29
SECTION 2.02 Execution and Authentication..........................30
SECTION 2.03 Registrar and Paying Agent............................31
SECTION 2.04 Paying Agent To Hold Assets in Trust..................31
SECTION 2.05 Securityholder Lists..................................32
SECTION 2.06 Transfer and Exchange.................................32
SECTION 2.07 Replacement Securities................................33
SECTION 2.08 Outstanding Securities................................33
SECTION 2.09 Treasury Securities...................................33
SECTION 2.10 Temporary Securities..................................34
SECTION 2.11 Cancellation..........................................34
SECTION 2.12 Defaulted Interest....................................34
SECTION 2.13 CUSIP Number..........................................35
SECTION 2.14 Deposit of Moneys.....................................35
SECTION 2.15 Book-Entry Provisions for Global Securities...........35
SECTION 2.16 Registration of Transfers and Exchanges...............36
ARTICLE THREE
REDEMPTION
SECTION 3.01 Notices to Trustee....................................40
SECTION 3.02 Selection of Securities To Be Redeemed................40
SECTION 3.03 Notice of Redemption..................................41
SECTION 3.04 Effect of Notice of Redemption........................42
SECTION 3.05 Deposit of Redemption Price...........................42
SECTION 3.06 Securities Redeemed in Part...........................42
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ARTICLE FOUR
COVENANTS
SECTION 4.01 Payment of Securities.................................43
SECTION 4.02 Maintenance of Office or Agency.......................43
SECTION 4.03 Transactions with Affiliates..........................43
SECTION 4.04 Limitation on Indebtedness............................44
SECTION 4.05 Disposition of Proceeds of Asset Sales................46
SECTION 4.06 Limitation on Restricted Payments.....................48
SECTION 4.07 Corporate Existence...................................51
SECTION 4.08 Payment of Taxes and Other Claims.....................51
SECTION 4.09 Notice of Defaults....................................52
SECTION 4.10 Maintenance of Properties and Insurance...............52
SECTION 4.11 Compliance Certificate................................52
SECTION 4.12 Provision of Financial Information....................53
SECTION 4.13 Waiver of Stay, Extension or Usury Laws...............54
SECTION 4.14 Change of Control.....................................54
SECTION 4.15 Limitation on Layering................................55
SECTION 4.16 Limitations on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries........55
SECTION 4.17 Designation of Unrestricted Subsidiaries..............56
SECTION 4.18 Limitation on Liens...................................57
SECTION 4.19 Guaranty of Notes by Restricted Subsidiaries..........57
SECTION 4.20 Limitation on the Sale or Issuance of Preferred
Equity Interests of Restricted Subsidiaries...........58
SECTION 4.21 Limitation on Lines of Business.......................58
SECTION 4.22 Payments for Consent..................................58
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01 Mergers, Sale of Assets, etc..........................59
SECTION 5.02 Successor Corporation Substituted.....................60
ARTICLE SIX
DEFAULT AND REMEDIES
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SECTION 6.01 Events of Default.....................................60
SECTION 6.02 Acceleration..........................................62
SECTION 6.03 Other Remedies........................................63
SECTION 6.04 Waiver of Past Default................................63
SECTION 6.05 Control by Majority...................................64
SECTION 6.06 Limitation on Suits...................................64
SECTION 6.07 Rights of Holders To Receive Payment..................64
SECTION 6.08 Collection Suit by Trustee............................65
SECTION 6.09 Trustee May File Proofs of Claim......................65
SECTION 6.10 Priorities............................................65
SECTION 6.11 Undertaking for Costs.................................66
ARTICLE SEVEN
TRUSTEE
SECTION 7.01 Duties of Trustee.....................................66
SECTION 7.02 Rights of Trustee.....................................67
SECTION 7.03 Individual Rights of Trustee..........................68
SECTION 7.04 Trustee's Disclaimer..................................68
SECTION 7.05 Notice of Defaults....................................69
SECTION 7.06 Reports by Trustee to Holders.........................69
SECTION 7.07 Compensation and Indemnity............................69
SECTION 7.08 Replacement of Trustee................................70
SECTION 7.09 Successor Trustee by Merger, etc......................71
SECTION 7.10 Eligibility; Disqualification.........................71
SECTION 7.11 Preferential Collection of Claims Against Company.....72
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01 Securities Subordinated to Senior Indebtedness........72
SECTION 8.02 No Payment on Securities in Certain Circumstances.....72
SECTION 8.03 Payment Over of Proceeds upon Dissolution, etc........73
SECTION 8.04 Subrogation...........................................75
SECTION 8.05 Obligations of Company Unconditional..................75
SECTION 8.06 Notice to Trustee.....................................76
SECTION 8.07 Reliance on Judicial Order or Certificate of
Liquidating Agent.....................................76
SECTION 8.08 Trustee's Relation to Senior Indebtedness.............77
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SECTION 8.09 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Indebtedness..........................................77
SECTION 8.10 Securityholders Authorize Trustee To Effectuate
Subordination of Securities...........................77
SECTION 8.11 This Article Not To Prevent Events of Default.........78
SECTION 8.12 Trustee's Compensation Not Prejudiced.................78
SECTION 8.13 No Waiver of Subordination Provisions.................78
SECTION 8.14 Subordination Provisions Not Applicable to Money
Held in Trust for Securityholders; Payments May
Be Paid Prior to Dissolution..........................78
SECTION 8.15 Acceleration of Securities............................79
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01 Termination of Company's Obligations..................79
SECTION 9.02 Application of Trust Money............................80
SECTION 9.03 Repayment to Company..................................80
SECTION 9.04 Reinstatement.........................................81
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01 Without Consent of Holders............................81
SECTION 10.02 With Consent of Holders...............................82
SECTION 10.03 Compliance with Trust Indenture Act...................84
SECTION 10.04 Revocation and Effect of Consents.....................84
SECTION 10.05 Notation on or Exchange of Securities.................84
SECTION 10.06 Trustee To Sign Amendments, etc.......................85
ARTICLE ELEVEN
GUARANTY
SECTION 11.01 Unconditional Guaranty................................85
SECTION 11.02 Severability..........................................86
SECTION 11.03 Release of a Guarantor................................86
SECTION 11.04 Limitation of Guarantor's Liability...................86
SECTION 11.05 Contribution..........................................87
SECTION 11.06 Execution of Security Guaranty........................87
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SECTION 11.07 Subordination of Subrogation and Other Rights.........87
ARTICLE TWELVE
SUBORDINATION OF GUARANTY
SECTION 12.01 Guaranty Obligations Subordinated to Guarantor
Senior Indebtedness...................................88
SECTION 12.02 Payment Over of Proceeds upon Dissolution, etc........88
SECTION 12.03 Subrogation...........................................89
SECTION 12.04 Obligations of Guarantors Unconditional...............90
SECTION 12.05 Notice to Trustee.....................................90
SECTION 12.06 Reliance on Judicial Order or Certificate of
Liquidating Agent.....................................91
SECTION 12.07 Trustee's Relation to Guarantor Senior Indebtedness...91
SECTION 12.08 Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor
Senior Indebtedness...................................92
SECTION 12.09 Securityholders Authorize Trustee To Effectuate
Subordination of Guaranty.............................92
SECTION 12.10 This Article Not To Prevent Events of Default.........92
SECTION 12.11 Trustee's Compensation Not Prejudiced.................92
SECTION 12.12 No Waiver of Guaranty Subordination Provisions........93
SECTION 12.13 Payments May Be Paid Prior to Dissolution.............93
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls..........................93
SECTION 13.02 Notices...............................................94
SECTION 13.03 Communications by Holders with Other Holders..........95
SECTION 13.04 Certificate and Opinion as to Conditions Precedent....95
SECTION 13.06 Rules by Trustee, Paying Agent, Registrar.............96
SECTION 13.07 Governing Law.........................................96
SECTION 13.08 No Recourse Against Others............................96
SECTION 13.09 Successors............................................96
SECTION 13.10 Counterpart Originals.................................96
SECTION 13.11 Severability..........................................96
SECTION 13.12 No Adverse Interpretation of Other Agreements.........96
SECTION 13.13 Legal Holidays........................................97
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INDENTURE dated as of August 1, 1997, among SOVEREIGN SPECIALTY
CHEMICALS, INC., a Delaware corporation (the "Company"), the GUARANTORS named
herein and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the
"Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Accounts Receivable Subsidiary" means any Subsidiary of the
Company that is, directly or indirectly, wholly owned by the Company (other than
director qualifying shares) and organized solely for the purpose of and engaged
in (i) purchasing, financing and collecting accounts receivable obligations of
customers of the Company or its Subsidiaries, (ii) the sale or financing of such
accounts receivable or interest therein and (iii) other activities incident
thereto.
"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an Acquisition from such Person or (b) existing at
the time such Person becomes a Restricted Subsidiary or is merged or
consolidated with or into the Company or any Restricted Subsidiary.
"Acquired Person" means, with respect to any specified Person,
any other Person which merges with or into or becomes a Subsidiary of such
specified Person.
"Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary to any other Person, or any acquisition or purchase of
Equity Interests of any other Person by the Company or any Restricted
Subsidiary, in either case pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated with or merged into the Company
or any Restricted Subsidiary or (ii) any acquisition by the Company or any
Restricted Subsidiary of the assets of any Person which constitute substantially
all of an operating unit or line of business of such Person or which is
otherwise outside of the ordinary course of business.
"Additional Interest" has the meaning provided in Section 4(a) of
the Registration Rights Agreement.
"Affiliate" of any specified person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction
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of the management or policies of such Person, whether through the ownership of
voting securities, by agreement or otherwise; provided, however, that (i)
beneficial ownership of 15.0% or more of the then outstanding Equity Interests
of a Person shall be deemed to be control for purposes of Section 4.03; and (ii)
no individual, other than a director of the Company or an officer of the Company
with a policy making function, shall be deemed an Affiliate of the Company or
any of its Subsidiaries, solely by reason of such individual's employment,
position or responsibilities by or with respect to the Company or any of its
Subsidiaries.
"Affiliate Transaction" see Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Company or a Wholly Owned Restricted
Subsidiary, in one transaction or a series of related transactions, of (i) any
Equity Interest of any Restricted Subsidiary; (ii) any material license,
franchise or other authorization of the Company or any Restricted Subsidiary;
(iii) any assets of the Company or any Restricted Subsidiary which constitute
substantially all of an operating unit or line of business of the Company or any
Restricted Subsidiary; or (iv) any other property or asset of the Company or any
Restricted Subsidiary outside of the ordinary course of business (including the
receipt of proceeds paid on account of the loss of or damage to any property or
asset and awards of compensation for any asset taken by condemnation, eminent
domain or similar proceedings). For the purposes of this definition, the term
"Asset Sale" shall not include (a) any transaction consummated in compliance
with Section 5.01 and the creation of any Lien not prohibited by Section 4.18;
provided, however, that any transaction consummated in compliance with Section
5.01 involving a sale, conveyance, assignment, transfer, lease or other disposal
of less than all of the properties or assets of the Company shall be deemed to
be an Asset Sale with respect to the properties or assets of the Company and the
Restricted Subsidiaries that are not so sold, conveyed, assigned, transferred,
leased or otherwise disposed of in such transaction; (b) sales of property or
equipment that has become worn out, obsolete or damaged or otherwise unsuitable
for use in connection with the business of the Company or any Restricted
Subsidiary; (c) any transaction consummated in compliance with Section 4.06; (d)
sales of accounts receivable for cash at Fair Market Value; and (e) any sale,
conveyance or transfer of accounts receivable in the ordinary course of business
to an Accounts Receivable Subsidiary or to third parties that are not Affiliates
of the Company or any Subsidiary of the Company.
"Bankruptcy Law" see Section 6.01.
"Board of Directors" means the Board of Directors of the Company
or any Guarantor, as the case may be, or any authorized committee of such Board
of Directors.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
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"Business Day" means a day that is not a Saturday, a Sunday or a
day on which banking institutions in New York, New York are not required to be
open.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Cash Equivalents" means: (a) U.S. dollars and any other currency
that is convertible into U.S. dollars without legal restrictions and which is
utilized by the Company or any of the Restricted Subsidiaries in the ordinary
course of its business; (b) securities issued or directly and fully guarantied
or insured by the U.S. government or any agency or instrumentality thereof
having maturities of not more than six months from the date of acquisition; (c)
certificates of deposit and time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
six months and overnight bank deposits, in each case with any commercial bank
having capital and surplus in excess of $500.0 million (or the foreign currency
equivalent thereof); (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (b) and
(c) above entered into with any financial institution meeting the qualifications
specified in clause (c) above; and (e) commercial paper rated P-1, A-1 or the
equivalent thereof by Moody's Investors Service, Inc. or Standard & Poor's
Corporation, respectively, and in each case maturing within six months after the
date of acquisition.
"Change of Control" means the occurrence of any of the following
events (whether or not approved by the Board of Directors of the Company): (i)
any Person (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than one or more Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
shares that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon the happening of
an event or otherwise), directly or indirectly, of more than 35% of the total
voting power of the then outstanding Voting Equity Interests of the Company or,
so long as Holdings owns a majority of the Voting Equity Interests of the
Company, Holdings (or, for so long as Holdings is a partnership, its general
partner); provided, however, that the Permitted Holders beneficially own (as
defined above), directly or indirectly, in the aggregate a lesser percentage of
the total voting power of the then outstanding Voting Equity Interests of the
Company, Holdings or such general partner, as the case may be, than such other
Person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of the Company; (ii) the Company consolidates with, or merges with or
into, another Person (other than a Guarantor which is a Wholly Owned Restricted
Subsidiary) or the Company or the Restricted Subsidiaries sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of the assets
of the Company and the Restricted Subsidiaries (determined on a consolidated
basis) to any Person (other than the Company or a Guarantor which is a Wholly
Owned Restricted Subsidiary), other than any such transaction where immediately
after such transaction the Person or Persons that "beneficially
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owned" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) immediately prior to such
transaction, directly or indirectly, the then outstanding Voting Equity
Interests of the Company "beneficially own" (as so determined), directly or
indirectly, a majority of the total voting power of the then outstanding Voting
Equity Interests of the surviving or transferee Person; or (iii) following the
first public offering of Voting Equity Interests of the Company, during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of the directors of the Company then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office.
"Change of Control Date" see Section 4.14.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President or its Treasurer, and by
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of Consolidated EBITDA for the four
quarter period of the most recent four consecutive fiscal quarters ending prior
to the date of such determination (the "Four Quarter Period") to (ii)
Consolidated Interest Expense for such Four Quarter Period; provided, however,
that (1) if the Company or any Restricted Subsidiary has incurred any
Indebtedness since the beginning of such Four Quarter Period that remains
outstanding on such date of determination or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such
Four Quarter Period shall be calculated after giving effect on a pro forma basis
to such Indebtedness as if such Indebtedness had been Incurred on the first day
of such Four Quarter Period and the discharge of any other Indebtedness repaid,
repurchased or otherwise discharged with the proceeds of such new Indebtedness
as if such discharge had occurred on the first day of such Four Quarter Period,
(2) if since the beginning of such Four Quarter Period the Company or any
Restricted Subsidiary shall have made any Asset Sale, the Consolidated EBITDA
for such Four Quarter Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) directly attributable to the assets that are
the subject of such Asset Sale for such Four Quarter Period or increased by an
amount equal to the Consolidated EBITDA (if negative) directly attributable
thereto for such Four Quarter Period and Consolidated Interest Expense for such
Four Quarter Period shall be reduced by an amount equal to
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the Consolidated Interest Expense directly attributable to any Indebtedness of
the Company or any Restricted Subsidiary repaid, repurchased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Sale for such Four Quarter Period
(or, if the Equity Interests of any Restricted Subsidiary are sold, the
Consolidated Interest Expense for such Four Quarter Period directly attributable
to the Indebtedness of such Restricted Subsidiary to the extent the Company and
its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale), (3) if since the beginning of such Four Quarter
Period the Company or any Restricted Subsidiary (by merger or otherwise) shall
have made an Investment in any Restricted Subsidiary (or any Person that becomes
a Restricted Subsidiary) or an acquisition of assets, including any acquisition
of assets occurring in connection with a transaction causing a calculation to be
made hereunder, which constitutes all or substantially all of an operating unit
of a business, Consolidated EBITDA and Consolidated Interest Expense for such
Four Quarter Period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such Four Quarter Period and (4) if
since the beginning of such Four Quarter Period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such Four Quarter Period) shall
have made any Asset Sale or any Investment or acquisition of assets that would
have required an adjustment pursuant to clause (2) or (3) above if made by the
Company or a Restricted Subsidiary during such Four Quarter Period, Consolidated
EBITDA and Consolidated Interest Expense for such Four Quarter Period shall be
calculated after giving pro forma effect thereto as if such Asset Sale,
Investment or acquisition of assets occurred on, with respect to any Investment
or acquisition, the first day of such Four Quarter Period and, with respect to
any Asset Sale, the day prior to the first day of such Four Quarter Period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings and any cost savings
relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness Incurred in connection therewith, the pro forma calculations
shall be determined in good faith by a responsible financial or accounting
officer of the Company. If any Indebtedness bears a floating rate of interest
and is being given pro forma effect, the interest expense on such Indebtedness
shall be calculated as if the rate in effect on the date of determination had
been the applicable rate for the entire period (taking into account any
agreement under which Hedging Obligations relating to interest are outstanding
applicable to such Indebtedness if such agreement under which such Hedging
Obligations are outstanding has a remaining term as at the date of determination
in excess of 12 months).
"Consolidated EBITDA" means, for any period, the Consolidated Net
Income for such period, minus any non-cash item increasing Consolidated Net
Income during such period, plus the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Income Tax Expense
for such period; (ii) Consolidated Interest Expense for such period; (iii)
depreciation expense for such period; (iv) amortization expense for such period;
and (v) all other non-cash items reducing Consolidated Net Income for such
period (other than any non-cash item requiring an accrual or a reserve for cash
disbursements in any future period).
"Consolidated Income Tax Expense" means, with respect to the
Company for any period, the provision for Federal, state, local and foreign
income taxes payable by the Company and
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the Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the
Company for any period, without duplication, the sum of (i) the interest expense
of the Company and the Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP, including, without limitation, (a)
any amortization of debt discount, (b) the net cost under Hedging Obligations
relating to interest (including any amortization of discounts), (c) the interest
portion of any deferred payment obligation, (d) all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and (e) all capitalized interest and all accrued interest,
(ii) the interest component of Capital Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by the Company and the Restricted Subsidiaries
during such period as determined on a consolidated basis in accordance with GAAP
and (iii) dividends and distributions in respect of Disqualified Equity
Interests of the Company during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the consolidated
net income (loss) of the Company and the Restricted Subsidiaries; provided,
however, that there shall not be included in such Consolidated Net Income: (i)
any net income (loss) of any Person if such person is not a Restricted
Subsidiary, except that (A) subject to the limitations contained in clause (iv)
below, the Company's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (B) the Company's equity in a
net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income; (ii) any
net income (loss) of any person acquired by the Company or a Restricted
Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition; (iii) any net income (loss) of any Restricted
Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company except that (A)
subject to the limitations contained in (iv) below, the Company's equity in the
net income of any such Restricted Subsidiary for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash that could
have been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend (subject, in the case of
a dividend that could have been made to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the Company's equity in a net loss
of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income; (iv) any gain or loss realized upon
the sale or other disposition of any asset of the Company or the Restricted
Subsidiaries (including pursuant to any sale/leaseback transaction) that is not
sold or otherwise disposed of in the ordinary course of business and any gain or
loss realized upon the sale or other disposition of any Equity Interests of any
Person; (v) any extraordinary gain or loss; and (vi) the cumulative effect of a
change in accounting principles.
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"Consolidated Net Worth" of the Company means the stockholders'
equity of the Company and the Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP, less amounts attributed to
Disqualified Equity Interests.
"Corporate Trust Office of the Trustee" shall be at the address
of the Trustee specified in Section 13.02 or such other address as the Trustee
may give notice to the Company.
"Custodian" see Section 6.01.
"Default" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"Defeasance Trust Payment" see Section 8.01.
"Depository" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness" means (a) any Indebtedness
outstanding under the Senior Credit Facility and (b) any other Senior
Indebtedness which, at the time of determination, has an aggregate principal
amount outstanding, together with any commitments to lend additional amounts, of
at least $15.0 million, if the instrument governing such Senior Indebtedness
expressly states that such Indebtedness is "Designated Senior Indebtedness" for
purposes of this Indenture and a Board Resolution setting forth such designation
by the Company has been filed with the Trustee.
"Designation" see Section 4.17.
"Designation Amount" see Section 4.17.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" means any Equity Interest which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable, at the option of the holder
thereof, in whole or in part, or exchangeable into Indebtedness on or prior to
the Final Maturity Date.
"Equity Interest" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or
limited, in such Person, including any Preferred Equity Interests.
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13
"Event of Default" see Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 9 1/2% Senior Subordinated Notes
due 2007, Series B, to be issued in exchange for the Initial Securities pursuant
to the Registration Rights Agreement.
"Existing Indebtedness" means any Indebtedness of the Company and
the Restricted Subsidiaries in existence on the Issue Date until such amounts
are repaid.
"Expiration Date" has the meaning set forth in the definition of
"Offer to Purchase" below.
"Fair Market Value" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, however, that the Fair Market
Value of any such asset or assets shall be determined conclusively by the Board
of Directors of the Company acting in good faith, and shall be evidenced by
resolutions of the Board of Directors of the Company delivered to the Trustee.
"Final Maturity Date" means August 1, 2007.
"Foreign Subsidiary" means any Restricted Subsidiary of the
Company that is not organized under the laws of the United States of America or
any state thereof or the District of Columbia.
"Four Quarter Period" has the meaning set forth in the definition
of "Consolidated Coverage Ratio" above.
"Funding Guarantor" see Section 11.05.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States which are applicable at the
date of determination and which are consistently applied for all applicable
periods.
"Global Securities" means one or more IAI Global Securities and
144A Global Securities.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
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14
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guarantee shall include,
without limitation, any agreement to maintain or preserve any other Person's
financial condition or to cause any other Person to achieve certain levels of
operating results.
"Guarantor" means (i) each of the Subsidiaries of the Company
(other than Foreign Subsidiaries) as of the Issue Date and their respective
successors, and (ii) each other Restricted Subsidiary, formed, created or
acquired before or after the Issue Date, required to become a Guarantor after
the Issue Date pursuant to Section 4.19.
"Guarantor Senior Indebtedness" means, with respect to any
Guarantor, at any date, (a) all Obligations of such Guarantor under the Senior
Credit Facility; (b) all Hedging Obligations of such Guarantor; (c) all
Obligations of such Guarantor under stand-by letters of credit; and (d) all
other Indebtedness of such Guarantor for borrowed money, including principal,
premium, if any, and interest (including Post-Petition Interest) on such
Indebtedness unless the instrument under which such Indebtedness of such
Guarantor for money borrowed is Incurred expressly provides that such
Indebtedness for money borrowed is not senior or superior in right of payment to
such Guarantor's Guaranty of the Securities, and all renewals, extensions,
modifications, amendments or refinancings thereof. Notwithstanding the
foregoing, Guarantor Senior Indebtedness shall not include (a) to the extent
that it may constitute Indebtedness, any Obligation for Federal, state, local or
other taxes; (b) any Indebtedness among or between such Guarantor and any
Subsidiary of such Guarantor; (c) to the extent that it may constitute
Indebtedness, any Obligation in respect of any trade payable Incurred for the
purchase of goods or materials, or for services obtained, in the ordinary course
of business; (d) Indebtedness evidenced by such Guarantor's Guaranty; (e)
Indebtedness of such Guarantor that is expressly subordinate or junior in right
of payment to any other Indebtedness of such Guarantor; (f) to the extent that
it may constitute Indebtedness, any obligation owing under leases (other than
Capitalized Lease Obligations) or management agreements; and (g) any obligation
that by operation of law is subordinate to any general unsecured obligations of
such Guarantor.
"guaranty" means, as applied to any obligation, (i) a guaranty
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guaranty shall include,
without limitation, any agreement to maintain or preserve any other Person's
financial condition or to cause any other Person to achieve certain levels of
operating results.
"Guaranty" or "Security Guarantee" see Section 11.01.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar
- 14 -
15
agreements, (ii) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates and (iii) foreign currency or
chemical commodity hedge, exchange or similar protection agreements (agreements
referred to in this definition being referred to herein as "Hedging
Agreements").
"Holders" means the registered holder of any Security.
"Holdings" means Sovereign Specialty Chemicals, L.P., a Delaware
limited partnership, and its successors.
"IAI Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
to Institutional Accredited Investors.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guaranty or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall
have meanings correlative to the foregoing). Indebtedness of any Acquired Person
or any of its Subsidiaries existing at the time such Acquired Person becomes a
Restricted Subsidiary (or is merged into or consolidated with the Company or any
Restricted Subsidiary), whether or not such Indebtedness was Incurred in
connection with, as a result of, or in contemplation of, such Acquired Person
becoming a Restricted Subsidiary (or being merged into or consolidated with the
Company or any Restricted Subsidiary), shall be deemed Incurred at the time any
such Acquired Person becomes a Restricted Subsidiary or merges into or
consolidates with the Company or any Restricted Subsidiary.
"Indebtedness" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (a) every obligation of such Person for money
borrowed; (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (c) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (d)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding (x) earnout or other similar obligations
until such time as the amount of such obligation is capable of being determined,
(y) trade accounts payable incurred in the ordinary course of business and
payable in accordance with industry practices, or (z) other accrued liabilities
arising in the ordinary course of business which are not overdue or which are
being contested in good faith); (e) every Capital Lease Obligation of such
Person; (f) every net obligation under Hedging Agreements of such Person; (g)
every obligation of the type referred to in clauses (a) through (f) of another
Person and all dividends of another Person the payment of which, in either case,
such Person has guarantied or is responsible or liable for, directly or
indirectly, as obligor, guarantor or otherwise; and (h) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (a) through (g) above. Indebtedness (a) shall never
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16
be calculated taking into account any cash and Cash Equivalents held by such
Person; (b) shall not include obligations of any Person (x) arising from the
honoring by a bank or other financial institution of a check, draft or similar
instrument inadvertently drawn against insufficient funds in the ordinary course
of business, provided that such obligations are extinguished within two Business
Days of their incurrence, (y) resulting from the endorsement of negotiable
instruments for collection in the ordinary course of business and consistent
with past business practices and (z) under stand-by letters of credit to the
extent collateralized by cash or Cash Equivalents; (c) which provides that an
amount less than the principal amount thereof shall be due upon any declaration
of acceleration thereof shall be deemed to be incurred or outstanding in an
amount equal to the accreted value thereof at the date of determination; (d)
shall include the liquidation preference and any mandatory redemption payment
obligations in respect of any Disqualified Equity Interests of the Company or
any Restricted Subsidiary; and (e) shall not include obligations under
performance bonds, performance guaranties, surety bonds and appeal bonds,
letters of credit or similar obligations, incurred in the ordinary course of
business. For purposes of determining compliance with any U.S. dollar-
denominated restriction on the Incurrence of Indebtedness denominated in a
foreign currency, the U.S. dollar-equivalent principal amount of such
Indebtedness Incurred pursuant thereto shall be calculated based on the relevant
currency exchange rate in effect on the date that such Indebtedness was Incurred
if such Indebtedness is Incurred to refinance other Indebtedness denominated in
a foreign currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced. The principal amount of
any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a
different currency from the Indebtedness being refinanced, shall be calculated
based on the currency exchange rate applicable to the currencies in which such
respective Indebtedness is denominated that is in effect on the date of such
refinancing.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Independent Financial Advisor" means a nationally recognized,
accounting, appraisal, investment banking firm or consultant that is, in the
judgment of the Company's Board of Directors, qualified to perform the task for
which it has been engaged (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
the Company and (ii) which, in the judgment of the Board of Directors of the
Company, is otherwise independent and qualified to perform the task for which it
is to be engaged.
"Initial Securities" means the 9 1/2% Senior Subordinated Notes
due 2007, Series A, of the Company.
"Initial Purchasers" means Chase Securities Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation.
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17
"Insolvency or Liquidation Proceeding" means, with respect to any
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"interest" means, with respect to the Securities, the sum of any
cash interest and any Additional Interest on the Securities.
"Interest Payment Date" means each semiannual interest payment
date on February 1 and August 1 of each year, commencing February 1, 1998.
"Interest Record Date" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the January
15 or July 15 (whether or not a Business Day), as the case may be, immediately
preceding such Interest Payment Date.
"Investment" means, with respect to any Person, any direct or
indirect loan, advance, guaranty or other extension of credit or capital
contribution to (by means of transfers of cash or other property or assets to
others or payments for property or services for the account or use of others, or
otherwise), or purchase or acquisition of capital stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any other
Person. The amount of any Investment shall be the original cost of such
Investment, plus the cost of all additions thereto, and minus the amount of any
portion of such Investment repaid to such Person in cash as a repayment of
principal or a return of capital, as the case may be, but without any other
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment. In determining the amount of any
Investment involving a transfer of any property or asset other than cash, such
property shall be valued at its fair market value at the time of such transfer,
as determined in good faith by the Board of Directors (or comparable body) of
the Person making such transfer.
"Issue Date" means the original issue date of the Securities,
August 5, 1997.
"Junior Subordinated Seller Note" means the $3.0 million
aggregate principal amount 8% Note due 2002 issued by Holdings to Laporte plc on
the Issue Date.
"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrance of any kind (including any
conditional sale or capital lease or other title retention agreement, any lease
in the nature thereof and any agreement to give any security interest).
"Net Cash Proceeds" means the aggregate proceeds in the form of
cash or Cash Equivalents received by the Company or any Restricted Subsidiary in
respect of any Asset Sale, including all cash or Cash Equivalents received upon
any sale, liquidation or other exchange of proceeds of Asset Sales received in a
form other than cash or Cash Equivalents, net of (a) the direct costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment
- 17 -
18
banking fees, and sales commissions) and any relocation expenses incurred as a
result thereof; (b) taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements); (c) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale; (d) amounts deemed, in good faith, appropriate by the Board of
Directors of the Company to be provided as a reserve, in accordance with GAAP,
against any liabilities associated with such assets which are the subject of
such Asset Sale (provided that the amount of any such reserves shall be deemed
to constitute Net Cash Proceeds at the time such reserves shall have been
released or are not otherwise required to be retained as a reserve); and (e)
with respect to Asset Sales by Restricted Subsidiaries, the portion of such cash
payments attributable to Persons holding a minority interest in such Restricted
Subsidiary.
"Obligations" means any principal, interest (including, without
limitation, Post-Petition Interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer to
Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent by
or on behalf of the Company by first-class mail, postage prepaid, to each holder
at his address appearing in the register for the Securities on the date of the
Offer offering to purchase up to the principal amount of Securities specified in
such Offer at the purchase price specified in such Offer (as determined pursuant
to this Indenture). Unless otherwise required by applicable law, the Offer shall
specify an expiration date (the "Expiration Date") of the Offer to Purchase,
which shall be not less than 20 Business Days nor more than 60 days after the
date of such Offer, and a settlement date (the "Purchase Date") for purchase of
Securities to occur no later than five Business Days after the Expiration Date.
The Company shall notify the Trustee at least 15 Business Days (or such shorter
period as is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be mailed
by the Company or, at the Company's request, by the Trustee in the name and at
the expense of the Company. The Offer shall contain all the information required
by applicable law to be included therein. The Offer shall also contain
information concerning the business of the Company and its Subsidiaries which
the Company in good faith believes will enable such Holders to make an informed
decision with respect to the Offer to Purchase (which at a minimum will include
(i) the most recent annual and quarterly financial statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained in the documents required to be filed with the Trustee pursuant to
this Indenture (which requirements may be satisfied by delivery of such
documents together with the Offer), (ii) a description of material developments
in the Company's business subsequent to the date of the latest of such financial
statements referred to in clause (i) (including a description of the events
requiring the Company to make the Offer to Purchase), (iii) if applicable,
appropriate pro forma financial information concerning the Offer to Purchase and
the events requiring the Company to make the Offer to Purchase and (iv) any
other information required by applicable law to be included therein). The Offer
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this
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19
Indenture pursuant to which the Offer to Purchase is being made; (2) the
Expiration Date and the Purchase Date; (3) the aggregate principal amount of the
outstanding Securities offered to be purchased by the Company pursuant to the
Offer to Purchase (including, if less than 100%, the manner by which such amount
has been determined pursuant to the Section of this Indenture requiring the
Offer to Purchase) (the "Purchase Amount"); (4) the purchase price to be paid by
the Company for each $1,000 aggregate principal amount of Securities accepted
for payment (as specified pursuant to this Indenture) (the "Purchase Price");
(5) that the Holder may tender all or any portion of the Securities registered
in the name of such Holder and that any portion of a Security tendered must be
tendered in an integral multiple of $1,000 principal amount; (6) the place or
places where Securities are to be surrendered for tender pursuant to the Offer
to Purchase; (7) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue to
accrue; (8) that on the Purchase Date the Purchase Price will become due and
payable upon each Security being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date; (9) that each Holder electing to tender all or any portion of a
Security pursuant to the Offer to Purchase will be required to surrender such
Security at the place or places specified in the Offer prior to the close of
business on the Expiration Date (such Security being, if the Company or the
Trustee so requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing); (10) that
Holders will be entitled to withdraw all or any portion of Securities tendered
if the Company (or its Paying Agent) receives, not later than the close of
business on the fifth Business Day next preceding the Expiration Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder tendered, the
certificate number of the Security the Holder tendered and a statement that such
Holder is withdrawing all or a portion of his tender; (11) that (a) if
Securities in an aggregate principal amount less than or equal to the Purchase
Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase,
the Company shall purchase all such Securities and (b) if Securities in an
aggregate principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
Securities having an aggregate principal amount equal to the Purchase Amount on
a pro rata basis (with such adjustments as may be deemed appropriate so that
only Securities in denominations of $1,000 principal amount or integral
multiples thereof shall be purchased); and (12) that in the case of any Holder
whose Security is purchased only in part, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unpurchased portion of the Security so tendered.
An Offer to Purchase shall be governed by and effected in
accordance with the provisions above pertaining to any Offer.
"Officer" means the Chairman, any Vice Chairman, the President,
any Vice President, the Chief Financial Officer, the Treasurer, or the Secretary
of the Company.
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20
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company complying with Sections 13.04 and 13.05.
"144A Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Rule 144A.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company or the Trustee.
"Pari Passu Debt" means Indebtedness of the Company or any
Guarantor that neither constitutes Senior Indebtedness or Guarantor Senior
Indebtedness, as applicable, or Subordinated Indebtedness.
"Pari Passu Debt Pro Rata Share" means the amount of the
applicable Net Cash Proceeds obtained by multiplying the amount of such Net Cash
Proceeds by a fraction, (i) the numerator of which is the aggregate accreted
value and/or principal amount, as the case may be, of all Pari Passu Debt
outstanding at the time of the applicable Asset Sale with respect to which the
Company is required to use Net Cash Proceeds to repay or make an offer to
purchase or repay and (ii) the denominator of which is the sum of (a) the
aggregate principal amount of all Securities outstanding at the time of the
applicable Asset Sale and (b) the aggregate principal amount or the aggregate
accreted value, as the case may be, of all Pari Passu Debt outstanding at the
time of the applicable Offer to Purchase with respect to which the Company is
required to use the applicable Net Cash Proceeds to offer to repay or make an
offer to purchase or repay.
"Participant" has the meaning set forth in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Payment Blockage Notice" see Section 8.02(a).
"Payment Blockage Period" see Section 8.02(a).
"Permitted Holder" means (i) First Chicago NBD Corp. and any
Person controlled by either First Chicago NBD Corp. or any of its or its
Subsidiaries' officers; (ii) Robert B. Covalt, Carol E. Bramson and Lawrence E.
Fox; and (iii) any Person controlled by any Person referred to in clause (ii) of
this definition.
"Permitted Indebtedness" see Section 4.04.
"Permitted Investments" means (a) Cash Equivalents; (b)
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) loans and advances to employees made in the ordinary
- 20 -
21
course of business not to exceed $1.0 million in the aggregate at any one time
outstanding; (d) Hedging Obligations; (e) bonds, notes, debentures or other
securities received as a result of Asset Sales permitted under Section 4.05 not
to exceed 20% of the total consideration for such Asset Sales and any "earn out"
or similar right permitted under Section 4.05; (f) transactions with officers,
directors and employees of the Company or any Restricted Subsidiary entered into
in the ordinary course of business (including compensation or employee benefit
arrangements with any such director or employee) and consistent with past
business practices; (g) Investments existing as of the Issue Date and any
amendment, extension, renewal or modification thereof to the extent that any
such amendment, extension, renewal or modification does not require the Company
or any Restricted Subsidiary to make any additional cash or non-cash payments or
provide additional services in connection therewith; (h) any Investment to the
extent that the consideration therefor consists of Qualified Equity Interests of
the Company; (i) any Investment consisting of a guaranty by a Guarantor of
Senior Indebtedness or any guaranty permitted under clause (e) of the second
paragraph of Section 4.04; (j) Investments in Persons primarily engaged in a
Related Business in an aggregate amount not to exceed $10.0 million; provided
that the Company and/or the Restricted Subsidiaries own at least one-third of
the outstanding Voting Equity Interests of each such Person; and (k) Investments
in the form of the sale (on a "true sale" non-recourse basis) or the servicing
of receivables transferred from the Company or any Restricted Subsidiary, or
transfers of cash, to an Accounts Receivable Subsidiary as a capital
contribution or in exchange for Indebtedness of such Accounts Receivable
Subsidiary or cash, in each case in the ordinary course of business.
"Permitted Junior Securities" means any securities of the Company
or any other Person that are (i) equity securities without special covenants or
(ii) subordinated in right of payment to all Senior Indebtedness that may at the
time be outstanding, to substantially the same extent as, or to a greater extent
than, the Securities are subordinated as provided in the Indenture, in any event
pursuant to a court order so providing and as to which (a) the rate of interest
on such securities shall not exceed the effective rate of interest on the
Securities on the date of the Indenture, (b) such securities shall not be
entitled to the benefits of covenants or defaults materially more beneficial to
the holders of such securities than those in effect with respect to the
Securities on the Issue Date and (c) such securities shall not provide for
amortization (including sinking fund and mandatory prepayment provisions)
commencing prior to the date six months following the final scheduled maturity
date of the Senior Indebtedness (as modified by the plan of reorganization of
readjustment pursuant to which such securities are issued).
"Permitted Liens" means (a) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the Company
or any Restricted Subsidiary; provided, however, that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not
secure any property or assets of the Company or any Restricted Subsidiary other
than the property or assets subject to the Liens prior to such merger or
consolidation; (b) Liens imposed by law such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith and by appropriate proceedings; (c)
Liens existing on the Issue Date; (d) Liens securing only the Securities; (e)
Liens in favor of the Company or any Restricted Subsidiary; (f) Liens for taxes,
assessments or governmental charges or claims that
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22
are not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded; provided, however,
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (g) easements, reservation
of rights of way, restrictions and other similar easements, licenses,
restrictions on the use of properties, or minor imperfections of title that in
the aggregate are not material in amount and do not in any case materially
detract from the properties subject thereto or interfere with the ordinary
conduct of the business of the Company and the Restricted Subsidiaries; (h)
Liens resulting from the deposit of cash or notes in connection with contracts,
tenders or expropriation proceedings, or to secure workers' compensation, surety
or appeal bonds, costs of litigation when required by law and public and
statutory obligations or obligations under franchise arrangements entered into
in the ordinary course of business; (i) Liens securing Indebtedness consisting
of Capitalized Lease Obligations, Purchase Money Indebtedness, mortgage
financings, industrial revenue bonds or other monetary obligations, in each case
incurred solely for the purpose of financing all or any part of the purchase
price or cost of construction or installation of assets used in the business of
the Company or the Restricted Subsidiaries, or repairs, additions or
improvements to such assets, provided, however, that (I) such Liens secure
Indebtedness in an amount not in excess of the original purchase price or the
original cost of any such assets or repair, addition or improvement thereto
(plus an amount equal to the reasonable fees and expenses in connection with the
incurrence of such Indebtedness), (II) such Liens do not extend to any other
assets of the Company or the Restricted Subsidiaries (and, in the case of
repair, addition or improvements to any such assets, such Lien extends only to
the assets (and improvements thereto or thereon) repaired, added to or
improved), (III) the Incurrence of such Indebtedness is permitted by Section
4.04 and (IV) such Liens attach within 90 days of such purchase, construction,
installation, repair, addition or improvement; (j) Liens to secure any
refinancings, renewals, extensions, modifications or replacements (collectively,
"refinancing") (or successive refinancings), in whole or in part, of any
Indebtedness secured by Liens referred to in the clauses above so long as such
Lien does not extend to any other property (other than improvements thereto);
(k) Liens securing letters of credit entered into in the ordinary course of
business and consistent with past business practice; and (l) Liens on and
pledges of the Equity Interests of any Unrestricted Subsidiary securing any
Indebtedness of such Unrestricted Subsidiary.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability limited partnership, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Physical Securities" means one or more certificated Securities
in registered form.
"Post-Petition Interest" means, with respect to any Indebtedness
of any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument creating,
evidencing or governing such Indebtedness, whether or not, pursuant to
applicable law or otherwise, the claim for such interest is allowed as a claim
in such Insolvency or Liquidation Proceeding.
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"Preferred Equity Interest," in any Person, means an Equity
Interest of any class or classes (however designated) which is preferred as to
the payment of dividends or distributions, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class in such Person.
"principal" of a debt security means the principal of the
security, plus, when appropriate, the premium, if any, on the security.
"Private Exchange Securities" have the meaning provided in
Sections 2(b) of the Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth
on the Initial Securities in the form set forth on Exhibit A hereto.
"Public Equity Offering" means, with respect to the Company, an
underwritten primary public offering of Qualified Equity Interests of the
Company pursuant to an effective registration statement filed under the
Securities Act (excluding registration statements filed on Form S-8).
"Public Market" means any time after (x) a Public Equity Offering
has been consummated and (y) at least 15% of the total issued and outstanding
Qualified Equity Interests of the Company has been distributed by means of an
effective registration statement under the Securities Act.
"Purchase Amount" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Agreement" means the Purchase Agreement dated as of
July 31, 1997 by and among the Company, the Guarantors and the Initial
Purchasers.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Money Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary Incurred for the purpose of financing all or any
part of the purchase price or the cost of construction or improvement of any
property; provided that the aggregate principal amount of such Indebtedness does
not exceed the lesser of the Fair Market Value of such property or such purchase
price or cost, including any refinancing of such Indebtedness that does not
increase the aggregate principal amount (or accreted amount, if less) thereof as
of the date of refinancing.
"Purchase Price" has the meaning set forth in the definition of
"Offer to Purchase" above.
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"Qualified Equity Interest" in any Person means any Equity
Interest in such Person other than any Disqualified Equity Interest.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
"Registrar" see Section 2.03.
"Registration" means a registered exchange offer for the
Securities by the Company or other registration of the Securities under the
Securities Act pursuant to and in accordance with the terms of the Registration
Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of August 5, 1997 by and among the Company, the Guarantors
and the Initial Purchasers.
"Related Business" means (a) those businesses in which the
Company or any of the Restricted Subsidiaries is engaged on the Issue Date, or
that are reasonably related or incidental thereto and (b) any business (the
"Other Business") which forms a part of a business (the "Acquired Business")
which is acquired by the Company or any of the Restricted Subsidiaries if (i)
the primary intent of the Company or such Restricted Subsidiary was to acquire
that portion of the Acquired Business which meets the requirements of clause (a)
of this definition and (ii) the Company believed that it would not have been
able to acquire such portion of the Acquired Business if the Other Business was
not also acquired.
"Required Filing Dates" see Section 4.12.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Payments" see Section 4.06.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided, however, that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether any Security is a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that
has not been designated by the Board of Directors of the Company, by a Board
Resolution of the Company delivered to the Trustee, as an Unrestricted
Subsidiary pursuant to Section 4.17. Any such
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designation may be revoked by a Board Resolution of the Company delivered to the
Trustee, subject to the provisions of Section 4.17.
"Revocation" see Section 4.17.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities" means, collectively, the Initial Securities, the
Private Exchange Securities and the Unrestricted Securities treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Senior Credit Facility" means the Amended and Restated Credit
Agreement, dated as of the Issue Date, between the Company, the Subsidiaries of
the Company named therein from time to time, the lenders named therein, and The
Chase Manhattan Bank, as Administrative Agent, including any deferrals,
renewals, extensions, replacements, refinancings or refundings thereof, or
amendments, modifications or supplements thereto and any agreement providing
therefor (including any restatements thereof and any increases in the amount of
commitments thereunder), whether by or with the same or any other lender,
creditor, group of lenders or group of creditors, and including related notes,
guaranty and note agreements and other instruments and agreements executed in
connection therewith.
"Senior Indebtedness" means, at any date, (a) all Obligations of
the Company under the Senior Credit Facility; (b) all Hedging Obligations of the
Company; (c) all Obligations of the Company under stand-by letters of credit;
and (d) all other Indebtedness of the Company for borrowed money, including
principal, premium, if any, and interest (including Post-Petition Interest) on
such Indebtedness, unless the instrument under which such Indebtedness of the
Company for money borrowed is Incurred expressly provides that such Indebtedness
for money borrowed is not senior or superior in right of payment to the
Securities, and all renewals, extensions, modifications, amendments or
refinancings thereof. Notwithstanding the foregoing, Senior Indebtedness shall
not include (a) to the extent that it may constitute Indebtedness, any
Obligation for Federal, state, local or other taxes; (b) any Indebtedness among
or between the Company and any Subsidiary of the Company, unless and for so long
as such Indebtedness has been pledged to secure Obligations under the Senior
Credit Facility; (c) to the extent that it may constitute Indebtedness, any
Obligation in respect of any trade payable Incurred for the purchase of goods or
materials, or for services obtained, in the ordinary course of business; (d)
Indebtedness evidenced by the Securities; (e) Indebtedness of the Company that
is expressly subordinate or junior in right of payment to any other Indebtedness
of the Company; (f) to the extent that it may constitute Indebtedness, any
obligation owing under leases (other than Capital Lease Obligations) or
management agreements; and (g) any obligation that by operation of law is
subordinate to any general unsecured obligations of the Company.
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"Significant Restricted Subsidiary" means, at any date of
determination, (a) any Restricted Subsidiary that, together with its
Subsidiaries that constitute Restricted Subsidiaries (i) for the most recent
fiscal year of the Company accounted for more than 5.0% of the consolidated
revenues of the Company and the Restricted Subsidiaries or (ii) as of the end of
such fiscal year, owned more than 5.0% of the consolidated assets of the Company
and the Restricted Subsidiaries, all as set forth on the consolidated financial
statements of the Company and the Restricted Subsidiaries for such year prepared
in conformity with GAAP, and (b) any Restricted Subsidiary which, when
aggregated with all other Restricted Subsidiaries that are not otherwise
Significant Restricted Subsidiaries and as to which any event described in
clause (f), (g), (h) or (i) of Section 6.01 has occurred, would constitute a
Significant Restricted Subsidiary under clause (a) of this definition.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subordinated Indebtedness" means, with respect to the Company or
any Guarantor, any Indebtedness of the Company or such Guarantor, as the case
may be, which is expressly subordinated in right of payment to the Securities or
such Guarantor's Guaranty, as the case may be.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which the outstanding Voting Equity Interests having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (b) any other
Person of which at least a majority of Voting Equity Interests are at the time,
directly or indirectly, owned by such first named Person.
"Surviving Person" means, with respect to any Person involved in
or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ??
77aaa-77bbbb), as amended, as in effect on the date of this Indenture (except as
provided in Section 10.03) until such time as the Indenture is qualified under
the TIA, and thereafter as in effect on the date on which the Indenture is
qualified under the TIA.
"Trustee" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the provisions
of this Indenture and thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means,
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with respect to a particular corporate trust matter, any other officer to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"United States Government Obligations" means direct non-callable
obligations of the United States for the payment of which the full faith and
credit of the United States is pledged.
"Unrestricted Securities" means one or more Securities that do
not and are not required to bear the Private Placement Legend in the form set
forth in Exhibit A hereto, including, without limitation, the Exchange
Securities and any Securities registered under the Securities Act pursuant to
and in accordance with the Registration Rights Agreement.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 4.17. Any such designation may be revoked
by a Board Resolution of the Company delivered to a Trustee, subject to the
provisions of Section 4.17.
"Unutilized Net Cash Proceeds" see Section 4.05(a).
"Voting Equity Interests" means Equity Interests in a corporation
or other Person with voting power under ordinary circumstances entitling the
holders thereof to elect the Board of Directors or other governing body of such
corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Voting Equity Interests (other than directors'
qualifying shares) of which are owned, directly or indirectly, by the Company.
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:
"Commission" means the SEC.
"indenture securities" means the Securities and the Guaranties.
"indenture security holder" means a Securityholder.
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"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, a
Guarantor 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 SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
effect from time to time, and any other reference in this Indenture to
"generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) "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.
ARTICLE TWO
THE SECURITIES
SECTION 2.01 Form and Dating.
The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements (including the Security Guarantee)
required by law, stock exchange rule or usage. The Company and
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the Trustee shall approve the form of the Securities and any notation, legend or
endorsement (including the Security Guarantee) on them. Each Security shall be
dated the date of its issuance and shall show the date of its authentication.
Securities offered and sold in reliance on Rule 144A and
Securities offered and sold to Institutional Accredited Investors shall be
issued initially in the form of one or more Global Securities, substantially in
the form set forth in Exhibit A hereto, deposited with the Trustee, as custodian
for the Depository, duly executed by the Company and authenticated by the
Trustee as hereinafter provided with the Guaranties of the Guarantors endorsed
thereon and shall bear the legend set forth in Exhibit C hereto. The aggregate
principal amount of the Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
SECTION 2.02 Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer shall sign and one Officer or an Assistant Secretary (each
of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to such Officer's signature, the Securities for
the Company by manual or facsimile signature.
If an Officer or an Assistant Secretary whose signature is on a
Security was an Officer or an Assistant Secretary, as the case may be, at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee 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 shall authenticate (i) Initial Securities for
original issue in an aggregate principal amount not to exceed $125,000,000, (ii)
Private Exchange Securities from time to time only in exchange for a like
principal amount of Initial Securities and (iii) Unrestricted Securities from
time to time only in exchange for (A) a like principal amount of Initial
Securities or (B) a like principal amount of Private Exchange Securities, in
each case upon a written order of the Company in the form of an Officers'
Certificate. Each such written order shall specify the amount of Securities to
be authenticated and the date on which the Securities are to be authenticated,
whether the Securities are to be Initial Securities, Private Exchange Securities
or Unrestricted Securities and whether the Securities are to be issued as
Physical Securities or Global Securities and such other information as the
Trustee may reasonably request. The aggregate principal amount of Securities
outstanding at any time may not exceed $125,000,000, except as provided in
Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
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The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent to deal with the Company and Affiliates of the
Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange (the "Registrar"), (b)
Securities may be presented or surrendered for payment (the "Paying Agent") and
(c) notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company, upon notice to the Trustee, may appoint one
or more co-Registrars and one or more additional Paying Agents. The term "Paying
Agent" includes any additional Paying Agent. Except as provided herein, the
Company or any Guarantor may act as Paying Agent, Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 7.07.
The Company initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04 Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Securities, and shall notify the
Trustee of any Default by the Company in making any such payment. The Company at
any time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets 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 distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent (if other than the Company), the Paying Agent shall have no further
liability for such assets. If the Company, any Guarantor or any
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of their respective Affiliates acts as Paying Agent, it shall, on or before each
due date of the principal of or interest on the Securities, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
SECTION 2.05 Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee before each Interest Record Date and at such other times as the Trustee
may request in writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06 Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations of the
same series, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, 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 governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, 4.05,
4.14, or 10.05). The Registrar or co-Registrar shall not be required to register
the transfer or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and neither the Company,
the Trustee nor any such Agent shall be affected by notice to the contrary. Any
Holder of a beneficial interest in a Global Security shall, by acceptance of
such beneficial interest in a Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a
book-entry system maintained by the Depository (or its agent), and that
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ownership of a beneficial interest in a Global Security shall be required to be
reflected in a book entry.
SECTION 2.07 Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of Securities
are met. If required by the Company or the Trustee, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee and any Agent from
any loss which any of them may suffer if a Security is replaced The Company may
charge such Holder for its reasonable out-of-pocket expenses in replacing a
Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08 Outstanding Securities.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section 2.08 as not outstanding.
Subject to Section 2.09, a Security does not cease to be outstanding because the
Company or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date, Purchase Date or the Final Maturity Date the
Paying Agent holds money sufficient to pay all of the principal and interest due
on the Securities payable on that date, and is not prohibited from paying such
money to the Holders pursuant to the terms of this Indenture, then on and after
that date such Securities cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.09 Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, the Guarantors or any of their respective Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trust Officer of the Trustee actually knows are so owned shall
be disregarded.
The Company shall notify the Trustee, in writing, when it, any
Guarantor or any of its Affiliates repurchases or otherwise acquires Securities,
of the aggregate principal amount of such Securities so repurchased or otherwise
acquired.
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SECTION 2.10 Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate upon receipt of a written order of the Company
pursuant to Section 2.02 definitive Securities in exchange for temporary
Securities.
SECTION 2.11 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, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation. If the Company or any Guarantor shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12 Defaulted Interest.
The Company shall pay interest on overdue principal from time to time on
demand at the rate of interest then borne by the Securities. The Company shall,
to the extent lawful, pay interest on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
of interest then borne by the Securities.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day preceding the date
fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(b) shall be paid to
Holders as of the Interest Record Date for the Interest Payment Date for which
interest has not been paid.
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SECTION 2.13 CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number and the
Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided , however, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14 Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date,
Redemption Date, Purchase Date and the Final Maturity Date, the Company shall
deposit with the Paying Agent in immediately available funds money sufficient to
make cash payments, if any, due on such Interest Payment Date, Redemption Date,
Purchase Date or Final Maturity Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, Redemption Date, Purchase Date or Final Maturity Date, as the case
may be.
SECTION 2.15 Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit C.
Members of, or participants in, the Depository ("Participants") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and Participants, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
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(c) In connection with the transfer of Global Securities as an entirety
to beneficial owners pursuant to paragraph (b) of this Section 2.15, the Global
Securities shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall upon written instructions
from the Company authenticate and deliver, to each beneficial owner identified
by the Depository in exchange for its beneficial interest in the Global
Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(d) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (c) of
this Section 2.15 shall, except as otherwise provided by Section 2.16, bear the
Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture or the Securities.
SECTION 2.16 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal principal
amount of Physical Securities of other authorized denominations, the
Registrar or co-Registrar shall register the transfer or make the
exchange as requested if the requirements under this Indenture as set
forth in this Section 2.16 for such transactions are met; provided,
however, that the Physical Securities presented or surrendered for
Registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing; and
(II) in the case of Physical Securities the offer and sale
of which have not been registered under the Securities Act, such
Physical Securities shall be accompanied, in the sole discretion
of the Company, by the following additional information and
documents, as applicable:
(A) if such Physical Security is being delivered to
the Registrar or co-Registrar by a Holder for Registration
in the name of such Holder, without transfer, a
certification from such Holder to that effect
(substantially in the form of Exhibit D hereto); or
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(B) if such Physical Security is being transferred
to a QIB in accordance with Rule 144A, a certification to
that effect (substantially in the form of Exhibit D
hereto); or
(C) if such Physical Security is being transferred
to an Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and a transferee letter of
representation substantially in the form of Exhibit E
hereto and, at the option of the Company, an Opinion of
Counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the
Securities Act; or
(D) if such Physical Security is being transferred
in reliance on Rule 144 under the Securities Act, delivery
of a certification to that effect (substantially in the
form of Exhibit D hereto) and, at the option of the
Company, an Opinion of Counsel reasonably satisfactory to
the Company to the effect that such transfer is in
compliance with the Securities Act; or
(E) if such Physical Security is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect (substantially in the form of Exhibit D
hereto) and, at the option of the Company, an Opinion of
Counsel reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities
Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security the offer and sale of which
has not been registered under the Securities Act may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D
hereto, that such Physical Security is being transferred (I) to a
QIB or (II) to an Accredited Investor and, with respect to (II),
at the option of the Company, an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act; and
(B) written instructions directing the Registrar or
co-Registrar to make, or to direct the Depository to make, an
endorsement on the applicable Global Security to reflect an
increase in the aggregate amount of the Securities represented by
the Global Security, then the Registrar or co-Registrar shall
cancel such Physical Security and cause, or direct the Depository
to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Securities represented by
the applicable Global
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Security to be increased accordingly. If no 144A Global Security
or IAI Global Security, as the case may be, is then outstanding,
the Company shall, unless either of the events in the proviso to
Section 2.15(b) have occurred and are continuing, issue and the
Trustee shall, upon written instructions from the Company in
accordance with Section 2.02, authenticate such a Global Security
in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co-Registrar of written instructions,
or such other instruction as is customary for the Depository, from the
Depository or its nominee, requesting the Registration of transfer of an
interest in a 144A Global Security or an IAI Global Security, as the case may
be, to another type of Global Security, together with the applicable Global
Securities (or, if the applicable type of Global Security required to represent
the interest as requested to be transferred is not then outstanding, only the
Global Security representing the interest being transferred), the Registrar or
Co-Registrar shall cancel such Global Securities (or Global Security) and the
Company shall issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate new Global Securities of
the types so cancelled (or the type so cancelled and applicable type required to
represent the interest as requested to be transferred) reflecting the applicable
increase and decrease of the principal amount of Securities represented by such
types of Global Securities, giving effect to such transfer. If the applicable
type of Global Security required to represent the interest as requested to be
transferred is not outstanding at the time of such request, the Company shall
issue and the Trustee shall, upon written instructions from the Company in
accordance with Section 2.02, authenticate a new Global Security of such type in
principal amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Physical Security;
provided, however, that prior to the Registration, a transferee that is
a QIB or Institutional Accredited Investor may not exchange a beneficial
interest in Global Security for a Physical Security. Upon receipt by the
Registrar or co-Registrar of written instructions, or such other form of
instructions as is customary for the Depository, from the Depository or
its nominee on behalf of any Person (subject to the previous sentence)
having a beneficial interest in a Global Security and upon receipt by
the Trustee of a written order or such other form of instructions as is
customary for the Depository or the Person designated by the Depository
as having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange of a
beneficial interest in Securities the offer and sale of which have not
been registered under the Securities Act, the following additional
information and documents:
(A) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the
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form of Exhibit D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the Securities
Act; or
(B) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements
of the Securities Act, a certification to that effect
(substantially in the form of Exhibit D hereto) and, at the
option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository and
the Registrar or co-Registrar, the aggregate principal amount of the
applicable Global Security to be reduced and, following such reduction,
the Company will execute and, upon receipt of an authentication order in
the form of an Officers' Certificate in accordance with Section 2.02,
the Trustee will authenticate and deliver to the transferee a Physical
Security in the appropriate principal amount.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in
such names and in such authorized denominations as the Depository,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Registrar or co-Registrar in writing. The
Registrar or co-Registrar shall deliver such Physical Securities to the
Persons in whose names such Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except 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 or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or replacement
of Securities not bearing the Private Placement Legend, the Registrar or
co-Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar or co-Registrar shall deliver only
Securities that bear the Private Placement Legend unless, and the Trustee is
hereby authorized to deliver Securities without the Private Placement Legend if,
(i) there is delivered to the Trustee an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act;(ii) such Security
has been sold pursuant to an effective registration statement under the
Securities Act (including pursuant to a Registration); or (iii) the date of such
transfer, exchange or replacement is two years after the later of (x) the Issue
Date and (y) the last date that the Company or any affiliate (as defined in Rule
144 under the Securities Act) of the Company was the owner of such Securities
(or any predecessor thereto).
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(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01 Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 5 or 6
of the Securities at the applicable redemption price set forth thereon, it shall
notify the Trustee in writing of the Redemption Date and the principal amount of
Securities to be redeemed. The Company shall give such notice to the Trustee at
least 60 days before the Redemption Date (unless a shorter notice shall be
agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02 Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a pro rata basis, by lot
or in such other manner as the Trustee shall deem fair and appropriate.
Selection of the Securities to be redeemed pursuant to paragraph 6 of the
Securities shall be made by the Trustee only on a pro rata basis or on as nearly
a pro rata basis as is practicable (subject to the procedures of the Depository)
based on the aggregate principal amount of Securities held by each Holder. The
Trustee shall make the selection from the Securities then outstanding, subject
to redemption and not previously called for redemption.
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The Trustee may select for redemption pursuant to paragraph 5 or 6 of
the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.03 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail a notice of redemption by first-class mail to each Holder
whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 6 of the
Securities shall be mailed to each Holder whose Securities are to be redeemed no
later than 60 days after the date of the Closing of the relevant Public Equity
Offering of Holdings or the Company.
Each notice of redemption shall identify the Securities to be redeemed
(including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the Redemption Date and the only remaining right of the
Holders is to receive payment of the redemption price upon surrender to
the Paying Agent; and
(6) in the case of any redemption pursuant to paragraph 5 or 6 of
the Securities, if any Security is being redeemed in part, the portion
of the principal amount of such Security to be redeemed and that, 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 issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
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SECTION 3.04 Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the redemption price. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price, plus accrued interest thereon, if any, to the Redemption Date, but
interest installments whose maturity is on or prior to such Redemption Date
shall be payable to the Holders of record at the close of business on the
relevant Interest Record Date.
SECTION 3.05 Deposit of Redemption Price.
At least one Business Day before the Redemption Date, the Company shall
deposit with the Paying Agent (or if the Company is its own Paying Agent, shall,
on or before the Redemption Date, segregate and hold in trust) money sufficient
to pay the redemption price of and accrued interest, if any, on all Securities
to be redeemed on that date other than Securities or portions thereof called for
redemption on that date which have been delivered by the Company to the Trustee
for cancellation.
If any Security surrendered for redemption in the manner provided in the
Securities shall not be so paid on the Redemption Date due to the failure of the
Company to deposit with the Paying Agent money sufficient to pay the redemption
price thereof, the principal and accrued and unpaid interest, if any, thereon
shall, until paid or duly provided for, bear interest as provided in Sections
2.12 and 4.01 with respect to any payment default.
SECTION 3.06 Securities Redeemed in Part.
Upon surrender of a 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 the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of and interest on the Securities in
the manner provided in the Securities and the Registration Rights Agreement. An
installment of principal or interest shall be considered paid on the date due if
the Trustee or Paying Agent (other than the Company, a Guarantor or any of their
respective Affiliates) holds on that date money designated for and sufficient to
pay the installment in full and is not prohibited from paying such money to the
Holders of the Securities pursuant to the terms of this Indenture.
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The Company shall pay cash interest on overdue principal at the same
rate per annum borne by the Securities. The Company shall pay cash interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of New
York, the office or agency required under Section 2.03. The Company shall 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 address of the Trustee set forth in Section 13. The
Company hereby initially designates the Trustee at its address set forth in
Section 13.02 as its office or agency in The Borough of Manhattan, The City of
New York, for such purposes.
SECTION 4.03 Transactions with Affiliates.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into any
transaction (or series of related transactions) with or for the benefit of any
of their respective Affiliates or any officer, director or employee of the
Company or any Restricted Subsidiary (each an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms which are no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than would be
available in a comparable transaction with an unaffiliated third party and (ii)
if such Affiliate Transaction or series of related Affiliate Transactions (other
than any such Affiliate Transactions between the Company or a Restricted
Subsidiary and an Unrestricted Subsidiary or an Accounts Receivable Subsidiary
in the ordinary course of business) involves aggregate payments or other
consideration having a Fair Market Value in excess of $1.0 million, such
Affiliate Transaction is in writing and a majority of the disinterested members
of the Board of Directors of the Company shall have approved such Affiliate
Transaction and determined that such Affiliate Transaction complies with the
foregoing provisions. In addition, any Affiliate Transaction (other than an
Affiliate Transaction between the Company or a Restricted Subsidiary and an
Unrestricted Subsidiary or an Accounts Receivable Subsidiary in the ordinary
course of business) involving aggregate payments or other consideration having a
Fair Market Value in excess of $5.0 million will also require a written opinion
from an Independent Financial Advisor (filed with the Trustee) stating that the
terms of such Affiliate Transaction are fair, from a financial point of view, to
the Company or the Restricted Subsidiary involved in such Affiliate Transaction,
as the case may be.
Notwithstanding the foregoing, the restrictions set forth in this
Section 4.03 shall not apply to (i) transactions with or among the Company and
any Restricted Subsidiary or between or among Restricted Subsidiaries; (ii)
customary directors' fees, indemnification and similar arrangements, consulting
fees, employee salaries, bonuses or employment agreements, compensation or
employee benefit arrangements and incentive arrangements with any officer,
director or employee of the Company or any Restricted Subsidiary entered into in
the ordinary course of business (including
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customary benefits thereunder) and payments under any indemnification
arrangements permitted by applicable law; (iii) any transactions undertaken
pursuant to any contractual obligations in existence on the Issue Date (as in
effect on the Issue Date); (iv) the issue and sale by the Company to its
stockholders of Qualified Equity Interests; (v) any Restricted Payments made in
compliance with Section 4.06; (vi) loans and advances to officers, directors and
employees of the Company or any Restricted Subsidiary for travel, entertainment,
moving and other relocation expenses, in each case made in the ordinary course
of business; (vii) the Incurrence of intercompany Indebtedness permitted
pursuant to clause (d) of the second paragraph of Section 4.04; and (viii) the
pledge of Equity Interests of Unrestricted Subsidiaries to support the
Indebtedness thereof.
SECTION 4.04 Limitation on Indebtedness.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness) or issue any Disqualified Equity Interests, except for
Permitted Indebtedness; provided, however, that (i) the Company and any
Guarantor may Incur Indebtedness (other than Disqualified Equity Interests),
(ii) any Restricted Subsidiary may incur Acquired Indebtedness and (iii) the
Company may issue Disqualified Equity Interests if, in any such case, at the
time of and immediately after giving pro forma effect to such Incurrence of
Indebtedness or issuance of Disqualified Equity Interests and the application of
the proceeds therefrom, the Consolidated Coverage Ratio would be greater than
(a) 1.85 to 1.0, if such Incurrence occurs on or prior to December 31, 1999, or
(b) 2.0 to 1.0, if such Incurrence occurs after December 31, 1999.
The foregoing limitations will not apply to the Incurrence of any of the
following (collectively, "Permitted Indebtedness"), each of which shall be given
independent effect:
(a) Indebtedness under the Securities, the Guaranties and this
Indenture;
(b) Existing Indebtedness;
(c) Indebtedness of the Company, the Guarantors and Foreign
Subsidiaries pursuant to the Senior Credit Facility in an aggregate principal
amount at any one time outstanding not to exceed the sum of (x) the greater of
(I) $30.0 million and (II) the sum of (A) 85% of the net book value of the
accounts receivable of the Company and the Restricted Subsidiaries on a
consolidated basis in accordance with GAAP and (B) 50% of the net book value of
the inventory of the Company and the Restricted Subsidiaries on a consolidated
basis in accordance with GAAP with respect to revolving loans thereunder and (y)
$30.0 million with respect to term loans, additional revolving loans or other
loans thereunder;
(d) Indebtedness of any Restricted Subsidiary owed to and held by
the Company or any Restricted Subsidiary and Indebtedness of the Company owed to
and held by any Restricted Subsidiary, which Indebtedness is unsecured and
subordinated in right of payment to the payment and performance of the Company's
obligations under any Senior Indebtedness, this Indenture and the Securities;
provided, however, that an Incurrence of Indebtedness that is not permitted by
this
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clause (d) shall be deemed to have occurred upon (i) any sale or other
disposition of any Indebtedness of the Company or any Restricted Subsidiary
referred to in this clause (d) to a Person (other than the Company or any
Restricted Subsidiary), and (ii) the designation of a Restricted Subsidiary
which holds Indebtedness of the Company or any other Restricted Subsidiary as an
Unrestricted Subsidiary;
(e) the Guaranties and guaranties by any Guarantor of
Indebtedness of the Company; provided, however, that if such guaranty is of
Subordinated Indebtedness, then the Guaranty of such Guarantor shall be senior
to such Guarantor's guaranty of Subordinated Indebtedness;
(f) Hedging Obligations of the Company and the Restricted
Subsidiaries;
(g) Purchase Money Indebtedness and Capitalized Lease Obligations
(and refinancings thereof) of the Company and the Restricted Subsidiaries which
do not exceed $10.0 million in the aggregate at any one time outstanding;
(h) Indebtedness of the Company or a Restricted Subsidiary to the
extent representing a replacement, renewal, refinancing or extension
(collectively, a "refinancing") of outstanding Indebtedness Incurred in
compliance with the Consolidated Coverage Ratio of the first paragraph of this
covenant or clause (a) or (b) of this paragraph of this Section 4.04; provided,
however, that (i) any such refinancing shall not exceed the sum of the principal
amount (or accreted amount (determined in accordance with GAAP), if less) of the
Indebtedness or Disqualified Equity Interests being refinanced, plus the amount
of accrued interest or dividends thereon, plus the amount of any reasonably
determined prepayment premium necessary to accomplish such refinancing and such
reasonable fees and expenses incurred in connection therewith, (ii) Indebtedness
representing a refinancing of Indebtedness other than Senior Indebtedness shall
have a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of the Indebtedness being refinanced; (iii)
Indebtedness that is pari passu with the Securities may only be refinanced with
Indebtedness that is made pari passu with or subordinate in right of payment to
the Securities and Subordinated Indebtedness may only be refinanced with
Subordinated Indebtedness or Disqualified Equity Interests and Disqualified
Equity Interests may only be refinanced with other Disqualified Equity
Interests; and (iv) refinancing Indebtedness incurred by a Restricted Subsidiary
which is not a Guarantor may only be used to refinance Indebtedness of a
Restricted Subsidiary which is not a Guarantor;
(i) in addition to the items referred to in clauses (a) through
(h) above and clause (j) below, Indebtedness of the Company (including any
Indebtedness under the Senior Credit Facility that utilizes this subparagraph
(i)) having an aggregate principal amount not to exceed $10.0 million at any
time outstanding; and
(j) Indebtedness of a Foreign Subsidiary, (i) for working capital
purposes in an aggregate principal amount at any one time outstanding not to
exceed the sum of (x) 85% of the net book value of the accounts receivable of
such Foreign Subsidiary in accordance with GAAP and (y)
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50% of the net book value of the inventory of such Foreign Subsidiary in
accordance with GAAP, (ii) representing guaranties of Indebtedness of another
Foreign Subsidiary incurred pursuant to subclause (i) of this clause (j).
Notwithstanding any other provision of this Section 4.04, the maximum
amount of Indebtedness that the Company or any Restricted Subsidiary may Incur
pursuant to this Section 4.04 shall not be deemed to be exceeded due solely to
the result of fluctuations in the exchange rates of currencies. For purposes of
determining any particular amount of Indebtedness under this Section 4.04,
guarantees of, or obligations with respect to letters of credit supporting,
Indebtedness otherwise included in the determination of such particular amount
shall not be included. For purposes of determining compliance with this Section
4.04, 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.
SECTION 4.05 Disposition of Proceeds of Asset Sales.
(a) The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, make any Asset Sale, unless (i) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (ii) at least 80% of such
consideration consists of (A) cash or Cash Equivalents, (B) properties and
capital assets to be used in a Related Business, (C) Equity Interests in any
Person which thereby becomes a Wholly Owned Restricted Subsidiary whose assets
consist primarily of properties and capital assets used in a Related Business or
(D) "earn out" or similar rights providing for a cash payment contingent upon
operating results or the financial condition of the business and/or Person
subject to such Asset Sale. The amount of any (i) Indebtedness (other than any
Subordinated Indebtedness) of the Company or any Restricted Subsidiary that is
actually assumed by the transferee in such Asset Sale and from which the Company
and the Restricted Subsidiaries are fully released shall be deemed to be cash
for purposes of determining the percentage of cash consideration received by the
Company or the Restricted Subsidiaries and (ii) notes or other similar
obligations received by the Company or the Restricted Subsidiaries from such
transferee that are immediately converted, sold or exchanged (or are converted,
sold or exchanged within thirty days of the related Asset Sale) by the Company
or the Restricted Subsidiaries into cash shall be deemed to be cash, in an
amount equal to the net cash proceeds realized upon such conversion, sale or
exchange for purposes of determining the percentage of cash consideration
received by the Company or the Restricted Subsidiaries.
The Company or such Restricted Subsidiary, as the case may be, may (i)
apply the Net Cash Proceeds of any Asset Sale within 270 days of receipt thereof
to repay Senior Indebtedness, (ii) commit in writing to acquire, construct or
improve properties and capital assets to be used in a Related Business and so
apply such Net Cash Proceeds within 270 days after the receipt thereof or (iii)
apply the Net Cash Proceeds of any Asset Sale within 270 days of receipt thereof
to repay Pari Passu Debt not exceeding the Pari Passu Debt Pro Rata Share;
provided that the Company or such
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Restricted Subsidiary may use up to $10.0 million of aggregate Net Cash Proceeds
from Asset Sales for any purpose not prohibited by this Indenture.
To the extent all or part of the Net Cash Proceeds of any Asset Sale are
not applied within 270 days of such Asset Sale as described in clause (i), (ii)
or (iii) or the proviso of the immediately preceding paragraph (such Net Cash
Proceeds, the "Unutilized Net Cash Proceeds"), the Company shall, within 20 days
after such 270th day, make an Offer to Purchase all outstanding Securities up to
a maximum principal amount (expressed as a multiple of $1,000) of Securities
equal to such Unutilized Net Cash Proceeds, at a purchase price in cash equal to
100% of the principal amount thereof, plus accrued and unpaid interest thereon,
if any, to the Purchase Date; provided, however, that the Offer to Purchase may
be deferred until there are aggregate Unutilized Net Cash Proceeds equal to or
in excess of $10.0 million, at which time the entire amount of such Unutilized
Net Cash Proceeds, and not just the amount in excess of $10.0 million, shall be
applied as required pursuant to this paragraph. Each Holder shall be entitled to
tender all or any portion of the Securities owned by such Holder pursuant to the
Offer to Purchase, subject to the requirement that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal amount and
subject to any proration among tendering Holders as described in paragraph (b)
below.
(b) With respect to any Offer to Purchase effected pursuant to this
Section 4.05, among the Securities, to the extent the aggregate principal amount
of Securities tendered pursuant to such Offer to Purchase exceeds the Unutilized
Net Cash Proceeds to be applied to the repurchase thereof, such Securities shall
be purchased pro rata based on the aggregate principal amount of such Securities
tendered by each Holder. To the extent the Unutilized Net Cash Proceeds exceed
the aggregate amount of Securities tendered by the Holders of the Securities
pursuant to such Offer to Purchase, the Company may retain and utilize any
portion of the Unutilized Net Cash Proceeds not applied to repurchase the
Securities for any purpose consistent with the other terms of this Indenture.
(c) On or prior to the Purchase Date specified in the Offer to Purchase,
the Company shall (i) subject to paragraph (b) of this Section 4.05, accept for
payment all Securities validly tendered pursuant to the Offer, (ii) deposit with
the Paying Agent or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 2.04, 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 for cancellation all Securities
so accepted together with an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The Paying Agent (or the
Company, if so acting) shall promptly mail or deliver to Holders of Securities
so accepted, payment in an amount equal to the Purchase Price for such
Securities, and the Trustee shall promptly authenticate and mail or deliver to
each Holder of Securities a new Security or Securities equal in principal amount
to any unpurchased portion of the Security surrendered as requested by the
Holder. Any Security not accepted for payment shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Offer on or as soon as practicable after the
Purchase Date.
(d) In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable
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47
requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange Act, and
any violation of the provisions of this Indenture relating to such Offer to
Purchase occurring as a result of such compliance shall not be deemed a Default
or an Event of Default.
SECTION 4.06 Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or any other distribution on any
Equity Interests of the Company or any Restricted Subsidiary or make any
payment or distribution to the direct or indirect holders (in their
capacities as such) of Equity Interests of the Company or any Restricted
Subsidiary (other than any dividends, distributions and payments made to
the Company or any Restricted Subsidiary and dividends or distributions
payable to any Person solely in Qualified Equity Interests of the
Company or in options, warrants or other rights to purchase Qualified
Equity Interests of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any Restricted Subsidiary (other
than any such Equity Interests owned by the Company or any Restricted
Subsidiary);
(iii) purchase, redeem, defease or retire for value, or make any
principal payment on, prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated
Indebtedness (other than any Subordinated Indebtedness held by the
Company or any Restricted Subsidiary); or
(iv) make any Investment (other than Permitted Investments) in
any Person (other than in the Company), any Restricted Subsidiary or a
Person that becomes a Restricted Subsidiary, or is merged with or into
or consolidated with the Company or a Restricted Subsidiary (provided
the Company or a Restricted Subsidiary is the survivor), as a result of
or in connection with such Investment)
(any such payment or any other action (other than any exception thereto)
described in (i), (ii), (iii) or (iv) each, a "Restricted Payment"), unless
(a) no Default shall have occurred and be continuing at the time
or immediately after giving effect to such Restricted Payment;
(b) immediately after giving effect to such Restricted Payment,
the Company would be able to Incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the Consolidated Coverage Ratio of the first
paragraph of Section 4.04; and
(c) immediately after giving effect to such Restricted Payment,
the aggregate amount of all Restricted Payments declared or made on or after the
Issue Date does not exceed an
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amount equal to the sum of (1) 50% of cumulative Consolidated Net Income
determined for the period (taken as one period) from the beginning of the first
fiscal quarter commencing after the Issue Date and ending on the last day of the
most recent fiscal quarter immediately preceding the date of such Restricted
Payment for which consolidated financial information of the Company is available
(or if such cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss), plus (2) the aggregate net cash proceeds received by the Company
either (x) as capital contributions to the Company after the Issue Date or (y)
from the issue and sale (other than to a Restricted Subsidiary) of its Qualified
Equity Interests after the Issue Date (excluding the net proceeds from any
issuance and sale of Qualified Equity Interests financed, directly or
indirectly, using funds borrowed from the Company or any Restricted Subsidiary
until and to the extent such borrowing is repaid), plus (3) the principal amount
(or accreted amount (determined in accordance with GAAP), if less) of any
Indebtedness of the Company or any Restricted Subsidiary Incurred after the
Issue Date which has been converted into or exchanged for Qualified Equity
Interests of the Company, plus (4) in the case of the disposition or repayment
of any Investment constituting a Restricted Payment made after the Issue Date,
an amount (to the extent not included in the computation of Consolidated Net
Income) equal to the lesser of: (x) the return of capital with respect to such
Investment and (y) the amount of such Investment which was treated as a
Restricted Payment, in either case, less the cost of the disposition of such
Investment and net of taxes, plus (5) so long as the Designation thereof was
treated as a Restricted Payment made after the Issue Date, with respect to any
Unrestricted Subsidiary that has been redesignated as a Restricted Subsidiary
after the Issue Date in accordance with Section 4.17, the Company's
proportionate interest in an amount equal to the excess of (x) the total assets
of such Subsidiary, valued on an aggregate basis at Fair Market Value, over (y)
the total liabilities of such Subsidiary, determined in accordance with GAAP
(and provided that such amount shall not in any case exceed the Designation
Amount with respect to such Restricted Subsidiary upon its Designation), plus
(6) (to the extent not included in the computation of Consolidated Net Income)
the amount of cash dividends or cash distributions (other than to pay taxes)
received from any Unrestricted Subsidiary since the Issue Date, minus (7) the
greater of (x) $0 and (y) the Designation Amount (measured as of the date of
Designation) with respect to any Subsidiary of the Company which has been
designated as an Unrestricted Subsidiary after the Issue Date in accordance with
Section 4.17.
The foregoing provisions will not prevent (i) (x) the payment of
any dividend or distribution on, or redemption of, Equity Interests within 60
days after the date of declaration of such dividend or distribution or the
giving of formal notice of such redemption, if at the date of such declaration
or giving of such formal notice such payment or redemption would comply with the
provisions of this Indenture or (y) the payment of any dividend or distribution
on a pro rata basis to holders of minority Equity Interests in a Restricted
Subsidiary out of the net income from the Issue Date of such Restricted
Subsidiary; (ii) the purchase, redemption, retirement or other acquisition of
any Equity Interests of the Company in exchange for, or out of the net cash
proceeds of (or the payment of a dividend or distribution to Holdings out of the
net cash proceeds of) the substantially concurrent issue and sale (other than to
a Restricted Subsidiary) of, Qualified Equity Interests of the Company;
provided, however, that any such net cash proceeds and the value of any
Qualified Equity Interests issued in exchange for such retired Equity Interests
are excluded from clause (c)(2) of the preceding paragraph (and were not
included therein at any time); (iii) the purchase, redemption,
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49
retirement, defeasance or other acquisition of Subordinated Indebtedness, or any
other payment thereon, made in exchange for, or out of the net cash proceeds of,
a substantially concurrent issue and sale (other than to a Restricted
Subsidiary) of (x) Qualified Equity Interests of the Company; provided, however,
that any such net cash proceeds and the value of any Qualified Equity Interests
issued in exchange for Subordinated Indebtedness are excluded from clauses
(c)(2) and (c)(3) of the preceding paragraph (and were not included therein at
any time) or (y) other Subordinated Indebtedness having no stated maturity for
the payment of principal thereof prior to the final stated maturity of the
Securities; (iv) any Investment to the extent that it is funded with the net
cash proceeds of the substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of Qualified Equity Interests of the Company; provided,
however, that any such net cash proceeds are excluded from clause (c)(2) of the
preceding paragraph (and were not included therein at any time); (v) the
purchase, redemption or other acquisition, cancellation or retirement for value
of Equity Interests, or options, warrants, equity appreciation rights or other
rights to purchase or acquire Equity Interests, of the Company or any Restricted
Subsidiary, or similar securities, held by officers or employees or former
officers or employees of the Company or any Restricted Subsidiary (or their
estates or beneficiaries under their estates), upon death, disability,
retirement or termination of employment, or dividends by the Company to Holdings
to effect the same in respect of its Equity Interests held by officers or
employees or former officers or employees of the Company or any Restricted
Subsidiary (or their estates or beneficiaries under their estates), upon death,
disability, retirement or termination of employment, not to exceed $1.0 million
per fiscal year; provided that if the full $1.0 million is not utilized in any
fiscal year, such unutilized portion may be so utilized in any subsequent fiscal
year; and provided, further, that in no fiscal year shall such payments exceed
$4.0 million; (vi) distributions to Holdings to fund the payment of principal
and interest on the Junior Subordinated Seller Note in accordance with the terms
thereof; (vii) Restricted Payments not to exceed $2.0 million in the aggregate
since the Issue Date; or (viii) payments to Holdings to pay general and
administrative expenses of Holdings not to exceed $250,000 in any fiscal year;
or (ix) the payment of any dividend or distribution to Holdings to fund the
federal and state income tax liability of the partners of Holdings for periods
ending on or before the Issue Date in an aggregate amount not to exceed
$200,000; provided, however, that in the case of each of clauses (ii), (iii),
(iv), (v), (vii) and (viii) no Default shall have occurred and be continuing or
would arise therefrom.
In determining the amount of Restricted Payments permissible
under this Section 4.06, amounts expended pursuant to clauses (i), (v), (vii)
and (viii) of the immediately preceding paragraph shall be included as
Restricted Payments and amounts expended pursuant to clauses (ii), (iii), (iv),
(vi) and (ix) shall be excluded. The amount of any non-cash Restricted Payment
shall be deemed to be equal to the Fair Market Value thereof at the date of the
making of such Restricted Payment.
SECTION 4.07 Corporate Existence.
Subject to Article Five, the Company shall do or shall cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
of each such Restricted Subsidiary and the rights (charter and statutory)
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and material franchises of the Company and the Restricted Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right or franchise, or the corporate existence of any Restricted Subsidiary, if
the Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
the Restricted Subsidiaries, taken as a whole, and that the loss thereof is not,
and will not be, adverse in any material respect to the Holders; provided,
further, however, that a determination of the Board of Directors of the Company
shall not be required in the event of a merger of one or more Wholly Owned
Restricted Subsidiaries of the Company with or into another Wholly Owned
Restricted Subsidiary of the Company or another Person, if the surviving Person
is a Wholly Owned Restricted Subsidiary of the Company organized under the laws
of the United States or a State thereof or of the District of Columbia.
SECTION 4.08 Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Restricted Subsidiary or upon the income, profits or property of the Company or
any Restricted Subsidiary and (2) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a material
liability, or Lien upon the property, of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate provision has been made.
SECTION 4.09 Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any of
its Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default, the
Company shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.10 Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by or
leased to it or any Restricted Subsidiary and used or useful in the conduct of
its business or the business of any Restricted Subsidiary to be maintained and
kept in normal condition, repair and working order and supplied with all
necessary equipment and shall 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
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51
advantageously conducted at all times; provided, however, that nothing in this
Section 4.10 shall prevent the Company or any Restricted Subsidiary from
discontinuing the use, operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Board of Directors or of the board of directors of the Restricted
Subsidiary concerned, or of an officer (or other agent employed by the Company
or of any Restricted Subsidiary) of the Company or such Restricted Subsidiary
having managerial responsibility for any such property, desirable in the conduct
of the business of the Company or any Restricted Subsidiary, and if such
discontinuance or disposal is not adverse in any material respect to the
Holders.
(b) The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, and workers' compensation
insurance.
SECTION 4.11 Compliance Certificate.
The Company shall deliver to the Trustee within 45 days after the
end of each of the first three fiscal quarters of the Company and within 90 days
after the close of each fiscal year a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
stating that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
quarter or fiscal year. If they do know of such a Default or Event of Default,
the certificate shall describe all such Defaults or Events of Default, their
status and the action the Company is taking or proposes to take with respect
thereto. The first certificate to be delivered by the Company pursuant to this
Section 4.11 shall be for the fiscal quarter ending September 30, 1997.
SECTION 4.12 Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d)
of the Exchange Act, or any successor provision thereto, the Company shall file
with the SEC (if permitted by SEC practice and applicable law and regulations)
the annual reports, quarterly reports and other documents which the Company
would have been required to file with the SEC pursuant to such Section 13(a) or
15(d) (each, an "Exchange Act Report") or any successor provision thereto if the
Company were so subject, such documents to be filed with the SEC on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been required so to file such documents if the Company were so subject;
provided that the Required Filing Date for the quarterly report with respect to
the fiscal quarter ended June 30, 1997 shall be the 45th day after the Issue
Date and such report shall include pro forma financial statements as of and for
the six months ended June 30, 1997 prepared on a basis substantially similar to
the pro forma financial statements included in the Offering Memorandum of the
Company dated July 31, 1997 relating to the Initial Securities. If, at any time
prior to the consummation of the Exchange Offer when the Company is not subject
to
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52
such Section 13(a) or 15(d), the information which would be required in an
Exchange Act Document is included in a public filing of the Company under the
Securities Act at the applicable Required Filing Date, such public filing shall
fulfill the filing requirement with the SEC with respect to the applicable
Exchange Act Document. The Company shall also in any event (a) within 15 days of
each Required Filing Date (whether or not permitted or required to be filed with
the SEC) (i) transmit (or cause to be transmitted) by mail to all Holders, as
their names and addresses appear in the Security register, without cost to such
Holders, and (ii) file with the Trustee, copies of the annual reports, quarterly
reports and other documents which the Company is required to file with the SEC
pursuant to the preceding sentence, or, if such filing is not so permitted (or,
prior to the consummation of the Exchange Offer, when the Company is not subject
to Section 13(d) or 15(d) of the Exchange Act), information and data of a
similar nature, and (b) if, notwithstanding the preceding sentence, filing such
documents by the Company with the SEC is not permitted by SEC practice or
applicable law or regulations, promptly upon written request supply copies of
such documents to any Holder. In addition, for so long as any Securities remain
outstanding, the Company will furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act, and, to any
beneficial holder of Securities, if not obtainable from the SEC, information of
the type that would be filed with the SEC pursuant to the foregoing provisions,
upon the request of any such holder. The Company shall also comply with ? 314(a)
of the TIA.
SECTION 4.13 Waiver of Stay, Extension or Usury Laws.
Each of the Company and the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, 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, which would prohibit or forgive the
Company or such Guarantor from paying all or any portion of the principal of
and/or interest, if any, on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company and each Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.14 Change of Control.
(a) Following the occurrence of a Change of Control (the date of
such occurrence being the "Change of Control Date"), the Company shall notify
the Holders of the Securities of such occurrence in the manner prescribed by
this Indenture and shall, within 20 days after the Change of Control Date, make
an Offer to Purchase all Securities then outstanding at a purchase price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Purchase Date (subject to the right of Holders
of record on the relevant Interest Record Date to receive interest due on the
relevant Interest Payment Date). The Company's obligations may be satisfied if a
third party makes the Offer to Purchase in the manner, at the times and
otherwise in compliance with the requirements of this Indenture applicable to an
Offer to Purchase made by the
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53
Company and purchases all Securities validly tendered and not withdrawn under
such Offer to Purchase. Each Holder shall be entitled to tender all or any
portion of the Securities owned by such Holder pursuant to the Offer to
Purchase, subject to the requirement that any portion of a Security tendered
must be tendered in an integral multiple of $1,000 principal amount.
(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04, 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 for cancellation all Securities so accepted together
with an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent (or the Company, if so
acting) shall promptly mail or deliver to Holders of Securities so accepted,
payment in an amount equal to the Purchase Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to each Holder of
Securities a new Security or Securities equal in principal amount to any
unpurchased portion of the Security surrendered as requested by the Holder. Any
Security not accepted for payment shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Offer on or as soon as practicable after the Purchase Date.
(c) If the Company makes an Offer to Purchase, the Company will
comply with all applicable tender offer laws and regulations, including, to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any
other applicable Federal or state securities laws and regulations and any
applicable requirements of any securities exchange on which the Securities are
listed, and any violation of the provisions of this Indenture relating to such
Offer to Purchase occurring as a result of such compliance shall not be deemed a
Default or an Event of Default.
SECTION 4.15 Limitation on Layering.
(a) The Company shall not, directly or indirectly, Incur any
Indebtedness that by its terms would expressly rank senior in right of payment
to the Securities and expressly rank subordinate in right of payment to any
other Indebtedness of the Company.
(b) The Company shall not permit any Guarantor to, and no
Guarantor shall, directly or indirectly, Incur any Indebtedness that by its
terms would expressly rank senior in right of payment to the Guaranty of such
Guarantor and expressly rank subordinate in right of payment to any Guarantor
Senior Indebtedness of such Guarantor.
SECTION 4.16 Limitations on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other
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54
distributions to the Company or any other Restricted Subsidiary on its Equity
Interests or with respect to any other interest or participation in, or measured
by, its profits, or pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (b) make loans or advances to, or guaranty any
Indebtedness or other obligations of, the Company or any other Restricted
Subsidiary or (c) transfer any of its properties or assets to the Company or any
other Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) the Senior Credit Facility, or any other
agreement of the Company or the Restricted Subsidiaries outstanding on the Issue
Date, in each case as in effect on the Issue Date, and any amendments,
restatements, renewals, replacements or refinancings thereof; provided, however,
that any such amendment, restatement, renewal, replacement or refinancing is no
more restrictive in the aggregate with respect to such encumbrances or
restrictions than those contained in the agreement being amended, restated,
renewed, replaced or refinanced; (ii) applicable law; (iii) any instrument
governing Indebtedness or Equity Interests of (x) a Foreign Subsidiary or (y) an
Acquired Person acquired by the Company or any Restricted Subsidiary as in
effect at the time of such acquisition (except to the extent any such
Indebtedness or Equity Interests were Incurred by such Acquired Person in
connection with, as a result of or in contemplation of such acquisition);
provided, however, that such encumbrances and restrictions are not applicable to
any Restricted Subsidiary, or the properties or assets of any Restricted
Subsidiary, other than a Foreign Subsidiary or the Acquired Person, as the case
may be; (iv) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices; (v) Purchase
Money Indebtedness for property acquired in the ordinary course of business that
only imposes encumbrances and restrictions on the property so acquired; (vi) any
agreement for the sale or disposition of the Equity Interests or assets of any
Restricted Subsidiary; provided, however, that such encumbrances and
restrictions described in this clause (vi) are only applicable to such
Restricted Subsidiary or assets, as applicable, and any such sale or disposition
is made in compliance with Section 4.05 to the extent applicable thereto; (vii)
refinancing Indebtedness permitted under clause (h) of the second paragraph of
Section 4.04; provided, however, that such encumbrances and restrictions
contained in the agreements governing such Indebtedness are no more restrictive
in the aggregate than those contained in the agreements governing the
Indebtedness being refinanced immediately prior to such refinancing; (viii) this
Indenture; or (ix) contained in any other indenture governing debt securities
that are no more restrictive than those contained in this Indenture.
SECTION 4.17 Designation of Unrestricted Subsidiaries.
(a) The Company may designate after the Issue Date any Subsidiary
of the Company as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") only if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
(ii) at the time of and after giving effect to such Designation,
the Company could Incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the Consolidated Coverage Ratio of the
first paragraph of Section 4.04; and
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(iii) the Company would be permitted to make an Investment (other
than a Permitted Investment) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to the first paragraph of
Section 4.06 in an amount (the "Designation Amount") equal to the Fair
Market Value of the Company's aggregate Investment in such Subsidiary on
such date.
Neither the Company nor any Restricted Subsidiary shall at any
time (x) provide credit support for, subject any of its property or assets
(other than the Equity Interests of any Unrestricted Subsidiary) to the
satisfaction of, or guarantee, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary, or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary,
except for any non-recourse guarantee given solely to support the pledge by the
Company or any Restricted Subsidiary of the capital stock of any Unrestricted
Subsidiary. All Subsidiaries of Unrestricted Subsidiaries shall be automatically
deemed to be Unrestricted Subsidiaries.
(b) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation;
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at such
time, have been permitted to be Incurred for all purposes of this Indenture; and
(iii) any transaction (or series of related transactions) between
such Subsidiary and any of its Affiliates that occurred while such Subsidiary
was an Unrestricted Subsidiary would be permitted by Section 4.03 as if such
transaction (or series of related transactions) had occurred at the time of such
Revocation.
Upon the effectiveness of any such Revocation, the Company shall
cause such Subsidiary to become a Guarantor pursuant to and in accordance with
Section 4.19.
All Designations and Revocations must be evidenced by Board
Resolutions of the Company, delivered to the Trustee certifying compliance with
the foregoing provisions.
SECTION 4.18 Limitation on Liens.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist any
Liens of any kind against or upon any of their
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respective properties or assets now owned or hereafter acquired, or any proceeds
therefrom or any income or profits therefrom, to secure any Indebtedness unless
contemporaneously therewith effective provision is made, in the case of the
Company, to secure the Securities and all other amounts due under this
Indenture, and in the case of a Restricted Subsidiary which is a Guarantor, to
secure such Restricted Subsidiary's Guaranty of the Securities and all other
amounts due under this Indenture, equally and ratably with such Indebtedness
(or, in the event that such Indebtedness is subordinated in right of payment to
the Securities or such Guarantor's Guaranty, prior to such Indebtedness) with a
Lien on the same properties and assets securing such Indebtedness for so long as
such Indebtedness is secured by such Lien, except for (i) Liens securing any
Senior Indebtedness or Guarantor Senior Indebtedness and (ii) Permitted Liens.
SECTION 4.19 Guaranty of Notes by Restricted Subsidiaries.
The Company shall cause each Subsidiary (other than a Guarantor,
an Unrestricted Subsidiary or a Foreign Subsidiary) formed, created or acquired
after the Issue Date to guarantee all of the Company's Obligations under the
Securities and this Indenture on the terms set forth in Article Eleven;
provided, however, that the guarantee of such Restricted Subsidiary shall be
subordinated in right of payment to all Guarantor Senior Indebtedness of such
Restricted Subsidiary pursuant to the subordination provisions of Article
Twelve. The Company shall cause each such Restricted Subsidiary to (i) execute
and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall
become a party to this Indenture as a Guarantor and thereby unconditionally
guarantee all of the Company's Obligations under the Securities and this
Indenture on the terms set forth in Article Eleven and Article Twelve hereof,
(ii) execute and deliver to the Trustee a Security Guarantee in accordance with
Section 11.06 and (iii) deliver to the Trustee an opinion of counsel that each
of such supplemental indenture and Security Guarantee has been duly authorized,
executed and delivered by such Restricted Subsidiary and constitutes a legal,
valid, binding and enforceable obligation of such Restricted Subsidiary (which
opinion may be subject to customary assumptions and qualifications). Thereafter,
such Restricted Subsidiary shall (unless released in accordance with the terms
of this Indenture) be a Guarantor for all purposes of this Indenture.
SECTION 4.20 Limitation on the Sale or Issuance of Preferred Equity
Interests of Restricted Subsidiaries.
The Company shall not sell any Preferred Equity Interest of a
Restricted Subsidiary, and shall not cause or permit any Restricted Subsidiary
to issue any of its Preferred Equity Interests or sell any Preferred Equity
Interests of another Restricted Subsidiary (other than to the Company or a
Wholly Owned Restricted Subsidiary).
SECTION 4.21 Limitation on Lines of Business.
The Company shall not, and shall not cause or permit any
Restricted Subsidiary, directly or indirectly to, engage in any business outside
the specialty chemical products business other than a Related Business.
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SECTION 4.22 Payments for Consent.
Neither the Company nor any of its Subsidiaries shall, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of the
Securities, this Indenture or the Registration Rights Agreement unless such
consideration is offered to be paid or agreed to be paid to all Holders that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01 Mergers, Sale of Assets, etc.
(a) The Company shall not consolidate with or merge with or into
(whether or not the Company is the Surviving Person) any other entity and the
Company shall not and shall not cause or permit any Restricted Subsidiary to,
sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of the Company's and the Restricted Subsidiaries' properties
and assets (determined on a consolidated basis for the Company and the
Restricted Subsidiaries) to any entity in a single transaction or series of
related transactions, unless: (i) either (x) the Company shall be the Surviving
Person or (y) the Surviving Person (if other than the Company) shall be a
corporation organized and validly existing under the laws of the United States
of America or any State thereof or the District of Columbia, and shall, in any
such case, expressly assume by a supplemental indenture, the due and punctual
payment of the principal of, premium, if any, and interest on all the Securities
and the performance and observance of every covenant of this Indenture and the
Registration Rights Agreement to be performed or observed on the part of the
Company; (ii) immediately thereafter, no Default or Event of Default shall have
occurred and be continuing; (iii) immediately after giving effect to any such
transaction including the Incurrence by the Company or any Restricted
Subsidiary, directly or indirectly, of additional Indebtedness (and treating any
Indebtedness not previously an obligation of the Company or any Restricted
Subsidiary in connection with or as a result of such transaction as having been
Incurred at the time of such transaction), the Surviving Person could Incur, on
a pro forma basis after giving effect to such transaction as if it had occurred
at the beginning of the four quarter period immediately preceding such
transaction for which consolidated financial statements of the Company are
available, at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the Consolidated Coverage Ratio of the first paragraph of
Section 4.04; (iv) immediately after giving effect to such transaction, the
Surviving Person will have a Consolidated Net Worth in an amount which is not
less than the Consolidated Net Worth of the Company immediately prior to such
transaction; and (v) the Company will have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture.
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Notwithstanding the foregoing clause (iii) of the immediately
preceding paragraph, any Restricted Subsidiary may consolidate with, merge into
or transfer all or part of its properties and assets to the Company.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all the properties and assets of one or
more Restricted Subsidiaries the Equity Interests of which constitute all or
substantially all the properties and assets of the Company shall be deemed to be
the transfer of all or substantially all the properties and assets of the
Company.
(b) No Guarantor (other than a Guarantor whose Guaranty is to be
released in accordance with the terms of its Guaranty and Section 11.03) shall
consolidate with or merge with or into another Person, whether or not such
Person is affiliated with such Guarantor and whether or not such Guarantor is
the Surviving Person, unless (i) the Surviving Person (if other than such
Guarantor) is a corporation organized and validly existing under the laws of the
United States, any State thereof or the District of Columbia; (ii) the Surviving
Person (if other than such Guarantor) expressly assumes by a supplemental
indenture all the obligations of such Guarantor under its Guaranty of the
Securities and the performance and observance of every covenant of this
Indenture and the Registration Rights Agreement to be performed or observed by
such Guarantor; (iii) at the time of and immediately after such Disposition, no
Default or Event of Default shall have occurred and be continuing; (iv)
immediately after giving effect to such transaction, the Company will have
Consolidated Net Worth in an amount which is not less than the Consolidated Net
Worth of the Company immediately prior to such transaction; and (v) the Company
will have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture; provided, however,
that clauses (iv) of this paragraph shall not be a condition to a merger or
consolidation of a Guarantor if such merger or consolidation only involves the
Company and/or one or more other Guarantors.
SECTION 5.02 Successor Corporation Substituted.
In the event of any transaction (other than a lease) described in
and complying with the conditions listed in Section 5.01 in which the Company or
a Guarantor, as the case may be, is not the Surviving Person and the Surviving
Person is to assume all the Obligations of the Company under the Securities,
this Indenture and the Registration Rights Agreement or of such Guarantor under
its Guaranty, this Indenture and the Registration Rights Agreement, as the case
may be, pursuant to a supplemental indenture, such Surviving Person shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, and the Company shall be
discharged from its Obligations under this Indenture and the Securities or such
Guarantor shall be discharged from its Obligations under this Indenture and its
Guaranty.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01 Events of Default.
Each of the following shall be an "Event of Default" for purposes
of this Indenture:
(a) failure to pay principal of (or premium, if any, on) any
Security when due (whether or not prohibited by the provisions of Article
Eight);
(b) failure to pay any interest on any Security when due,
continued for 30 days or more (whether or not prohibited by the provisions of
Article Eight);
(c) default in the payment of principal of or interest on any
Security required to be purchased pursuant to any Offer to Purchase required by
this Indenture when due and payable or failure to pay on the Purchase Date the
Purchase Price for any Security validly tendered pursuant to any Offer to
Purchase (whether or not prohibited by the provisions of Article Eight);
(d) failure to perform or comply with any of the provisions of
Section 5.01;
(e) failure to perform any other covenant, warranty or agreement
of the Company under this Indenture or in the Securities or of the Guarantors
under this Indenture or in the Guaranty;
(f) default or defaults under the terms of one or more
instruments evidencing or securing Indebtedness of the Company or any of its
Significant Restricted Subsidiaries having an outstanding principal amount of
$5.0 million or more individually or in the aggregate that have resulted in the
acceleration of the payment of such Indebtedness or failure by the Company or
any of its Significant Restricted Subsidiaries to pay principal when due at the
stated maturity of any such Indebtedness;
(g) the rendering of a final judgment or judgments (not subject
to appeal) against the Company or any of its Significant Restricted Subsidiaries
in an amount of $5.0 million or more (net of any amounts covered by reputable
and creditworthy insurance companies) which remains undischarged or unstayed for
a period of 60 days after the date on which the right to appeal has expired;
(h) the Company or any Significant Restricted Subsidiary pursuant
to or within the meaning of any Bankruptcy Law: (i) admits in writing its
inability to pay its debts generally as they become due; (ii) commences a
voluntary case or proceeding; (iii) consents to the entry of an order for relief
against it in an involuntary case or proceeding; (iv) consents or acquiesces in
the institution of a bankruptcy or insolvency proceeding against it; (v)
consents to the appointment of a Custodian of it or for all or substantially all
of its property; or (vi) makes a general assignment for the benefit of its
creditors, or any of them takes any action to authorize or effect any of the
foregoing;
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(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company or any
Significant Restricted Subsidiary in an involuntary case or proceeding; (ii)
appoints a Custodian of the Company or any Significant Restricted Subsidiary for
all or substantially all of its property; or (iii) orders the liquidation of the
Company or any Significant Restricted Subsidiary; and in each case the order or
decree remains unstayed and in effect for 60 days; provided, however, that if
the entry of such order or decree is appealed and dismissed on appeal, then the
Event of Default hereunder by reason of the entry of such order or decree shall
be deemed to have been cured; or
(j) other than as provided in or pursuant to any Guaranty or this
Indenture, any Guaranty ceases to be in full force and effect or is declared
null and void and unenforceable or found to be invalid or any Guarantor denies
its liability under its Guaranty (other than by reason of a release of such
Guarantor from its Guaranty in accordance with the terms of this Indenture and
such Guaranty).
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
A Default under clause (e) of this Section 6.01 is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in principal amount of the outstanding Securities notify the Company and the
Trustee, of the Default in writing and the Company does not cure the Default
within 30 days after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a "Notice of Default."
Such notice shall be given by the Trustee if so requested by the Holders of at
least 25% in principal amount of the Securities then outstanding. When a Default
is cured, it ceases.
SECTION 6.02 Acceleration.
If an Event of Default with respect to the Securities (other than
an Event of Default specified in clause (h) or (i) of Section 6.01 with respect
to the Company) occurs and is continuing, the Trustee or the Holders of at least
25% in aggregate principal amount of the outstanding Securities by notice in
writing to the Company (and to the Trustee if given by the Holders) may declare
the unpaid principal of (and premium, if any) and accrued interest to the date
of acceleration on all outstanding Securities to be due and payable immediately
and, upon any such declaration, such principal amount (and premium, if any) and
accrued interest, notwithstanding anything contained in this Indenture or the
Securities to the contrary, shall become immediately due and payable; provided,
however, that so long as the Senior Credit Facility shall be in full force, if
an Event of Default shall have occurred and be continuing (other than an Event
of Default specified in clause (h) or (i) of Section 6.01 with respect to the
Company), the Securities shall not become due and payable until the earlier to
occur of (x) five Business Days following delivery of a written notice by the
Trustee of such acceleration of the Securities to the agent under the Senior
Credit Facility and (y) the acceleration (ipso facto or otherwise) of any
Indebtedness under the Senior Credit Facility.
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If an Event of Default specified in clause (h) or (i) of Section
6.01 with respect to the Company occurs, all unpaid principal of (and premium,
if any) and accrued interest on all outstanding Securities shall ipso facto
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.
After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Securities has been obtained, the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may rescind an
acceleration and its consequences if all existing Events of Default (other than
the nonpayment of principal of and interest on the Securities which has become
due solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
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 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. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04 Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
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 or interest on any
Security as specified in clauses (a), (b) and (c) of Section 6.01 or a Default
in respect of any term or provision of this Indenture that may not be amended or
modified without the consent of each Holder affected as provided in Section
10.02. The Company shall deliver to the Trustee an Officers' Certificate stating
that the requisite percentage of Holders have consented to such waiver and
attaching copies of such consents. In case of any such waiver, the Company, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Securities, respectively. This paragraph of this Section
6.04 shall be in lieu of ? 316(a)(1)(B) of the TIA and such ? 316(a)(1)(B) of
the TIA is hereby expressly excluded from this Indenture and the Securities, as
permitted by the TIA.
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Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.05 Control by Majority.
Subject to Section 2.09, the Holders of a majority in 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 it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder, or
that may involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In the event the Trustee takes any action or
follows any direction pursuant to this Indenture, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction. This Section
6.05 shall be in lieu of ss. 316(a)(1)(A) of the TIA, and such ss. 316(a)(1)(A)
of the TIA is hereby expressly excluded from this Indenture and the Securities,
as permitted by the TIA.
SECTION 6.06 Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
the outstanding Securities make a written request to the Trustee to pursue a
remedy;
(iii) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over such
other Securityholder.
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SECTION 6.07 Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of and premium, if any or interest
on a Security, on or after the respective due dates expressed in the Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(a), (b) or (c) 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 on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest overdue
on principal and to the extent that payment of such interest is lawful, interest
on overdue installments of interest, in each case at the rate per annum 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 compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor upon 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 such judicial proceedings is hereby authorized by each
Securityholder 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
Securityholders, 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 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder 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 Securityholder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
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Second: to Holders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders 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 party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount of
the outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the
performance of such duties as are specifically set forth herein; 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
conforming to the requirements of this Indenture; however, in the case of any
such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine such
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
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(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02 Rights of Trustee.
Subject to Section 7.01:
(a) 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.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which shall
conform to the provisions of Section 13.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence of any
agent or attorney (other than an agent who is an employee of the Trustee)
appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel of its selection and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution.
(g) 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 Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney.
(i) The Trustee shall not be deemed to have notice of any Event
of Default unless a Trust Officer of the Trustee has actual knowledge thereof or
unless the Trustee shall have received written notice thereof at the Corporate
Trust Office of the Trustee, and such notice references the Securities and this
Indenture.
SECTION 7.03 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 Trustee,
subject to Section 7.10 hereof. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company
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in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and
the Trustee knows of such Defaults or Events of Default, the Trustee shall mail
to each Securityholder notice of the Default or Event of Default within 30 days
after the occurrence thereof. Except in the case of a Default or an Event of
Default in payment of principal of or interest on any Security or a Default or
Event of Default in complying with Section 5.01, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of Securityholders.
This Section 7.05 shall be in lieu of the proviso to ? 315(b) of the TIA and
such proviso to ? 315(b) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 7.06 Reports by Trustee to Holders.
If required by TIA ? 313(a), within 60 days after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Securityholder a report dated as of such May 15 that complies
with TIA ? 313(a). The Trustee also shall comply with TIA ? 313(b), (c) and (d).
A copy of each such report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange, if any, on
which the Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including fees, disbursements and expenses of its agents and
counsel) incurred or made by it in addition to the compensation for its services
except any such disbursements, expenses and advances as may be attributable to
the Trustee's negligence or bad faith. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents,
accountants, experts and counsel and any taxes or other expenses incurred by a
trust created pursuant to Section 9.01 hereof.
The Company shall indemnify the Trustee for, and hold it harmless
against any and all loss, damage, claims, liability or expense, including taxes
(other than franchise taxes imposed on the Trustee and taxes based upon,
measured by or determined by the income of the Trustee), arising
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out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent that such loss, damage,
claim, liability or expense is due to its own negligence or bad faith. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. However, the failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall cooperate in
the defense (and may employ its own counsel) at the Company's expense; provided,
however, that the Company's reimbursement obligation with respect to counsel
employed by the Trustee will be limited to the reasonable fees and expenses of
such counsel.
The Company need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld. The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee as a result of the violation of this Indenture by the
Trustee.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Securities or the Purchase Price or redemption price of any Securities to be
purchased pursuant to an Offer to Purchase or redeemed.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(h) or (i) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Nine and any rejection or termination under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent under
any Bankruptcy Law;
(c) a custodian or other public officer takes charge of the
Trustee or its property; or
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(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Securityholder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the outstanding Securities
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee. If the Trustee fails to comply with
Section 7.10, any Securityholder 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 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09 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 banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA ?? 310(a)(1) and 310(a)(2). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. If the Trustee has or
shall acquire any "conflicting interest" within the meaning of TIA ? 310(b), the
Trustee and the Company shall comply with the provisions of TIA ? 310(b);
provided, however, that there shall be excluded from the operation of TIA ?
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ? 310(b)(1)
are met. If at any time the Trustee
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shall cease to be eligible in accordance with the provisions of this Section
7.10, the Trustee shall resign immediately in the manner and with the effect
hereinbefore specified in this Article Seven.
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ? 311(a), excluding any
creditor relationship listed in TIA ? 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ? 311(a) to the extent indicated therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01 Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and the Trustee and each Holder
of the Securities by his acceptance thereof likewise covenant and agree, that
all Securities shall be issued subject to the provisions of this Article Eight;
and each person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that all payments
of the principal of and interest on the Securities by the Company shall, to the
extent and in the manner set forth in this Article Eight, be subordinated and
junior in right of payment to the prior payment in full in cash of all amounts
payable under Senior Indebtedness.
SECTION 8.02 No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment (excluding any payment or
distribution of Permitted Junior Securities and excluding any payment from funds
held in trust for the benefit of the Holders pursuant to Article Nine (a
"Defeasance Trust Payment")) by or on behalf of the Company or any Subsidiary of
the Company of principal of, premium, if any, or interest on the Securities,
whether pursuant to the terms of the Securities, upon acceleration, pursuant to
an Offer to Purchase or otherwise, will be made if, at the time of such payment,
there exists a default in the payment of all or any portion of the obligations
on any Designated Senior Indebtedness, whether at maturity, on account of
mandatory redemption or prepayment, acceleration or otherwise, and such default
shall not have been cured or waived or the benefits of this sentence waived by
or on behalf of the holders of such Designated Senior Indebtedness. In addition,
during the continuance of any non-payment event of default with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
immediately accelerated, and upon receipt by the Trustee of written notice (a
"Payment Blockage Notice") from the holder or holders of such Designated Senior
Indebtedness or the trustee or agent acting on behalf of the holders of such
Designated Senior Indebtedness, then, unless and until such event of default has
been cured or waived or has ceased to exist or such Designated Senior
Indebtedness has been discharged or repaid in full in cash or the benefits of
these provisions have been waived by the holders of such Designated Senior
Indebtedness, no direct or indirect payment (excluding any payment or
distribution of Permitted Junior Securities and excluding any Defeasance Trust
Payment) will be made by or on behalf of the Company or any
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Subsidiary of the Company of principal of, premium, if any, or interest on the
Securities, to such Holders, during a period (a "Payment Blockage Period")
commencing on the date of receipt of such notice by the Trustee and ending 179
days thereafter.
Notwithstanding anything in the subordination provisions of the
Indenture or the Securities to the contrary, (x) in no event will a Payment
Blockage Period extend beyond 179 days from the date the Payment Blockage Notice
in respect thereof was given, (y) there shall be a period of at least 181
consecutive days in each 360-day period when no Payment Blockage Period is in
effect and (z) not more than one Payment Blockage Period may be commenced with
respect to the Securities during any period of 360 consecutive days. No event of
default that existed or was continuing on the date of commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period (to the extent the holder of Designated
Senior Indebtedness, or trustee or agent, giving notice commencing such Payment
blockage Period had knowledge of such existing or continuing event of default)
may be, or be made, the basis for the commencement of any other Payment Blockage
Period by the holder or holders of such Designated Senior Indebtedness or the
trustee or agent acting on behalf of such Designated Senior Indebtedness,
whether or not within a period of 360 consecutive days, unless such event of
default has been cured or waived for a period of not less than 90 consecutive
days.
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 8.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Designated Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Designated Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that, upon notice from the Trustee to the holders of Designated Senior
Indebtedness that such prohibited payment has been made, the holders of the
Designated Senior Indebtedness (or their representative or representatives or a
trustee or trustees) notify the Trustee in writing of the amounts then due and
owing on the Designated Senior Indebtedness, if any, and only the amounts
specified in such notice to the Trustee shall be paid to the holders of
Designated Senior Indebtedness.
SECTION 8.03 Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of
the Company of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities and
excluding Defeasance Trust Payment), upon any dissolution or winding-up or total
liquidation or reorganization of the Company, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all Senior
Indebtedness shall first be paid in full in cash before the Holders of the
Securities or the Trustee on behalf of such Holders shall be entitled to receive
any payment by the Company of the principal of, premium, if any, or interest on
the Securities, or any payment by the Company to acquire any of the Securities
for cash, property or securities, or any distribution by the Company with
respect to the Securities of any cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities and excluding any
Defeasance Trust Payment). Before any payment may be made by, or on behalf of,
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the Company of the principal of, premium, if any, or interest on the Securities
upon any such dissolution or winding-up or total liquidation or reorganization,
any payment or distribution of assets or securities of the Company of any kind
or character, whether in cash, property or securities (excluding any payment or
distribution of Permitted Junior Securities and excluding any Defeasance Trust
Payment), to which the Holders of the Securities or the Trustee on their behalf
would be entitled, but for the subordination provisions of this Indenture, shall
be made by the Company or by any receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, directly to
the holders of the Senior Indebtedness (pro rata to such holders on the basis of
the respective amounts of Senior Indebtedness held by such holders) or their
representatives or to the trustee or trustees or agent or agents under any
agreement or indenture pursuant to which any of such Senior Indebtedness may
have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Indebtedness in full in cash after giving
effect to any prior or concurrent payment, distribution or provision therefor to
or for the holders of such Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any payment or distribution of Permitted Junior
Securities and excluding any Defeasance Trust Payment), shall be received by the
Trustee or any Holder of Securities at a time when such payment or distribution
is prohibited by Section 8.03(a) and before all obligations in respect of Senior
Indebtedness are paid in full in cash, such payment or distribution shall be
received and held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such holders)
or their respective representatives, or to the trustee or trustees or agent or
agents under any indenture pursuant to which any of such Senior Indebtedness may
have been issued, as their respective interests may appear, for application to
the payment of Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full in cash after giving effect to any prior or
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 8.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 8.04 Subrogation.
Upon the payment in full in cash of all Senior Indebtedness, or
provision for payment, the Holders of the Securities shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company made on such Senior
Indebtedness until the principal of and interest on the Securities shall be paid
in full in cash;
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and, for the purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee on their behalf would be entitled
except for the provisions of this Article Eight, and no payment over pursuant to
the provisions of this Article Eight to the holders of Senior Indebtedness by
Holders of the Securities or the Trustee on their behalf shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. It is understood that the provisions of this
Article Eight are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Eight shall have been applied, pursuant to the provisions of this
Article Eight, to the payment of all amounts payable under Senior Indebtedness,
then and in such case, the Holders of the Securities shall be entitled to
receive from the holders of such Senior Indebtedness any payments or
distributions received by such holders of Senior Indebtedness in excess of the
amount required to make payment in full in cash of such Senior Indebtedness.
SECTION 8.05 Obligations of Company Unconditional.
Nothing contained in this Article Eight or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Securities and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Holder of any Security or the Trustee on their
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Eight of the holders of the Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article Eight shall restrict the right of the Trustee or the
Holders of Securities to take any action to declare the Securities to be due and
payable prior to their stated maturity pursuant to Section 6.01 or to pursue any
rights or remedies hereunder; provided, however, that all Senior Indebtedness
then due and payable shall first be paid in full in cash before the Holders of
the Securities or the Trustee are entitled to receive any direct or indirect
payment from the Company of principal of or interest on the Securities.
SECTION 8.06 Notice to Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the
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Securities pursuant to the provisions of this Article Eight. The Trustee shall
not be charged with knowledge of the existence of any event of default with
respect to any Senior Indebtedness or of any other facts which would prohibit
the making of any payment to or by the Trustee unless and until the Trustee
shall have received notice in writing at its Corporate Trust Office to that
effect signed by an Officer of the Company, or by a holder of Senior
Indebtedness or trustee or agent therefor; and prior to the receipt of any such
written notice, the Trustee shall, subject to Article Seven, be entitled to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 8.06 at least two
Business Days prior to the date upon which by the terms of this Indenture any
moneys shall become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Security), then, regardless of
anything herein to the contrary, the Trustee shall have full power and authority
to receive any moneys from the Company and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date. Nothing
contained in this Section 8.06 shall limit the right of the holders of Senior
Indebtedness to recover payments as contemplated by Section 8.03. The Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Indebtedness (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Senior Indebtedness or a trustee
or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Eight, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Eight, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 8.07 Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities referred
to in this Article Eight, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Eight.
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SECTION 8.08 Trustee's Relation to Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article Eight with respect to any Senior Indebtedness
which may at any time be held by it in its individual or any other capacity to
the same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eight, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness (except as provided in
Section 8.03(b)). The Trustee shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article Eight or otherwise.
SECTION 8.09 Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with. The provisions of this Article Eight are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness.
SECTION 8.10 Securityholders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Eight, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, total
liquidation or reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company, the filing of a claim for the unpaid balance
of its or his Securities in the form required in those proceedings.
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SECTION 8.11 This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Eight shall not be
construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 8.12 Trustee's Compensation Not Prejudiced.
Nothing in this Article Eight shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 8.13 No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article Eight or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding or secured; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Senior Indebtedness; and (d) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 8.14 Subordination Provisions Not Applicable to Money Held in Trust for
Securityholders; Payments May Be Paid Prior to Dissolution.
All money and United States Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Article Nine shall be
for the sole benefit of the Holders and shall not be subject to this Article
Eight.
Nothing contained in this Article Eight or elsewhere in this
Indenture shall prevent (i) the Company, except under the conditions described
in Section 8.02, from making payments of principal of and interest on the
Securities or from depositing with the Trustee any moneys for such payments or
from effecting a termination of the Company's and the Guarantors' obligations
under the Securities and this Indenture as provided in Article Nine, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 8.02(b) or in Section 8.06. The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
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SECTION 8.15 Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of the Senior Indebtedness of
the acceleration.
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01 Termination of Company's Obligations.
Subject to the provisions of Article Eight, the Company may
terminate its and the Guarantors' substantive obligations in respect of the
Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal of and
interest on all Securities or otherwise. In addition to the foregoing, subject
to the provisions of Article Eight with respect to the creation of the
defeasance trust provided for in the following clause (i), the Company may,
provided that no Default or Event of Default has occurred and is continuing or
would arise therefrom (or, with respect to a Default or Event of Default
specified in Section 6.01(h) or (i), occurs at any time on or prior to the 91st
calendar day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 91st day)) and provided
that no default under any Senior Indebtedness would result therefrom, terminate
its and the Guarantors' substantive obligations in respect of Article Four
(other than Sections 4.01, 4.02, 4.07, 4.09, 4.11 and 4.12) and Article Five
hereof and any Event of Default specified in Section 6.01 (d) or (e) by (i)
depositing with the Trustee, under the terms of an irrevocable trust agreement,
money or United States Government Obligations sufficient (without reinvestment)
to pay all remaining Indebtedness on the Securities, (ii) delivering to the
Trustee either an Opinion of Counsel or a ruling directed to the Trustee from
the Internal Revenue Service to the effect that the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit
and termination of obligations, (iii) delivering to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
Section 9.01 will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" under the Investment Company Act of
1940, as amended (the "Investment Company Act"), and (iv) delivering to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating
compliance with all conditions precedent provided for herein. In addition,
subject to the provisions of Article Eight with respect to the creation of the
defeasance trust provided for in the following clause (i), the Company may,
provided that no Default or Event of Default has occurred and is continuing or
would arise therefrom (or, with respect to a Default or Event of Default
specified in Section 6.01(h) or (i), occurs at any time on or prior to the 91st
calendar day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 91st day)) and provided
that no default under any Senior Indebtedness would arise therefrom, terminate
all of its and the Guarantors' substantive obligations in respect of the
Securities (including its obligations to pay the principal of and interest on
the Securities and the Guarantors' Guaranty thereof) by (i) depositing with the
Trustee, under the terms of an irrevocable trust agreement, money or United
States Government Obligations sufficient
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(without reinvestment) to pay all remaining Indebtedness on the Securities, (ii)
delivering to the Trustee either a ruling directed to the Trustee from the
Internal Revenue Service to the effect that the Holders of the Securities will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit and termination of obligations or an Opinion of Counsel
addressed to the Trustee based upon such a ruling or based on a change in the
applicable Federal tax law since the date of this Indenture to such effect,
(iii) delivering to the Trustee an Opinion of Counsel to the effect that the
Company's exercise of its option under this Section 9.01 will not result in any
of the Company, the Trustee or the trust created by the Company's deposit of
funds pursuant to this provision becoming or being deemed to be an "investment
company" under the Investment Company Act and (iv) delivering to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating compliance with all
conditions precedent provided for herein.
Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 2.12, 2.13 and 4.01 (but
not with respect to termination of substantive obligations pursuant to the third
sentence of the foregoing paragraph), 4.02, 7.07, 7.08, 9.03 and 9.04 shall
survive until the Securities are no longer outstanding. Thereafter the Company's
obligations in Sections 7.07, 9.03 and 9.04 shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Securities and this Indenture except for those surviving
obligations specified above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 9.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Securities.
SECTION 9.02 Application of Trust Money.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 9.01, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities.
SECTION 9.03 Repayment to Company.
Subject to Sections 7.07 and 9.01, the Trustee shall promptly pay to
the Company upon written request any excess money held by it at any time. The
Trustee shall pay to the Company upon written request any money held by it for
the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee before being required to make any payment
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from
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the date of such publication or mailing, any unclaimed balance of such money
then remaining shall be repaid to the Company. After payment to the Company,
Securityholders entitled to money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person and all liability of the Trustee or Paying Agent with respect to such
money shall thereupon cease.
SECTION 9.04 Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and the Guarantors' obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.01 until such time as the Trustee is permitted to apply
all such money or United States Government Obligations in accordance with
Section 9.01; provided, however, that if the Company has made any payment of
interest on or principal of 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 United States
Government Obligations held by the Trustee.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01 Without Consent of Holders.
The Company and the Guarantors, when authorized by a resolution of
their respective Boards of Directors, and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any
Securityholder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the rights
of any Holder;
(b) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and his Indenture in connection
with any transaction complying with Article Five of this Indenture;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit or
rights to the Holders;
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(f) to make any other change that does not adversely affect the
rights of any Holder under this Indenture;
(g) to evidence the succession of another Person to any Guarantor
and the assumption by any such successor of the covenants of such Guarantor
herein and in the Guaranty in connection with any transaction complying with
Article Five of this Indenture;
(h) to add to the covenants of the Company or the Guarantors for the
benefit of the Holders, or to surrender any right or power herein conferred upon
the Company or any Guarantor;
(i) to secure the Securities pursuant to the requirements of Section
4.18 or otherwise; or
(j) to reflect the release of a Guarantor from its obligations with
respect to its Guaranty in accordance with the provisions of Section 11.03 and
to add a Guarantor pursuant to the requirements of Section 4.19; provided,
however, that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 10.01.
SECTION 10.02 With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by a resolution of their respective Boards of Directors, and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to Section 6.07, the Holders of a majority in
principal amount of the outstanding Securities may waive compliance by the
Company or any Guarantor with any provision of this Indenture or the Securities.
However, without the consent of each Securityholder affected, an amendment,
supplement 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 alter the optional redemption or
repurchase provisions of any Security or this Indenture in a manner adverse to
the Holders of the Securities;
(b) reduce the principal amount (or premium) of any Security;
(c) reduce the rate of or extend the time for payment of interest on
any Security;
(d) change the place or currency of payment of the principal of (or
premium) or interest on any Security;
(e) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07 or this
Section 10.02 (other than to add sections
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of this Indenture or the Securities which may not be amended, supplemented or
waived without the consent of each Securityholder affected);
(f) reduce the percentage of the principal amount of outstanding
Securities necessary for amendment to or waiver of compliance with any provision
of this Indenture or the Securities or for waiver of any Default;
(g) waive a Default in the payment of the principal of or interest
on or redemption or purchase payment with respect to any Security (except a
rescission of acceleration of the Securities by the Holders as provided in
Section 6.02 and a waiver of the payment default that resulted from such
acceleration);
(h) modify the ranking or priority of the Securities or the Guaranty
in respect of any Guarantor, or modify the definition of Senior Indebtedness or
Guarantor Senior Indebtedness, or amend or modify any of the provisions of
Article Eight or Article Twelve in any manner adverse to the Holders;
(i) release any Guarantor from any of its obligations under its
Guaranty or this Indenture otherwise than in accordance with this Indenture; or
(j) modify the provisions relating to any Offer to Purchase required
pursuant to Section 4.05 or 4.14 in a manner materially adverse to the Holders.
An amendment under this Section 10.02 may not make any change under
Article Eight or Article Twelve hereof that adversely affects in any material
respect the rights of any holder of Senior Indebtedness or Guarantor Senior
Indebtedness, as the case may be, then outstanding unless the holders of such
Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be, (or
any representative thereof authorized to give a consent) shall have consented to
such change.
It shall not be necessary for the consent of the Holders under this
Section 10.02 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 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 10.03 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
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SECTION 10.04 Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders of Securities 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 of such Securities 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 Securityholder, unless it makes a change described in any of clauses
(a) through (j) of Section 10.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 10.05 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.06 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 this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company and
the Guarantors, enforceable in accordance with its terms (subject to customary
exceptions). The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver
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which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise. In signing any amendment, supplement or waiver, the
Trustee shall be entitled to receive an indemnity reasonably satisfactory to it.
ARTICLE ELEVEN
GUARANTY
SECTION 11.01 Unconditional Guaranty.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (each, a "Guaranty" or "Security Guarantee") to each Holder of a
Security authenticated by the Trustee and to the Trustee and its successors and
assigns that: the principal of and interest on the Securities will be promptly
paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise, and interest on the overdue principal
and interest on any overdue interest on the Securities and all other obligations
of the Company to the Holders or the Trustee hereunder or under the Securities
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; subject, however, to the limitations set forth in Section
11.04. Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Securities or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that the Guaranty will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture, and
this Guaranty. If any Holder or the Trustee is required by any court or
otherwise to return to the Company, any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or any
Guarantor, any amount paid by the Company or any Guarantor to the Trustee or
such Holder, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purpose of this Guaranty,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forth become due and payable
by each Guarantor for the purpose of this Guaranty.
SECTION 11.02 Severability.
In case any provision of this Guaranty 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.
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SECTION 11.03 Release of a Guarantor.
If the Securities are defeased in accordance with the terms of this
Indenture, or if Section 5.01(b) is complied with, or if, subject to the
requirements of Section 5.01(a), all or substantially all of the assets of any
Guarantor or all of the Equity Interests of any Guarantor are sold (including by
issuance or otherwise) by the Company in a transaction constituting an Asset
Sale and (x) the Net Cash Proceeds from such Asset Sale are used in accordance
with Section 4.05 or (y) the Company delivers to the Trustee an Officers'
Certificate to the effect that the Net Cash Proceeds from such Asset Sale shall
be used in accordance with Section 4.05 and within the time limits specified by
Section 4.05, then each Guarantor (in the case of defeasance) or such Guarantor
(in the case of compliance with Section 5.01(b) or in the event of a sale or
other disposition of all of the Equity Interests of such Guarantor) or the
corporation acquiring such assets (in the event of a sale or other disposition
of all or substantially all of the assets of such Guarantor) shall be released
and discharged from all obligations under this Article Eleven without any
further action required on the part of the Trustee or any Holder. The Trustee
shall, at the sole cost and expense of the Company and upon receipt at the
reasonable request of the Trustee of an Opinion of Counsel that the provisions
of this Section 11.03 have been complied with, deliver an appropriate instrument
evidencing such release upon receipt of a request by the Company accompanied by
an Officers' Certificate certifying as to the compliance with this Section
11.03. Any Guarantor not so released remains liable for the full amount of
principal of and interest on the Securities and the other obligations of the
Company hereunder as provided in this Article Eleven.
SECTION 11.04 Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guaranty not constitute a fraudulent
transfer or conveyance for purposes of title 11 of the United States Code, as
amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar U.S. Federal or state or other applicable law. To effectuate
the foregoing intention, the Holders and each Guarantor hereby irrevocably agree
that the obligations of each Guarantor under its Guaranty shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor (including any Senior Indebtedness incurred
after the Issue Date) and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guaranty or pursuant to Section
11.05, result in the obligations of such Guarantor under its Guaranty not
constituting such a fraudulent transfer or conveyance.
SECTION 11.05 Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guaranty, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each Guarantor
(including the Funding Guarantor), determined in accordance with GAAP, subject
to
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Section 11.04, for all payments, damages and expenses incurred by such Funding
Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations with respect to the Guaranty.
SECTION 11.06 Execution of Security Guaranty.
To further evidence their Guaranty to the Holders, each of the
Guarantors hereby agree to execute a Security Guarantee to be endorsed on each
Security ordered to be authenticated and delivered by the Trustee. Each
Guarantor hereby agrees that its Guaranty set forth in Section 11.01 shall
remain in full force and effect notwithstanding any failure to endorse on each
Security a Security Guarantee. Each such Security Guarantee shall be signed on
behalf of each Guarantor by its Chairman of the Board, its President or one of
its Vice Presidents prior to the authentication of the Security on which it is
endorsed, and the delivery of such Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of such Security
Guarantee on behalf of such Guarantor. Such signature upon the Security
Guarantee may be manual or facsimile signature of such officer and may be
imprinted or otherwise reproduced on the Security Guarantee, and in case such
officer who shall have signed the Security Guarantee shall cease to be such
officer before the Security on which such Security Guarantee is endorsed shall
have been authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and delivered or
disposed of as though the Person who signed the Security Guarantee had not
ceased to be such officer of such Guarantor.
SECTION 11.07 Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Guaranty or this Indenture, including, without limitation,
any right of subrogation, shall be subject and subordinate to, and no payment
with respect to any such claim of such Guarantor shall be made before, the
payment in full in cash of all outstanding Securities in accordance with the
provisions provided therefor in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF GUARANTY
SECTION 12.01 Guaranty Obligations Subordinated to Guarantor Senior
Indebtedness.
Each Guarantor covenants and agrees, and the Trustee and each Holder
of the Securities by his acceptance thereof likewise covenant and agree, that
the Guaranty of such Guarantor shall be issued subject to the provisions of this
Article Twelve; and each person holding any Security, whether upon original
issue or upon transfer, assignment or exchange thereof, accepts and agrees that
all payments of the principal of and interest on the Securities pursuant to the
Guaranty made by or on behalf of any Guarantor shall, to the extent and in the
manner set forth in
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this Article Twelve, be subordinated and junior in right of payment to the prior
payment in full in cash of all amounts payable under Guarantor Senior
Indebtedness of such Guarantor.
SECTION 12.02 Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of any
Guarantor of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities), upon any
dissolution or winding-up or total liquidation or reorganization of such
Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Guarantor Senior Indebtedness of such
Guarantor shall first be paid in full in cash before the Holders of the
Securities or the Trustee on behalf of such Holders shall be entitled to receive
any payment by such Guarantor of the principal of, premium, if any, or interest
on the Securities pursuant to such Guarantor's Guaranty, or any payment to
acquire any of the Securities for cash, property or securities, or any
distribution with respect to the Securities of any cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities). Before
any payment may be made by, or on behalf of, any Guarantor of the principal of,
premium, if any, or interest on the Securities upon any such dissolution or
winding-up or total liquidation or reorganization, any payment or distribution
of assets or securities of such Guarantor of any kind or character, whether in
cash, property or securities (excluding any payment or distribution of Permitted
Junior Securities), to which the Holders of the Securities or the Trustee on
their behalf would be entitled, but for the subordination provisions of this
Indenture, shall be made by such Guarantor or by any receiver, trustee in
bankruptcy, liquidation trustee, agent or other Person making such payment or
distribution, directly to the holders of the Guarantor Senior Indebtedness of
such Guarantor (pro rata to such holders on the basis of the respective amounts
of such Guarantor Senior Indebtedness held by such holders) or their
representatives or to the trustee or trustees or agent or agents under any
agreement or indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all such Guarantor Senior Indebtedness in full in
cash after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities (excluding any payment or distribution of Permitted
Junior Securities), shall be received by the Trustee or any Holder of Securities
at a time when such payment or distribution is prohibited by Section 12.02(a)
and before all obligations in respect of the Guarantor Senior Indebtedness of
such Guarantor are paid in full in cash, such payment or distribution shall be
received and held in trust for the benefit of, and shall be paid over or
delivered to, the holders of such Guarantor Senior Indebtedness (pro rata to
such holders on the basis of the respective amounts of such Guarantor Senior
Indebtedness held by such holders) or their respective representatives, or to
the trustee or trustees or agent or agents under any indenture pursuant to which
any of such Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of such
Guarantor Senior Indebtedness remaining unpaid until all such Guarantor Senior
Indebtedness has been paid in full
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in cash after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 12.02
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 12.03 Subrogation.
Upon the payment in full in cash of all Guarantor Senior
Indebtedness of a Guarantor, or provision for payment, the Holders of the
Securities shall be subrogated to the rights of the holders of such Guarantor
Senior Indebtedness to receive payments or distributions of cash, property or
securities of such Guarantor made on such Guarantor Senior Indebtedness until
the principal of and interest on the Securities shall be paid in full in cash;
and, for the purposes of such subrogation, no payments or distributions to the
holders of such Guarantor Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee on their behalf
would be entitled except for the provisions of this Article Twelve, and no
payment over pursuant to the provisions of this Article Twelve to the holders of
such Guarantor Senior Indebtedness by Holders of the Securities or the Trustee
on their behalf shall, as between such Guarantor, its creditors other than
holders of such Guarantor Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by such Guarantor to or on account of such
Guarantor Senior Indebtedness. It is understood that the provisions of this
Article Twelve are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of Guarantor Senior Indebtedness of each Guarantor, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Twelve shall have been applied, pursuant to the provisions of this
Article Twelve, to the payment of all amounts payable under Guarantor Senior
Indebtedness, then and in such case, the Holders of the Securities shall be
entitled to receive from the holders of such Guarantor Senior Indebtedness any
payments or distributions received by such holders of Guarantor Senior
Indebtedness in excess of the amount required to make payment in full in cash of
such Guarantor Senior Indebtedness.
SECTION 12.04 Obligations of Guarantors Unconditional.
Subject to Sections 11.04 and 8.02, nothing contained in this
Article Twelve or elsewhere in this Indenture or in the Securities or the
Guaranties is intended to or shall impair, as among each of the Guarantors and
the Holders of the Securities, the obligation of each Guarantor, which is
absolute and unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities as and when the same shall become
due and payable in accordance with
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the terms of the Guaranty of such Guarantor, or is intended to or shall affect
the relative rights of the Holders of the Securities and creditors of any
Guarantor other than the holders of Guarantor Senior Indebtedness of such
Guarantor, nor shall anything herein or therein prevent the Holder of any
Security or the Trustee on their behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Twelve of the holders of Guarantor Senior
Indebtedness in respect of cash, property or securities of any Guarantor
received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained
in this Article Twelve shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Guarantor Senior Indebtedness
of any Guarantor then due and payable shall first be paid in full before the
Holders of the Securities or the Trustee are entitled to receive any direct or
indirect payment from such Guarantor of principal of or interest on the
Securities pursuant to such Guarantor's Guaranty.
SECTION 12.05 Notice to Trustee.
The Company and each Guarantor shall give prompt written notice to
the Trustee of any fact known to the Company or such Guarantor which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Twelve. The Trustee shall
not be charged with knowledge of the existence of any event of default with
respect to any Guarantor Senior Indebtedness or of any other facts which would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing at its Corporate Trust Office to
that effect signed by an Officer of the Company or such Guarantor, or by a
holder of Guarantor Senior Indebtedness or trustee or agent therefor; and prior
to the receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided, however, that
if the Trustee shall not have received the notice provided for in this Section
12.06 at least two Business Days prior to the date upon which by the terms of
this Indenture any moneys shall become payable for any purpose (including,
without limitation, the payment of the principal of or interest on any
Security), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from any Guarantor and
to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 12.06 shall limit the right
of the holders of Guarantor Senior Indebtedness to recover payments as
contemplated by Section 12.03. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Guarantor Senior Indebtedness (or a trustee on behalf of, or
other representative of, such holder) to establish that such notice has been
given by a holder of such Guarantor Senior Indebtedness or a trustee or
representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person
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to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Guarantor Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article Twelve,
and if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 12.06 Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities of a
Guarantor referred to in this Article Twelve, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Guarantor Senior Indebtedness
of such Guarantor and other indebtedness of such Guarantor, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Twelve.
SECTION 12.07 Trustee's Relation to Guarantor Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Twelve with respect to any Guarantor Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Twelve, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness (except as provided in Section 12.02(b)). The Trustee shall not be
liable to any such holders if the Trustee shall in good faith mistakenly pay
over or distribute to Holders of Securities or to the Company or to any other
person cash, property or securities to which any holders of Guarantor Senior
Indebtedness shall be entitled by virtue of this Article Twelve or otherwise.
SECTION 12.08 Subordination Rights Not Impaired by Acts or Omissions of the
Guarantors or Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by any Guarantor with the terms of this
Indenture,
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regardless of any knowledge thereof which any such holder may have or
otherwise be charged with. The provisions of this Article Twelve are intended to
be for the benefit of, and shall be enforceable directly by, the holders of
Guarantor Senior Indebtedness.
SECTION 12.09 Securityholders Authorize Trustee To Effectuate Subordination of
Guaranty.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Twelve, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, total
liquidation or reorganization of any Guarantor (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of such Guarantor, the filing of a claim
for the unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 12.10 This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Twelve shall not be
construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 12.11 Trustee's Compensation Not Prejudiced.
Nothing in this Article Twelve shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 12.12 No Waiver of Guaranty Subordination Provisions.
Without in any way limiting the generality of Section 12.08, the
holders of Guarantor Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Twelve or the obligations hereunder of the Holders of the Securities to the
holders of Guarantor Senior Indebtedness, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Guarantor Senior Indebtedness or any instrument
evidencing the same or any agreement under which Guarantor Senior Indebtedness
is outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Guarantor Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Guarantor Senior Indebtedness; and (d) exercise or refrain from exercising any
rights against any Guarantor and any other Person.
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SECTION 12.13 Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) a Guarantor, except under the conditions described
in Section 12.02, from making payments of principal of and interest on the
Securities, or from depositing with the Trustee any moneys for such payments, or
(ii) the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of and interest on the Securities,
to the holders entitled thereto unless at least two Business Days prior to the
date upon which such payment becomes due and payable, the Trustee shall have
received the written notice provided for in Section 12.06. The Guarantors shall
give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of such Guarantor.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01 Trust Indenture Act Controls.
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. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this Indenture as so modified. If any provision of this Indenture excludes
any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.
The provisions of TIA ?? 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
SECTION 13.02 Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to the Company or to the Guarantors:
Sovereign Specialty Chemicals, Inc.
225 West Washington Street
Suite 2200
Chicago, Illinois 60606
Attention: Chief Financial Officer
Facsimile: (312) 419-7151
Telephone: (312) 419-7100
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92
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Carter W. Emerson, Esq.
Facsimile: (312) 861-2200
Telephone: (312) 861-2000
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Facsimile: (212) 815-5915
Telephone: (212) 815-5783
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, first-class, postage prepaid, to
a Holder including any notice delivered in connection with TIA ? 310(b), TIA ?
313(c), TIA ? 314(a) and TIA ? 315(b), shall be mailed to him at his address as
set forth on the Security Register and shall be sufficiently given to him if so
mailed within the time prescribed. To the extent required by the TIA, any notice
or communication shall also be mailed to any Person described in TIA ? 313(c).
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03 Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ? 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA ? 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
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(1) an Officers' Certificate in form and substance satisfactory to
the Trustee 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
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) 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
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 13.06 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.07 Governing Law.
The laws of the State of New York shall govern this Indenture, the
Securities and the Security Guarantees without regard to principles of conflicts
of law.
SECTION 13.08 No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Securities, the Guaranty of such Guarantor or
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability.
- 93 -
94
SECTION 13.09 Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of each Guarantor in this Indenture and
such Guarantor's Guaranty shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 13.10 Counterpart 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 13.11 Severability.
In case any provision in this Indenture, in the Securities or in the
Guaranty 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, and a Holder shall have no claim therefor against any party
hereto.
SECTION 13.12 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or a Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 13.13 Legal Holidays.
If a payment date is a not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day, and no
interest shall accrue for the intervening period.
[Signature Pages Follow]
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95
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
SOVEREIGN SPECIALTY CHEMICALS, INC.
By: /s/ Robert B. Covalt
----------------------------------
Name: Robert B. Covalt
Title: Chairman, President and
Chief Executive Officer
PIERCE & STEVENS CORP.,
as Guarantor
By: /s/ Robert B. Covalt
Name: Robert B. Covalt
Title: Chairman
SIA ADHESIVES, INC.,
as Guarantor
By: /s/ Robert Covalt
Name: Robert B. Covalt
Title: Chairman
LA PORTE CONSTRUCTION CHEMICALS
NORTH AMERICA, INC.,
as Guarantor
By: /s/ Robert B. Covalt
Name: Robert B. Covalt
Title: Chairman
- 95 -
96
MERCER PRODUCTS COMPANY, INC.,
as Guarantor
By: /s/ Robert B. Covalt
Name: Robert B. Covalt
Title: Chairman
EVODE-TANNER INDUSTRIES, INC.,
as Guarantor
By: /s/ Robert B. Covalt
Name: Robert B. Covalt
Title: Chairman
THE BANK OF NEW YORK,
as Trustee
By: /s/ Mary La Gumina
Name: Mary La Gumina
Title: Vice President
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97
EXHIBIT A
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS 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 (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT 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) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000 FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN THE
CASE OF THE FOREGOING CAUSE (D), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE ISSUER AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
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98
SOVEREIGN SPECIALTY CHEMICALS, INC.
9 1/2 % Senior Subordinated Note
due August 1 , 2007, Series A
CUSIP No.:[ ]
No. [ ] $[ ]
SOVEREIGN SPECIALTY CHEMICALS, INC., a Delaware corporation (the
"Company", which term includes any successor corporation), for value received
promises to pay to [ ] or registered assigns, the principal sum of [ ] Dollars,
on August 1, 2007.
Interest Payment Dates: February 1 and August 1, commencing on February 1,
1998.
Interest Record Dates: January 15 and July 15
Reference is made to the further provisions of this Security
contained herein, which will 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 officer.
SOVEREIGN SPECIALTY CHEMICALS, INC.
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Dated: [ ]
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 1/2% Senior Subordinated Notes due August 1,
2007, Series A, described in the within-mentioned Indenture. Dated: [ ]
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------
Authorized Signatory
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100
(REVERSE OF SECURITY)
SOVEREIGN SPECIALTY CHEMICALS, INC.
9 1/2% Senior Subordinated Note
due August 1, 2007, Series A
1. Interest.
SOVEREIGN SPECIALTY CHEMICALS, INC., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. Cash 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 August 1, 1997. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing February 1, 1998. 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 from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are cancelled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar.
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
August 1, 1997 (the "Indenture"), by and among the Company, the Guarantors and
the Trustee. Capitalized terms
- 100 -
101
herein are used as defined in the Indenture unless otherwise defined herein.
This Security is one of a duly authorized issue of Securities of the Company
designated as its 9 1/2% Senior Subordinated Notes due 2007, Series A (the
"Initial Securities"), limited (except as otherwise provided in the Indenture)
in aggregate principal amount to $125,000,000, which may be issued under the
Indenture. The Securities include the Initial Securities, the Private Exchange
Securities (as defined in the Indenture) and the Unrestricted Securities (as
defined below) issued in exchange for the Initial Securities pursuant to the
Registration Rights Agreement. The Initial Securities and the Unrestricted
Securities are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
?? 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture (except
as otherwise indicated in the Indenture) until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and holders of Securities
are referred to the Indenture and the TIA for a statement of them. The
Securities are general unsecured obligations of the Company. The Securities are
subordinated in right of payment to all Senior Indebtedness of the Company to
the extent and in the manner provided in the Indenture. Each Holder of a
Security, by accepting a Security, agrees to such subordination, authorizes the
Trustee to give effect to such subordination and appoints the Trustee as
attorney-in-fact for such purpose.
Payment on the Securities is guaranteed (each, a "Guaranty"), on a senior
subordinated basis, jointly and severally, by each Restricted Subsidiary (other
than Foreign Subsidiaries) of the Company existing on the Issue Date (each, a
"Guarantor") pursuant to Article Eleven and Article Twelve of the Indenture. In
addition, the Indenture requires the Company to cause each Restricted Subsidiary
(other than Foreign Subsidiaries) formed, created or acquired after the Issue
Date to become a party to the Indenture as a Guarantor and guarantee payment on
the Securities pursuant to Article Eleven and Article Twelve of the Indenture.
In certain circumstances, the Guaranties may be released.
5. Optional Redemption.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after August 1, 2002, at the redemption
prices (expressed as a percentage of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the redemption date (subject to
the right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date), if redeemed during the twelve-month
period beginning on August 1, of the years indicated below:
----------------------------------------
Year Redemption Price
----------------------------------------
2002 104.750%
----------------------------------------
2003 103.167%
----------------------------------------
2004 101.584%
----------------------------------------
2005 and thereafter 100.000%
----------------------------------------
- 101 -
102
6. Optional Redemption upon Public Equity Offerings.
In addition, at any time and from time to time on or prior to August
1, 2000, the Company may redeem in the aggregate up to $40.0 million aggregate
principal amount of the Securities with the net cash proceeds of one or more
Public Equity Offerings by the Company after which there is a Public Market, at
a redemption price in cash equal to 109.50% of the principal amount thereof,
plus accrued and unpaid interest thereon, if any, to the date of redemption
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that at least $85.0 million aggregate principal amount of the Securities must
remain outstanding immediately after giving effect to each such redemption
(excluding any Securities held by the Company or any of its Affiliates). Notice
of any such redemption must be given within 60 days after the date of the
closing of the relevant Public Equity Offering of the Company.
7. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
8. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 20
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. Limitation on Disposition of Assets.
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103
The Company is, subject to certain conditions, obligated to make an
Offer to Purchase Securities at a purchase price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Purchase Date (subject to the right of Holders of record on the Interest
Relevant Record Date to receive interest due on the relevant Interest Payment
Date) with the proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at its written request. After that, all liability of the Trustee and
such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guaranties, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guaranties, in each case upon satisfaction of certain conditions specified in
the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and the
Guaranties may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of 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, the Securities and the Guaranties to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
- 103 -
104
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not materially adversely
affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets, to engage in transactions with affiliates or certain other related
persons or to engage in certain businesses. The limitations are subject to a
number of important qualifications and exceptions. The Company must report
quarterly to the Trustee on compliance with such limitations Defaults. 16. and
Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guaranties except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guaranties unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company or any Guarantor shall have any liability for any
obligation of the Company or any Guarantor under the Securities, the Guaranty of
such Guarantor or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security 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 and the
Guaranties.
- 104 -
105
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Registration Rights.
Pursuant to the Registration Rights Agreement, the Company will be
obligated upon the occurrence of certain events to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Security for a 9 1/2% Senior Subordinated Note due 2007, Series B, of the
Company (an "Unrestricted Security") which have been registered under the
Securities Act, in like principal amount and having terms identical in all
material respects to the Initial Securities. The Holders shall be entitled to
receive certain additional interest payments in the event such exchange offer is
not consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.
23. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and any Guaranty thereof without regard to principles of conflicts of
laws.
- 105 -
106
[FORM OF SECURITY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantor (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) hereby unconditionally guarantees
on a senior subordinated basis (such guaranty by the Guarantor being referred to
herein as the "Guaranty") the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal, premium and interest on the Securities, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee, all in accordance with the terms set forth in Article Eleven of the
Indenture.
The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to the Guaranty and the Indenture are expressly set forth,
and are expressly subordinated and subject in right of payment to the prior
payment in full of all Guarantor Senior Indebtedness (as defined in the
Indenture) of such Guarantor, to the extent and in the manner provided in
Article Eleven and Article Twelve of the Indenture, and reference is hereby made
to such Indenture for the precise terms of the Guaranty therein made.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Security Guarantee is subject to release upon the terms set
forth in the Indenture.
PIERCE & STEVENS CORP.
By:
Name:
Title:
SIA ADHESIVES, INC.
By:
Name:
- 106 -
107
Title:
LA PORTE CONSTRUCTION CHEMICALS
NORTH AMERICA, INC.
By:
Name:
Title:
MERCER PRODUCTS COMPANY, INC.
By:
Name:
Title:
EVODE-TANNER INDUSTRIES, INC.
By:
Name:
Title:
- 107 -
108
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
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:
------------------- ------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
- -------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
- 108 -
109
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.05 or Section 4.14 of the Indenture, check the appropriate
box: Section 4.05 [ ] Section 4.14 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state the
amount: $_____________
Dated: Your Signature:
------------------- -----------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
- -------------------------
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
- 109 -
110
EXHIBIT B
[FORM OF SERIES B SECURITY]
SOVEREIGN SPECIALTY CHEMICALS, INC.
9 1/2% Senior Subordinated Note
due August 1, 2007, Series B
CUSIP No.:[ ]
No. [ ] $[ ]
SOVEREIGN SPECIALTY CHEMICALS, INC., a Delaware corporation (the
"Company", which term includes any successor corporation), for value received
promises to pay to [ ] or registered assigns, the principal sum of [ ] Dollars,
on August 1, 2007.
Interest Payment Dates: February 1 and August 1, commencing on
February 1, 1998.
Interest Record Dates: January 15 and July 15
Reference is made to the further provisions of this Security
contained herein, which will 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 officer.
SOVEREIGN SPECIALTY CHEMICALS, INC.
By:
Name:
Title:
By:
Name:
Title:
Dated: [ ]
- 110 -
111
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 1/2% Senior Subordinated Notes due August 1,
2007, Series B, described in the within-mentioned Indenture. Dated: [ ]
THE BANK OF NEW YORK,
as Trustee
By:
Authorized Signatory
- 111 -
112
(REVERSE OF SECURITY)
SOVEREIGN SPECIALTY CHEMICALS, INC.
9 1/2% Senior Subordinated Note
due August 1, 2007, Series B
1. Interest.
SOVEREIGN SPECIALTY CHEMICALS, INC., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. Cash 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 August 5, 1997. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing February 1, 1998. 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 from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are cancelled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar.
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
August 1, 1997 (the "Indenture"), by and among the Company, the Guarantors and
the Trustee. Capitalized terms
- 112 -
113
herein are used as defined in the Indenture unless otherwise defined herein.
This Security is one of a duly authorized issue of Securities of the Company
designated as its 9?% Senior Subordinated Notes due 2007, Series B (the
"Unrestricted Securities"), limited (except as otherwise provided in the
Indenture) in aggregate principal amount to $125,000,000, which may be issued
under the Indenture. The Securities include the 9 1/2% Senior Subordinated Notes
due 2007, Series A (the "Initial Securities"), the Private Exchange Securities
(as defined in the Indenture) and the Unrestricted Securities. The Initial
Securities, the Private Exchange Securities and the Unrestricted Securities are
treated as a single class of securities under the Indenture. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ??
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture (except as
otherwise indicated in the Indenture) until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and holders of Securities
are referred to the Indenture and the TIA for a statement of them. The
Securities are general unsecured obligations of the Company. The Securities are
subordinated in right of payment to all Senior Indebtedness of the Company to
the extent and in the manner provided in the Indenture. Each Holder of a
Security, by accepting a Security, agrees to such subordination, authorizes the
Trustee to give effect to such subordination and appoints the Trustee as
attorney-in-fact for such purpose.
Payment on the Securities is guaranteed (each, a "Guaranty"), on a
senior subordinated basis, jointly and severally, by each Restricted Subsidiary
(other than Foreign Subsidiaries) of the Company existing on the Issue Date
(each, a "Guarantor") pursuant to Article Eleven and Article Twelve of the
Indenture. In addition, the Indenture requires the Company to cause each
Restricted Subsidiary (other than Foreign Subsidiaries) formed, created or
acquired after the Issue Date to become a party to the Indenture as a Guarantor
and guarantee payment on the Securities pursuant to Article Eleven and Article
Twelve of the Indenture. In certain circumstances, the Guaranties may be
released.
5. Optional Redemption.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after August 1, 2002, at the redemption
prices (expressed as a percentage of principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the redemption date (subject to
the right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date), if redeemed during the twelve-month
period beginning on August 1 of the years indicated below:
---------------------------------------
Year Redemption Price
---------------------------------------
2002 104.750%
---------------------------------------
2003 103.167%
---------------------------------------
2004 101.584%
---------------------------------------
2005 and thereafter 100.000%
---------------------------------------
6. Optional Redemption upon Public Equity Offerings.
- 113 -
114
In addition, at any time and from time to time on or prior to August
1, 2000, the Company may redeem in the aggregate up to $40.0 million aggregate
principal amount of the Securities with the net cash proceeds of one or more
Public Equity Offerings by the Company after which there is a Public Market, at
a redemption price in cash equal to 9 1/2% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the date of redemption (subject
to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date); provided, however, that at
least $85.0 million aggregate principal amount of the Securities must remain
outstanding immediately after giving effect to each such redemption (excluding
any Securities held by the Company or any of its Affiliates). Notice of any such
redemption must be given within 60 days after the date of the closing of the
relevant Public Equity Offering of the Company.
7. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
8. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 20
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. Limitation on Disposition of Assets.
The Company is, subject to certain conditions, obligated to make an
Offer to Purchase Securities at a purchase price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Purchase Date (subject to the right of Holders of record on the Interest
- 114 -
115
Relevant Record Date to receive interest due on the relevant Interest Payment
Date) with the proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at its written request. After that, all liability of the Trustee and
such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guaranties, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guaranties, in each case upon satisfaction of certain conditions specified in
the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and the
Guaranties may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of 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, the Securities and the Guaranties to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not materially adversely
affect the rights of any Holder of a Security.
- 115 -
116
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets, to engage in transactions with affiliates or certain other related
persons or to engage in certain businesses. The limitations are subject to a
number of important qualifications and exceptions. The Company must report
quarterly to the Trustee on compliance with such limitations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guaranties except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guaranties unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company or any Guarantor shall have any liability for any
obligation of the Company or any Guarantor under the Securities, the Guaranty of
such Guarantor or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security 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 and the
Guaranties.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
- 116 -
117
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and any Guaranty thereof without regard to principles of conflicts of
laws.
- 117 -
118
[FORM OF SECURITY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantor (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) hereby unconditionally guarantees
on a senior subordinated basis (such guaranty by the Guarantor being referred to
herein as the "Guaranty") the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal, premium and interest on the Securities, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee, all in accordance with the terms set forth in Article Eleven of the
Indenture.
The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to the Guaranty and the Indenture are expressly set forth,
and are expressly subordinated and subject in right of payment to the prior
payment in full of all Guarantor Senior Indebtedness (as defined in the
Indenture) of such Guarantor, to the extent and in the manner provided in
Article Eleven and Article Twelve of the Indenture, and reference is hereby made
to such Indenture for the precise terms of the Guaranty therein made.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Security Guarantee is subject to release upon the terms set
forth in the Indenture.
PIERCE & STEVENS CORP.
By:
Name:
Title:
SIA ADHESIVES, INC.
By:
Name:
Title:
LA PORTE CONSTRUCTION CHEMICALS
NORTH AMERICA, INC.
By:
Name:
Title:
MERCER PRODUCTS COMPANY, INC.
- 118 -
119
By:
Name:
Title:
EVODE-TANNER INDUSTRIES, INC.
By:
Name:
Title:
- 119 -
120
ASSIGNMENT FORM
I or we assign and transfer this Security to
(Print or type name, address and zip code of assignee or transferee)
(Insert Social Security or other identifying number of assignee or transferee)
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:
---------------------- ------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
- -------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
- 120 -
121
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.05 or Section 4.14 of the Indenture, check the appropriate
box: Section 4.05 [ ] Section 4.14 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state the
amount: $_____________
Dated: Your Signature:
------------------- ------------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
- -----------------------------
- 121 -
122
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
- 122 -
123
EXHIBIT C
FORM OF LEGEND FOR GLOBAL 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 ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
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. TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL
- 123 -
124
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE
INDENTURE.
- 124 -
125
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 9 1/2% Senior Subordinated Notes due 2007
(the "Securities"), of Sovereign Specialty Chemicals, Inc.
This Certificate relates to $_______ principal amount of Securities
held in the form of* ___ a beneficial interest in a Global Security or* _______
Physical Securities by ______ (the "Transferor"). The Transferor:*
has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive, registered
form of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
has requested that the Registrar by written order to exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of the Securities does not require Registration under the
Securities Act of 1933, as amended (the "Act"), because*:
Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit E to the Indenture.
Such Security is being transferred in reliance on Rule 144 under the
Act.
Such Security is being transferred in reliance on and in compliance
with an exemption from the Registration requirements of the Act other than Rule
144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." [An Opinion of Counsel to the effect that such transfer
does not require Registration under the Securities Act accompanies this
certification.]
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--------------------------------
[INSERT NAME OF TRANSFEROR]
By:
----------------------------
[Authorized Signatory]
Date:
* Check applicable box.
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EXHIBIT E
FORM OF TRANSFEREE LETTER OF REPRESENTATION
Sovereign Specialty Chemicals, Inc.
c/o The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Dear Sirs:
This certificate is delivered to request a transfer of $________
principal amount of the 9 1/2% Senior Subordinated Notes due 2007 (the "Notes")
of Sovereign Specialty Chemicals, Inc. (the "Company"). Upon transfer, the Notes
would be registered in the name of the new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risk of our investment in the Notes and we invest
in or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes to offer, sell or otherwise transfer
such Notes prior to the date which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom
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notice is given that the transfer is being made in reliance on Rule 144A, (d) to
an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act, that is purchasing for its own account
or for the account of such an institutional "accredited investor," in each case
in a minimum principal amount of Notes of $250,000 or (e) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (d) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Notes pursuant to clause (d) or (e) above to
require the delivery of an opinion of counsel, certificates and/or other
information satisfactory to the Company and the Trustee.
Dated: TRANSFEREE: By:
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