EXHIBIT 4.3
Conformed Copy
PENNZOIL-QUAKER STATE COMPANY
THE SUBSIDIARY GUARANTORS PARTIES HERETO,
AND
THE CHASE MANHATTAN BANK,
AS TRUSTEE
10% Senior Notes due 2008
INDENTURE
Dated as of November 2, 2001
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions and Incorporation by Reference............................................................................. 1
SECTION 1.1. Definitions.............................................................................................. 1
SECTION 1.2. Other Definitions........................................................................................ 31
SECTION 1.3. Incorporation by Reference of Trust Indenture Act........................................................ 33
SECTION 1.4. Rules of Construction.................................................................................... 33
ARTICLE II
The Securities......................................................................................................... 34
SECTION 2.1. Form, Dating and Terms................................................................................... 34
SECTION 2.2. Execution and Authentication............................................................................. 40
SECTION 2.3. Registrar and Paying Agent............................................................................... 41
SECTION 2.4. Paying Agent to Hold Money in Trust...................................................................... 42
SECTION 2.5. Securityholder Lists..................................................................................... 42
SECTION 2.6. Transfer and Exchange.................................................................................... 42
SECTION 2.7. Form of Certificate to be Delivered in Connection with Transfers to Institutional Accredited Investors... 45
SECTION 2.8. Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S................ 47
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities.......................................................... 48
SECTION 2.10. Outstanding Securities.................................................................................. 49
SECTION 2.11. Temporary Securities.................................................................................... 49
SECTION 2.12. Cancellation............................................................................................ 49
SECTION 2.13. Payment of Interest; Defaulted Interest................................................................. 50
SECTION 2.14. Computation of Interest................................................................................. 51
SECTION 2.15. CUSIP Numbers........................................................................................... 51
ARTICLE III
Covenants.............................................................................................................. 51
SECTION 3.1. Payment of Securities................................................................................... 51
SECTION 3.2. SEC Reports............................................................................................. 51
SECTION 3.3. Limitation on Indebtedness.............................................................................. 52
SECTION 3.4. Limitation on Restricted Payments....................................................................... 56
SECTION 3.5. Limitation on Liens..................................................................................... 62
SECTION 3.6. Limitation on Restrictions on Distributions from Restricted Subsidiaries................................ 62
SECTION 3.7. Limitation on Sales of Assets and Subsidiary Stock...................................................... 64
SECTION 3.8. Limitation on Affiliate Transactions.................................................................... 67
SECTION 3.9. Change of Control....................................................................................... 69
SECTION 3.10. Limitation on Sale of Capital Stock of Restricted Subsidiaries.......................................... 71
i
SECTION 3.11. Limitation on Sale/Leaseback Transactions............................................................... 72
SECTION 3.12. Future Subsidiary Guarantors............................................................................ 72
SECTION 3.13. Limitation on Lines of Business......................................................................... 72
SECTION 3.14. Effectiveness of Covenants.............................................................................. 72
SECTION 3.15. Maintenance of Office or Agency......................................................................... 72
SECTION 3.16. Corporate Existence..................................................................................... 73
SECTION 3.17. Payment of Taxes and Other Claims....................................................................... 73
SECTION 3.18. Payments for Consent.................................................................................... 73
SECTION 3.19. Compliance Certificate.................................................................................. 74
SECTION 3.20. Further Instruments and Acts............................................................................ 74
SECTION 3.21. Statement by Officers as to Default..................................................................... 74
ARTICLE IV
Successor Company...................................................................................................... 74
SECTION 4.1. Merger and Consolidation................................................................................. 74
ARTICLE V
Redemption of Securities............................................................................................... 75
SECTION 5.1. Optional Redemption...................................................................................... 75
SECTION 5.2. Applicability of Article................................................................................. 76
SECTION 5.3. Election to Redeem; Notice to Trustee.................................................................... 76
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed........................................................ 76
SECTION 5.5. Notice of Redemption..................................................................................... 76
SECTION 5.6. Deposit of Redemption Price.............................................................................. 77
SECTION 5.7. Securities Payable on Redemption Date.................................................................... 77
SECTION 5.8. Securities Redeemed in Part.............................................................................. 78
ARTICLE VI
Defaults and Remedies.................................................................................................. 78
SECTION 6.1. Events of Default....................................................................................... 78
SECTION 6.2. Acceleration............................................................................................ 81
SECTION 6.3. Other Remedies.......................................................................................... 81
SECTION 6.4. Waiver of Past Defaults................................................................................. 82
SECTION 6.5. Control by Majority..................................................................................... 82
SECTION 6.6. Limitation on Suits..................................................................................... 82
SECTION 6.7. Rights of Holders to Receive Payment.................................................................... 83
SECTION 6.8. Collection Suit by Trustee.............................................................................. 83
SECTION 6.9. Trustee May File Proofs of Claim........................................................................ 83
SECTION 6.10. Priorities.............................................................................................. 83
SECTION 6.11. Undertaking for Costs................................................................................... 84
SECTION 6.12. Additional Payments..................................................................................... 84
ii
ARTICLE VII
Trustee................................................................................................................ 84
SECTION 7.1. Duties of Trustee....................................................................................... 84
SECTION 7.2. Rights of Trustee....................................................................................... 86
SECTION 7.3. Individual Rights of Trustee............................................................................ 86
SECTION 7.4. Trustee's Disclaimer.................................................................................... 86
SECTION 7.5. Notice of Defaults...................................................................................... 86
SECTION 7.6. Reports by Trustee to Holders........................................................................... 87
SECTION 7.7. Compensation and Indemnity.............................................................................. 87
SECTION 7.8. Replacement of Trustee.................................................................................. 88
SECTION 7.9. Successor Trustee by Merger............................................................................. 89
SECTION 7.10. Eligibility; Disqualification........................................................................... 89
SECTION 7.11. Preferential Collection of Claims Against Company....................................................... 89
SECTION 7.12. Trustee's Application for Instruction from the Company.................................................. 89
ARTICLE VIII
Discharge of Indenture; Defeasance..................................................................................... 90
SECTION 8.1. Discharge of Liability on Securities; Defeasance......................................................... 90
SECTION 8.2. Conditions to Defeasance................................................................................. 91
SECTION 8.3. Application of Trust Money............................................................................... 92
SECTION 8.4. Repayment to Company..................................................................................... 92
SECTION 8.5. Indemnity for U.S. Government Obligations................................................................ 93
SECTION 8.6. Reinstatement............................................................................................ 93
ARTICLE IX
Amendments............................................................................................................. 93
SECTION 9.1. Without Consent of Holders............................................................................... 93
SECTION 9.2. With Consent of Holders.................................................................................. 94
SECTION 9.3. Compliance with Trust Indenture Act...................................................................... 95
SECTION 9.4. Revocation and Effect of Consents and Waivers............................................................ 95
SECTION 9.5. Notation on or Exchange of Securities.................................................................... 95
SECTION 9.6. Trustee To Sign Amendments............................................................................... 96
ARTICLE X
Subsidiary Guarantee................................................................................................... 96
SECTION 10.1. Subsidiary Guarantee.................................................................................... 96
SECTION 10.2. Limitation on Liability; Termination, Release and Discharge............................................. 97
SECTION 10.3. Right of Contribution................................................................................... 98
SECTION 10.4. No Subrogation.......................................................................................... 98
iii
ARTICLE XI
Miscellaneous.......................................................................................................... 99
SECTION 11.1. Trust Indenture Act Controls........................................................................... 99
SECTION 11.2. Notices................................................................................................ 99
SECTION 11.3. Communication by Holders with other Holders............................................................ 100
SECTION 11.4. Certificate and Opinion as to Conditions Precedent..................................................... 100
SECTION 11.5. Statements Required in Certificate or Opinion.......................................................... 100
SECTION 11.6. When Securities Disregarded............................................................................ 101
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar........................................................... 101
SECTION 11.8. Legal Holidays......................................................................................... 101
SECTION 11.9. GOVERNING LAW.......................................................................................... 101
SECTION 11.10. No Recourse Against Others............................................................................. 101
SECTION 11.11. Successors............................................................................................. 101
SECTION 11.12. Multiple Originals..................................................................................... 101
SECTION 11.13. Variable Provisions.................................................................................... 102
SECTION 11.14. Qualification of Indenture............................................................................. 102
SECTION 11.15. Table of Contents; Headings............................................................................ 102
EXHIBIT A Form of the Series A Note
EXHIBIT B Form of the Series B Note
EXHIBIT C Form of Subsidiary Guarantee
iv
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.8; 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.5
(b) 13.3
(c) 13.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6
(d) 7.6
314(a) 3.2; 3.19; 13.2
(b) N.A.
(c)(1) 13.4
(c)(2) 13.4
(c)(3) N.A.
(d) N.A.
(e) 13.5
315(a) 7.1
(b) 7.5; 13.2
(c) 7.1
(d) 7.1
(e) 6.11
316(a)(last sentence) 13.6
(a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) N.A.
(b) 6.7
317(a)(1) 6.8
(a)(2) 6.9
(b) 2.4
318(a) 13.1
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
INDENTURE dated as of November 2, 2001, among PENNZOIL-QUAKER STATE
COMPANY, a Delaware corporation (the "Company"), THE SUBSIDIARY GUARANTORS (as
defined) and The Chase Manhattan Bank, a New York banking corporation (the
"Trustee") as Trustee.
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (i) the Company's 10% Senior
Notes, Series A, due 2008, issued on the date hereof (the "Initial Securities"),
(ii) if and when issued, an unlimited principal amount of additional 10% Senior
Notes, Series A, due 2008 in a non-registered offering or 10% Senior Notes,
Series B, due 2008 in a registered offering of the Company that may be offered
from time to time subsequent to the Issue Date (the "Additional Securities") and
(iii) if and when issued, the Company's 10% Senior Notes, Series B, due 2008
that may be issued from time to time in exchange for Initial Securities or any
Additional Securities in an offer registered under the Securities Act as
provided in the Registration Rights Agreement (as hereinafter defined the
"Exchange Securities," and together with the Initial Securities and Additional
Securities, the "Securities").
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.
"1995 Indenture" means the indenture dated as of October 23, 1995
between the Company, as successor to Quaker State Corporation, and Chemical
Bank, as Trustee, as the same may be amended, supplemented or otherwise modified
from time to time.
"1999 Indenture" means the indenture dated as of February 1, 1999,
between the Company and Chase Bank of Texas, National Association, as Trustee,
as the same may be amended, supplemented or otherwise modified from time to
time.
"2002 Notes" means the Company's $150 million principal amount of
8.65% Notes due 2002 issued pursuant to Section 301 of the 1999 Indenture.
"2005 Notes" means the Company's $100 million principal amount of
6-5/8% Notes due 2005 issued pursuant to the 1995 Indenture. Pennzoil-Quaker
State Company has replaced Quaker State Corporation as obligor under these
notes.
"2009 Notes" means the Company's $200 million principal amount of
6-3/4% Notes due 2009 issued pursuant to Section 301 of the 1999 Indenture.
"2029 Debentures" means the Company's $400 million principal amount of
7-3/8% Debentures due 2029 issued pursuant to Section 301 of the 1999 Indenture.
"Additional Assets" means:
2
(1) any property or assets (other than Indebtedness and Capital
Stock) to be used by the Company or a Restricted Subsidiary in a
Related Business;
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock
by the Company or a Restricted Subsidiary of the Company; or
(3) Capital Stock constituting a minority interest in any Person that
at such time is a Restricted Subsidiary of the Company;
provided, however, that, in the case of clauses (2) and (3), such Restricted
Subsidiary is primarily engaged in a Related Business.
"Additional Securities" has the meaning ascribed to it in the second
introductory paragraph of this Indenture.
"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 the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing;
provided that beneficial ownership of 10% or more of the Voting Stock of a
Person shall be deemed to be control.
"Asset Disposition" means any direct or indirect sale, lease (other
than an operating lease entered into in the ordinary course of business),
transfer, issuance or other disposition, or a series of related sales, leases,
transfers, issuances or dispositions that are part of a common plan, of shares
of Capital Stock of a Subsidiary (other than directors' qualifying shares),
property or other assets (each referred to for the purposes of this definition
as a "disposition") by the Company or any of its Restricted Subsidiaries,
including any disposition by means of a merger, consolidation or similar
transaction.
Notwithstanding the preceding, the following items shall not be deemed
to be Asset Dispositions:
(1) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Restricted Subsidiary
(other than a Receivables Entity);
(2) the sale of Cash Equivalents in the ordinary course of business;
(3) a disposition of inventory in the ordinary course of business;
(4) a disposition of obsolete or worn out equipment or equipment that
is no longer useful in the conduct of the business of the Company
and its Restricted Subsidiaries and that is disposed of in each
case in the ordinary course of business;
3
(5) transactions permitted under Sections 4.1 and 10.2;
(6) an issuance of Capital Stock by a Restricted Subsidiary of the
Company to the Company or to a Restricted Subsidiary (other than
a Receivables Entity);
(7) for purposes of Section 3.7 only, the making of a Permitted
Investment or a disposition permitted by Section 3.4;
(8) sales of accounts receivable and related assets or an interest
therein of the type specified in the definition of "Qualified
Receivables Transaction" made in connection with a Qualified
Receivables Transaction;
(9) dispositions of assets in a single transaction or series of
related transactions with an aggregate fair market value in any
calendar year of less than $25.0 million;
(10) dispositions in connection with Permitted Liens;
(11) the licensing or sublicensing of intellectual property or other
general intangibles and licenses, leases or subleases of other
property in the ordinary course of business which do not
materially interfere with the business of the Company and its
Restricted Subsidiaries;
(12) Permitted Sale/Leaseback Dispositions;
(13) foreclosure on assets; and
(14) sales of notes receivable (including, without limitation, any
collateral securing such notes, all contracts and guarantees or
other obligations in respect thereof and all proceeds of the
foregoing) in connection with the PLCAC Agreement.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (1) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (2) the sum of all such payments.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banking institutions are authorized or required by law to
close in New York City.
4
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation will be the capitalized amount of such obligation
at the time any determination thereof is to be made as determined in accordance
with GAAP, and the Stated Maturity thereof will be the date of the last payment
of rent or any other amount due under such lease prior to the first date such
lease may be terminated without penalty.
"Cash Equivalents" means:
(1) securities issued or directly and fully guaranteed or insured by
the United States Government or any agency or instrumentality of
the United States, having maturities of not more than one year
from the date of acquisition;
(2) marketable general obligations issued by any state of the United
States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year
from the date of acquisition of the United States and, at the
time of acquisition, having a credit rating of "A" or better from
either S&P or Moody's;
(3) certificates of deposit, time deposits, eurodollar time deposits,
overnight bank deposits or bankers' acceptances having maturities
of not more than one year from the date of acquisition thereof
issued by any commercial bank (i) in the case of any commercial
bank chartered by the United States Government or any state
thereof the long-term debt of which bank is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by
S&P, or "A" or the equivalent thereof by Moody's and (ii) having
combined capital and surplus in excess of $500.0 million (or the
U.S. dollar equivalent thereof);
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (1),
(2) and (3) entered into with any bank meeting the qualifications
specified in clause (3) above;
(5) commercial paper rated at the time of acquisition thereof at
least "A-2" or the equivalent thereof by S&P or "P-2" or the
equivalent thereof by Xxxxx'x, or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of investments,
and in any case maturing within one year after the date of
acquisition thereof;
5
(6) interests in any investment company or money market fund which
invests primarily in instruments of the type specified in clauses
(1) through (5) above;
(7) in the case of Foreign Subsidiaries, substantially similar
investments to those set forth in clauses (1) through (6) above
denominated in foreign currencies; provided that references to
the United States Government shall be deemed to mean foreign
countries having a sovereign rating of "A" or better from either
S&P or Xxxxx'x; and
(8) overnight bank deposits not to exceed $100,000 at any U.S.
financial institution or $350,000 at any non-U.S. financial
institution.
"Change of Control" means:
(1) any "person" or "group" of related persons (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that such person or group shall be
deemed to have "beneficial ownership" of all shares that any such
person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total voting
power of the Voting Stock of the Company (or its successor by
merger, consolidation or purchase of all or substantially all of
its assets) (for the purposes of this clause, such person or
group shall be deemed to beneficially own any Voting Stock of the
Company held by a parent entity, if such person or group
"beneficially owns" (as defined above), directly or indirectly,
more than 50% of the voting power of the Voting Stock of such
parent entity);
(2) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors; or
(3) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets
of the Company and its Restricted Subsidiaries taken as a whole
to any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act); or
(4) the adoption by the stockholders of the Company of a plan for the
liquidation or dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means with respect to any Person, any and all shares,
interest or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of such Person's common stock whether or not
outstanding on the Issue Date, and includes, without limitation, all series and
classes of such common stock.
6
"Company" has the meaning ascribed to it in the first introductory
paragraph of this Indenture, and any successor.
"Consolidated Coverage Ratio" means as of any date of determination,
with respect to any Person, the ratio of (x) the aggregate amount of
Consolidated EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination for
which financial statements are in existence to (y) Consolidated Interest Expense
for such four fiscal quarters, provided, however, that:
(1) if the Company or any Restricted Subsidiary:
(a) has Incurred any Indebtedness since the beginning of such
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 period will 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 period (except that in making such
computation, the amount of Indebtedness under any revolving
credit facility outstanding on the date of such calculation
will be computed based on (i) the average daily balance of
such Indebtedness during such four fiscal quarters or such
shorter period for which such facility was outstanding or
(ii) if such facility was created after the end of such four
fiscal quarters, the average daily balance of such
Indebtedness during the period from the date of creation of
such facility to the date of such calculation) and the
discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the
first day of such period; or
(b) has repaid, repurchased, defeased or otherwise discharged
any Indebtedness since the beginning of the period that is
no longer outstanding on such date of determination or if
the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio involves a discharge of
Indebtedness (in each case other than Indebtedness incurred
under any revolving credit facility unless such Indebtedness
has been permanently repaid and the related commitment
terminated), Consolidated EBITDA and Consolidated Interest
Expense for such period will be calculated after giving
effect on a pro forma basis to such discharge of such
Indebtedness, including with the proceeds of such new
Indebtedness, as if such discharge had occurred on the first
day of such period;
(2) if since the beginning of such period the Company or any
Restricted Subsidiary will have made any Asset Disposition or if
the transaction
7
giving rise to the need to calculate the Consolidated Coverage
Ratio is an Asset Disposition:
(a) the Consolidated EBITDA for such period will be reduced by
an amount equal to the Consolidated EBITDA (if positive)
directly attributable to the assets which are the subject of
such Asset Disposition for such period or increased by an
amount equal to the Consolidated EBITDA (if negative)
directly attributable thereto for such period; and
(b) Consolidated Interest Expense for such period will be
reduced by an amount equal to the Consolidated Interest
Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary which has been (or is
to be) repaid, repurchased, defeased or otherwise discharged
with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for
such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for
such 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 period the Company or any
Restricted Subsidiary (by merger or otherwise) will have made an
Investment in any Restricted Subsidiary (or any Person which
becomes a Restricted Subsidiary or is merged with or into the
Company) 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, division or line of
business or for its most recent fiscal year generated operating
income in excess of $1.0 million, Consolidated EBITDA and
Consolidated Interest Expense for such period will be calculated
after giving pro forma effect thereto (including the Incurrence
of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period; and
(4) if since the beginning of such 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 period) will have made any Asset Disposition 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 period,
Consolidated EBITDA and Consolidated Interest Expense for such
period will be calculated after giving pro forma effect thereto
as if such Asset Disposition or Investment or acquisition of
assets occurred on the first day of such period.
8
For purposes of this definition, whenever pro forma effect is to be
given to any calculation under this definition, the pro forma calculations will
be determined in good faith by a responsible financial or accounting officer of
the Company (including pro forma expense and cost reductions calculated on a
basis consistent with Regulation S-X under the Securities Act). If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness will be calculated as if the
average rate in effect for the four quarter period preceding such date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months).
"Consolidated EBITDA" for any period means, without duplication, the
Consolidated Net Income for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income:
(1) Consolidated Interest Expense;
(2) Consolidated Income Taxes;
(3) consolidated depreciation expense;
(4) consolidated amortization expense; and
(5) other non-cash charges reducing Consolidated Net Income
(excluding any such non-cash charge to the extent it represents
an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior
period not included in the calculation).
Notwithstanding the preceding sentence, clauses (2) through (5)
relating to amounts of a Restricted Subsidiary of a Person will be added to
Consolidated Net Income to compute Consolidated EBITDA of such Person only to
the extent (and in the same proportion) that the net income (loss) of such
Restricted Subsidiary was included in calculating the Consolidated Net Income of
such Person and, to the extent the amounts set forth in clauses (2) through (5)
are in excess of those necessary to offset a net loss of such Restricted
Subsidiary or if such Restricted Subsidiary has net income for such period
included in Consolidated Net Income, only if a corresponding amount would be
permitted at the date of determination to be dividended, distributed, advanced
or loaned to the Company by such Restricted Subsidiary without prior approval
(that has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Income Taxes" means, with respect to any Person for any
period, taxes imposed upon such Person or other payments required to be made by
such Person by any governmental authority which taxes or other payments are
calculated by reference to the income or profits of such Person or such Person
and its Restricted Subsidiaries (to the extent such income or profits were
included in computing Consolidated Net Income for such period), regardless of
whether such taxes or payments are required to be remitted to any governmental
authority.
9
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
whether paid or accrued, plus, to the extent not included in such interest
expense:
(1) interest expense attributable to Capitalized Lease Obligations in
accordance with GAAP and the interest component of any deferred
payment obligations;
(2) amortization of debt discount and debt issuance cost;
(3) non-cash interest expense;
(4) interest actually paid by the Company or any such Restricted
Subsidiary under any Guarantee of Indebtedness of any other
Person;
(5) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period;
(6) the product of (a) all dividends paid or payable in cash, Cash
Equivalents or Indebtedness or accrued during such period on any
series of Disqualified Stock of such Person or on Preferred Stock
of its Restricted Subsidiaries payable to a party other than the
Company or a Wholly-Owned Subsidiary, times (b) a fraction, the
numerator of which is one and the denominator of which is one
minus the then current combined federal, state, provincial and
local statutory tax rate of such Person, expressed as a decimal,
in each case, on a consolidated basis and in accordance with
GAAP; provided that the foregoing tax adjustment shall only be
applied to the extent dividends on such Preferred Stock or
Disqualified Stock are non-deductible for tax purposes; and
(7) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such
plan or trust to pay interest or fees to any Person (other than
the Company) in connection with Indebtedness Incurred by such
plan or trust;
provided, however, that there will be excluded therefrom any such interest
expense of any Unrestricted Subsidiary to the extent the related Indebtedness is
not Guaranteed or paid by the Company or any Restricted Subsidiary.
For purposes of the foregoing, total interest expense will be
determined after giving effect to any net payments made or received or accrued
by the Company and its Subsidiaries with respect to Interest Rate Agreements and
with respect to Indebtedness denominated in foreign currencies, net payments
made or received or accrued by the Company and its Subsidiaries with respect to
Currency Agreements.
"Consolidated Net Income" means, for any period, the net income (loss)
of the Company and its consolidated Restricted Subsidiaries determined in
accordance with GAAP; provided, however, that there will not be included in such
Consolidated Net Income:
10
(1) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that:
(a) subject to the limitations contained in clauses (3), (4) and
(5) below, the Company's equity in the net income of any
such Person for such period will 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 (2) below); and
(b) the Company's equity in a net loss of any such Person (other
than an Unrestricted Subsidiary) for such period will be
included in determining such Consolidated Net Income to the
extent such loss has been funded with cash from the Company
or a Restricted Subsidiary;
(2) any net income (but not loss) of any Restricted Subsidiary if
such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends and the making of
distributions and advances by such Restricted Subsidiary,
directly or indirectly, to the Company, except that:
(a) subject to the limitations contained in clauses (3), (4) and
(5) below, the Company's equity in the net income of any
such Restricted Subsidiary for such period will be included
in such Consolidated Net Income up to the aggregate amount
of cash that could have been dividended, distributed or
advanced by such Restricted Subsidiary during such period to
the Company or another Restricted Subsidiary (subject, in
the case of a dividend, distribution or advance 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 will be included in determining
such Consolidated Net Income;
(3) any gain (loss) realized upon the sale or other disposition of
any property, plant or equipment of the Company or its
consolidated Restricted Subsidiaries (including pursuant to any
Sale/Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business and any gain
(loss) realized upon the sale or other disposition of any Capital
Stock of any Person;
(4) any extraordinary gain or loss; and
(5) the cumulative effect of a change in accounting principles.
11
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who: (1) was a member of such
Board of Directors on the date of this Indenture; or (2) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Credit Facility" means one or more debt facilities (including,
without limitation, the revolving credit agreement to be entered into among the
Company, The Chase Manhattan Bank, as Administrative Agent, and the lenders
which are parties thereto from time to time) or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans, receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time (and whether or not with the original administrative
agent and lenders or another administrative agent or agents or other lenders and
whether provided under the original Credit Facility or any other credit or other
agreement or indenture).
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in Section 2.13.
"Definitive Securities" means certificated Securities.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the happening
of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or Disqualified
Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of the Company or a Restricted
Subsidiary); or
(3) is redeemable at the option of the Holder of the Capital Stock
thereof, in whole or in part,
in each case on or prior to the date that is 91 days after the date (a) on which
the Securities mature or (b) on which there are no Securities outstanding,
provided that only the portion of
12
Capital Stock which so matures or is mandatorily redeemable, is so convertible
or exchangeable or is so redeemable at the option of the Holder thereof prior to
such date will be deemed to be Disqualified Stock; provided, further, that any
Capital Stock that would constitute Disqualified Stock solely because the
Holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or asset sale (each defined in
a substantially identical manner to the corresponding definitions in this
Indenture) shall not constitute Disqualified Stock if the terms of such Capital
Stock (and all such securities into which it is convertible or for which it is
ratable or exchangeable) provide that the Company may not repurchase or redeem
any such Capital Stock (and all such securities into which it is convertible or
for which it is ratable or exchangeable) pursuant to such provision prior to
compliance by the Company with the provisions of Sections 3.9 and 3.7 (to the
extent such provisions remain in effect) and such repurchase or redemption
complies with Section 3.4.
"DTC" means The Depository Trust Company, its nominees and their
respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Equity Offering" means an offering for cash by the Company of its
Capital Stock (other than Disqualified Stock), or options, warrants or rights
with respect to its Capital Stock (other than Disqualified Stock) made pursuant
to a registration statement that has been declared effective by the SEC (other
than on Form S-4 or S-8) or pursuant to a private placement.
"Excel Paralubes Sponsor Agreement" means the Sponsor Agreement dated
as of May 22, 1995 among Atlas Processing Company, Excel Paralubes, Excel
Paralubes Funding Corporation, and The First National Bank of Chicago, and any
amendments, supplements or other modifications thereto that do not materially
adversely affect the rights of a Holder of the Securities taken as a whole;
provided that any amendment, supplement or modification that increases or could
increase the financial obligations of the Company or its Restricted Subsidiaries
under such agreement shall be deemed to materially adversely affect the rights
of the Holders of the Securities.
"Excel Paralubes Partner Loan Agreement" means the Partner Loan
Agreement dated as of May 22, 1995 among Conoco Inc., Atlas Processing Company,
Excel Paralubes and The First National Bank of Chicago, and any amendments
thereto that do not materially adversely affect the rights of any Holder, taken
as a whole, provided that any amendment, supplement or modification that
increases or could increase the financial obligations of the Company or its
Restricted Subsidiaries under such agreement shall be deemed to materially
adversely affect the rights of the Holders of the Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" shall have the meaning set forth in the Registration
Rights Agreement.
"Exchange Securities" has the meaning ascribed to it in the second
introductory paragraph of this Indenture.
13
"Fiscal Year" means the fiscal year of the Company ending on December
31 of each year.
"Foreign Subsidiary" means any Restricted Subsidiary doing business
outside of the United States of America or any state thereof or the District of
Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
United States accounting profession. All ratios and computations based on GAAP
contained in this Indenture will be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness of such other Person (including
arising by virtue of partnership arrangements); or
(2) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in
part) (including by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise);
provided, however, that the term "Guarantee" will not include Limited Recourse
Obligations or endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor Subordinated Obligation" means, with respect to a
Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether
outstanding on the Issue Date or thereafter Incurred) which is expressly
subordinate in right of payment to the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee pursuant to a written agreement.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered in the Note Register.
"Incur" means issue, create, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) will be deemed to
be incurred by such Restricted Subsidiary at the time it becomes a
14
Restricted Subsidiary; and the terms "Incurred" and "Incurrence" have meanings
correlative to the foregoing.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(2) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other
similar instruments, if, and to the extent, any of the foregoing
would appear as a liability on a balance sheet of such Person
prepared in accordance with GAAP;
(3) the principal component of all obligations of such Person in
respect of letters of credit, bankers' acceptances or other
similar instruments (including reimbursement obligations with
respect thereto except to the extent such reimbursement
obligation relates to a trade payable and such obligation is
satisfied within 90 days of Incurrence);
(4) the principal component of all obligations of such Person to pay
the deferred and unpaid purchase price of property (except
accrued expenses or trade payables or payments due under supply
or service contracts in the ordinary course of business), which
purchase price is due more than six months after the date of
placing such property in service or taking delivery and title
thereto;
(5) Capitalized Lease Obligations of such Person;
(6) the principal component or liquidation preference of all
obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with
respect to any Subsidiary, any Preferred Stock (but excluding, in
each case, any accrued dividends);
(7) the principal component of all Indebtedness of other Persons
secured by a Lien on any asset of such Person (excluding Limited
Recourse Stock Pledges), whether or not such Indebtedness is
assumed by such Person; provided, however, that the amount of
such Indebtedness will be the lesser of (a) the fair market value
of such asset at such date of determination and (b) the amount of
such Indebtedness of such other Persons;
(8) the principal component of Indebtedness of other Persons to the
extent Guaranteed by such Person; and
(9) to the extent not otherwise included in this definition, net
obligations of such Person under Currency Agreements and Interest
Rate Agreements (the amount of any such obligations to be equal
at any time to the
15
termination value of such agreement or arrangement giving rise to
such obligation that would be payable by such Person at such
time).
The amount of Indebtedness of any Person at any date will be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations as described above at such
date. Notwithstanding the foregoing, (i) money borrowed and set aside at the
time of the Incurrence of any Indebtedness in order to pre-fund the payment of
interest on such Indebtedness shall not be deemed to be "Indebtedness" provided
that such money is held to secure the payment of such interest and (ii)
Indebtedness shall not include obligations under take-or-pay or put-or-pay
agreements entered into in the ordinary course of business.
In addition, "Indebtedness" of any Person shall include Indebtedness
described in the preceding paragraph that would not appear as a liability on the
balance sheet of such Person if:
(1) such Indebtedness is the obligation of a Joint Venture;
(2) such Person or a Restricted Subsidiary of such Person is a
general partner of the Joint Venture or otherwise liable for the
debts of such Joint Venture (a "General Partner"); and
(3) there is recourse, by contract or operation of law, with respect
to the payment of such Indebtedness to property or assets of such
Person or a Restricted Subsidiary of such Person (other than
pursuant to Limited Recourse Obligations); and then such
Indebtedness shall be included in an amount not to exceed:
(a) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property
or assets of such Person or a Restricted Subsidiary of such
Person; or
(b) if less than the amount determined pursuant to clause (a)
immediately above, the actual amount of such Indebtedness
that is recourse to such Person or a Restricted Subsidiary
of such Person, if the Indebtedness is evidenced by a
writing and is for a determinable amount and the related
interest expense shall be included in Consolidated Interest
Expense to the extent actually paid by the Company or its
Restricted Subsidiaries.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Securities" has the meaning ascribed to it in the second
introductory paragraph of this Indenture.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate
16
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement or other similar agreement or arrangement as to
which such Person is party or a beneficiary.
"International Facilities" means the debt facilities in existence on
the Issue Date with respect to Subsidiaries of the Company whose primary
business is outside of the United States, in each case as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time (whether or not with the original lenders).
"Investment" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of any direct or
indirect advance, loan (other than advances to customers in the ordinary course
of business) or other extension of credit (including by way of Guarantee or
similar arrangement, but excluding any debt or extension of credit represented
by a bank deposit other than a time deposit) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by, such other Person and all other items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; provided that
none of the following will be deemed to be an Investment:
(1) Hedging Obligations, commodity price protection agreements and
commodity price hedging agreements entered into in the ordinary
course of business and in compliance with this Indenture;
(2) endorsements of negotiable instruments and documents in the
ordinary course of business; and
(3) an acquisition of assets, Capital Stock or other securities by
the Company or a Subsidiary for consideration to the extent such
consideration consists of common equity securities of the
Company.
For purposes of Section 3.4:
(1) "Investment" will include the portion (proportionate to the
Company's equity interest in a Restricted Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair market
value of the net assets of such Restricted Subsidiary of the
Company at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the
Company will be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if
positive) equal to (a) the Company's "Investment" in such
Subsidiary at the time of such redesignation less (b) the portion
(proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets (as
conclusively determined by the Board of Directors of the Company
in good faith) of such Subsidiary at the time that such
Subsidiary is so re-designated a Restricted Subsidiary; and
17
(2) any property transferred to or from an Unrestricted Subsidiary
will be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board
of Directors or senior management of the Company. If the Company
or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Voting Stock of any Restricted Subsidiary of the
Company such that, after giving effect to any such sale or
disposition, such entity is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment
on the date of any such sale or disposition equal to the fair
market value (as conclusively determined by the Board of
Directors or senior management of the Company in good faith) of
the Capital Stock of such Subsidiary not sold or disposed of.
"Investment Grade Status," with respect to the Company, shall occur
when the Securities receive a rating of "BBB-" or higher from S&P and a rating
of "Baa3" or higher from Moody's.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"Legal Holiday" has the meaning ascribed to it in Section 11.8.
"Joint Venture" means a partnership or joint venture that is not a
Restricted Subsidiary.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Limited Recourse Obligations" means:
(1) obligations of the Company or any Restricted Subsidiary to any
Joint Venture under take-or-pay contracts or put-or-pay
contracts;
(2) Limited Recourse Stock Pledges;
(3) the extension by the Company or any Restricted Subsidiary of
insurance coverage to any Joint Venture;
(4) the obligation of Atlas Processing Company (or a successor
thereof) to purchase subordinated notes pursuant to the Excel
Paralubes Partner Loan Agreement; and
(5) the obligation of Atlas Processing Company (or a successor
thereof) under the Excel Paralubes Sponsor Agreement to maintain
expense reserves, make capital contributions to cover uninsured
property losses and to deposit funds in the debt service reserve
account.
18
"Limited Recourse Stock Pledge" means the pledge of Capital Stock in
any Joint Venture or any Unrestricted Subsidiary to secure Non-Recourse Debt of
such Joint Venture or Unrestricted Subsidiary.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of:
(1) all legal, accounting, investment banking, title and recording
tax expenses, commissions and other fees and expenses incurred,
and all Federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP as a
consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon such assets, or which must by its terms,
or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds
from such Asset Disposition;
(3) all distributions and other payments required to be made to
minority interest Holders in Subsidiaries or joint ventures as a
result of such Asset Disposition;
(4) the deduction of appropriate amounts to be provided by the seller
as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition
and retained by the Company or any Restricted Subsidiary after
such Asset Disposition; and
(5) all payments made with respect to liabilities directly associated
with the assets which are the subject of the Asset Disposition,
including, without limitation, trade payables and other accrued
liabilities.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, listing fees,
discounts or commissions and brokerage, consultant and other fees and charges
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result of such issuance or sale.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any Restricted Subsidiary (a)
provides any Guarantee or credit support of any kind (including
any undertaking, guarantee, indemnity, agreement or instrument
that would
19
constitute Indebtedness) or (b) is directly or indirectly liable
(as a guarantor or otherwise);
(2) no default with respect to which (including any rights that the
Holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time
or both) any Holder of any other Indebtedness of the Company or
any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and
(3) the explicit terms of which provide there is no recourse against
any of the assets of the Company or its Restricted Subsidiaries.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Note Register" means the register of Securities, maintained by the
Trustee, pursuant to Section 2.3.
"Obligations" has the meaning ascribed to it in Section 10.1.
"Officer" means the Chairman of the Board, the President, the Chief
Executive Officer, the Chief Operating Officer, the Chief Financial Officer, any
Vice President, the Treasurer, the Controller or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company.
"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 Indebtedness" means Indebtedness that ranks equally in
right of payment to the Securities.
"Permitted Sale/Leaseback Disposition" means any Sale/Leaseback
Transaction entered into within 180 days of the date of acquisition of property
that is entered into with any vendor or supplier (or Affiliate thereof) (or any
financial institution acting on behalf of or for the purpose of financing
purchases from such vendor or supplier) to the extent the Indebtedness
thereunder is Incurred for the purpose of financing the acquisition of such
assets or property to be used in a Related Business.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) a Restricted Subsidiary (other than a Receivables Entity) or a
Person which will, upon the making of such Investment, become a
Restricted
20
Subsidiary (other than a Receivables Entity); provided, however,
that the primary business of such Restricted Subsidiary is a
Related Business;
(2) another Person if as a result of such Investment such other
Person is merged, consolidated or amalgamated with or into, or
transfers or conveys all or substantially all its assets to, the
Company or a Restricted Subsidiary (other than a Receivables
Entity); provided, however, that such Person's primary business
is a Related Business;
(3) cash and Cash Equivalents;
(4) trade receivables or notes receivable owing to the Company or any
Restricted Subsidiary;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the
ordinary course of business;
(6) loans or advances to officers, employees or directors made in the
ordinary course of business consistent with past practices of the
Company or such Restricted Subsidiary;
(7) Investments received in settlement of debts created in the
ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction or settlement of
judgments, litigations or arbitrations, or pursuant to any plan
of reorganization or similar arrangement upon the bankruptcy or
insolvency of a debtor;
(8) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 3.7;
(9) Investments in existence on the Issue Date;
(10) Currency Agreements, Interest Rate Agreements and related Hedging
Obligations, which transactions or obligations are Incurred in
compliance with Section 3.3;
(11) Investments by the Company or any of its Restricted Subsidiaries,
together with all other Investments pursuant to this clause (11),
in an aggregate amount at the time of such Investment not to
exceed $20.0 million outstanding at any one time;
(12) Guarantees issued in accordance with Section 3.3;
(13) Investments by the Company or a Restricted Subsidiary in a
Receivables Entity or any Investment by a Receivables Entity in
any other Person, in each case, in connection with a Qualified
Receivables Transaction,
21
provided, however, that any Investment in any such Person is in
the form of a Purchase Money Note, or any equity interest or
interests in accounts receivable and related assets generated by
the Company or a Restricted Subsidiary and transferred to any
Person in connection with a Qualified Receivables Transaction or
any such Person owning such accounts receivable; and
(14) Limited Recourse Stock Pledges.
"Permitted Liens" means, with respect to any Person:
(1) Liens securing Indebtedness and other obligations of the Company
under the Credit Facility and related Interest Rate Agreements
and liens on assets of Restricted Subsidiaries securing
Guarantees of Indebtedness and other obligations of the Company
under the Credit Facility permitted to be incurred under this
Indenture;
(2) pledges or deposits by such Person under workmen's compensation
laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts (other
than for the payment of Indebtedness) or leases, subleases or
licenses to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits or
cash or United States government bonds to secure surety or appeal
bonds to which such Person is a party, or deposits as security
for contested taxes or import or customs duties or for the
payment of rent, in each case Incurred in the ordinary course of
business;
(3) Liens imposed by law, including carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings if a reserve
or other appropriate provisions, if any, as shall be required by
GAAP shall have been made in respect thereof;
(4) Liens for taxes, assessments or other governmental charges or
claims not yet subject to penalties for non-payment or which are
being contested in good faith by appropriate proceedings provided
appropriate reserves required pursuant to GAAP have been made in
respect thereof;
(5) Liens in favor of issuers of tender, bid, surety, appeal or
performance bonds or letters of credit or bankers' acceptances
issued pursuant to the request of and for the account of such
Person in the ordinary course of its business; provided, however,
that such letters of credit do not support Indebtedness;
(6) encumbrances, easements or reservations of, or rights of others
for, licenses, rights of way, sewers, electric lines, telegraph
and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real properties or liens
incidental to the conduct of the business of such
22
Person or to the ownership of its properties which do not in the
aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of the
business of such Person;
(7) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be Incurred under this
Indenture;
(8) licenses, leases and subleases of real or personal property which
do not materially interfere with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries;
(9) judgment Liens not giving rise to an Event of Default so long as
such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of
such judgment have not been finally terminated or the period
within which such proceedings may be initiated has not expired;
(10) Liens for the purpose of securing the payment of all or a part of
the purchase price or cost of construction or improvement of (or
Indebtedness Incurred in connection therewith), or Capitalized
Lease Obligations with respect to, assets or property acquired or
constructed or improved in the ordinary course of business
(including, without limitation, Permitted Sale Leaseback
Dispositions), provided that:
(a) the aggregate principal amount of Indebtedness secured by
such Liens is otherwise permitted to be Incurred under this
Indenture and does not exceed the cost of the assets or
property so acquired or constructed; and
(b) such Liens are created within 180 days of construction or
acquisition of such assets or property and do not encumber
any other assets or property of the Company or any
Restricted Subsidiary other than such assets or property and
assets affixed or appurtenant thereto or proceeds in respect
thereof;
(11) Liens arising solely by virtue of any statutory or common law
provisions relating to banker's Liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds
maintained with a depositary institution, including dedicated
cash collateral accounts to secure obligations under letters of
credit;
(12) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company
and its Restricted Subsidiaries in the ordinary course of
business;
(13) Liens existing on the Issue Date;
23
(14) Liens on property (plus assets or property affixed or appurtenant
thereto or proceeds in respect thereof) or Capital Stock of a
Person at the time such Person becomes a Restricted Subsidiary
(plus assets or property affixed or appurtenant thereto or
proceeds in respect thereof); provided, however, that such Liens
are not created, incurred or assumed in connection with, or in
contemplation of, such other Person becoming a Restricted
Subsidiary; provided further, however, that any such Lien may not
extend to any other property owned by the Company or any
Restricted Subsidiary;
(15) Liens on property at the time the Company or a Restricted
Subsidiary acquired the property, including any acquisition by
means of a merger or consolidation with or into the Company or
any Restricted Subsidiary (plus assets or property affixed or
appurtenant thereto or proceeds in respect thereof); provided,
however, that such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such acquisition;
provided further, however, that such Liens may not extend to any
other property owned by the Company or any Restricted Subsidiary;
(16) Liens securing Indebtedness or other obligations of a Restricted
Subsidiary owing to the Company or a Restricted Subsidiary (other
than a Receivables Entity);
(17) Liens securing the Securities and Subsidiary Guarantees;
(18) Liens securing Refinancing Indebtedness incurred to refinance
Indebtedness that was previously so secured, provided that any
such Lien is limited to all or part of the same property or
assets (plus assets or property affixed or appurtenant thereto or
proceeds in respect thereof) that secured (or, under the written
arrangements under which the original Lien arose, could secure)
the Indebtedness being refinanced or is in respect of property
that is the security for a Permitted Lien hereunder;
(19) Liens on assets transferred to a Receivables Entity or on assets
of a Receivables Entity, in either case incurred in connection
with a Qualified Receivables Transaction;
(20) Liens securing Indebtedness or other obligations (other than
Subordinated Obligations and Guarantor Subordinated Obligations)
in an aggregate principal amount outstanding at any one time not
to exceed $25.0 million;
(21) Limited Recourse Stock Pledges;
(22) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Company or any Restricted
Subsidiary in the ordinary course of business in accordance with
industry practice;
24
(23) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from federal income
taxation pursuant to Section 103(b) of the Internal Revenue Code;
(24) customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to an indenture, escrow agreement or
similar agreement establishing a trust or escrow arrangement, and
Liens pursuant to merger agreements, stock purchase agreements,
asset sale agreements, option agreements and similar agreements
in respect of the disposition of property or assets of the
Company or any Restricted Subsidiary on the property to be
disposed of, to the extent such dispositions are permitted
hereunder;
(25) Liens resulting from the deposit of funds or securities in trust
for the purpose of defeasing the 2002 Notes, 2005 Notes, 2009
Notes and 2029 Debentures;
(26) Liens securing the 2002 Notes, the 2005 Notes, the 2009 Notes and
the 2029 Debentures, to the extent such Liens are required
pursuant to the terms thereof;
(27) Liens securing amounts borrowed, or Guarantees in respect
thereof, under commitments in existence on the Issue Date under
the International Facilities; and
(28) Liens on assets of the Company or any Restricted Subsidiary
arising as a result of a Sale/Leaseback Transaction with respect
to such assets; provided that the Net Available Cash from such
Sale/Leaseback Transaction are applied in accordance with Section
3.7 (to the extent such Section remains in effect).
"Permitted Non-Recourse Indebtedness" means Indebtedness of the
Company or any Restricted Subsidiary incurred in connection with the acquisition
or construction by the Company or such Restricted Subsidiary of any property
with respect to which:
(1) the Holders of such Indebtedness agree that they will look solely
to the property so acquired or constructed and securing such
Indebtedness, and neither the Company nor any Restricted
Subsidiary (a) provides direct or indirect credit support,
including any undertaking, agreement or instrument that would
constitute Indebtedness (other than the grant of a Lien on such
acquired or constructed property) or (b) is directly or
indirectly liable for such Indebtedness; and
(2) no default with respect to such Indebtedness would cause, or
permit (after notice or passage of time or otherwise), according
to the terms thereof, any Holder (or any representative of any
such Holder) of any other Indebtedness of the Company or a
Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment, repurchase,
25
redemption, defeasance or other acquisition or retirement for
value thereof to be accelerated or payable prior to any scheduled
principal payment, scheduled sinking fund or maturity.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, government or any agency or political subdivision
hereof or any other entity.
"PLCAC Agreement" means the Second Amended and Restated Lube Center
Receivable Purchase and Sale Agreement dated as of June 22, 2000 among Pennzoil
Lube Center Acceptance Corporation, as Seller, Corporate Receivables Corporation
and Liberty Street Funding Corp., as Investors, Citicorp North America, Inc., as
Investor Agent, and The Bank of Nova Scotia, and Liberty Agent, as amended by
the First Amendment thereto dated as of March 13, 2001 and the Second Amendment
thereto dated as of June 14, 2001, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Purchase Money Note" means a promissory note of a Receivables Entity
evidencing a line of credit, which may be irrevocable, from the Company or any
Restricted Subsidiary of the Company in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note is repayable from cash available
to the Receivables Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts owing
to such investors and amounts paid in connection with the purchase of newly
generated accounts receivable.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (1) a Receivables Entity (in the case
of a transfer by the Company or any of its Restricted Subsidiaries) and (2) any
other Person (in the case of a transfer by a Receivables Entity), or may grant a
security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, the proceeds of such receivables and
other assets which are customarily transferred, or in respect of which security
interests are customarily granted in connection with asset securitization
involving accounts receivable.
"QIB" means any "qualified institutional buyer" (as defined in Rule
144A under the Securities Act).
26
"Receivables Entity" means a Wholly-Owned Subsidiary of the Company
(or another Person in which the Company or any Restricted Subsidiary of the
Company makes an Investment and to which the Company or any Restricted
Subsidiary of the Company transfers accounts receivable and related assets)
which engages in no activities other than in connection with the financing of
accounts receivable and which is designated by the Board of Directors of the
Company (as provided below) as a Receivables Entity:
(1) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which:
(a) is guaranteed by the Company or any Restricted Subsidiary of
the Company (excluding guarantees of Obligations (other than
the principal of, and interest on, Indebtedness) pursuant to
Standard Securitization Undertakings);
(b) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way other than pursuant to
Standard Securitization Undertakings; or
(c) subjects any property or asset of the Company or any
Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to Standard Securitization
Undertakings;
(2) with which neither the Company nor any Restricted Subsidiary of
the Company has any material contract, agreement, arrangement or
understanding (except in connection with a Purchase Money Note or
Qualified Receivables Transaction) other than on terms no less
favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons that are not
Affiliates of the Company, other than fees payable in the
ordinary course of business in connection with servicing accounts
receivable; and
(3) to which neither the Company nor any Restricted Subsidiary of the
Company has any obligation to maintain or preserve such entity's
financial condition or cause such entity to achieve certain
levels of operating results (except pursuant to Standard
Securitization Undertakings).
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"Redemption Date" means, with respect to any redemption of Securities,
the date of redemption with respect thereto.
27
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, exchange, renew, repay or extend (including pursuant
to any defeasance or discharge mechanism) (collectively, "refinance,"
"refinances," and "refinanced" shall have a correlative meaning) any
Indebtedness existing on the date of this Indenture or Incurred in compliance
with this Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary)
including Indebtedness that refinances Refinancing Indebtedness, provided,
however, that:
(1) (a) if the Stated Maturity of the Indebtedness being refinanced
is earlier than the Stated Maturity of the Securities, the
Refinancing Indebtedness has a Stated Maturity no earlier than
the Stated Maturity of the Indebtedness being refinanced or (b)
if the Stated Maturity of the Indebtedness being refinanced is
later than the Stated Maturity of the Securities, the Refinancing
Indebtedness has a Stated Maturity at least 91 days later than
the Stated Maturity of the Securities;
(2) the Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater
than the Average Life of the Indebtedness being refinanced;
(3) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to or less than the sum of
the aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of
Indebtedness being refinanced (plus, without duplication, any
additional Indebtedness Incurred to pay interest or premiums
required by the instruments governing such existing Indebtedness
or otherwise paid or payable to complete such repurchase and fees
and expenses Incurred in connection therewith); and
(4) if the Indebtedness being refinanced is subordinated in right of
payment to the Securities or the Subsidiary Guarantee, such
Refinancing Indebtedness is subordinated in right of payment to
the Securities or the Subsidiary Guarantee on terms at least as
favorable to the Holders of Securities as those contained in the
documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the Issue Date among X.X. Xxxxxx Securities Inc., the Subsidiary
Guarantors and the Company, or any future registration rights agreement that
relates to Additional Securities issued in a non-registered offering.
"Related Business" means any business which is the same as or related,
ancillary or complementary to any of the businesses of the Company and its
Restricted Subsidiaries on the date of this Indenture.
28
"Related Business Assets" means assets used or useful in a Related
Business.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Period" means the 40 consecutive days beginning on and
including the later of (A) the day on which the Initial Securities are offered
to persons other than distributors (as defined in Regulation S under the
Securities Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement Legend set
forth in clause (A) of Section 2.1(d) or the Regulation S Legend set forth in
clause (B) of Section 2.1(d), as applicable.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person or an Affiliate thereof.
"S&P" means Standard & Poor's Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any borrowings under a credit facility or
indenture that are secured by a Lien on assets of the relevant borrower.
"Securities" means the collective reference to the Additional
Securities, Initial Securities and Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by DTC), or any successor Person thereto and shall
initially be the Trustee.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company which are reasonably customary in
securitization of accounts receivable transactions.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision, but shall not include any contingent
29
obligations to repay, redeem or repurchase any such principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred), which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership, joint venture, limited liability company or other business entity
of which more than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership and joint venture interests) entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (1) such Person, (2) such Person and one or more
Subsidiaries of such Person or (3) one or more Subsidiaries of such Person.
Unless otherwise specified herein, each reference to a Subsidiary will refer to
a Subsidiary of the Company.
"Subsidiary Guarantee" means, individually, any Guarantee of payment
of the Securities by a Subsidiary Guarantor pursuant to the terms of this
Indenture and any supplemental indenture thereto, and, collectively, all such
Guarantees. Each such Subsidiary Guarantee will be in the form prescribed by
this Indenture.
"Subsidiary Guarantor" means each Subsidiary of the Company in
existence on the Issue Date and any Restricted Subsidiary created or acquired by
the Company after the Issue Date that Guarantees obligations under a Credit
Facility and is therefore, to the extent required by this Indenture, required to
Guarantee obligations under this Indenture and the Securities or at the
Company's option, any Restricted Subsidiary designated as a Subsidiary Guarantor
by the Company.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. (S)(S) 77aaa-77bbbb), as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of
Directors of the Company in the manner provided below; and
30
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary or a Person
becoming a Subsidiary through merger or consolidation or Investment therein) to
be an Unrestricted Subsidiary only if:
(1) such Subsidiary or any of its Subsidiaries does not own any
Capital Stock or Indebtedness of or have any Investment in, or
own or hold any Lien on any property of, any other Subsidiary of
the Company which is not a Subsidiary of the Subsidiary to be so
designated or otherwise an Unrestricted Subsidiary;
(2) all the Indebtedness of such Subsidiary and its Subsidiaries
shall, at the date of designation, and will at all times
thereafter, consist of Non-Recourse Debt;
(3) such designation and the Investment of the Company in such
Subsidiary complies with Section 3.4
(4) such Subsidiary, either alone or in the aggregate with all other
Unrestricted Subsidiaries, does not operate, directly or
indirectly, all or substantially all of the business of the
Company and its Subsidiaries;
(5) such Subsidiary is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation:
(a) to subscribe for additional Capital Stock of such Person; or
(b) to maintain or preserve such Person's financial condition or
to cause such Person to achieve any specified levels of
operating results; and
(6) on the date such Subsidiary is designated an Unrestricted
Subsidiary, such Subsidiary is not a party to any agreement,
contract, arrangement or understanding with the Company or any
Restricted Subsidiary with terms substantially less favorable to
the Company than those that might have been obtained from Persons
who are not Affiliates of the Company.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complies with the foregoing
conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.
31
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and the Company could
incur at least $1.00 of additional Indebtedness under the first paragraph of
Section 3.3 on a pro forma basis taking into account such designation.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors' qualifying
shares) is owned by the Company or another Wholly-Owned Subsidiary.
SECTION 1.2. Other Definitions.
Term Defined in Section
---- ------------------
"Affiliate Transaction".............................. 3.8
"Agent Member"....................................... 2.1(d)
"Asset Sale Offer"................................... 3.7
"Asset Sale Offer Amount"............................ 3.7
"Asset Sale Offer Period"............................ 3.7
"Asset Sale Purchase Date"........................... 3.7
"Authenticating Agent"............................... 2.2
"Bankruptcy Law"..................................... 6.1
"Blockage Notice".................................... 10.3
"Change of Control".................................. 3.9
"Change of Control Offer"............................ 3.9
"Change of Control Payment".......................... 3.9
"Change of Control Payment Date"..................... 3.9
"Company Order"...................................... 2.2
32
"Corporate Trust Office"............................. 3.15
"covenant defeasance option"......................... 8.1(b)
"Custodian".......................................... 6.1
"Event of Default"................................... 6.1
"Excess Proceeds".................................... 3.7
"Exchange Global Note"............................... 2.1(a)
"Global Securities".................................. 2.1(a)
"IAI"................................................ 2.1(a)
"Institutional Accredited Investor Global Note"...... 2.1(a)
"legal defeasance option"............................ 8.1(b)
"Pari Passu Notes"................................... 3.67
"Paying Agent"....................................... 2.3
"Payment Blockage Period"............................ 10.3
"Private Placement Legend"........................... 2.1(d)
"Registrar".......................................... 2.3
"Regulation S"....................................... 2.1(a)
"Regulation S Global Note"........................... 2.1(a)
"Regulation S Legend"................................ 2.1(d)
"Regulation S Note".................................. 2.1(a)
"Resale Restriction Termination Date"................ 2.6
"Restricted Payment"................................. 3.5
"Rule 144A".......................................... 2.1(a)
"Rule 144A Global Note".............................. 2.1(a)
"Rule 144A Note"..................................... 2.1(a)
"Special Interest Payment Date"...................... 2.13
33
"Special Record Date"................................ 2.13
"Successor Company".................................. 4.1
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.4. 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 GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as
unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater.
34
ARTICLE II
The Securities
SECTION 2.1. Form, Dating and Terms.
(a) The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Initial
Securities issued on the date hereof will be in an aggregate principal amount of
$250,000,000. In addition, the Company may issue, from time to time in
accordance with the provisions of this Indenture, including, without limitation,
Section 3.3 hereof, Additional Securities and Exchange Securities. Furthermore,
Securities may be authenticated and delivered upon registration or transfer, or
in lieu of, other Securities pursuant to Section 2.6, 2.9, 2.11 or 9.5 or in
connection with an Asset Disposition Offer pursuant to Section 3.7 or a Change
of Control Offer pursuant to Section 3.9.
The Initial Securities shall be known and designated as "10 % Senior
Notes, Series A, due 2008" of the Company. Additional Securities issued as
Restricted Securities shall be known and designated as "10% Senior Notes, Series
A, due 2008" of the Company. Additional Securities issued other than as
Restricted Securities shall be known and designated as "10% Senior Notes, Series
B, due 2008" of the Company, and Exchange Securities shall be known and
designated as "10% Senior Notes, Series B, due 2008" of the Company.
With respect to any Additional Securities, the Company shall set forth
in a Board Resolution and an Officer's Certificate, the following information:
(1) the aggregate principal amount of such Additional Securities to
be authenticated and delivered pursuant to this Indenture;
(2) the issue price and the issue date of such Additional Securities;
and
(3) whether such Additional Securities shall be Restricted Securities
issued in the form of Exhibit A hereto and/or shall be issued in
the form of Exhibit B hereto.
The Initial Securities, the Additional Securities and the Exchange
Securities shall be considered collectively as a single class for all purposes
of this Indenture. Holders of the Initial Securities, the Additional Securities
and the Exchange Securities will vote and consent together on all matters to
which such Holders are entitled to vote or consent as one class, and none of the
Holders of the Initial Securities, the Additional Securities or the Exchange
Securities shall have the right to vote or consent as a separate class on any
matter to which such Holders are entitled to vote or consent.
(b) The Initial Securities are being offered and sold by the Company
pursuant to a Purchase Agreement, dated October 29, 2001, among the Company, the
Subsidiary Guarantors, X.X. Xxxxxx Securities Inc. and the other initial
purchasers named therein. The Initial Securities and any Additional Securities
(if issued as Restricted Securities) (the "Additional Restricted Securities")
will be resold initially only to (A) qualified institutional buyers (as defined
in Rule 144A under the Securities Act ("Rule 144A")) in reliance on Rule 144A
("QIBs") and (B) Persons other than U.S. Persons (as defined in Regulation S
under the Securities Act
35
("Regulation S")) in reliance on Regulation S. Such Initial Securities and
Additional Restricted Securities may thereafter be transferred to among others,
QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule
501 of the Securities Act in accordance with the procedure described herein.
Initial Securities and Additional Restricted Securities offered and
sold to qualified institutional buyers in the United States of America in
reliance on Rule 144A (the "Rule 144A Notes") shall be issued in the form of a
permanent global Security, without interest coupons, substantially in the form
of Exhibit A, which is hereby incorporated by reference and made a part of this
Indenture, including appropriate legends as set forth in Section 2.1(d) (the
"Rule 144A Global Note"), deposited with the Trustee, as custodian for DTC, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The Rule 144A Global Note may be represented by more than one
certificate, if so required by DTC's rules regarding the maximum principal
amount to be represented by a single certificate. The aggregate principal
amount of the Rule 144A Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.
Initial Securities and Additional Securities offered and sold outside
the United States of America (the "Regulation S Notes") in reliance on
Regulation S shall be issued in the form of a permanent global Security, without
interest coupons, substantially in the form of Exhibit A (the "Regulation S
Global Note") deposited with the Trustee, as custodian for DTC, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
Regulation S Global Note may be represented by more than one certificate, if so
required by DTC's rules regarding the maximum principal amount to be represented
by a single certificate. The aggregate principal amount of the Regulation S
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for DTC or its nominee, as
hereinafter provided.
Initial Securities and Additional Securities resold to institutional
"accredited investors" (as defined in Rules 501(a)(1), (2), (3) and (7) under
the Securities Act) who are not QIBs ("IAIs") (the "Institutional Accredited
Investor Notes") in the United States of America shall be issued in the form of
a permanent global Security, without interest coupons, substantially in the form
of Exhibit A (the "Institutional Accredited Investor Global Note") deposited
with the Trustee, as custodian for DTC, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The Institutional
Accredited Investor Global Note may be represented by more that one certificate,
if so required by DTC's rules regarding the maximum principal amount to be
represented by a single certificate. The aggregate principal amount of the
Institutional Accredited Investor Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A Notes,
the Regulation S Notes and the Institutional Accredited Investor Notes will be
issued in the form of a permanent global Security, without interest coupons,
substantially in the form of Exhibit B, which is hereby incorporated by
reference and made a part of this Indenture, deposited with the Trustee as
hereinafter provided, including the appropriate legend set forth in Section
2.1(d) (the "Exchange Global Note"). The Exchange Global Note may be
represented by more than one
36
certificate, if so required by DTC's rules regarding the maximum principal
amount to be represented by a single certificate.
The Rule 144A Global Note, the Regulation S Global Note, the
Institutional Accredited Investor Global Note and the Exchange Global Note are
sometimes collectively herein referred to as the "Global Securities."
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose pursuant to Section 2.3; provided,
however, that, at the option of the Company, each installment of interest may be
paid by (i) check mailed to addresses of the Persons entitled thereto as such
addresses shall appear on the Note Register or (ii) wire transfer to an account
located in the United States maintained by the payee. Payments in respect of
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by DTC.
The Securities may have notations, legends or endorsements required by
law, stock exchange rule or usage, in addition to those set forth on Exhibit A
and Exhibit B and in Section 2.1(d). The Company and the Trustee shall approve
the forms of the Securities and any notation, endorsement or legend on them.
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibit A and Exhibit B are part of the terms of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to be bound by such
terms.
(c) Denominations. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
(d) Restrictive Legends. Unless and until (i) an Initial Security is
sold under an effective registration statement or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement or a
similar agreement,
(A) the Rule 144A Global Note and the Institutional Accredited
Investor Global Note shall bear the following legend (the "Private Placement
Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. 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 UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE
37
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF 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
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF 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 TRANSACTION INVOLVING
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 (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) AND (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.";
and
(B) the Regulation S Global Note shall bear the following legend (the
"Regulation S Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
38
TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF 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
UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S, (E) 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 TRANSACTION INVOLVING 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 (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE.
THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND
INCLUDING THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE OFFERED TO
PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B) THE
DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
(C) The Global Securities, whether or not an Initial Security, shall
bear the following legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND
39
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 DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
(e) Book-Entry Provisions
(i) This Section 2.1(e) shall apply only to Global Securities
deposited with the Trustee, as custodian for DTC.
(ii) Each Global Security initially shall (x) be registered in the
name of DTC for such Global Security or the nominee of DTC, (y) be delivered to
the Trustee as custodian for DTC and (z) bear legends as set forth in Section
2.1(d).
(iii) Members of, or participants in, DTC ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by DTC or by the Trustee as the custodian of DTC or under such Global
Security, and DTC may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner of such 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
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices of DTC governing the exercise of the rights of a Holder of a
beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (f) of this Section 2.1 to
beneficial owners who are required to hold Definitive Securities, the Securities
Custodian shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Definitive Securities of like tenor and amount.
(v) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (f) of this Section 2.1, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by DTC in exchange for its
40
beneficial interest in such Global Security, an equal aggregate principal amount
of Definitive Securities of authorized denominations.
(vi) The registered Holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(f) Definitive Securities. (i) Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
Definitive Securities. If required to do so pursuant to any applicable law or
regulation, beneficial owners may obtain Definitive Securities in exchange for
their beneficial interests in a Global Security upon written request in
accordance with DTC's and the Registrar's procedures. In addition, Definitive
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Security if (a) DTC notifies the Company that
it is unwilling or unable to continue as depositary for such Global Security or
DTC ceases to be a clearing agency registered under the Exchange Act, at a time
when DTC is required to be so registered in order to act as depositary, and in
each case a successor depositary is not appointed by the Company within 90 days
of such notice or, (b) the Company executes and delivers to the Trustee and
Registrar an Officers' Certificate stating that such Global Security shall be so
exchangeable or (c) an Event of Default has occurred and is continuing and the
Registrar has received a request from DTC.
(ii) Any Definitive Security delivered in exchange for an interest in
a Global Security pursuant to Section 2.1(e)(iv) or (v) shall, except as
otherwise provided by Section 2.6(c), bear the applicable legend regarding
transfer restrictions applicable to the Definitive Security set forth in Section
2.1(d).
(iii) In connection with the exchange of a portion of a Definitive
Security for a beneficial interest in a Global Security, the Trustee shall
cancel such Definitive Security, and the Company shall execute, and the Trustee
shall authenticate and deliver, to the transferring Holder a new Definitive
Security representing the principal amount not so transferred.
SECTION 2.2. Execution and Authentication. One Officer shall sign the
Securities for the Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless, after
giving effect to any exchange of Initial Securities for Exchange Securities.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture. A Security shall be
dated the date of its authentication.
At any time and from time to time after the execution and delivery of
this Indenture, the Trustee shall authenticate and make available for delivery:
(1) Initial Securities for original issue on the Issue Date in an aggregate
principal amount of $250,000,000, (2) Additional Securities for original issue
and (3) Exchange Securities for issue only in an
41
Exchange Offer pursuant to the Registration Rights Agreement, and only in
exchange for Initial Securities or Additional Securities of an equal principal
amount, in each case upon a written order of the Company signed by two Officers
or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company (the "Company Order"). Such Company Order shall specify the amount
of the Securities to be authenticated and the date on which the original issue
of Securities is to be authenticated and whether the Securities are to be
Initial Securities, Additional Securities or Exchange Securities.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company or any Subsidiary Guarantor, pursuant to Article
IV or Section 10.2, shall be consolidated or merged with or into any other
Person or shall convey, transfer, lease or otherwise dispose of its properties
and assets substantially as an entirety to any Person, and the successor Person
resulting from such consolidation, or surviving such merger, or into which the
Company or any Subsidiary Guarantor shall have been merged, or the Person which
shall have received a conveyance, transfer, lease or other disposition as
aforesaid, shall have executed an indenture supplemental hereto with the Trustee
pursuant to Article IV, any of the Securities authenticated or delivered prior
to such consolidation, merger, conveyance, transfer, lease or other disposition
may, from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Securities as specified in such order for the purpose
of such exchange. If Securities shall at any time be authenticated and
delivered in any new name of a successor Person pursuant to this Section 2.2 in
exchange or substitution for or upon registration of transfer of any Securities,
such successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Securities at the time outstanding for
Securities authenticated and delivered in such new name.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Company shall cause each of
the Registrar and the Paying Agent to maintain an office or agency in the
Borough of Manhattan, The City of New York. The Registrar shall keep a register
of the Securities and of their transfer and exchange (the "Note Register"). The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms 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 each such agent.
42
If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such and shall be entitled to appropriate compensation therefor pursuant
to Section 7.7. The Company or any of its Restricted Subsidiaries may act as
Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4. Paying Agent to Hold Money in Trust. By at least 10:00
a.m. (New York City time) on the date on which any principal of or interest on
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee in writing of any
default by the Company or any Subsidiary Guarantor in making any such payment.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent (other than the Trustee) to pay
all money held by it to the Trustee and to account for any funds disbursed by
such Paying Agent. Upon complying with this Section, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money
delivered to the Trustee. Upon any bankruptcy, reorganization or similar
proceeding with respect to the Company, the Trustee shall serve as Paying Agent
for the Securities.
SECTION 2.5. 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 Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Company shall
furnish to the Trustee, in writing at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange.
(a) The following provisions shall apply with respect to any proposed
transfer of a Rule 144A Note or an Institutional Accredited Investor Note prior
to the date which is two years after the later of the date of its original issue
and the last date on which the Company or any affiliate of the Company was the
owner of such Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date"):
(i) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Note or a beneficial interest therein to a QIB shall be made upon
the representation of the transferee in the form as set forth on the
reverse of the Security that it is purchasing for its own account or an
account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within
the meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the
43
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A;
(ii) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Note or a beneficial interest therein to an IAI shall be made upon
receipt by the Trustee or its agent of a certificate substantially in the
form set forth in Section 2.7 from the proposed transferee and, if
requested by the Company or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them; and
(iii) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Note or a beneficial interest therein to a Non-U.S. Person shall
be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.8 from the proposed
transferee and, if requested by the Company or the Trustee, the delivery of
an opinion of counsel, certification and/or other information satisfactory
to each of them.
(b) The following provisions shall apply with respect to any proposed
transfer of a Regulation S Note prior to the expiration of the Restricted
Period:
(i) a transfer of a Regulation S Note or a beneficial interest therein
to a QIB shall be made upon the representation of the transferee, in the
form of assignment on the reverse of the certificate, that it is purchasing
the Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the exemption
from registration provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial interest
therein to an IAI shall be made upon receipt by the Trustee or its agent of
a certificate substantially in the form set forth in Section 2.7 from the
proposed transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them; and
(iii) a transfer of a Regulation S Note or a beneficial interest
therein to a Non-U.S. Person shall be made upon receipt by the Trustee or
its agent of a certificate substantially in the form set forth in Section
2.8 hereof from the proposed transferee and, if requested by the Company or
the Trustee, receipt by the Trustee or its agent of an opinion of counsel,
certification and/or other information satisfactory to each of them.
After the expiration of the Restricted Period, interests in the
Regulation S Note may be transferred without requiring the certification set
forth in Section 2.7, Section 2.8 or any additional certification.
44
(c) Restricted Securities Legend. Upon the transfer, exchange or
replacement of Securities not bearing a Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear a Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing a
Restricted Securities Legend, the Registrar shall deliver only Securities that
bear a Restricted Securities Legend unless there is delivered to the Registrar
an Opinion of Counsel 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.
(d) The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.1 or this Section
2.6. 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 prior written notice to the Registrar.
(e) Obligations with Respect to Transfers and Exchanges of Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall, subject to the other terms and conditions of this Article II,
execute and the Trustee shall authenticate Definitive Securities and Global
Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charges payable upon exchange or
transfer pursuant to Sections 3.7, 3.9 or 9.5).
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of any Security for a period beginning (1) 15
days before the mailing of a notice of an offer to repurchase or redeem
Securities and ending at the close of business on the day of such mailing
or (2) 15 days before an interest payment date and ending on such interest
payment date.
(iv) Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) Any Definitive Security delivered in exchange for an interest in a
Global Security pursuant to Section 2.1(e) shall, except as otherwise
provided by Section 2.6(c), bear the applicable legend regarding transfer
restrictions applicable to the Definitive Security set forth in Section
2.1(d).
(vi) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
45
(f) No Obligation of the Trustee
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in, DTC or
other Person with respect to the accuracy of the records of DTC or its nominee
or of any participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than DTC) of any notice (including any
notice of redemption) or the payment of any amount or delivery of any Securities
(or other security or property) under or with respect to such Securities. All
notices and communications to be given to the Holders and all payments to be
made to Holders in respect of the Securities shall be given or made only to or
upon the order of the registered Holders (which shall be DTC or its nominee in
the case of a Global Security). The rights of beneficial owners in any Global
Security shall be exercised only through DTC subject to the applicable rules and
procedures of DTC. The Trustee may rely and shall be fully protected in relying
upon information furnished by DTC with respect to its members, participants and
any beneficial owners.
(ii) 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 DTC
participants, members or beneficial owners 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.
SECTION 2.7. Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors.
[Date]
Pennzoil-Quaker State Company
c/o The Chase Manhattan Bank
Chase Tower
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Corporate Trust Division
Dear Sirs:
This certificate is delivered to request a transfer of $_________
principal amount of the 10% Senior Notes due 2008 (the "Securities") of
Pennzoil-Quaker State Company (the "Company").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name: ___________________________________
46
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, as amended (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
Securities, and we are acquiring the Securities 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 Securities
and we invest in or purchase securities similar to the Securities 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 Securities 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 Securities to offer, sell or
otherwise transfer such Securities prior to the date that 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 Securities (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 notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of 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 Securities of $250,000 or (f) 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 Securities is proposed to be made pursuant to clause (e) 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 Securities
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 Termination
Date of the Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
47
TRANSFEREE:______________________
BY:________________________________
SECTION 2.8. Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S.
[Date]
Pennzoil-Quaker State Company
c/o The Chase Manhattan Bank
Chase Tower
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Corporate Trust Division
Re: Pennzoil-Quaker State Company
10% Senior Notes due 2008 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a person in the United
States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
48
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________________
_______________________________
Authorized Signature
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities. If a
mutilated Security is surrendered to the Registrar 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 requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any co-
registrar from any loss which any of them may suffer if a Security is replaced,
and, in the absence of notice to the Company, any Subsidiary Guarantor or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
make available for delivery, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor (if
applicable) and any other obligor upon the Securities, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
49
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security ceases to be outstanding in the event the
Company or a Subsidiary of the Company holds the Security, provided, however,
that (i) for purposes of determining which are outstanding for consent or voting
purposes hereunder, Securities shall cease to be outstanding in the event the
Company or an Affiliate of the Company holds the Security and (ii) in
determining whether the Trustee shall be protected in making a determination
whether the Holders of the requisite principal amount of outstanding Securities
are present at a meeting of Holders of Securities for quorum purposes or have
consented to or voted in favor of any request, demand, authorization, direction,
notice, consent, waiver, amendment or modification hereunder, or relying upon
any such quorum, consent or vote, only Securities which a Trust Officer of the
Trustee actually knows to be held by the Company or an Affiliate of the Company
shall not be considered outstanding.
If a Security is replaced pursuant to Section 2.9, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.11. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
Holder of Definitive Securities.
SECTION 2.12. 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 registration
of transfer, exchange or payment. The
50
Trustee and no one else shall cancel all Securities surrendered for registration
of transfer, exchange, payment or cancellation and dispose of such Securities in
accordance with its internal policies including delivery of a certificate (a
"Certificate of Destruction") describing such Securities disposed. The Company
may not issue new Securities to replace Securities it has paid or delivered to
the Trustee for cancellation for any reason other than in connection with a
transfer or exchange.
SECTION 2.13. Payment of Interest; Defaulted Interest. Interest on any
Security which is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the Person in whose name such Security
(or one or more predecessor Securities) is registered at the close of business
on the regular record date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 2.3.
Any interest on any Security which is payable, but is not paid when
the same becomes due and payable and such nonpayment continues for a period of
30 days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") shall be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective predecessor
Securities) are registered at the close of business on a Special Record
Date (as defined below) for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date (not less than 30 days after such notice) of
the proposed payment (the "Special Interest Payment Date"), and at the same
time the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a record date (the "Special Record Date") for the payment of such
Defaulted Interest, which date shall be not more than 15 days and not less
than 10 days prior to the Special Interest Payment Date and not less than
10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date, and in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor to be given in the
manner provided for in Section 11.2, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date
therefor having been so given, such Defaulted Interest shall be paid on the
Special Interest Payment Date to the Persons in whose names the Securities
(or their respective predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
51
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of, transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14. Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.15. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such CUSIP numbers. The Company
shall promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE III
Covenants
SECTION 3.1. Payment of Securities. The Company shall promptly pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 3.2. SEC Reports. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, to the extent permitted by the Exchange Act, the Company will file with the
SEC, and provide the Trustee and
52
the registered Holders of the Securities with, the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that are
specified in Sections 13 and 15(d) of the Exchange Act within the time periods
specified therein; provided that the Company shall be deemed to have satisfied
its delivery obligations under this covenant to the extent it timely files all
such reports on the SEC's XXXXX database. In the event that the Company is not
permitted to file such reports, documents and information with the SEC pursuant
to the Exchange Act, the Company will nevertheless provide such Exchange Act
information to the Trustee and the Holders of the Securities as if the Company
were subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act within the time periods specified therein.
If the Company has designated any of its Subsidiaries that,
individually or collectively, constitutes (after intercompany eliminations) in
excess of 5% of Consolidated EBITDA of the Company on a consolidated basis for
the relevant reporting period as an Unrestricted Subsidiary, then the quarterly
and annual financial information required by the preceding paragraph shall
include a reasonably detailed presentation, either on the face of the financial
statements or in the footnotes to the financial statements and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, of the
financial condition and results of operations of the Company and its Restricted
Subsidiaries.
SECTION 3.3. Limitation on Indebtedness. The Company will not, and
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness;
provided, however, that the Company and the Subsidiary Guarantors may Incur
Indebtedness if on the date thereof:
(1) the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries is at least 2.00 to 1.00; and
(2) no Default or Event of Default will have occurred and be
continuing or would occur as a consequence of Incurring the
Indebtedness.
The first paragraph of this covenant will not prohibit the Incurrence
of the following Indebtedness:
(1) Indebtedness Incurred pursuant to the Credit Facility in an
aggregate principal amount up to $348.0 million at any time
outstanding and Guarantees of Restricted Subsidiaries and the
Company in respect of the Indebtedness Incurred pursuant to the
Credit Facility;
(2) the principal component of amounts outstanding under Qualified
Receivables Transactions in an aggregate principal amount of
$170.0 million at any time outstanding and the related Purchase
Money Note;
(3) the Subsidiary Guarantees and the Guarantee by the Company or any
Restricted Subsidiary of Indebtedness of the Company or a
Restricted Subsidiary that was Incurred in accordance with the
provisions of this Indenture; provided that in the event such
Indebtedness that is being Guaranteed is a Subordinated
Obligation or a Guarantor Subordinated
53
Obligation, then the related Guarantee shall be subordinated in
right of payment to the Subsidiary Guarantee or the Securities,
as the case may be;
(4) Indebtedness of the Company owing to and held by any Restricted
Subsidiary (other than a Receivables Entity) or Indebtedness of a
Restricted Subsidiary owing to and held by the Company or any
Restricted Subsidiary (other than a Receivables Entity),
provided, however;
(a) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment
in full in cash of all obligations with respect to the
Securities; and
(b) (i) any subsequent issuance or transfer of Capital Stock or
any other event which results in any such Indebtedness being
beneficially held by a Person other than the Company or a
Restricted Subsidiary (other than a Receivables Entity) of
the Company; and
(ii) any sale or other transfer of any such Indebtedness to
a Person other than the Company or a Restricted Subsidiary
(other than a Receivables Entity) of the Company,
shall be deemed, in each case, to constitute an Incurrence of
such Indebtedness by the Company or such Subsidiary, as the case
may be;
(5) Indebtedness represented by (a) the Initial Securities, (b) any
Indebtedness (other than the Indebtedness described in clauses
(1), (2), (3), (4), (7), (9), (10) and (11) of the second
paragraph of this covenant) outstanding on the Issue Date and (c)
any Refinancing Indebtedness Incurred in respect of any
Indebtedness described in this clause (5) or clause (6) below or
Incurred pursuant to the first paragraph of this covenant;
(6) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on the date on which such Restricted Subsidiary was acquired by
the Company (including, without limitation, Indebtedness Incurred
(a) to provide all or any portion of the funds utilized to
consummate the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Subsidiary
or was otherwise acquired by the Company or (b) otherwise in
connection with, or in contemplation of, such acquisition);
provided, however, that at the time such Restricted Subsidiary is
acquired by the Company, the Company would have been able to
Incur $1.00 of additional Indebtedness pursuant to the first
paragraph of this covenant after giving effect to the Incurrence
of such Indebtedness pursuant to this clause (6);
(7) Indebtedness under Currency Agreements and Interest Rate
Agreements; provided that in the case of Currency Agreements,
such Currency Agreements are related to business transactions of
the Company or its Restricted Subsidiaries entered into in the
ordinary course of business or
54
in the case of Currency Agreements and Interest Rate Agreements,
such Currency Agreements and Interest Rate Agreements are entered
into for bona fide hedging purposes of the Company or its
Restricted Subsidiaries (as determined in good faith by the Board
of Directors or senior management of the Company) and
substantially correspond in terms of notional amount, duration,
currencies and interest rates, as applicable, to Indebtedness of
the Company or its Restricted Subsidiaries Incurred without
violation of this Indenture;
(8) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capitalized Lease
Obligations, mortgage financings or purchase money obligations or
other Indebtedness Incurred with respect to assets other than
Capital Stock or other Investments, in each case incurred for the
purpose of financing all or any part of the purchase price or
cost of construction or improvements of property used in the
business of the Company or such Restricted Subsidiary, in an
aggregate principal amount not to exceed $70.0 million at any
time outstanding;
(9) Indebtedness incurred in respect of workers' compensation claims,
self-insurance obligations, performance, surety and similar bonds
and completion guarantees provided by the Company or a Restricted
Subsidiary in the ordinary course of business;
(10) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment
of purchase price or similar obligations, in each case, incurred
or assumed in connection with the disposition of any business,
assets or Capital Stock of a Restricted Subsidiary, provided that
the maximum aggregate liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually
received by the Company and its Restricted Subsidiaries in
connection with such disposition;
(11) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft, instruction or similar
instrument drawn against insufficient funds in the ordinary
course of business, provided, however, that such Indebtedness is
extinguished within five business days of Incurrence;
(12) Guarantees given in connection with the sale of notes receivable
under the PLCAC Agreement in an aggregate principal amount not to
exceed $15.0 million at any time outstanding;
(13) Guarantees given in connection with fast lube customer agreements
in an aggregate principal amount not to exceed $11.7 million at
any time outstanding;
55
(14) Indebtedness under the International Facilities in an aggregate
principal amount not to exceed $55.0 million at any time
outstanding; and
(15) in addition to the items referred to in clauses (1) through (14)
above, Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate outstanding principal amount which,
when taken together with the principal amount of all other
Indebtedness Incurred pursuant to this clause (15) and then
outstanding, will not exceed $45.0 million.
The Company will not Incur any Indebtedness under the preceding
paragraphs if the proceeds thereof are used, directly or indirectly, to
refinance any Subordinated Obligations of the Company unless such Indebtedness
will be subordinated to the Securities to at least the same extent as such
Subordinated Obligations. No Subsidiary Guarantor will incur any Indebtedness if
the proceeds thereof are used, directly or indirectly, to refinance any
Guarantor Subordinated Obligations of such Subsidiary Guarantor unless such
Indebtedness will be subordinated to the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee to at least the same extent as such
Guarantor Subordinated Obligations. No Restricted Subsidiary (other than a
Subsidiary Guarantor) may Incur any Indebtedness if the proceeds are used to
refinance Indebtedness of the Company, except to the extent the proceeds of such
Indebtedness are applied to refinance an intercompany note or advance.
For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness incurred pursuant to and in
compliance with, this Section 3.3:
(1) in the event that Indebtedness meets the criteria of more than
one of the types of Indebtedness described in the first and
second paragraphs of this covenant, the Company, in its sole
discretion, will classify such item of Indebtedness on the date
of Incurrence and only be required to include the amount and type
of such Indebtedness in the clause so selected, except that the
Company may reclassify Indebtedness between clauses (1) and (15)
of the second paragraph of this covenant and between clauses (8)
and (15) of the second paragraph of this covenant and between
clauses (12) and (15) of the second paragraph of this covenant
and between clauses (13) and (15) of the second paragraph of this
covenant; provided that the Indebtedness so reclassified is of
the nature referred to in the clause into which such Indebtedness
is reclassified;
(2) all Indebtedness outstanding on the date of this Indenture under
the Credit Facility should be deemed outstanding under clause (1)
of the second paragraph of this covenant;
(3) all amounts outstanding under Qualified Receivables Transactions
on the date of this Indenture shall be deemed outstanding under
clause (2) of the second paragraph of this covenant; and
56
(4) the amount of Indebtedness issued at a price that is less than
the principal amount thereof will be equal to the amount of the
liability in respect thereof determined in accordance with GAAP.
Accrual of interest, accrual of dividends, the accretion of accreted
value, the payment of interest in the form of additional Indebtedness and the
payment of dividends in the form of additional shares of Preferred Stock will
not be deemed to be an incurrence of Indebtedness for purposes of this Section
3.3. The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value of the Indebtedness in the case of any Indebtedness issued with
original issue discount and (ii) the principal amount or liquidation preference
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.
In addition, the Company will not permit any of its Unrestricted
Subsidiaries to Incur any Indebtedness or issue any shares of Disqualified
Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary
becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be
deemed to be Incurred by a Restricted Subsidiary of the Company as of such date
(and, if such Indebtedness is not permitted to be Incurred as of such date under
this Section 3.3, the Company shall be in Default of this Section 3.3).
For purposes of determining compliance with any U.S. dollar-
denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-
equivalent principal amount of Indebtedness denominated in a foreign currency
shall be calculated based on the relevant currency exchange rate in effect on
the date such Indebtedness was Incurred, in the case of term Indebtedness, or
first committed, in the case of revolving credit Indebtedness; provided that 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. Notwithstanding any other
provision of this Section 3.3, the maximum amount of Indebtedness that the
Company may Incur pursuant to this Section 3.3 shall not be deemed to be
exceeded solely as a result of fluctuations in the exchange rate of currencies.
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 Refinancing Indebtedness is denominated that is
in effect on the date of such refinancing.
SECTION 3.4. Limitation on Restricted Payments. The Company will not,
and will not permit any of its Restricted Subsidiaries, directly or indirectly,
to:
(1) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection
with any merger or consolidation involving the Company or any of
its Restricted Subsidiaries) except:
57
(a) dividends or distributions payable in Capital Stock of the
Company (other than Disqualified Stock) or in options,
warrants or other rights to purchase such Capital Stock of
the Company; and
(b) dividends or distributions payable to the Company or a
Restricted Subsidiary of the Company (and if such Restricted
Subsidiary is not a Wholly-Owned Subsidiary, to its other
Holders of common Capital Stock on a pro rata basis);
(2) purchase, redeem, retire or otherwise acquire for value any
Capital Stock of the Company or any direct or indirect parent of
the Company held by Persons other than the Company or a
Restricted Subsidiary of the Company (other than in exchange for
Capital Stock of the Company (other than Disqualified Stock));
(3) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated
Obligations or Guarantor Subordinated Obligations (other than the
purchase, repurchase or other acquisition of Subordinated
Obligations or Guarantor Subordinated Obligations purchased in
anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year
of the date of purchase, repurchase or acquisition); or
(4) make any Restricted Investment in any Person;
(any such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Restricted Investment referred to in clauses
(1) through (4) shall be referred to herein as a "Restricted Payment"), if at
the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(a) a Default shall have occurred and be continuing (or would result
therefrom); or
(b) the Company is not able to Incur an additional $1.00 of
Indebtedness pursuant to the first paragraph of Section 3.3 after
giving effect, on a pro forma basis, to such Restricted Payment;
or
(c) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made subsequent to the Issue Date
(except as otherwise indicated below) would exceed the sum of
(without duplication):
(i) 50% of Consolidated Net Income for the period (treated as
one accounting period) from October 1, 2001 to the end of
the most recent fiscal quarter ending prior to the date of
such Restricted Payment for which financial statements are
in existence (or, in case
58
such Consolidated Net Income is a deficit, minus 100% of
such deficit);
(ii) the aggregate Net Cash Proceeds received by the Company from
the issue or sale of its Capital Stock (other than
Disqualified Stock) or other capital contributions
subsequent to the Issue Date (other than Net Cash Proceeds
received from an issuance or sale of such Capital Stock to a
Subsidiary of the Company or an employee stock ownership
plan, option plan or similar trust to the extent such sale
to an employee stock ownership plan, option plan or similar
trust is financed by loans from or guaranteed by the Company
or any Restricted Subsidiary unless such loans have been
repaid with cash on or prior to the date of determination);
(iii) the amount by which Indebtedness of the Company or any
Restricted Subsidiary is reduced on the Company's balance
sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Issue Date of
any Indebtedness of the Company or any Restricted Subsidiary
convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any
cash, or other property, distributed by the Company or any
Restricted Subsidiary upon such conversion or exchange); and
(iv) the amount equal to the net reduction in Restricted
Investments made by the Company or any of its Restricted
Subsidiaries in any Person resulting from:
(A) repurchases or redemptions of such Restricted
Investments by such Person, proceeds realized upon the
sale of such Restricted Investment to an unaffiliated
purchaser, repayments of loans or advances or other
transfers of assets (including by way of dividend or
distribution) by such Person to the Company or any
Restricted Subsidiary of the Company; or
(B) the redesignation of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as
provided in the definition of "Investment") not to
exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made by the Company or
any Restricted Subsidiary in such Unrestricted
Subsidiary,
which amount in each case under this clause (iv) was
included in the calculation of the amount of Restricted
Payments; provided,
59
however, that no amount will be included under this clause
(iv) to the extent it is already included in Consolidated
Net Income.
The provisions of the preceding paragraph will not prohibit the
following actions and (except as otherwise specifically indicated) shall not
reduce the amount that would otherwise be available for Restricted Payments
under the preceding paragraph:
(1) any defeasance, purchase or redemption of Capital Stock or
Subordinated Obligations of the Company or Guarantor Subordinated
Obligations of any Subsidiary Guarantors made by exchange for, or
out of the proceeds of the substantially concurrent sale of,
Capital Stock of the Company (other than Disqualified Stock and
other than Capital Stock issued or sold to a Subsidiary or an
employee stock ownership plan or similar trust to the extent such
sale to an employee stock ownership plan or similar trust is
financed by loans from or guaranteed by the Company or any
Restricted Subsidiary unless such loans have been repaid with
cash on or prior to the date of determination); provided,
however, that (a) such defeasance, purchase or redemption will be
excluded in subsequent calculations of the amount of Restricted
Payments and (b) the Net Cash Proceeds from such sale will be
excluded from clause (c)(ii) of the preceding paragraph;
(2) any defeasance, purchase or redemption of Subordinated
Obligations of the Company or Guarantor Subordinated Obligations
of any Subsidiary Guarantors made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated
Obligations of the Company that qualifies as Refinancing
Indebtedness;
(3) so long as no Default or Event of Default has occurred and is
continuing, any defeasance, purchase or redemption of
Subordinated Obligations from Net Available Cash to the extent
permitted under Section 3.7;
(4) so long as no Default or Event of Default has occurred and is
continuing,
(i) the purchase, redemption or other acquisition,
cancellation or retirement for value of Capital
Stock, or options, warrants, equity appreciation
rights or other rights to purchase or acquire
Capital Stock of the Company or any Restricted
Subsidiary of the Company or any parent of the
Company held by any existing or former employees or
management of the Company or any Subsidiary of the
Company or their assigns, estates or heirs, in each
case in connection with the repurchase provisions
under employee stock option or stock purchase
agreements or other agreements to compensate
management employees; provided that such
redemptions or repurchases pursuant to this
60
clause will not exceed $2.0 million in the
aggregate during any calendar year and $5.0 million
in the aggregate for all such redemptions and
repurchases; provided, however, that the amount of
any such repurchase or redemption will be included
in subsequent calculations of the amount of
Restricted Payments; and
(ii) loans or advances to employees or directors of the
Company or any Subsidiary of the Company the
proceeds of which are used to purchase Capital
Stock of the Company, in an aggregate amount not in
excess of $2.0 million at any one time outstanding;
provided, however, that the amount of such loans
and advances will be included in subsequent
calculations of the amount of Restricted Payments;
(5) so long as no Default or Event of Default has occurred and is
continuing, the declaration and payment of dividends to Holders
of any class or series of Disqualified Stock of the Company
issued in accordance with the terms of this Indenture to the
extent such dividends are included in the definition of
"Consolidated Interest Expense";
(6) repricing of employee stock options or repurchases of Capital
Stock deemed to occur upon the exercise of stock options if such
Capital Stock represents a portion of the exercise price thereof;
(7) so long as no Default or Event of Default has occurred and is
continuing, the payment of dividends on the Company's Common
Stock in an amount not to exceed $10.0 million in the aggregate
in any fiscal year; provided, however, that the amount of such
payment will be included in subsequent calculations of the amount
of Restricted Payments;
(8) so long as no Default or Event of Default has occurred and is
continuing, the payment of dividends in respect of Common Stock
of the Company issued to acquire assets or Capital Stock of
another Person in an amount not to exceed in any fiscal year the
product of (x) $0.10 per share of Common Stock (such number
adjusted to reflect any stock split, combination, subdivision,
reclassification, merger or other similar event that occurs
subsequent to the date of this Indenture) and (y) the number of
shares so issued in such a stock acquisition; provided that after
giving pro forma effect to such dividend, the Company would have
been able to Incur $1.00 of additional Indebtedness pursuant to
the first paragraph under Section 3.3; provided, however, that
the amount of such payment will be included in subsequent
calculations of the amount of Restricted Payments;
61
(9) Restricted Payments in an amount not to exceed $15.0 million
(after giving effect to any reductions in the aggregate amount of
Restricted Investments made pursuant to this clause (9) as a
result of the receipt of cash due to the disposition thereof,
including through liquidation, repayment or other reduction,
including by way of dividend or distribution, the aggregate
amount of such reductions not to exceed the aggregate amount of
such Restricted Investments outstanding and previously made
pursuant to this clause (9)); provided, however, that the amount
of such payments will be included in subsequent calculations of
the amount of Restricted Payments;
(10) Restricted Investments in any Joint Venture made during any
fiscal year of the Company or within 45 days after the end of
such fiscal year in amounts that, together with all other
Restricted Investments made in such Joint Venture during such
fiscal year in reliance on this clause (10) during such fiscal
year or within 45 days after the end of such fiscal year, do not
exceed the amount of dividends or distributions previously paid
during such fiscal year to the Company or any Restricted
Subsidiary by such Joint Venture; provided that the amount of
such dividends and distributions so applied as a Restricted
Investment pursuant to this clause (10) shall be excluded from
clause (c)(i) of the first paragraph of this Section 3.4;
(11) the purchase by the Company of fractional shares arising out of
stock dividends, splits or combinations or business combinations;
provided, however, that the amount of such payment will be
included in subsequent calculations of the amount of Restricted
Payments;
(12) indemnity payments permitted by clause (10) of the second
paragraph of Section 3.3;
(13) Restricted Payments constituting Limited Recourse Obligations;
(14) the acquisition in open-market purchases of the Company's Common
Stock for contributions to its employee stock purchase and
deferred compensation plans in the ordinary course of business or
payments in settlement of stock appreciation rights existing on
the Issue Date in an amount not to exceed $2.0 million in any
fiscal year or $4.0 million in the aggregate; provided, however,
that the amount of such payment will be included in subsequent
calculations of the amount of Restricted Payments; or
(15) the payment of any dividend on any Capital Stock of the Company
within 60 days after the date of declaration thereof, if at such
declaration date such declaration complied with the provisions of
the first paragraph above (and such payment shall be deemed to
have been paid on such date of declaration for purposes of any
calculation required by the provisions of the first paragraph
above); provided, however, that the amount of such
62
payment will be included in subsequent calculations of the amount
of Restricted Payments.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of such Restricted Payment of the asset(s) or
securities proposed to be paid, transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
The fair market value of any cash Restricted Payment shall be its face amount.
The fair market value of any non-cash Restricted Payment shall be determined
conclusively by the Board of Directors or senior management of the Company
acting in good faith whose resolution, in the case of the Board of Directors, or
an Officers' Certificate, in the case of senior management, with respect thereto
shall be delivered to the Trustee within 30 days thereafter. Not later than 30
days after the date of making any Restricted Payment pursuant to the first
paragraph of this Section 3.4, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section 3.4
were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture. In computing Consolidated Net Income of the Company
under clause (C)(1) of the first paragraph of this covenant, (1) the Company
shall use audited financial statements for the portions of the relevant period
for which audited financial statements are available on the date of
determination and unaudited financial statements and other current financial
data based on the books and records of the Company for the remaining portion of
such period and (2) the Company shall be permitted to rely in good faith on the
financial statements and other financial data derived from the books and records
of the Company that are available on the date of determination. If the Company
makes a Restricted Payment which, at the time of the making of such Restricted
Payment would in the good faith determination of the Company be permitted under
the requirements of this Indenture, such Restricted Payment shall be deemed to
have been made in compliance with this Indenture notwithstanding any subsequent
adjustments made in good faith to the Company's consolidated financial
statements affecting Consolidated Net Income of the Company for any period.
SECTION 3.5. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur or suffer to exist any Lien (other than Permitted Liens) upon any of its
property or assets (including Capital Stock), whether owned on the date of this
Indenture or acquired after that date, securing any Indebtedness, unless
contemporaneously with the Incurrence of the Liens effective provision is made
to secure the Indebtedness due under this Indenture and the Securities or, in
respect of Liens on any Restricted Subsidiary's property or assets, any
Subsidiary Guarantee of such Restricted Subsidiary, equally and ratably with (or
prior to in the case of Liens with respect to Subordinated Obligations or
Guarantor Subordinated Obligations, as the case may be) the Indebtedness secured
by such Lien for so long as such Indebtedness is so secured.
SECTION 3.6. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to:
63
(1) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the
Company or any Restricted Subsidiary;
(2) make any loans or advances to the Company or any Restricted
Subsidiary; or
(3) transfer any of its property or assets to the Company or any
Restricted Subsidiary.
The preceding provisions will not prohibit:
(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the date of this Indenture,
including, without limitation, this Indenture and the Credit
Facility in effect on such date;
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by a Restricted Subsidiary on or
before the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the
funds utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by
the Company or in contemplation of the transaction) and
outstanding on such date;
(iii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement effecting a
refunding, replacement or refinancing of Indebtedness
Incurred pursuant to an agreement referred to in clause (i)
or (ii) of this paragraph or this clause (iii) or contained
in any amendment to an agreement referred to in clause (i)
or (ii) of this paragraph or this clause (iii); provided,
however, that the encumbrances and restrictions with respect
to such Restricted Subsidiary contained in any such
agreement are no less favorable in any material respect to
the Holders of the Securities than the encumbrances and
restrictions contained in such agreements referred to in
clauses (i) or (ii) of this paragraph on the Issue Date or
the date such Restricted Subsidiary became a Restricted
Subsidiary, whichever is applicable;
(iv) in the case of clause (3) of the first paragraph of this
Section 3.6, any encumbrance or restriction:
(a) that restricts in a customary manner the subletting,
assignment or transfer of any property or asset that is
subject to a lease, license or similar contract, or the
64
assignment or transfer of any such lease, license or
other contract;
(b) contained in mortgages, pledges or other security
agreements permitted under this Indenture securing
Indebtedness of the Company or a Restricted Subsidiary
to the extent such encumbrances or restrictions
restrict the transfer of the property subject to such
mortgages, pledges or other security agreements; or
(c) pursuant to customary provisions restricting
dispositions of real property interests set forth in
any reciprocal easement agreements of the Company or
any Restricted Subsidiary;
(v) purchase money obligations for property acquired in the
ordinary course of business that impose encumbrances or
restrictions of the nature described in clause (3) of the
first paragraph of this Section 3.6 on the property so
acquired;
(vi) any Purchase Money Note or other Indebtedness or contractual
requirements incurred with respect to a Qualified
Receivables Transaction relating exclusively to a
Receivables Entity that, in the good faith determination of
the Board of Directors or senior management, are necessary
to effect such Qualified Receivables Transaction;
(vii) any restriction with respect to a Restricted Subsidiary
(or any of its property or assets) imposed pursuant to an
agreement entered into for the direct or indirect sale or
disposition of assets (including the Capital Stock or assets
of such Restricted Subsidiary) (or the property or assets
that are subject to such restriction) pending the closing of
such sale or disposition;
(viii) encumbrances or restrictions arising or existing by
reason of applicable law or any applicable rule, regulation
or order; and
(ix) customary provisions with respect to the disposition or
distribution of assets or property in joint venture
agreements.
SECTION 3.7. Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company will not, and will not permit any of its Restricted Subsidiaries to,
make any Asset Disposition unless:
(1) the Company and/or such Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Disposition
at least equal to the fair market value, as determined in good
faith by the Board of Directors (including as to the value of all
non-cash consideration), of the shares and assets subject to such
Asset Disposition;
65
(2) at least 75% of the consideration from such Asset Disposition
received by the Company and/or such Restricted Subsidiary, as the
case may be, is in the form of cash or Cash Equivalents or
Additional Assets; and
(3) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company or such Restricted
Subsidiary, as the case may be:
(i) to the extent the Company or any Restricted Subsidiary, as
the case may be, elects (or is required by the terms of any
Indebtedness), to prepay, repay or purchase Secured
Indebtedness (other than Disqualified Stock or Subordinated
Obligations) of the Company or Secured Indebtedness (other
than any Preferred Stock or Guarantor Subordinated
Obligation) of a Restricted Subsidiary (in each case other
than Indebtedness owed to the Company or an Affiliate of the
Company) or the Credit Facility (whether the Credit Facility
is secured or unsecured) within 360 days from the later of
the date of such Asset Disposition or the receipt of such
Net Available Cash; provided, however, that, in connection
with any prepayment, repayment or purchase of Indebtedness
pursuant to this clause (a), the Company or such Restricted
Subsidiary will retire such Indebtedness and will cause the
related commitment (if any) to be permanently reduced in an
amount equal to the principal amount so prepaid, repaid or
purchased; or
(ii) to the extent of the balance of such Net Available Cash
after application in accordance with clause (i) above, to
the extent the Company or such Restricted Subsidiary elects,
to invest in Additional Assets within 360 days from the
later of the date of such Asset Disposition or the receipt
of such Net Available Cash.
(b) Pending the final application of any such Net Available Cash, the
Company and its applicable Restricted Subsidiaries may temporarily reduce the
revolving Indebtedness under the Credit Facility or otherwise invest such Net
Available Cash in cash or Cash Equivalents. Any Net Available Cash from Asset
Dispositions that are not applied or invested as provided in the preceding
paragraph will be deemed to constitute "Excess Proceeds." On the 361st day
after an Asset Disposition, if the aggregate amount of Excess Proceeds exceeds
$10.0 million, the Company will be required to make an offer ("Asset Disposition
Offer") to all Holders of Securities and to the extent required by the terms of
other Pari Passu Indebtedness, to all Holders of other Pari Passu Indebtedness
outstanding with similar provisions requiring the Company to make an offer to
purchase such Pari Passu Indebtedness with the proceeds from any Asset
Disposition ("Pari Passu Notes"), to purchase the maximum principal amount of
Securities and any such Pari Passu Notes to which the Asset Disposition Offer
applies that may be purchased out of the Excess Proceeds, at an offer price in
cash in an amount equal to 100% of the principal amount of the Securities and
Pari Passu Notes plus accrued and unpaid interest to the date of purchase, plus
premium, if any, in accordance with the procedures set forth in this Indenture
or the agreements governing the Pari Passu Notes, as applicable, in each case in
66
integral multiples of $1,000. To the extent that the aggregate amount of
Securities and Pari Passu Notes so validly tendered and not properly withdrawn
pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes,
subject to the other covenants contained in this Indenture. If the aggregate
principal amount of Securities surrendered by Holders thereof and other Pari
Passu Notes surrendered by Holders or lenders, collectively, exceeds the amount
of Excess Proceeds, the Trustee shall select the Securities and Pari Passu Notes
to be purchased on a pro rata basis on the basis of the aggregate principal
amount of tendered Securities and Pari Passu Notes. Upon completion of such
Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero.
(c)(1) The Asset Disposition Offer will remain open for a period of
20 Business Days following its commencement, except to the extent that a longer
period is required by applicable law (the "Asset Disposition Offer Period"). No
later than five Business Days after the termination of the Asset Disposition
Offer Period (the "Asset Disposition Purchase Date"), the Company will purchase
the principal amount of Securities and Pari Passu Notes required to be purchased
pursuant to this covenant (the "Asset Disposition Offer Amount") or, if less
than the Asset Disposition Offer Amount has been so validly tendered, all
Securities and Pari Passu Notes validly tendered in response to the Asset
Disposition Offer.
(2) If the Asset Disposition Purchase Date is on or after an interest
record date and on or before the related interest payment date, any accrued and
unpaid interest will be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders of the Securities who tender Securities
pursuant to the Asset Disposition Offer.
(3) On or before the Asset Disposition Purchase Date, the Company
will, to the extent lawful, accept for payment, on a pro rata basis to the
extent necessary, the Asset Disposition Offer Amount of Securities and Pari
Passu Notes or portions of Securities and Pari Passu Notes so validly tendered
and not properly withdrawn pursuant to the Asset Disposition Offer, or if less
than the Asset Disposition Offer Amount has been validly tendered and not
properly withdrawn, all Securities and Pari Passu Notes so validly tendered and
not properly withdrawn, in each case in integral multiples of $1,000. The
Company will deliver to the Trustee an Officers' Certificate stating that such
Securities or portions thereof were accepted for payment by the Company in
accordance with the terms of this covenant and, in addition, the Company will
deliver all certificates and notes required, if any, by the agreements governing
the Pari Passu Notes. The Company or the Paying Agent, as the case may be, will
promptly (but in any case not later than five Business Days after termination of
the Asset Disposition Offer Period) mail or deliver to each tendering Holder of
Securities or Holder or lender of Pari Passu Notes, as the case may be, an
amount equal to the purchase price of the Securities or Pari Passu Notes so
validly tendered and not properly withdrawn by such Holder or lender, as the
case may be, and accepted by the Company for purchase, and the Company will
promptly issue a new Security, and the Trustee, upon delivery of an Officers'
Certificate from the Company will authenticate and mail or deliver such new
Security to such Holder, in a principal amount equal to any unpurchased portion
of the Note surrendered; provided that each such new Security will be in a
principal amount of $1,000 or an integral multiple of $1,000. In addition, the
Company will take any and all other actions required by the agreements governing
the Pari Passu Notes. Any
67
Security not so accepted will be promptly mailed or delivered by the Company to
the Holder thereof. The Company will publicly announce the results of the Asset
Disposition Offer on the Asset Disposition Purchase Date.
For the purposes of this Section 3.6, the following will be deemed to
be cash:
(1) the assumption by the transferee of Indebtedness (other than
Subordinated Obligations or Disqualified Stock) or other
liabilities reflected on the balance sheet of the Company or
Indebtedness (other than Guarantor Subordinated Obligations or
Preferred Stock) or other liabilities reflected on the balance
sheet of any Restricted Subsidiary of the Company and the release
of the Company or such Restricted Subsidiary from all liability
on such Indebtedness or such other liabilities reflected on the
balance sheet of the Company or its Restricted Subsidiaries in
connection with such Asset Disposition (in which case the Company
will, without further action, be deemed to have applied such
deemed cash to Indebtedness in accordance with Section
3.6(a)(3)(i)); and
(2) securities, notes or other obligations received by the Company or
any Restricted Subsidiary of the Company from the transferee that
are promptly converted or monetized by the Company or such
Restricted Subsidiary into cash.
(d) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Indenture by virtue of any conflict.
SECTION 3.8. Limitation on Affiliate Transactions. The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless:
(1) the terms of such Affiliate Transaction are no less favorable to
the Company or such Restricted Subsidiary, as the case may be,
than those that could be obtained in a comparable transaction at
the time of such transaction in arm's length dealings with a
Person who is not such an Affiliate;
(2) in the event such Affiliate Transaction involves an aggregate
amount in excess of $10.0 million, the terms of such transaction
have been approved by a majority of the members of the Board of
Directors of the Company and by a majority of the members of such
Board having no personal stake in such transaction, if any (and
such majority or majorities, as the case
68
may be, determines that such Affiliate Transaction satisfies the
criteria in clause (1) above); and
(3) in the event such Affiliate Transaction involves an aggregate
amount in excess of $25.0 million, the Company has received a
written opinion from an independent investment banking firm of
nationally recognized standing that such Affiliate Transaction is
not materially less favorable than those that might reasonably
have been obtained in a comparable transaction at such time on an
arm's length basis from a Person that is not an Affiliate.
The preceding paragraph will not apply to:
(1) any Restricted Payment permitted to be made pursuant to Section
3.4;
(2) any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans
and other reasonable fees, compensation, benefits and indemnities
paid or entered into by the Company or its Restricted
Subsidiaries in the ordinary course of business, or
indemnification pursuant to the Company's or a Restricted
Subsidiary's charter or by-laws or applicable corporate law, to
or with officers, directors or employees of the Company and its
Restricted Subsidiaries;
(3) loans or advances to officers, employees or directors in the
ordinary course of business of the Company or any of its
Restricted Subsidiaries;
(4) any transaction between or among the Company and/or Restricted
Subsidiaries (other than Receivable Entities);
(5) the payment of reasonable and customary fees and other
compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Company or any Restricted
Subsidiary of the Company;
(6) the performance of obligations of the Company or any of its
Restricted Subsidiaries under the terms of any agreement to which
the Company or any of its Restricted Subsidiaries is a party, on
the one hand, and a Person other than the Company or a Restricted
Subsidiary, on the other hand, on the Issue Date as these
agreements may be amended, modified or supplemented from time to
time; provided, however, that any future amendment, modification
or supplement entered into after the Issue Date will be permitted
to the extent that its terms are not more materially
disadvantageous, taken as a whole, to the Holders of the
Securities than the terms of the agreements in effect on the
Issue Date;
(7) sales or other transfers or dispositions of accounts receivable
and other related assets customarily transferred in an asset
securitization transaction involving accounts receivable to a
Receivables Entity in a Qualified
69
Receivables Transaction, and acquisitions of Permitted
Investments in connection with a Qualified Receivables
Transaction;
(8) sales of Capital Stock of the Company to the extent not
prohibited by this Indenture; and
(9) any transaction or series of transactions between the Company or
any Restricted Subsidiary, on the one hand, and any of their
Joint Ventures, on the other hand, provided that (i) such
transaction or series of transactions is (x) in the ordinary
course of business between the Company or such Restricted
Subsidiary and such Joint Venture, (y) otherwise in compliance
with the terms of this Indenture and (z) on terms at least as
favorable as might reasonably have been obtained at such time
from an unaffiliated party and (ii) with respect to any such
Affiliate Transaction involving aggregate consideration in excess
of $25.0 million, such Affiliate Transaction complies with clause
(2) of the first paragraph of this Section 3.8.
SECTION 3.9. Change of Control. If a Change of Control occurs, each
registered Holder of Securities will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Securities at a purchase price in cash equal to 101% of the
principal amount of the Securities plus accrued and unpaid interest, if any, to
the date of purchase (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
Within 30 days following any Change of Control, the Company will mail
a notice (the "Change of Control Offer") to each registered Holder with a copy
to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company pursuant to this Section 3.9 to
purchase such Holder's Securities at a purchase price in cash
equal to 101% of the principal amount of such Securities plus
accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on a record date to
receive interest on the relevant interest payment date) (the
"Change of Control Payment");
(2) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed) (the
"Change of Control Payment Date");
(3) that any Security not tendered shall continue to accrue interest,
if any;
(4) that, unless the Company defaults in the payment of principal or
interest, all Securities accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest, if any,
after the Change of Control Payment Date;
70
(5) that Holders electing to have any Securities purchased pursuant
to a Change of Control Offer shall be required to surrender the
Securities to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day
preceding the date of purchase for the Change of Control Payment
Date;
(6) that Holders shall be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on
the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Securities
delivered for purchase, and a statement that such Holder is
withdrawing its election to have the Securities purchased;
(7) that Holders whose Securities are being purchased only in part
shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which
unpurchased portion must be equal to $1,000 in principal amount
or an integral multiple thereof; and
(8) the procedures determined by the Company, consistent with this
Section 3.9, that a Holder must follow in order to have its
Securities repurchased.
On the Change of Control Payment Date, the Company will, to the extent
lawful:
(1) accept for payment all Securities or portions of Securities (in
integral multiples of $1,000) properly tendered under the Change
of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of
Control Payment in respect of all Securities or portions of
Securities so tendered; and
(3) deliver or cause to be delivered to the Trustee the Securities so
accepted together with an Officers' Certificate stating the
aggregate principal amount of Securities or portions of
Securities being purchased by the Company.
The paying agent will promptly mail to each Holder of Securities so
tendered the Change of Control Payment for such Securities, and the Trustee
shall promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Security equal in principal amount to any unpurchased
portion of the Securities surrendered, if any; provided that each such new
Security will be in a principal amount of $1,000 or an integral multiple of
$1,000. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
If the Change of Control Payment Date is on or after an interest
record date and on or before the related interest payment date, any accrued and
unpaid interest, if any, will be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender pursuant to the Change of Control
Offer.
71
Prior to mailing a Change of Control Offer, and as a condition to such
mailing (i) the requisite Holders of each issue of Indebtedness issued under an
indenture or other agreement that may be violated by such payment shall have
consented to such Change of Control Offer being made and waived the event of
default, if any, caused by the Change of Control or (ii) the Company will repay
all outstanding Indebtedness issued under an indenture or other agreement that
may be violated by a payment to the Holders of Securities under a Change of
Control Offer or the Company must offer to repay all such Indebtedness, and make
payment to the Holders of such Indebtedness that accept such offer and obtain
waivers of any event of default from the remaining Holders of such Indebtedness.
The Company covenants to effect such repayment or obtain such consent and waiver
within 30 days following any Change of Control, it being a Default of this
Section 3.9 if the Company fails to comply herewith.
The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Section 3.9 applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 3.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations described in this Indenture by virtue of the
conflict.
SECTION 3.10. Limitation on Sale of Capital Stock of Restricted
Subsidiaries. The Company will not, and will not permit any Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Voting Stock of any Restricted Subsidiary or to issue any of the Voting
Stock of a Restricted Subsidiary (other than, if necessary, shares of its Voting
Stock constituting directors' qualifying shares) to any Person except:
(1) to the Company or a Restricted Subsidiary other than a
Receivables Entity; or
(2) in compliance with Section 3.7 and immediately after giving
effect to such issuance or sale, such Restricted Subsidiary would
continue to be a Restricted Subsidiary.
Notwithstanding the preceding paragraph, (i) the Company and any
Restricted Subsidiary may sell all the Voting Stock of a Restricted Subsidiary
as long as the Company or such Restricted Subsidiary, as the case may be,
complies with Section 3.7 and (ii) each of Pennzoil-Quaker State India Limited
and Pennzoil-Quaker State France S.A. and any other Subsidiary of the Company
incorporated outside the United States for which a rights offering is the only
alternative allowed under applicable law to increase paid-in capital may engage
in and complete rights offerings to all its shareholders; provided that the
Company participates fully in any such rights offering.
72
SECTION 3.11. Limitation on Sale/Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any Sale/Leaseback Transaction unless:
(1) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Sale/Leaseback
Transaction at least equal to the fair market value (as evidenced
by an Officer's Certificate or a determination by the Board of
Directors) of the property subject to such transaction;
(2) the Company or such Restricted Subsidiary could have Incurred
Indebtedness in an amount equal to the Capitalized Lease
Obligation in respect of such Sale/Leaseback Transaction pursuant
to Section 3.3 (to the extent such Section remains in effect);
(3) the Company or such Restricted Subsidiary would be permitted to
create a Lien (other than with respect to operating leases) on
the property subject to such Sale/Leaseback Transaction without
securing the Securities by Section 3.5 (to the extent such
Section remains in effect); and
(4) the Sale/Leaseback Transaction is treated as an Asset Disposition
(except in connection with Permitted Sale/Leaseback Dispositions)
and all of the conditions of Section 3.7 (including the
provisions concerning the application of Net Available Cash) are
satisfied with respect to such Sale/Leaseback Transaction,
treating all of the consideration received in such Sale/Leaseback
Transaction as Net Available Cash for purposes of such covenant.
SECTION 3.12. Future Subsidiary Guarantors. After the Issue Date,
unless such Subsidiary has previously issued a Subsidiary Guarantee which is
then in full force and effect, the Company will cause each Subsidiary that
issues a Guarantee in respect of obligations under a Credit Facility to execute
and deliver to the Trustee a Subsidiary Guarantee pursuant to which such
Subsidiary Guarantor will unconditionally Guarantee, on a joint and several
basis, the full and prompt payment of the principal of, premium, if any, and
interest on the Securities on a senior basis.
SECTION 3.13. Limitation on Lines of Business. The Company will not,
and will not permit any Restricted Subsidiary to, engage in any business other
than a Related Business.
SECTION 3.14. Effectiveness of Covenants. The covenants described in
Sections 3.2, 3.3, 3.4, 3.6, 3.7, 3.8, 3.10, 3.12 and 3.13 will no longer be in
effect upon the Company reaching Investment Grade Status.
SECTION 3.15. Maintenance of Office or Agency. The Company will
maintain in The City of New York, an office or agency where the Securities may
be presented or surrendered for payment, where, if applicable, the Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the
73
Securities and this Indenture may be served. The principal corporate trust
office of the Trustee, or if the Trustee's principal corporate trust office is
not located in The City of New York, any other office or agency maintained by
the Trustee in The City of New York (the "Corporate Trust Office"), shall be
such office or agency of the Company, unless the Company shall designate and
maintain some other office or agency for one or more of such purposes. The
Company will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
SECTION 3.16. Corporate Existence. Subject to Article IV and Section
10.2, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and that of each
Restricted Subsidiary and the corporate rights (charter and statutory) licenses
and franchises of the Company and each Restricted Subsidiary; provided, however,
that the Company shall not be required to preserve any such existence (except
the Company), right, license or franchise 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 each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not, and will not
be, disadvantageous in any material respect to the Holders, and provided,
further, the Company may merge in accordance with Sections 4.1 and 10.2.
SECTION 3.17. Payment of Taxes and Other Claims. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, 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 reserves, if necessary (in the
good faith judgment of management of the Company), are being maintained in
accordance with GAAP or where the failure to effect such payment will not be
disadvantageous to the Holders.
SECTION 3.18. Payments for Consent. Neither the Company nor any of its
Restricted Subsidiaries will, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fees or otherwise, to any Holder
of any Securities for or as an
74
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or is paid to all Holders of the Securities that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or amendment.
SECTION 3.19. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each Fiscal Year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they do,
the certificate shall describe the Default or Event of Default, its status and
what action the Company is taking or proposes to take with respect thereto. The
Company also shall comply with TIA (S) 314(a)(4).
SECTION 3.20. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.21. Statement by Officers as to Default. The Company shall
deliver to the Trustee, as soon as possible and in any event within five days
after the Company becomes aware of the occurrence of any Event of Default or an
event which, with notice or the lapse of time or both, would constitute an Event
of Default, an Officers' Certificate setting forth the details of such Event of
Default or default and the action which the Company proposes to take with
respect thereto.
ARTICLE IV
Successor Company
SECTION 4.1. Merger and Consolidation. The Company will not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") will be a corporation, partnership, trust or limited
liability company organized and existing under the laws of the
United States of America, any State of the United States or the
District of Columbia and the Successor Company (if not the
Company) will expressly assume, by supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the
Securities and this Indenture;
(2) immediately after giving effect to such transaction (and treating
any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of
such transaction as having been Incurred by the Successor Company
or such Subsidiary at the
75
time of such transaction), no Default or Event of Default shall
have occurred and be continuing;
(3) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least an additional
$1.00 of Indebtedness pursuant to the first paragraph of Section
3.3 (to the extent such Section remains in effect);
(4) each Subsidiary Guarantor (unless it is the other party to the
transactions above, in which case clause (1) shall apply) shall
have by supplemental indenture confirmed that its Subsidiary
Guarantee shall apply to such Person's obligations in respect of
this Indenture and the Securities and its obligations under the
Registration Rights Agreement shall continue to be in effect; and
(5) the Company shall 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.
For purposes of this Section 4.1, the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but, in the
case of a lease of all or substantially all its assets, the Company will not be
released from the obligation to pay the principal of and interest on the
Securities.
Notwithstanding clauses (3), (4) and (5) of the first paragraph of
this Section 4.1: (x) any Restricted Subsidiary of the Company may consolidate
with, merge into or transfer all or part of its properties and assets to the
Company and (y) the Company may merge with an Affiliate incorporated solely for
the purpose of reincorporating the Company in another jurisdiction to realize
tax benefits.
ARTICLE V
Redemption of Securities
SECTION 5.1. Optional Redemption. The Securities may be redeemed, as a
whole or from time to time in part, subject to the conditions and at the
redemption prices specified in the form of Securities set forth in Exhibits A
and B hereto, which are hereby
76
incorporated by reference and made a part of this Indenture, together with
accrued and unpaid interest to the Redemption Date.
SECTION 5.2. Applicability of Article. Redemption of Securities at the
election of the Company or otherwise, as permitted or required by any provision
of this Indenture, shall be made in accordance with such provision and this
Article.
SECTION 5.3. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities pursuant to Section 5.1 shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company,
the Company shall, upon not later than the earlier of the date that is 30 days
prior to the Redemption Date fixed by the Company or the date on which notice is
given to the Holders (except as provided in Section 5.5 or unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities to be redeemed and
shall deliver to the Trustee such documentation and records as shall enable the
Trustee to select the Securities to be redeemed pursuant to Section 5.4.
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities are to be redeemed at any time pursuant to an
optional redemption, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
outstanding Securities not previously called for redemption, in compliance with
the requirements of the principal securities exchange, if any, on which such
Securities are listed, or, if such Securities are not so listed, on a pro rata
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements)
and which may provide for the selection for redemption of portions of the
principal of the Securities; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of a Security not redeemed to
less than $1,000.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
SECTION 5.5. Notice of Redemption. Notice of redemption shall be given
in the manner provided for in Section 11.2 not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed.
The Trustee shall give notice of redemption in the Company's name and at the
Company's expense; provided, however, that the Company shall deliver to the
Trustee, at least 45 days prior to the Redemption Date, an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the following items.
All notices of redemption shall state:
77
(1) the Redemption Date,
(2) the redemption price and the amount of accrued interest to the
Redemption Date payable as provided in Section 5.7, if any,
(3) if less than all outstanding Securities are to be redeemed, the
identification of the particular Securities (or portion thereof)
to be redeemed, as well as the aggregate principal amount of
Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder will
receive, without charge, a new Security or Securities of
authorized denominations for the principal amount thereof
remaining unredeemed,
(5) that on the Redemption Date the redemption price (and accrued
interest, if any, to the Redemption Date payable as provided in
Section 5.7) will become due and payable upon each such Security,
or the portion thereof, to be redeemed, and, unless the Company
defaults in making the redemption payment, that interest on
Securities called for redemption (or the portion thereof) will
cease to accrue on and after said date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(7) the name and address of the Paying Agent,
(8) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to the
accuracy or correctness of the CUSIP number, if any, listed in
such notice or printed on the Securities, and
(10) the paragraph of the Securities pursuant to which the Securities
are to be redeemed.
SECTION 5.6. Deposit of Redemption Price. Prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 2.4) an amount of money sufficient to pay the redemption
price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 5.7. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the redemption price
therein specified (together with accrued interest,
78
if any, to the Redemption Date), and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the redemption price, together with accrued interest,
if any, to the Redemption Date (subject to the rights of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date).
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 5.8. Securities Redeemed in Part. Any Security which is to be
redeemed only in part (pursuant to the provisions of this Article) shall be
surrendered at the office or agency of the Company maintained for such purpose
pursuant to Section 3.15 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and make available for delivery to the Holder of such
Security at the expense of the Company, 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 unredeemed portion of the principal of
the Security so surrendered, provided, that each such new Security will be in a
principal amount of $1,000 or integral multiple thereof.
ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default. The occurrence and continuance of each
of the following is an Event of Default:
(1) default in any payment of interest or additional interest (as
required by the Registration Rights Agreement) on any Security
when due, continued for 30 days;
(2) default in the payment of principal of or premium, if any, on any
Security when due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or
otherwise;
(3) failure by the Company or any Subsidiary Guarantor to comply with
its obligations under Article IV or Section 10.2;
(4) failure by the Company to comply for 30 days after notice with
any of its obligations under Sections 3.2, 3.3, 3.4, 3.5, 3.6,
3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.15, 3.16, 3.17 and 3.18
(in each case, other than a failure to purchase Securities
pursuant to Section 3.7 or 3.9, which shall constitute an Event
of Default under clause (2) above );
79
(5) failure by the Company to comply for 60 days after notice with
its other obligations contained in this Indenture;
(6) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is Guaranteed by
the Company or any of its Restricted Subsidiaries), which
default:
(a) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness
("payment default"); or
(b) results in the acceleration of such Indebtedness prior to
its maturity (the "cross acceleration provision");
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a payment default or the maturity of
which has been so accelerated, aggregates $25.0 million or more;
provided, that this clause (b) shall not apply to (i)
Indebtedness of any Receivables Entity, (ii) Indebtedness owed to
the Company or a Restricted Subsidiary or (iii) Permitted Non-
Recourse Indebtedness, whether such Indebtedness or Guarantee
exists on the date hereof, or is created after the date of this
Indenture;
(7) (a) the Company or Significant Subsidiary (other than any
Receivables Entity) or a group of Restricted Subsidiaries (other
than Receivables Entities) that, taken together (as of the latest
audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy
Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of judgment, decree or order
for relief against it in an involuntary case or
proceeding;
(iii) consents to the appointment of a Custodian of it or
for any substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it;
80
(vi) takes any corporate action to authorize or effect
any of the foregoing; or takes any comparable
action under any foreign laws relating to
insolvency; or
(b) 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 Subsidiary (other than any Receivables
Entity) or a group of Restricted Subsidiaries
(other than Receivables Entities) that, taken
together (as of the latest audited consolidated
financial statements for the Company and its
Restricted Subsidiaries), would constitute a
Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any
Significant Subsidiary (other than any Receivables
Entity) or a group of Restricted Subsidiaries
(other than Receivables Entities) that, taken
together (as of the latest audited consolidated
financial statements for the Company and its
Restricted Subsidiaries), would constitute a
Significant Subsidiary or for any substantial part
of its property; or
(iii) orders the winding up or liquidation of the Company
or any Significant Subsidiary (other than any
Receivables Entity) or a group of Restricted
Subsidiaries (other than Receivables Entities)
that, taken together (as of the latest audited
consolidated financial statements for the Company
and its Restricted Subsidiaries), would constitute
a Significant Subsidiary;
or any similar relief is granted under any foreign laws and the
order, decree or relief remains unstayed and in effect for 60
days;
(8) failure by the Company or any Significant Subsidiary (other than
any Receivables Entity) or group of Restricted Subsidiaries
(other than any Receivables Entity) that, taken together (as of
the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary to pay final judgments of a court of
competent jurisdiction aggregating in excess of $25.0 million
(net of any amounts that a reputable and creditworthy insurance
company has acknowledged liability for in writing or which has
81
been determined to be applicable by a final nonappealable
determination by a court of competent jurisdiction), which
judgments are not paid, discharged or stayed and there shall have
been a period of 90 days after the date on which any period for
appeal has expired and during which a stay of enforcement of such
judgment, order or decree shall not be in effect (the "judgment
default provision"); or
(9) any Subsidiary Guarantee ceases to be in full force and effect
(except as contemplated by the terms of this Indenture) or is
declared null and void in a judicial proceeding or any Subsidiary
Guarantor denies or disaffirms its obligations under this
Indenture or its Subsidiary Guarantee.
However, a Default under clauses (4) and (5) of this Section 6.1 will
not constitute an Event of Default until the Trustee or the Holders of at least
25% in principal amount of the outstanding Securities notify the Company of the
Default and the Company does not cure such Default within the time specified in
clauses (4) and (5) of this Section 6.1 after receipt of such notice.
SECTION 6.2. Acceleration. If an Event of Default (other than an Event
of Default described in Section 6.1(7)) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in principal amount of the
outstanding Securities by notice to the Company and the Trustee, may, and the
Trustee at the request of such Holders shall, declare the principal of, premium,
if any, and accrued and unpaid interest, if any, on all the Securities to be due
and payable. Upon such a declaration, such principal, premium and accrued and
unpaid interest will be due and payable immediately. In the event of a
declaration of acceleration of the Securities because an Event of Default
described in Section 6.1(6) has occurred and is continuing, the declaration of
acceleration of the Securities shall be automatically annulled if the event of
default or payment default triggering such Event of Default pursuant to Section
6.1(6) shall be remedied or cured by the Company or a Restricted Subsidiary of
the Company or waived by the Holders of the relevant Indebtedness within 20 days
after the declaration of acceleration with respect thereto and if (i) the
annulment of the acceleration of the Securities would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) all existing
Events of Default, except nonpayment of principal, premium or interest on the
Securities that became due solely because of the acceleration of the Securities,
have been cured or waived. If an Event of Default described in Section 6.1(7)
above occurs and is continuing, the principal of, premium, if any, and accrued
and unpaid interest on all the Securities will become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holders. The Holders of a majority in principal amount of the outstanding
Securities may waive all past defaults (except with respect to nonpayment of
principal, premium or interest) and rescind any such acceleration with respect
to the Securities and its consequences if (x) rescission would not conflict with
any judgment or decree of a court of competent jurisdiction and (y) all existing
Events of Default, other than the nonpayment of the principal of, premium, if
any, and interest on the Securities that have become due solely by such
declaration of acceleration, have been cured or waived.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of (or premium,
82
if any) or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may (a)
waive, by their consent (including, without limitation consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Securities), an existing Default or Event of Default and its consequences except
(i) a Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on a Security or (ii) a Default or Event of Default
in respect of a provision that under Section 9.2 cannot be amended without the
consent of each Securityholder affected and (b) rescind any such acceleration
with respect to the Securities and its consequences if (i) rescission would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, other than the nonpayment of the principal
of, premium, if any, and interest on the Securities that have become due solely
by such declaration of acceleration, have been cured or waived. When a Default
or Event of Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
consequent right.
SECTION 6.5. Control by Majority. 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 of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Sections 7.1 and 7.2, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. Subject to Section 6.7, a
Securityholder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in outstanding principal amount of
the Securities make a request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
83
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction that, in the opinion of the
Trustee, is inconsistent with such request during such 60-day
period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture (including, without limitation, Section 6.6),
the right of any Holder to receive payment of principal of, premium (if any) or
interest on the Securities held by such Holder, on or after the respective due
dates expressed in the Securities, 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 such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. 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 and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
its or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal, premium, if any, 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.
84
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
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, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a
suit by Holders of more than 10% in outstanding principal amount of the
Securities.
SECTION 6.12. Additional Payments. In the case of any Event of Default
occurring by reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Company with the intention of avoiding payment of the
premium that the Company would have had to pay if the Company then had elected
to redeem the Securities pursuant to the optional redemption provisions of this
Indenture or was required to repurchase the Securities, an equivalent premium
shall also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the Securities. If an Event of Default occurs prior
to November 1, 2005 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Securities prior to November 1, 2005, the
premium specified in this Indenture shall also become immediately due and
payable to the extent permitted by law upon the acceleration of the Securities.
ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise 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; provided that if an Event of
Default occurs and is continuing, the Trustee will be under no obligation to
exercise any of the rights or powers under this Indenture at the request or
direction of any of the Holders unless such Holders have offered to the Trustee
reasonable indemnity or security against loss, liability or expense.
(b) Except during the continuance of an Event of Default:
85
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(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,
opinions or orders furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provisions 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 on their face to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(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 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) 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.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
86
(i) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
(including reasonable attorneys' fees and expenses) and liabilities that might
be incurred by it in compliance with such request or direction.
SECTION 7.2. Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may conclusively rely on any document (whether in its
original or facsimile form) reasonably 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. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers, unless the Trustee's conduct constitutes wilful misconduct or
negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 7.3. 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. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. 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 in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each
87
Securityholder notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium (if any), or interest on any Security (including payments
pursuant to the optional redemption or required repurchase provisions of such
Security, if any), the Trustee may withhold the notice if and so long as its
board of directors, a committee of its board of directors or a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as practicable
after each May 15 beginning with the May 15, following the date of this
Indenture, and in any event prior to July 15 in each year, the Trustee shall
mail to each Securityholder a brief report dated as of such May 15 that complies
with TIA (S) 313(a). The Trustee also shall comply with TIA (S) 313(b). The
Trustee shall also transmit by mail all reports required by TIA (S) 313(c).
A copy of each 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 agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. 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 out-of-pocket expenses
incurred or made by it, including costs of collection, costs of preparing and
reviewing reports, certificates and other documents, costs of preparation and
mailing of notices to Securityholders and reasonable costs of counsel retained
by the Trustee in connection with the delivery of an Opinion of Counsel or
otherwise, in addition to the compensation for its services. Such expenses shall
include the reasonable compensation and expenses, disbursements and advances of
the Trustee's agents, counsel, accountants and experts. The Company shall
indemnify the Trustee against any and all loss, liability, damages, claims or
expense (including reasonable attorneys' fees and expenses) incurred by it
without negligence or wilful misconduct on its part in connection with the
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of enforcing this Indenture (including this
Section 7.7) and of defending itself against any claims (whether asserted by any
Securityholder, the Company or otherwise). The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. 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 may have separate
counsel and the Company shall pay the fees and expenses of such counsel provided
that the Company shall not be required to pay such fees and expenses if it
assumes the Trustee's defense, and, in the reasonable judgment of outside
counsel to the Trustee, there is no conflict of interest between the Company and
the Trustee in connection with such defense. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct or negligence.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The
88
Trustee's right to receive payment of any amounts due under this Section 7.7
shall not be subordinate to any other liability or Indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) with respect to the
Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of the 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.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition, at the Company's
expense, 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 the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
89
SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 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 (S)
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated.
SECTION 7.12. Trustee's Application for Instruction from the Company.
Any application by the Trustee for written instructions from the Company may, at
the option of the Trustee, set forth in writing any action proposed to be taken
or omitted by the Trustee under this Indenture and the date on and/or after
which such action shall be taken or such omission shall be effective. The
Trustee shall not be liable for any action taken by, or omission of, the Trustee
in accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
90
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance. (a)
Subject to Section 8.1(c), when (i)(x) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to Section 2.9)
for cancellation or (y) all outstanding Securities not theretofore delivered for
cancellation have become due and payable, whether at maturity or upon redemption
or will become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name and at the expense
of the Company and the Company or any Subsidiary Guarantor irrevocably deposits
or causes to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders money in U.S. dollars, non-callable U.S. Government
Obligations, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation for principal, premium, if any, and accrued interest to the
date of maturity or redemption; (ii) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the Company or
any Subsidiary Guarantor is a party or by which the Company or any Guarantor is
bound; (iii) the Company or any Subsidiary Guarantor has paid or caused to be
paid all sums payable under this Indenture and the Securities; and (iv) the
Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of such Securities at
maturity or the Redemption Date, as the case may be, then the Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company (accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option"), and after giving effect to such legal defeasance,
any omission to comply with such obligations shall no longer constitute a
Default or Event of Default or (ii) its obligations under Sections 3.2, 3.3,
3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.18, and 4.1(3) and the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document and such omission to comply with such covenants shall
no longer constitute a Default or an Event of Default under Section 6.1(3),
6.1(4) and 6.1(5) and the operation of Sections 6.1(6), 6.1(7) (but only with
respect to a Significant Subsidiary or group of Restricted Subsidiaries that
would constitute a Significant Subsidiary), 6.1(8) and 6.1(9), and the events
specified in such Sections shall no longer constitute an Event of Default
(clause (ii) being referred to as the "covenant defeasance option"), but except
as specified above, the remainder of this Indenture and the Securities shall be
unaffected thereby. The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. If
91
the Company exercises its covenant defeasance option, the Company may elect to
have any Subsidiary Guarantees in effect at such time terminate.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default, and the
Subsidiary Guarantees in effect at such time shall terminate. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Section 6.1(4) (as such
Section relates to 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13 and 3.18), 6.1(5), 6.1(6), 6.1(7) (but only with respect to a Significant
Subsidiary or group of Restricted Subsidiaries that would constitute a
Significant Subsidiary), 6.1(8) or 6.1(9) or because of the failure of the
Company to comply with Section 4.1(3).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 8.1(a) and (b), the
Company's obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.9, 2.10, 2.11, 3.1,
3.15, 3.16, 3.17, 3.19, 3.20, 3.21, 6.7, 7.7, 7.8 and in this Article 8 shall
survive until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee for the
benefit of the Holders money in U.S. dollars or U.S. Government Obligations
or a combination thereof for the payment of principal, premium, if any, and
interest on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, with respect to certain
bankruptcy or insolvency Events of Default, on the 91st day after such date
of deposit;
(4) such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary assumptions and exclusions) to the effect
that (A) the Securities and (B) assuming no intervening bankruptcy of the
Company between the date of deposit
92
and the 91st day following the deposit and that no Holder of the Securities
is an insider of the Company, after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' right
generally;
(6) the deposit does not constitute a default under any other
agreement binding on the Company;
(7) the Company delivers to the Trustee an Opinion of Counsel (subject
to customary assumptions and exclusions) to the effect that the trust
resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940;
(8) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Securityholders will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such legal defeasance had
not occurred;
(9) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States to the effect that the
Securityholders will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and covenant defeasance and will
be subject to federal income tax on the same amount, in the same manner and
at the same times as would have been the case if such deposit and covenant
defeasance had not occurred; and
(10) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities and this Indenture as
contemplated by this Article VIII have been complied with.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.4. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture.
93
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal of or interest on the Securities that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.
SECTION 8.5. Indemnity for U.S. Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article VIII 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 obligations of the Company under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; 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 U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by a
Successor Company of an obligation of the Company under this Indenture;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities, to release a
Subsidiary Guarantor in accordance with this Indenture or to secure the
Securities;
94
(5) to add to the covenants of the Company and the Subsidiary
Guarantors for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to make any change that does not materially adversely affect the
rights of any Securityholder; or
(8) to provide for the issuance of the Exchange Securities, which will
have terms substantially identical in all material respects to the Initial
Securities or the Additional Securities, as the case may be (except that
the transfer restrictions contained in the Initial Securities or the
Additional Securities, if any, will be modified or eliminated, as
appropriate), and which will be treated, together with any outstanding
Initial Securities or Additional Securities, as a single issue of
securities.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.2. With Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to any Securityholder but with the written consent of the Holders of at
least a majority in principal amount of the Securities then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Securities). However, without the
consent of each Securityholder affected, an amendment may not:
(1) reduce the principal amount of Securities whose Holders must
consent to an amendment;
(2) reduce the stated rate of or extend the stated time for payment of
interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may or shall be
redeemed or repurchased as described under Section 3.7, Section 3.9
(including an amendment to the definition of "Change of Control") or
Article V or any similar provision, whether through an amendment to or
waiver of Section 3.7, Section 3.9 or Article V, a definition or otherwise;
(5) make any Security payable in currency other than that stated in
the Security;
95
(6) impair the right of any Holder to receive payment of principal of,
premium, if any, and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any payment
on or with respect to such Holder's Securities; or
(7) make any change to the amendment provisions which require each
Holder's consent or to the waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder. An amendment or
waiver shall become effective upon receipt by the Trustee of the requisite
number of written consents under Section 9.1 or 9.2 as applicable.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 120
days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an amendment
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 regarding 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 to issue a new Security shall not affect the validity of such
amendment.
96
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in
relying upon an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
ARTICLE X
Subsidiary Guarantee
SECTION 10.1. Subsidiary Guarantee. Each Subsidiary Guarantor hereby
fully, unconditionally and irrevocably guarantees, as primary obligor and not
merely as surety, jointly and severally with each other Subsidiary Guarantor, to
each Holder of the Securities and the Trustee the full and punctual payment when
due, whether at maturity, by acceleration, by redemption or otherwise, of the
principal of, premium, if any, and interest on the Securities and all other
obligations of the Company under this Indenture (all the foregoing being
hereinafter collectively called the "Obligations"). Each Subsidiary Guarantor
further agrees (to the extent permitted by law) that the Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
it, and that it will remain bound under this Article X notwithstanding any
extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder to assert any claim or demand or to enforce any right or remedy against
the Company or any other person under this Indenture, the Securities or any
other agreement or otherwise; (b) any extension or renewal of any thereof; (c)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Obligations or
any of them; (e) the failure of any Holder to exercise any right or remedy
against any other Subsidiary Guarantor; or (f) any change in the ownership of
the Company.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a Guarantee of payment when due (and not a Guarantee of
collection) and waives any right to require that any resort be had by any Holder
to any security held for payment of the Obligations.
The obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
97
otherwise. Without limiting the generality of the foregoing, the obligations of
each Subsidiary Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder to assert any claim or demand or
to enforce any remedy under this Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any Subsidiary
Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor
as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any of
the Obligations is rescinded or must otherwise be restored by any Holder upon
the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against any Subsidiary Guarantor
by virtue hereof, upon the failure of the Company to pay any of the Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, each Subsidiary Guarantor hereby promises to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid
amount of such Obligations then due and owing and (ii) accrued and unpaid
interest on such Obligations then due and owing (but only to the extent not
prohibited by law).
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as provided
in this Indenture for the purposes of its Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby and (y) in the
event of any such declaration of acceleration of such Obligations, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Subsidiary Guarantor for the purposes of this Subsidiary
Guarantee.
Each Subsidiary Guarantor also agrees to pay any and all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or the Holders in enforcing any rights under this Section.
SECTION 10.2. Limitation on Liability; Termination, Release and
Discharge. The obligations of each Subsidiary Guarantor hereunder will be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor (including,
without limitation, any guarantees under the any Credit Facility) and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its
contribution obligations under this Indenture, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
98
Each Subsidiary Guarantor may consolidate with or merge into or sell
its assets to the Company or another Subsidiary Guarantor without limitation.
Subject to Article III and Article IV, each Subsidiary Guarantor may consolidate
with or merge into or sell all or substantially all its assets to a corporation,
partnership or trust other than the Company or another Subsidiary Guarantor
(whether or not affiliated with the Subsidiary Guarantor), except that if the
surviving corporation of any such merger or consolidation is a Subsidiary of the
Company, such merger, consolidation or sale shall not be permitted unless (i)
the Person formed by or surviving any such consolidation or merger assumes all
the obligations of such Subsidiary under the Subsidiary Guarantee pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee in respect of the Securities, this Indenture and the Subsidiary
Guarantee; (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; and (iii) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Trustee with
respect to the foregoing matters. Upon the sale or disposition of a Subsidiary
Guarantor (by merger, consolidation, the sale of its Capital Stock or the sale
of all or substantially all of its assets (other than by lease)) and whether or
not the Subsidiary Guarantor is the surviving corporation in such transaction to
a Person (whether or not an Affiliate of the Subsidiary Guarantor) which is not
the Company or a Restricted Subsidiary of the Company (other than a Receivables
Entity), which sale or disposition is otherwise in compliance with this
Indenture (including Sections 3.7 and 3.10), such Subsidiary Guarantor will be
deemed released from all its obligations under this Indenture and its Subsidiary
Guarantee and such Subsidiary Guarantee will terminate; provided, however, that
any such termination will occur only to the extent that all obligations of such
Subsidiary Guarantor under the Credit Facility and all of its guarantees of, and
under all of its pledges of assets or other security interests which secure, any
other Indebtedness of the Company or its Restricted Subsidiaries will also
terminate upon such release, sale or transfer.
A Subsidiary Guarantor will be deemed released and relieved of its
obligations under this Indenture and its Subsidiary Guarantee without any
further action required on the part of the Company or such Subsidiary Guarantor
upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary
in accordance with the terms of this Indenture.
SECTION 10.3. Right of Contribution. Each Subsidiary Guarantor hereby
agrees that to the extent that any Subsidiary Guarantor shall have paid more
than its proportionate share of any payment made on the obligations under the
Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to seek and
receive contribution from and against the Company or any other Subsidiary
Guarantor who has not paid its proportionate share of such payment. Each
Subsidiary Guarantor's right of contribution shall be subject to the terms and
conditions of Section 3.6. The provisions of this Section 10.3 shall in no
respect limit the obligations and liabilities of each Subsidiary Guarantor to
the Trustee and the Holders and each Subsidiary Guarantor shall remain liable to
the Trustee and the Holders for the full amount guaranteed by such Subsidiary
Guarantor hereunder.
SECTION 10.4. No Subrogation. Notwithstanding any payment or payments
made by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor shall be
entitled to be subrogated to any of the rights of the Trustee or any Holder
against the Company or any other Subsidiary Guarantor or any collateral security
or guarantee or right of offset held by the Trustee or any Holder for the
payment of the Obligations, nor shall any Subsidiary Guarantor seek or be
99
entitled to seek any contribution or reimbursement from the Company or any other
Subsidiary Guarantor in respect of payments made by such Subsidiary Guarantor
hereunder, until all amounts owing to the Trustee and the Holders by the Company
on account of the Obligations are paid in full. If any amount shall be paid to
any Subsidiary Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by such Subsidiary Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Subsidiary Guarantor, and shall, forthwith
upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the
exact form received by such Subsidiary Guarantor (duly indorsed by such
Subsidiary Guarantor to the Trustee, if required), to be applied against the
Obligations.
ARTICLE XI
Miscellaneous
SECTION 11.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Subsidiary Guarantor in addition to performing its
obligations under its Subsidiary Guarantee shall perform such other obligations
as may be imposed upon it with respect to this Indenture under the TIA.
SECTION 11.2. Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail addressed as follows:
if to the Company:
Pennzoil-Quaker State Company
Pennzoil Place
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx, General Counsel
with a copy to:
Xxxxx Xxxxx LLP
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxx
100
if to the Trustee:
The Chase Manhattan Bank
Chase Tower
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Corporate Trust Division
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a registered Securityholder
shall be mailed to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
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. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.3. Communication by Holders with other Holders.
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 11.4. 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:
(1) an Officers' Certificate in form and substance reasonably
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 reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual 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;
101
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
SECTION 11.6. When Securities Disregarded. 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 or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 11.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 11.9. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 11.10. No Recourse Against Others. An incorporator, director,
officer, employee, stockholder or controlling person, as such, of the Company or
any Subsidiary Guarantor shall not have any liability for any obligations of the
Company under the Securities, this Indenture or the Subsidiary Guarantees or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 11.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple 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. One signed copy is enough to prove this
Indenture.
102
SECTION 11.13. Variable Provisions. The Company initially appoints the
Trustee as Paying Agent and Registrar and custodian with respect to any Global
Securities.
SECTION 11.14. Qualification of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive from
the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 11.15. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
103
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
PENNZOIL-QUAKER STATE COMPANY
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Group Vice President and
Chief Financial Officer
JIFFY LUBE INTERNATIONAL, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
JIFFY LUBE INTERNATIONAL OF MARYLAND, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
MEDO INDUSTRIES, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
Q LUBE, INC.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
104
RAIN-X CORPORATION
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
BLUE CORAL-SLICK 50, LTD.
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
PENNZOIL-QUAKER STATE
INTERNATIONAL CORPORATION
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
PENNZOIL-QUAKER STATE CANADA
HOLDING COMPANY
/s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
PENNZOIL-QUAKER STATE INVESTMENT
COMPANY
/s/ Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx
President
THE CHASE MANHATTAN BANK, as Trustee
/s/ Xxxxx Xxxxxx
-----------------
Xxxxx Xxxxxx
Vice President & Trust Officer
EXHIBIT A
[FORM OF FACE OF SERIES A NOTE]
[Applicable Restricted Securities Legend]
[Depository Legend, if applicable]
No. [___] Principal Amount $[___________]
CUSIP NO. ________
PENNZOIL-QUAKER STATE COMPANY
% Senior Note, Series A, due 2008
Pennzoil-Quaker State Company, a Delaware corporation, promises to pay
to [__________], or registered assigns, the principal sum of [_______________]
Dollars, on November 1, 2008.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Additional provisions of this Security are set forth on the other side
of this Security.
PENNZOIL-QUAKER STATE COMPANY
By:
--------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE CHASE MANHATTAN BANK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By________________________________
Authorized Signatory Date: November __, 2001
A-1
[FORM OF REVERSE SIDE OF SERIES A NOTE]
10% Senior Note, Series A, due 2008
1. Interest
Pennzoil-Quaker State Company, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on May 1 and November 1 of
each year commencing May 1, 2002. Interest on the Securities will accrue from
the most recent date to which interest has been paid on the Securities or, if no
interest has been paid, from November 2, 2001. The Company shall pay interest
on overdue principal or premium, if any (plus interest on such interest to the
extent lawful), at the rate borne by the Securities to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the April 15 or October 15 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will 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. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
Definitive Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, The Chase Manhattan Bank (the "Trustee"), will act as
Trustee, Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice to any Securityholder.
The Company or any of its Restricted Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
A-2
4. Indenture
The Company issued the Securities under an Indenture dated as of
November 2, 2001 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company, the
Subsidiary Guarantors and the Trustee. 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. (S)(S) 77aaa-77bbbb) as in effect
on the date of the Indenture (the "Act"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are general unsecured senior obligations of the
Company. The aggregate principal amount of securities that may be authenticated
and delivered under the Indenture is unlimited. This Security is one of the 10%
Senior Notes, Series A, due 2008 referred to in the Indenture. The Securities
include (i) $250,000,000 aggregate principal amount of the Company's 10% Senior
Notes, Series A, due 2008 issued under the Indenture on November 2, 2001 (herein
called "Initial Securities"), (ii) if and when issued, additional 10% Senior
Notes, Series A, due 2008 or 10% Senior Notes, Series B, due 2008 of the Company
that may be issued from time to time under the Indenture subsequent to
November 2, 2001 (herein called "Additional Securities") and (iii) if and when
issued, the Company's 10% Senior Notes, Series B, due 2008 that may be issued
from time to time under the Indenture in exchange for Initial Securities or
Additional Securities in an offer registered under the Securities Act as
provided in the Registration Rights Agreement. The Initial Securities,
Additional Securities and Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on,
among other things, the Incurrence of Indebtedness by the Company and its
Subsidiaries, the payment of dividends and other distributions on the Capital
Stock of the Company and its Subsidiaries, the purchase or redemption of Capital
Stock of the Company and Capital Stock of such Subsidiaries, certain purchases
or redemptions of Subordinated Indebtedness, the sale or transfer of assets and
Capital Stock of Subsidiaries, certain sale/leaseback transactions involving the
Company or any Restricted Subsidiary, the issuance or sale of Capital Stock of
Subsidiaries, the incurrence of certain liens, certain payment guarantees, the
business activities and investments of the Company and its Subsidiaries and
transactions with Affiliates, provided, however, certain of such limitations
will no longer be in effect if the Securities receive a rating of "BBB-" or
higher from Standard & Poor's Rating Service (or its successors) and "Baa3" or
higher from Xxxxx'x Investors Service, Inc. (or its successors). In addition,
the Indenture limits the ability of the Company and its Subsidiaries to enter
into agreements that restrict distributions and dividends from Subsidiaries.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior basis pursuant to the terms of the Indenture.
A-3
5. Redemption
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to November 1, 2005. On and after such date,
the Securities will be redeemable, at the Company's option, in whole or in part,
at any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest 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 12-month period commencing on November 1of the
years set forth below:
REDEMPTION
PERIOD PRICE
------ ----------
2005 105.00%
2006 102.50%
2007 and thereafter 100.00%
In addition, at any time and from time to time prior to November 1,
2004, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Securities with the Net Cash Proceeds of one or more
Equity Offerings received by the Company at a redemption price (expressed as a
percentage of principal amount) of 110% plus accrued and unpaid interest, 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); provided, however, that at least 65% of the original principal amount of
the Securities must remain outstanding after each such redemption; provided
further, that each such redemption occurs within 90 days of the date of closing
of such Equity Offering.
If the optional redemption date is on or after an interest record date
and on or before the related interest payment date, the accrued and unpaid
interest, if any, will be paid to the Person in whose name the Security is
registered at the close of business on such record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed or, if the Securities are not listed, then on a pro rata basis, by lot or
by such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Securities of $1,000 in original principal amount
or less will be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the portion
of the principal amount thereof to be redeemed. A new Security in 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
A-4
redemption as long as the Company has deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to the Indenture.
6. Repurchase Provisions
(a) Upon a Change of Control any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 3.7 (b) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Securities and
any Pari Passu Notes in accordance with the procedures set forth in Section 3.7
of the Indenture.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Securities to be redeemed
and ending on the date of such mailing or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Defeasance
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
A-5
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment or in
respect of a provision that cannot be amended without the written consent of
each Securityholder affected) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article IV of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities, to release a Subsidiary Guarantor in accordance with the Indenture
or to secure the Securities, or to add additional covenants of the Company and
the Subsidiary Guarantors, or surrender rights and powers conferred on the
Company, or to comply with any request of the SEC in connection with qualifying
the Indenture under the Act, or to make any change that does not materially
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Securities.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest or additional interest when due on the Securities; (ii)
default in payment of principal or premium, if any, on the Securities at Stated
Maturity, upon required repurchase or upon optional redemption pursuant to
paragraphs 5 and 6 of the Securities, upon declaration or otherwise; (iii) the
failure by the Company or any Subsidiary Guarantor to comply with its
obligations under Article IV or Section 10.2 of the Indenture; (iv) failure by
the Company to comply for 30 days after notice with any of its obligations under
the covenants described under Sections 3.2 through 3.13 inclusive and Sections
3.15 through 3.18 inclusive of the Indenture (in each case, other than a failure
to purchase Securities when required pursuant to Section 3.7 or 3.9 or Article
V, which failure shall constitute an Event of Default under clause (ii) above);
(v) the failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture or under the Securities (other than those
referred to in (i), (ii), (iii) or (iv) above); (vi) subject to certain
exceptions contained in the Indenture, default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries), other than Indebtedness owed to the Company
or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists,
or is created after the date of the Indenture, which default (a) is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness before the expiration of the grace period provided in such
Indebtedness ("Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its maturity (the "cross acceleration provision") and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$25.0 million or more; (vii) certain events of bankruptcy, insolvency or
reorganization of the Company or a Significant Subsidiary (other than any
Receivables Entity) or group of Restricted Subsidiaries
A-6
(other than any Receivables Entity) that, taken together (as of the latest
audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary (the "bankruptcy
provisions"); (viii) failure by the Company or any Significant Subsidiary (other
than any Receivables Entity) or group of Restricted Subsidiaries (other than any
Receivables Entity) that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries) would
constitute a Significant Subsidiary to pay final judgments aggregating in excess
of $25.0 million or its foreign currency equivalent at the time (net of any
amounts with respect to which a reputable and creditworthy insurance company has
acknowledged liability in writing or which has been determined to be applicable
by a final nonappealable determination by a court of competent jurisdiction),
which judgments are not paid, discharged or stayed for a period of 90 days after
the date on which any period appeal has expired and during which a stay of
enforcement of such judgment, order or decree shall not be in effect (the
"judgment default provision") or (ix) any Subsidiary Guarantee ceases to be in
full force and effect (except as contemplated by the terms of the Indenture) or
is declared null and void in a judicial proceeding or any Subsidiary Guarantor
denies or disaffirms its obligations under the Indenture or its Subsidiary
Guarantee. However, a default under clauses (iv) and (v) will not constitute an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Company of the default and the
Company does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, 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 and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of each of the Company, or any Subsidiary Guarantor
shall not have any liability for any
A-7
obligations of the Company under the Securities, the Indenture or any Subsidiary
Guarantees or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors
Act).
17. 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 and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. Governing Law
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture, which has in
it the text of this Security in larger type. Requests may be made to:
Pennzoil-Quaker State Company
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, Vice President
and Corporate Secretary
A-8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_____________________________________________________
(Print or type assignee's name, address and zip code)
__________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ___________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
_______________________________________________________________________
Date:____________________ Your Signature:_____________________________
Signature
Guarantee:_____________________________________________________________
(Signature must be guaranteed)
_______________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities
evidenced by this certificate occurring prior to the date that is two years
after the later of the date of original issuance of such Securities and the last
date, if any, on which such Securities were owned by the Company or any
Affiliate of the Company, the undersigned confirms that such Securities are
being:
CHECK ONE BOX BELOW:
1 [ ] acquired for the undersigned's own account, without transfer; or
2 [ ] transferred to the Company; or
3 [ ] transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"); or
4 [ ] transferred pursuant to an effective registration statement under
the Securities Act; or
5 [ ] transferred pursuant to and in compliance with Regulation S under
the Securities Act; or
A-9
6 [ ] transferred to an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act), that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter appears as
Section 2.7 of the Indenture); or
7 [ ] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
______________________________
Signature
Signature Guarantee:
______________________________ ______________________________
(Signature must be guaranteed) Signature
_______________________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
_______________________
Dated:
A-10
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Principal Amount of Signature of
Amount of decrease Amount of increase this Global authorized
in Principal Amount in Principal Amount Security following signatory of
Date of of this Global of this Global such decrease or Trustee or
Exchange Security Security increase Securities Custodian
-------- ------------------- ------------------- ------------------- --------------------
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.7 or 3.9 of the Indenture, check either box:
[ ] [ ]
3.7 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.7 or 3.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature_________________________________________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
A-12
EXHIBIT B
[FORM OF FACE OF SERIES B NOTE]
[Depository Legend, if applicable]
No. [___] Principal Amount $[___________]
CUSIP NO. ________
PENNZOIL-QUAKER STATE COMPANY
% Senior Note, Series B, due 2008
Pennzoil-Quaker State Company, a Delaware corporation, promises to pay
to [__________], or registered assigns, the principal sum of [_______________]
Dollars, on _______, 2008.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Additional provisions of this Security are set forth on the other side
of this Security.
PENNZOIL-QUAKER STATE COMPANY
By:
--------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE CHASE MANHATTAN BANK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By________________________________
Authorized Signatory Date: November __, 2001
B-1
[FORM OF REVERSE SIDE OF SERIES B NOTE]
10% Senior Note, Series B, due 2008
1. Interest
Pennzoil-Quaker State Company, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on May and November 1 of
each year commencing May 1, 2002. Interest on the Securities will accrue from
the most recent date to which interest has been paid on the Securities or, if no
interest has been paid, from November 2, 2001. The Company shall pay interest
on overdue principal or premium, if any (plus interest on such interest to the
extent lawful), at the rate borne by the Securities to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the April 15 or October 15 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will 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. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
Definitive Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, The Chase Manhattan Bank (the "Trustee"), will act as
Trustee, Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice to any Securityholder.
The Company or any of its Restricted Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
B-2
4. Indenture
The Company issued the Securities under an Indenture dated as of
November 2, 2001 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company, the
Subsidiary Guarantors and the Trustee. 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. (S)(S) 77aaa-77bbbb) as in effect
on the date of the Indenture (the "Act"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are general unsecured senior obligations of the
Company. The aggregate principal amount of securities that may be authenticated
and delivered under the Indenture is unlimited. This Security is one of the 10%
Senior Notes, Series B, due 2008 referred to in the Indenture. The Securities
include (i) $250,000,000 aggregate principal amount of the Company's 10% Senior
Notes, Series A, due 2008 issued under the Indenture on November 2, 2001 (herein
called "Initial Securities"), (ii) if and when issued, additional 10% Senior
Notes, Series A, due 2008 or 10% Senior Notes, Series B, due 2008 of the Company
that may be issued from time to time under the Indenture subsequent to November
2, 2001 (herein called "Additional Securities") and (iii) if and when issued,
the Company's 10% Senior Notes, Series B, due 2008 that may be issued from time
to time under the Indenture in exchange for Initial Securities or Additional
Securities in an offer registered under the Securities Act as provided in the
Registration Rights Agreement. The Initial Securities, Additional Securities
and Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on, among other things,
the Incurrence of Indebtedness by the Company and its Subsidiaries, the payment
of dividends and other distributions on the Capital Stock of the Company and its
Subsidiaries, the purchase or redemption of Capital Stock of the Company and
Capital Stock of such Subsidiaries, certain purchases or redemptions of
Subordinated Indebtedness, the sale or transfer of assets and Capital Stock of
Subsidiaries, certain sale/leaseback transactions involving the Company or any
Restricted Subsidiary, the issuance or sale of Capital Stock of Subsidiaries,
the incurrence of certain liens, certain payment guarantees, the business
activities and investments of the Company and its Subsidiaries and transactions
with Affiliates, provided, however, certain of such limitations will no longer
be in effect if the Securities receive a rating of "BBB-" or higher from
Standard & Poor's Rating Service (or its successors) and "Baa3" or higher from
Xxxxx'x Investors Service, Inc. (or its successors). In addition, the Indenture
limits the ability of the Company and its Subsidiaries to enter into agreements
that restrict distributions and dividends from Subsidiaries.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior basis pursuant to the terms of the Indenture.
B-3
5. Redemption
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to November 1, 2005. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest 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 12-month period commencing on November 1 of the
years set forth below:
REDEMPTION
PERIOD PRICE
------ ----------
2005 100.00%
2006 102.50%
2007 and thereafter 100.00%
In addition, at any time and from time to time prior to November 1,
2004, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Securities with the Net Cash Proceeds of one or more
Equity Offerings received by the Company at a redemption price (expressed as a
percentage of principal amount) of 110% plus accrued and unpaid interest, 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); provided, however, that at least 65% of the original principal amount of
the Securities must remain outstanding after each such redemption; provided
further, that each such redemption occurs within 90 days of the date of closing
of such Equity Offering.
If the optional redemption date is on or after an interest record date
and on or before the related interest payment date, the accrued and unpaid
interest, if any, will be paid to the Person in whose name the Security is
registered at the close of business on such record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed or, if the Securities are not listed, then on a pro rata basis, by lot or
by such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Securities of $1,000 in original principal amount
or less will be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the portion
of the principal amount thereof to be redeemed. A new Security in 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
B-4
redemption as long as the Company has deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to the Indenture.
6. Repurchase Provisions
(a) Upon a Change of Control any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 3.7 (b) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Securities and
any Pari Passu Notes in accordance with the procedures set forth in Section 3.7
of the Indenture.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Securities to be redeemed
and ending on the date of such mailing or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Defeasance
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
B-5
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment or in
respect of a provision that cannot be amended without the written consent of
each Securityholder affected) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article IV of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities, to release a Subsidiary Guarantor in accordance with the Indenture
or to secure the Securities, or to add additional covenants of the Company and
the Subsidiary Guarantors, or surrender rights and powers conferred on the
Company, or to comply with any request of the SEC in connection with qualifying
the Indenture under the Act, or to make any change that does not materially
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Securities.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest when due on the Securities; (ii) default in payment of
principal or premium, if any, on the Securities at Stated Maturity, upon
required repurchase or upon optional redemption pursuant to paragraphs 5 and 6
of the Securities, upon declaration or otherwise; (iii) the failure by the
Company or any Subsidiary Guarantor to comply with its obligations under Article
IV or Section 10.2 of the Indenture; (iv) failure by the Company to comply for
30 days after notice with any of its obligations under the covenants described
under Sections 3.2 through 3.13 inclusive and Sections 3.15 through 3.18
inclusive of the Indenture (in each case, other than a failure to purchase
Securities when required pursuant to Section 3.7 or 3.9 or Article V, which
failure shall constitute an Event of Default under clause (ii) above); (v) the
failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture or under the Securities (other than those
referred to in (i), (ii), (iii) or (iv) above); (vi) subject to certain
exceptions contained in the Indenture, default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries), other than Indebtedness owed to the Company
or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists,
or is created after the date of the Indenture, which default (a) is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness before the expiration of the grace period provided in such
Indebtedness ("Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its maturity (the "cross acceleration provision") and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$25.0 million or more; (vii) certain events of bankruptcy, insolvency or
reorganization of the Company or a Significant Subsidiary (other than any
Receivables Entity) or group of Restricted Subsidiaries (other than any
Receivables Entity) that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary (the "bankruptcy provisions"); (viii)
failure by the Company or any Significant Subsidiary (other than any Receivables
Entity) or group of Restricted Subsidiaries (other than any Receivables Entity)
that,
B-6
taken together (as of the latest audited consolidated financial statements for
the Company and its Restricted Subsidiaries) would constitute a Significant
Subsidiary to pay final judgments aggregating in excess of $25.0 million or its
foreign currency equivalent at the time (net of any amounts with respect to
which a reputable and creditworthy insurance company has acknowledged liability
in writing or which has been determined to be applicable by a final
nonappealable determination by a court of competent jurisdiction), which
judgments are not paid, discharged or stayed for a period of 90 days after the
date on which any period appeal has expired and during which a stay of
enforcement of such judgment, order or decree shall not be in effect (the
"judgment default provision") or (ix) any Subsidiary Guarantee ceases to be in
full force and effect (except as contemplated by the terms of the Indenture) or
is declared null and void in a judicial proceeding or any Subsidiary Guarantor
denies or disaffirms its obligations under the Indenture or its Subsidiary
Guarantee. However, a default under clauses (iv) and (v) will not constitute an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Company of the default and the
Company does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, 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 and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of each of the Company, or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company under the
Securities, the Indenture or any Subsidiary Guarantees or
B-7
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors
Act).
17. 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 and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. Governing Law
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Pennzoil-Quaker State Company
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, Vice President
and Corporate Secretary
B-8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_____________________________________________________
(Print or type assignee's name, address and zip code)
__________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ____________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
__________________________________________________________________________
Date: _______________ Your Signature___________________________________________
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
__________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
B-9
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Principal Amount of Signature of
Amount of decrease Amount of increase this Global authorized
in Principal Amount in Principal Amount Security following signatory of
Date of of this Global of this Global such decrease or Trustee or
Exchange Security Security increase Securities Custodian
-------- ------------------- ------------------- ------------------- --------------------
B-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.7 or 3.9 of the Indenture, check either box:
[ ] [ ]
3.7 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.7 or 3.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: _______________ Your Signature: ________________________________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
B-11
EXHIBIT C
FORM OF SUBSIDIARY GUARANTEE
This Supplemental Indenture, dated as of November 2, 2001 (this
"Supplemental Indenture" or "Guarantee"), among [name of future Subsidiary
Guarantor] (the "Guarantor"), Pennzoil-Quaker State Company (together with its
successors and assigns, the "Company"), each other then existing Subsidiary
Guarantor under the Indenture referred to below, and The Chase Manhattan Bank,
as Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have
heretofore executed and delivered an Indenture, dated as of November 2, 2001 (as
amended, supplemented, waived or otherwise modified, the "Indenture"), providing
for the issuance of an aggregate principal amount of $250,000,000 of 10% Senior
Notes due 2008 of the Company (the "Securities");
WHEREAS, Section 3.12 of the Indenture provides that unless such
Subsidiary has previously issued a Subsidiary Guarantee which is then in full
force and effect, the Company is required to cause each Subsidiary that issues a
Guarantee in respect of obligations under a Credit Facility to execute and
deliver to the Trustee a Subsidiary Guarantee pursuant to which such Subsidiary
to execute and deliver to the Trustee a Subsidiary Guarantee pursuant to which
such Restricted Subsidiary will unconditionally Guarantee, on a joint and
several basis with the other Subsidiary Guarantors, the full and prompt payment
of the principal of, premium, if any, and interest on the Securities on a senior
basis; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee and the
Company are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor, the Company, the other Subsidiary Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders of the
Securities as follows:
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. As used in this Subsidiary Guarantee, terms
defined in the Indenture or in the preamble or recital hereto are used herein as
therein defined, except that the term "Holders" in this Guarantee shall refer to
the term "Holders" as defined in
C-1
the Indenture and the Trustee acting on behalf or for the benefit of such
holders. The words "herein," "hereof" and "hereby" and other words of similar
import used in this Supplemental Indenture refer to this Supplemental Indenture
as a whole and not to any particular section hereof.
ARTICLE II
Agreement to be Bound; Guarantee
SECTION 2.1 Agreement to be Bound. The Guarantor hereby becomes a
party to the Indenture as a Subsidiary Guarantor and as such will have all of
the rights and be subject to all of the obligations and agreements of a
Subsidiary Guarantor under the Indenture. The Guarantor agrees to be bound by
all of the provisions of the Indenture applicable to a Subsidiary Guarantor and
to perform all of the obligations and agreements of a Subsidiary Guarantor under
the Indenture.
SECTION 2.2 Guarantee. The Guarantor hereby fully, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, jointly and
severally with each other Subsidiary Guarantor, to each Holder of the Securities
and the Trustee, the full and punctual payment when due, whether at maturity, by
acceleration, by redemption or otherwise, of the Obligations pursuant to Article
X of the Indenture on a senior basis.
ARTICLE III
Miscellaneous
SECTION 3.1 Notices. All notices and other communications to the
Guarantor shall be given as provided in the Indenture to the Guarantor, at its
address set forth below, with a copy to the Company as provided in the Indenture
for notices to the Company.
SECTION 3.2 Parties. Nothing expressed or mentioned herein is intended
or shall be construed to give any Person, firm or corporation, other than the
Holders and the Trustee, any legal or equitable right, remedy or claim under or
in respect of this Supplemental Indenture or the Indenture or any provision
herein or therein contained.
SECTION 3.3 Governing Law. This Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 3.4 Severability Clause. In case any provision in this
Supplemental Indenture 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 such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.
C-2
SECTION 3.5 Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby. The
Trustee makes no representation or warranty as to the validity or sufficiency of
this Supplemental Indenture.
SECTION 3.6 Counterparts. The parties hereto may sign one or more
copies of this Supplemental Indenture in counterparts, all of which together
shall constitute one and the same agreement.
SECTION 3.7 Headings. The headings of the Articles and the sections in
this Guarantee are for convenience of reference only and shall not be deemed to
alter or affect the meaning or interpretation of any provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[SUBSIDIARY GUARANTOR],
as a Subsidiary Guarantor
By:_______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Trustee
By:_______________________________________
Name:
Title:
PENNZOIL-QUAKER STATE COMPANY
By:_______________________________________
Name:
Title:
[OTHER SUBSIDIARY GUARANTORS]
By:_______________________________________
Name:
Title:
C-3
