EXHIBIT 4.1
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PLASTIC CONTAINERS, INC.,
as Issuer,
CONTINENTAL PLASTIC CONTAINERS, INC.
and
CONTINENTAL CARIBBEAN CONTAINERS, INC.,
as Guarantors,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
_______________________
INDENTURE
Dated as of December 17, 1996
_______________________
$125,000,000
10% Senior Secured Notes due 2006, Series A
and
10% Senior Secured Notes due 2006, Series B
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
----------- -----------------
310(a)(1).............................................7.10
(a)(2).............................................7.10
(a)(3).............................................7.12
(a)(4).............................................N.A.
(b)................................................7.8; 7.10; 13.2
(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).............................................7.6
(b)(2).............................................7.6
(c)................................................7.6; 13.2
(d)................................................7.6
314(a)................................................4.8; 13.2
(b)................................................11.2
(c)(1).............................................13.4
(c)(2).............................................13.4
(c)(3).............................................N.A.
(d)................................................11.4(c); 11.6
(e)................................................13.5
(f)................................................N.A.
315(a)................................................7.1(b)
(b)................................................7.5; 13.2
(c)................................................7.1(a)
(d)................................................7.1(c)
(e)................................................6.11
316(a) (last sentence)................................2.9
(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)................................................2.3; 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
a part of this Indenture.
TABLE OF CONTENTS
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Section Page
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ARTICLE I
DEFINITIONS AND
INCORPORATION BY REFERENCE
1.1 Definitions...................................................1
1.2 Incorporation by Reference of Trust
Indenture Act...............................................20
1.3 Rules of Construction.........................................20
ARTICLE II
THE SECURITIES
2.1 Form and Dating...............................................21
2.2 Execution and Authentication..................................25
2.3 Registrar and Paying Agent....................................26
2.4 Paying Agent To Hold Assets in Trust..........................26
2.5 Securityholder Lists..........................................27
2.6 Transfer and Exchange.........................................27
2.7 Replacement Securities........................................28
2.8 Outstanding Securities........................................28
2.9 Treasury Securities...........................................29
2.10 Temporary Securities..........................................29
2.11 Cancellation..................................................29
2.12 Defaulted Interest............................................30
2.13 CUSIP Number..................................................30
2.14 Deposit of Moneys.............................................30
2.15 Book-Entry Provisions for Global Security.....................30
2.16 Special Transfer Provisions...................................33
ARTICLE III
REDEMPTION
3.1 Notices to Trustee............................................39
3.2 Selection of Securities To Be
Redeemed....................................................39
3.3 Notice of Redemption..........................................40
3.4 Effect of Notice of Redemption................................41
3.5 Deposit of Redemption Price...................................41
3.6 Securities Redeemed in Part...................................41
ARTICLE IV
COVENANTS
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Section Page
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4.1 Payment of Securities.........................................42
4.2 Maintenance of Office or Agency...............................42
4.3 Corporate Existence...........................................43
4.4 Payment of Taxes and Other Claims.............................43
4.5 Maintenance of Properties; Insurance;
Books and Records; Compliance with Law......................43
4.6 Guarantees....................................................44
4.7 Compliance Certificates.......................................44
4.8 Reports.......................................................45
4.9 Further Assurance to the Trustee..............................46
4.10 Limitation on Additional Company
Indebtedness................................................46
4.11 Limitation on Additional Subsidiary
Indebtedness................................................47
4.12 Limitation on Sale-Leaseback Transactions.....................48
4.13 Limitation on Liens...........................................49
4.14 Limitation on Restricted Payments.............................50
4.15 Disposition of Proceeds of Asset
Sales.......................................................52
4.16 Limitation on Transactions with Affiliates....................56
4.17 Change of Control.............................................57
4.18 Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.........................60
4.19 Limitation on Issuance of Preferred Stock by
Subsidiaries................................................60
4.20 Impairment of Security Interest...............................61
4.21 Conflicting Agreements........................................61
4.22 Amendment to Security Documents...............................61
4.23 Special Covenants of Each Guarantor...........................61
4.24 Real Property.................................................62
4.25 Waiver of Stay, Extension or Usury Laws.......................62
4.26 Limitation on Investments, Loans and
Advances....................................................62
4.27 Ownership of Stock of Wholly-Owned
Subsidiaries................................................63
ARTICLE V
SUCCESSOR CORPORATION
5.1 When Company May Merge, Etc...................................63
5.2 Successor Entity Substituted..................................66
ARTICLE VI
DEFAULT AND REMEDIES
6.1 Events of Default.............................................66
6.2 Acceleration..................................................68
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Section Page
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6.3 Other Remedies................................................69
6.4 Waiver of Past Default........................................69
6.5 Control by Majority...........................................70
6.6 Limitation on Suits...........................................70
6.7 Rights of Holders To Receive Payment..........................71
6.8 Collection Suit by Trustee....................................71
6.9 Trustee May File Proofs of Claim..............................71
6.10 Priorities....................................................72
6.11 Undertaking for Costs.........................................72
ARTICLE VII
TRUSTEE
7.1 Duties of Trustee.............................................73
7.2 Rights of Trustee.............................................76
7.3 Individual Rights of Trustee..................................77
7.4 Trustee's Disclaimer..........................................77
7.5 Notice of Defaults............................................78
7.6 Reports by Trustee to Holders.................................78
7.7 Compensation and Indemnity....................................78
7.8 Replacement of Trustee........................................79
7.9 Successor Trustee by Merger, Etc..............................81
7.10 Eligibility; Disqualification.................................81
7.11 Preferential Collection of Claims Against
Company.....................................................81
7.12 Co-Trustee....................................................81
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
8.1 Termination of Company's Obligations..........................83
8.2 Legal Defeasance and Covenant Defeasance......................84
8.3 Application of Trust Money....................................89
8.4 Repayment to Company or Guarantors............................89
8.5 Reinstatement.................................................89
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
9.1 Without Consent of Holders....................................90
9.2 With Consent of Holders.......................................91
9.3 Compliance with Trust Indenture Act...........................92
9.4 Revocation and Effect of Consents.............................92
9.5 Notation on or Exchange of Securities.........................94
9.6 Trustee To Sign Amendments, Etc...............................94
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Section Page
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ARTICLE X
GUARANTEE ARRANGEMENTS
10.1 Guarantee.....................................................94
10.2 Execution and Delivery of Guarantee...........................96
10.3 Additional Guarantors.........................................96
ARTICLE XI
SECURITY DOCUMENTS
11.1 Collateral and Security Documents.............................97
11.2 Recording, Etc................................................97
11.3 Disposition of Collateral Without Release.....................99
11.4 Release of Collateral.........................................102
11.5 Substitute Collateral.........................................108
11.6 Eminent Domain and Other Governmental
Takings.....................................................109
11.7 Trust Indenture Act Requirements..............................111
11.8 Suits To Protect the Collateral...............................112
11.9 Purchaser Protected...........................................113
11.10 Powers Exercisable by Receiver or Trustee.....................113
11.11 Disposition of Obligations Received...........................113
11.12 Determinations Relating to Collateral.........................114
11.13 Renewal and Refunding.........................................114
11.14 Release upon Termination of the Company's
and the Guarantor's Obligations.............................114
11.15 Trustee's Duties in Respect of Collateral.....................115
ARTICLE XII
APPLICATION OF TRUST MONEYS
12.1 "Trust Moneys" Defined........................................115
12.2 Retirement of Securities......................................116
12.3 Withdrawals of Insurance Proceeds and
Condemnation Awards.........................................119
12.4 Withdrawal of Trust Moneys for Reinvestment...................123
12.5 Powers Exercisable Notwithstanding Event
of Default..................................................127
12.6 Powers Exercisable by Trustee or Receiver.....................127
12.7 Disposition of Securities Retired.............................127
12.8 Investment of Trust Moneys....................................128
ARTICLE XIII
MISCELLANEOUS
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Section Page
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13.1 Trust Indenture Act Controls..................................128
13.2 Notices.......................................................128
13.3 Communications by Holders with Other
Holders.....................................................129
13.4 Certificate and Opinion of Counsel as to
Conditions Precedent........................................130
13.5 Statements Required in Certificate and
Opinion of Counsel..........................................130
13.6 Rules by Trustee, Paying Agent, Registrar.....................130
13.7 Legal Holidays................................................131
13.8 Governing Law.................................................131
13.9 No Recourse Against Others....................................131
13.10 Successors....................................................131
13.11 Duplicate Originals...........................................131
13.12 Separability..................................................131
13.13 Table of Contents, Headings, Etc..............................132
SIGNATURES............................................................132
EXHIBIT A - Form of Initial Security
EXHIBIT B - Form of Exchange Security
EXHIBIT C - Form of certification to be given by the holders of beneficial
interest in a temporary Regulation S global security to Euroclear
or Cedel
EXHIBIT D - Form of certification to be given by Euroclear operator or Cedel
EXHIBIT E - Form of certification to be given by transferee of beneficial
interest in a temporary Regulation S global security
EXHIBIT F - Form of certification for transfer or exchange of restricted
global security to temporary Regulation S global security
EXHIBIT G - Form of certification for transfer or exchange of restricted
global security to permanent Regulation S global security
EXHIBIT H - Form of certification for transfer or exchange of temporary
Regulation S global security or permanent Regulation S global
security to restricted global security
EXHIBIT I - Form of certification for transfer or exchange of non-global
restricted security to restricted global security
EXHIBIT J - Form of certification for transfer or exchange of non-global
restricted security to permanent Regulation S global security or
temporary Regulation S global security
EXHIBIT K-1 - Form of certification for transfer or exchange of non-global
permanent Regulation S security to restricted global security
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EXHIBIT K-2 - Form of certification for transfer or exchange of non-global
permanent Regulation S security to permanent Regulation S global
security
EXHIBIT L - Form of Transferee Letter of Representation
EXHIBIT M - Form of Legend for Book-Entry Securities
EXHIBIT N - Form of Mortgage
EXHIBIT O - Form of Pledge and Security Agreement
EXHIBIT P - Form of Stock Pledge Agreement
EXHIBIT Q - Form of Notice of Security Interest
EXHIBIT R - Mortgage Note Pledge Agreement
EXHIBIT S - Deed of Constitution of Mortgage
EXHIBIT T - Mortgage Note
EXHIBIT U - Personal Property Mortgage Note Pledge Agreement
EXHIBIT V - Personal Property Mortgage and Affidavit
EXHIBIT W - Personal Property Mortgage Note (included in Exhibit V)
EXHIBIT X - Previously Leased/Financed Equipment
Schedule A - List of Mortgaged Real Properties
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INDENTURE dated as of December 17, 1996, among PLASTIC CONTAINERS,
INC., a Delaware corporation, as Issuer (the "Company"), CONTINENTAL PLASTIC
CONTAINERS, INC. a Delaware corporation, as Guarantor ("CPC" or a "Guarantor"),
CONTINENTAL CARIBBEAN CONTAINERS, INC., a Delaware corporation, as Guarantor
("Caribbean" or a "Guarantor"), and UNITED STATES TRUST COMPANY OF NEW YORK, a
New York corporation, as Trustee (the "Trustee").
The Company and the Guarantors have duly authorized the execution and
delivery of this Indenture to provide for the issuance of the 10% Senior Secured
Notes due 2006, Series A, of the Company (the "Initial Securities") and the 10%
Senior Secured Notes due 2006, Series B, of the Company (the "Exchange
Securities" and, together with the Initial Securities, the "Securities") to be
issued as provided for in this Indenture and the related Guarantees (as
hereinafter defined) of CPC and Caribbean.
The parties hereto agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the Securities, without
distinction as to Series:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.1 Definitions.
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"1996 Sale/Leaseback" means the Sale/Leaseback having substantially
the same terms described in the Offering Memorandum under "The Refinancing--The
Sale/Leaseback" between General Electric Capital Corporation and certain other
financial institutions as lessors, CPC as lessee and the Company as guarantor,
as the same may be amended or restated and any Sale/Leaseback Transaction used
to refinance or replace the 1996 Sale/Leaseback in an amount not to exceed the
purchase price at the time of the termination thereof.
"Account" has the meaning assigned to that term in the Revolving
Credit Facility as in effect on the Issue Date.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Subsidiary of the Company or assumed in connection
with an Asset Acquisition by such Person, including, without limitation,
Indebtedness incurred in connection with, or in anticipation of, such Person
becoming a Subsidiary of the Company or such acquisition.
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"Affiliate" of any specified Person means any other Person which,
directly or indirectly, controls, is controlled by or is 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.
"Affiliate Transaction" has the meaning provided in Section 4.16.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" has the meaning provided in Section 2.15.
"Appraiser" means a Person who, in the course of its business,
appraises property and, where Real Property is involved, who is a member in good
standing of the American Institute of Real Estate Appraisers, recognized and
licensed to do business in the jurisdiction where the applicable Real Property
is situated, and who may be employed by the Company or a Guarantor.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise), or purchase or
acquisition of Capital Stock, by the Company or any of its Subsidiaries in any
other Person, in either case, pursuant to which such Person shall become a
Subsidiary of the Company or any of its Subsidiaries or shall be merged with or
into the Company or any of its Subsidiaries or (ii) any acquisition by the
Company or any of its Subsidiaries of the assets of any Person which constitute
substantially all of an operating unit or business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition to any Person other than the Company or a Subsidiary
of the Company, in one transaction or a series of related transactions, of (i)
any Capital Stock of any Subsidiary of the Company or (ii) any other property or
asset of the Company or any Subsidiary of the Company, in each case, other than
Inventory in the ordinary course of business and other than such isolated
transactions which do not exceed $250,000 individually. For the purposes of
this definition, the term "Asset Sale" shall not include sales of (i)
receivables not a part of a
-3-
sale of the business from which they arose or any disposition of properties and
assets of the Company or any Subsidiary that is governed under and complies with
Section 5.1 hereof or (ii) the assets securing the Previously Leased/Financed
Equipment so long as such assets do not constitute Collateral.
"Asset Sale Offer" has the meaning provided in Section
4.15(a)(ii).
"Asset Sale Payment Date" means, with respect to any Available Amount
from an Asset Sale, the earliest of (x) the 270th day following receipt of such
Available Amount if no written commitments to apply such Available Amount to a
use other than an Asset Sale Offer have been made or (y) the 360th day following
receipt of such Available Amount or (z) such earlier date on which an Asset Sale
Offer shall expire.
"Available Amount" has the meaning provided in Section 4.15(a)(ii).
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or a
Guarantor, as appropriate, or any committee of such Board of Directors
authorized to act for it hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or a Guarantor, as
appropriate, to have been duly adopted by the Board of Directors of the Company,
or a Guarantor, as appropriate, and to be in full force and effect on the date
of such certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, a Sunday or any day on
which banking institutions in New York, New York are required or authorized by
law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock, whether
outstanding on the date on which the Securities are originally issued or issued
after such date, and any and all rights, warrants or options exchangeable for or
convertible into such capital stock.
-4-
"Capitalized Lease Obligation" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required to be classified
and accounted for as a capital lease obligation under GAAP, and, for the
purposes of this Indenture, the amount of such obligation at any date shall be
the capitalized amount thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means, at any time (i) any evidence of Indebtedness
with a maturity of 180 days or less issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or acceptances with a
maturity of 180 days or less of any financial institution that is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500,000,000; (iii) commercial paper with a maturity of
180 days or less issued by a corporation (except an Affiliate of the Company)
organized under the laws of any state of the United States or the District of
Columbia and having the highest rating obtainable from Standard & Poor's Ratings
Service, a division of The XxXxxx-Xxxx Companies, Inc., or Xxxxx'x Investors
Service, Inc.; and (iv) repurchase obligations for a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above.
"CEDEL" means Cedel Bank, Societe Anonyme (or any successor securities
clearing agency).
"Change of Control" means (i) the direct or indirect sale, lease,
exchange or other transfer of all or substantially all of the assets of the
Company to any Person or entity or group of Persons or entities acting in
concert as a partnership or other group (a "Group of Persons") other than an
Affiliate of the Company, (ii) the merger or consolidation of the Company with
or into another corporation with the effect that the then existing shareholders
of the Company hold less than 50% of the combined voting power of the then
outstanding securities of the surviving corporation of such merger or the
corporation resulting from such consolidation ordinarily (and apart from rights
arising under special circumstances) having the right to vote in the election of
directors, (iii) the replacement of a majority of the Board of Directors of the
Company, over a two-year period, from the directors who constituted the Board of
Directors at the beginning
-5-
of such period, and such replacement shall not have been approved by the Board
of Directors of the Company as constituted at the beginning of such period or
(iv) a Person or Group of Persons (other than Continental Can or any of its
Affiliates) shall, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise, have become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company or Continental Can representing 50% or more of the
combined voting power of the then outstanding securities of the Company or
Continental Can ordinarily (and apart from rights arising under special
circumstances) having the right to vote in the election of directors.
"Change of Control Date" has the meaning provided in Section 4.17.
"Change of Control Offer" has the meaning provided in Section 4.17.
"Change of Control Payment Date" has the meaning provided in Section
4.17.
"Collateral" means, collectively, all of the property and assets
(including, without limitation, Trust Moneys) that are from time to time subject
to the Security Documents.
"Common Stock" means, with respect to any Person, any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of, such Person's common stock, whether
outstanding on the date on which the Securities are originally issued or issued
after such date, and includes, without limitation, all series and classes of
such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means the successor.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period increased (to
the extent deducted in determining Consolidated Net Income) by the sum of: (i)
all income taxes of such Person paid or accrued in accordance with GAAP for such
period (other than income taxes attributable to extraordinary, unusual or non-
recurring gains or losses); (ii) all interest expense of such Person paid or
accrued in accordance with GAAP (net of any interest income) for such period
(including amortization of original issue
-6-
discount and the interest portion of deferred payment obligations); (iii)
depreciation; (iv) amortization, including, without limitation, amortization of
capitalized debt issuance costs; and (v) any other non-cash charges to the
extent deducted from Consolidated Net Income (including the non-cash portion of
any rental expense and non-cash expenses recognized in accordance with Financial
Accounting Standards Bulletin Number 106) except for non-cash charges which
require an accrual of or a reserve for any future period, and decreased by the
amount of any non-cash items increasing Consolidated Net Income for such period.
"Consolidated Financial Statements" means the consolidated financial
statements of the Company as contained in the Offering Memorandum.
"Consolidated Interest Coverage Ratio" means, with respect to any
Person, the ratio of (i) Consolidated Cash Flow of such Person for the four full
fiscal quarters for which financial statements are available that immediately
precede the date of the transaction or other circumstances giving rise to the
need to calculate the Consolidated Interest Coverage Ratio (the "Transaction
Date") to (ii) all cash and non-cash interest expense (including capitalized
interest) of such Person and its Subsidiaries determined in accordance with GAAP
(net of any interest income to the extent received in cash by such Person and
its Subsidiaries and exclusive of deferred financing fees of such Person and its
Subsidiaries) and the product of (x) the amount of all dividends declared, paid,
or accrued on Capital Stock (other than Common Stock) of such Person during such
period times (y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated Federal, state,
local and foreign tax rate (expressed as a decimal number between 1 and 0) of
such Person during such period (as reflected in the audited consolidated
financial statements of such person for the most recently completed fiscal
year). For purposes of this definition, if the Transaction Date occurs prior to
the date on which the Company's consolidated financial statements for the four
full fiscal quarters subsequent to the date on which the Securities are
originally issued are first available, "Consolidated Cash Flow" and the items
referred to in the preceding clause (ii) shall be calculated, in the case of the
Company, after giving effect on a pro forma basis as if the Securities
outstanding on the Transaction Date were issued on the first day of such four
full fiscal quarter period. In addition to and without limitation of the
foregoing, for purposes of this definition, "Consolidated Cash Flow" and the
items referred to in the preceding clause (ii) shall be calculated after giving
effect on a pro forma basis for the period of such
-7-
calculation to (i) the incurrence of any Indebtedness of such Person or any of
its Subsidiaries at any time during the period (the "Reference Period") (A)
commencing on the first day of the four full fiscal quarter period for which
financial statements are available that precedes the Transaction Date and (B)
ending on and including the Transaction Date, including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such calculation,
as if such incurrence occurred on the first day of the Reference Period;
provided that if such Person or any of its Subsidiaries directly or indirectly
--------
guarantees Indebtedness of a third Person, the above clause shall give effect to
the incurrence of such guaranteed Indebtedness as if such Person or Subsidiary
had directly incurred such guaranteed Indebtedness and (ii) any Asset Sales or
Asset Acquisitions (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of the Company or any of
its Subsidiaries (including any Person who becomes a Subsidiary as a result of
the Asset Acquisition) incurring Acquired Indebtedness) occurring during the
Reference Period and any retirement of Indebtedness in connection with such
Asset Acquisitions, as if such Asset Sale or Asset Acquisition and/or retirement
occurred on the first day of the Reference Period. Furthermore, in calculating
the denominator (but not the numerator) of this "Consolidated Interest Coverage
Ratio," (1) subject to clause (3) below, interest on Indebtedness determined on
a fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to accrue at a fixed rate per annum equal
--- -----
to the rate of interest on such Indebtedness in effect on the Transaction Date;
(2) if interest on any Indebtedness actually incurred on the Transaction Date
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate based upon a factor of a prime or similar rate shall be deemed to
have been in effect; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Rate Protection Obligations, shall be
deemed to accrue at the rate per annum resulting after giving effect to the
--- -----
operation of such agreements.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP (which,
in the case of the Company, shall include any cash interest payment received by
the Company in respect of the Continental Can Note); provided, however, that (i)
-------- -------
the Net Income of any Person (the "Other Person") in which the Person in
question or any of its Subsidiaries has a
-8-
joint interest with a third party (which interest does not cause the income of
such other Person to be consolidated into the net income of the Person in
question in accordance with GAAP) shall be included only to the extent of the
amount of dividends or distributions paid, in cash, to the Person in question or
the Subsidiary, (ii) the Net Income of any Subsidiary of the Person in question
that is subject to any restriction or limitation on the payment of dividends or
the making of other distributions shall be excluded to the extent of such
restriction or limitation, (iii) the Net Income (or loss) of any Person acquired
in a pooling of interests transaction for any period prior to the date of the
acquisition of such Person shall be excluded, and (iv) any net gain or loss
resulting from an Asset Sale by the Person in question or any of its
Subsidiaries other than in the ordinary course of business shall be excluded.
"Consolidated Net Worth" means, with respect to any Person at any date
of determination, the consolidated equity of the common stockholders of such
Person and its Subsidiaries at such date, as determined on a consolidated basis
in accordance with GAAP.
"Continental Can" means Continental Can Company, Inc., a Delaware
corporation.
"Continental Can Note" means the note having substantially the terms
set forth in the Offering Memorandum under the section "The Refinancing--The
Continental Can Loan", evidencing Indebtedness of Continental Can to the
Company.
"Custodian" has the meaning provided in Section 6.1(b).
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock 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, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
Maturity Date of the Securities.
-9-
"Equipment" shall have the meaning assigned to such term in the Pledge
and Security Agreement.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning provided in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the Company
to each Holder of the Initial Securities to exchange all the Initial Securities
held by such Holder for the Exchange Securities in an aggregate principal amount
equal to the aggregate principal amount of the Initial Securities held by such
Holder, all in accordance with the terms and conditions of the Registration
Rights Agreement.
"Exchange Securities" has the meaning provided in the preamble to this
Indenture.
"Fair Market Value" or "fair value" means, with respect to any asset
or property, the price which could be negotiated in an arms' length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under undue pressure or compulsion to complete the transaction. Fair
Market Value shall be determined by the Board of Directors acting in good faith
and shall be evidenced by a Board Resolution delivered to the Trustee except (i)
any determination of Fair Market Value made with respect to any parcel of Real
Property shall be made by an Appraiser and (ii) any determination of Fair Market
Value of any asset or assets which would reasonably be expected to have a Fair
Market Value of $5 million or more made with respect to Section 4.16, shall be
made by an Independent Financial Advisor or Independent Appraiser.
"Financial Advisor" means an investment banking firm of national
reputation which (except as otherwise expressly provided in this Indenture) may
be employed by the Company.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
-10-
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are applicable as of the date of this
Indenture.
"Global Security" means, as the context may require, any or all of the
Temporary Regulation S Global Security, the Permanent Regulation S Global
Security and the Restricted Global Security.
"Guarantee" means the guarantee of each Guarantor set forth in
Article X.
"Guarantor" means each of CPC and Caribbean and their respective
successors.
"Holder" or "Securityholder" means each Person in whose name a
Security is registered on the Registrar's books.
"incur" means, with respect to any Indebtedness, to directly or
indirectly, create, incur, assume, issue, guarantee or otherwise become liable
for or with respect to such Indebtedness, and the terms "incurred," "incurrence"
and "incurring" have meanings correlative to the foregoing.
"Indebtedness" means, with respect to any Person, without duplication,
(i) any liability, contingent or otherwise, of such Person (A) for borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of such Person or only to a portion thereof), (B) evidenced by a note, debenture
or similar instrument or letters of credit (including a purchase money
obligation) or (C) for the payment of money relating to a Capitalized Lease
Obligation or other obligation relating to the deferred purchase price of
property; (ii) any liability of others of the kind described in the preceding
clause (i) which the Person has guaranteed or which is otherwise its legal
liability; (iii) any obligation secured by a Lien to which the property or
assets of such Person are subject, whether or not the obligations secured
thereby shall have been assumed by or shall otherwise be such Person's legal
liability; and (iv) any and all deferrals, renewals, extensions and refundings
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (i), (ii) or (iii).
"Indenture" means this Indenture as amended or supplemented from time
to time pursuant to the terms hereof.
"Independent" when used with respect to any specified Person means
such a Person who (a) is in fact independent, (b) does
-11-
not have any direct financial interest or any material indirect financial
interest in the Company, or in any Guarantor or in any Affiliate of the Company
or any Guarantor, and (c) is not an officer, employee, promoter, underwriter,
trustee, partner or director or Person performing similar functions to any of
the foregoing for the Company or any Guarantor. Whenever it is provided in this
Indenture that any Independent Person's opinion or certificate shall be
furnished to the Trustee, such Person shall be appointed by the Company and
approved by the Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning thereof.
"Initial Purchasers" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, Xxxxxx Brothers, Inc. and Societe Generale Securities Corporation.
"Initial Securities" has the meaning provided in the preamble to this
Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest," when used with respect to any Security, means the amount
of all interest accruing on such Security, including all interest accruing
subsequent to the occurrence of any events specified in Sections 6.1(a)(viii)
and (ix) or which would have accrued but for any such event.
"Interest Payment Date," when used with respect to any Security, means
the stated maturity of an installment of interest specified in such Security.
"Interest Rate," when used with respect to any Security, means the
rate per annum specified in such Security as the rate of interest accruing on
--- -----
the principal amount of such Security.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without
-12-
limitation, interest rate swaps, caps, floors, collars and similar agreements.
"Inventory" has the meaning assigned to that term in the Revolving
Credit Facility as in effect on the date of issuance of the Securities.
"Investments" has the meaning provided in Section 4.26.
"Issue Date" means the date the Securities are initially issued.
"Legal Holiday" means any day other than a Business Day.
"Lien" means any mortgage, lien (statutory or other), pledge, security
interest, encumbrance, claim, hypothecation, assignment for security, deposit
arrangement or preference or other security agreement of any kind or nature
whatsoever. For purposes of this Indenture, a Person shall be deemed to own
subject to a Lien any property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Person.
"Liquidated Damages" means all liquidated damages owing pursuant to
the Registration Rights Agreement.
"Maturity Date," when used with respect to any Security, means the
date specified in such Security as the fixed date on which the principal of such
Security is due and payable.
"Merrywood Agreement" means the Stock Purchase Agreement dated as of
October 22, 1996 by and among the Company, Continental Can, Merrywood, Inc. and
Plaza Limited.
"Mortgage" means (i) in the case of CPC, a mortgage instrument (or
deed of trust) and assignment of leases and rents, substantially in the form of
Exhibit N hereto (including such changes to such form as may be necessary or
desirable to conform such form to local laws or customs applicable to property
in the jurisdiction where such instrument is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof, hereof and of any other Security Document and (ii) in the
case of Caribbean, (x) a Mortgage Note Pledge Agreement substantially in the
form of Exhibit U hereto, (y) a Deed of Constitution of Mortgage substantially
in the form of Exhibit S hereto and (z) a Mortgage Note substantially in
-13-
the form of Exhibit T hereto, in each case including such changes to such forms
as may be necessary or desirable to conform such form to local laws or customs
applicable to property in the jurisdiction where such instrument is to be
recorded, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof and hereof.
"Mortgaged Property" means any Real Property that is subject to a
Mortgage.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations with respect to
Indebtedness are financed or sold with recourse to the Company or any of its
Subsidiaries) net of (i) brokerage commissions and other reasonable fees and
expenses (including reasonable fees and expenses of counsel and investment
bankers) related to such Asset Sale; (ii) provisions for all taxes payable as a
result of such Asset Sale; (iii) payments made to retire Indebtedness secured by
the current assets subject to such Asset Sale (including retirements of
Indebtedness under the Revolving Credit Facility) to the extent required
pursuant to the terms of such Indebtedness; and (iv) appropriate amounts to be
provided by the Company or any of its Subsidiaries, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities associated with such
Asset Sale and retained by the Company or any of its Subsidiaries, as the case
may be, after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person determined in accordance with GAAP.
"Net Proceeds" means (a) in the case of any sale of Capital Stock by
the Company, the aggregate net proceeds received by the Company, after payment
of expenses, commissions and the like incurred in connection therewith, whether
such proceeds are in cash or in property (valued at the Fair Market Value
thereof, as determined in good faith by the Board of Directors, at the time of
receipt) and (b) in the case of any exchange, exercise, conversion or surrender
of outstanding securities of any kind for or into shares of Capital Stock of the
Company which is not Disqualified Stock, the net book value of such outstanding
securities on the
-14-
date of such exchange, exercise, conversion or surrender (plus any additional
amount required to be paid by the holder to the Company upon such exchange,
exercise, conversion or surrender, less any and all payments made to the
holders, e.g., on account of fractional shares, and less all expenses incurred
---
by the Company in connection therewith).
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Notice of Security Interest" means a Notice of Security Interest
relating to intellectual property, substantially in the form of Exhibit Q
hereto, as such may be amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"Offering Memorandum" means the offering memorandum of the Company,
dated December 11, 1996 pursuant to which the Company offered the Securities.
"Officer" means the Chairman, the President, any Vice President, the
Chief Financial Officer, the Treasurer, the Secretary or the Controller of the
Company or a Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or Assistant Secretary of the Company
or a Guarantor, as the case may be.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee, which may include counsel to the Company or a
Guarantor.
"Paying Agent" has the meaning provided in Section 2.3.
"Permanent Regulation S Global Security" has the meaning set forth in
Section 2.1.
"Permitted Investments" means (i) obligations of the U.S. government
due within one year; (ii) certificates of deposit or Eurodollar deposits due
within one year with a commercial bank having capital funds of at least
$500,000,000 or more; and (iii) A-1, P-1 commercial paper.
"Permitted Liens" means, with respect to any Person, any Lien arising
by reason of (a) any judgment, decree or order of any court, so long as such
Lien is being contested in good faith and is
-15-
adequately bonded, any appropriate legal proceedings which may have been duly
initiated for the review of such judgment, decree or order shall not have been
finally terminated or the period within which such proceedings may be initiated
shall not have expired; (b) taxes not yet delinquent or which are being
contested in good faith; (c) security for payment of workers' compensation or
other insurance; (d) security for the performance of tenders, contracts (other
than contracts for the payment of money) or leases; (e) deposits to secure
public or statutory obligations, or to secure permitted contracts for the
purchase or sale of any currency entered into in the ordinary course of
business; (f) Liens imposed by operation of law in favor of carriers,
warehousemen, landlords, mechanics, materialmen, laborers, employees or
suppliers, incurred in the ordinary course of business for sums which are not
yet delinquent or are being contested in good faith by negotiations or by
appropriate proceedings which suspend the collection thereof; (g) security for
surety or appeal bonds; and (h) easements, rights-of-way, zoning and similar
covenants and restrictions and other similar encumbrances or title defects
which, in the aggregate, are not substantial in amount, and which do not in any
case materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the Company or
any of its Subsidiaries.
"Permitted Related Acquisition" has the meaning provided in Section
4.15(a)(ii).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Physical Security" has the meaning provided in Section 2.1.
"Pledge and Security Agreement" means (i) in the case of the Company,
CPC and Caribbean, a Pledge and Security Agreement, substantially in the form
attached hereto as Exhibit O, as such may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof and thereof and
(ii) in the case of Caribbean, a Personal Property Mortgage Note Pledge
Agreement, substantially in the form attached hereto as Exhibit U, a Personal
Property Mortgage and Affidavit, substantially in the form attached hereto as
Exhibit V, and a Personal Property Mortgage Note, substantially in the form
attached hereto as Exhibit W, in each case as such may be amended, supplemented
or otherwise modified from time to time in accordance with the terms hereof and
thereof.
-16-
"Previously Leased/Financed Equipment" means the equipment and
machinery listed on Exhibit X hereto representing certain equipment and
machinery currently the subject of certain operating and capital leases and any
additions or accessories thereto.
"principal" of a debt security means the principal amount of the
security plus, when appropriate, the premium, if any, on the security.
"Prior Liens" has the meaning set forth in the Security Documents.
"Prohibited Investments" has the meaning provided in Section 4.26.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A under the Securities Act.
"Real Property" means any interest in any real property or any portion
thereof whether owned in fee or leased or otherwise owned.
"Redemption Date" means, with respect to any Security, the Maturity
Date of such Security or the date on which such Security is to be redeemed by
the Company pursuant to the terms of the Securities.
"Registrar" has the meaning provided in Section 2.3.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the Issue Date between the Company, the Guarantors and the
Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Release Notice" has the meaning provided in Section 11.4.
"Restricted Global Security" has the meaning set forth in Section 2.1.
"Restricted Payment" means any of the following: (i) the declaration
or payment of any dividend or any other distribution on Capital Stock of the
Company or any Subsidiary of the Company or
-17-
any payment made to the direct or indirect holders (in their capacities as such)
of Capital Stock of the Company or any Subsidiary of the Company (other than (x)
dividends or distributions payable solely in Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to purchase Capital
Stock (other than Disqualified Stock) and (y) in the case of Subsidiaries of the
Company, dividends or distributions payable to the Company or to a Subsidiary of
the Company), (ii) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company or any of its Subsidiaries, (iii)
the making of any principal payment on, or the purchase, defeasance, repurchase,
redemption or other acquisition or retirement for value, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment, of any
Indebtedness which is subordinated in right of payment to the Securities (other
than Indebtedness acquired in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one
year of the date of acquisition) and (iv) the making of any Prohibited
Investment or guarantee of any Prohibited Investment in any Person.
"Restricted Period" has the meaning set forth in Section 2.1.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided that the Trustee shall be entitled to request
--------
and conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Revolving Credit Facility" means the credit agreement entered into
between the Company and The CIT Group/Business Credit, Inc. as lender, providing
for working capital and other financing, as the same may at any time be amended,
amended and restated, supplemented or otherwise modified, including any
refinancing, refunding, replacement or extension thereof by the Company or CPC
by the same or any other lender or group of lenders.
"Rule 144" means Rule 144 under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Company or any Subsidiary of the Company of any
real or tangible personal
-18-
property, which property has been or is to be sold or transferred by the Company
or such Subsidiary to such Person in contemplation of such leasing.
"SEC" means the Securities and Exchange Commission.
"Security Documents" means, collectively, (i) the Stock Pledge
Agreement, (ii) the Pledge and Security Agreements, (iii) the Mortgages and (iv)
the Notice of Security Interest.
"Security Interests" means the Lien on the Collateral created by the
Security Documents in favor of the Trustee for the benefit of the Holders of
Securities.
"Securities" means the Initial Securities and the Exchange Securities
treated as a single class of securities, as amended or supplemented from time to
time in accordance with the terms hereof, that are issued pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Stock Pledge Agreement" means the Stock Pledge Agreement
substantially in the form attached hereto as Exhibit P, as such may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors shall at the time be owned,
directly or indirectly, by such Person, or (ii) any other Person of which at
least a majority of voting interest is at the time, directly or indirectly,
owned by such Person.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 2.07 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Survey" means a survey of any parcel of real property (and all
improvements thereon): (i) prepared by a surveyor or
-19-
engineer licensed to perform surveys in the state where such property of
located, (ii) dated (or redated) not earlier than six months prior to the date
of delivery thereof (unless there shall have occurred within six months prior to
such date of delivery any exterior construction on the site of such property, in
which event such survey shall be dated (or redated) after the completion of such
construction or if such construction shall not have been completed as of such
date of delivery, not earlier than 20 days prior to such date of delivery),
(iii) certified by the surveyor (in a manner reasonably acceptable to the title
company providing title insurance) and (iv) complying in all respects with the
minimum detail requirements of the American Land Title Association, or local
equivalent, as such requirements are in effect on the date of preparation of
such survey, or that is otherwise reasonably acceptable to the Trustee (giving
consideration to the applicable transaction).
"Temporary Regulation S Global Security" has the meaning set
forth in Section 2.1.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Transaction Documents" means, collectively, (i) the Securities, (ii)
this Indenture, (iii) the Guarantees and (iv) the Security Documents.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor, and shall in addition include any Person
designated or constituted as a co-trustee or separate trustee pursuant to
Section 7.12 for the limited purposes of such designation or constitution.
"Trust Moneys" has the meaning provided in Section 12.1.
"Trust Officer" means an officer or assistant officer of the Trustee
assigned to the Corporate Trustee Administration Division, or any successor to
such department or, in the case of a successor trustee, an officer assigned to
the department, division or group performing the corporate trust work of such
successor.
"U.S. Government Obligations" has the meaning provided in Section
8.1(b).
-20-
"Wholly-Owned Subsidiary" means any Subsidiary of the Company of which
100% of the outstanding Capital Stock is owned by the Company or another Wholly-
Owned Subsidiary of the Company.
"Working Capital Proceeds" has the meaning provided in Section
4.15(a)(i).
SECTION 1.2 Incorporation by Reference
of Trust Indenture Act.
--------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision shall be deemed incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
(a) "Commission" means the SEC;
(b) "indenture securities" means the Securities;
(c) "indenture security holder" means a Securityholder;
(d) "indenture to be qualified" means this Indenture;
(e) "indenture trustee" or "institutional trustee" means the
Trustee; and
(f) "obligor" on the indenture securities means the Company or
any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings so assigned to them therein.
SECTION 1.3 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) "or" is exclusive;
(c) words in the singular include the plural, and words in the
plural include the singular;
-21-
(d) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision; and
(e) unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with GAAP as in effect from time to time,
applied on a basis consistent with the most recent audited consolidated
financial statements of the Company .
ARTICLE
THE SECURITIES
--------------
SECTION 2.1 Form and Dating.
---------------
The Securities and the Trustee's certificates of authentication with
respect thereto shall be substantially in the form set forth in Exhibit A or
---------
Exhibit B annexed hereto, as the case may be, which are hereby incorporated in
---------
and expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, rule, usage or agreement to which the
Company is subject. The Company and the Trustee shall approve the form of the
Securities and any notating legend or endorsement on them. Each Security shall
be dated the date of its issuance and shall show the date of its authentication.
The terms and provisions contained in the Securities shall constitute, and are
expressly made, a part of this Indenture.
Securities offered and sold in reliance on Rule 144A or to
Institutional Accredited Investors shall be issued initially in the form of one
or more permanent Global Securities in registered form, substantially in the
form set forth in Exhibit A (collectively, and together with their Successor
Securities, the "Restricted Global Security"), with such applicable legends as
are provided for in Exhibit A or Exhibit M, registered in the name of the
--------- ---------
Depository or its nominee and deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and the Guarantors and authenticated by
the Trustee as hereinafter provided, for credit by the Depository to the
respective accounts of beneficial owners of the Securities represented thereby
(or such other accounts as they may direct). The aggregate principal amount of
the Restricted Global Security may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depository, as hereinafter provided.
-22-
Securities offered and sold in their initial distribution in reliance
on Regulation S may be initially issued in the form of temporary Global
Securities in fully registered form without interest coupons, substantially in
the form set forth in Exhibit A, with such applicable legends as are provided
for in Exhibit A or Exhibit M. Such temporary Global Securities shall be
registered in the name of the Depository or its nominee and deposited with the
Trustee, as custodian for the Depository, duly executed by the Company and the
Subsidiary Guarantors and authenticated by the Trustee as hereinafter provided,
for credit by the Depository to the respective accounts of the beneficial owners
of the Securities represented thereby (or such other accounts as they may
direct), provided that upon such deposit all such Securities shall be credited
--------
to or through accounts maintained at the Depository by or on behalf of Euroclear
or CEDEL. Until such time as the Restricted Period (as defined below) shall
have expired, such temporary Global Securities, together with their Successor
Securities which are Global Securities other than the Restricted Global
Security, shall be referred to herein as a "Temporary Regulation S Global
Security." After such time as the Restricted Period shall have expired and the
certifications referred to below in the next succeeding paragraph shall have
been provided, interests in such Temporary Regulation S Global Securities shall
be exchanged for interests in like Global Securities, referred to herein
collectively as the "Permanent Regulation S Global Security," substantially in
the form of Security set forth in Exhibit A, with such applicable legends as are
provided for in Exhibit A or Exhibit M. Such Permanent Regulation S Global
Securities shall be registered in the name of the Depository or its nominee and
deposited with the Trustee, as custodian for the Depository, duly executed by
the Company and the Subsidiary Guarantors and authenticated by the Trustee as
hereinafter provided, for credit to the respective accounts of the beneficial
owners of the Securities represented thereby (or such other accounts as they may
direct). The aggregate principal amount of the Temporary Regulation S Global
Security or the Permanent Regulation S Global Security may be increased or
decreased from time to time by adjustments made on the records of the Trustee,
as custodian for the Depository, as hereinafter provided. As used herein, the
term "Restricted Period" means the period of 40 days commencing on the day after
the later of (a) the day on which the Securities are first offered to persons
other than distributors (as defined in Regulation S) in reliance on Regulation S
and (b) the Issue Date.
Interests in a Temporary Regulation S Global Security may be exchanged
for interests in a Permanent Regulation S Global Security only after (a) the
expiration of the Restricted Period,
-23-
(b) delivery by a beneficial owner of an interest therein to Euroclear or CEDEL
of a written certification (an "Owner Securities Certification") substantially
in the form of Exhibit C hereto, and (c) upon delivery by Euroclear or CEDEL to
the Trustee of a written certification (a "Depository Securities Certification")
substantially in the form attached hereto as Exhibit D. Upon satisfaction of
such conditions, the Trustee will exchange the portion of the Temporary
Regulation S Global Security covered by such certification for interests in a
Permanent Regulation S Global Security. The delivery by such Holder of a
beneficial interest in such Temporary Regulation S Global Security of such
certification shall constitute an irrevocable instruction by such holder to
Euroclear or CEDEL, as the case may be, to exchange such Holder's beneficial
interest in the Temporary Regulation S Global Security for a beneficial interest
in the Permanent Regulation S Global Security upon the expiration of the
Restricted Period in accordance with the next succeeding paragraph.
Upon:
(i) the expiration of the Restricted Period;
(ii) receipt by Euroclear or CEDEL, as the case may be, of Owner
Securities Certifications described in the preceding paragraph;
(iii) receipt by the Depository of:
(1) written instructions given in accordance with the rules and
procedures of the Depository, Euroclear and CEDEL, in each case to the extent
applicable and as in effect from time to time (the "Applicable Procedures"),
from an Agent Member directing the Depository to credit or cause to be credited
to a specified Agent Member's account a beneficial interest in a Permanent
Regulation S Global Security in a principal amount equal to that of the
beneficial interest in a corresponding Temporary Regulation S Global Security
for which the necessary certifications have been delivered; and
(2) a written order given in accordance with the Applicable Procedures
containing information regarding the account of the Agent Member, and the
Euroclear or CEDEL account for which such Agent Member's account is held, to be
credited with, and the account of the Agent Member to be debited for, such
beneficial interest; and
-24-
(iv) receipt by the Trustee of notification from the Depository of
the transactions described in (iii) above and from Euroclear or CEDEL, as
the case may be, of Depository Securities Certifications,
the Trustee, as Registrar, shall instruct the Depository to reduce the principal
amount of such Temporary Regulation S Global Security and to increase the
principal amount of such Permanent Regulation S Global Security, by the
principal amount of the beneficial interest in such Temporary Regulation S
Global Security to be so transferred, and to credit or cause to be credited to
the account of the Person specified in such instructions a beneficial interest
in such Permanent Regulation S Global Security having a principal amount equal
to the amount by which the principal amount of such Temporary Regulation S
Global Security was reduced upon such transfer.
Securities offered and sold in reliance on Regulation S, and
Securities offered and sold in reliance on Rule 144A or to Institutional
Accredited Investors may be originally issued at the request of the Holders
thereof in the form of permanent certificated Securities in registered form, in
substantially the form set forth in Exhibit A (the "Physical Securities") with
appropriate legends. Beneficial owners of Physical Securities may request
registration of such Physical Securities in their names or the names of their
nominees.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
If the Securities are to be issued in the form of one or more Global
Securities, then the Company shall execute and the Trustee shall authenticate
and deliver one or more Global Securities that shall represent and shall be in
minimum denominations of $1,000.
Exchange Notes may be issued only in exchange for a like principal
amount of Initial Notes pursuant to an Exchange Offer.
The principal of and interest on Book-Entry Securities shall be
payable to the Depository or its nominee, as the case may be, as the sole
registered owner and the sole holder of the Book-Entry Securities represented
thereby. The principal of and interest on Securities in certificated form shall
be payable at the office of the Paying Agent.
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SECTION 2.2 Execution and Authentication.
----------------------------
Two Officers shall execute the Securities on behalf of the Company by
either manual or facsimile signature. The Company's seal shall be impressed,
affixed, imprinted or reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security or at any time
thereafter, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. Such
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Securities for original issue in an
aggregate principal amount not to exceed $125,000,000, and (ii) Exchange
Securities from time to time for issue only in exchange for a like principal
amount of Original Securities, in each case upon receipt of an Officers'
Certificate signed by two Officers directing the Trustee to authenticate the
Securities and certifying that all conditions precedent to the issuance of the
Securities contained herein and in the Security Documents have been complied
with.
The Officers' Certificate shall specify the amount of Securities to be
authenticated, the date on which the Securities are to be authenticated and the
aggregate principal amount of Securities outstanding on the date of
authentication, whether the Securities are to be Original Securities or Exchange
Securities. The aggregate principal amount of Securities outstanding at any
time may not exceed $125,000,000, except as provided in Section 2.7.
The Trustee shall not be required to authenticate Securities if the
issuance of such Securities pursuant to this Indenture will affect the Trustee's
own rights, duties or immunities under the Securities and this Indenture in a
manner which is not reasonably acceptable to the Trustee.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each
-26-
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall have the same
rights as the Trustee in any dealings hereunder with the Company or with any of
the Company's Affiliates.
SECTION 2.3 Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in the City of New York, State of New York) where
Securities may be presented for registration of transfer or for exchange (the
"Registrar"), an office or agency (which shall be located in the Borough of
Manhattan, City of New York, State of New York) where Securities may be
presented or surrendered for payment (the "Paying Agent") and an office or
agency where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities and of their transfer and exchange. 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. Neither the Company
nor any Affiliate thereof may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 7.7.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Securities,
until such time as the Trustee has resigned or a successor has been appointed.
The Paying Agent or Registrar may resign upon 30 days' notice to the Company.
SECTION 2.4 Paying Agent To Hold Assets in Trust.
------------------------------------
Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all assets held by the Paying Agent for the
payment of principal of or interest on the Securities (whether such assets have
been distributed to it by the Company or any other obligor on the Securities),
and the Company and the Paying Agent shall notify the Trustee of any default by
the Company (or any other obligor on the Securities) in making any such
-27-
payment. Money held in trust by the Paying Agent need not be segregated except
as required by law and in no event shall the Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require the Paying Agent to distribute all assets held by it to the Trustee and
account for any assets distributed and the Trustee may at any time during the
continuance of any Event of Default specified in Section 6.1(a)(i), (ii) or
(iii), upon written request to the Paying Agent, require such Paying Agent to
distribute forthwith all assets so held by it to the Trustee and to account for
any assets distributed. Upon making such distribution, the Paying Agent shall
have no further liability for such assets delivered to the Trustee.
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
the Securityholders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least five 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 the Securityholders.
SECTION 2.6 Transfer and Exchange.
---------------------
Subject to the provisions of Sections 2.15 and 2.16, when Physical
Securities are presented to the Registrar or a co-registrar with a request from
the Holder of such Securities to register the transfer or to exchange them for
an equal principal amount of Securities of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested;
provided that every Security presented or surrendered for registration of
--------
transfer or exchange shall be duly endorsed or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorneys duly authorized in writing.
To permit registrations of transfers and exchanges, the Company shall issue and
execute and the Trustee shall authenticate new Securities evidencing such
transfer or exchange at the Registrar's request. No service charge shall be
made to the Securityholder for any registration of transfer or exchange. The
Company may require from the Securityholder payment of a sum sufficient to cover
any transfer taxes or other governmental charge that may be imposed in relation
to a transfer or exchange, but this provision shall not apply to any exchange
pursuant to Section 2.10, 3.6, 4.15, 4.17 or 9.5 (in which events the Company
will be responsible for the
-28-
payment of such taxes). The Trustee shall not be required to exchange or
register a transfer of any Security for a period of 15 days immediately
preceding the first mailing of notice of redemption of Securities to be redeemed
or of any Security selected, called or being called for redemption except, in
the case of any Security where public notice has been given that such Security
is to be redeemed in part, the portion thereof not to be redeemed.
SECTION 2.7 Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Registrar or the Trustee
or if the Holder of a Security claims that the Security has been lost, destroyed
or wrongfully taken, the Company shall issue and the Trustee shall authenticate
a replacement Security if the Holder of such Security furnishes to the Company
and to the Trustee evidence reasonably acceptable to them of the ownership and
the destruction, loss or theft of such Security. If required by the Trustee or
the Company, an indemnity bond shall be posted, sufficient in the judgment of
both to protect the Company, the Trustee or any Paying Agent from any loss that
any of them may suffer if such Security is replaced. The Company may charge
such Holder for the Company's expenses in replacing such Security and the
Trustee may charge the Company for the Trustee's expenses in replacing such
Security. Every replacement Security shall constitute an additional obligation
of the Company.
SECTION 2.8 Outstanding Securities.
----------------------
The Securities outstanding at any time are all Securities that have
been authenticated by the Trustee except for (a) those cancelled by it, (b)
those delivered to it for cancellation, (c) to the extent set forth in Sections
8.1 and 8.2, on or after the date on which the conditions set forth in Section
8.1 or 8.2 have been satisfied, those Securities theretofore authenticated and
delivered by the Trustee hereunder and (d) those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because the
Company or one of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser in whose hands such Security is a legal, valid
and binding obligation of the Company.
-29-
If the Paying Agent holds, in its capacity as such, on any Maturity
Date or on any optional redemption date, money sufficient to pay all accrued
interest and principal with respect to such Securities payable on that date and
is not prohibited from paying such money to the Holders thereof pursuant to the
terms of this Indenture, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.9 Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any declaration of acceleration or notice of
default or direction, waiver or consent or any amendment, modification or other
change to this Indenture, Securities owned by the Company or an Affiliate of the
Company shall be disregarded as though they were not outstanding, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent or any amendment, modification
or other change to this Indenture, only Securities that the Trustee actually
knows are so owned shall be so disregarded.
SECTION 2.10 Temporary Securities.
--------------------
Until definitive Securities are prepared and 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 in exchange for temporary
Securities. Until such exchange, temporary Securities shall be entitled to the
same rights, benefits and privileges as definitive Securities.
SECTION 2.11 Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall (subject
to the record-retention requirements of the Exchange Act) dispose of cancelled
Securities unless the Company directs the Trustee to return such Securities to
the Company, and, if so disposed, shall deliver a certificate of disposition
thereof to the Company. The
-30-
Company may not reissue or resell, or issue new Securities to replace,
Securities that the Company has redeemed or paid, or that have been delivered to
the Trustee for cancellation.
SECTION 2.12 Defaulted Interest.
------------------
If the Company defaults on a payment of interest on the Securities, it
shall pay the defaulted interest, plus (to the extent permitted by law) any
interest payable on the defaulted interest, in accordance with the terms hereof,
to the Persons who are Securityholders on a subsequent special record date,
which date shall be at least five Business Days prior to the payment date. The
Company shall fix such special record date and payment date in a manner
satisfactory to the Trustee. At least 15 days before such special record date,
the Company shall mail to each Securityholder of such series a notice that
states the special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
SECTION 2.13 CUSIP Number.
------------
The Company in issuing the Securities may use a "CUSIP" number or
numbers, and if so, such CUSIP number or numbers shall be included in notices of
redemption or exchange as a convenience to Holders; provided, however, that any
-------- -------
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number or numbers printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company will promptly notify the Trustee
of any change in the CUSIP number or numbers.
SECTION 2.14 Deposit of Moneys.
-----------------
On each Interest Payment Date and Maturity Date, the Company shall
have deposited with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date or
Maturity Date, as the case may be, in a timely manner which permits the Trustee
to remit payment to the Holders on such Interest Payment Date or Maturity Date,
as the case may be.
SECTION 2.15 Book-Entry Provisions
for Global Security.
---------------------
(a) Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the
-31-
Depository, or the Trustee as its custodian, or under the Global Security, and
the Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of the Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Security. With respect to any Global Security
deposited with the Trustee as custodian for the Depository for credit to their
respective accounts (or to such other accounts as they may direct) at Euroclear
or CEDEL, the provisions of the "Operating Procedures of the Euroclear System"
and the "Terms and Conditions Governing Use of Euroclear", and the "Management
Regulations" and "Instructions to Participants" of CEDEL, respectively, shall be
applicable to such Global Security.
(b) Transfers of a Global Security shall be limited to transfers in
whole or in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in a Global Security may be transferred
or exchanged for Physical Securities in accordance with the rules and procedures
of the Depository and the provisions of Section 2.16. In addition, Physical
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Security if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Security and a successor depositary is not appointed by the Company within 90
days of such notice or (ii) an Event of Default has occurred and is continuing
and the Registrar has received a written request from the Depository to issue
Physical Securities.
(c) If any Global Security is to be exchanged for other Securities or
cancelled in whole, it shall be surrendered by or on behalf of the Depository or
its nominee to the Trustee, as Registrar, for exchange or cancellation as
provided in this Article II. If any Global Security is to be exchanged for
other Securities or cancelled in part, or if a Physical Security is to be
exchanged in whole or in part for a beneficial interest in any Global Security,
such Global Security shall be so surrendered for exchange or cancellation as
provided in this Article II or, if the Trustee is acting as custodian for the
Depository or its nominee (or is party to a similar arrangement) with respect to
such Global Security, the principal amount thereof shall be reduced or increased
by an amount equal to the portion thereof to be so
-32-
exchanged or cancelled, or the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, in each case by
means of an appropriate adjustment made on the records of the Trustee, whereupon
the Trustee, in accordance with the Applicable Procedures, shall instruct the
Depository or its authorized representatives to make a corresponding adjustment
to its records (including by crediting or debiting any Agent Member's account as
necessary to reflect any transfer or exchange of a beneficial interest). Upon
any such surrender or adjustment of a Global Security, the Trustee shall,
subject to this Article II, authenticate and deliver any Securities issuable in
exchange for such Global Security (or any portion thereof) to or upon the order
of, and registered in such names as may be directed by, the Depository or its
authorized representative. Upon the request of the Trustee in connection with
the occurrence of any of the events specified in the preceding paragraph or in
paragraph (b) above, the Company shall promptly make available to the Trustee a
reasonable supply of Securities that are not in the form of Global Securities.
The Trustee shall be entitled to rely upon any order, direction or request of
the Depository or its authorized representative which is given or made pursuant
to this Article II if such order, direction or request is given or made in
accordance with the Applicable Procedures.
(d) In connection with the transfer of the entire Global Security to
beneficial owners pursuant to paragraph (b), the 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 the Depository in exchange for its beneficial interest in
the Global Security, an equal aggregate principal amount of Physical Securities
of authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (d)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (d) of Section
2.16, bear the legend regarding transfer restrictions applicable to the Physical
Securities set forth in Exhibit A.
(f) If an Initial Security is a Restricted Security and a Physical
Security, then as provided in this Indenture and subject to the limitations
herein set forth, the Holder, provided it is a Qualified Institutional Buyer,
may exchange such Security for a Book-Entry Security by instructing the Trustee
(by completing the Transferee Certificate in the form of Exhibit I or J hereto)
to arrange for such an Initial Security to be represented by a
-33-
beneficial interest in a Global Security in accordance with the customary
procedures of the Depository.
(g) The 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 such Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.16 Special Transfer Provisions.
---------------------------
(a) Transfers of Physical Securities to Non-QIB Institutional
---------------------------------------------------------
Accredited Investors and Non-U.S. Persons. The following
-----------------------------------------
provisions shall apply with respect to the registration of any proposed transfer
of a Security constituting a Restricted Security to any Institutional Accredited
Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears the
private placement legend substantially in the form of Exhibit A hereto
("Private Placement Legend"), if (x) the requested transfer is after
December 17, 1999 or (y) (1) in the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of Exhibit L hereto or (2) in the case of a
transfer to a Non-U.S. Person, the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit E hereto; and
(ii) if the proposed transferor is an Agent Member holding a beneficial
interest in the Global Security, upon receipt by the Registrar of (x) the
certificate, if any, required by paragraph (i) above and (y) instructions
given in accordance with the Depository's and the Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Securities)
a decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and (b) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Securities of like tenor and
amount.
-34-
(b) Transfers of Physical Securities to QIBs. The following
----------------------------------------
provisions shall apply with respect to the registration of any proposed transfer
of a Security constituting a Restricted Security to a QIB:
(i) the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has advised the Company and the Registrar
in writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Security stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Security for its own account
or an account with respect to which it exercises sole investment discretion
and that it and any such account is a QIB within the meaning of Rule 144A,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Securities
to be transferred consist of Physical Securities which after transfer are to
be evidenced by an interest in the Global Security, upon receipt by the
Registrar of instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global Security in
an amount equal to the principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities so
transferred.
(c) Certain Transfers and Exchanges.
-------------------------------
(i) Temporary Regulation S Global Security. If the holder of a
--------------------------------------
beneficial interest in a Temporary Regulation S Global Security wishes at
any time to transfer such interest to a Person who wishes to take delivery
thereof in the form of a beneficial interest in such Temporary Regulation S
Global Security, such transfer may be effected, subject to the Applicable
Procedures, only in accordance with this clause (i). Upon delivery (a) by a
beneficial owner of an interest in a Temporary Regulation S Global Security
to Euroclear or CEDEL, as the case may be, of an Owner Securities
-35-
Certification, (b) by the transferee of such beneficial interest in the
Temporary Regulation S Global Security to Euroclear or CEDEL, as the case
may be, of a written certification (a "Transferee Securities Certification")
substantially in the form of Exhibit E hereto and (c) by Euroclear or CEDEL,
as the case may be, to the Trustee, as Security Registrar, of a Depository
Securities Certification, the Trustee may direct either Euroclear or CEDEL,
as the case may be, to reflect on its records the transfer of a beneficial
interest in the Temporary Regulation S Global Security from the beneficial
owner providing the Owner Securities Certification to the Person providing
the Transferee Securities Certification.
(ii) Restricted Global Security to Temporary Regulation S Global
-----------------------------------------------------------
Security or Permanent Regulation S Global Security. If the holder of a
--------------------------------------------------
beneficial interest in the Restricted Global Security wishes at any time to
transfer such interest to a Person who wishes to take delivery thereof in
the form of a beneficial interest in the Temporary Regulation S Global
Security or the Permanent Regulation S Global Security, such transfer may be
effected, subject to the Applicable Procedures, only in accordance with the
provisions of this clause (ii) and clause (vii) below. Upon receipt by the
Trustee, as Registrar, of (A) written instructions given by or on behalf of
the Depository in accordance with the Applicable Procedures directing the
Trustee to credit or cause to be credited to a specified Agent Member's
account a beneficial interest in the Temporary Regulation S Global Security
or the Permanent Regulation S Global Security, as the case may be, in a
specified principal amount and to cause to be debited from another specified
Agent Member's account a beneficial interest in the Restricted Global
Security in an equal principal amount and (B) a certificate in substantially
the form set forth (i) in Exhibit F for holders taking delivery in the form
of a beneficial interest in the Temporary Regulation S Global Security or
(ii) in Exhibit G for holders taking delivery in the form of a beneficial
interest in the Permanent Regulation S Global Security signed by or on
behalf of the holder of such beneficial interest in the Restricted Global
Security, the Trustee, as Registrar, shall, subject to clause (vii) below,
reduce the principal amount of the Restricted Global Security, and increase
the principal amount of the Temporary Regulation S Global Security or the
Permanent Regulation S Global Security, as the case may be, by such
specified principal amount.
-36-
(iii) Temporary Regulation S Global Security or Permanent Regulation S
----------------------------------------------------------------
Global Security to Restricted Global Security. If the holder of a beneficial
---------------------------------------------
interest in the Temporary Regulation S Global Security or Permanent
Regulation S Global Security at any time, wishes to transfer such interest
to a Person who wishes to take delivery thereof in the form of a beneficial
interest in the Restricted Global Security, such transfer may be effected,
subject to the Applicable Procedures, only in accordance with this clause
(iii) and clause (vii) below; provided that with respect to any transfer of
--------
a beneficial interest in a Temporary Regulation S Global Security, the
transferor and Euroclear or CEDEL, as the case may be, must have previously
delivered an Owner Securities Certification and a Depository Securities
Certification respectively, with respect to such beneficial interest. Upon
receipt by the Trustee, as Registrar, of (A) written instructions given by
or on behalf of the Depository in accordance with the Applicable Procedures
directing the Trustee to credit or cause to be credited to a specified Agent
Member's account a beneficial interest in the Restricted Global Security in
a specified principal amount and to cause to be debited from another
specified Agent Member's account a beneficial interest in the Temporary
Regulation S Global Security or the Permanent Regulation S Global Security,
as the case may be, in an equal principal amount and (B) a certificate in
substantially the form set forth in Exhibit H signed by or on behalf of the
holder of such beneficial interest in the Temporary Regulation S Global
Security or the Permanent Regulation S Global Security, as the case may be,
the Trustee, as Registrar, shall, subject to clause (vii) below, reduce the
principal amount of such Temporary Regulation S Global Security or Permanent
Regulation S Global Security, as the case may be, and increase the principal
amount of the Restricted Global Security by such specified principal amount.
(iv) Non-Global Restricted Security to Global Security. If the holder
-------------------------------------------------
of a Restricted Security (other than a Global Security) wishes at any time
to transfer all or any portion of such Security to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the Restricted
Global Security, the Temporary Regulation S Global Security or the Permanent
Regulation S Global Security, such transfer may be effected, subject to the
Applicable Procedures, only in accordance with this clause (iv) and clause
(vii) below. Upon receipt by the Trustee, as Registrar, of (A) such Security
and written instructions given by or on behalf of such Holder as
-37-
provided in Section 2.15 directing the Trustee to credit or cause to be
credited to a specified Agent Member's account a beneficial interest in the
Restricted Global Security, the Temporary Regulation S Global Security or
the Permanent Regulation S Global Security, as the case may be, in a
specified principal amount equal to the principal amount of the Restricted
Security (or portion thereof) to be so transferred, and (B) an appropriately
completed certificate substantially in the form set forth in Exhibit I
hereto, if the specified account is to be credited with a beneficial
interest in the Restricted Global Security, or Exhibit J hereto, if the
specified account is to be credited with a beneficial interest in the
Temporary Regulation S Global Security or the Permanent Regulation S Global
Security, signed by or on behalf of such Holder, then the Trustee, as
Registrar, shall, subject to clause (vii) below, cancel such Restricted
Security (and issue a new Security in respect of any untransferred portion
thereof as provided in Section 2.15 and increase the principal amount of the
Restricted Global Security, Temporary Regulation S Global Security or
Permanent Regulation S Global Security, as the case may be, by the specified
principal amount.
(v) Non-Global Permanent Regulation S Security to Restricted Global
---------------------------------------------------------------
Security or Permanent Regulation S Global. If the Holder of a Permanent
-----------------------------------------
Regulation S Security (other than a Global Security) wishes at any time to
transfer all or any portion of such Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the Restricted
Global Security or the Permanent Regulation S Global Security, as the case
may be, such transfer may be effected only in accordance with this clause
(v) and subject to the Applicable Procedures. Upon receipt by the Trustee,
as Registrar, of (A) such Security and instructions given by or on behalf of
such Holder as provided in Section 2.15 directing the Trustee to credit or
cause to be credited to a specified Agent Member's account a beneficial
interest in the Restricted Global Security or the Permanent Regulation S
Global Security, as the case may be, in a principal amount equal to the
principal amount of the Security (or portion thereof) to be so transferred,
(B) (i) with respect to a transfer which is to be delivered in the form of a
beneficial interest in the Restricted Global Security, a certificate in
substantially the form set forth in Exhibit K-1, signed by or on behalf of
such Holder, and (ii) with respect to a transfer which is to be delivered in
the form of a beneficial interest in the Permanent Regulation S Global
Security, a certificate in
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substantially the form set forth in Exhibit K-2, signed by or on behalf of
such Holder, then the Trustee, as Registrar, shall, subject to clause (vii)
below, cancel such Security (and issue a new Security in respect of any
untransferred portion thereof) as provided in Section 2.15 and increase the
principal amount of the Restricted Global Security, or the Permanent
Regulation S Global Security, as the case may be, by the specified principal
amount.
(vi) Other Exchange. Securities that are not Global Securities may be
--------------
exchanged (on transfer or otherwise) for Securities that are not Global
Securities or for beneficial interests in a Global Security (if any is then
outstanding) only in accordance with such procedures, which shall be
substantially consistent with the provisions of clauses (i) through (v)
above (including the certification requirements intended to insure that
transfers of beneficial interests in a Global Security comply with Rule
144A, Regulation S, or another exemption from the Securities Act) and any
Applicable Procedures, as may be from time to time adopted by the Company
and the Trustee.
(vii) Interests in Temporary Regulation S Global Security to Be Held
--------------------------------------------------------------
Through Euroclear or CEDEL. Until the later of the expiration of the
--------------------------
Restricted Period and the provision of the Owner Securities Certification
and the Depository Securities Certification, beneficial interests in any
Temporary Regulation S Global Security may be held only in or through
accounts maintained at the Depository by Euroclear or CEDEL (or by Agent
Members acting for the account thereof).
(d) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless (i) the circumstance contemplated by
paragraph (a)(i)(x) of this Section 2.16 exist or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.
(e) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security
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acknowledges the restrictions on transfer of such Security set forth in this
Indenture and in the Private Placement Legend and agrees that it will transfer
such Security only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE III
REDEMPTION
----------
SECTION 3.1 Notices to Trustee.
------------------
If the Company elects to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify each Guarantor, the Trustee and the Paying Agent
in writing of the Redemption Date and the principal amount of Securities to be
redeemed.
The Company shall give each notice provided for in this Section 3.1 at
least 45 days before the Redemption Date (unless a shorter notice shall be
agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein
and in the Securities.
SECTION 3.2 Selection of Securities
To Be Redeemed.
-----------------------
If less than all of the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed in compliance with the requirements of the
principal national securities exchange, if any, on which the Securities being
redeemed are listed or, if the Securities are not listed on a national
securities exchange, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate. The Trustee shall make the selection
from the Securities outstanding and not previously called for redemption. The
Trustee shall promptly notify the Company in writing of such Securities selected
for redemption and, in the case of Securities selected for partial redemption,
the principal amount to be redeemed. The Trustee may select for redemption
portions of the principal amount of
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Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in amounts of $1,000 or integral multiples
of $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
SECTION 3.3 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause the mailing of a notice of redemption by first-class
mail to each Holder of Securities to be redeemed and the Trustee and any Paying
Agent.
The notice shall identify the Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the redemption price and the amount of accrued interest, if any, to
be paid;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price and accrued interest, if any;
(e) that, unless the Company defaults in making the redemption payment,
interest on Securities called for redemption ceases to accrue on and after
the Redemption Date and the only remaining right of the Holders of such
Securities of such series is to receive payment of the redemption price upon
surrender to the Paying Agent of the Securities redeemed;
(f) if any Security is to be redeemed in part, the portion of the
principal amount (equal to $1,000 or any integral multiple thereof) of such
Security to be redeemed and that, on or after the Redemption Date, upon
surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued
without charge to the Securityholder;
(g) if less than all of the 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
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aggregate principal amount of Securities estimated to be outstanding after
such partial redemption; and
(h) the CUSIP number or numbers, if any, pursuant to Section 2.13.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the redemption price. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price plus accrued interest to the Redemption Date, but interest installments
whose maturity is on or prior to such Redemption Date will be payable on the
relevant Interest Payment Dates to the Holders of record at the close of
business on the relevant record dates referred to in the Securities.
SECTION 3.5 Deposit of Redemption Price.
---------------------------
At least one Business Day prior to the Redemption Date, the Company
shall deposit with the Paying Agent in immediately available funds money
sufficient to pay the redemption price of and accrued interest on all Securities
or portions thereof to be redeemed on that date.
If any Security surrendered for redemption in the manner provided in the
Securities shall not be so paid on the Redemption Date due to the failure of the
Company or any Guarantor to deposit sufficient funds with the Paying Agent,
interest will continue to accrue from the Redemption Date until such payment is
made on the unpaid principal and, to the extent lawful, on any interest not paid
on such unpaid principal, in each case at the date and in the manner provided in
the Securities.
SECTION 3.6 Securities Redeemed in Part.
---------------------------
Upon surrender to the Paying Agent of a Security that is redeemed in
part, the Company shall execute and the Trustee shall authenticate for the
Holder a new Security (accompanied by a notation of Guarantee duly endorsed by
the Guarantors) equal in principal amount to the unredeemed portion of the
Security surrendered.
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ARTICLE IV
COVENANTS
---------
SECTION 4.1 Payment of Securities.
---------------------
The Company shall pay the principal of and interest on the Securities on
the dates and in the manner provided in the Securities and this Indenture.
An installment of principal or interest shall be considered paid on the
date due if the Trustee or the Paying Agent holds on such date immediately
available funds designated for and sufficient to pay such installment.
The Company shall pay interest on overdue principal and (to the extent
permitted by law) on overdue installments of interest at a rate equal to 11% per
---
annum.
-----
SECTION 4.2 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency, where Securities may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
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
Borough of Manhattan, 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 of any change in the location of any such other office or agency.
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The Company hereby initially designates the corporate trust office of
the Trustee set forth in Section 13.2 as an agency of the Company in accordance
with Section 2.3.
SECTION 4.3 Corporate Existence.
-------------------
Subject to Article V, the Company shall do or cause to be done, at its
own cost and expense, all things necessary to and will cause each of its
Subsidiaries to, preserve and keep in full force and effect the corporate or
partnership existence and rights (charter and statutory), licenses and/or
franchises of the Company and each of its Subsidiaries; provided, however, that
-------- -------
subject to Article XI and the terms of any Security Document, the Company or any
of its Subsidiaries shall not be required to preserve any such rights, licenses
or franchises if the Board of Directors of the Company shall reasonably
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company or such Subsidiary and the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.4 Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon its or its Subsidiaries' income,
profits or property and (b) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a Lien upon its property; provided,
--------
however, that, subject to the terms of the applicable Security Documents, 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 negotiations or
proceedings and for which disputed amounts adequate reserves (in the good faith
judgment of the Board of Directors of the Company) have been made.
SECTION 4.5 Maintenance of Properties; Insurance;
Books and Records; Compliance with Law.
--------------------------------------
(a) Subject to, and in compliance with, the provisions of Sections 11.3
and 11.4 and to the provisions of the applicable Security Documents, the Company
shall, and shall cause each of its Subsidiaries to, at all times cause all
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order (reasonable wear and tear
excepted) and supplied with all necessary equipment, and shall
-44-
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereto.
The Company and each of its Subsidiaries shall maintain insurance
subject to the provisions of the applicable Security Documents in such amounts
and covering such risks as are usually and customarily carried with respect to
similar facilities according to their respective locations.
The Company shall and shall cause each of its Subsidiaries to keep
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Company
and each Subsidiary of the Company, in accordance with GAAP consistently applied
to the Company and its Subsidiaries taken as a whole.
The Company shall and shall cause each of its Subsidiaries to comply
with all statutes, laws, ordinances, or government rules and regulations to
which it is subject, non-compliance with which would materially adversely affect
the business, prospects, earnings, properties, assets or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole.
SECTION 4.6 Guarantees.
----------
The Company shall at all times ensure that each Guarantee shall remain
in full force and effect and shall not be subordinated in right of payment to
any Indebtedness of the Guarantors.
SECTION 4.7 Compliance Certificates.
-----------------------
(a) The Company and each Guarantor shall deliver to the Trustee, within
45 days after the end of each of the first three quarters of the Company's
fiscal year, and within 90 days after the end of such fiscal year, Officers'
Certificates of the Company and each Guarantor stating (i) that a review of the
activities of the Company or such Guarantor, as the case may be, during the
preceding fiscal quarter or year, as the case may be, has been made under the
supervision of the signing Officers with a view to determining whether the
Company or such Guarantor, as the case may be, has kept, observed, performed and
fulfilled its obligations under this Indenture, and (ii) that, to the best
knowledge of each Officer signing such certificate, the Company or such
Guarantor, as the case may be, has kept, observed, performed and fulfilled each
and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and
-45-
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which such Officers may
have knowledge, their status and what action the Company or such Guarantor, as
the case may be, is taking or proposes to take with respect thereto).
(b) So long as (and to the extent) not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
annual financial statements delivered pursuant to Section 4.8 shall be
accompanied by a written statement of the Company's independent public
accountants that in making the examination necessary for certification of such
annual financial statements nothing has come to their attention that would lead
them to believe that the Company has violated any provisions of this Indenture
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c) The Company and each Guarantor shall, so long as any of the
Securities are outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.8 Reports.
-------
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Securities are outstanding, the Company shall furnish
to the Holders of securities (i) all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations of
the Company and its Subsidiaries, and, with respect to the annual information
only, a report thereon by the Company's certified independent accountants and
(ii) all reports that would be filed with the SEC on Form 8-K if the Company
were required to file such reports. In addition, whether or not required by the
rules and regulations of the SEC, the Company will file a copy of all such
information and reports with the SEC for public availability (unless the SEC
will not accept such a filing) and make such information available to investors
who request it in writing. Upon qualification of this Indenture under the TIA,
the Company shall also comply with the provisions of TIA Section 314(a).
-46-
(b) For so long as any of the Securities remain outstanding, the
Company shall furnish to the Holders and beneficial Holders of Securities and to
prospective purchasers of Securities designated by the Holders of Transfer
Restricted Securities (as defined in the Registration Rights Agreement) and to
broker dealers, upon their request, the information required to be delivered
pursuant to Rule 144(d)(4) under the Securities Act.
SECTION 4.9 Further Assurance to the Trustee.
--------------------------------
The Company shall, upon request of the Trustee, execute and deliver such
further instruments and do such further acts as may reasonably be necessary or
proper to carry out more effectively the provisions of this Indenture and the
Security Documents.
SECTION 4.10 Limitation on Additional Company
Indebtedness.
--------------------------------
The Company shall not incur any Indebtedness (including any Acquired
Indebtedness), except for the following (each of which shall be given
independent effect):
(i) Indebtedness under the Securities and this Indenture;
(ii) Indebtedness which, when aggregated with any Indebtedness of CPC
or Caribbean incurred pursuant to paragraph (vii) of Section 4.11, does not
exceed the greater of (a) Indebtedness outstanding from time to time
pursuant to the commitments, advance rates and definitions of "Eligible
Receivables" and "Eligible Inventory" in effect from time to time under the
Revolving Credit Facility and (b) $25,000,000;
(iii) Indebtedness of the Company outstanding on the date on which the
Securities are originally issued and included in the Consolidated Financial
Statements;
(iv) Indebtedness if, immediately after giving pro forma effect to the
incurrence thereof, the Consolidated Interest Coverage Ratio of the Company
would be greater than or equal to 2.25:1.00 on or prior to December 31, 1999
and 2.50:1.00 thereafter;
(v) Indebtedness incurred in connection with or arising out of
Capitalized Lease Obligations or secured by Liens permitted under paragraph
(iii) of Section 4.13 in an aggregate amount at any time outstanding which,
when
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aggregated with any Indebtedness incurred pursuant to paragraph (iv) of
Section 4.11 does not exceed $10,000,000; provided that such Indebtedness
--------
arising out of Capitalized Lease Obligations is incurred in accordance with
paragraph (vi) of Section 4.13;
(vi) Interest Rate Protection Obligations of the Company covering
Indebtedness of the Company (which Indebtedness (A) bears interest at
fluctuating interest rates and (B) is otherwise permitted to be incurred
under this Section 4.10) to the extent the notional principal amount of such
Interest Rate Protection Obligations does not exceed the principal amount of
the Indebtedness to which such Interest Rate Protection Obligations relate;
(vii) Indebtedness arising under any appeal and reimbursement
obligation entered into with respect to any judgment;
(viii) Indebtedness in the nature of or in connection with (i) any Sale-
Leaseback Transaction permitted under Section 4.12 below, (ii) a guarantee
of the 1996 Sale/Leaseback, or (iii) a refinancing or replacement of the
1996 Sale/Leaseback, so long as any such Indebtedness incurred pursuant to
clause (i) or (iii) is incurred pursuant to the Consolidated Interest
Coverage Ratio test set forth in paragraph (iv) of this Section 4.10;
(ix) any replacements, renewals, refinancings and extensions of the
Indebtedness incurred under clauses (i) through (iv) above; provided
--------
that any such replacement, renewal, refinancing and extension (A) shall not
provide for any mandatory redemption, amortization or sinking fund
requirement in an amount greater than or at a time prior to the amounts and
times specified in the Indebtedness being replaced, renewed, refinanced or
extended, and (B) shall not exceed the principal amount (plus accrued
interest) of the Indebtedness being replaced, renewed, refinanced or
extended; and
(x) Indebtedness under any guarantees by the Company of any
obligations of CPC or Caribbean outstanding from time to time under the
Revolving Credit Facility.
SECTION 4.11 Limitation on Additional Subsidiary
Indebtedness.
-----------------------------------
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The Company shall not cause or permit any Subsidiary to incur any
Indebtedness (including any Acquired Indebtedness), except for the following
(each of which shall be given independent effect):
(i) Indebtedness under the Guarantees;
(ii) Indebtedness issued to and held by the Company or a Wholly-Owned
Subsidiary of the Company;
(iii) Indebtedness of Subsidiaries outstanding on the date on which the
Securities are originally issued and included in the Consolidated Financial
Statements;
(iv) Indebtedness incurred in connection with or arising out of
Capitalized Lease Obligations or secured by Liens permitted under paragraph
(iii) of Section 4.13 in an aggregate amount at any time outstanding which,
when aggregated with any Indebtedness incurred pursuant to Section 4.10(v),
does not exceed $10,000,000; provided that such Indebtedness arising out of
--------
Capitalized Lease Obligations is incurred in accordance with paragraph (vi)
of Section 4.13;
(v) Indebtedness in the nature of or in connection with any Sale-
Leaseback Transaction permitted under Section 4.12 or in connection with a
refinancing or replacement of the 1996 Sale/Leaseback, so long as any such
Indebtedness is incurred pursuant to the Consolidated Interest Coverage
Ratio test set forth in paragraph (iv) of Section 4.10 above;
(vi) Indebtedness under any guarantees by CPC and Caribbean of the
obligations outstanding from time to time under the Revolving Credit
Facility; and
(vii) Indebtedness which, when aggregated with any Indebtedness of the
Company incurred pursuant to paragraph (ii) of Section 4.10, does not exceed
the greater of (a) Indebtedness outstanding from time to time pursuant to
the commitments, advance rates and definitions of "Eligible Receivables" and
"Eligible Inventory" in effect from time to time under the Revolving Credit
Facility and (b) $25,000,000.
SECTION 4.12 Limitation on Sale-Leaseback
Transactions.
----------------------------
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(a) The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any Sale-Leaseback Transaction other than the 1996
Sale/Leaseback.
(b) Notwithstanding paragraph (a), the Company and its Subsidiaries may
enter into Sale-Leaseback Transactions if (i) after giving effect to any such
Sale-Leaseback Transaction, the Company is in compliance with paragraph (iv) of
Section 4.10 or the applicable Company Subsidiary is in compliance with
paragraph (v) of Section 4.11 and, (ii) the net proceeds of such Sale-Leaseback
Transaction are at least equal to the Fair Market Value of such property
(determined by the Company's Board of Directors), and the Company or such
Subsidiary applies the Net Cash Proceeds of the sale as provided in Section
4.15.
SECTION 4.13 Limitation on Liens.
-------------------
The Company shall not, and shall not permit, cause or suffer any
Subsidiary of the Company to, create, incur, assume or suffer to exist any Lien
of any kind upon any property or assets now owned or hereafter acquired by the
Company, except for the following:
(i) Liens existing as of the Issue Date and disclosed in the Security
Documents on such date and Liens created by the Securities, this Indenture
and the Security Documents;
(ii) Permitted Liens on property and assets not constituting Collateral
and certain Liens on the Collateral to the extent permitted by the Security
Documents;
(iii) Liens to secure the payment of all or a part of the purchase price
of assets or property acquired or constructed in the ordinary course of
business after the date on which the Securities are originally issued;
provided that (a) the aggregate principal amount of Indebtedness secured by
--------
such Liens shall not exceed the lesser of cost or Fair Market Value of the
assets or property so acquired or constructed and shall not, in any event,
exceed $15,000,000, provided, however, that for the purpose of calculating
-------- -------
the amount of permitted under this clause (a), Indebtedness incurred to
refinance or replace the 1996 Sale/Leaseback and secured by such Liens shall
not be included, (b) the Indebtedness secured by such Liens shall have
otherwise been permitted to be incurred under this Indenture and (c) such
Liens shall not encumber any other assets or property of the Company or any
of its Subsidiaries and shall attach to such assets or property
-50-
within 60 days of the construction or acquisition of such assets or
property;
(iv) Liens on the assets or property of a Subsidiary of the Company
existing at the time such Subsidiary became a Subsidiary of the Company and
not incurred as a result of (or in connection with or in anticipation of)
such Subsidiary becoming a Subsidiary of the Company; provided that such
--------
Liens do not extend to or cover any property or assets of the Company
or any of its Subsidiaries (other than the property or assets so acquired);
(v) Liens on the Inventory and Accounts of the Company, CPC and
Caribbean securing the obligations under the Revolving Credit Facility;
(vi) any Lien pursuant to Capitalized Lease Obligations not to exceed
$10,000,000 in the aggregate, provided such Liens do not extend to or cover
--------
any property or assets of the Company or any of its Subsidiaries (other than
the property or assets subject to such Capitalized Lease Obligations);
(vii) leases and subleases of real property which do not interfere with
the ordinary conduct of the business of the Company or any of its
Subsidiaries, and which are made on customary and usual terms applicable to
similar properties;
(viii) Liens securing (a) Indebtedness which is incurred to replace or
refinance the 1996 Sale/Leaseback or (b) Indebtedness which has been secured
by a Lien permitted under this Indenture and is permitted to be refinanced
under this Indenture; provided that none of such Liens extend to or cover
--------
any property or assets of the Company or any of its Subsidiaries not
securing the 1996 Sale/Leaseback or Indebtedness so replaced or refinanced,
as the case may be;
(ix) Liens securing the 1996 Sale/Leaseback and Previously
Leased/Financed Equipment, including Liens on the Previously Leased/Financed
Equipment which may in the future secure the 1996 Sale/Leaseback; and
(x) in addition to Liens permitted under clauses (i)-(viii) above,
Liens securing an aggregate of $5,000,000 of Indebtedness or other
obligations.
SECTION 4.14 Limitation on Restricted Payments.
---------------------------------
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(a) Subject to Section 4.14(b), the Company shall not, and shall not
cause, suffer or permit any of its Subsidiaries to, directly or indirectly, make
any Restricted Payment, unless:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted Payment;
(ii) the Company is able to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set
forth in paragraph (iv) of Section 4.10; and
(iii) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after the date on
which the Securities are originally issued does not exceed the sum of (a)
75% of the Consolidated Net Income of the Company (or in the event such
Consolidated Net Income shall be a deficit, minus 100% of such deficit) from
January 1, 1997, (b) 100% of the aggregate net cash proceeds and the Fair
Market Value of marketable securities received by the Company from the issue
or sale, after the Issue Date, of Capital Stock (other than Disqualified
Stock) of the Company, or any Indebtedness or other securities of the
Company convertible into or exercisable for Capital Stock (other than
Disqualified Stock) of the Company which has been so converted or exercised,
as the case may be, plus (c) solely to the extent such Restricted Payment is
made to provide Continental Can with the funds necessary to purchase shares
of the Company pursuant to the Merrywood Agreement, $7,500,000, provided
--------
that at the time of such Restricted Payment made pursuant to this
clause (c), the Consolidated Interest Coverage Ratio computed on a pro forma
basis is greater than 2.75:1.00. For purposes of determining under clause
(b) above the amount expended for Restricted Payments, cash distributed
shall be valued at the face amount thereof and property other than cash
shall be valued at its Fair Market Value.
(b) The provisions of Section 4.14(a) shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would
comply with the provisions of this Indenture;
-52-
(ii) the retirement of any shares of Capital Stock of the Company in
exchange for, or out of, the Net Proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of other shares of Capital
Stock of the Company (other than Disqualified Stock); and
(iii) the redemption or retirement of subordinated Indebtedness of the
Company in exchange for, by conversion into or out of the Net Proceeds of, a
substantially concurrent (x) sale or issuance of Capital Stock of the
Company or (y) incurrence of subordinated Indebtedness of the Company that
is contractually subordinated in right of payment to the Securities and that
is permitted to be incurred under Section 4.10;
In determining the amount of Restricted Payments permissible under
clause (ii) of paragraph (a) above, the amounts expended pursuant to clauses
(i) through (iii) of paragraph (b) above shall be included as Restricted
Payments.
SECTION 4.15 Disposition of Proceeds of Asset Sales.
--------------------------------------
(a) The Company shall not, and shall not permit any of its Subsidiaries to,
make any Asset Sale unless (i) such Asset Sale is for Fair Market Value, (ii)
the proceeds therefrom consist of at least 85% in cash and/or Cash Equivalents,
(iii) if such Asset Sale involves Collateral it shall be made in compliance with
the provisions of Article XI, and (iv) the Company shall commit to apply the Net
Cash Proceeds of such Asset Sale within 270 days of receipt thereof, and shall
apply such Net Cash Proceeds within 360 days of receipt thereof, as follows:
(i) first, to the extent such Net Cash Proceeds are received from an
Asset Sale involving the sale, transfer or disposition of Inventory or
Accounts ("Working Capital Proceeds"), to satisfy all mandatory repayment
obligations arising by reason of such Asset Sale;
(ii) second, any Working Capital Proceeds remaining after application
pursuant to the preceding paragraph (i), together with any Net Cash Proceeds
received from an Asset Sale not involving the sale, transfer or disposition
of Inventory or Accounts (the "Available Amount"), the Company shall make an
offer to purchase (the "Asset Sale Offer") from all Holders of Securities,
up to a maximum principal amount (expressed as a multiple of $1,000) of
Securities equal to the Available Amount at a purchase price equal to 100%
of the principal
-53-
amount thereof plus accrued and unpaid interest thereon, if any, to the date
of purchase, provided, however, that the Company will not be required to
-------- -------
apply pursuant to this paragraph (ii) Net Cash Proceeds
received from any Asset Sale if, and only to the extent that, such Net Cash
Proceeds are committed in writing to be applied to acquire property or
assets in lines of business related to the Company's and its Subsidiaries'
business at such time (a "Permitted Related Acquisition") within 270 days of
such Asset Sale, and are so applied within 360 days of such Asset Sale, and
the property and assets so acquired are made subject to the Lien of the
Indenture and the applicable Security Documents pursuant to Article XI; and,
provided, further, that the Company may defer the Asset Sale Offer until
-------- -------
there is an aggregate unutilized Available Amount equal to or in excess of
$5,000,000 resulting from one or more Asset Sales (at which time, the entire
unutilized Available Amount, and not just the amount in excess of
$5,000,000, shall be applied as required pursuant to this paragraph).
Notwithstanding the foregoing, the sale or other disposition of assets
subject to the 1996 Sale/Leaseback (including any Previously Leased/Financed
Equipment which becomes subject to the 1996 Sale/Leaseback) in connection with a
refinancing or replacement thereof shall not be deemed to be an Asset Sale so
long as such sale or disposition is committed to in writing within 270 days of
the termination of the 1996 Sale/Leaseback as originally executed and such
proceeds are so applied within 360 days of the date of such termination.
(b) Whenever Net Cash Proceeds in excess of $1,000,000 from any Asset
Sale are received by the Company and such Net Cash Proceeds may, through the
passage of time or otherwise, be required to be applied to the purchase of
Securities pursuant to this Section 4.15, the Company shall deposit such Net
Cash Proceeds with the Trustee as Trust Moneys subject to disposition as
provided in this Section 4.15 or as provided in Section 11.4 or Article XII, and
such Net Cash Proceeds shall be set aside by the Trustee pending application to
either the purchase of Securities or its other permitted applications. Such Net
Cash Proceeds shall be invested by the Trustee in Permitted Investments pursuant
to the direction of the Company which shall specify the Permitted Investment in
which such Net Cash Proceeds shall be invested and the maturity date of such
investment; provided, however, that in no event shall the Company specify a
-------- --------
maturity date later than the Asset Sale Payment Date. The Company or its
relevant Subsidiary,
-54-
as applicable, shall be entitled to any interest or dividends accrued, earned or
paid on such Permitted Investments.
(c) The Company shall provide the Trustee with notice of the Asset Sale
Offer at least 30 days before any notice of any Asset Sale Offer is mailed to
Holders of the Securities (unless shorter notice is acceptable to the Trustee).
Notice of an Asset Sale Offer shall be mailed by the Company to all Holders of
Securities not less than 30 days nor more than 60 days before the Asset Sale
Payment Date at their last registered address with a copy to the Trustee and the
Paying Agent. The Asset Sale Offer shall remain open from the time of mailing
for at least 20 Business Days and until at least 5:00 p.m., New York City time,
on the Asset Sale Payment Date. The notice, which shall govern the terms of the
Asset Sale Offer, shall include such disclosures as are required by law and
shall state:
(i) that the Asset Sale Offer is being made pursuant to this Section
4.15;
(ii) the purchase price (including the amount of accrued interest, if
any) for each Security and the Asset Sale Payment Date;
(iii) that any Security not tendered or accepted for payment will
continue to accrue interest in accordance with the terms thereof;
(iv) that, unless the Company defaults on making the payment, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease
to accrue interest after the Asset Sale Payment Date;
(v) that Holders electing to have Securities purchased pursuant to an
Asset Sale Offer will be required to surrender their Securities to the
Paying Agent at the address specified in the notice prior to 5:00 p.m., New
York City time, on the Asset Sale Payment Date and must complete any form
letter of transmittal proposed by the Company and acceptable to the Trustee
and the Paying Agent;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than 5:00 p.m., New York City time, on the
Asset Sale Payment Date, a tested telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Securities the
Holder delivered for purchase, the Security certificate number
-55-
(if any) and a statement that such Holder is withdrawing his election to
have such Securities purchased;
(vii) that if Securities in a principal amount in excess of the
Available Amount are tendered pursuant to the Asset Sale Offer, the Company
shall purchase Securities on a pro rata basis among the Securities tendered
--- ----
(with such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000 or integral multiples of $1,000
shall be acquired);
(viii) that Holders whose Securities are purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion
of the Securities surrendered; and
(ix) the instructions that Holders must follow in order to tender
their Securities.
On or before the Asset Sale Payment Date, the Company shall (i) accept
for payment, on a pro rata basis among the Securities (subject to adjustment as
--- ----
contemplated by clause (vii) above), Securities or portions thereof tendered
pursuant to the Asset Sale Offer, (ii) cause the Trustee to liquidate the
necessary amount of Permitted Investments and to deposit with the Paying Agent
on the Asset Sale Payment Date money, in immediately available funds, in an
amount sufficient to pay the purchase price of all Securities or portions
thereof so tendered and accepted and (iii) deliver to the Paying Agent the
Securities so accepted together with an Officers' Certificate setting forth the
Securities or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to Holders of
Securities so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. To the extent an Asset Sale
Offer is not fully subscribed to by the Holders, the Company may retain (free
and clear of the Lien of this Indenture and the Security Documents) any
unutilized portion of the Available Amount. The Paying Agent shall promptly
deliver to the Company the balance of any such Trust Moneys held by the Paying
Agent after payment to the holders of Securities as aforesaid. Notwithstanding
anything herein to the contrary, in no event shall the Trustee be liable for any
loss incurred as a result of the liquidation of any Permitted Investments absent
its gross negligence or willful misconduct.
-56-
The Company shall 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 the
Asset Sale Offer. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.15, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.15 by virtue
thereof.
(d) No transaction or action otherwise permitted under this Section
4.15 shall occur until the Trustee shall have received an Officers' Certificate
and an Opinion of Counsel as to (i) the Company's compliance with this Section
4.15 and with the Security Documents and (ii) the fulfillment of all conditions
precedent to such transaction or action.
SECTION 4.16 Limitation on Transactions with
Affiliates.
-------------------------------
The Company shall not, and shall not permit, cause or suffer any of
its Subsidiaries to, conduct any business or enter into any transaction or
series of transactions with or for the benefit of any of their respective
Affiliates (each an "Affiliate Transaction"), except in good faith and on terms
that are no less favorable to the Company or such Subsidiary, as the case may
be, than those that could have been obtained in a comparable transaction on an
arm's-length basis from a Person not an Affiliate of the Company or such
Subsidiary. All Affiliate Transactions (and each series of related Affiliated
Transactions which are similar or part of a common plan) involving aggregate
payments or other market value in excess of $500,000 shall be approved by the
Board of Directors of the Company, such approval to be evidenced by a Board
Resolution stating that the Board of Directors of the Company has determined
that such transaction complies with the provisions of this Section 4.16. If the
Company or any Subsidiary of the Company enters into an Affiliate Transaction
(or a series of related Affiliate Transactions which are similar or part of a
common plan) involving aggregate payments or other market value in excess of
$5,000,000, the Company or such Subsidiary, as the case may be, shall, prior to
the consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to the Company or the relevant
Subsidiary, as the case may be, from a financial point of view, from an
Independent Financial Advisor and file the same with the Trustee.
Notwithstanding the foregoing, the restrictions set forth in this Section 4.16
shall not apply to (i) transactions between the
-57-
Company and any of its Wholly-Owned Subsidiaries or among Wholly-Owned
Subsidiaries of the Company, (ii) Restricted Payments permitted under this
Indenture and (iii) customary directors' fees, indemnification and similar
arrangements, consulting fees, employee salaries (including the reimbursement of
Continental Can for a pro rata portion of the salaries and fringe benefit
--- ----
expenses of Messrs. Bainton and Yazgi and other officers of Continental Can
based on the actual time devoted by them to Company matters) and bonuses and
legal fees.
SECTION 4.17 Change of Control.
-----------------
In the event of a Change of Control (the date of such occurrence, the
"Change of Control Date"), the Company shall notify the holders of Securities in
writing of such occurrence and shall make an offer to purchase (the "Change of
Control Offer") on a Business Day (the "Change of Control Payment Date") not
later than 60 days following the Change of Control Date, all Securities then
outstanding at a purchase price equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the Change of Control Payment Date.
Notice of a Change of Control Offer shall be mailed by the Company not
less than 30 days nor more than 45 days before the Change of Control Payment
Date to the holders of Securities at their last registered addresses with a copy
to the Trustee and the Paying Agent. The Change of Control Offer shall remain
open from the time of mailing for at least 20 Business Days and until 5:00 p.m.,
New York City time, on the Change of Control Payment Date. The notice, which
shall govern the terms of the Change of Control Offer, shall include such
disclosures as are required by law and shall state:
(a) that a Change of Control Offer is being made pursuant to this
Section 4.17 and that all Securities will be accepted for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Security and the Change of Control Payment Date;
(c) that any Security not tendered for payment will continue to accrue
interest in accordance with the terms thereof;
(d) that, unless the Company defaults on making the payment, any
Security accepted for payment pursuant to the
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Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(e) that Holders electing to have Securities purchased pursuant to a
Change of Control Offer will be required to surrender their Securities to
the Paying Agent at the address specified in the notice prior to 5:00 p.m.,
New York City time, on the Change of Control Payment Date and must complete
any form letter of transmittal proposed by the Company and acceptable to the
Trustee and the Paying Agent;
(f) that Holders of Securities will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Change of Control Payment Date, a tested telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Securities the Holder delivered for purchase, the Security
certificate number (if any) and a statement that such Holder is withdrawing
his election to have such Securities purchased;
(g) that Holders whose Securities are purchased only in part will be
issued Securities equal in principal amount to the unpurchased portion of
the Securities surrendered;
(h) the instructions that Holders must follow in order to tender their
Securities; and
(i) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with respect to pro
forma historical financial information after giving effect to such Change of
Control, information regarding the Persons acquiring control and such
Persons' business plans going forward).
On the Change of Control Payment Date, the Company shall (i) accept
for payment Securities or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof so tendered and accepted
and (iii) deliver to the Trustee the Securities so accepted together with an
Officers' Certificate setting forth the Securities or portions thereof tendered
to and accepted for payment by the Company. The Paying Agent shall promptly
mail or deliver to the Holders of Securities so accepted payment in an amount
equal to the purchase price, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Security equal in principal
-59-
amount to any unpurchased portion of the Security surrendered. Any Securities
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof.
The Company shall 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 a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section 4.17, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.17 by virtue
thereof.
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SECTION 4.18 Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries.
---------------------------------
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist, or enter
into any agreement with any Person that would cause, any consensual encumbrance
or restriction of any kind on the ability of any Subsidiary of the Company to
(a) pay dividends, in cash or otherwise, or make any other distributions on its
Capital Stock or any other interest or participation in, or measured by, its
profits owned by, or pay any Indebtedness owed to, the Company or a Subsidiary
of the Company, (b) make any loans or advances to the Company or any Subsidiary
of the Company or (c) transfer any of its properties or assets to the Company or
to any Subsidiary of the Company, except, in each case, for such encumbrances or
restrictions existing under or contemplated by or by reason of (i) restrictions
imposed by applicable law, (ii) customary non-assignment provisions of any
contract or any lease governing a leasehold interest of the Company or any
Subsidiary of the Company, (iii) the Securities, this Indenture and the Security
Documents, (iv) any restrictions existing under or contemplated by agreements in
effect on the Issue Date, including, without limitation, restrictions under the
Revolving Credit Facility and the 1996 Sale/Leaseback as both are in effect on
such date, (v) any restrictions, with respect to a Subsidiary of the Company
that is not a Subsidiary of the Company on the date on which the Securities are
originally issued, in existence at the time such Person becomes a Subsidiary of
the Company (but not created in contemplation of such Person becoming a
Subsidiary) and (vi) any restrictions existing under any agreement that
refinances or replaces an agreement containing a restriction permitted by clause
(i) through (v) above, provided that the terms and conditions of any such
--------
restrictions under this clause (vi) are not materially less favorable to the
Holders than those under or pursuant to the agreement being replaced or the
agreement evidencing the Indebtedness being refinanced. Nothing contained in
this Section 4.18 shall prevent the Company or any of its Subsidiaries from
entering into any agreement (x) permitted under Section 4.13 or (y) restricting
the sale or other disposition of assets or property securing Indebtedness
evidenced by such agreement provided that the Company complies with Section
4.15.
SECTION 4.19 Limitation on Issuance of Preferred
Stock by Subsidiaries.
-----------------------------------
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The Company shall not cause or permit any Subsidiary of the Company to
issue any Capital Stock other than Common Stock or to have outstanding at any
time any shares of Capital Stock other than Common Stock, except issuances of
Capital Stock to the Company, provided, however, that the Company is at all
-------- -------
times the sole beneficial and record owner of such Capital Stock.
SECTION 4.20 Impairment of Security Interest.
-------------------------------
The Company shall not, and shall not permit any of its Subsidiaries
to, take or knowingly or negligently omit to take any action, which action or
omission might or would have the result of materially impairing the security
interest in favor of the Trustee on behalf of the Holders of the Securities,
with respect to the Collateral, and the Company shall not grant to any Person
(other than the Trustee on behalf of the Holders of the Securities) any interest
whatsoever in the Collateral, except, in either case, as expressly permitted by
this Indenture and the Security Documents.
SECTION 4.21 Conflicting Agreements.
----------------------
The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any agreement or instrument that by its terms expressly (i)
prohibits the Company from making any payments on or in respect of the
Securities in accordance with the terms thereof and of this Indenture, as in
effect from time to time, or (ii) requires that the proceeds received from the
sale of any Collateral be applied to repay, redeem or otherwise retire any
Indebtedness of any Person other than the Indebtedness represented by the
Securities, except as expressly permitted by this Indenture or the Security
Documents (other than the Revolving Credit Facility or 1996 Sale/Leaseback which
may provide for repayment of obligations owing thereunder to the extent of any
unutilized portion of any Available Amount in the event of an Asset Sale Offer
that is not fully subscribed to by the Securityholders as provided in Section
4.15).
SECTION 4.22 Amendment to Security Documents.
-------------------------------
The Company shall not, and shall not permit any Subsidiary of the
Company to, amend, modify or supplement, or permit or consent to any amendment,
modification or supplement of, any of the Security Documents in any way which
would be adverse to the Holders of the Securities or which would constitute a
Default under this Indenture or a default under any Security Document.
SECTION 4.23 Special Covenants of Each Guarantor.
-----------------------------------
-62-
Each Guarantor shall comply with each of the covenants contained in
this Indenture that impose restrictions or obligations on such Guarantor (by
virtue of being a Guarantor or otherwise) notwithstanding that the text of such
covenant is worded as a restriction on or obligation of the Company with respect
to such Guarantor.
SECTION 4.24 Real Property.
-------------
Prior to the authentication and delivery of any Securities pursuant to
Section 2.2, the Company, CPC or Caribbean, as applicable, will execute and
deliver to the Trustee a Mortgage, as required or allowed by the law of the
applicable jurisdiction, with respect to each Real Property listed on Schedule A
attached hereto and incorporated herein by reference. The Trustee shall not
have any responsibility to determine the sufficiency for the purposes of this
Indenture of any Mortgage so executed and delivered.
SECTION 4.25 Waiver of Stay, Extension
or Usury Laws.
-------------------------
Each of the Company and each Guarantor covenants (to the extent
permitted by law) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of or
interest on the Securities as contemplated herein, wherever enacted, now or at
any time hereafter in force, or that may affect the covenants or the performance
of this Indenture; and (to the extent permitted by law) each of the Company and
each Guarantor hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 4.26 Limitation on Investments,
Loans and Advances.
--------------------------
The Company shall not make and shall not permit any of its
Subsidiaries to make any capital contributions, advances or loans to, or
investments or purchases of Capital Stock in, any Person (collectively,
"Investments"), except: (i) Investments by the Company in or to any Wholly-
Owned Subsidiary and Investments in or to the Company or a Wholly-Owned
Subsidiary by any Subsidiary; (ii) Investments represented by accounts
receivable created or
-63-
acquired in the ordinary course of business; (iii) advances to employees in the
ordinary course of business; (iv) Investments under or pursuant to Interest Rate
Protection Agreements; (v) Investments, not exceeding $5,000,000 in the
aggregate, in joint ventures, partnerships or Persons that are not Wholly-Owned
Subsidiaries, provided that such Investments are made solely for the purpose of
--------
acquiring businesses related to the Company's business; (vi) Restricted Payments
permitted by Section 4.14 above; and (vii) Permitted Investments. Investments
other than those permitted by the foregoing provisions are referred to herein as
"Prohibited Investments."
SECTION 4.27 Ownership of Stock of
Wholly-Owned Subsidiaries.
-------------------------
The Company shall at all times maintain, or cause each Subsidiary to
maintain, ownership of 100% of each class of voting securities of, and all other
equity securities in, each Subsidiary of the Company existing on the date on
which the Securities are originally issued, except any Subsidiary that shall be
disposed of in its entirety or consolidated or merged with or into the Company
or another Subsidiary, in each case in accordance with Section 4.15 and Section
5.1.
ARTICLE V
SUCCESSOR CORPORATION
---------------------
SECTION 5.1 When Company May Merge, Etc.
---------------------------
Neither the Company nor any Guarantor shall consolidate with or merge
with or into or sell, assign, convey, lease or transfer all or substantially all
of its properties and assets, in a single transaction or through a series of
transactions, as an entirety, to any Person or group of affiliated Persons,
unless:
(a) the Company or such Guarantor, as the case may be, shall be the
continuing Person, or the resulting, surviving or transferee Person (the
"surviving entity") shall be a corporation organized and existing under the laws
of the United States, any State thereof or the District of Columbia;
(b) the surviving entity shall expressly assume, by a supplemental
indenture executed and delivered to the Trustee, in form and substance
reasonably satisfactory to the Trustee, in the case of a transaction involving
the Company, all of the obligations of the Company under the Securities, this
Indenture and the
-64-
Security Documents, or, in the case of a transaction involving a Guarantor, all
of the obligations of such Guarantor under the Securities, such Guarantor's
Guarantee, this Indenture and the Security Documents;
(c) immediately before and immediately after giving effect to such
transaction or series of transactions (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no Default or Event of
Default shall have occurred and be continuing;
(d) the Company or the surviving entity (if the transaction or series of
transactions involves the Company) shall, immediately before and immediately
after giving effect to such transaction or series of transactions (including,
without limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of transactions),
have a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of the Company immediately prior to such transaction or series of
transactions;
(e) immediately after giving effect to such transaction or series of
transactions on a pro forma basis, the Company or the surviving entity (if the
transaction or series of transactions involves the Company) would be permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Interest Coverage Ratio test set forth in paragraph (iv) of Section 4.10;
(f) the Company or the surviving entity shall have delivered to the
Trustee an Officers' Certificate stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction or series of transactions, such supplemental
indenture, complies with this Section 5.1, and that all conditions precedent
provided for in this Indenture relating to such transaction or series of
transactions have been satisfied; and
(g) the Guarantors shall, by supplemental indenture, confirm that their
Guarantee shall apply to the surviving entity's obligations under the Securities
and this Indenture, as modified by such supplemental indenture, and confirm the
due and punctual performance of the Guarantee and every covenant in this
Indenture on the part of the Guarantors to be performed or observed; and
(h) neither the Company nor any Subsidiary would thereupon become
obligated with respect to any Indebtedness, nor any of its
-65-
property subject to any Lien, unless the Company or such Subsidiary could incur
such Indebtedness or create such Lien under this Indenture.
-66-
SECTION 5.2 Successor Entity Substituted.
----------------------------
Upon any consolidation, merger or any transfer of all or substantially
all of the assets of the Company in accordance with Section 5.1, the surviving
entity formed by such consolidation or into which the Company is merged or to
which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such surviving entity had been named as the Company herein.
ARTICLE VI
DEFAULT AND REMEDIES
--------------------
SECTION 6.1 Events of Default.
-----------------
(a) An "Event of Default" occurs if:
(i) the Company defaults in the payment of interest on, or Liquidated
Damages (if any) with respect to, the Securities when the same becomes due
and payable and any such Default continues for a period of 30 days; or
(ii) the Company defaults in the payment of the principal of (or
premium, if any, on) the Securities when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise (including the failure
to make a payment to purchase Securities tendered pursuant to a Change of
Control Offer or an Asset Sale Offer); or
(iii) the Company or any Guarantor defaults in the performance of or
compliance with, or breaches, any term, covenant, condition, or provision of
the Security Documents, which default or breach shall continue unremedied
for 30 days after written notice to the Company by the Trustee or to the
Company and the Trustee by Holders of at least 25% in aggregate principal
amount of the outstanding Securities; or
(iv) the Company or any Guarantor defaults in the performance of, or
breaches, any covenant of this Indenture (other than defaults specified in
clause (i) or (ii) above), and such default or breach continues for a period
of 30 days after written notice to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the outstanding Securities; or
-67-
(v) the Company or any Subsidiary fails (a) to make any payment when
due with respect to any other Indebtedness in an aggregate principal amount
of $2,500,000 or more; or (b) to perform any term, covenant, condition or
provision of one or more classes of Indebtedness in an aggregate principal
amount of $2,500,000 or more, which failure, in the case of this clause (b),
results in an acceleration of the maturity thereof; or
(vi) one or more judgments, orders or decrees for the payment of money
in excess of $2,500,000, either individually or in an aggregate amount,
shall be entered against the Company or any of its Subsidiaries or any of
their respective properties and shall not be discharged and there shall have
been a period of 60 days during which a stay of enforcement of such judgment
or order, by reason of pending appeal or otherwise, shall not be in effect;
or
(vii) (A) either of the Guarantees shall cease to be in full force and
effect or any of the Security Documents shall cease to be in full force and
effect, or shall cease to give the Trustee in any material respect the
Liens, rights, powers and privileges purported to be created thereby
(including, without limitation, a perfected security interest in, and Lien
on, all of the Collateral to the extent provided for herein or in such
Security Documents) in favor of the Trustee for the benefit of the Holders
subject to no other Liens (in each case, except as permitted hereby and by
the Security Documents); or
(B) any provision of Article X shall cease to be in full force and
effect, or any Guarantor or any Person acting by or on behalf of any
Guarantor shall deny or disaffirm such Guarantor's obligations thereunder;
or
(viii) the Company, CPC or Caribbean pursuant to or within the meaning
of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief against it in
an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
-68-
(D) makes a general assignment for the benefit of its creditors
or
(E) shall generally not pay its debts when such debts become due
or shall admit in writing its inability to pay its debts
generally; or
(ix) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company, CPC or Caribbean in an
involuntary case or proceeding,
(B) appoints a Custodian of the Company, CPC or Caribbean for
all or substantially all of its properties, or
(C) orders the liquidation of the Company, CPC or Caribbean,
and in each case the order or decree remains unstayed and in effect for 60 days;
provided, however, that if the entry of such order or decree is appealed and
-------- -------
dismissed on appeal then the Event of Default hereunder by reason of the entry
of such order or decree shall be deemed to have been cured.
(b) For purposes of this Section 6.1, the term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official
charged with maintaining possession or control over property for one or more
creditors.
(c) Subject to the provisions of Sections 7.1 and 7.2, the Trustee shall
not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to a trust officer at the corporate trust office
of the Trustee by the Company or any other Person.
SECTION 6.2 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in
Section 6.1(a)(viii) or (ix) with respect to the Company, CPC or Caribbean)
occurs and is continuing, the Holders of at least 25% in principal amount of the
outstanding Securities may, by written notice to the Company and the Trustee,
and the Trustee upon the request of the Holders of not less than 25% in
principal amount of the outstanding Securities shall declare the principal of
and accrued interest on all the Securities to be due and payable
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immediately. Upon any such declaration such amounts shall become due and
payable immediately. If an Event of Default specified in Section 6.1(a)(viii)
or (ix) with respect to the Company, CPC or Caribbean occurs and is continuing,
then the principal of and accrued interest on all the Securities shall ipso
----
facto become and be immediately due and payable without any declaration or other
-----
act on the part of the Trustee or any Holder. The Holders of a majority in
aggregate principal amount of outstanding Securities may, by notice to the
Trustee, rescind such declaration of acceleration if all existing Events of
Default have been cured or waived, other than the non-payment of principal of
and accrued interest on the Securities that has become due solely as a result of
such acceleration and if the rescission of acceleration would not conflict with
any judgment or decree. No such rescission shall affect any subsequent default
or impair any right consequent thereto.
SECTION 6.3 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities, this Indenture or the Security
Documents.
All rights of action and claims under this Indenture or the Securities
may be enforced by the Trustee even if the Trustee 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 to the
extent permitted by law.
Each Holder, by accepting a Security, acknowledges that the exercise
of remedies by the Trustee with respect to the Collateral is subject to the
terms and conditions of the Security Documents and the proceeds received upon
realization of the Collateral shall be applied by the Trustee in accordance with
Section 6.10.
SECTION 6.4 Waiver of Past Default.
----------------------
Subject to Sections 6.7 and 9.2, the Holders of, in the aggregate, at
least a majority in principal amount of the outstanding Securities by notice to
the Trustee may waive an
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existing Default or Event of Default and its consequences, except a Default
specified in Section 6.1(a)(i) or (ii) or in respect of any provision hereof
which cannot be modified or amended without the consent of the Holder so
affected pursuant to Section 9.2. When a Default or Event of Default is so
waived, it shall be deemed cured and ceases.
SECTION 6.5 Control by Majority.
-------------------
The Holders of at least a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it; provided, however, that the Trustee may refuse to follow
-------- -------
any direction that (i) conflicts with law or this Indenture, (ii) the Trustee
determines may be unduly prejudicial to the rights of another Securityholder, or
(iii) may involve the Trustee in personal liability unless the Trustee has
indemnification satisfactory to it in its sole discretion against any loss or
expense caused by its following such direction; and provided, further, that the
-------- -------
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction.
SECTION 6.6 Limitation on Suits.
-------------------
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue a
remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 15 days after
receipt of the request and the offer and, if requested, provision of
indemnity; and
(e) during such 15-day period the Holders of a majority in principal
amount of the outstanding Securities do not give the Trustee a direction
inconsistent with the request.
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The foregoing limitations shall not apply to a suit instituted by a
Holder for the enforcement of the payment of principal of or accrued interest on
such Security on or after the respective due dates set forth in such Security.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.7 Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of such Holder except to the extent that the institution or prosecution
of such suit or the entry of judgment therein would, under applicable law,
result in the surrender, impairment or waiver of the Lien of this Indenture and
the Security Documents upon the Collateral.
SECTION 6.8 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.1(a)(i) or (ii) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company, the Guarantors or any other
obligor on the Securities for the whole amount of principal and accrued interest
remaining unpaid, together with interest overdue on principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the Interest Rate and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.9 Trustee May File Proofs of Claim.
--------------------------------
The Trustee shall be entitled and empowered to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Securityholders allowed in any judicial proceedings
relative to the Company, the Subsidiaries of the Company or any Guarantor (or
any
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other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.7. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article VI or
pursuant to any of the Security Documents, it shall pay out such money in the
following order:
First: to the Trustee for amounts due under Section 7.7 and for amounts
due under any of the Security Documents;
Second: to Holders for interest accrued on the Securities, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for interest;
Third: to Holders for principal amounts owing under the Securities,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal; and
Fourth: to the Company or, to the extent the Trustee collects any amount
pursuant to Article X from any Guarantor, to such Guarantor.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to this
Section 6.10.
SECTION 6.11 Undertaking for Costs.
---------------------
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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 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by Holders of more than 10% in aggregate
principal amount of the outstanding Securities.
ARTICLE VII
TRUSTEE
-------
SECTION 7.1 Duties of Trustee.
-----------------
(a) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default actually
known to the Trustee:
(i) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no others and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall examine such certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of this
Section 7.1.
(ii) 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.
(iii) 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 6.2, 6.4 or 6.5.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company or any
Guarantor. Except as otherwise provided for in Section 7.1(g) below, money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) Notwithstanding anything herein to the contrary, all Net Cash
Proceeds delivered to the Trustee shall be invested on behalf of the Company in
one or more Permitted Investments pursuant to the written directions of the
Company delivered to the Trustee. Such written directions shall specify the
Permitted Investment into which the Net Cash Proceeds shall be invested and the
maturity of such Permitted Investments, all subject to the requirements of this
Indenture.
(h) The Trustee may refuse to perform any duty or exercise any right
or power unless it is provided adequate funds to
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enable it to do so and it receives indemnity satisfactory to it in its sole
discretion against any loss, liability, fee or expense.
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SECTION 7.2 Rights of Trustee.
-----------------
Subject to Section 7.1:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books, records
and premises of the Company or any Guarantor, personally or by agent or
attorney.
(b) Before the Trustee acts or refrains from acting with respect to
any matter contemplated by this Indenture, it may require an Officers'
Certificate or an Opinion of Counsel, which shall conform to the provisions
of Section 13.5. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent (other than the
negligence or willful misconduct of an agent who is an employee of the
Trustee) 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 reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization
and protection from liability in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Subject to Section 9.2 hereof, the Trustee may (but shall not be
obligated to), without the consent of the Holders, give any consent, waiver
or approval required under
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any of the Security Documents or by the terms hereof with respect to the
Collateral, but shall not without the consent of the Holders of a majority
in aggregate principal amount of the Securities at the time outstanding (i)
give any consent, waiver or approval or (ii) agree to any amendment or
modification of any of the Security Documents, in each case which will have
an adverse effect on the interests of any Holder. The Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with
respect to whether any consent, waiver, approval, amendment or modification
will have an adverse effect on the interests of any Holder.
(g) Subject to clause (a) of Section 7.1 hereof, 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 Holder pursuant to this
Indenture, unless such Holder shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
SECTION 7.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual capacity or any other capacity may
become the owner or pledgee of Securities and may otherwise deal with the
Company, any Guarantor or their respective Subsidiaries and Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, the Trustee is subject to 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, the Securities, the Guarantees
or the Security Documents or the Collateral covered thereby, or of any insurance
thereon, and it shall not be accountable for the Company's use of the proceeds
from the issuance of the Securities, and it shall not be responsible for any
statement of the Company or any Guarantor in this Indenture, the Guarantee, the
Security Documents or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication.
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SECTION 7.5 Notice of Defaults.
------------------
If a Default or an Event of Default with respect to the Securities
occurs and is continuing and is known to the Trustee, the Trustee shall mail to
each Securityholder notice of the Default or Event of Default within 45 days
after the occurrence thereof. Except in the case of a Default or an Event of
Default in payment of principal of or interest on any Security, the Trustee may
withhold the notice to the Securityholders if a committee of its Trust Officers
in good faith determines that withholding the notice is in the interest of
Securityholders.
SECTION 7.6 Reports by Trustee to Holders.
-----------------------------
To the extent required by TIA Section 313(a), within 10 days after May
15 of each year commencing with 1997 and for as long as there are Securities
outstanding hereunder, the Trustee shall mail to each Securityholder the
Company's brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Section 313(b) and TIA Section
313(c) and (d). A copy of such report at the time of its mailing to
Securityholders shall be filed with the SEC, if required, and each stock
exchange, if any, on which the Securities are listed.
The Company shall promptly notify the Trustee if the Securities become
listed on any stock exchange, and the Trustee shall comply with TIA Section
313(d).
SECTION 7.7 Compensation and Indemnity.
--------------------------
The Company and the Guarantors shall pay to the Trustee, the Paying
Agent and the Registrar from time to time reasonable compensation for their
respective services rendered hereunder or under the Security Documents. The
Trustee's, the Paying Agent's and the Registrar's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company and the Guarantors shall reimburse the Trustee, the Paying Agent and the
Registrar upon request for all reasonable out-of-pocket disbursements, expenses
and advances (including fees and expenses of counsel) incurred or made by each
of them in addition to the compensation for their respective services. Such
expenses shall include the reasonable compensation, out-of-pocket disbursements
and expenses of the Trustee's, the Paying Agent's and the Registrar's agents and
counsel.
The Company and the Guarantors shall indemnify the Trustee, the Paying
Agent and the Registrar for, and hold each of
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them harmless against, any claim, demand, expense (including but not limited to
attorneys' fees and expenses), loss or liability incurred by each of them
arising out of or in connection with the administration of this Indenture or the
Security Documents and their respective duties hereunder or thereunder. Each of
the Trustee, the Paying Agent and the Registrar shall notify the Company and the
Guarantors promptly of any claim asserted against it for which it may seek
indemnity. However, failure by the Trustee, the Paying Agent or the Registrar
to so notify the Company and the Guarantors shall not relieve the Company or any
Guarantor of its obligations hereunder. The Company and the Guarantors need not
reimburse any expense or indemnify against any loss or liability incurred by the
Trustee, the Paying Agent or the Registrar through the Trustee's, the Paying
Agent's or the Registrar's, as the case may be, own willful misconduct,
negligence or bad faith.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.7, each of the Trustee, the Paying Agent and the Registrar shall
have a lien prior to the Securities on all money or property held or collected
by it, in its capacity as Trustee, Paying Agent or Registrar, as the case may
be, except money or property held in trust to pay principal of or interest on
particular Securities.
When any of the Trustee, the Paying Agent and the Registrar incurs
expenses or renders services after an Event of Default specified in Section
6.1(a)(viii) or (ix) occurs, the expenses and the compensation for the services
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 and the
Guarantors in writing, such resignation to be effective upon the appointment of
a successor Trustee. The Holders of a majority in principal amount of the
outstanding Securities may remove the Trustee by so notifying the Trustee in
writing and may appoint a successor Trustee with the Company's consent, which
consent shall not be unreasonably withheld. The Company may remove the Trustee
if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
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(c) a receiver or other public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of the Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company and the Guarantors shall
promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of the
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee (subject to the lien provided in Section 7.7), 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. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 25% in principal amount of the outstanding Securities may
petition 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.
Any resignation or removal of the Trustee pursuant to this Indenture
shall be deemed to be a resignation or removal of the Trustee in its capacity as
collateral agent or mortgagee under each of the Security Documents and any
appointment of a successor Trustee pursuant to this Indenture shall be deemed to
be an appointment of a successor collateral agent or mortgagee under each of the
Security Documents and such successor shall assume all of the obligations of the
Trustee pursuant to the Security Documents.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's and the Guarantors' obligations
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under Section 7.7 shall continue for the benefit of the retiring Trustee.
SECTION 7.9 Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or
transferee corporation or national banking association without any further act
shall be the successor Trustee (and successor collateral agent or mortgagee, as
applicable, under each of the Security Documents) provided such corporation
shall be otherwise qualified and eligible under this Article VII.
SECTION 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1) and (2). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA Section
310(b); provided, however, that there shall be excluded from the operation of
-------- -------
TIA Section 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 Section
310(b)(1) are met. The provisions of TIA Section 310 shall apply to the Company,
as obligor of the Securities.
SECTION 7.11 Preferential Collection of
Claims Against Company.
--------------------------
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company and each
Guarantor, as obligors on the Securities.
SECTION 7.12 Co-Trustee.
----------
(a) If at any time or times it shall be necessary or prudent in order
to conform to any law of any jurisdiction in which any of the Collateral shall
be located, or the Trustee shall be advised by counsel satisfactory to it, that
it is necessary or prudent in the interest of the Holders, or 25% of the Holders
of the outstanding Securities shall in writing so request the Trustee and the
Company, or the Trustee shall deem it desirable for its own
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protection in the performance of its duties hereunder, the Trustee and the
Company shall execute and deliver all instruments and agreements necessary or
proper to constitute another bank or trust company, or one or more Persons
approved by the Trustee and the Company, either to act as co-trustee or co-
trustees (each, a "co-trustee") of all or any of the Collateral, jointly with
the Trustee, or to act as separate trustee or trustees of any such property. If
the Company shall not have joined in the execution of such instruments and
agreements within 10 days after it receives a written request from the Trustee
to do so, or if a notice of acceleration is in effect, the Trustee may act under
the foregoing provisions of this Section without the concurrence of the Company.
The Company hereby appoints the Trustee as its agent and attorney to act for it
under the foregoing provisions of this Section in either of such contingencies.
(b) Every separate trustee and every co-trustee, other than any
successor Trustee appointed pursuant to Section 7.8, shall, to the extent
permitted by law, be appointed and act and be such, subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee hereunder shall be conferred or imposed and exercised or
performed by the Trustee and such separate trustee or separate trustees or
co-trustee or co-trustees, jointly, as shall be provided in the instrument
appointing such separate trustee or separate trustees or co-trustee or co-
trustees, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations shall be exercised and performed by
such separate trustee or separate trustees or co-trustee or co-trustees;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Company and the Trustee, at any time by an instrument in
writing executed by them jointly, may accept the resignation of or remove
any such separate trustee or co-trustee and, in that case by an instrument
in writing executed by them jointly, may appoint a successor to such
separate trustee or co-trustee, as the case may be, anything contained
herein to the contrary notwithstanding. If the Company shall not have
joined in the execution of any such instrument within
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10 days after it receives a written request from the Trustee to do so, or
if a notice of acceleration is in effect, the Trustee shall have the power
to accept the resignation of or remove any such separate trustee or co-
trustee and to appoint a successor without the concurrence of the Company,
the Company hereby appointing the Trustee its agent and attorney to act for
it in such connection in such contingency. If the Trustee shall have
appointed a separate trustee or separate trustees or co-trustee or co-
trustees as above provided, the Trustee may at any time, by an instrument
in writing, accept the resignation of or remove any such separate trustee
or co-trustee and the successor to any such separate trustee or co-trustee
shall be appointed by the Company and the Trustee, or by the trustee alone
pursuant to this Section.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
----------------------------------
SECTION 8.1 Termination of Company's Obligations.
------------------------------------
The Company may terminate its obligations under the Securities and
this Indenture, and the obligations of the Guarantors shall terminate, except
those obligations referred to in the penultimate paragraph of this Section 8.1,
if all Securities previously authenticated and delivered (other than destroyed,
lost or stolen Securities which have been replaced or paid) have been delivered
to the Trustee for cancellation and the Company has paid all sums payable by it
hereunder, or if:
(a) pursuant to Article III, the Company shall have (i) given notice
to the Trustee of the redemption of all of the Securities and (ii) either
(x) mailed to Holders notice(s) of the redemption of all of the Securities
under arrangements satisfactory to the Trustee for the giving of such
notice(s) or (y) deposited with the Trustee such notice(s) of redemption,
together with irrevocable instructions to the Trustee to mail such notice(s)
to Holders in accordance with Section 3.3;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, money or direct non-callable obligations
of, or non-callable obligations guaranteed by, the
-00-
Xxxxxx Xxxxxx xx Xxxxxxx for the payment of which guarantee or obligation
the full faith and credit of the United States is pledged ("U.S. Government
Obligations") maturing as to principal and interest in such amounts and at
such times as are sufficient without consideration of any reinvestment of
such interest, to pay principal of and interest on the outstanding
Securities to maturity or redemption, as the case may be, provided that the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of said
principal and interest with respect to the Securities; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's and the Guarantors'
obligation under the Securities and this Indenture have been complied with.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.5, 2.6, 2.7, 2.8, 4.1, 4.2, 7.7, 7.8, 8.4 and 8.5 and the Guarantors'
obligations under Section 10.1 in respect thereof shall survive until the
Securities are no longer outstanding. After the Securities are no longer
outstanding, the Company's obligations in Sections 7.7, 8.4 and 8.5 and the
Guarantors' obligations under Section 10.1 in respect thereof shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Securities and this Indenture except for those surviving
obligations specified above.
SECTION 8.2 Legal Defeasance and Covenant
Defeasance.
----------------------------
(a) The Company may, at its option by Board Resolution, at any time,
with respect to the Securities, elect to have either paragraph (b) or paragraph
(c) below be applied to the outstanding Securities upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "legal
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defeasance"). For this purpose, such legal defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of paragraph (e) below and the other
Sections of and matters under this Indenture referred to in (i) and (ii) below,
and to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in paragraph (d) below and as more
fully set forth in such paragraph, payments in respect of the principal of and
interest on such Securities when such payments are due, (ii) the Company's
obligations with respect to such Securities under Sections 2.6, 2.7 and 4.2,
and, with respect to the Trustee, under Section 7.7 and the Guarantor's
obligations under Section 10.1 in respect thereof, (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (iv) this Section
8.2. Subject to compliance with this Section 8.2, the Company may exercise its
option under this paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article V and in Sections
4.5 and 4.7 through 4.27 with respect to the outstanding Securities on and after
the date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Securities shall thereafter be deemed to be not
"outstanding" for the purpose of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the outstanding Securities, the Company and any Guarantor 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 shall not constitute a Default or an Event of Default
under Section 6.1, but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby.
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(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Section 8.2 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A)
money in an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal of and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (C) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge and which shall be applied by the Trustee
(or other qualifying trustee) to pay and discharge principal of and interest
on the outstanding Securities on the Maturity Date of such principal or
installment of principal or interest in accordance with the terms of this
Indenture and of such Securities; provided, however, that the Trustee
-------- -------
(or other qualifying trustee) shall have received an irrevocable
written order from the Company instructing the Trustee (or other qualifying
trustee) to apply such money or the proceeds of such U.S. Government
Obligations to said payments with respect to the Securities;
(ii) no Default or Event of Default or event which with notice or lapse
of time or both would become a Default or an Event of Default with respect
to the Securities shall have occurred and be continuing on the date of such
deposit or, insofar as Sections 6.1(a)(viii) and (ix) are concerned, at any
time during the period ending on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied until
the expiration of such period);
(iii) such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default under,
this Indenture or any other agreement or instrument to which the Company is
a party or by which it is bound;
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(iv) in the case of an election under paragraph (b) above, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) 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 shall confirm that, the
Holders of the outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such legal 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;
(v) in the case of an election under paragraph (c) above, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that
the Holders of the outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant defeasance
and will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred;
(vi) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that, (x) the trust funds will
not be subject to any rights of any other holders of Indebtedness of the
Company, and (y) after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable Bankruptcy Law;
provided, however, that if a court were to rule under any such law in any
-------- -------
case or proceeding that the trust funds remained property of the Company, no
opinion needs to be given as to the effect of such laws on the trust funds
except the following: (A) assuming such trust funds remained in the
Trustee's possession prior to such court ruling to the extent not paid to
Holders of Securities, the Trustee will hold, for the benefit of the Holders
of Securities, a valid and enforceable security interest in such trust funds
that is not avoidable in bankruptcy or otherwise, subject only to principles
of equitable subordination, (B) the Holders of Securities will be entitled
to receive adequate protection of their interests in such trust funds if
such trust funds are used, and (C) no property, rights in property or other
interests granted to the Trustee or the Holders of Securities in exchange
for or with respect to any of such funds will be subject to any prior rights
of any other Person, subject only
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to prior Liens granted under Section 364 of Title 11 of the U.S. Bankruptcy
Code (or any section of any other Bankruptcy Law having the same effect),
but still subject to the foregoing clause (B); and
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (A) all conditions
precedent provided for relating to either the legal defeasance under
paragraph (b) above or the covenant defeasance under paragraph (c) above, as
the case may be, have been complied with and (B) if any other Indebtedness
of the Company shall then be outstanding or committed, such legal defeasance
or covenant defeasance will not violate the provisions of the agreements or
instruments evidencing such Indebtedness.
(e) All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this paragraph (e), the "Trustee") pursuant to paragraph (d)
above in respect of the outstanding Securities shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(other than the Company) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to paragraph (d) above or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Securities.
Anything in this Section 8.2 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request,
in writing, by the Company any money or U.S. Government Obligations held by it
as provided in paragraph (d) above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
legal defeasance or covenant defeasance.
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SECTION 8.3 Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Sections 8.1 and 8.2, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of and interest on the
Securities.
SECTION 8.4 Repayment to Company or Guarantors.
----------------------------------
Subject to Sections 7.7, 8.1 and 8.2, the Trustee shall promptly pay
to the Company, or if deposited with the Trustee by the Guarantors, to the
Guarantors, upon receipt by the Trustee of an Officers' Certificate, any excess
money, determined in accordance with Sections 8.2(d)(i) and (e), held by it at
any time. The Trustee and the Paying Agent shall pay to the Company or the
Guarantors, as the case may be, upon receipt by the Trustee or the Paying Agent,
as the case may be, of an Officers' Certificate, any money held by it for the
payment of principal or interest that remains unclaimed for two years; provided,
--------
however, that the Trustee and the Paying Agent before being required to make any
-------
payment may, but need not, at the expense of the Company cause to be published
once in a newspaper of general circulation in The City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein, which shall be at least 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company or the
Guarantors, as the case may be, Securityholders entitled to money must look
solely to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person, and all liability of the
Trustee or Paying Agent with respect to such money shall thereupon cease.
SECTION 8.5 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture 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, then
and only then the Company's and each Guarantor's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had been made pursuant to this Indenture until such time as the Trustee
is permitted to apply all such money or U.S. Government Obligations in
accordance with this Indenture; provided, however, that if the Company or the
-------- -------
Guarantors have made
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any payment of interest on or principal of any Securities because of the
reinstatement of their obligations, the Company or the Guarantors, as the case
may be, 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, SUPPLEMENTS AND WAIVERS
-----------------------------------
SECTION 9.1 Without Consent of Holders.
--------------------------
The Company and the Guarantors, when authorized by a Board Resolution
of each of them, and the Trustee may amend, waive or supplement this Indenture,
the Securities or any Security Document without notice to or consent of any
Securityholder:
(a) to cure any ambiguity, defect or inconsistency, provided that such
amendment or supplement does not adversely affect the rights of any Holder;
(b) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(c) to comply with any requirements of the SEC under the TIA;
to evidence the succession in accordance with Article V hereof of
another Person to the Company or a Guarantor and the assumption by any such
successor of the covenants of the Company herein and in the Securities;
(d) to mortgage, pledge or grant a security interest in favor of the
Trustee as additional security for the payment and performance of their
obligations under this Indenture, in any property or assets, including any
which are required to be mortgaged, pledged or hypothecated, or in which a
security interest is required to be granted, to the Trustee pursuant to any
Security Document or otherwise;
(e) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the Securities
and to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder
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by more than one Trustee, pursuant to the requirements of Section 7.12; or
(g) to make any change that does not adversely affect the rights of
any Holder.
SECTION 9.2 With Consent of Holders.
-----------------------
Subject to Section 6.7 and the provisions of this Section 9.2, the
Company, the Guarantors and the Trustee may amend or supplement this Indenture,
the Securities or any of the Security Documents with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding. Subject to Section 6.7 and the provisions of this Section
9.2, the Holders of, in the aggregate, at least a majority in aggregate
principal amount of the outstanding Securities affected may waive compliance by
the Company or any Guarantor with any provision of this Indenture or the
Securities without notice to any other Securityholder. However, without the
consent of each Securityholder affected, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.4, may not:
(a) reduce the amount of Securities the Holders of which must consent
to an amendment, supplement or waiver of any provision of this Indenture,
the Securities or the Security Documents;
(b) reduce the rate of, change the method of calculation of, or extend
the time for, payment of interest on any Security;
(c) reduce the principal amount outstanding of or extend the fixed
maturity of any Security or alter the redemption provisions with respect
thereto;
(d) waive a default in the payment of the principal of, interest on,
Liquidated Damages with respect to, or redemption payment or an offer to
purchase required hereunder with respect to, any Security;
(e) make any Security payable in money other than that stated in the
Security;
(f) affect the ranking or security of the Securities;
(g) release any Guarantor from any of its obligations under its
Guarantee or this Indenture (other than as a result
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of a merger of one of the Guarantors with or into the other Guarantor or the
Company or with another Wholly-Owned Subsidiary of the Company that assumes
all of such Guarantor's obligations under the Guarantee, this Indenture and
the Security Documents);
(h) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities; or
(i) modify this Section 9.2 or Section 6.4.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 9.3 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture, the Security
Documents or the Securities shall comply with the TIA as then in effect.
SECTION 9.4 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of a Security. Such revocation shall be effective
only if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective. Notwithstanding the above,
nothing in this paragraph shall impair the right of any Securityholder under
Section 316(b) of the TIA.
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The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
second and third sentences of the immediately preceding paragraph, those Persons
who were Holders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to consent to such amendment, supplement
or waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. Such consent shall be effective
only for actions taken within 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(a) through (i) of Section 9.2; if it makes such a change, the amendment,
supplement or waiver shall bind every subsequent Holder of a Security or portion
of a Security that evidences the same debt as the consenting Holder's Security.
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SECTION 9.5 Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee shall (in accordance with the specific direction of the Company)
request the Holder of the Security to deliver it to the Trustee. The Trustee
shall (in accordance with the specific direction of the Company) place an
appropriate notation on the Security about the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.
SECTION 9.6 Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article IX if the amendment, supplement or waiver does not
adversely affect the rights, duties or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing any amendment, supplement or
waiver, the Trustee shall be entitled to receive, if requested, an indemnity
satisfactory to it in its sole discretion and to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture. The Company may not sign an
amendment until its Board of Directors approves it.
ARTICLE X
GUARANTEE ARRANGEMENTS
----------------------
SECTION 10.1 Guarantee.
---------
Each Guarantor hereby jointly and severally unconditionally guarantees
(such guarantees collectively referred to as the "Guarantee") to each Holder of
a Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Securities, the Security Documents or the obligations of the
Company or any other Guarantors to the Holders or the Trustee hereunder or
thereunder, that: (a) the principal of and any interest on the Securities will
be duly and punctually paid in full when due, whether at stated maturity, by
acceleration or otherwise, and interest on the overdue principal and (to the
extent
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permitted by law) interest, if any, on the Securities and all other obligations
of the Company or the Guarantors to the Holders or the Trustee hereunder or
thereunder (including fees, expenses or other) will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Securities or any of such
other obligations, the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed, or failing performance of any other obligation of the Company to
the Holders, for whatever reason, each Guarantor will be obligated to pay, or to
perform or cause the performance of, the same immediately. An Event of Default
under this Indenture, the Security Documents or the Securities shall constitute
an event of default under this Guarantee, and shall entitle the Holders of
Securities to accelerate the obligations of the Guarantors hereunder in the same
manner and to the same extent as the obligations of the Company. This Guarantee
is intended to be superior to or pari passu in right of payment with all
---- -----
Indebtedness of the Guarantors. Each of the Guarantors hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities, the Security Documents or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Securities with respect to any provisions hereof or
thereof, any releases of Collateral, any release of any other Guarantor, any
delays in obtaining or realizing upon or failure to obtain or realize upon
Collateral, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each of the Guarantors
hereby waives diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that its Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture, the Security Documents and this Guarantee. If any Securityholder or
the Trustee is required by any court or otherwise to return to the Company or to
any Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or such Guarantor, any amount paid by the
Company or such Guarantor to the Trustee or such Securityholder, this Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each of the Guarantors agrees that it shall not be entitled to, and
hereby waives, any right of subrogation in relation to the Securityholders
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or the Trustee, as the case may be, in respect of any obligations guaranteed
hereby. Each Guarantor further agrees that, as between it, on the one hand, and
the Holders of Securities and the Trustee, on the other hand, (x) subject to
this Article X, the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article VI hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article VI hereof,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Guarantee.
SECTION 10.2 Execution and Delivery of Guarantee.
-----------------------------------
To further evidence the Guarantee set forth in Section 10.1, each
Guarantor hereby agrees that a notation of such Guarantee shall be endorsed on
each Security authenticated and delivered by the Trustee and executed by either
manual or facsimile signature of two Officers of each Guarantor.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 10.1 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, such Guarantor's Guarantee of such Security
shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
SECTION 10.3 Additional Guarantors.
---------------------
Any Person that was not a Guarantor on the date of this Indenture may
become a Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture in form and substance satisfactory to the Trustee, which subjects such
Person to the provisions (including the representations and warranties) of this
Indenture as a Guarantor and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person
(subject to such
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customary exceptions concerning creditors' rights and equitable principles as
may be acceptable to the Trustee in its discretion).
ARTICLE XI
SECURITY DOCUMENTS
------------------
SECTION 11.1 Collateral and Security Documents.
---------------------------------
(a) In order to secure the due and punctual payment of the Securities,
the Company, the Guarantors and the Trustee have entered into the Security
Documents to create the Security Interests and for related matters. The Trustee,
the Company and the Guarantors hereby agree that the Trustee holds the
Collateral in trust for the benefit of the Holders pursuant to the terms of the
Security Documents.
(b) Each Holder, by accepting a Security, agrees to all of the terms
and provisions of the Security Documents, as the same may be amended from time
to time pursuant to the provisions of the Security Documents and this Indenture.
SECTION 11.2 Recording, Etc.
--------------
(a) The Company will, and will cause CPC and Caribbean to, take or
cause to be taken all action required or desirable to maintain, preserve and
protect the Security Interests in the Collateral granted by the Security
Documents, including, but not limited to, causing all financing statements,
Mortgages, other instruments of further assurance, including, without
limitation, continuation statements covering security interests in personal
property, and all mortgages securing purchase money obligations delivered to the
Trustee or to the trustee, mortgagee or other holder of a Permitted Lien under
Section 11.4 to be promptly recorded, registered and filed, and at all times to
be kept recorded, registered and filed, and will execute and file such financing
statements and cause to be issued and filed such continuation statements, all in
such manner and in such places as may be required by law fully to preserve and
protect the rights of the Holders and the Trustee under this Indenture and the
Security Documents to all property comprising the Collateral.
The Company or the relevant Guarantor will from time to time promptly
pay and discharge all mortgage and financing and continuation statement
recording and/or filing fees, charges and taxes relating to this Indenture and
the Security Documents, any amendments thereto and any other instruments of
further assurance.
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Without limiting the generality of the foregoing covenant, in the event at any
time the Trustee shall determine that additional mortgage recording, transfer or
similar taxes are required to be paid to perfect or continue any Lien on any
Real Property in an amount at least equal to the Fair Market Value from time to
time of such Real Property, the Company or the relevant Guarantor shall pay such
taxes promptly upon demand by the Trustee. Notwithstanding the foregoing, the
Trustee shall not have any duty or obligation to ascertain whether any such
taxes are required to be paid at any time, and the determination referred to in
the preceding sentence shall only be made by the Trustee upon receipt of written
notice that such taxes are due and owing.
(b) The Company, CPC and Caribbean shall furnish to the Trustee:
(i) at the time of execution and delivery of this Indenture,
Opinion(s) of Counsel either (a) substantially to the effect that, in the
opinion of such Counsel, this Indenture and the grant of a Security Interest
in the Collateral intended to be made by each Security Document and all
other instruments of further assurance or assignment have been properly
recorded, registered and filed to the extent necessary to perfect the
Security Interests created by each such Security Document and reciting the
details of such action, and stating that as to the Security Interests
created pursuant to each such Security Document, such recordings,
registerings and filings are the only recordings, registerings and filings
necessary to give notice thereof and that no re-recordings, re-registerings
or refilings are necessary to maintain such notice (other than as stated in
such opinion), or (b) to the effect that, in the opinion of such counsel, no
such action is necessary to perfect such Security Interests;
(ii) at the time of execution and delivery of this Indenture, with
respect to each Mortgage, a policy of title insurance (or a commitment to
issue such a policy) which may be issued pursuant to an endorsement to any
existing policy or commitment insuring (or committing to insure) the Lien of
such Mortgage as a valid first mortgage Lien on the real property and
fixtures described therein, subordinate only to those Liens specified in the
Mortgage as "Permitted Liens," in an amount not less than the Fair Market
Value of such real property and fixtures, which policy (or commitment) shall
(a) be issued by Chicago Title Insurance Company (b) have been supplemented
by the following endorsements, to the extent available at commercially
reasonable rates: contiguity, first
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loss, last dollar, usury, doing business and so-called comprehensive
coverage over covenants and restrictions and (c) contain only such
exceptions to title as shall be Prior Liens (as defined in the Mortgages);
(iii) within 30 days after January 1 in each year beginning with January
1, 1998, an Opinion of Counsel, dated as of such date, either (a) to the
effect that, in the opinion of such counsel, such action has been taken with
respect to the recordings, registerings, filings, re-recordings, re-
registerings and refilings of all financing statements, continuation
statements or other instruments of further assurance as is necessary to
maintain the Security Interests of each of the Security Documents and
reciting with respect to such Security Interests the details of such action
or referencing to prior Opinions of Counsel in which such details are given,
and stating that all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and protect the
rights of the Holders and the Trustee hereunder and under each of the
Security Documents with respect to the Security Interests, or (b) to the
effect that, in the opinion of such Counsel, no such action is necessary to
maintain such Security Interests;
(iv) within 90 days after the Issue Date, with respect to each Mortgaged
Property located in California and Pennsylvania, a survey certified to the
Trustee and the title insurance company issuing the title commitments
referred to in clause (iv) above in such form as shall be required by the
title insurance company to issue a comprehensive endorsement in customary
form.
SECTION 11.3 Disposition of Collateral Without
Release.
---------------------------------
(a) Notwithstanding the provisions of Section 11.4, so long as no
Event of Default shall have occurred and be continuing, the Company and the
Guarantors may, without any release or consent by the Trustee:
(i) sell or otherwise dispose of any machinery, equipment, furniture,
apparatus, tools or implements, materials or supplies or other similar
property subject to the Lien of the Security Documents, which may have
become worn out or obsolete, not exceeding in value in any one calendar year
the lesser of $25,000 or one percent of the principal amount of the
Securities at the time outstanding;
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(ii) grant rights-of-way and easements over or in respect of any Real
Property; provided, however, that such grant will not, in the reasonable
-------- -------
opinion of the Board of Directors of the Company or the relevant Guarantor,
impair the usefulness of such property in the conduct of the Company's or
the relevant Guarantor's business, as applicable, and will not be
prejudicial to the interests of the Holders;
(iii) alter, repair, replace, change the location or position of and
add to its plants, structures, machinery, systems, equipment, fixtures and
appurtenances; provided, however, that no change in the location of any such
-------- -------
Collateral subject to the Lien of any of the Security Documents shall be
made which (1) removes such property into a jurisdiction in which any
instrument required by law to preserve the Lien of any of the Security
Documents on such property, including all necessary financing statements and
continuation statements, has not been recorded, registered or filed in the
manner required by law to preserve the Lien of any of the Security Documents
on such property, (2) does not comply with the terms of this Indenture and
the Security Documents or (3) otherwise impairs the Lien of the Security
Documents;
(iv) demolish, dismantle, tear down or scrap any Collateral, or
abandon any thereof other than land or interests in land (other than
leases), if in the good faith opinion of the Board of Directors of the
Company or the relevant Guarantor (as evidenced by a Board Resolution if it
involves Collateral having a Fair Market Value in excess of the lesser of
$100,000 or 1% of the aggregate principal amount of the outstanding
Securities), such demolition, dismantling, tearing down, scrapping or
abandonment is in the best interests of the Company or the relevant
Guarantor, and the Fair Market Value and utility of the Collateral as an
entirety, and the security for the Securities, will not thereby be impaired;
(v) grant a non-exclusive license of any Patent, Trademark or
Copyright (each as defined in the relevant Security Document);
(vi) abandon any Patent, Trademark or Copyright where subsequent
applications relating to such Patent, Trademark or Copyright have been filed
with respect to similar subject matter or where the Company or the relevant
Guarantor, in its reasonable business judgment, concludes that such
abandonment
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is in the best interest of the Company or the relevant Guarantor;
(vii) grant leases in respect of any Real Property in the event that the
Company or the relevant Guarantor determines that such Real Property is no
longer useful in the conduct of the Company's or the relevant Guarantor's
business; provided, however, that any such lease shall by its terms be
-------- -------
subject and subordinate to the Lien of the Mortgage affecting such Real
Property;
(viii) abandon, terminate, cancel, release or make alterations in or
substitutions of any leases, contracts or rights-of-way subject to the Lien
of the Security Documents; provided, however, that any altered or
-------- -------
substituted leases, contracts or rights-of-way shall forthwith be made
subject to the Lien of the Security Documents to the same extent as those
previously existing; and provided, further, that if the Company or the
-------- --------
relevant Guarantor shall receive-any money or property in excess of its
expenses in connection with such termination, cancellation, release,
alteration or substitution, to the extent it exceeds $250,000 (in which case
all of the money so received and not just the portion in excess of $250,000
shall be subject to this clause), forthwith upon its receipt by the Company
or the relevant Guarantor, shall be deposited with the Trustee (unless
otherwise required by a Prior Lien permitted under the applicable Security
Documents) as Trust Moneys subject to disposition as provided in Article
Twelve hereof or otherwise subjected to the Lien of the Security Documents;
or
(ix) surrender or modify any franchise, license or permit subject to
the Lien of any of the Security Documents which it may own or under which it
may be operating; provided, however, that after the surrender or
-------- -------
modification of any such franchise, license or permit, the Company or the
applicable Guarantor shall still, in the reasonable opinion of the Board of
Directors of the Company or the relevant Guarantor, be entitled, under some
other or without any franchise, license or permit, to conduct its business
in the territory in which it is then operating; and provided, further, that
-------- --------
if the Company or the relevant Guarantor shall be entitled to receive any
money or property in excess of its expenses in connection with such
surrender or modification, to the extent it exceeds $250,000 (in which case
all of the money so received and not just the portion in excess of $250,000
shall be subject to this clause), forthwith upon its receipt by the Company
or the
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relevant Guarantor, shall be deposited with the Trustee (unless otherwise
required by a Prior Lien permitted under the applicable Security Documents)
as Trust Moneys subject to disposition as provided in Article Twelve hereof
or otherwise subjected to the Lien of the Security Documents.
(b) In the event that the Company or the relevant Guarantor has sold,
exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise
dispose of any portion of the Collateral which under the provisions of this
Section 11.3 may be sold, exchanged or otherwise disposed of by the Company or
the relevant Guarantor without any release or consent of the Trustee, and the
Company or the relevant Guarantor requests the Trustee to furnish a written
disclaimer, release or quitclaim of any interest in such property under any of
the Security Documents, the Trustee shall promptly execute such an instrument
upon delivery to the Trustee of (i) an Officers' Certificate by the Company or
the relevant Guarantor reciting the sale, exchange or other disposition made or
proposed to be made and describing in reasonable detail the property affected
thereby, and stating that such property is property which by the provisions of
this Section 11.3 may be sold, exchanged or otherwise disposed of or dealt with
by the Company or the relevant Guarantor without any release or consent of the
Trustee and (ii) an Opinion of Counsel stating that the sale, exchange or other
disposition made or proposed to be made was duly taken by the Company or the
relevant Guarantor in conformity with a designated subsection of Section 11.3(a)
and that the execution of such written disclaimer, release or quitclaim is
appropriate under this Section 11.3.
Any disposition of Collateral made in strict compliance with the
provisions of this Section 11.3 shall be deemed not to impair the Security
Interests in contravention of the provisions of this Indenture.
SECTION 11.4 Release of Collateral.
---------------------
In addition to its rights under Sections 11.3 and 11.5, the Company or
the relevant Guarantor shall have the right, at any time and from time to time,
to sell, exchange or otherwise dispose of any of the Collateral (other than
Trust Moneys, which are subject to release from the Lien of the Security
Documents as provided under Article XII), upon compliance with the requirements
and conditions of this Section 11.4, and the Trustee shall promptly release the
same from the Lien of any of the Security Documents upon receipt by the Trustee
(other than in the case of Section 11.4(d) below) of a Release Notice requesting
such release and
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describing the property to be so released, together with delivery of the
following, among other matters:
(a) If the property to be released has a book value of at least
$5,000,000, a Board Resolution of the Company or the relevant Guarantor, as
the case may be, requesting such release and authorizing an application to
the Trustee therefor.
(b) An Officers' Certificate of the Company or the relevant Guarantor,
as the case may be, dated not more than 30 days prior to the date of the
application for such release, and signed also, in the case of the following
clauses (ii) and (iv) by an Independent Appraiser or, if such property
consists of securities, by a Financial Advisor, in each case stating in
substance as follows:
(i) that, in the opinion of the signers, the security afforded by
the Security Documents will not be impaired by such release in
contravention of the provisions of this Indenture, and that either (A)
the Collateral to be released is not being replaced by comparable
property, has a book value of less than $250,000, and is not necessary
for the efficient operation of the Company's and its remaining
Subsidiaries' remaining property or in the conduct of the business of
the Company and its Subsidiaries as conducted immediately prior thereto,
or (B) the Collateral to be released is being released in connection
with an Asset Sale of such Collateral and the net proceeds (as defined
in Section 11.4(d)) from such Asset Sale are being delivered to the
Trustee (if required by Section 4.15) in accordance with, and to the
extent required by, the provisions of Section 11.4(d);
(ii) that the Company or the relevant Guarantor has either disposed
of or will dispose of the Collateral so to be released in compliance
with all applicable terms of this Indenture and for a consideration
representing, in the opinion of the signers, its fair value, which
consideration may, subject to any other provision of this Indenture,
consist of any one or more of the following: (A) cash or Cash
Equivalents, (B) obligations secured by a purchase money Lien upon the
property so to be released and (C) any other property or assets that, in
each case, upon acquisition thereof by the Company or the relevant
Guarantor, would be subject to the Lien of the Security
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Documents (except as provided in Section 11.4(d)) and subject to no Lien
other than certain Liens which, under the applicable provisions of the
Security Documents relating thereto, are permitted to be superior to the
Lien of the Trustee for the benefit of the Holders herein and therein,
all of such consideration to be briefly described in the certificate;
(iii) that no Event of Default has occurred and is continuing;
(iv) the fair value, in the opinion of the signers, of the
property to be released at the date of such application for release;
provided, however, that it shall not be necessary under this clause
-------- -------
(iv) to state the fair value of any property whose fair value is
certified in a certificate of an Independent Appraiser or Independent
Financial Advisor under Section 11.4(c); and
(v) that all conditions precedent herein provided for relating to the
release of the Collateral in question have been complied with.
(c) If (i) the fair value of the property to be released and of all other
property released from the Lien of the Security Documents since the commencement
of the then current calendar year, as shown by certificates required by Section
11.4(b), is 10% or more of the aggregate principal amount of the Securities
outstanding on the date of the application, and (ii) the fair value of the
Collateral to be so released, as shown by the certificate filed pursuant to
paragraph (b) of this Section 11.4, is at least $25,000 and at least 1% of the
aggregate principal amount of the Securities outstanding on the date of the
application, a certificate of an Independent Appraiser, or if such property
consists of securities, a certificate of an Independent Financial Advisor,
stating:
(1) the then fair value, in the opinion of the signer, of the property
to be released; and
(2) that such release, in the opinion of the signer, will not impair
the Security Interests under any of the Security Documents in contravention
of its terms.
(d) The net proceeds (excluding any Net Cash Proceeds from any Asset Sale
which are not required, or cannot possibly be required, through the passage of
time or otherwise, to be
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used to purchase or redeem Securities under Section 4.15) or, if the
Collateral so to be released is subject to a Lien permitted by the Security
Documents to be prior to the Security Interests, a certificate of the
trustee, mortgagee or other holder of such prior Lien permitted by the
Security Documents that it has received such net proceeds (except to the
extent that the assignment thereof would violate the terms thereof or any
agreement relating thereto) and has been irrevocably authorized by the
Company or the relevant Guarantor to pay over to the Trustee any balance of
such net proceeds remaining after the discharge of such Indebtedness secured
by such prior Lien permitted by the Security Documents; and, if any property
other than cash, Cash Equivalents or obligations is included in such net
proceeds, such instruments of conveyance, assignment and transfer, if any,
as may be necessary, in the Opinion of Counsel to be given pursuant to
Section 11.4(e), to subject to the Lien of the Security Documents all the
right, title and interest of the Company or the relevant Guarantor in and to
such property.
For the purposes of this Section 11.4(d), "net proceeds" means any cash,
Cash Equivalents, obligations or other property received on the sale,
transfer, exchange or other disposition of Collateral to be released, less a
proportionate share of (i) brokerage commissions and other reasonable fees
and expenses related to such transaction and (ii) any provision for any
Federal, state or local taxes payable as a result of such sale, transfer,
exchange or other disposition.
(e) One or more Opinions of Counsel which, when considered
collectively, shall be substantially to the effect (i) that any obligation
included in the consideration for any property so to be released and to be
received by the Trustee pursuant to Section 11.4(d) is a valid and binding
obligation enforceable in accordance with its terms, subject to such
customary exceptions regarding equitable principles, creditors' rights
generally and bankruptcy as shall be reasonably acceptable to the Trustee in
its sole judgment, and is effectively pledged under the Security Documents,
(ii) that any Lien granted by a purchaser to secure a purchase money
obligation is a fully perfected first priority Lien to the extent obtainable
by filing and such instrument granting such Lien is enforceable in
accordance with its terms, (iii) either (x) that such instruments of
conveyance, assignment and transfer as have been or are then delivered to
the Trustee are sufficient to subject to the Lien of the applicable Security
Documents all the right, title and interest of the Company or
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the relevant Guarantor in and to any property, other than cash, Cash
Equivalents and obligations, that is included in the consideration for the
Collateral so to be released and is to be received by the Trustee pursuant
to Section 11.4(d), subject to no Lien other than Liens of the type
permitted by the applicable Security Documents, or (y) that no instruments
of conveyance, assignment or transfer are necessary for such purpose, (iv)
that the Company or the relevant Guarantor has corporate power to own all
property included in the consideration for such release, (v) in case any
part of the money or obligations referred to in Section 11.4(d) has been
deposited with a trustee or other holder of a Lien permitted by the Security
Documents to be prior to the Security Interests, that the Collateral to be
released, or a specified portion thereof, is or immediately before such
release was subject to such prior Lien permitted by the Security Documents
and that such deposit is required by such prior Lien permitted by the
Security Documents and (vi) that all conditions precedent herein and under
any of the Security Documents relating to the release of such Collateral
have been complied with.
(f) If the Collateral to be released is only a portion of a discrete
parcel of Real Property, evidence that a title insurance company shall have
committed to issue an endorsement to the title insurance policy relating to
the affected Mortgaged Property confirming that after such release, the Lien
of the applicable Mortgage continues unimpaired as a first priority
perfected Lien upon the remaining Mortgaged Property subject only to those
Liens permitted by the applicable Mortgage.
(g) If the Collateral to be released is Mortgaged Property having a
fair value in excess of $250,000, the Company or the relevant Guarantor
shall have delivered to the Trustee a Survey depicting the Real Property to
be released.
In connection with any release, the Company or the relevant Guarantor
shall (i) execute, deliver and record or file and obtain such instruments as the
Trustee may reasonably require, including, without limitation, amendments to the
Security Documents and (ii) deliver to the Trustee such evidence of the
satisfaction of the applicable provisions of this Indenture and the Security
Documents as the Trustee may reasonably require.
The Company or the relevant Guarantor shall exercise their rights
under this Section 11.4 by delivery to the Trustee of
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a notice (each, a "Release Notice"), which shall (i) refer to this Section 11.4,
(ii) contain all the resolutions, certificates, opinions, title insurance
endorsements, Surveys and such other documents and statements as are required
pursuant to this Section 11.4 (including, without limitation, the Officers'
Certificate required pursuant to Section 11.4(b)), (iii) describe with
particularity the items of property proposed to be covered by the release and
(iv) be accompanied by a counterpart of the instruments proposed to give effect
to the release fully executed and acknowledged (if applicable) by all parties
thereto other than the Trustee and in form for execution by the Trustee. Upon
such compliance, the Company or the relevant Guarantor shall direct the Trustee
to execute, acknowledge (if applicable) and deliver to the Company or the
relevant Guarantor such counterpart within 10 Business Days after receipt by the
Trustee of a Release Notice and the satisfaction of the requirements of this
Section 11.4.
Notwithstanding the foregoing provisions of this Section 11.4, the
Company or the Guarantors may obtain a release of Available Amounts required to
purchase Securities pursuant to an Asset Sale Offer on an Asset Sale Payment
Date by directing the Trustee in writing to cause to be applied such Available
Amounts to such purchase in accordance with Section 4.15 and Article XII.
In case an Event of Default shall have occurred and be continuing, the
Company or the Guarantors, while in possession of the Collateral (other than
cash, Cash Equivalents, securities and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder or under any
Security Document or with the trustee, mortgagee or other holder of a prior Lien
permitted by the Security Documents), may do any of the things enumerated in
this Section 11.4 only if the Trustee, in its discretion, or the Holders of a
majority in aggregate principal amount of the Securities outstanding, by
appropriate action of such Holders, shall consent to such action, in which event
any certificate filed under this Section 11.4 shall omit the statement to the
effect that no Event of Default has occurred and is continuing. This paragraph
shall not apply, however, during the continuance of an Event of Default of the
type specified in Section 6.1(a)(i) or (ii).
All cash or Cash Equivalents received by the Trustee pursuant to this
Section 11.4 shall be held by the Trustee for the benefit of the Holders, as
Trust Moneys subject to application as provided in this Section 11.4 (in the
case of any Net Cash Proceeds from Asset Sales) or in Article XII. All purchase
money and other obligations received by the Trustee pursuant to this Section
11.4
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shall be held by the Trustee for the benefit of the Holders, as Collateral.
Any releases of Collateral made in strict compliance with the
provisions of this Section 11.4 shall be deemed not to impair the Security
Interests, in contravention of the provisions of this Indenture.
SECTION 11.5 Substitute Collateral.
---------------------
The Company or any Guarantor may, at its option, obtain a release of
any of the Collateral constituting Equipment by subjecting other Equipment used
or to be used in the business of the Company or the relevant Guarantor to the
Lien of any Security Document or a similar instrument in place of and in
exchange for any of the Collateral to be released, if such substitute Equipment
has a fair value equal to or greater than the Collateral to be released
("Substitute Collateral"), upon presentation to the Trustee of the following
documents:
(a) an application of the Company or the relevant Guarantor requesting
such substitution of Substitute Collateral and describing the property to
be so released and the property to be substituted therefor;
(b) the resolutions, certificates, opinions and other statements
required by the provisions of Section 11.4 (other than Section 11.4(b)(1)),
as applicable, in respect of any of the Collateral to be released;
(c) an Officers' Certificate, also signed by an Independent Appraiser,
stating in substance the Fair Market Value, in the opinion of the signers,
of the Substitute Collateral and the Collateral to be released;
(d) an instrument or instruments in recordable form sufficient for the
Lien of the Security Documents to cover the Substitute Collateral;
(e) an Opinion of Counsel stating that the Lien of the Security
Documents constitutes a valid and perfected Lien on such Substitute
Collateral and an Opinion of Counsel in the jurisdiction in which the
Substitute Collateral is located substantially in the form of the local
counsel opinions delivered on the Closing Date and otherwise in form and
substance satisfactory to the Trustee with respect to the documents
executed and delivered by the Company or the
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relevant Guarantor and the Substitute Collateral encumbered thereby;
(f) an Officers' Certificate of the Company or the relevant Guarantor
stating that (i) any specific exceptions to such Lien are Liens of the
character which were permitted to be Prior Liens under the Security
Documents with respect to the Collateral being replaced by such Substitute
Collateral and (ii) the Fair Market Value of all Collateral released
pursuant to this Section 11.5 during the then current calendar year does
not exceed in the aggregate $10,000,000; and
(g) evidence of payment or a closing statement indicating payments to
be made by the Company or the relevant Guarantor of all filing fees,
recording charges, transfer taxes and other costs and expenses, including
reasonable legal fees and disbursements of counsel for the Trustee (and any
local counsel) that may be incurred to validly and effectively subject such
Substitute Collateral to the Lien of any applicable Security Document and
to perfect such Liens.
SECTION 11.6 Eminent Domain and Other Governmental
Takings.
-------------------------------------
Should any of the Collateral be taken by eminent domain or be sold
pursuant to the exercise by the United States of America or any state,
municipality or other governmental authority of any right which it may then have
to purchase, or to designate a purchaser or to order a sale of, all or any part
of the Collateral, the Trustee shall release the property so taken or purchased,
but only upon receipt by the Trustee of the following:
(a) an Officers' Certificate stating that such property has been taken
by eminent domain and the amount of the award therefor, or that such
property has been sold pursuant to a right vested in the United States of
America, or a state, municipality or other governmental authority to
purchase, or to designate a purchaser, or order a sale of such property and
the amount of the proceeds of such sale, and that all conditions precedent
herein provided for relating to such release have been complied with;
(b) the award for such property or the proceeds of such sale, to be
held as Trust Moneys subject to the disposition thereof pursuant to Article
XII; provided, however, that, in lieu of all or any part of such award or
-------- -------
proceeds,the Company shall have the right to deliver to the
Trustee a certificate
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of the trustee, mortgagee or other holder of a Lien on all or any part of
the property to be released which is permitted by the Security Documents to
be prior to the Security Interests, stating that such award or proceeds, or
a specified portion thereof, has been deposited with such trustee,
mortgagee or other holder pursuant to the requirements of such prior Lien
permitted by the Security Documents, in which case the balance of the
award, if any, shall be delivered to the Collateral Agent; and
(c) an Opinion of Counsel substantially to the effect:
(1) that such property has been taken by eminent domain, or has
been sold pursuant to the exercise of a right vested in the United
States of America or a state, municipality or other governmental
authority to purchase, or to designate a purchaser or order a sale of,
such property;
(2) in the case of any taking by eminent domain, that the award
for the property so taken has become final or that the Board of
Directors of the Company has determined that an appeal from such award
is not advisable in the interests of the Company or the relevant
Guarantor or the Holders of the Securities;
(3) in the case of any such sale, that the amount of the proceeds
of the property so sold is not less than the amount to which the
Company or the relevant Guarantor is legally entitled under the terms
of such right to purchase or designate a purchaser, or under the order
or orders directing such sale, as the case may be;
(4) in case, pursuant to Section 11.7(b), the award for such
property or the proceeds of such sale, or a specified portion thereof,
shall be certified to have been deposited with the trustee, mortgagee
or other holder of a Lien which is permitted by the Security Documents
to be prior to the Security Interests, that the property to be
released, or a specified portion thereof, is or immediately before
such taking or purchase was subject to such prior Lien permitted by
the Security Documents, and that such deposit is required by such
prior Lien permitted by the Security Documents; and
(5) that the instrument or the instruments and the award or
proceeds of such sale which have been or are
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therewith delivered to and deposited with the Trustee conform to the
requirements of this Indenture and any of the applicable Security
Documents and that, upon the basis of such application, the Trustee is
permitted by the terms hereof and of the Security Documents to execute
and deliver the release requested, and that all conditions precedent
herein provided for relating to such release have been complied with.
In any proceedings for the taking or purchase or sale of any part of
the Collateral, by eminent domain or by virtue of any such right to purchase or
designate a purchaser or to order a sale, the Trustee may be represented by
counsel who may be counsel for the Company.
All cash or Cash Equivalents received by the Trustee pursuant to this
Section 11.6 shall be held by the Trustee as Trust Moneys under Article XII
subject to application as therein provided. All purchase money and other
obligations received by the Trustee pursuant to this Section 11.6 shall be held
by the Trustee as Collateral subject to application as provided in Section
11.11.
SECTION 11.7 Trust Indenture Act Requirements.
--------------------------------
The release of any Collateral, whether pursuant to Article XI or XII,
from the Lien of any of the Security Documents or the release of, in whole or in
part, the Liens created by any of the Security Documents, will not be deemed to
impair the Security Interests in contravention of the provisions hereof if and
to the extent the Collateral or Liens are released pursuant to the applicable
Security Documents and pursuant to the terms hereof. The Trustee and each of
the Holders acknowledge that a release of Collateral or Liens strictly in
accordance with the terms of the Security Documents and the terms hereof will
not be deemed for any purpose to be an impairment of the Security Interests in
contravention of the terms of this Indenture. To the extent applicable, without
limitation, the Company, the Guarantors and each obligor on the Securities shall
cause Trust Indenture Act (S) 314(d) relating to the release of property or
securities from the Liens hereof and of the Security Documents to be complied
with. Any certificate or opinion required by Trust Indenture Act (S) 314(d) may
be made by an officer of the Company, except in cases in which Trust Indenture
Act (S) 314(d) requires that such certificate of opinion be made by an
independent person.
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SECTION 11.8 Suits To Protect the Collateral.
-------------------------------
Subject to the provisions of the Security Documents, the Trustee shall
have power to institute and to maintain such suits and proceedings as it may
deem expedient to prevent any impairment of the Collateral by any acts which may
be unlawful or in violation of any of the Security Documents or this Indenture,
and such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the Security Interests or be prejudicial to the interests of the Holders
or the Trustee).
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SECTION 11.9 Purchaser Protected.
-------------------
In no event shall any purchaser in good faith of any property
purported to be released hereunder be bound to ascertain the authority of the
Trustee to execute the release or to inquire as to the satisfaction of any
conditions required by the provisions hereof for the exercise of such authority
or to see to the application of any consideration given by such purchaser or
other transferee; nor shall any purchaser or other transferee of any property or
rights permitted by this Article XI to be sold be under obligation to ascertain
or inquire into the authority of the Company or the relevant Guarantor to make
any such sale or other transfer.
SECTION 11.10 Powers Exercisable by Receiver or
Trustee.
---------------------------------
In case the Collateral shall be in the possession of a receiver or
trustee, lawfully appointed, the powers conferred in this Article XI upon the
Company or the relevant Guarantor with respect to the release, sale or other
disposition of such property may be exercised by such receiver or trustee, and
an instrument signed by such receiver or trustee shall be deemed the equivalent
of any similar instrument of the Company or the relevant Guarantor or of any
officer or officers thereof required by the provisions of this Article XI.
SECTION 11.11 Disposition of Obligations Received.
-----------------------------------
All purchase money or other obligations received by the Trustee under
this Article XI shall be held by the Trustee, as a part of the Collateral. Upon
payment in cash or Cash Equivalents by or on behalf of the Company or the
obligor thereof to the Trustee of the entire unpaid principal amount of any such
obligation, to the extent not constituting Net Cash Proceeds from an Asset Sale
which may possibly be required, through the passage of time or otherwise, to be
used to purchase Securities pursuant to Section 4.15, the Trustee shall promptly
release and transfer such obligation and any mortgage securing the same upon
receipt of any documentation that the Trustee may reasonably require. Any cash
or Cash Equivalents received by the Trustee in respect of the principal of any
such obligations shall be held by the Trustee as Trust Moneys under Article XII
subject to application as therein provided. Unless and until the Securities are
accelerated, pursuant to Section 6.2, all interest and other income on any such
obligations, when received by the Trustee, shall be paid to the Company from
time to time in accordance with Section 12.7. If the
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Securities have been accelerated pursuant to Section 6.2, any such interest or
other income not theretofore paid, when collected by the Trustee, shall be
applied by the Trustee, as the case may be, in accordance with Section 6.10.
SECTION 11.12 Determinations Relating to Collateral.
-------------------------------------
In the event (i) the Trustee shall receive any written request from
the Company or a Guarantor under any Security Document for consent or approval
with respect to any matter or thing relating to any Collateral or the Company's
or the Guarantor's obligations with respect thereto or (ii) there shall be due
to or from the Trustee under the provisions of any Security Document any
performance or the delivery of any instrument or (iii) the Trustee shall become
aware of any nonperformance by the Company or any Guarantor of any covenant or
any breach of any representation or warranty of the Company or any Guarantor set
forth in any Security Document, then, in each such event, the Trustee shall be
entitled to hire experts, consultants, agents and attorneys to advise the
Trustee on the manner in which the Trustee should respond to such request or
render any requested performance or response to such nonperformance or breach
(the expenses of which shall be reimbursed to the Trustee pursuant to Section
7.7 hereof). The Trustee shall be fully protected in the taking of any action
recommended or approved by any such expert, consultant, agent or attorney or
agreed to by a majority of Holders pursuant to Section 6.5.
SECTION 11.13 Renewal and Refunding.
---------------------
Nothing in this Article XI shall prevent (a) the renewal or extension,
without impairment of the Security Interests, at the same or at a lower or
higher rate of interest, of any of the obligations or Indebtedness of any
corporation included in the Collateral or (b) the issue in substitution for any
such obligations or Indebtedness of other obligations or Indebtedness of such
corporation for equivalent amounts and of substantially equal or superior rank
as to security, if any; provided, however, that every such obligation or
-------- -------
Indebtedness as so renewed or extended shall continue to be subject to the Lien
of the Security Documents and every substituted obligation of Indebtedness and
the evidence thereof shall be deposited and pledged with the Trustee.
SECTION 11.14 Release upon Termination of the
Company's and the Guarantor's
Obligations.
-------------------------------
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In the event that each of the Company and the Guarantors deliver an
Officers' Certificate certifying that all of their respective obligations under
the Indenture have been satisfied and discharged by complying with the
provisions of Article VIII, the Trustee shall not be deemed to hold the Security
Interests for the benefit of the Holders.
SECTION 11.15 Trustee's Duties in
Respect of Collateral.
---------------------
The Trustee, acting in its capacity as collateral agent or mortgagee
under each of the Security Documents, shall have only such duties with respect
to the Collateral as are set forth in the Security Documents.
ARTICLE XII
APPLICATION OF TRUST MONEYS
---------------------------
SECTION 12.1 "Trust Moneys" Defined.
---------------------
All cash or Cash Equivalents received by the Trustee:
(a) upon the release of property from the Lien of any of the Security
Documents, including, without limitation, all moneys received in respect of
the principal of all purchase money, governmental and other obligations; or
(b) as compensation for, or proceeds of the sale of, all or any part
of the Collateral taken by eminent domain or purchased by, or sold pursuant
to an order of, a governmental authority or otherwise disposed of; or
(c) as proceeds of insurance upon any, all or part of the Collateral
(other than any liability insurance proceeds payable to the Trustee for any
loss, liability or expense incurred by it); or
(d) pursuant to the Mortgages; or
(e) as proceeds of any other sale or other disposition of all or any
part of the Collateral by or on behalf of the Trustee or any collection,
recovery, receipt, appropriation or other realization of or from all or any
part of the Collateral pursuant to the Security Documents or otherwise; or
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(f) for application under this Article XII as elsewhere provided in
this Indenture or any Security Document, or whose disposition is not
elsewhere otherwise specifically provided for herein or in any Security
Document;
(all such moneys being herein sometimes called "Trust Moneys"; provided,
--------
however, that Trust Moneys shall not include any property deposited with the
-------
Trustee pursuant to Section 4.17 or Articles III or VIII or delivered to or
received by the Trustee pursuant to Section 6.10 hereof), shall be held by the
Trustee for the benefit of the Holders as a part of the Collateral and, upon any
entry upon or sale or other disposition of the Collateral or any part thereof
pursuant to any of the Security Documents, said Trust Moneys shall be applied in
accordance with Section 6.10; but, prior to any such entry, sale or other
disposition, all or any part of the Trust Moneys may be withdrawn, and shall be
released, paid or applied by the Trustee, from time to time as provided in
Sections 12.2 through 12.5, inclusive.
SECTION 12.2 Retirement of Securities.
------------------------
The Trustee shall apply Trust Moneys from time to time to the payment
of the principal of and interest on any Securities, on any Maturity Date or to
the redemption thereof or the purchase thereof upon tender or in the open market
or at private sale or upon any exchange or in any one or more of such ways,
including, without limitation, pursuant to an offer to purchase under Section
4.15, or a Change of Control Offer under Section 4.17, as the Company or the
relevant Guarantor shall request in writing, upon receipt by the Trustee of the
following:
(a) Board Resolutions of the Company or the relevant Guarantor
directing the application pursuant to this Section 12.2 of a specified
amount of Trust Moneys and, in case any such moneys are to be applied to
payment, designating the Securities so to be paid and, in case any such
moneys are to be applied to the purchase of Securities, prescribing the
method of purchase, the price or prices to be paid and the maximum
principal amount of Securities to be purchased and any other provisions of
this Indenture governing such purchase;
(b) cash in the maximum amount of the accrued interest, if any,
required to be paid in connection with any such purchase, which cash shall
be held by the Trustee in trust for such purpose;
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(c) an Officers' Certificate, dated not more than five Business Days
prior to the date of the relevant application stating
(i) that no Default or Event of Default exists unless such Default
or Event of Default would be cured thereby; and
(ii) that all conditions precedent and covenants herein provided
for relating to such application of Trust Moneys have been complied
with; and
(d) an Opinion of Counsel stating that the documents and the cash or
Cash Equivalents, if any, which have been or are therewith delivered to and
deposited with the Trustee conform to the requirements of this Indenture and
that all conditions precedent herein provided for relating to such
application of Trust Moneys have been complied with.
Upon compliance with the foregoing provisions of this Section, the
Trustee shall apply Trust Moneys as directed and specified by such Board
Resolution, up to, but not exceeding, the principal amount of the Securities so
paid or purchased, using the cash deposited pursuant to paragraph (b) of this
Section 12.2, to the extent necessary, to pay any accrued interest required in
connection with such purchase.
A Board Resolution expressed to be irrevocable directing the
application of Trust Moneys under this Section 12.2 to the payment of the
principal of particular Securities shall for all purposes of this Indenture be
deemed the equivalent of the deposit of money with the Trustee in trust for such
purpose. Such Trust Moneys and any cash deposited with the Trustee pursuant to
paragraph (b) of this Section 12.2 for the payment of accrued interest shall
not, after compliance with the foregoing provisions of this Section, be deemed
to be part of the Collateral or Trust Moneys.
The Company or the relevant Guarantor shall have the right, at any
time and from time to time to obtain a release of Trust Moneys constituting Net
Cash Proceeds from an Asset Sale that were subject to an Asset Sale Offer and
not used to purchase Securities thereunder because it was not fully subscribed
by the Holders upon receipt by the Trustee of an Officers' Certificate stating
(i) that an Asset Sale Offer was made in accordance with Section 12.2 hereof,
(ii) the amount of Net Cash Proceeds of such Asset Sale remaining after the
completion of such Asset Sale Offer
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(iii) that no Default or Event of Default exists and (iv) that all conditions
precedent and covenants herein provided for relating to such application of
Trust Moneys have been complied with. Upon compliance with the foregoing, the
Trustee shall release such Trust Moneys to the Company or the relevant
Guarantor.
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SECTION 12.3 Withdrawals of Insurance Proceeds
and Condemnation Awards.
---------------------------------
To the extent that any Trust Moneys consist of either (a) the proceeds
of insurance upon any part of the Collateral or (b) any award for or the
proceeds of any of the Collateral being taken by eminent domain or sold pursuant
to the exercise by the United States of America or any state, municipality or
other governmental authority of any right which it may then have to purchase, or
to designate a purchaser or to order a sale of any part of the Collateral, such
Trust Moneys may be withdrawn by the Company or the relevant Guarantor and shall
be paid by the Trustee upon a request by the Company or the relevant Guarantor
by the proper officer or officers of the Company to reimburse the Company or the
relevant Guarantor for expenditures made, or to pay costs incurred, by the
Company or the relevant Guarantor to repair, rebuild or replace the property
destroyed, damaged or taken, upon receipt by the Trustee of the following:
(a) an Officers' Certificate of the Company or the relevant Guarantor,
dated not more than 30 days prior to the date of the application for the
withdrawal and payment of such Trust Moneys and signed also in the case of
the following clauses (i), (iv) and (vi), by an Appraiser or Financial
Advisor, setting forth:
(i) that expenditures have been made, or costs incurred, by the
Company or the relevant Guarantor in a specified amount for the purpose
of making certain repairs, rebuildings and replacements of the
Collateral, which shall be briefly described, and stating the fair value
thereof to the Company or the relevant Guarantor at the date of the
acquisition thereof by the Company or the relevant Guarantor, except
that it shall not be necessary under this clause (i) to state the fair
value of any such repairs, rebuildings or replacements that are
separately described pursuant to clause (vi) of this paragraph (a) and
whose fair value is stated in the Independent Appraiser's or Independent
Financial Advisor's certificate under paragraph (b) of this Section
12.3;
(ii) that no part of such expenditures in any previous or then
pending application, has been or is being made the basis for the
withdrawal of any Trust Moneys pursuant to this Section 12.3;
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(iii) that no part of such expenditures or costs has been paid out
of either the proceeds of insurance upon any part of the Collateral not
required to be paid to the Trustee under the relevant Mortgage or any
award for or the proceeds from any of the Collateral being taken not
required to be paid to the Trustee under Section 11.6, as the case may
be;
(iv) that there is no outstanding Indebtedness, other than costs
for which payment is being requested, known to the Company or the
relevant Guarantor, after due inquiry, for the purchase price or
construction of such repairs, rebuildings or replacements, or for labor,
wages, materials or supplies in connection with the making thereof,
which, if unpaid, might become the basis of a vendor's, mechanics',
laborers' materialmen's, statutory or other similar Lien upon any of
such repairs, rebuildings or replacement, which Lien might, in the
opinion of the signers of such certificate, materially impair the
security afforded by such repairs, rebuildings or replacement;
(v) that the property to be repaired, rebuilt or replaced is
necessary or desirable in the conduct of the Company's or the relevant
Guarantor's business;
(vi) whether any part of such repairs, rebuildings or replacements
within six months before the date of acquisition thereof by the Company
or the relevant Guarantor, has been used or operated by others than the
Company or the relevant Guarantor in a business similar to that in which
such property has been or is to be used or operated by the Company or
the relevant Guarantor, and whether the fair value to the Company or the
relevant Guarantor, at the date of such acquisition, of such part of
such repairs, rebuildings or replacement is at least $25,000, and 1% of
the aggregate principal amount of the outstanding Securities; and, if
all of such facts are present, such part of said repairs, rebuildings or
replacements shall be separately described, and it shall be stated that
an Independent Appraiser's or Independent Financial Advisor's
certificate as to the fair value to the Company or the relevant
Guarantor of such separately described repairs, rebuildings or
replacements will be furnished under paragraph (b) of this Section 12.3;
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(vii) that no Default or Event of Default shall have occurred and
be continuing; and
(viii) that all conditions precedent herein provided for relating to
such withdrawal and payment have been complied with.
(b) In case any part of such repairs, rebuildings or replacements is
separately described pursuant to the foregoing clause (vi) of paragraph (a)
of this Section 12.3, a certificate of an Independent Appraiser or
Independent Financial Advisor stating the fair value to the Company or the
relevant Guarantor, in such Independent Appraiser's or Independent
Financial Advisor's opinion, of such separately described repairs,
rebuildings or replacements at the date of the acquisition thereof by the
Company or the relevant Guarantor.
(c) (i) In case any part of such repairs, rebuildings or replacements
constitutes Real Property:
(1) with respect to any such repairs, rebuildings or replacements
that are not encompassed within or are not erected upon Mortgaged
Property, an instrument or instruments in recordable form sufficient for
the Lien of this Indenture and any Mortgage to cover such repairs,
rebuildings or replacements which, if such repairs, rebuildings or
replacements include leasehold or easement interests, shall include
normal and customary provisions with respect thereto and evidence of the
filing of all such documents as may be necessary to perfect such Liens;
(2) a policy of title insurance (or a commitment to issue title
insurance) insuring that the Lien of this Indenture and any Mortgage
constitutes a direct and valid and perfected first priority mortgage
Lien on such repairs, rebuildings or replacements in an aggregate amount
equal to the fair value of such repairs, rebuildings or replacements,
together with such endorsements and other opinions as are contemplated
by Section 11.2(b)(ii), or with respect to any such repairs, rebuildings
or replacements that are encompassed within or are erected upon
Mortgaged Property an endorsement to the title insurance policy issued
pursuant to Section 11.2(b)(ii) regarding the affected Mortgaged
Property confirming that such repairs, rebuildings or replacements
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are encumbered by the first priority Lien of the applicable Mortgage;
(3) in the event such repairs, rebuildings or replacements have a
fair value in excess of $250,000, a Survey with respect thereto; and
(4) evidence of payment or a closing statement indicating payments
to be made by the Company or the relevant Guarantor of all title
premiums, recording charges, transfer taxes and other costs and
expenses, including reasonable legal fees and disbursements of counsel
for the Trustee (and any local counsel), that may be incurred to validly
and effectively subject such repairs, rebuildings or replacements to the
Lien of any applicable Security Document to perfect such Lien; and
(ii) in case any part of such repairs, rebuildings or replacements
constitutes personal property interests:
(1) an instrument in recordable form sufficient for the Lien of
any applicable Security Document to cover such repairs, rebuildings or
replacements; and
(2) evidence of payment or a closing statement indicating payments
to be made by the Company or the relevant Guarantor of all filing fees,
recording charges, transfer taxes and other costs and expenses,
including reasonable legal fees and disbursements of counsel for the
Trustee (and any local counsel), that may be incurred to validly and
effectively subject such repairs, rebuildings or replacements to the
Lien of any Security Document.
(d) An Opinion of Counsel substantially stating:
(i) that the instruments that have been or are therewith delivered
to the Trustee conform to the requirements of this Indenture or any
other Security Document, and that, upon the basis of such request of the
Company and the accompanying documents specified in this Section 12.3,
all conditions precedent herein provided for relating to such withdrawal
and payment have been complied with, and the Trust Moneys whose
withdrawal is then requested may be lawfully paid over under this
Section 12.3;
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(ii) that the Company or the relevant Guarantor has acquired title
to said repairs, rebuildings and replacements at least the equivalent to
its title to the property destroyed, damaged or taken, and that the same
and every part thereof are free and clear of all Liens prior to the Lien
of any of the Security Documents, except Liens of the type permitted
under the applicable Security Document to which the property so
destroyed, damaged or taken shall have been subject at the time of such
destruction, damage or taking; and
(iii) that all of the Company's or the relevant Guarantor's right,
title and interest in and to said repairs, rebuildings or replacements,
or combination thereof, are then subject to the Lien of any of the
Security Documents.
Upon compliance with the foregoing provisions of this Section 12.3,
the Trustee shall pay on the written request of the Company an amount of Trust
Moneys of the character aforesaid equal to the amount of the expenditures or
costs stated in the Officers' Certificate required by clause (i) of paragraph
(a) of this Section 12.3, or the fair value to the Company or the relevant
Guarantor of such repairs, rebuildings and replacements stated in such Officers'
Certificate (and in such Independent Appraiser's or Independent Financial
Advisor's certificate, if required by paragraph (b) of this Section 12.3),
whichever is less; provided, however, that notwithstanding the above, so long as
-------- -------
no Default or Event of Default shall have occurred and be continuing, in the
event that any insurance proceeds or award for such property or proceeds of such
sale does not exceed the lesser of $25,000 or 1% of the principal amount of the
outstanding Securities, and, in the good faith estimate of the Company or the
relevant Guarantor, such destruction or damage resulting in such insurance
proceeds or such taking or sale resulting in such award does not detrimentally
affect the value or use of the applicable Collateral in any material respect,
upon delivery to the Trustee of an Officers' Certificate of the Company or the
relevant Guarantor to such effect, the Trustee shall release to the Company or
the relevant Guarantor such insurance proceeds or award for such property or
proceeds of such sale, free of the Lien hereof and of the applicable Security
Documents; the Company or the relevant Guarantor shall take all steps necessary
to notify the condemning authority of such assignment.
SECTION 12.4 Withdrawal of Trust Moneys
for Reinvestment.
--------------------------
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To the extent that any Trust Moneys consist of Net Cash Proceeds
received by the Trustee pursuant to Section 4.15 and the Company or any
Guarantor, as applicable, intends to reinvest such Net Cash Proceeds in a manner
that would constitute a Permitted Related Acquisition, such Trust Moneys may be
withdrawn by the Company or any Guarantor, as applicable, and shall be paid by
the Trustee upon a written request by the Company by the proper officer or
officers of the Company or any Guarantor, as applicable, to reimburse the
Company or any Guarantor, as applicable, for expenditures made or to pay costs
incurred by the Company or any Guarantor, as applicable, in connection with such
Permitted Related Acquisition, upon receipt by the Trustee of the following:
(a) An Officers' Certificate of the Company, dated not more than 30
days prior to the date of the application for the withdrawal and payment of
such Trust Moneys, stating in substance as follows:
(i) that the Trust Moneys to be released constitute Net Cash
Proceeds from an Asset Sale;
(ii) setting forth with particularity the investment to be made
with such Trust Moneys;
(iii) that the release of the Trust Moneys complies with all
applicable terms of this Indenture;
(iv) that there is no Default or Event of Default (both before and
after giving effect to the Permitted Related Acquisition) continuing;
and
(v) that all conditions precedent herein provided for relating to
the release of the Trust Moneys in question have been provided.
(b) If the Permitted Related Acquisition to be made is an investment
in Real Property, the Company shall also deliver to the Trustee:
(i) an instrument or instruments in recordable form sufficient
for the Lien of any Mortgage to cover such Real Property which, if the
Real Property is a leasehold or easement interest, shall include
normal and customary provisions with respect thereto and evidence of
the filing of all such financing statements and other instruments as
may be necessary to perfect such Liens;
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(ii) a policy of title insurance (or a commitment to issue
title insurance) insuring that the Lien of this Indenture and any
Mortgage constitutes a valid and perfected mortgage Lien on such
Real Property (subject to no Prior Liens other than Prior Liens of
the type which were permitted with respect to the Collateral which
was the subject of the Asset Sale) in an aggregate amount equal to
the Fair Market Value of the Real Property, together with an
Officers' Certificate stating that any specific exceptions to such
title insurance are Liens of the type which were permitted with
respect to the Collateral which was the subject of the Asset Sale,
together with such endorsements and other opinions as are
contemplated by Section 11.2(b)(ii); and
(iii) evidence of payment or a closing statement indicating
payments to be made by the Company or the appropriate Guarantor of
all title premiums, recording charges, transfer taxes and other
costs and expenses, including reasonable legal fees and
disbursements of counsel for the Trustee (and any local counsel),
that may be incurred to validly and effectively subject the Real
Property to the Lien of any applicable Security Document and to
perfect such Lien.
(c) If the Permitted Related Acquisition is a personal property
interest, the Company or the appropriate Guarantor shall deliver to
the Trustee and the Collateral Agent:
(i) an instrument in recordable form sufficient for the Lien of
any applicable Security Document to cover such personal property
interest; and
(ii) evidence of payment or a closing statement indicating
payments to be made by the Company or the appropriate Guarantor of
all filing fees, recording charges, transfer taxes and other costs
and expenses, including reasonable legal fees and disbursements of
counsel for the Trustee (and any local counsel), that may be
incurred to validly and effectively subject the Permitted Related
Acquisition to the Lien of any Security Document and to perfect such
Lien.
(d) An Opinion of Counsel stating that the documents that have been
or are therewith delivered to the Trustee conform to the requirements of
this Indenture and that allQS
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conditions precedent herein relating to such application of Trust Moneys have
been complied with.
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SECTION 12.5 Powers Exercisable Notwithstanding
Event of Default.
----------------------------------
In case an Event of Default shall have occurred and shall be
continuing, the Company or the relevant Guarantor, while in possession of the
Collateral (other than cash, Cash Equivalents, securities and other personal
property held by, or required to be deposited or pledged with, the Trustee
hereunder or under the Security Documents or with the trustee, mortgagee or
other holder of a Lien permitted by the Security Documents to be prior to the
Security Interests), may do any of the things enumerated in Sections 12.2 and
12.3 if the Holders of a majority in aggregate principal amount of the
Securities outstanding, by appropriate action of such Holders, shall consent to
such action, in which event any certificate filed under any of such Sections
shall omit the statement to the effect that no Event of Default has occurred and
is continuing. This Section 12.5 shall not apply, however, during the
continuance of an Event of Default of the type specified in Section 6.1(a)(i) or
(ii).
SECTION 12.6 Powers Exercisable by Trustee or
Receiver.
--------------------------------
In case the Collateral (other than any cash, Cash Equivalents,
securities and other personal property held by, or required to be deposited or
pledged with, the Trustee hereunder or under the Security Documents or with the
trustee, mortgagee or other holder of a Lien permitted by the Security Documents
to be prior to the Security Interests) shall be in the possession of a receiver
or trustee lawfully appointed, the powers hereinbefore in this Article XII
conferred upon the Company or the relevant Guarantor with respect to the
withdrawal or application of Trust Moneys may be exercised by such receiver or
trustee, in which case a certificate signed by such receiver or trustee shall be
deemed the equivalent of any Officers' Certificate required by this Article XII.
If the Trustee shall be in possession of any of the Collateral hereunder or
under any of the Security Documents, such powers may be exercised by the
Trustee, in its discretion.
SECTION 12.7 Disposition of Securities
Retired.
-------------------------
All Securities received by the Trustee and for whose purchase Trust
Moneys are applied under this Article XII, if not otherwise cancelled, shall be
promptly delivered to the Trustee for cancellation and destruction unless the
Trustee shall be otherwise directed by the Company or the relevant Guarantor.
Upon
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destruction of any Securities, the Trustee shall issue a certificate of
destruction to the Company.
SECTION 12.8 Investment of Trust Moneys.
--------------------------
All or any part of any Trust Moneys held by the Trustee hereunder
(except such as may be held for the account of any particular Securities) shall
from time to time be invested or reinvested by the Trustee in any Cash
Equivalents or, with respect to Net Cash Proceeds from Asset Sales, in any
Permitted Investments pursuant to the direction of the Company which shall
specify the Permitted Investment in which such Net Cash Proceeds shall be
invested and the maturity date of such investment, as provided in Section 4.15.
Unless an Event of Default occurs and is continuing, any interest on such Cash
Equivalents or Permitted Investments (in excess of any accrued interest paid at
the time of purchase) which may be received by the Trustee shall be forthwith
paid to the Company. Such Cash Equivalents and Permitted Investments shall be
held by the Trustee as a part of the Collateral, subject to the same provisions
hereof as the cash used by it to purchase such Cash Equivalents or Permitted
Investments.
The Trustee shall not be liable or responsible for any loss resulting
from such investments or sales except only for its own grossly negligent action,
its own grossly negligent failure to act or its own willful misconduct in
complying with this Section 12.8.
ARTICLE XIII
MISCELLANEOUS
-------------
SECTION 13.1 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 required provision shall control.
SECTION 13.2 Notices.
-------
Any notice or communication shall be sufficiently given if in writing
and delivered in Person or mailed by first-class mail addressed as follows:
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(a) if to the Company or the Guarantors:
PLASTIC CONTAINERS, INC.
000 Xxxxxxx 0 Xxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
Continental Can Company, Inc.
Xxx Xxxxxx Xxx
Xxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
(b) if to the Trustee:
UNITED STATES TRUST COMPANY
OF NEW YORK
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Re: Plastic Containers, Inc.
Attention: Corporate Trust Department
The Company, the Guarantors 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 Securityholder, including any
notice delivered in connection with TIA Section 310(b), TIA Section 313(c), TIA
Section 314(a) and TIA Section 315(b), shall be mailed to him, first-class
postage prepaid, at his address as it appears on the registration books of the
Registrar and shall be sufficiently given to him 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. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3 Communications by Holders with Other
Holders.
------------------------------------
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the
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Registrar and any other Person shall have the protection of TIA Section 312(c).
SECTION 13.4 Certificate and Opinion of Counsel
as to Conditions Precedent.
----------------------------------
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, the Company or such Guarantor,
as the case may be, shall furnish to the Trustee at the request of the Trustee
(a) an Officers' Certificate in form and substance satisfactory to the Trustee
stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, (b) an Opinion of Counsel in form and substance satisfactory to
the Trustee stating that, in the opinion of counsel, all such conditions have
been complied with and (c) where applicable, a certificate or opinion by an
independent certified public accountant satisfactory to the Trustee that
complies with TIA Section 314(c).
SECTION 13.5 Statements Required in Certificate
and Opinion of Counsel.
----------------------------------
Each certificate and Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate has read such
covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such certificate are
based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 13.6 Rules by Trustee, Paying Agent,
Registrar.
-------------------------------
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The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Securityholders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 13.7 Legal Holidays.
--------------
If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 13.8 Governing Law.
-------------
The internal laws of the State of New York shall govern this Indenture
and the Securities without regard to principles of conflict of laws.
SECTION 13.9 No Recourse Against Others.
--------------------------
A trustee, director, officer, employee, stockholder or beneficiary, as
such, of the Company shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such liability.
SECTION 13.10 Successors.
----------
All agreements of the Company and each Guarantor in this Indenture and
the Securities shall bind their respective successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 13.11 Duplicate Originals.
-------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.12 Separability.
------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
-132-
SECTION 13.13 Table of Contents, Headings, Etc.
--------------------------------
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, and are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
PLASTIC CONTAINERS, INC.
By /s/
-----------------------------
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By /s/
-----------------------------
Title:
GUARANTORS:
CONTINENTAL PLASTIC
CONTAINERS, INC.
By /s/
-----------------------------
Title:
CONTINENTAL CARIBBEAN
CONTAINERS, INC.
By /s/
-----------------------------
Title:
Exhibit A
---------
[FORM OF SERIES A NOTE]
[If a restricted security, then insert -- THE NOTE (OR ITS PREDECESSOR)
EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER
OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) INSIDE THE
UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A FOREIGN PURCHASER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND,
IN THE CASE OF CLAUSE (b), (c) OR (d), BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY
OR ANY NOTE ISSUED IN EXCHANGE FOR OR IN SUBSTITUTION OF THIS NOTE OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.]
Each Temporary Regulation S Global Security shall bear the following
legend on the face thereof:
THIS SECURITY IS A TEMPORARY REGULATION S GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE REFERRED TO HEREINAFTER. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN
SECTION 2.16 OF THE INDENTURE, INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY MAY NOT BE OFFERED OR SOLD TO A U.S. PERSON OR FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (AS
DEFINED IN THE INDENTURE), AND NO TRANSFER OR EXCHANGE OF AN INTEREST IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY MAY BE MADE FOR AN INTEREST IN A
RESTRICTED GLOBAL SECURITY OR IN A PERMANENT REGULATION S GLOBAL SECURITY UNTIL
AFTER THE LATER OF THE DATE OF EXPIRATION OF THE RESTRICTED PERIOD AND THE DATE
ON WHICH THE OWNER SECURITIES CERTIFICATION AND THE DEPOSITORY SECURITIES
CERTIFICATION RELATING TO SUCH INTEREST HAVE BEEN PROVIDED IN
A-1
ACCORDANCE WITH THE TERMS OF THE INDENTURE, TO THE EFFECT THAT THE BENEFICIAL
OWNER OR OWNERS OF SUCH INTEREST ARE NOT U. S. PERSONS.
Each Permanent Regulation S Security shall bear the following legend
on the face thereof:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, OR
DELIVERED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S.
PERSON, UNLESS THE SECURITIES ARE REGISTERED UNDER THE SECURITIES AT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.
A-2
CUSIP NO.: 000000XX0
PLASTIC CONTAINERS, INC.
No. $
10% SENIOR SECURED NOTE DUE 2006, SERIES A
PLASTIC CONTAINERS, INC., a Delaware corporation (the "Company", which
term includes any successor entity) for value received promises to pay to
or registered assigns the principal sum of Dollars on December
15, 2006.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
To the extent set forth in the Collateral Documents, payment hereof is
secured, on an equal and ratable basis with all other Securities, by a valid,
perfected security interest in the Collateral (as defined in the Indenture) with
the priority contemplated in Section 11.01(a) of the Indenture, the terms of
which security interest are more fully set forth in the Collateral Documents.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated:
PLASTIC CONTAINERS, INC.
By: _______________________________
Chairman of the Board and
Chief Executive Officer
By: ______________________________
Vice President, Secretary
and Treasurer
A-3
Certificate of Authentication
This is one of the 10% Senior Secured Notes due 2006, Series A
referred to in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By:___________________________
Authorized Officer
Dated: _____________________
A-4
(REVERSE OF SECURITY)
PLASTIC CONTAINERS, INC.
10% SENIOR SECURED NOTE DUE 2006, SERIES A
1. Interest. PLASTIC CONTAINERS, INC., a Delaware corporation (the
--------
"Company"), promises to pay, until the principal hereof is paid or made
available for payment, interest on the principal amount set forth on the reverse
side hereof at a rate of 10% per annum. Interest on the Senior Secured Notes
--- -----
will accrue from and including the most recent date or which interest has been
paid or, if no interest has been paid, from and including December 17, 1996.
Interest shall be payable in arrears on June 15 and December 15 of each year,
commencing June 15, 1997. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Company shall pay interest on overdue
principal and on overdue interest (to the full extent permitted by law) at a
rate of 11% per annum.
--- -----
2. Method of Payment. The Company will pay interest on the Senior
-----------------
Secured Notes (except defaulted interest) to the Persons who are registered
Holders of Senior Secured Notes at the close of business on the June 1 or
December 1 next preceding the interest payment date. Holders must surrender
Senior Secured Notes 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.
3. Paying Agent and Registrar. Initially, United States Trust
--------------------------
Company of New York (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without notice.
Neither the Company nor any of its Subsidiaries may act as Paying Agent,
Registrar or co-Registrar.
4. Indenture. The Company issued the Senior Secured Notes under an
---------
Indenture dated as of December 17, 1996 (the "Indenture") among the Company,
Continental Plastic Containers, Inc. ("CPC"), Continental Caribbean Containers,
Inc. ("Caribbean") and the Trustee. This Senior Secured Note is one of an issue
of Senior Secured Notes of the Company issued, or to be issued, under the
Indenture. The terms of the Senior Secured Notes 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. Code Sections 77aaa-77bbbb), as amended from time
to time. The Senior Secured Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of them. Capitalized
and certain other terms used herein and not otherwise defined have
A-5
the meanings set forth in the Indenture. This Senior Secured Note is one of a
duly authorized issue of Initial Notes of the Company designated as its 10%
Senior Secured Notes due 2006, Series A (the "Initial Securities"). The Senior
Secured Notes are secured obligations of the Company limited in aggregate
principal amount to $125,000,000. The Senior Secured Notes include the Initial
Securities and the Exchange Securities, as defined below, issued in exchange for
the Initial Securities pursuant to the Indenture. The Initial Securities and
the Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture limits, among other things, the incurrence of
Indebtedness by the Company and its Subsidiaries; Sale-Leaseback Transactions by
the Company and its Subsidiaries; the creation of Liens by the Company and its
Subsidiaries; purchases, redemptions, and other acquisitions or retirements of
Capital Stock of the Company and its Subsidiaries; transactions by the Company
and its Subsidiaries with their respective Affiliates; and the ability of the
Company or any of its Subsidiaries to merge with or into another entity. The
Indenture also requires each Guarantor to comply with each of the covenants that
impose restrictions on such Guarantor. The limitations are subject to a number
of important qualifications and exceptions. The Company must report to the
Trustee quarterly on compliance with the limitations contained in the Indenture.
5. Optional Redemption. The Company, at its option, may redeem all or
-------------------
any of the Senior Secured Notes, in whole or in part, at any time on or after
December 15, 2001 at the redemption prices (expressed in percentages of
principal amount) set forth below plus accrued and unpaid interest to the
Redemption Date, if redeemed during the 12-month period beginning December 15 of
the years indicated below:
Year Percentage
---- ----------
2001......................... 105.000%
2002......................... 103.333%
2003......................... 101.667%
2004 and thereafter.......... 100.000%
In addition, on or prior to December 15, 1999, the Company may, at its
option, following a Public Equity Offering (as defined below) which yields gross
proceeds (before discounts, commissions and expenses) of $15,000,000 or more in
aggregate, redeem up to $40,000,000 of the principal amount of Senior Secured
Notes originally issued from the holders of Senior Secured Notes, on a pro rata
basis (or as nearly pro rata as practicable), at a redemption price equal to
109% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of redemption; provided that at least $85,000,000 aggregate
principal amount of Senior Secured Notes would remain outstanding immediately
after giving effect to any such redemption. In order to effect the
A-6
foregoing redemption with the net proceeds of a Public Equity Offering, the
Company shall send the redemption notice not later than 60 days after the
consummation of such Public Equity Offering.
As used in the preceding paragraph, a "Public Equity Offering" means
an underwritten public offering of Capital Stock (other than Disqualified Stock)
of the Company made on a primary basis by the Company pursuant to a registration
statement filed with and declared effective by the Commission in accordance with
the Securities Act or an underwritten offering of Capital Stock (other than
Disqualified Stock) of the Company made on a primary basis by the Company
pursuant to Rule 144A under the Securities Act.
6. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the redemption date to each
Holder of Senior Secured Notes to be redeemed at his registered address. On and
after the Redemption Date, unless the Company defaults in making the redemption
payment, interest ceases to accrue on Senior Secured Notes or portions thereof
called for redemption.
7. Offers To Purchase. Sections 4.15 and 4.17 of the Indenture
------------------
provide that after an Asset Sale or upon the occurrence of a Change of Control,
and subject to further limitations contained therein, the Company shall make an
offer to purchase certain amounts of Senior Secured Notes in accordance with the
procedures set forth in the Indenture.
8. Security Documents. In order to secure the due and punctual
------------------
payment of the principal of and interest on the Senior Secured Notes and all
other amounts payable by the Company under the Indenture and the Senior Secured
Notes when and as the same shall be due and payable, whether at maturity, by
acceleration or otherwise, according to the terms of the Senior Secured Notes
and the Indenture, each of the Company, CPC and Caribbean has granted security
interests in and Liens on the Collateral owned by it to the Trustee for the
benefit of the Holders of Senior Secured Notes pursuant to the Indenture and the
Security Documents. The Senior Secured Notes will be secured by Liens on and
security interests in the Collateral that are subject only to certain permitted
encumbrances.
Each Holder, by accepting a Senior Secured Note, agrees to all of the
terms and provisions of the Security Documents, as the same may be amended from
time to time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms
A-7
and provisions of the Indenture will not be deemed for any purpose to be an
impairment of the security under the Indenture.
9. Denominations, Transfer, Exchange. The Senior Secured Notes are in
---------------------------------
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. A Holder may transfer or exchange Senior Secured Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay to
it any taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Senior Secured Notes or portion of a
Senior Secured Note selected for redemption, or transfer or exchange any Senior
Secured Notes for a period of 15 days before a selection of Senior Secured Notes
to be redeemed.
10. Persons Deemed Owners. The registered Holder of a Senior Secured
---------------------
Note may be treated as the owner of it for all purposes. With respect to Global
Securities, the Depository may grant proxies and otherwise authorize Holders of
Book-Entry Securities to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a Holder of a Security
is entitled to give or take under this Indenture.
11. Unclaimed Money. If money for the payment of principal or interest
---------------
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an "abandoned
property" law designates another Person.
12. Amendment, Supplement, Waiver. The Company and the Guarantors and
-----------------------------
the Trustee (if a party thereto) may, without the consent of the Holders of any
outstanding Senior Secured Notes, amend, waive or supplement the Indenture, the
Security Documents or the Senior Secured Notes for certain specified purposes,
including, among other things, curing ambiguities, defects or inconsistencies,
maintaining the qualification of the Indenture under the Trust Indenture Act of
1939, as amended, making any change that does not adversely affect the rights of
any Holder or mortgaging, pledging or granting a security interest in favor of
the Trustee as additional security for the payment and performance of the
obligations under the Indenture, in any property or assets, including any which
is required to be mortgaged, pledged or hypothecated, or in which a security
interest is required to be granted, to the Trustee pursuant to any Security
Document or otherwise. Other amendments and modifications of the Indenture, the
Senior Secured Notes or the Security Documents may be made by the Company, the
Guarantors and the Trustee with the consent of the Holders of not less than a
majority of the aggregate principal amount of the outstanding Senior Secured
Notes, subject to certain
A-8
exceptions requiring the consent of the Holders of the particular Senior Secured
Notes to be affected.
13. Successor Corporation. When a successor corporation assumes all
---------------------
the obligations of its predecessor under the Senior Secured Notes and the
Indenture and the transaction complies with the terms of Article V of the
Indenture, the predecessor corporation will be released from those obligations.
14. Defaults and Remedies. Events of Default are set forth in the
---------------------
Indenture. Subject to certain limitations in the Indenture, if an Event of
Default (other than an Event of Default specified in Section 6.1(a)(viii) or
(ix) of the Indenture (with respect to the Company, CPC or Caribbean)) occurs
and is continuing, then the Holders of not less than 25% in aggregate principal
amount of the outstanding Senior Secured Notes may, and the Trustee upon the
request of the Holders of not less than 25% in aggregate principal amount of the
outstanding Senior Secured Notes shall, declare the principal of and interest on
all of the Senior Secured Notes to be due and payable immediately. If an Event
of Default specified in Section 6.1(a)(viii) or (ix) of the Indenture (with
respect to the Company, CPC or Caribbean) occurs and is continuing, the
principal of and interest on all of the Senior Secured Notes shall ipso facto
---- -----
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. Holders may not enforce the Indenture
or the Senior Secured Notes except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Senior Secured Notes. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Senior Secured Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to the
Trustee.
15. Trustee Dealings with Company. The Trustee, in its individual or
-----------------------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
16. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Senior Secured Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Senior Secured Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Senior Secured Notes.
A-9
17. Discharge. The Company's obligations pursuant to the Indenture
---------
will be discharged, except for obligations pursuant to certain sections thereof,
subject to the terms of the Indenture, upon the payment of all the Senior
Secured Notes or upon the irrevocable deposit with the Trustee of money or U.S.
Government Obligations sufficient to pay when due principal of and interest on
the Senior Secured Notes to maturity or redemption, as the case may be.
18. Authentication. This Senior Secured Note shall not be valid until
--------------
the Trustee signs the certificate of authentication on the other side of this
Senior Secured Note.
19. Abbreviations. Customary abbreviations may be used in the name of
-------------
a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. Governing Law. The laws of the State of New York shall govern this
-------------
Senior Secured Note and the Indenture.
21. Registration Rights. Pursuant to the Registration Rights Agreement
-------------------
among the Company and the Initial Purchasers, the Company will be obligated to
consummate an exchange offer pursuant to which the Holder of this Security shall
have the right to exchange this Security for the Company's 10% Senior Secured
Notes due 2006, Series B (the "Exchange Securities"), which have been registered
under the Securities Act, in like principal amount and having terms identical in
all material respects to the Initial Securities. The Holders of the Initial
Securities shall be entitled to receive Liquidated Damages in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
PLASTIC CONTAINERS, INC.
000 Xxxxxxx Xxxxxxxxx Xxxx 0
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
The form of reverse of a Temporary Regulation S Global Security shall
include the language:
This Temporary Regulation S Global Security is one of a duly
authorized issue of Securities of the Company designated as
A-10
its Senior Secured Notes due 2006 (the "Securities"), issued under an Indenture,
dated as of December , 1996 (herein called the "Indenture"), among the
Company, the Guarantors and United States Trust Company of New York, as trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture). The Securities are limited in aggregate principal amount to
$115,000,000. Reference is hereby made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Guarantors, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
Until this Temporary Regulation S Global Security is exchanged for a
Permanent Regulation S Global Security, the Holder hereof shall not be entitled
to receive payments of interest hereon; until so exchanged in full, this
Temporary Regulation S Global Security shall in all other respects be entitled
to the same benefits as other Securities under the Indenture.
This Temporary Regulation S Global Security is exchangeable in whole
or in part for one or more Permanent Regulation S Global Securities or
Restricted Global Securities only (i) on or after the expiration of the
Restricted Period and (ii) upon presentation of certificates (accompanied by an
opinion of Counsel, if applicable) required by Article III of the Indenture.
Upon exchange of this Temporary Regulation S Global Security for one or more
Permanent Regulation S Global Securities or Restricted Global Securities, the
Trustee shall cancel this Temporary Regulation S Global Security.
This Temporary Regulation S Global Security shall not become valid or
obligatory until the certificate of authentication hereon shall have been duly
manually signed by the Trustee in accordance with the Indenture. This Temporary
Regulation S Global Security shall be governed by and construed in accordance
with the laws of the State of New York.
A-11
GUARANTEE
Each Guarantor (which term includes any successor Person under the
Indenture) has unconditionally guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, (a) the due and
punctual payment of the principal of and interest on the Senior Secured Notes,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on overdue principal, and, to the extent permitted by law, interest,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
X of the Indenture and (b) in case of any extension of time of payment or
renewal of any Senior Secured Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of the Guarantors to the Holders of Senior Secured
Notes and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth in Article X of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Guarantee.
Guarantors:
CONTINENTAL PLASTIC CONTAINERS, INC.
CONTINENTAL CARIBBEAN CONTAINERS, INC.
By:
-------------------------------
President of each of the
foregoing corporations
By:
-------------------------------
Secretary of each of the
foregoing corporations
A-12
ASSIGNMENT FORM
If you the Holder want to assign this Senior Secured Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Senior Secured Note to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number) ____________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
--------------------------------------------------------------------------------
agent to transfer this Senior Secured Note on the books of the Company. The
agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: _________________ Your signature:
------------------------
(Sign exactly as your
name appears on the other
side of this Senior
Secured Note)
Signature Guarantee:
--------------------
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Senior Secured Note purchased by the Company
pursuant to Section 4.15 or 4.17 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Senior Secured Note purchased by
the Company pursuant to Section 4.15 or 4.17 of the Indenture, state the amount:
$_____________
Date: ________________ Your Signature: _____________________
(Sign exactly as your
name appears on the
other side of this
Senior Secured Note)
Signature Guarantee: _____________________
A-14
Exhibit B
---------
CUSIP No.:
PLASTIC CONTAINERS, INC.
10% SENIOR SECURED NOTE DUE 2006, SERIES B
No. $
PLASTIC CONTAINERS, INC., a Delaware corporation (the "Company," which
term includes any successor entity) for value received promises to pay to
or registered assigns, the principal sum of Dollars, on December 15,
2006.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
To the extent set forth in the Collateral Documents, payment hereof is
secured, on an equal and ratable basis with all other Securities, by a valid,
perfected security interest in the Collateral (as defined in the Indenture) with
the priority contemplated in Section 11.01(a) of the Indenture, the terms of
which security interest are more fully set forth in the Collateral Documents.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers
B-1
and a facsimile of its corporate seal to be affixed hereto or imprinted hereon.
Dated:
PLASTIC CONTAINERS, INC.
By:
-----------------------------
Chairman of the Board and
Chief Executive Officer
By:
-----------------------------
Vice President, Secretary
and Treasurer
B-2
Certificate of Authentication
This is one of the 10% Senior Secured Notes due 2006, Series B
referred to in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK
as Trustee
Dated: By:
--------------------------------
Authorized Officer
B-3
(REVERSE OF SECURITY)
PLASTIC CONTAINERS, INC.
10% SENIOR SECURED NOTE DUE 2006, SERIES B
1. Interest. PLASTIC CONTAINERS, INC., a Delaware corporation (the
--------
"Company"), promises to pay, until the principal hereof is paid or made
available for payment, interest on the principal amount set forth on the reverse
side hereof at a rate of 10% per annum. Interest on the Senior Secured Notes
--- -----
will accrue from and including the most recent date or which interest has been
paid or, if no interest has been paid, from and including December 17, 1996.
Interest shall be payable in arrears on June 15 and December 15 of each year,
commencing June 15, 1997. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Company shall pay interest on overdue
principal and on overdue interest (to the full extent permitted by law) at a
rate of 11% per annum.
--- -----
2. Method of Payment. The Company will pay interest on the Senior
-----------------
Secured Notes (except defaulted interest) to the Persons who are registered
Holders of Senior Secured Notes at the close of business on the June 1 or
December 1 next preceding the interest payment date. Holders must surrender
Senior Secured Notes 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.
3. Paying Agent and Registrar. Initially, United States Trust
--------------------------
Company of New York (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without notice.
Neither the Company nor any of its Subsidiaries may act as Paying Agent,
Registrar or co-Registrar.
4. Indenture. The Company issued the Senior Secured Notes under an
---------
Indenture dated as of December 17, 1996 (the "Indenture") among the Company,
Continental Plastic Containers, Inc. ("CPC"), Continental Caribbean Containers,
Inc. ("Caribbean") and the Trustee. This Senior Secured Note is one of an issue
of Senior Secured Notes of the Company issued, or to be issued, under the
Indenture. The terms of the Senior Secured Notes 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. Code Sections 77aaa-77bbbb), as amended from time
to time. The Senior Secured Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of them. Capitalized
and certain other terms used herein and not otherwise defined have
B-4
the meanings set forth in the Indenture. This Senior Secured Note is one of a
duly authorized issue of Exchange Notes of the Company designated as its 10%
Senior Secured Notes due 2006, Series B. The Senior Secured Notes are secured
obligations of the Company limited in aggregate principal amount to
$125,000,000. The Indenture limits, among other things, the incurrence of
Indebtedness by the Company and its Subsidiaries; Sale-Leaseback Transactions by
the Company and its Subsidiaries; the creation of Liens by the Company and its
Subsidiaries; purchases, redemptions, and other acquisitions or retirements of
Capital Stock of the Company and its Subsidiaries; transactions by the Company
and its Subsidiaries with their respective Affiliates; and the ability of the
Company or any of its Subsidiaries to merge with or into another entity. The
Indenture also requires each Guarantor to comply with each of the covenants that
impose restrictions on such Guarantor. The limitations are subject to a number
of important qualifications and exceptions. The Company must report to the
Trustee quarterly on compliance with the limitations contained in the Indenture.
5. Optional Redemption. The Company, at its option, may redeem all or
-------------------
any of the Senior Secured Notes, in whole or in part, at any time on or after
December 15, 2001 at the redemption prices (expressed in percentages of
principal amount) set forth below plus accrued and unpaid interest to the
Redemption Date, if redeemed during the 12-month period beginning December 15 of
the years indicated below:
Year Percentage
---- ----------
2001......................... 105.000%
2002......................... 103.333%
2003......................... 101.667%
2004 and thereafter.......... 100.000%
In addition, on or prior to December 15, 1999, the Company may, at its
option, following a Public Equity Offering (as defined below) which yields gross
proceeds (before discounts, commissions and expenses) of $15,000,000 or more in
aggregate, redeem up to $40,000,000 of the principal amount of Senior Secured
Notes originally issued from the holders of Senior Secured Notes, on a pro rata
basis (or as nearly pro rata as practicable), at a redemption price equal to
109% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of redemption; provided that at least $85,000,000 aggregate
principal amount of Senior Secured Notes would remain outstanding immediately
after giving effect to any such redemption. In order to effect the foregoing
redemption with the net proceeds of a Public Equity Offering, the Company shall
send the redemption notice not later than 60 days after the consummation of such
Public Equity Offering.
B-5
As used in the preceding paragraph, a "Public Equity Offering" means
an underwritten public offering of Capital Stock (other than Disqualified Stock)
of the Company made on a primary basis by the Company pursuant to a registration
statement filed with and declared effective by the Commission in accordance with
the Securities Act or an underwritten offering of Capital Stock (other than
Disqualified Stock) of the Company made on a primary basis by the Company
pursuant to Rule 144A under the Securities Act.
6. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the redemption date to each
Holder of Senior Secured Notes to be redeemed at his registered address. On and
after the Redemption Date, unless the Company defaults in making the redemption
payment, interest ceases to accrue on Senior Secured Notes or portions thereof
called for redemption.
7. Offers To Purchase. Sections 4.15 and 4.17 of the Indenture
------------------
provide that after an Asset Sale or upon the occurrence of a Change of Control,
and subject to further limitations contained therein, the Company shall make an
offer to purchase certain amounts of Senior Secured Notes in accordance with the
procedures set forth in the Indenture.
8. Security Documents. In order to secure the due and punctual
------------------
payment of the principal of and interest on the Senior Secured Notes and all
other amounts payable by the Company under the Indenture and the Senior Secured
Notes when and as the same shall be due and payable, whether at maturity, by
acceleration or otherwise, according to the terms of the Senior Secured Notes
and the Indenture, each of the Company, CPC and Caribbean has granted security
interests in and Liens on the Collateral owned by it to the Trustee for the
benefit of the Holders of Senior Secured Notes pursuant to the Indenture and the
Security Documents. The Senior Secured Notes will be secured by Liens on and
security interests in the Collateral that are subject only to certain permitted
encumbrances.
Each Holder, by accepting a Senior Secured Note, agrees to all of the
terms and provisions of the Security Documents, as the same may be amended from
time to time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture will
not be deemed for any purpose to be an impairment of the security under the
Indenture.
B-6
9. Denominations, Transfer, Exchange. The Senior Secured Notes are in
---------------------------------
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. A Holder may transfer or exchange Senior Secured Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay to
it any taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Senior Secured Notes or portion of a
Senior Secured Note selected for redemption, or transfer or exchange any Senior
Secured Notes for a period of 15 days before a selection of Senior Secured Notes
to be redeemed.
10. Persons Deemed Owners. The registered Holder of a Senior Secured
---------------------
Note may be treated as the owner of it for all purposes. With respect to Global
Securities, the Depository may grant proxies and otherwise authorize Holders of
Book-Entry Securities to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a Holder of a Security
is entitled to give or take under this Indenture.
11. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company at its request. After that, Holders entitled to
the money must look to the Company for payment as general creditors unless an
"abandoned property" law designates another Person.
12. Amendment, Supplement, Waiver. The Company and the Guarantors
-----------------------------
and the Trustee (if a party thereto) may, without the consent of the Holders of
any outstanding Senior Secured Notes, amend, waive or supplement the Indenture,
the Security Documents or the Senior Secured Notes for certain specified
purposes, including, among other things, curing ambiguities, defects or
inconsistencies, maintaining the qualification of the Indenture under the Trust
Indenture Act of 1939, as amended, making any change that does not adversely
affect the rights of any Holder or mortgaging, pledging or granting a security
interest in favor of the Trustee as additional security for the payment and
performance of the obligations under the Indenture, in any property or assets,
including any which is required to be mortgaged, pledged or hypothecated, or in
which a security interest is required to be granted, to the Trustee pursuant to
any Security Document or otherwise. Other amendments and modifications of the
Indenture, the Senior Secured Notes or the Security Documents may be made by the
Company, the Guarantors and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of the outstanding Senior
Secured Notes, subject to certain exceptions requiring the consent of the
Holders of the particular Senior Secured Notes to be affected.
B-7
13. Successor Corporation. When a successor corporation assumes all
---------------------
the obligations of its predecessor under the Senior Secured Notes and the
Indenture and the transaction complies with the terms of Article V of the
Indenture, the predecessor corporation will be released from those obligations.
14. Defaults and Remedies. Events of Default are set forth in the
---------------------
Indenture. Subject to certain limitations in the Indenture, if an Event of
Default (other than an Event of Default specified in Section 6.1(a)(viii) or
(ix) of the Indenture (with respect to the Company, CPC or Caribbean)) occurs
and is continuing, then the Holders of not less than 25% in aggregate principal
amount of the outstanding Senior Secured Notes may, and the Trustee upon the
request of the Holders of not less than 25% in aggregate principal amount of the
outstanding Senior Secured Notes shall, declare the principal of and interest on
all of the Senior Secured Notes to be due and payable immediately. If an Event
of Default specified in Section 6.1(a)(viii) or (ix) of the Indenture (with
respect to the Company, CPC or Caribbean) occurs and is continuing, the
principal of and interest on all of the Senior Secured Notes shall ipso facto
---- -----
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. Holders may not enforce the Indenture
or the Senior Secured Notes except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Senior Secured Notes. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Senior Secured Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to the
Trustee.
15. Trustee Dealings with Company. The Trustee, in its individual or
-----------------------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
16. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Senior Secured Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Senior Secured Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Senior Secured Notes.
17. Discharge. The Company's obligations pursuant to the Indenture
---------
will be discharged, except for obligations pursuant
B-8
to certain sections thereof, subject to the terms of the Indenture, upon the
payment of all the Senior Secured Notes or upon the irrevocable deposit with the
Trustee of money or U.S. Government Obligations sufficient to pay when due
principal of and interest on the Senior Secured Notes to maturity or redemption,
as the case may be.
18. Authentication. This Senior Secured Note shall not be valid
--------------
until the Trustee signs the certificate of authentication on the other side of
this Senior Secured Note.
19. Abbreviations. Customary abbreviations may be used in the name
-------------
of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. Governing Law. The laws of the State of New York shall govern
-------------
this Senior Secured Note and the Indenture.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
PLASTIC CONTAINERS, INC.
000 Xxxxxxx 0 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
B-9
GUARANTEE
Each Guarantor (which term includes any successor Person under the
Indenture) has unconditionally guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, (a) the due and
punctual payment of the principal of and interest on the Senior Secured Notes,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on overdue principal, and, to the extent permitted by law, interest,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
X of the Indenture and (b) in case of any extension of time of payment or
renewal of any Senior Secured Notes or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.
The obligations of the Guarantors to the Holders of Senior Secured
Notes and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth in Article X of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Guarantee.
Guarantors:
CONTINENTAL PLASTIC CONTAINERS, INC.
CONTINENTAL CARIBBEAN CONTAINERS, INC.
By:
------------------------------------
President of each of the
foregoing corporations
By:
------------------------------------
Secretary of each of the foregoing
corporations
B-10
ASSIGNMENT FORM
If you the Holder want to assign this Senior Secured Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Senior Secured Note to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax ID number) ____________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code) and irrevocably appoint
--------------------------------------------------------------------------------
agent to transfer this Senior Secured Note on the books of the Company. The
agent may substitute another to act for him.
Date: ________________ Your Signature: _____________________
(Sign exactly as your
name appears on the other
side of this Senior
Secured Note)
Signature Guarantee:
--------------------
B-11
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Senior Secured Note purchased by the Company
pursuant to Section 4.15 or 4.17 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Senior Secured Note purchased by
the Company pursuant to Section 4.15 or 4.17 of the Indenture, state the amount:
$_____________
Date: ________________ Your Signature: _____________________
(Sign exactly as your
name appears on the
other side of this
Senior Secured Note)
Signature Guarantee: _____________________
B-12
Exhibit C
---------
[FORM OF CERTIFICATION TO BE GIVEN BY HOLDERS OF
BENEFICIAL INTEREST IN A TEMPORARY
REGULATION S GLOBAL SECURITY
TO EUROCLEAR OR CEDEL]
OWNER SECURITIES CERTIFICATION
PLASTIC CONTAINERS, INC.
10% Senior Secured Notes due 2006
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the "Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers, Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This is to certify that, as of the date hereof, $______ of the above-
captioned Securities (the "Securities") are beneficially owned by non-U.S.
person(s). As used in this
the term "U.S. person" has the meaning given to it paragraph,
by Regulation S under the Securities Act of 1933, as amended.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the Securities
held by you for our account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceedings.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer, the Guarantors and the Initial Purchasers.
Dated: ,
-------------------- ----
By:
--------------------------------------------
As, or as agent for, the beneficial owner(s)
of the Securities to which this certificate
relates.
C-1
Exhibit D
---------
[FORM OF CERTIFICATION TO BE GIVEN
BY THE EUROCLEAR OPERATOR OR
CEDEL]
DEPOSITORY SECURITIES CERTIFICATION
PLASTIC CONTAINERS, INC.
10% Senior Secured Notes due 2006
CUSIP No. 000000XX0
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers, Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This is to certify that, with respect to U.S.$__________ principal
amount of the above-captioned Securities (the "Securities"), except as set forth
below, we have received in writing, by tested telex or by electronic
transmission, from member organizations appearing in our records as persons
being entitled to a portion of the principal amount of the Securities (our
"Member Organizations"), certifications with respect to such portion,
substantially to the effect set forth in the Indenture./1/
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the Temporary Regulation S Global Security (as defined in the
Indenture) excepted in such certifications and (ii) that as of the date hereof
we have not received any notification from any of our Member Organizations to
the effect that the statements made by such Member Organizations with respect to
any portion of the part submitted herewith for exchange (or, if relevant,
exercise of any rights or collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
----------
/1/ Unless Xxxxxx Guaranty Trust Company of New York, London Branch is
otherwise informed by the Agent, the long form certificate set out in the
Operating Procedures will be deemed to meet the requirements of this sentence.
D-1
We understand that this certification is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
you to produce this certification to any interested party in such proceedings.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer, the Guarantors and the Initial Purchasers.
Dated:______________, _____
Yours faithfully,
[XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as operator of the
Euroclear System]
or
[CEDEL BANK, SOCIETE ANONYME]
By
---------------------------
D-2
Exhibit E
---------
[FORM OF CERTIFICATION TO BE GIVEN BY
TRANSFEREE OF BENEFICIAL INTEREST IN A
TEMPORARY REGULATION S GLOBAL SECURITY]
TRANSFEREE SECURITIES CERTIFICATION
PLASTIC CONTAINERS, INC.
10% Senior Secured Notes due 2006
CUSIP No. 000000XX0
Reference is hereby made to the Indenture, dated as of December 17, 1996 (the
Indenture"), among Plastic Containers, Inc., as Issuer, Continental Plastic
Containers, Inc. and Continental Caribbean Containers, Inc., as Guarantors, and
United States Trust Company of New York, as Trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
For purposes of acquiring a beneficial interest in the Temporary Regulation S
Global Security, the undersigned certifies that it is not a U.S. Person as
defined by Regulation S under the Securities Act of 1933, as amended.
We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certification relating to the Securities held by
you in which we intend to acquire a beneficial interest in accordance with your
operating procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
We understand that this certificate is required in connection with certain
securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer, the Guarantors and the Initial Purchasers.
Dated: ,
-------------------- ----
By:
-----------------------------------------
As, or as agent for, the beneficial
owner(s) of the Securities to which this
certificate relates.
E-1
Exhibit F
---------
FORM OF CERTIFICATION FOR TRANSFER OR
EXCHANGE OF RESTRICTED GLOBAL SECURITY
TO TEMPORARY REGULATION S GLOBAL SECURITY
(Exchanges or transfers pursuant to
Section 2.16(ii) of the Indenture)
United States Trust Company
of New York
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Attention: Global Trust Services
International Corporate
Trust Administration
Re: Plastic Containers Inc. 10%
Senior Secured Notes due
2006 (the "Securities")
-------------------------------
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers, Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to U.S.$__________ aggregate principal amount of
Securities which are Held in the form of the Restricted Global Security (CUSIP
No.000000XX0) with the Depository in the name of [insert name of transferor]
(the "Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Securities to a Person who will take delivery thereof in the
form of an equal aggregate principal amount of Securities evidenced by the
Temporary Regulation S Global Security (CUSIP No._____) to be held with the
Depository in the name of [Euroclear] [Cedel Bank, societe anonyme].
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Securities and
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and accordingly the Transferor does
hereby certify that:
(1) the offer of the Securities was not made to a person in the United
States;
F-1
[(2) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the transferee was outside the United
States]/1/
[(2) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor nor any
person acting on our behalf knows that the transaction was pre-arranged with
a buyer in the United States;]/1/
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903 (b) or 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depository in the name
of [Euroclear] [Cedel Bank, societe anonyme].
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer, the Guarantors and the Initial Purchasers.
[Insert Name of Transferor)
By:
-------------------------------
Name:
Title:
Dated:
-----------
cc: Plastic Containers, Inc.
----------
/1/ Insert one of these two provisions, which come from the definition of
"offshore transaction" in Regulation S.
F-2
Exhibit G
---------
FORM OF CERTIFICATION FOR TRANSFER OR EXCHANGE OF
RESTRICTED GLOBAL SECURITY TO
PERMANENT REGULATION S GLOBAL SECURITY
(Exchanges or transfers pursuant to
Section 2.16(ii) of the Indenture)
United States Trust Company of New York,
as Trustee
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Attention: Global Trust Services
International Corporate
Trust Administration
Re: Plastic Containers, Inc.
10% Senior Secured Notes
due 2006 (the "Securities")
---------------------------
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the "Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers, Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to U.S.$____________ aggregate principal amount of
Securities which are held in the form of the Restricted Global Security (CUSIP
No. 000000XX0) with the Depository in the name of [insert name of transferor]
(the "Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Securities to a Person who will take delivery thereof in the
form of an equal aggregate principal amount of Securities evidenced by the
Permanent Regulation S Global Security (CUSIP No. __________).
In connection with such request, and in respect of such Securities,
the Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Securities and,
(1) with respect to transfers made in reliance on Regulation S under
the Securities Act of 1933, as amended (the "Securities Act"), the
Transferor does hereby certify that:
(A) the offer of the Securities was not made to a person in the
United States;
G-1
[(B) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on
its behalf reasonably believed that the transferee was outside the
United States;]/1/
[(B) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the Transferor
nor any person acting on our behalf knows that the transaction was pre-
arranged with a buyer in the United States;]/1/
(C) no directed selling efforts have been made in contravention of
the requirements of Rule 903 (b) or 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; and
(2) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Securities are
being transferred in a transaction permitted by Rule 144 under the
Securities Act.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer, the Guarantors and the Initial Purchasers.
[Insert Name of Transferor]
By:
----------------------------
Name:
Title:
Dated:
-----------------------
cc: Plastic Containers, Inc.
----------
/1/ Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S.
G-2
Exhibit H
---------
FORM OF CERTIFICATION FOR TRANSFER OR EXCHANGE OF
TEMPORARY REGULATION S GLOBAL SECURITY
OR PERMANENT REGULATION S GLOBAL SECURITY TO
RESTRICTED GLOBAL SECURITY
(Exchanges or transfers pursuant to
Section 2.16(iii) of the Indenture)
United States Trust Company of New York,
as Trustee
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Attention: Global Trust Services
International Corporate
Trust Administration
Re: Plastic Containers, Inc.
10% Senior Secured Notes
due 2006 (the "Securities")
---------------------------
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the "Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers, Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to U.S.$____________ principal amount of
Securities which are evidenced by an aggregate [Temporary Regulation S Global
Security (CUSIP No. __________)] [Permanent Regulation S Global Security (CUSIP
No. __________)] and held with the Depository through [Euroclear] [Cedel]
(Common Code __________) in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in Securities to a person that will take delivery thereof in the form
of an equal aggregate principal amount of Securities evidenced by a Restricted
Global Security of the same series and of like tenor as the Securities (CUSIP
No. 000000XX0).
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that such transfer is being effected pursuant to
and in accordance with Rule 144A under the Securities Act and, accordingly, the
Transferor does hereby further certify that the Securities are being transferred
to a person that the Transferor reasonably believes is purchasing the Securities
for its own account, or for one or more accounts with respect to which such
person exercises sole investment discretion, and such person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A, in
each case in a
H-1
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuer, the Guarantors and the Initial
Purchasers.
[Insert Name of Transferor]
By:
------------------------------
Name:
Title:
Dated:
-----------------------
cc: Plastic Containers, Inc.
H-2
Exhibit I
---------
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL RESTRICTED SECURITY TO
RESTRICTED GLOBAL SECURITY
(Transfers and exchanges pursuant to
Section 2.16(iv) of the Indenture)
United States Trust Company of New York
as Trustee
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Attention: Global Trust Services
International Corporate
Trust Administration
Re: Plastic Containers, Inc.
10% Senior Secured Notes
due 2006 (the "Securities")
---------------------------
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the "Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers, Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $_____________ principal amount of Restricted
Securities held in definitive form (CUSIP No. 000000XX0) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchanged or
transfer of such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A or another exemption
under the United States Securities Act of 1933, as amended (the "Securities
Act") and accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 144A:
(A) the Securities are being transferred to a person that the
Transferor reasonably believes is purchasing the Securities for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion;
I-1
(B) such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A; and
(C) the Securities have been transferred in a transaction
meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States; or
(2) if the transfer has been effected pursuant to another exemption
under the Act:
(A) the Securities were transferred to a person that the Transferor
reasonably believes is an Institutional Accredited Investor; and
(B) the Securities have been transferred pursuant to an exemption
from the Securities Act and made in accordance with any applicable
securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer, the Guarantors and the Initial Purchasers.
Dated: ,
-------------- ------
[Insert Name of Transferor]
By:
--------------------------
Name:
Title:
cc: Plastic Containers, Inc.
I-2
Exhibit J
---------
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL RESTRICTED SECURITY TO
PERMANENT REGULATION S GLOBAL SECURITY
OR TEMPORARY REGULATION S GLOBAL SECURITY
(Transfers and exchanges pursuant to
Section 2.16(iv) of the Indenture)
United States Trust Company of New York
as Trustee
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Attention: Global Trust Services
International Corporate
Trust Administration
Re: Plastic Containers, Inc.
10% Senior Secured Notes
due 2006 (the "Securities")
---------------------------
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the "Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $___ principal amount of Restricted Securities
held in definitive form (CUSIP No. 000000XX0) by [insert name of transferor]
(the "Transferor"). The Transferor has requested an exchange or transfer of
such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act of 1933, as amended (the "Act"), and accordingly the Transferor
does hereby further certify 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 the Transferor
and any person acting on its behalf reasonably believed
that the transferee was outside the United States, or
J-1
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was pre-arranged with a buyer in
the United States;
(C) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or 904(b) of Regulation S, as
applicable;
(D) the transaction is not part of a plan or scheme to evade the
registration requirements of the Act; and
(E) if such transfer is to occur during the Restricted Period,
upon completion of the transaction, the beneficial interest being
transferred as described above was held with the Depository through
[Euroclear] [CEDEL].
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer, the Guarantors and the Initial Purchasers.
Dated: ,
-------------- ------
[Insert Name of Transferor]
By:
--------------------------
Name:
Title:
cc: Plastic Containers, Inc.
J-2
Exhibit K-1
-----------
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL PERMANENT REGULATION S
SECURITY TO RESTRICTED GLOBAL SECURITY
(Transfers and exchanges pursuant to
Section 2.16(v) of the Indenture)
United States Trust Company of New York
as Trustee
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Attention: Global Trust Services
International Corporate
Trust Administration
Re: Plastic Containers, Inc.
10% Senior Secured Notes
due 2006 (the "Securities")
---------------------------
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the "Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $___ principal amount of Restricted Securities
held in definitive form (CUSIP No. 000000XX0) by [insert name of transferor]
(the "Transferor"). The Transferor has requested an exchange or transfer of
such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended, and accordingly the Transferor does
hereby further certify that the Securities are being transferred to a person
that the Transferor reasonably believes is purchasing the Securities for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in each case in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In
K-1-1
connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate to any interested party in
such proceeding. This certificate and the statements contained herein are made
for your benefit and the benefit of the Issuer, the Guarantors and the Initial
Purchasers.
Dated: ,
-------------- -------
[Insert Name of Transferor]
By:
--------------------------
Name:
Title:
cc: Plastic Containers, Inc.
K-1-2
Exhibit K-2
-----------
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL PERMANENT REGULATION S
SECURITY TO PERMANENT REGULATION S GLOBAL SECURITY
(Transfers and exchanges pursuant to
Section 2.16(v) of the Indenture)
United States Trust Company of New York
as Trustee
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Attention: Global Trust Services
International Corporate
Trust Administration
Re: Plastic Containers, Inc.
10% Senior Secured Notes
due 2006 (the "Securities")
---------------------------
Reference is hereby made to the Indenture, dated as of December 17,
1996 (the "Indenture"), among Plastic Containers, Inc., as Issuer, Continental
Plastic Containers, Inc. and Continental Caribbean Containers Inc., as
Guarantors, and United States Trust Company of New York, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
This letter relates to $___ principal amount of Restricted Securities
held in definitive form (CUSIP No. 000000XX0) by [insert name of transferor]
(the "Transferor"). The Transferor has requested an exchange or transfer of
such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with (a) Rule 903 or Rule 904 under
the Securities Act of 1933, as amended (the "Act"), or (b) Rule 144 under the
Act, and accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 903 or Rule 904:
(A) the offer of the Securities was not made to a person in the United
States;
(B) either;
K-2-1
(i) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on
its 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 offshore securities market and neither the Transferor
nor any person acting on its behalf knows that the transaction was
pre-arranged with a buyer in the United States;
(C) no directed selling efforts have been made in contravention of the
requirements of Rule 903 (b) or 904 (b) of Regulation S, as applicable;
(D) the transaction is not part of a plan or scheme to evade the
registration requirements of the Act; and
(E) if such transfer is to occur during the Restricted Period, upon
completion of the transaction, the beneficial interest being transferred as
described above was held with the Depository through [Euroclear] [CEDEL];
or
(2) if the transfer has been effected pursuant to Rule 144:
(A) more than two years has elapsed since the date of the closing of
the initial placement of the Securities pursuant to the Purchase Agreement;
and
(B) the Securities have been transferred in a transaction permitted by
Rule 144 and made in accordance with any applicable securities laws of any
state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issuer, the Guarantors and the Initial Purchasers.
Dated: ,
-------------- -------
[Insert Name of Transferor]
By:
--------------------------
Name:
Title:
cc: Plastic Containers, Inc.
K-2-2
Exhibit L
---------
Transferee Letter of Representation
-----------------------------------
___________, ____
United States Trust Company
of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Attention: Corporate Trust Division
Re: Plastic Containers Inc. 10%
Senior Secured Notes due 2006
------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of 10% Senior Secured Notes
due 2006 (the "Notes") of Plastic Containers Inc. (the "Company"), we confirm
that:
1. We understand that the Notes have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and, unless so
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Notes to offer, sell or otherwise transfer such Notes prior to the
date which is three years after the later of the date of original issue and the
last date on which the Company or any affiliate of the Company was the owner of
such Notes (or any predecessor thereto) (the "Resale Restriction Termination
Date") only (a) to the Company, (b) pursuant to a registration statement which
has been declared effective under the Securities Act, (c) so long as the Notes
are eligible for resale pursuant to 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 subparagraph (a)(1), (2), (3) or (7)
of Rule 501 under the Securities Act that is purchasing for his own account or
for the account of such an institutional "accredited investor," in each case in
a minimum principal amount of Notes of $500,000, (f) in an offshore transaction
pursuant to Regulation S of the Securities Act or (g) 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 to compliance with any
applicable state securities
L-1
laws. The foregoing restrictions on resale will not apply subsequent to the
Resale Restriction Termination Date. If any resale or other transfer of the
Notes is proposed to be made pursuant to clause (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 Trustee, which shall
provide, among other things, that the transferee is an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act and that it is acquiring such Notes for investment
purposes and not for distribution in violation of the Securities Act. Each
purchaser acknowledges that the Company and the Trustee reserve the right prior
to any offer, sale or other transfer prior to the Resale Restriction Termination
Date of the Notes pursuant to clause (c), (d) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Notes 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 and we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.
3. We are acquiring at least $500,000 principal amount of the Notes
and we are acquiring the Notes purchased by us for our own account or for one or
more accounts as to each of which we exercise sole investment discretion.
L-2
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
----------------------------
(Name of Purchaser)
By:
----------------------------
Date:
--------------------------
Upon transfer the Notes would be registered in the name of the new
beneficial owner as follows:
Name:
------------------------------
Address:
---------------------------
Taxpayer ID Number:
----------------
L-3
EXHIBIT M
---------
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
M-1
EXHIBIT N
---------
MORTGAGE, SECURITY AGREEMENT
AND ASSIGNMENT OF LEASES AND RENTS
Between
CONTINENTAL PLASTIC CONTAINERS, INC.,
as Mortgagor
And
UNITED STATES TRUST COMPANY OF NEW YORK
as Collateral Agent for the Holders,
as Mortgagee
Dated: December 17, 1996
This instrument was prepared by, and after recording return to, Xxxx
Xxxxxxxx, Esq., Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
N-1
MORTGAGE, SECURITY AGREEMENT
AND ASSIGNMENT OF LEASES AND RENTS
THIS MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS
("Mortgage") made as of December 17, 1996 between CONTINENTAL PLASTIC
--------
CONTAINERS, INC., having an address at 000 Xxxxxxx 0 Xxxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxx 00000 ("Mortgagor"), and UNITED STATES TRUST COMPANY OF NEW YORK,
---------
having an address at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
collateral agent and as trustee for the Holders (as defined in the Indenture)
under the Indenture (as hereinafter defined) (together with any successors in
such capacity, "Mortgagee").
---------
R E C I T A L S :
- - - - - - - -
A. Plastic Containers, Inc. (the "Company") , a Delaware corporation,
-------
Continental Caribbean Containers, Inc., a Delaware corporation, Mortgagor and
Mortgagee have entered into a certain indenture (as amended from time to time,
the "Indenture"; capitalized terms used herein and not defined shall have the
---------
meanings assigned to such terms in the Indenture), dated as of the date hereof,
pursuant to which the Company has issued 10% Senior Secured Notes due 2006 (the
"Series A Notes") in the aggregate principal amount of $125,000,000 and pursuant
--------------
to which the Company may issue 10% Series B Senior Secured Notes due 2006 (the
"Series B Notes"; together with the Series A Notes, the "Securities").
--------------- ----------
B. This Mortgage is given by Mortgagor to secure the prompt payment
and performance in full when due, whether at stated maturity, by acceleration or
otherwise (including the payment of amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a), and any successor provision thereto), of (i) all
obligations, indebtedness and liabilities of the Company pursuant to the terms
of the Indenture, the Securities and the Security Documents, including, without
limitation, the obligations of the Company to pay principal of, premium, if any,
and interest on the Securities when due and payable, and all other amounts due
and to become due under or in connection with the Indenture, the Securities and
the Security Documents, (ii) all obligations of Mortgagor pursuant to the terms
of the Indenture, the Security Documents and its Guarantee and (iii) without
duplication of the amounts described in clause (ii), all obligations,
indebtedness and liabilities of Mortgagor pursuant to the terms of this
Mortgage, in each case, whether now existing or hereafter arising and whether in
the regular course of business or otherwise (collectively, the "Secured
-------
Obligations").
-----------
N-2
A G R E E M E N T :
- - - - - - - - -
NOW, THEREFORE, in consideration of the premises set forth herein and
the further sum of One Dollar ($1.00) to Mortgagee in hand well and truly paid
by Mortgagor at and before the sealing and delivery hereof, the receipt whereof
is hereby acknowledged, Mortgagor intending to be legally bound has granted,
bargained and sold, mortgaged, conveyed, alined, released, confirmed, assigned,
transferred and set over, and by these presents does grant, bargain and sell,
mortgage, convey, alien, release, confirm, assign, transfer and set over unto
Mortgagee, its successors and assigns, for the use and benefit of Mortgagee in
its capacity as Collateral Agent under the Indenture, all that certain plot,
piece, or parcel of land more particularly described in Schedule A annexed
----------
hereto and by this reference made a part hereof;
TOGETHER with (1) all and singular the tenements, hereditaments and
appurtenances thereunto belonging or in anywise appertaining, and also in and to
(i) any land lying within the right-of-way of any streets, open or proposed,
adjoining the same, (ii) any easements, rights-of-way and rights used in
connection therewith or as a means of access thereto and (iii) any and all
sidewalks, alleys, strips and gores of land adjacent thereto or used in
connection therewith (all of the foregoing being hereinafter collectively called
the "Premises");
--------
(2) all buildings, structures and other improvements (collectively,
the "Improvements") now or hereafter erected on the Premises and owned by
------------
Mortgagor;
(3) all machinery, apparatus, equipment, fittings, fixtures and other
articles of personal property, including all goods and all goods which become
fixtures (collectively, the "Equipment"), which may now or hereafter be owned by
---------
Mortgagor and which are located on, attached to or used in connection with the
Premises and the Improvements and all replacements thereof, additions thereto
and substitutions therefor (the Premises, the Improvements and the Equipment,
collectively, the "Property");
--------
TOGETHER with all Mortgagor's books and records or other materials
used or useful in the business of the Mortgagor and now or hereafter located on
or in the Property and all replacements thereof, additions thereto and
substitutions therefor;
TOGETHER with the tenements, hereditaments, appurtenances and all the
estates and rights of Mortgagor in and to the Property;
N-3
TOGETHER with the reversions, remainders, easements, rents, issues,
profits and other benefits derived from any of the foregoing arising or issuing
from the Property;
TOGETHER with any and all awards, damages, payments and other
compensation and any and all claims therefor and rights thereto which may result
from any taking or injury by virtue of the exercise of the power of eminent
domain of or to, or any damage, injury or destruction in any manner caused to,
the Property, and any buildings, structures and improvements thereon, or any
part thereof, or from any change of grade or vacation of any street abutting
thereon, all of which awards, damages, payments, compensation, claims and rights
are hereby assigned, transferred and set over to Mortgagee to the fullest extent
that Mortgagor may under the law so do. Mortgagee is hereby irrevocably
appointed attorney-in-fact for Mortgagor to settle for, collect and receive any
such awards, damages, payments and compensation from the authorities making the
same, to appear in and prosecute any proceeding therefor, and to give receipts
and acquittances therefor;
TOGETHER with all right, title and interest of Mortgagor in and to all
unearned premiums accrued, accruing or to accrue under any and all insurance
policies now or hereafter obtained by Mortgagor with regard to any of the
foregoing;
TOGETHER with any other interest Mortgagor may hereafter acquire in
any real property situated at the Premises;
TOGETHER with the cash and noncash proceeds of all of the foregoing;
ALL of which property and rights hereinabove described or mentioned
being hereinafter collectively called the "Mortgaged Property".
------------------
TO HAVE AND TO HOLD unto Mortgagee, its successors and assigns,
forever;
PROVIDED, HOWEVER, that if Secured Obligations secured hereby shall be
paid or performed, as applicable, in full according to the terms and provisions
hereof and of the Transaction Documents, then this Mortgage and the estate
hereby created shall cease, terminate and become void.
Notwithstanding the foregoing, the Mortgaged Property shall not
include (i) Accounts or Inventory (each as defined in the Uniform Commercial
Code as from time to time in effect in the State
N-4
of New York), (ii) any Documents of Title (as defined in that certain financing
agreement, as in effect on the date hereof, executed in connection with the
Revolving Credit Facility), (iii) any 1996 Leaseback Equipment (as defined in
the Pledge and Security Agreement) or (iv) any Previously Leased/Financed
Equipment (as defined in the Pledge and Security Agreement).
Mortgagor covenants, promises and agrees with Mortgagee as follows:
ARTICLE I.
COVENANTS AS TO PAYMENT, PERFORMANCE AND TITLE
SECTION 1.01. Mortgagor shall pay to Mortgagee all sums now or
hereafter due Mortgagee under the terms hereof and of the Transaction Documents,
including the entire unpaid principal indebtedness under the Securities and all
fees, expenses and other amounts payable in connection therewith, together with
all interest thereon, and shall pay and perform all other Secured Obligations,
punctually as and when the same shall become due by the terms thereof and hereof
or otherwise become due and payable. Mortgagor will fully and faithfully
observe and perform all of the terms, provisions, conditions, covenants and
agreements on the part of Mortgagor to be observed and performed under the
Transaction Documents.
SECTION 1.02. Mortgagor warrants to Mortgagee that: (i) it has and
will have title to the Mortgaged Property subject only to those Liens existing
as of the date hereof identified as exceptions to title insurance coverage on
Schedule B-2 (other than the so-called "standard exceptions" and any other
exception which the title insurance company has affirmatively insured Mortgagee
against loss thereof) to the ALTA title insurance policy dated the date hereof
issued to Mortgagee by Chicago Title Insurance Company insuring the Lien of this
Mortgage (the "Prior Liens") and Permitted Liens (as hereinafter defined); (ii)
it has full power and lawful authority to encumber the Mortgaged Property in the
manner and form herein set forth; (iii) subject to Permitted Liens, it owns and
will own all fixtures and articles of personal property now or hereafter affixed
and/or used in connection with the Premises, including any substitutions or
replacements thereof, free and clear of Liens and claims other than Permitted
Liens; (iv) this Mortgage is and will remain a valid and enforceable first Lien
on the Mortgaged Property subject only to Prior Liens; and (v) it will preserve
such title it has as of the date hereof, and will forever warrant and defend the
same to Mortgagee and will forever warrant
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and defend the validity and priority of the Lien (subject to Prior Liens) hereof
against the claims of all persons and parties whomsoever, by, through, or under
Mortgagor.
As used herein, Permitted Liens shall mean those Liens constituting
Permitted Liens, as defined in the Indenture, under clauses (f) and (h) thereof.
ARTICLE II.
COVENANTS AS TO TAXES, IMPOSITIONS, LIENS, ETC.
SECTION 2.01. Mortgagor shall pay and discharge, when the same shall
become due and payable, all taxes of every kind and nature, water rates, sewer
rents and assessments, levies, permits, inspection and license fees and all
other charges imposed upon or assessed against the Mortgaged Property or any
part thereof or upon the revenues, rents, issues, income and profits of the
Premises or arising in respect of the occupancy, use or possession thereof, and
Mortgagor shall exhibit to Mortgagee within five (5) days after written request
by Mortgagee, validated receipts showing the payment of such taxes, assessments,
water rates, sewer rents, levies, fees and other charges which may be or become
a lien on the Mortgaged Property. Should Mortgagor default in the payment of
any of the foregoing taxes, assessments, water rates, sewer rents or other
charges, Mortgagee may, but shall not be obligated to, pay the same or any part
thereof and Mortgagor shall, on demand, reimburse Mortgagee for all amounts so
paid. Notwithstanding the foregoing, if by law, any such payment described
above may at the option of Mortgagor be paid in installments (whether or not
interest accrues thereon), Mortgagor shall have the option to pay the same in
installments as they become due and before any fine, penalty, further interest
or cost may be added thereto.
ARTICLE III.
INSURANCE
SECTION 3.01. Mortgagor will keep the Premises insured for the
benefit of Mortgagee, with such coverage in such amounts and forms, and with
such companies as is customarily maintained by companies similarly situated and
each insurance policy shall provide that all losses payable thereunder shall be
payable to Mortgagee, as sole loss payee or shall name Mortgagee as an
additional insured or both as applicable. Mortgagor shall from time to time
obtain such additional coverage or increase the
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amounts of coverage or modify the forms thereof as Mortgagee shall request from
time to time.
SECTION 3.02. Mortgagor shall carry primary policies of insurance and
Mortgagor shall not carry separate or additional insurance concurrent in form or
contributing, in the event of loss, with that required hereunder unless endorsed
in favor of Mortgagee as loss payee or additional insured, as applicable, and
otherwise acceptable to Mortgagee in all respects. Nothing contained herein
shall prohibit Mortgagor from holding or obtaining an owner's policy of title
insurance covering the Premises.
SECTION 3.03. In the event of foreclosure of this Mortgage, transfer
of title to the Premises by deed in lieu of foreclosure or other transfer of
title or assignment of the Premises in extinguishment, in whole or in part, of
the Secured Obligations, all right, title and interest of Mortgagor in and to
all policies of insurance required under the Indenture or this Article III or
otherwise then in force with respect to the Premises and all proceeds payable
thereunder and unearned premiums thereon shall immediately vest in the purchaser
or other transferee of the Premises.
SECTION 3.04. Mortgagor covenants that it has delivered to Mortgagee,
and shall, from time to time (but not less than once annually), deliver to
Mortgagee, the policies of insurance or certificates in respect thereof to
enable Mortgagee to confirm that the insurance required under the terms of this
Mortgage is in place and in full force and effect.
ARTICLE IV.
REPAIRS, MAINTENANCE AND REMOVAL
SECTION 4.01. Except as otherwise permitted under the Indenture,
Mortgagor will not cause or permit any building, structure or improvement or
other property now or hereafter covered by the Lien of this Mortgage and
comprising part of the Mortgaged Property to be removed, or demolished or
structurally changed or altered, in whole or in part, without the prior written
consent of Mortgagee, which consent shall be granted in accordance with the
terms of the Indenture. Mortgagor shall have the right to remove items of
Equipment from the Mortgaged Property in accordance with Section 5(o) of the
Pledge and Security Agreement. Mortgagor will not abandon or cause or permit
any waste to the Mortgaged Property and will at all times maintain, except as
otherwise permitted under the Indenture, the same in good repair and condition,
and will
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comply with all laws, statutes and ordinances relating to the maintenance or use
of the Mortgaged Property and with all requirements, orders and notices of
violation thereof issued by any governmental authority.
SECTION 4.02. Mortgagor will permit Mortgagee and Mortgagee's
representatives to enter the Mortgaged Property at reasonable times and upon
reasonable prior notice to inspect the same.
ARTICLE V.
COMPLIANCE WITH LAWS, ORDINANCES, ETC.
SECTION 5.01. Subject to the provisions of Section 5.03 hereof,
throughout the term of this Mortgage, Mortgagor shall, at its sole cost and
expense, promptly comply with all present and future laws, ordinances, orders,
rules, regulations and requirements of all federal, state and municipal
governments, courts, departments, commissions, boards and officers, any national
or local Board of Fire Underwriters, or any other body exercising functions
similar to those of any of the foregoing, foreseen or unforeseen, ordinary as
well as extraordinary, which may be applicable to the Mortgaged Property or any
part thereof or to the use or manner of use of the Mortgaged Property whether or
not such law, ordinance, order, rule, regulation or requirement shall
necessitate structural changes or improvements, or the removal of any
encroachments or projections, ornamental, structural or otherwise, onto or over
the streets adjacent to the Mortgaged Property, or onto or over property
contiguous or adjacent thereto.
SECTION 5.02. Subject to the provisions of Section 5.03 hereof,
Mortgagor will promptly perform and observe, or cause to be performed or
observed, all of the terms, covenants and conditions of all instruments of
record affecting the Mortgaged Property, noncompliance with which may affect the
Lien and security of this Mortgage, or which may impose any duty or obligation
upon Mortgagor or any lessee or other occupant of the Mortgaged Property or any
part thereof, and Mortgagor shall do or cause to be done all things necessary to
preserve intact and unimpaired any and all easements, appurtenances and other
interests and rights in favor of or constituting any portion of the Mortgaged
Property.
SECTION 5.03. Notwithstanding anything to the contrary contained in
Sections 5.01 and 5.02 hereof, Mortgagor may, at its own expense, contest by
appropriate legal proceedings promptly initiated and conducted in good faith and
with due diligence, the
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validity or application of any requirements set forth in Sections 5.01 and 5.02
hereof, provided that (i) if any penalty or fine has been assessed and remains
unpaid, such proceedings shall suspend the payment thereof from Mortgagor and
the Mortgaged Property, (ii) neither the Mortgaged Property nor any part thereof
nor any interest therein will be in danger of being forfeited, foreclosed upon
or terminated, and (iii) Mortgagor shall have furnished such security as may be
reasonably requested by Mortgagee.
SECTION 5.04. Mortgagor shall not, without the prior written consent
of Mortgagee which consent shall not be unreasonably withheld or unduly delayed,
(i) initiate or support any zoning reclassification of the Premises or the
Improvements or seek any variance under existing zoning ordinances applicable to
the Land or the Improvements that will have a material adverse effect on the
value, suitability or use of the Mortgaged Property, (ii) use or permit the use
of the Mortgaged Property in a manner which would result in such use becoming a
nonconforming use under applicable zoning ordinances, (iii) permit or suffer the
Mortgaged Property to be used by the public or any person in such manner as
might make possible a claim of adverse possession or of any implied dedication
or easement, or (iv) permit any modification, amendment or supplement to any of
the Prior Liens or Permitted Liens which might adversely affect the Lien of this
Mortgage or the use or value of the Mortgaged Property.
SECTION 5.05. Unless contested in accordance with the provisions of
this Section, Mortgagor shall pay timely all lawful claims and demands of
mechanic's, materialmen, laborers, and all other claims, judgments, demands or
amounts of any nature (other than such matters as are addressed in Sections 5.01
and 5.02) which, if unpaid, might result in or permit the creation of a Lien on
the Mortgaged Property or which might result in the forfeiture of the Mortgaged
Property. Mortgagor may, in good faith and at its own expense, contest the
amount or applicability of any of the obligations described in this Section by
appropriate legal proceedings, the prosecution of which operates to prevent the
collection thereof and the sale or forfeiture of the Mortgaged Property to
satisfy the same; provided, however, that in connection with such contest,
Mortgagor shall have made provision for the payment of such contested amount on
Mortgagor's books if and to the extent required by GAAP.
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ARTICLE VI.
DAMAGE OR DESTRUCTION
SECTION 6.01. In case of casualty to the Mortgaged Property resulting
in damage or destruction, Mortgagor shall promptly give written notice thereof
to Mortgagee and of the filing of any proof of loss under any insurance policy
and take such steps as shall be necessary to preserve any undamaged portion of
the Mortgaged Property.
SECTION 6.02. In the event that any portion of the Mortgaged Property
is so damaged or destroyed, and such damage or destruction is covered, in whole
or in part, by insurance described in Article III hereof, then, (i) Mortgagee
may, but shall not be obligated to, make proof of loss if not made promptly by
Mortgagor and is hereby authorized and empowered by Mortgagor to settle, adjust
or compromise any claims for damage or destruction thereunder, (ii) each
insurance company is hereby authorized and directed, at the instruction of
Mortgagee, to make payment therefor in any amount directly to Mortgagee, and
(iii) such insurance proceeds shall be deemed Trust Moneys subject to retention
and disbursement by Mortgagee in accordance with the applicable provisions of
the Indenture. Mortgagor expressly assumes all risk of loss, including a
decrease in the use, enjoyment or value of the Mortgaged Property from any
casualty whatsoever, whether or not insurable or insured against.
ARTICLE VII.
CONDEMNATION
SECTION 7.01. Mortgagor shall give Mortgagee immediate notice of any
actual or threatened commencement of condemnation proceedings or the exercise of
the right of eminent domain. In the event that the Mortgaged Property, or any
part thereof, shall be taken in condemnation proceedings or by exercise of any
right of eminent domain (hereinafter called, collectively, "condemnation
------------
proceedings"), Mortgagee may on behalf of Mortgagor (but shall not be obligated
-----------
to) (i) participate in any such condemnation proceedings and Mortgagor shall
from time to time execute and deliver to Mortgagee all instruments requested by
Mortgagee or as may be required to permit such participation and (ii) adjust,
contest, accept, reject or compromise any proposed award and collect and receive
the proceeds thereof and endorse drafts, and Mortgagee is hereby irrevocably
appointed attorney-in-fact of Mortgagor for such purposes. The decision of
Mortgagee with regard
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to the adjustment, contest, acceptance, rejection or compromise of any proposed
award issued in connection with any condemnation proceedings shall be binding
upon Mortgagor.
SECTION 7.02. All proceeds of condemnation awards or proceeds of sale
in lieu of condemnation, and all judgments, decrees and awards for injury or
damage to the Mortgaged Property, are hereby assigned and shall be paid to
Mortgagee, and shall be deemed Trust Moneys subject to retention and
distribution by Mortgagee in accordance with the applicable provisions of the
Indenture. Mortgagor agrees to execute and deliver such further assignments
thereof as Mortgagee may request and authorizes Mortgagee to collect and receive
the same, to give receipts therefor, and to appeal from any such judgment,
decree or award. Mortgagee shall in no event be liable or responsible for
failure to collect, or exercise diligence in the collection of, any of the same.
SECTION 7.03. Notwithstanding any condemnation, taking or other
proceeding referred to in this Article VII causing injury to, or other decrease
in, the value of the Mortgaged Property, or any interest therein, Mortgagor
shall continue to pay and perform the Secured Obligations as provided herein.
Any reduction in the Secured Obligations resulting from any application of any
proceeds of condemnation awards or proceeds of sale in lieu of condemnation to
the Secured Obligations shall be deemed to take effect only on the date of
receipt by Mortgagee of such proceeds, judgments, decrees or awards and
application against the Secured Obligations, provided that if prior to the
receipt by Mortgagee of such proceeds, judgments, degrees or awards the
Mortgaged Property shall have been sold on foreclosure of this Mortgage or shall
have been transferred by deed in lieu of foreclosure of this Mortgage, Mortgagee
shall have the right to receive the same to the extent of any deficiency found
to be due upon such sale, with legal interest thereon together with attorneys'
fees and disbursements incurred by Mortgagee payable in accordance with the
provisions of this Mortgage in connection with the collection thereof.
ARTICLE VIII.
NOTICES
SECTION 8.01. All notices, demands, requests and consents required
under this Mortgage shall be given and shall be effective as set forth in
Section 13.2 of the Indenture and, if to Mortgagor, shall be addressed to it at
its address set forth in the Indenture and, if to Mortgagee, shall be addressed
to it at 000
X-00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Department.
ARTICLE IX.
GENERAL COVENANTS
SECTION 9.01. Mortgagor warrants that this Mortgage is a valid first
priority Lien on the Mortgaged Property subject only to Prior Liens, and that
there are no offsets, counterclaims or defenses to the Secured Obligations
secured hereby, or to any part thereof, or the interest thereon, either at law
or in equity.
SECTION 9.02. Without limiting any other provision of the Transaction
Documents, Mortgagor shall promptly pay upon request all expenses and costs
incurred by Mortgagee, including reasonable attorneys' fees, together with
interest thereon at the rate provided in the Indenture from the date of the
payment thereof by Mortgagee, in connection with any action, proceeding,
litigation or claim instituted or asserted by or against Mortgagee or in which
Mortgagee becomes engaged, including, without limitation, bankruptcy,
reorganization, arrangements, receivership or similar proceedings, wherein it
becomes necessary in the reasonable opinion of Mortgagee to protect Mortgagee's
interest in the Mortgaged Property or the security afforded hereby, or to defend
or uphold the Lien of this Mortgage, or the validity or effectiveness of any
assignment of any claim, award, payment, property damage insurance policy or any
other right or property conveyed, encumbered or assigned by Mortgagor to
Mortgagee hereunder, or the priority of any of the same, and all such expenses
and costs, and said interest thereon, shall be secured in all respects hereby as
if part of the indebtedness evidenced by the Securities; provided, however, that
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in any action to foreclose this Mortgage or to recover or collect the sums due
hereunder the provisions of law and of this Mortgage relative to the recovery of
costs, disbursements, commissions, allowances and attorneys' fees shall prevail
unaffected by this Section 9.02.
SECTION 9.03. In the event of the passage after the date of this
Mortgage of any laws of the state in which the Mortgaged Property is located,
deducting from the value of the Mortgaged Property for the purpose of taxation
any lien thereon, or changing in any way the laws now in force for the taxation
of mortgages, or debts secured thereby, for state or local purposes, or the
manner of the operation of any such taxes so as to affect the interest of
Mortgagee, then and in such event, Mortgagor shall bear and pay the full amount
of such taxes, provided that if for any reason payment
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by Mortgagor of any such new or additional taxes would be unlawful or if the
payment thereof would constitute usury or render the Secured Obligations wholly
or partially usurious under any of the terms or provisions of the Transaction
Documents, including this Mortgage, or otherwise, Mortgagee may, at Mortgagee's
option, pay that amount or portion of such taxes as renders the Secured
Obligations secured hereby unlawful or usurious, in which event Mortgagor shall
concurrently therewith pay the remaining lawful and non-usurious portion or
balance of said taxes.
SECTION 9.04. Wherever used in this Mortgage, unless the context
clearly indicates a contrary intent or unless otherwise specifically provided
herein, the word "Mortgagor" shall mean the party executing this instrument, its
heirs, personal representatives, successors and assigns or any subsequent owner
or owners of the Mortgaged Property; the word "Mortgagee" shall mean the party
to whom this Mortgage is given or any subsequent holder or holders of this
Mortgage; and whenever the singular or plural number, masculine or feminine or
neuter gender is used herein, it shall equally include the others.
SECTION 9.05. This Mortgage cannot be amended except by an agreement
in writing, entered into in accordance with the terms of the Indenture and
signed by the party against whom enforcement of the amendment is sought.
SECTION 9.06. The captions to the Articles of this Mortgage are for
convenience and reference only and in no way define, limit or describe the scope
or intent of this Mortgage nor in any way affect this Mortgage.
SECTION 9.07. This Mortgage shall be construed and enforced in
accordance with the laws of the state in which the Mortgaged Property is
located.
SECTION 9.08. Mortgagor shall, promptly upon reasonable request of
Mortgagee, do all acts and things, including but not limited to the execution of
any further assurances and the recording of any additional documentation, deemed
necessary by Mortgagee, to establish, confirm, maintain and continue the Lien
created and intended to be created hereby, and all other rights and benefits
conferred or intended to be conferred on Mortgagee hereby, and Mortgagor shall
pay all costs incurred by Mortgagee in connection therewith, including all
filing and recording costs, cost of searches and reasonable counsel fees
incurred by Mortgagee.
SECTION 9.09. Mortgagor agrees to indemnify, pay and hold harmless
Mortgagee and each of the Holders and the officers,
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directors, employees, agents and affiliates of Mortgagee and each of the Holders
(collectively, the "Indemnitees") from and against any and all liabilities,
-----------
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs (including, without limitation, settlement costs), expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitee shall be designated a
party thereto), which may be imposed on, incurred by, or asserted against that
Indemnitee, in any manner relating to or arising out of this Mortgage, the
Securities, the Indenture, its Guarantee or any other Security Document
(including, without limitation, any misrepresentation by Mortgagor in this
Mortgage, the Securities, the Indenture, its Guarantee or any other Security
Document) (the "indemnified liabilities"); provided, that Mortgagor shall have
----------------------- --------
no obligation to an Indemnitee hereunder with respect to an indemnified
liability if it has been determined by a final decision (after all appeals and
the expiration of time to appeal) by a court of competent jurisdiction that such
indemnified liability arose from the gross negligence or willful misconduct of
that Indemnitee. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Mortgagor shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them. The obligations of Mortgagor contained in this
Section 9.09 shall survive the termination of this Mortgage and the discharge of
Mortgagor's other obligations under this Mortgage, the Indenture, the
Securities, its Guarantee and the other Security Documents. Any amount paid by
any Indemnitee as to which such Indemnitee has the right to reimbursement shall
constitute Secured Obligations secured by the Mortgaged Property.
SECTION 9.10. This Mortgage and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.
SECTION 9.11. All obligations of Mortgagor hereunder shall be absolute
and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Mortgagor;
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(ii) any lack of validity or enforceability of any of the Transaction
Documents, or any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any of the
Transaction Documents, or any other agreement or instrument relating
thereto;
(iv) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to any departure from
any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect of this Mortgage, except as
specifically set forth in a waiver granted pursuant to the provisions of
this Mortgage; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, Mortgagor.
ARTICLE X.
SECURITY AGREEMENT
SECTION 10.01. Security Interest. This Mortgage shall be a security
-----------------
agreement between Mortgagor, as a debtor, and Mortgagee, as the secured party,
covering the Mortgaged Property constituting personal property or fixtures
governed by the Pennsylvania Uniform Commercial Code (hereinafter called the
"Uniform Commercial Code"), and Mortgagor grants to Mortgagee a security
interest in such portion of the Mortgaged Property. In addition to Mortgagee's
other rights hereunder, Mortgagee shall have all rights of a secured party under
the Uniform Commercial Code. Mortgagor shall execute and deliver to Mortgagee
all financing statements that may be required by Mortgagee to establish and
maintain the validity and priority of Mortgagee's security interest and
Mortgagor shall bear all costs thereof, including all Uniform Commercial Code
searches reasonably required by Mortgagee. If Mortgagee should dispose of any
of the Mortgaged Property pursuant to the Uniform Commercial Code, then ten (10)
days' written notice by Mortgagee to Mortgagor shall be deemed to be reasonable
notice; provided, however, Mortgagee may dispose of such
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property in accordance with the foreclosure procedures of this Mortgage in lieu
of proceeding under the Uniform Commercial Code.
SECTION 10.02. Notice of Changes. Mortgagor shall give advance
-----------------
notice in writing to Mortgagee of any proposed change in Mortgagor's name,
identity, or structure and will execute and deliver to Mortgagee, prior to or
concurrently with the occurrence of any such change, all additional financing
statements that Mortgagee may require to establish and maintain the validity and
priority of Mortgagee's security interest with respect to any of the Mortgaged
Property described or referred to herein.
SECTION 10.03. Fixtures. Some of the items of the Mortgaged Property
--------
described herein are goods that are, or are to become, fixtures related to the
Premises, and it is intended that, as to those goods, this Mortgage shall be
effective as a financing statement filed as a fixture filing from the date of
its filing for record in the real estate records of the county in which the
Mortgaged Property is situated. Information concerning the security interest
created by this instrument may be obtained from Mortgagee, as secured party, at
the address of Mortgagee stated above. The mailing address of the Mortgagor, as
debtor, is as stated above.
ARTICLE XI.
REMEDIES
SECTION 11.01. If any Event of Default shall occur and be continuing,
then in addition to all other rights and remedies which Mortgagee may have under
the Transaction Documents, at law or in equity or otherwise, Mortgagee may
forthwith, and without further delay, undertake any one or more of the following
in accordance with the terms of, and at the times, if any, specified in the
Indenture:
(1) Foreclosure. Institute an action of mortgage foreclosure, or take
such other action as the law may allow, at law or in equity, for the
enforcement thereof and realization on the mortgage security or any other
security which is herein or elsewhere provided for, and proceed thereon to
final judgment and execution thereon for the entire unpaid balance of the
principal indebtedness, with interest and premiums, if any, of the
Securities and all other outstanding Secured Obligations and together with
all other sums secured by this Mortgage, all costs of suit, interest as
specified in
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the Indenture on any judgment obtained by Mortgagee from and after the date
of any Sheriff's Sale of the Mortgaged Property (which may be sold in one
parcel or in such parcels, manner or order as Mortgagee shall elect) until
actual payment is made by the Sheriff of the full amount due Mortgagee, and
an attorney's commission for collection, which shall be one per cent of the
total of the foregoing sums, without further stay, any law, usage or custom
to the contrary notwithstanding.
(2) Entry. Mortgagee personally, or by its agents or attorneys, may
enter into and upon all or any part of the Mortgaged Property, and each and
every part thereof, and may exclude Mortgagor, its agents and servants
wholly therefrom without liability for trespass, damages or otherwise and
Mortgagor agrees to surrender possession to Mortgagee on demand after the
happening of any Event of Default; and having and holding the same, may
use, operate, manage and control the Mortgaged Property and likewise, from
time to time, at the expense of the Mortgagor, Mortgagee may make all
necessary or proper repairs, renewals and replacements and such useful
alterations, additions, betterments and improvements thereto and thereon as
it may deem advisable; and Mortgagee shall be entitled to collect and
receive all earnings, revenues, rents, issues, profits and income of the
Mortgaged Property and every part thereof. For such purposes Mortgagor
hereby authorizes any attorney of any court of record to appear for
Mortgagor to sign an agreement for entering an action of ejectment for
possession of the Mortgaged Property, and to confess judgment therein
against Mortgagor in favor of Mortgagee, whereupon a writ may forthwith
issue for the immediate possession of the Mortgaged Property, without any
prior writ or proceeding whatsoever; and for so doing this Mortgage or a
copy hereof verified by affidavit shall be a sufficient warrant.
(3) Receivership. Have a receiver appointed to enter into possession
of the Mortgaged Property, collect the earnings, revenues, rents, issues,
profits and income therefrom and apply the same as the court may direct.
Mortgagee shall be entitled to the appointment of a receiver without the
necessity of proving either the inadequacy of the security or the
insolvency of Mortgagor or any other person who may be legally or equitably
liable to pay moneys secured hereby and Mortgagor and each such person
shall be deemed to have waived such proof and to have consented to the
appointment of such receiver. Should Mortgagee or any receiver collect
earnings, revenues, rents, issues, profits or income from the Mortgaged
Property, the moneys so collected shall not be substituted for payment of
the debt nor can they
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be used to cure the default, without the prior written consent of
Mortgagee.
SECTION 11.02. Mortgagor hereby waives and releases (a) all errors,
defects and imperfections in any proceedings instituted by Mortgagee under this
Mortgage, (b) all benefit that might accrue to Mortgagor by virtue of any
present or future laws exempting the Mortgaged Property, or any part of the
proceeds arising from any sale thereof, from attachment, levy or sale under
execution, or providing for any stay of execution, exemption from civil process,
or extension of time for payment, (c) all benefits that might accrue to
Mortgagor from requiring valuation or appraisement of any part of the Mortgaged
Property levied or sold on execution of any judgment recovered for the Secured
Obligations secured hereby and (d) all notices not herein elsewhere specifically
required, of Mortgagor's default or of Mortgagee's exercise, or election to
exercise, any option under this Mortgage. Mortgagor further agrees to waive the
issuance and service of process and enter its voluntary appearance in any
action, suit or proceeding brought in connection with any Event of Default and
if required by Mortgagee, to consent to the appointment of a receiver or
receivers of the Mortgaged Property and of all the earnings, revenues, rents,
issues, profits and income thereof.
Mortgagor will not at any time insist upon, or plead, or in any manner
whatever, claim or take any benefit or advantage of any stay or extension or
moratorium law, any exemption from execution or sale of the Mortgaged Property
or any part thereof, wherever enacted, now or at any time hereafter in force,
which may affect the covenants and terms of performance of this Mortgage, nor
claim, take or insist upon any benefit or advantage of any law now or hereafter
in force providing for the valuation or appraisal of the Mortgaged Property, or
any part thereof, prior to any sale or sales thereof which may be made pursuant
to any provision herein, or pursuant to the decree, judgment or order of any
court of competent jurisdiction; nor, after any such sale or sales, claim or
exercise any right under any statute heretofore or hereafter enacted to redeem
the property so sold, or any part thereof, and Mortgagor hereby expressly waives
all benefit or advantage of any such law or laws, and covenants not to hinder,
delay or impede the execution of any power herein granted or delegated to
Mortgagee, but to suffer and permit the execution of every power as though no
such law or laws had been made or enacted. Mortgagor, for itself and all who
may claim under it, waives, to the extent that it lawfully may, all right to
have the Mortgaged Property marshaled upon any foreclosure hereof.
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SECTION 11.03. No failure by Mortgagee to insist upon the strict
performance of any covenant, agreement, provision, term or condition of this
Mortgage or any of the Transaction Documents or to exercise any right or remedy
consequent upon a breach thereof, shall constitute a waiver of any such breach
or of such covenant, agreement, provision, term or condition. No covenant,
agreement, provision, term or condition of this Mortgage to be performed or
complied with by Mortgagor, and no breach thereof, shall be waived, altered or
modified except by a written instrument executed by Mortgagee. No waiver of any
breach shall affect or alter this Mortgage, but each and every covenant,
agreement, provision, term and condition of this Mortgage shall continue in full
force and effect with respect to any other then existing or subsequent breach
thereof.
SECTION 11.04. Each right and remedy of Mortgagee provided for in
this Mortgage shall be in addition to every other right or remedy provided for
in this Mortgage, in the Transaction Documents or now or hereafter existing at
law, or in equity or by statute or otherwise, and the exercise or beginning of
the exercise by Mortgagee of any one or more of the rights or remedies provided
for in this Mortgage or now or hereafter existing at law, or in equity or by
statute or otherwise shall not preclude the simultaneous or later exercise by
Mortgagee of any or all other rights or remedies provided for in this Mortgage
or now or hereafter existing at law, in equity or by statute or otherwise.
SECTION 11.05. No recovery of any judgment by Mortgagee and no levy
of an execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect in any manner or to any extent the Lien of
this Mortgage upon the Mortgaged Property or any part thereof, or any liens,
rights, powers or remedies of Mortgagee hereunder, but such liens, rights,
powers and remedies of Mortgagee shall continue unimpaired as before.
SECTION 11.06. In the event any provision of this Mortgage conflicts
with any provision in the Indenture, the Indenture shall control.
SECTION 11.07. Notwithstanding anything in this Mortgage to the
contrary, Mortgagee shall exercise any remedy provided for in this Mortgage in
accordance with instructions from the Trustee under the Indenture delivered at
the direction of Holders of at least a majority in principal amount of the
outstanding Securities or refrain from exercising any remedy provided for in
this Mortgage either in the absence of instructions from the Trustee under the
Indenture or in accordance with instructions from Trustee under the
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Indenture delivered at the direction of Holders of at least a majority in
principal amount of the outstanding Securities.
ARTICLE XII.
ASSIGNMENT OF LEASES AND RENTS
SECTION 12.01. Mortgagor hereby absolutely sells, assigns, transfers
and sets over to Mortgagee all Mortgagor's right, title and interest in, to and
under any leases (the "Leases") now or hereafter in effect for all or any part
------
of the Mortgaged Property and the rents therefrom (the "Rents"). Mortgagor
-----
irrevocably appoints Mortgagee as its true and lawful attorney-in-fact, at the
option of Mortgagee at any time and from time to time, to demand, receive and
enforce payment, to give receipts, releases and satisfactions, and to xxx, in
the name of Mortgagor or Mortgagee, for all Rents and apply the Rents to the
Secured Obligations; provided, however, that consent is hereby given to
-------- -------
Mortgagor, so long as no Event of Default has occurred and is continuing, to
collect, receive, take, use and enjoy (subject to all the other provisions of
this Mortgage) the Rents, as they become due and payable, but not in advance
thereof. The Rents are hereby assigned absolutely by Mortgagor to Mortgagee,
subject only to the rights of Mortgagor to collect and enjoy the Rents as
aforesaid. Mortgagor agrees that Mortgagor will immediately upon request from
Mortgagee, execute, acknowledge and deliver specific and separate assignments of
the Leases and the Rents.
SECTION 12.02. Mortgagee's rights to collect the Rents upon the
occurrence and during the continuance of an Event of Default pursuant to this
Article XII is in no manner conditional upon Mortgagee first taking possession
of the Mortgaged Property. Should Mortgagee enter and take possession of the
Mortgaged Property or collect the Rents, such act shall not cure or waive any
Default or Event of Default or notice thereof hereunder or invalidate any act
done pursuant to such notice. Nothing contained herein, nor any collection of
Rents by Mortgagee or a receiver, shall be construed to make Mortgagee a
"mortgagee-in-possession" so long as Mortgagee has not itself entered into
actual possession of the Mortgaged Property.
SECTION 12.03. Nothing herein shall be construed to impose any
liability or obligation on Mortgagee under or with respect to any Lease.
Mortgagor shall indemnify and hold Mortgagee and each Holder harmless from and
against any and all liabilities, losses and damages (including, without
limitation, reasonable
N-20
attorneys' fees and disbursements) incurred under any Lease or by reason of any
provision of this Article XII.
ARTICLE XIII.
HAZARDOUS MATERIALS
SECTION 13.01. Mortgagor represents that (i) it has obtained all
material permits, licenses and other authorizations which are required with
respect to the ownership and operation of its business and the Mortgaged
Property under any and all Environmental Laws (as hereinafter defined); (ii) it
is in material compliance with all terms and conditions of such permits,
licenses and authorizations, and is also in material compliance with
Environmental Laws applicable to the Mortgaged Property, including, without
limitation, all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
the Environmental Laws; (iii) there is no material civil, criminal or
administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter pending or, to its knowledge,
threatened against it or the Mortgaged Property under the Environmental Laws
which could result in a material fine, penalty or other cost or expense (iv) to
its best knowledge, there are no past or present events, conditions,
circumstances, activities, practices, incidents, actions or plans with respect
to its operations at the Mortgaged Property which may materially interfere with
or prevent material compliance with the Environmental Laws, or which may give
rise to any common law or legal liability, including, without limitation,
liability under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or similar state, local or foreign laws, or
otherwise form the basis of any claim, action, demand, suit, proceeding, hearing
or notice of violation, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment at or from the Mortgaged Property, of any pollutant,
contaminant, chemical or industrial, toxic or hazardous substance or waste
("Hazardous Material") which, individually or in the aggregate, could reasonably
--------------------
be expected to result in a material fine, penalty or other cost or expense.
Mortgagor shall (i) take all actions necessary to keep its operations
at the Mortgaged Property in compliance with any and all present and future
Environmental Laws; provided, however, Mortgagor at its expense may, after prior
-------- -------
notice to Mortgagee,
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contest by appropriate legal, administrative or other proceedings conducted in
good faith and with due diligence, the validity or application, in whole or in
part, of any such Environmental Law, (ii) take necessary removal or other
response or corrective action as required by law with respect to any Hazardous
Material present on the Mortgaged Property and keep the Mortgaged Property free
of any lien imposed pursuant to any Environmental Law and (iii) not release,
store, treat, handle or dispose of any Hazardous Materials on the Mortgaged
Property in violation of any Environmental Law. Subject to the proviso in the
-------
preceding sentence, in the event Mortgagor fails to comply with the covenants in
the preceding sentence, Mortgagee may, in addition to any other remedies set
forth herein, take any necessary removal or other response or corrective action
with respect to any Hazardous Materials at the Premises at Mortgagor's sole
cost and expense. Any costs or expenses incurred by Mortgagee for such purpose
shall be immediately due and payable by Mortgagor and shall bear interest at the
highest rate then payable pursuant to the Indenture. Mortgagor shall provide to
Mortgagee and its agents and employees access to the Mortgaged Property and
hereby specifically grants to Mortgagee a license for such purpose. Mortgagor
shall indemnify and hold Mortgagee (and each Holder) harmless from and against
all loss, cost, damage (including, without limitation, consequential damages) or
expense (including, without limitation, reasonable attorneys' fees) that
Mortgagee (or such Holder) may sustain by reason of the assertion against
Mortgagee (or such Holder) by any party of any claim relating to such Hazardous
Material including, without limitation, any necessary removal or other response
or corrective action with respect to such Hazardous Material. The foregoing
indemnification shall survive repayment of all amounts due under the Securities,
the Indenture, the Guarantees and the Security Documents and any release or
assignment of this Mortgage.
For purposes of this Section 13.01, "Environmental Laws" shall mean
------------------
any and all Federal, state, local and foreign laws, rules or regulations, any
orders, decrees, judgments or injunctions and the common law in each case as now
or hereafter in effect, relating to pollution or protection of human health,
safety or the environment, including, without limitation, ambient air, indoor
air, soil, surface water, ground water, wetlands, land or subsurface strata,
including, without limitation, those relating to Releases or threatened Releases
of Hazardous Materials into the environment, or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials.
N-22
ARTICLE XIV.
MORTGAGEE'S RIGHT TO SEVER INDEBTEDNESS
SECTION 14.01. Mortgagor acknowledges that (a) the Mortgaged Property
does not constitute the sole source of security for the payment and performance
of the Secured Obligations and that the Secured Obligations are also secured by
property of Mortgagor and its affiliates in other jurisdictions (all such
property, collectively, the "Collateral"), (b) the number of such jurisdictions
----------
and the nature of the transaction of which this instrument is a part are such
that it would have been impracticable for the parties to allocate to each item
of Collateral a specific amount and to execute in respect of such item a
separate indenture and (c) Mortgagor intends that Mortgagee have the same rights
with respect to the Mortgaged Property, in foreclosure or otherwise, that
Mortgagee would have had if each item of Collateral had been secured, mortgaged
or pledged pursuant to a separate indenture, mortgage or security document. In
furtherance of such intent, Mortgagor agrees that Mortgagee may at any time by
notice (an "Allocation Notice") to Mortgagor allocate a portion (the "Allocated
----------------- ---------
Indebtedness") of the Secured Obligations to the Mortgaged Property and sever
------------
from the remaining Secured Obligations the Allocated Indebtedness. From and
after the giving of an Allocation Notice with respect to the Mortgaged Property,
the Secured Obligations hereunder shall be limited to the extent set forth in
the Allocation Notice and (as so limited) shall, for all purposes, be construed
as a separate obligation of Mortgagor unrelated to the other transactions
contemplated by any of the Documents or any document related to any thereof. To
the extent that the proceeds on any foreclosure of the Mortgaged Property shall
exceed the Allocated Indebtedness, such proceeds shall belong to Mortgagor and
shall not be available hereunder to satisfy any Secured Obligations of Mortgagor
other than the Allocated Indebtedness. In any action or proceeding to foreclose
the Lien of this Mortgage or in connection with any power of sale foreclosure or
other remedy exercised under this Mortgage commenced after the giving by
Mortgagee of an Allocation Notice, the Allocation Notice shall be conclusive
proof of the limits of the Secured Obligations hereby secured, and Mortgagor may
introduce, by way of defense or counterclaim, evidence thereof in any such
action or proceeding.
SECTION 14.02. Mortgagor hereby waives to the greatest extent
permitted under law the right to a discharge of any of the Secured Obligations
under any statute or rule of law now or hereafter in effect which provides that
foreclosure of the Lien of this Mortgage or other remedy exercised under this
Mortgage constitutes the exclusive means for satisfaction of the Secured
N-23
Obligations or which makes unavailable a deficiency judgment or any subsequent
remedy because Mortgagee elected to proceed with a power of sale foreclosure or
such other remedy or because of the failure by Mortgagee to comply with laws
that prescribe conditions to the entitlement to a deficiency judgment. In the
event that, notwithstanding the foregoing waiver, any court shall for any reason
hold that Mortgagee is not entitled to a deficiency judgment, Mortgagor shall
not (a) introduce in any other jurisdiction such judgment as a defense to
enforcement against Mortgagor of any remedy in any of the Documents or (b) seek
to have such judgment recognized or entered in any other jurisdiction, and any
such judgment shall in all events be limited in application only to the state or
jurisdiction where rendered.
SECTION 14.03. In the event any instrument in addition to the
Allocation Notice is necessary to effectuate the provisions of this Article XIV,
including, without limitation, any amendment to this Mortgage, any substitute
security or affidavit or certificate of any kind, Mortgagee may execute, deliver
or record such instrument as the attorney-in-fact of Mortgagor. Such power of
attorney is coupled with an interest and is irrevocable. Mortgagee shall give
reasonable notice, but no later than 3 days prior to filing any such document,
to Mortgagor that the provisions of this Section 14.03 are necessary to achieve
the purpose of this Article XIV.
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IN WITNESS WHEREOF, Mortgagor, intending to be legally bound hereby,
has caused this Mortgage to be duly executed, on the day and year first above
written.
CONTINENTAL PLASTIC CONTAINERS, INC.
Witness:
________________ By:
Its: ________________________________
The address of the Mortgagee under
this Mortgage is 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Department
--------------------------------------
On behalf of Mortgagee
X-00
XXXXX XX XXX XXXX )
: ss:
COUNTY OF NEW YORK)
On this ____ day of December, 1996, before me, _____________________
the undersigned officer, personally appeared __________________________, who
acknowledged himself to be the ___________________ of Continental Plastic
Containers, Inc., a Delaware corporation, and that he, as such
____________________, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by himself as _______________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
------------------------------------
Notary Public
------------------------------------
(Print Name of Notary)
My commission expires on __________.
N-26
Schedule A
----------
[Property description]
N-27
EXHIBIT O-1
-----------
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT ("Security Agreement") dated as of December
17, 1996, made by PLASTIC CONTAINERS, INC., a Delaware corporation ("Grantor"),
in favor of UNITED STATES TRUST COMPANY OF NEW YORK, a New York corporation
having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
collateral agent (together with any successors in such capacity the "Collateral
Agent") and as trustee for the Holders (as defined in the Indenture) under the
Indenture (as hereinafter defined).
R E C I T A L S :
- - - - - - - -
A. Grantor, Continental Caribbean Containers, Inc., a Delaware
corporation, Continental Plastic Containers, Inc., a Delaware corporation and
Collateral Agent have entered into a certain indenture (as amended from time to
time, the "Indenture"; capitalized terms used herein but not defined herein
shall have the meanings ascribed to such terms in the Indenture), dated as of
the date hereof, pursuant to which Grantor has issued 10% Senior Secured Notes
due 2006 (the "Series A Notes") in the aggregate principal amount of
$125,000,000 and pursuant to which Grantor may issue 10% Series B Senior Secured
Notes due 2006 (the "Series B Notes"; together with the Series A Notes, the
"Securities").
B. This Security Agreement is given by Grantor to secure the prompt
payment and performance in full when due, whether at stated maturity, by
acceleration or otherwise (including the payment of amounts which would become
due but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. (S) 362(a) and any successor provision thereto) of
(i) all obligations, indebtedness and liabilities of Grantor pursuant to the
terms of the Indenture, the Securities and the Security Documents, including,
without limitation, the obligations of Grantor to pay principal of, premium, if
any, and interest on the Securities when due and payable, and all other amounts
due and to become due under or in connection with the Indenture, the Securities
and the Security Documents and (ii) without duplication of the amounts described
in clause (i), all obligations, indebtedness and liabilities of Grantor pursuant
to the terms of this Security Agreement, in each case, whether now existing or
hereafter arising and whether in the regular course of business or otherwise
(collectively, the "Secured Obligations").
X-0-0
X X X X X X X X X :
- - - - - - - - -
NOW, THEREFORE, in consideration of the premises set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Grantor hereby agrees with Collateral Agent as follows:
Section 1. Defined Terms. The following terms which are defined in
-------------
the Code are used herein as so defined: Chattel Paper, Documents, Equipment,
Farm Products, General Intangibles, Instruments and Proceeds. The following
terms shall have the following meanings:
"1996 Leaseback Equipment" shall mean the equipment listed on Schedule
------------------------ --------
I hereto and any additions and accessions thereto.
-
"Code" shall mean the Uniform Commercial Code as from time to time in
----
effect in the State of New York.
"Collateral" shall have the meaning assigned to it in Section 2 of
----------
this Security Agreement.
"Contracts" shall mean all contracts between Grantor and any third
---------
party including, without limitation, all customer contracts now existing or
hereafter entered into as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (a) all
rights of Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (b) all rights of Grantor to damages arising
out of, or for, breach or default in respect thereof and (c) all rights of
Grantor to perform and to exercise all remedies thereunder.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Copyrights" shall mean copyrights, owned by or assigned to Grantor,
----------
including, without limitation, the copyrights listed on Schedule II hereto,
-----------
together with any and all (a) renewals and extensions thereof, (b) income,
royalties, damages, claims and payments now and hereafter due and/or
payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements
O-1-2
thereof, and (c) rights to xxx for past, present and future infringements
thereof.
"GECC" shall mean General Electric Capital Corporation.
----
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof and any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to any government, and any corporation or other entity owned
or controlled (through ownership of capital interests or otherwise) by any
of the foregoing.
"Intellectual Property" shall mean Patents, Trademarks and Copyrights.
---------------------
"Patents" shall mean (a) all letters patent of the United States or
-------
any other country, and all applications for letters patent of the United
States or any other country, including, without limitation, any referred to
in Schedule III hereto, (b) all reissues, continuations, continuations-in-
------------
part or extensions thereof and any other rights of any kind related to such
letters patent or applications and (c) any written agreement granting any
right to sell, distribute, manufacture or otherwise use any invention
covered by a Patent owned by a Person other than Grantor, including,
without limitation, any referred to in Schedule III hereto.
------------
"Permitted Liens" shall mean (i) those Liens constituting Permitted
---------------
Liens, as defined in the Indenture under clauses (b), (f) and (h) thereof
and (ii) the non-exclusive royalty free license in respect of certain
Intellectual Property granted to GECC in connection with the 1996
Sale/Leaseback.
"Person" means and includes an individual, a partnership, a firm, a
------
joint venture, a corporation, a trust, an unincorporated organization or
other association or entity and a Governmental Authority.
"Previously Leased/Financed Equipment" shall mean the equipment listed
------------------------------------
on Schedule IV hereto.
-----------
"Prior Liens" shall mean those Liens listed on Schedule V hereto.
----------- ----------
"Requirement of Law" shall mean as to any Person, the certificate of
------------------
incorporation and by-laws or other
O-1-3
organizational or governing documents of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Security Agreement" shall mean this Security Agreement, as amended,
------------------
supplemented or otherwise modified from time to time.
"Trademarks" shall mean (a) all trademarks, trade names, corporate
----------
names, company names, business names, fictitious business names, trade
styles, service marks, logos, other sources of business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature, now existing or hereafter adopted
or acquired, all registrations and recordings thereof, and all applications
in connection therewith, including, without limitation, registrations,
recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof,
including, without limitation, any referred to in Schedule VI hereto, (b)
-----------
all renewals thereof, (c) all goodwill of the business of Grantor
symbolized by and associated with such Trademarks and (d) any written
agreement granting any right to use any Trademark of a Person other than
Grantor, including, without limitation, any referred to in Schedule VI
-----------
hereto.
"Transaction Documents" shall mean, collectively, the Securities, the
---------------------
Indenture, the Guarantees and the Security Documents.
Section 2. Grant of Security Interest. As collateral security for
--------------------------
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Secured Obligations, Grantor
hereby grants to Collateral Agent a first priority security interest in all of
the following property now owned or at any time hereafter acquired by Grantor
or in which Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the "Collateral"):
----------
(i) all Chattel Paper;
(ii) all Contracts;
(iii) all Copyrights;
O-1-4
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Patents;
(ix) all Trademarks; and
(x) all Proceeds and products of any and all of the foregoing.
Notwithstanding the foregoing, the Collateral shall not include (i)
any Inventory or Accounts (each as defined in the Code), (ii) any Documents of
Title (as defined in that certain financing agreement, as in effect on the date
hereof, executed in connection with the Revolving Credit Facility), (iii) any
1996 Leaseback Equipment or (iv) any Previously Leased/Financed Equipment.
Section 3. Rights of Collateral Agent; Limitations on Collateral
-----------------------------------------------------
Agent's Obligations.
-------------------
(a) Grantor Remains Liable under Contracts. Anything herein to the
--------------------------------------
contrary notwithstanding, Grantor shall remain liable under each of the
Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of each such Contract. Collateral Agent shall not have
any obligation or liability under any Contract by reason of or arising out of
this Security Agreement or the receipt by Collateral Agent of any payment
relating to such Contract pursuant hereto, nor shall Collateral Agent be
obligated in any manner to perform any of the obligations of Grantor under or
pursuant to any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party under any Contract, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
(b) Notice to Contracting Parties. Upon the request of Collateral
-----------------------------
Agent at any time after the occurrence and during the continuance of a Default
or Event of Default, Grantor shall notify parties to the Contracts that the
Contracts have been assigned to Collateral Agent and that payments in respect
thereof shall be made directly to Collateral Agent. During the continuance of a
Default or Event of Default, Collateral Agent may in its own name or in the name
of others communicate with parties to the Contracts to verify
O-1-5
with them to its satisfaction the existence, amount and terms of any Contracts.
(c) First Priority. Grantor and Collateral Agent intend the security
--------------
interests granted pursuant to Section 2 of this Security Agreement to constitute
first priority perfected Liens until the Secured Obligations are paid in full
(including payment of principal of, premium, if any, and accrued but unpaid
interest on, the Securities).
(d) No Release. Nothing set forth in this Security Agreement shall
----------
relieve Grantor from the performance of any term, covenant, condition or
agreement on Grantor's part to be performed or observed under or in respect of
any of the Collateral or from any liability to any Person under or in respect of
any of the Collateral or impose any obligation on Collateral Agent or any Holder
to perform or observe any such term, covenant, condition or agreement on
Grantor's part to be so performed or observed or impose any liability on
Collateral Agent or any Holder for any act or omission on the part of the
Grantor relating thereto or for any breach of any representation or warranty on
the part of Grantor contained in any Security Document or in respect of the
Collateral or made in connection therewith.
Section 4. Representations and Warranties. Grantor hereby
------------------------------
represents and warrants that:
(a) Title; No Other Liens. Except for the Lien granted to Collateral
---------------------
Agent pursuant to this Security Agreement, Grantor is, and as to the
Collateral acquired by it from time to time after the date hereof Grantor
will be, except as otherwise permitted by the Indenture or this Security
Agreement, the sole owner of each item of Collateral subject to no other
Liens (other than Prior Liens and Permitted Liens), claims or rights of
others. No security agreement, financing statement or other public notice
with respect to all or any material part of the Collateral is on file or of
record in any public office, except such as may have been filed in favor
of Collateral Agent pursuant to this Security Agreement and in connection
with Prior Liens. As of the date hereof, no Collateral is evidenced by
Instruments required to be delivered to Collateral Agent which have not
been delivered to Collateral Agent.
(b) Perfection of Liens. Financing statements on form UCC-1 have been
-------------------
prepared and delivered to the Collateral Agent herewith. When this
Security Agreement is duly executed and
O-1-6
delivered and (i) such financing statements have been filed in the
jurisdictions indicated thereon, and (ii) the Notice of Security Interest
is filed and accepted in the United States Patent and Trademark Office,
then all filings shall have been made to create, preserve, protect and
perfect the security interest granted by Grantor to Collateral Agent hereby
in respect of such of the Collateral in which a security interest can be
perfected by the filing of a financing statement or the filing of a
security agreement with the United States Patent and Trademark Office. When
such filings are duly made the security interests granted to Collateral
Agent pursuant to this Security Agreement in and to such Collateral will
constitute perfected Liens and security interests therein and subject to no
liens other than Prior Liens. This Security Agreement is enforceable as
such against all creditors of and purchasers from Grantor and against any
owner or purchaser of the real property where any of the Equipment is
located and any present or future creditor obtaining a Lien on such real
property.
(c) Contracts. Except as set forth in Schedule VII hereto, no consent
--------- ------------
of any party (other than Grantor) to any material Contract is required, or
purports to be required, in connection with the execution, delivery and
performance of this Security Agreement. Each material Contract is in full
force and effect and constitutes a valid and legally enforceable obligation
of the parties thereto. No consent or authorization of, filing with or
other act by or in respect of any Governmental Authority is required in
connection with the execution, delivery, performance, validity or
enforceability of any of the material Contracts by any party thereto other
than those which have been duly obtained, made or performed, are in full
force and effect and do not subject the scope of any such Contract to any
material adverse limitation, either specific or general in nature. Neither
Grantor nor (to the best of Grantor's knowledge) any other party to any
material Contract is in default or is likely to become in default in the
performance or observance of any of the terms thereof. Grantor has fully
performed its obligations in all material respects under each material
Contract. The right, title and interest of Grantor in, to and under each
material Contract are not subject to any defense, offset, counterclaim or
claim, nor have any of the foregoing been asserted or alleged against
Grantor as to any material Contract. No amount payable to Grantor under or
in connection with any Contract is evidenced by any promissory note, other
Instrument or Chattel Paper which has not been delivered to Collateral
Agent, other than
O-1-7
in connection with the sale of Inventory in the ordinary course of
business.
(d) Equipment. The Equipment is kept at the locations listed on
---------
Schedule VIII hereto.
-------------
(e) Chief Executive Office. Grantor's chief executive office and
----------------------
chief place of business is located at Xxx Xxxxxx Xxx, Xxxxxxx, Xxx Xxxx
00000.
(f) Farm Products. None of the Collateral constitutes, or is the
-------------
Proceeds of, Farm Products.
(g) Patents, Trademarks and Copyrights. Schedule III hereto includes
---------------------------------- ------------
all Patents owned by Grantor in its own name as of the date hereof.
Schedule VI hereto includes all Trademarks owned by Grantor in its own name
-----------
as of the date hereof. Schedule II hereto includes all Copyrights owned by
-----------
Grantor in its own name as of the date hereof. Each Patent and Trademark
is valid, subsisting, unexpired and has not been abandoned. Except as set
forth in such Schedules, none of such Patents, Trademarks and Copyrights is
the subject of any licensing or franchise agreement. No holding, decision
or judgment has been rendered by any Governmental Authority which would
limit, cancel or question the validity of any Patent, Trademark, or
Copyright. No action or proceeding is pending (i) seeking to limit, cancel
or question the validity of any Patent, Trademark or Copyright, or (ii)
which, if adversely determined, would have a material adverse effect on the
value of any Patent, Trademark or Copyright.
(h) Valid and Binding Obligation. Grantor has full corporate power,
----------------------------
authority and legal right to pledge and grant a security interest in the
Collateral pursuant to this Security Agreement, and this Security Agreement
constitutes the legal, valid and binding obligation of Grantor, enforceable
against Grantor in accordance with its terms except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and by general
principles of equity.
(i) Consents and Approvals. Except as set forth in Schedule IX hereto
---------------------- -----------
and other consents which have been obtained as of the date hereof, no
consent of any other Person (including, without limitation, stockholders or
creditors of Grantor) and no consent, approval, authorization of, or
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registration or declaration or filing with, any Governmental Authority or
regulatory body is required to be obtained, effected or given in connection
with either (i) the pledge of, and grant of a security interest in, the
Collateral by Grantor pursuant to this Security Agreement or for the
execution, delivery or performance of this Security Agreement or any of the
other Security Documents by Grantor or (ii) for the exercise by Collateral
Agent of the rights provided for in this Security Agreement or any of the
other Security Documents or the remedies in respect of the Collateral
pursuant to this Security Agreement or any of the other Security Documents.
Section 5. Covenants. Grantor covenants and agrees with Collateral
---------
Agent that until the Secured Obligations are paid in full (including payment of
the principal of, premium, if any, and accrued but unpaid interest on, the
Securities):
(a) Further Documentation; Pledge of Instruments. At any time and
--------------------------------------------
from time to time, upon the written request of Collateral Agent, and at the
sole expense Grantor, Grantor will promptly and duly execute and deliver
such further instruments and documents and take such further action as
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Security Agreement and of the rights
and powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the Liens created hereby and
filings in the United States Patent and Trademark Office and the United
States Copyright Office. Grantor hereby authorizes Collateral Agent to
file any such financing or continuation statements and to make such filings
in the United States Patent and Trademark Office and the United States
Copyright Office without the signature of Grantor to the extent permitted
by applicable law. Notwithstanding the foregoing, the Collateral Agent's
right to obtain further instruments and documents from the Grantor shall
not release the Grantor from its obligations under Section 4(b) to make
filings of financing and continuation statements under the Uniform
Commercial Code in appropriate jurisdictions. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by
any promissory note, other Instrument or Chattel Paper, such note,
Instrument or Chattel Paper shall be immediately delivered to Collateral
Agent, duly endorsed in a manner satisfactory to Collateral Agent, to be
held as Collateral pursuant to this Agreement.
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(b) Indemnification. Grantor agrees to indemnify, pay and hold
---------------
harmless Collateral Agent and each of the Holders and the officers,
directors, employees, agents and affiliates of Collateral Agent and each of
the Holders (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs (including, without limitation, the settlement costs),
expenses or disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for
such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such
Indemnitees shall be designated a party thereto), which may be imposed on,
incurred by, or asserted against that Indemnitee, in any manner relating to
or arising out of any of the Transaction Documents (including, without
limitation, any misrepresentation by Grantor in any of the Transaction
Documents) (the "Indemnified Liabilities"); provided, that Grantor shall
--------
have no obligation to an Indemnitee hereunder with respect to an
Indemnified Liability if it has been determined by a final decision (after
all appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such Indemnified Liability arose from the negligence or
willful misconduct of that Indemnitee. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in the preceding sentence may
be unenforceable because it is violative of any law or public policy,
Grantor shall contribute the maximum portion which it is permitted to pay
and satisfy under the applicable law, to the payment and satisfaction of
all Indemnified Liabilities incurred by the Indemnitees or any of them. The
obligations of Grantor contained in this Section 5 shall survive the
termination of this Security Agreement and the discharge of Grantor's other
obligations under the Transaction Documents. Any amount paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement shall
constitute Secured Obligations secured by the Collateral.
(c) Maintenance of Records. Grantor will keep and maintain at its own
----------------------
cost and expense satisfactory and complete records in respect of the
Collateral. Grantor will xxxx its books and records pertaining to the
Collateral to evidence this Security Agreement and the security interests
granted hereby. For Collateral Agent's further security, Collateral Agent
is hereby granted a security interest in all of Grantor's books and records
pertaining to the Collateral, and Grantor shall permit access to any such
books and records to
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Collateral Agent or to its representatives during normal business hours at
the reasonable request of Collateral Agent and shall upon Collateral
Agent's request after the occurrence and during the continuation of any
Default or Event of Default turn over any such books and records to
Collateral Agent.
(d) Right of Inspection. Collateral Agent shall at all times have
-------------------
full and free access during normal business hours to all the books,
correspondence and records of Grantor, and
Collateral Agent or its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and Grantor agrees to render to
Collateral Agent, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Collateral
Agent and its representatives shall at all times also have the right to
enter into and upon any premises where any of the Equipment is located for
the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.
(e) Compliance with Laws, etc. Grantor will comply in all material
-------------------------
respects with all Requirements of Law applicable to the Collateral or any
part thereof or to the operation of Grantor's business; provided, however,
-------- -------
that Grantor may contest any Requirement of Law in any reasonable manner
which shall not adversely affect Collateral Agent's rights or the priority
of its Liens on the Collateral.
(f) Compliance with Terms of Contracts, etc. Grantor will perform
---------------------------------------
and comply in all material respects with all its obligations under the
Contracts and all its other Contractual Obligations relating to the
Collateral.
(g) Payment of Obligations. Grantor will pay promptly when due all
----------------------
taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except
that no such charge need be paid if (i) the validity thereof is being
contested in good faith by appropriate proceedings, (ii) such proceedings
do not involve any material danger of the sale, forfeiture or loss of any
of the Collateral or any interest therein and (iii) such charge is
adequately reserved against on Grantor's books in accordance with GAAP.
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(h) Limitation on Liens on Collateral. Grantor will not create, incur
---------------------------------
or permit to exist, will defend the Collateral against, and will take such
other action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby, Prior Liens, Permitted
Liens and other Liens permitted under Section 4.13 of the Indenture, and
will defend the right, title and interest of Collateral Agent in and to any
of the Collateral against the claims and demands of all Persons whomsoever.
Grantor will take no action which would or, in the reasonable judgment of
Collateral Agent would, adversely affect the existence, enforceability,
priority or perfection of the Liens on and security interests in any of the
Collateral granted hereunder. To the extent any security interest granted
hereunder in any property constituting a part of the Collateral either (i)
does not constitute a perfected first priority Lien on the date hereof (but
is intended to constitute a perfected first priority Lien pursuant to the
terms hereof) or (ii) ceases without consent of Collateral Agent to
constitute a perfected first priority Lien after the date hereof, Grantor
shall make all filings (including financing statements or continuation
statements and filings in the United States Patent and Trademark Office and
the United States Copyright Office) and record such instruments as may be
reasonably requested by Collateral Agent to restore the priority and
perfection of such Lien. The right of the Collateral Agent to require any
such filing shall not be deemed to impose upon the Collateral Agent any
duty or obligation to ascertain whether any circumstances exist which
require such filings or recordations.
(i) Limitations on Dispositions of Collateral. Grantor will not sell,
-----------------------------------------
transfer, lease or otherwise dispose of any of the Collateral, or attempt,
offer or contract to do so except in accordance with the terms of the
Indenture.
(j) Limitations on Modifications, Waivers, Extensions of Contracts.
--------------------------------------------------------------
Grantor will not (i) amend, modify, terminate or waive any provision of any
material Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral or
impair Grantor's ability to conduct its business, (ii) fail to exercise
promptly and diligently each and every material right which it may have
under each material Contract (other than any right of termination) or (iii)
fail to deliver to Collateral Agent a copy of each material demand, notice
or document received by it relating in any way to any material Contract.
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(k) Maintenance of Equipment. Except as otherwise provided in the
------------------------
Indenture, Grantor will maintain each item of Equipment in good operating
condition, ordinary wear and tear and immaterial impairments of value and
damage by the elements excepted, and will provide all maintenance, service
and repairs necessary for such purpose.
(l) Maintenance of Insurance. Grantor will maintain, with financially
------------------------
sound and reputable companies, insurance policies (i) insuring the
Equipment against loss by fire, explosion, theft and such other casualties
as are usually insured against by companies engaged in the same or similar
businesses and (ii) insuring Grantor and Collateral Agent against liability
for personal injury and property damage relating to such Equipment, such
policies to be in such form and amounts and having such coverage as is
customary for companies engaged in the same or similar businesses, with
losses payable to Grantor and Collateral Agent as their respective
interests may appear. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 10 days after receipt by
Collateral Agent of written notice thereof, (ii) name Collateral Agent as
an additional insured or loss payee, as applicable and (iii) be reasonably
satisfactory in all other respects to Collateral Agent. The Company shall
deliver to Collateral Agent a report of a reputable insurance broker with
respect to such insurance at least once in each calendar year and such
supplemental reports with respect thereto as Collateral Agent may from time
to time reasonably request.
(m) Further Identification of Collateral. Grantor will furnish to
------------------------------------
Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as Collateral Agent may reasonably request,
all in reasonable detail.
(n) Notices. Grantor will advise Collateral Agent promptly, in
-------
reasonable detail, at its address set forth above, (i) of any Lien (other
than Liens created or permitted hereby) on, or material claim asserted
against, any of the Collateral and (ii) of the occurrence of any other
event which could reasonably be expected to have a material adverse effect
on the aggregate value of the Collateral or on the Liens created hereunder.
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(o) Changes in Locations, Name, etc. Without collateral Agent's prior
-------------------------------
written consent, Grantor will not (i) change the location of its chief
executive office/chief place of business from that specified in Section
4(e) or remove its books and records from such location, (ii) permit any of
the Equipment to be kept at a location other than those listed on Schedule
--------
VIII hereto or (iii) change its name, identity or corporate structure to
----
such an extent that any financing statement filed by or on behalf of
Collateral Agent in connection with this Security Agreement would become
reasonably misleading. Collateral Agent's consent to any of the foregoing
will not be unreasonably withheld so long as Grantor shall (x) provide
Collateral Agent with 45 days prior written notice of its intention to take
any of the actions specified in clauses (i) - (iii) above, (y) take all
actions necessary to maintain the perfection of the security interest in
the Collateral intended to be created hereby and (z) in the event that
Grantor proposes to move any Equipment to a location at which any entity
has obtained a mortgage lien on the real property in connection with the
1996 Leaseback Transaction, obtain and deliver to the Collateral Agent an
access agreement substantially in the form of Schedule X hereto, duly
----------
executed by the holder of such mortgage lien and Grantor.
(p) Patents, Trademarks and Copyrights.
----------------------------------
(i) Grantor (either itself or through licensees) will, except
with respect to any Trademark that Grantor shall reasonably determine
is of immaterial economic value to it or which Grantor abandons in
accordance with Section (p)(ii) below, (i) continue to use each
Trademark on each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures and price
lists in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) maintain as in the past the
quality of products and services offered under such trademark, (iii)
employ such Trademark with the appropriate notice of registration,
(iv) not adopt or use any xxxx which is confusingly similar or a
colorable imitation of such Trademark unless Collateral Agent shall
obtain a perfected security interest in such xxxx pursuant to this
Security Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act
whereby any Trademark may become invalidated.
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(ii) Grantor will not, except with respect to any Patent or
Copyright that Grantor shall reasonably determine is of immaterial
economic value to it, do any act, or omit to do any act, whereby any
Patent or copyright may become abandoned or dedicated.
Notwithstanding the foregoing, Grantor, in its good faith business
judgment, may abandon any Patent, Trademark or Copyright, or
application for registration thereof, which is not necessary for the
operation of Grantor's business, upon thirty (30) days' prior written
notice to Collateral Agent.
(iii) Grantor will notify Collateral Agent immediately if it
knows, or has reason to know, that any application or registration
relating to any Patent, Trademark or Copyright may become abandoned or
dedicated, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding Grantor's ownership of any Patent,
Trademark or Copyright or its right to register the same or to keep
and maintain the same.
(iv) Whenever Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the
registration of any Patent or Trademark with the United States Patent
and Trademark Office or for the registration of any Copyright in the
United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, Grantor shall
report such filing to Collateral Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon
request of Collateral Agent, Grantor shall execute and deliver any and
all agreements, instruments, documents, and papers as Collateral Agent
may request to evidence Collateral Agent's security interest in any
Patent, Trademark or Copyright and the goodwill and general
intangibles of Grantor relating thereto or represented thereby, and
Grantor hereby constitutes and appoints Collateral Agent its attorney-
in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and
confirmed; such power being coupled with an interest is irrevocable
until the Secured Obligations are paid in full.
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(v) Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the United States Copyright
Office, or any similar office or agency in any other country or any
political subdivision thereof, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each
registration of the Patents, Trademarks and Copyrights (other than any
Patent, Trademark or Copyright which is abandoned by Pledgor in
accordance with Section (p)(ii) above), including, without limitation,
filing of applications for renewal, affidavits of use and affidavits
of incontestability.
(vi) In the event that any Patent, Trademark or Copyright
included in the Collateral is infringed, misappropriated or diluted by
a third party, Grantor shall promptly notify Collateral Agent after it
learns thereof and shall, unless Grantor shall reasonably determine
that such Patent, Trademark or Copyright is not of material economic
value to Grantor, promptly xxx for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover
any and all damages for such infringement, misappropriation or
dilution, or take such other actions as Grantor shall reasonably deem
appropriate under the circumstances to protect such Patent, Trademark
or Copyright.
(q) If at any time the Indebtedness of the Grantor in respect of any
Previously Leased/Financed Equipment is repaid in full and the Grantor is
not then required to grant to GECC a security interest in such Previously
Leased/Financed Equipment, Grantor shall grant to the Collateral Agent a
security interest in such Previously Leased/Financed Equipment and shall
take all actions necessary to perfect such security interest, including,
without limitation, the filing of financing statements in the appropriate
jurisdictions.
Section 6. Collateral Agent's Appointment as Attorney-in-Fact.
--------------------------------------------------
(a) Powers. Grantor hereby irrevocably constitutes and appoints
------
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of Grantor and in the name of Grantor
or in its own name, from time to time in Collateral Agent's discretion, for the
purpose of carrying
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out the terms of this Security Agreement, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement, and, without
limiting the generality of the foregoing, Grantor hereby gives Collateral Agent
the power and right, on behalf of Grantor, without notice to or assent by
Grantor, to do the following:
(i) upon the occurrence and during the continuance of any Event of
Default, in the name of Grantor or its own name or otherwise, to take
possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Instrument, General Intangible or Contract and to file any claim or to take
any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by Collateral Agent for the purpose of
collecting any and all such moneys due under any Instrument, General
Intangible or Contract whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of this Security Agreement and to pay all or any
part of the premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of any Event
of Default, (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to Collateral Agent or as Collateral Agent shall
direct; (B) to ask or demand for, collect, receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at
any time in respect of or arising out of any Collateral; (C) to sign and
endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Collateral; (D)
to commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or
any Proceeds thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding brought against
Grantor with respect to any Collateral; (F) to settle, compromise or adjust
any suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as Collateral
Agent may deem appropriate; (G) to assign any Patent, Trademark (along with
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the goodwill of the business to which any such Trademark pertains) or
Copyright, throughout the world for such term or terms, on such conditions,
and in such manner, as Collateral Agent shall in its sole discretion
determine; and (H) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though Collateral Agent were the absolute owner
thereof for all purposes, and to do, at Collateral Agent's option and
Grantor's expense, at any time, or from time to time, all acts and things
which Collateral Agent deems necessary to protect, preserve or realize upon
the Collateral and Collateral Agent's Liens thereon and to effect the
intent of this Security Agreement, all as fully and effectively as Grantor
might do.
Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(b) Other Powers. Grantor also authorizes Collateral Agent, at any
------------
time and from time to time, to execute, in connection with the sale provided for
in Section 8 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) No Duty on Collateral Agent's Part. The powers conferred on
----------------------------------
Collateral Agent hereunder are solely to protect Collateral Agent's interests in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Collateral Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be responsible to Grantor for
any act or failure to act hereunder, except for its own negligence or willful
misconduct.
Section 7. Performance by Collateral Agent of Grantor's Obligations.
--------------------------------------------------------
If Grantor fails to perform or comply with any of its agreements contained
herein and Collateral Agent, as provided for by the terms of this Security
Agreement, shall itself perform or comply, or otherwise cause performance or
compliance, with such agreement, the expenses of Collateral Agent incurred in
connection with such performance or compliance, together with interest thereon
at a rate per annum 2% above the rate payable under the Indenture, shall be
payable by Grantor to Collateral Agent on demand and shall constitute Secured
Obligations.
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Section 8. Remedies, Rights Upon Default. (a) Upon the occurrence
-----------------------------
and during the continuance of an Event of Default:
(i) all payments received by Grantor under or in connection with
any of the Collateral shall be held by Grantor in trust for Collateral
Agent for the benefit of the Holders, shall be segregated from other funds
of Grantor and shall forthwith upon receipt by Grantor be paid over to
Collateral Agent as Collateral, in the same form as received by Grantor
(duly endorsed by Grantor to Collateral Agent, if required);
(ii) any and all such payments so received by Collateral Agent
(whether from Grantor or otherwise) shall be held by Collateral Agent as
Trust Moneys and applied by it in such manner and only at such times as
provided in the Indenture;
(iii) Collateral Agent shall have the right to seize and take
possession of any Collateral and the books and records pertaining to the
Collateral (including, without limitation, customer lists, correspondence
with present or future or prospective suppliers or customers, advertising
or marketing materials, credit files, computer tapes, programs, printouts,
and all other computer materials, records and electronic data processing
software pertaining to the Collateral) and may enter the premises where
they, or any of them, are located for the purpose of effecting such
removal; Grantor shall have a reasonable time to make copies of such books
and records before their removal by Collateral Agent; Collateral Agent
shall not be liable to Grantor for any damage suffered by Grantor by reason
of such entry or seizure unless it results from Collateral Agent's
negligence, bad faith or willful misconduct, and Grantor hereby agrees to
indemnify and hold harmless Collateral Agent from and against any and all
claims, expenses or liabilities that it may incur to any Person (other than
to Grantor in connection with any liability of Collateral Agent to Grantor
resulting from Collateral Agent's negligence, bad faith or willful
misconduct) by reason of such entry or seizure;
(iv) Collateral Agent may hire and maintain at Grantor's premises a
custodian or independent contractor selected by Collateral Agent who shall
have full authority to do all lawful acts necessary to protect Collateral
Agent's interest and to report to Collateral Agent thereon. Grantor hereby
agrees to cooperate with any such Person and to do whatever Collateral
Agent may reasonably request to preserve the Collateral.
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(b) Upon the occurrence and during the continuance of an Event of
Default, then, and in any such event, and in accordance with Section 9 hereof,
Collateral Agent may exercise, in addition to all other rights and remedies
granted in this Security Agreement, and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party on default under the Code (or such other comparable
statute) in the applicable jurisdiction. Without limiting the generality of the
foregoing, Grantor expressly agrees that in any such event Collateral Agent may,
without demand or performance or other demand, advertisement or notice of any
kind (except the notice specified below of time and place of public or private
sale) to or upon Grantor or any other Person, all and each of which demands,
advertisements and/or notices are (to the extent permitted by applicable law)
hereby expressly waived, forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give option or options to purchase, or sell or otherwise dispose of and
deliver the Collateral (or contract to do so), or any part thereof, in one or
more parcels at public or private sale or sales, at any exchange or broker's
board or at any of Collateral Agent's offices or elsewhere, for cash, on credit
or for future delivery, at such time or times and at such price or prices and
upon such other terms as Collateral Agent may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the
Collateral. Collateral Agent and any Holder shall have the right on any such
public sale or sales and, to the extent permitted by law, on any such private
sale or sales to purchase the whole or any part of said Collateral so sold and
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price of all or any portion of the Collateral sold at any such
public sale, to use and apply any of the Secured Obligations owed to Collateral
Agent or such Holder, as the case may be, as a credit on account of the purchase
price of any Collateral payable by Collateral Agent or such Holder, as the case
may be, at such sale. Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of Grantor, except for
any right or redemption as may be available by applicable law. Grantor further
agrees, at Collateral Agent's request, to assemble Collateral and make it
available to Collateral Agent at places that Collateral Agent reasonably
selects, whether at Grantor's premises or elsewhere. The proceeds of any such
collection, recovery, receipt, appropriation, realization or sale shall
constitute Trust Moneys and shall be applied by Collateral Agent in accordance
with the Indenture in the manner provided in the Indenture.
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(c) To the extent permitted by applicable law, Grantor waives all
claims, damages and demands against Collateral Agent or any Holder arising out
of the repossession, retention or sale of the Collateral unless resulting from
Collateral Agent's or such Holder's negligence, bad faith or willful misconduct.
Grantor agrees that Collateral Agent need not give more than 10 days' notice
(which notice shall be deemed given when mailed) of the time and place of any
public sale or of the time after which a private sale may take place and that
such notice is reasonable notification of such matters. No notification need be
given to Grantor if it has signed, after default, a statement renouncing or
modifying any right to notification of sale or other intended disposition.
Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral applied
to the Secured Obligations pursuant to the Indenture are insufficient to
indefeasibly pay in full in cash all Secured Obligations and amounts to which
Collateral Agent and the Holders are entitled, Grantor also being liable for the
reasonable fees of any attorneys employed by Collateral Agent or any Holder to
collect such deficiency.
(d) To the extent that it may lawfully do so, Grantor agrees that it
will not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of any appraisal, valuation, stay, extension or
redemption laws, or any law permitting it to direct the order in which the
Collateral or any part thereof shall be sold, now or at any time hereafter in
force, that may delay, prevent or otherwise affect the performance or
enforcement of this Security Agreement or the Secured Obligations and hereby
expressly waives all benefit or advantage of any such laws and covenants that it
will not hinder, delay or impede the execution of any power granting or
delegated to Collateral Agent or any Holder in this Security Agreement or any
other Security Document, but will suffer and permit the execution of every such
power as though no such laws were in force.
Section 9. Decisions Relating to Exercise of Remedies.
------------------------------------------
Notwithstanding anything in this Agreement to the contrary, Collateral Agent
shall exercise any remedy provided for in Section 8 in accordance with the terms
of, and at the times, if any, specified in the Indenture and in accordance with
instructions from the Trustee delivered at the direction of the Holders of at
least
O-1-21
a majority in principal amount of the outstanding Securities or refrain from
exercising any remedy provided for in Section 8 either in the absence of
instructions from the Trustee or in accordance with instructions from the
Trustee delivered at the direction of the Holders of at least a majority in
principal amount of the outstanding Securities.
Section 10. Limitation on Collateral Agent's Duties in Respect of
-----------------------------------------------------
Collateral. Collateral Agent's sole duty with respect to the custody,
----------
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with
it in the same manner as Collateral Agent deals with similar property for its
own account. Neither Collateral Agent nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of Grantor or otherwise.
Section 11. Expenses. Grantor agrees to pay, without duplication, to
--------
Collateral Agent, from time to time upon demand, all reasonable fees, costs and
expenses of Collateral Agent (including, without limitation, the reasonable
expenses, fees and disbursements of its counsel, experts and agents) incurred by
Collateral Agent or arising in connection with (a) the preparation, execution,
delivery, administration, modification, amendment or termination of this
Security Agreement or the enforcement of any of the provisions hereof, (b) the
custody or preservation and protection of, or the sale of, collection from, or
other realization upon, any of the Collateral, (c) the preservation, protection,
defense, exercise or enforcement of any of the rights of Collateral Agent
hereunder and in and to the Collateral or (d) the failure by Grantor to perform
or observe any of the provisions hereof. When Collateral Agent incurs expenses
or renders services after an Event of Default specified in Sections 6.1(a)(viii)
or (ix) of the Indenture occurs, such expenses and the compensation for such
services are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 12. Obligations Absolute. All obligations of Grantor
--------------------
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Grantor;
O-1-22
(ii) any lack of validity or enforceability of any Transaction
Document or any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any Transaction
Document or any other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect of any Transaction Document
except as specifically set forth in a waiver granted pursuant to the
provisions of this Security Agreement; or
(vi) any other circumstances except payment which might otherwise
constitute a defense available to, or a discharge of, Grantor.
Section 13. Continuing Security Interest; Transfer of Secured
-------------------------------------------------
Obligations. This Security Agreement shall create a continuing security
-----------
interest in the Collateral and shall (a) remain in full force and effect until
all Secured Obligations are paid in full in cash (at which time Collateral Agent
will, at Grantor's expense, take all acts necessary or appropriate to return all
Collateral to Grantor and extinguish the security interests granted hereunder,
including, without limitation, the execution and filing of any necessary Uniform
Commercial Code termination statements and any necessary filings with the United
States Patent and Trademark Office and the United States Copyright Office), (b)
be binding upon Grantor, and its successors and assigns, and (c) inure, together
with the rights and remedies of Collateral Agent hereunder, to the benefit of
Collateral Agent, and each of the Holders and each of their respective
successors, transferees and assigns; no other Persons (including, without
limitation, any other creditor of Grantor) shall have any interest herein or any
right or benefit with respect hereto. Without limiting the generality of the
foregoing clause (c), Collateral Agent and any Holder may assign or otherwise
transfer any indebtedness held by it secured by this Security Agreement to any
other Person, and such other Person shall thereupon become vested with all the
benefits in
O-1-23
respect thereof granted to such party herein or otherwise. Neither this Security
Agreement nor any interest herein or in the Collateral, or any part thereof,
except as otherwise permitted herein, may be assigned by Grantor; provided,
--------
however, that this Security Agreement may be assumed by any other
-------
Person pursuant to and in compliance with Article V of the Indenture if such
Person executes and delivers an amendment hereto whereby it expressly assumes
all obligations of Grantor hereunder as if it were an original party hereto and
if all covenants herein with respect to any change in name or location or
otherwise has been complied with in connection therewith. This Security
Agreement shall be deemed to be automatically assigned by Collateral Agent to
any Person who succeeds to Collateral Agent in its capacity as Trustee under the
Indenture in accordance with the Indenture, and its assignee shall have all
rights and powers of, and shall act as, Collateral Agent.
Section 14. Execution in Counterparts. This Security Agreement and
-------------------------
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Section 15. Powers Coupled with an Interest. All authorizations and
-------------------------------
agencies herein contained with respect to the Collateral are irrevocable and are
powers coupled with an interest.
Section 16. Severability. Any provision of this Security Agreement
------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17. Paragraph Headings. The paragraph headings used in this
------------------
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
Section 18. No Waiver; Cumulative Remedies. Collateral Agent shall
------------------------------
not by any act (except pursuant to the execution of a written instrument
pursuant to Section 19 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default or in any breach of any of the terms and
O-1-24
conditions hereof. No failure to exercise, nor any delay in exercising, on the
part of Collateral Agent, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise or any other right, power or privilege. A waiver by Collateral Agent of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which Collateral Agent would otherwise have on any
future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or remedies
provided by law.
Section 19. Waivers and Amendments; Successors and Assigns; Governing
---------------------------------------------------------
Law. None of the terms or provisions of this Security Agreement may be waived,
---
amended, supplemented or otherwise modified except by a written instrument
executed by Grantor and Collateral Agent in accordance with the Indenture. This
Security Agreement shall be binding upon the successors and assigns of Grantor
and shall inure to the benefit of Collateral Agent and its successors and
assigns. This Security Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
O-1-25
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
PLASTIC CONTAINERS, INC.,
as Grantor
By:
------------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent
By:
------------------------------------
Name:
Title:
O-1-26
Schedule I - 1996 Leaseback Equipment
-------------------------------------
O-1-27
Schedule II - Copyrights
------------------------
O-1-28
Schedule III - Patents
----------------------
O-1-29
Schedule IV - Previously Leased/Financed Equipment
--------------------------------------------------
O-1-30
Schedule V - Prior Liens
------------------------
O-1-31
Schedule VI - Trademarks
------------------------
O-1-32
Schedule VII - Contracts
------------------------
O-1-33
Schedule VIII - Location of Equipment
-------------------------------------
O-1-34
Schedule IX - Consents and Approvals
------------------------------------
O-1-35
Schedule X - Access Agreement
-----------------------------
O-1-36
EXHIBIT O-2
-----------
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT ("Security Agreement") dated as of December
17, 1996, made by CONTINENTAL PLASTIC CONTAINERS, INC., a Delaware corporation
("Grantor"), in favor of UNITED STATES TRUST COMPANY OF NEW YORK, a New York
corporation having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as collateral agent (together with any successors in such capacity the
"Collateral Agent") and as trustee for the Holders (as defined in the Indenture)
under the Indenture (as hereinafter defined).
R E C I T A L S :
- - - - - - - -
A. Grantor, Continental Caribbean Containers, Inc., a Delaware
corporation, Plastic Containers, Inc., a Delaware corporation ("PCI"), and
Collateral Agent have entered into a certain indenture (as amended from time to
time, the "Indenture"; capitalized terms used herein but not defined herein
shall have the meanings ascribed to such terms in the Indenture), dated as of
the date hereof, pursuant to which PCI has issued 10% Senior Secured Notes due
2006 (the "Series A Notes") in the aggregate principal amount of $125,000,000
and pursuant to which PCI may issue 10% Series B Senior Secured Notes due 2006
(the "Series B Notes"; together with the Series A Notes, the "Securities"),
which Securities have been guaranteed by Grantor (the "Guaranty").
B. This Security Agreement is given by Grantor to secure all of its
obligations (including the payment of amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a) and any successor provision thereto) under (i) the
Guaranty and (ii) all obligations, indebtedness and liabilities of Grantor
pursuant to the terms of this Security Agreement, in each case, whether now
existing or hereafter arising and whether in the regular course of business or
otherwise (collectively, the "Secured Obligations").
A G R E E M E N T :
- - - - - - - - -
NOW, THEREFORE, in consideration of the premises set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby agrees with Collateral Agent as follows:
Section 1. Defined Terms. The following terms which are defined in the
-------------
Code are used herein as so defined: Chattel Paper,
X-0-0
Xxxxxxxxx, Xxxxxxxxx, Xxxx Products, General Intangibles, Instruments and
Proceeds. The following terms shall have the following meanings:
"1996 Leaseback Equipment" shall mean the equipment listed on Schedule
------------------------ --------
I hereto and any additions and accessions thereto.
-
"Code" shall mean the Uniform Commercial Code as from time to time in
----
effect in the State of New York.
"Collateral" shall have the meaning assigned to it in Section 2 of
----------
this Security Agreement.
"Contracts" shall mean all contracts between Grantor and any third
---------
party including, without limitation, all customer contracts now existing or
hereafter entered into as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (a) all
rights of Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (b) all rights of Grantor to damages arising
out of, or for, breach or default in respect thereof and (c) all rights of
Grantor to perform and to exercise all remedies thereunder.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Copyrights" shall mean copyrights, owned by or assigned to Grantor,
----------
including, without limitation, the copyrights listed on Schedule II hereto,
-----------
together with any and all (a) renewals and extensions thereof, (b) income,
royalties, damages, claims and payments now and hereafter due and/or
payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, and (c) rights
to xxx for past, present and future infringements thereof.
"GECC" shall mean General Electric Capital Corporation.
----
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof and any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to any
O-2-2
government, and any corporation or other entity owned or controlled
(through ownership of capital interests or otherwise) by any of the
foregoing.
"Intellectual Property" shall mean Patents, Trademarks and Copyrights.
---------------------
"Patents" shall mean (a) all letters patent of the United States or
-------
any other country, and all applications for letters patent of the United
States or any other country, including, without limitation, any referred to
in Schedule III hereto, (b) all reissues, continuations, continuations-in-
------------
part or extensions thereof and any other rights of any kind related to such
letters patent or applications and (c) any written agreement granting any
right to sell, distribute, manufacture or otherwise use any invention
covered by a Patent owned by a Person other than Grantor, including,
without limitation, any referred to in Schedule III hereto.
------------
"Permitted Liens" shall mean (i) those Liens constituting Permitted
---------------
Liens, as defined in the Indenture under clauses (b), (f) and (h) thereof
and (ii) the non-exclusive royalty free license in respect of certain
Intellectual Property granted to GECC in connection with the 1996
Sale/Leaseback.
"Person" means and includes an individual, a partnership, a firm, a
------
joint venture, a corporation, a trust, an unincorporated organization or
other association or entity and a Governmental Authority.
"Previously Leased/Financed Equipment" shall mean the equipment listed
------------------------------------
on Schedule IV hereto.
-----------
"Prior Liens" shall mean those Liens listed on Schedule V hereto.
----------- ----------
"Requirement of Law" shall mean as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
O-2-3
"Security Agreement" shall mean this Security Agreement, as amended,
------------------
supplemented or otherwise modified from time to time.
"Trademarks" shall mean (a) all trademarks, trade names, corporate
----------
names, company names, business names, fictitious business names, trade
styles, service marks, logos, other sources of business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature, now existing or hereafter adopted
or acquired, all registrations and recordings thereof, and all applications
in connection therewith, including, without limitation, registrations,
recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof,
including, without limitation, any referred to in Schedule VI hereto, (b)
-----------
all renewals thereof, (c) all goodwill of the business of Grantor
symbolized by and associated with such Trademarks and (d) any written
agreement granting any right to use any Trademark of a Person other than
Grantor, including, without limitation, any referred to in Schedule VI
-----------
hereto.
"Transaction Documents" shall mean, collectively, the Securities, the
---------------------
Indenture, the Guarantees and the Security Documents.
Section 2. Grant of Security Interest. As collateral security for
--------------------------
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Secured Obligations, Grantor
hereby grants to Collateral Agent a first priority security interest in all of
the following property now owned or at any time hereafter acquired by Grantor or
in which Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the "Collateral"):
----------
(i) all Chattel Paper;
(ii) all Contracts;
(iii) all Copyrights;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Patents;
(ix) all Trademarks; and
O-2-4
(x) all Proceeds and products of any and all of the foregoing.
Notwithstanding the foregoing, the Collateral shall not include (i)
any Inventory or Accounts (each as defined in the Code), (ii) any Documents of
Title (as defined in that certain financing agreement, as in effect on the date
hereof, executed in connection with the Revolving Credit Facility), (iii) any
1996 Leaseback Equipment or (iv) any Previously Leased/Financed Equipment.
Section 3. Rights of Collateral Agent; Limitations on Collateral
-----------------------------------------------------
Agent's Obligations.
-------------------
(a) Grantor Remains Liable under Contracts. Anything herein to the
--------------------------------------
contrary notwithstanding, Grantor shall remain liable under each of the
Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of each such Contract. Collateral Agent shall not have
any obligation or liability under any Contract by reason of or arising out of
this Security Agreement or the receipt by Collateral Agent of any payment
relating to such Contract pursuant hereto, nor shall Collateral Agent be
obligated in any manner to perform any of the obligations of Grantor under or
pursuant to any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party under any Contract, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
(b) Notice to Contracting Parties. Upon the request of Collateral
-----------------------------
Agent at any time after the occurrence and during the continuance of a Default
or Event of Default, Grantor shall notify parties to the Contracts that the
Contracts have been assigned to Collateral Agent and that payments in respect
thereof shall be made directly to Collateral Agent. During the continuance of a
Default or Event of Default, Collateral Agent may in its own name or in the name
of others communicate with parties to the Contracts to verify with them to its
satisfaction the existence, amount and terms of any Contracts.
(c) First Priority. Grantor and Collateral Agent intend the security
--------------
interests granted pursuant to Section 2 of this Security Agreement to constitute
first priority perfected Liens until the Secured Obligations are paid in full
(including payment
O-2-5
of principal of, premium, if any, and accrued but unpaid interest on, the
Securities).
(d) No Release. Nothing set forth in this Security Agreement shall
----------
relieve Grantor from the performance of any term, covenant, condition or
agreement on Grantor's part to be performed or observed under or in respect of
any of the Collateral or from any liability to any Person under or in respect of
any of the Collateral or impose any obligation on Collateral Agent or any Holder
to perform or observe any such term, covenant, condition or agreement on
Grantor's part to be so performed or observed or impose any liability on
Collateral Agent or any Holder for any act or omission on the part of the
Grantor relating thereto or for any breach of any representation or warranty on
the part of Grantor contained in any Security Document or in respect of the
Collateral or made in connection therewith.
Section 4. Representations and Warranties. Grantor hereby represents
------------------------------
and warrants that:
(a) Title; No Other Liens. Except for the Lien granted to Collateral
---------------------
Agent pursuant to this Security Agreement, Grantor is, and as to the
Collateral acquired by it from time to time after the date hereof Grantor
will be, except as otherwise permitted by the Indenture or this Security
Agreement, the sole owner of each item of Collateral subject to no other
Liens (other than Prior Liens and Permitted Liens), claims or rights of
others. No security agreement, financing statement or other public notice
with respect to all or any material part of the Collateral is on file or of
record in any public office, except such as may have been filed in favor of
Collateral Agent pursuant to this Security Agreement and in connection with
Prior Liens. As of the date hereof, no Collateral is evidenced by
Instruments required to be delivered to Collateral Agent which have not
been delivered to Collateral Agent.
(b) Perfected First Priority Liens. Financing statements on form UCC-
------------------------------
1 have been prepared and delivered to the Collateral Agent herewith. When
this Security Agreement is duly executed and delivered and (i) such
financing statements have been filed in the jurisdictions indicated
thereon, and (ii) the Notice of Security Interest is filed and accepted in
the United States Patent and Trademark Office, then all filings shall have
been made to create, preserve, protect and perfect the security interest
granted by Grantor to Collateral Agent hereby in respect of such of the
O-2-6
Collateral in which a security interest can be perfected by the filing of a
financing statement or the filing of a security agreement with the United
States Patent and Trademark Office. When such filings are duly made the
security interests granted to Collateral Agent pursuant to this Security
Agreement in and to such Collateral will constitute perfected Liens and
security interests therein and subject to no liens other than Prior Liens.
This Security Agreement is
enforceable as such against all creditors of and purchasers from Grantor
and against any owner or purchaser of the real property where any of the
Equipment is located and any present or future creditor obtaining a Lien on
such real property.
(c) Contracts. Except as set forth in Schedule VII hereto, no consent
--------- ------------
of any party (other than Grantor) to any material Contract is required, or
purports to be required, in connection with the execution, delivery and
performance of this Security Agreement. Each material Contract is in full
force and effect and constitutes a valid and legally enforceable obligation
of the parties thereto. No consent or authorization of, filing with or
other act by or in respect of any Governmental Authority is required in
connection with the execution, delivery, performance, validity or
enforceability of any of the material Contracts by any party thereto other
than those which have been duly obtained, made or performed, are in full
force and effect and do not subject the scope of any such Contract to any
material adverse limitation, either specific or general in nature. Neither
Grantor nor (to the best of Grantor's knowledge) any other party to any
material Contract is in default or is likely to become in default in the
performance or observance of any of the terms thereof. Grantor has fully
performed its obligations in all material respects under each material
Contract. The right, title and interest of Grantor in, to and under each
material Contract are not subject to any defense, offset, counterclaim or
claim, nor have any of the foregoing been asserted or alleged against
Grantor as to any material Contract. No amount payable to Grantor under or
in connection with any Contract is evidenced by any promissory note, other
Instrument or Chattel Paper which has not been delivered to Collateral
Agent, other than in connection with the sale of Inventory in the ordinary
course of business.
(d) Equipment. The Equipment is kept at the locations listed on
---------
Schedule VIII hereto.
-------------
O-2-7
(e) Chief Executive Office. Grantor's chief executive office and
----------------------
chief place of business is located at 000 Xxxxxxx 0 Xxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxx 00000.
(f) Farm Products. None of the Collateral constitutes, or is the
-------------
Proceeds of, Farm Products.
(g) Patents, Trademarks and Copyrights. Schedule III hereto includes
---------------------------------- ------------
all Patents owned by Grantor in its own name as of the date hereof.
Schedule VI hereto includes all Trademarks owned by Grantor in its own name
-----------
as of the date hereof. Schedule II hereto includes all Copyrights owned by
-----------
Grantor in its own name as of the date hereof. Each Patent and Trademark is
valid, subsisting, unexpired and has not been abandoned. Except as set
forth in such Schedules, none of such Patents, Trademarks and Copyrights is
the subject of any licensing or franchise agreement. No holding, decision
or judgment has been rendered by any Governmental Authority which would
limit, cancel or question the validity of any Patent, Trademark, or
Copyright. No action or proceeding is pending (i) seeking to limit, cancel
or question the validity of any Patent, Trademark or Copyright, or (ii)
which, if adversely determined, would have a material adverse effect on the
value of any Patent, Trademark or Copyright.
(h) Valid and Binding Obligation. Grantor has full corporate power,
----------------------------
authority and legal right to pledge and grant a security interest in the
Collateral pursuant to this Security Agreement, and this Security Agreement
constitutes the legal, valid and binding obligation of Grantor, enforceable
against Grantor in accordance with its terms except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and by
general principles of equity.
(i) Consents and Approvals. Except as set forth in Schedule IX hereto
---------------------- -----------
and other consents which have been obtained as of the date hereof, no
consent of any other Person (including, without limitation, stockholders or
creditors of Grantor) and no consent, approval, authorization of, or
registration or declaration or filing with, any Governmental Authority or
regulatory body is required to be obtained, effected or given in connection
with either (i) the pledge of, and grant of a security interest in, the
Collateral by Grantor pursuant to this Security Agreement or for the
execution, delivery or performance of this Security Agreement or any of
O-2-8
the other Security Documents by Grantor or (ii) for the exercise by
Collateral Agent of the rights provided for in this Security Agreement or
any of the other Security Documents or the remedies in respect of the
Collateral pursuant to this Security Agreement or any of the other Security
Documents.
Section 5. Covenants. Grantor covenants and agrees with Collateral
---------
Agent that until the Secured Obligations are paid in full (including payment of
the principal of, premium, if any, and accrued but unpaid interest on, the
Securities):
(a) Further Documentation; Pledge of Instruments. At any time and
--------------------------------------------
from time to time, upon the written request of Collateral Agent, and at the
sole expense Grantor, Grantor will promptly and duly execute and deliver
such further instruments and documents and take such further action as
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Security Agreement and of the rights
and powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the Liens created hereby and
filings in the United States Patent and Trademark Office and the United
States Copyright Office. Grantor hereby authorizes Collateral Agent to
file any such financing or continuation statements and to make such filings
in the United States Patent and Trademark Office and the United States
Copyright Office without the signature of Grantor to the extent permitted
by applicable law. Notwithstanding the foregoing, the Collateral Agent's
right to obtain further instruments and documents from the Grantor shall
not release the Grantor from its obligations under Section 4(b) to make
filings of financing and continuation statements under the Uniform
Commercial Code in appropriate jurisdictions. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by
any promissory note, other Instrument or Chattel Paper, such note,
Instrument or Chattel Paper shall be immediately delivered to Collateral
Agent, duly endorsed in a manner satisfactory to Collateral Agent, to be
held as Collateral pursuant to this Agreement.
(b) Indemnification. Grantor agrees to indemnify, pay and hold
---------------
harmless Collateral Agent and each of the Holders and the officers,
directors, employees, agents and affiliates of Collateral Agent and each of
the Holders (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
O-2-9
suits, claims, costs (including, without limitation, the settlement costs),
expenses or disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for
such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such
Indemnitees shall be designated a party thereto), which may be imposed on,
incurred by, or asserted against that Indemnitee, in any manner relating to
or arising out of any of the Transaction Documents (including, without
limitation, any misrepresentation by Grantor in any of the Transaction
Documents) (the "Indemnified Liabilities"); provided, that Grantor shall
--------
have no obligation to an Indemnitee hereunder with respect to an
Indemnified Liability if it has been determined by a final decision (after
all appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such Indemnified Liability arose from the negligence or
willful misconduct of that Indemnitee. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in the preceding sentence may
be unenforceable because it is violative of any law or public policy,
Grantor shall contribute the maximum portion which it is permitted to pay
and satisfy under the applicable law, to the payment and satisfaction of
all Indemnified Liabilities incurred by the Indemnitees or any of them. The
obligations of Grantor contained in this Section 5 shall survive the
termination of this Security Agreement and the discharge of Grantor's other
obligations under the Transaction Documents. Any amount paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement shall
constitute Secured Obligations secured by the Collateral.
(c) Maintenance of Records. Grantor will keep and maintain at its own
----------------------
cost and expense satisfactory and complete records in respect of the
Collateral. Grantor will xxxx its books and records pertaining to the
Collateral to evidence this Security Agreement and the security interests
granted hereby. For Collateral Agent's further security, Collateral Agent
is hereby granted a security interest in all of Grantor's books and records
pertaining to the Collateral, and Grantor shall permit access to any such
books and records to Collateral Agent or to its representatives during
normal business hours at the reasonable request of Collateral Agent and
shall upon Collateral Agent's request after the occurrence and during the
continuation of any Default or Event of Default turn over any such books
and records to Collateral Agent.
O-2-10
(d) Right of Inspection. Collateral Agent shall at all times have
-------------------
full and free access during normal business hours to all the books,
correspondence and records of Grantor, and Collateral Agent or its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and Grantor agrees to render to Collateral Agent, at
Grantor's cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. Collateral Agent and its
representatives shall at all times also have the right to enter into and
upon any premises where any of the Equipment is located for the purpose of
inspecting the same, observing its use or otherwise protecting its
interests therein.
(e) Compliance with Laws, etc. Grantor will comply in all material
-------------------------
respects with all Requirements of Law applicable to the Collateral or any
part thereof or to the operation of Grantor's business; provided, however,
-------- -------
that Grantor may contest any Requirement of Law in any reasonable manner
which shall not adversely affect Collateral Agent's rights or the priority
of its Liens on the Collateral.
(f) Compliance with Terms of Contracts, etc. Grantor will perform
---------------------------------------
and comply in all material respects with all its obligations under the
Contracts and all its other Contractual Obligations relating to the
Collateral.
(g) Payment of Obligations. Grantor will pay promptly when due all
----------------------
taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except
that no such charge need be paid if (i) the validity thereof is being
contested in good faith by appropriate proceedings, (ii) such proceedings
do not involve any material danger of the sale, forfeiture or loss of any
of the Collateral or any interest therein and (iii) such charge is
adequately reserved against on Grantor's books in accordance with GAAP.
(h) Limitation on Liens on Collateral. Grantor will not create, incur
---------------------------------
or permit to exist, will defend the Collateral against, and will take such
other action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby, Prior Liens, Permitted
Liens and other Liens permitted under Section 4.13 of the Indenture, and
will defend the right, title and interest of Collateral Agent
O-2-11
in and to any of the Collateral against the claims and demands of all
Persons whomsoever. Grantor will take no action which would or, in the
reasonable judgment of Collateral Agent would, adversely affect the
existence, enforceability, priority or perfection of the Liens on and
security interests in any of the Collateral granted hereunder. To the
extent any security interest granted hereunder in any property constituting
a part of the Collateral either (i) does not constitute a perfected first
priority Lien on the date hereof (but is intended to constitute a perfected
first priority Lien pursuant to the terms hereof) or (ii) ceases without
consent of Collateral Agent to constitute a perfected first priority Lien
after the date hereof, Grantor shall make all filings (including financing
statements or continuation statements and filings in the United States
Patent and Trademark Office and the United States Copyright Office) and
record such instruments as may be reasonably requested by Collateral Agent
to restore the priority and perfection of such Lien. The right of the
Collateral Agent to require any such filing shall not be deemed to impose
upon the Collateral Agent any duty or obligation to ascertain whether any
circumstances exist which require such filings or recordations.
(i) Limitations on Dispositions of Collateral. Grantor will not sell,
-----------------------------------------
transfer, lease or otherwise dispose of any of the Collateral, or attempt,
offer or contract to do so except in accordance with the terms of the
Indenture.
(j) Limitations on Modifications, Waivers, Extensions of Contracts.
--------------------------------------------------------------
Grantor will not (i) amend, modify, terminate or waive any provision of any
material Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral or
impair Grantor's ability to conduct its business, (ii) fail to exercise
promptly and diligently each and every material right which it may have
under each material Contract (other than any right of termination) or (iii)
fail to deliver to Collateral Agent a copy of each material demand, notice
or document received by it relating in any way to any material Contract.
(k) Maintenance of Equipment. Except as otherwise provided in the
------------------------
Indenture, Grantor will maintain each item of Equipment in good operating
condition, ordinary wear and tear and immaterial impairments of value and
damage by the elements excepted, and will provide all maintenance, service
and repairs necessary for such purpose.
O-2-12
(l) Maintenance of Insurance. Grantor will maintain, with financially
------------------------
sound and reputable companies, insurance policies (i) insuring the
Equipment against loss by fire, explosion, theft and such other casualties
as are usually insured against by companies engaged in the same or similar
businesses and (ii) insuring Grantor and Collateral Agent against liability
for personal injury and property damage relating to such Equipment, such
policies to be in such form and amounts and having such coverage as is
customary for companies engaged in the same or similar businesses, with
losses payable to Grantor and Collateral Agent as their respective
interests may appear. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 10 days after receipt by
Collateral Agent of written notice thereof, (ii) name Collateral Agent as
an additional insured or loss payee, as applicable and (iii) be reasonably
satisfactory in all other respects to Collateral Agent. The Company shall
deliver to Collateral Agent a report of a reputable insurance broker with
respect to such insurance at least once in each calendar year and such
supplemental reports with respect thereto as Collateral Agent may from time
to time reasonably request.
(m) Further Identification of Collateral. Grantor will furnish to
------------------------------------
Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as Collateral Agent may reasonably request,
all in reasonable detail.
(n) Notices. Grantor will advise Collateral Agent promptly, in
-------
reasonable detail, at its address set forth above, (i) of any Lien (other
than Liens created or permitted hereby) on, or material claim asserted
against, any of the Collateral and (ii) of the occurrence of any other
event which could reasonably be expected to have a material adverse effect
on the aggregate value of the Collateral or on the Liens created hereunder.
(o) Changes in Locations, Name, etc. Without collateral Agent's prior
-------------------------------
written consent, Grantor will not (i) change the location of its chief
executive office/chief place of business from that specified in Section
4(e) or remove its books and records from such location, (ii) permit any of
the Equipment to be kept at a location other than those listed on Schedule
--------
VIII hereto or (iii) change its name, identity or corporate
----
O-2-13
structure to such an extent that any financing statement filed by or on
behalf of Collateral Agent in connection with this Security Agreement would
become reasonably misleading. Collateral Agent's consent to any of the
foregoing will not be unreasonably withheld so long as Grantor shall (x)
provide Collateral Agent with 45 days prior written notice of its intention
to take any of the actions specified in clauses (i) - (iii) above, (y) take
all actions necessary to maintain the perfection of the security interest
in the Collateral intended to be created hereby and (z) in the event that
Grantor proposes to move any Equipment to a location at which any entity
has obtained a mortgage lien on the real property in connection with the
1996 Leaseback Transaction, obtain and deliver to the Collateral Agent an
access agreement substantially in the form of Schedule X hereto, duly
----------
executed by the holder of such mortgage lien and Grantor.
(p) Patents, Trademarks and Copyrights.
----------------------------------
(i) Grantor (either itself or through licensees) will, except
with respect to any Trademark that Grantor shall reasonably determine
is of immaterial economic value to it or which Grantor abandons in
accordance with Section (p)(ii) below, (i) continue to use each
Trademark on each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures and price
lists in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) maintain as in the past the
quality of products and services offered under such trademark, (iii)
employ such Trademark with the appropriate notice of registration,
(iv) not adopt or use any xxxx which is confusingly similar or a
colorable imitation of such Trademark unless Collateral Agent shall
obtain a perfected security interest in such xxxx pursuant to this
Security Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act
whereby any Trademark may become invalidated.
(ii) Grantor will not, except with respect to any Patent or
Copyright that Grantor shall reasonably determine is of immaterial
economic value to it, do any act, or omit to do any act, whereby any
Patent or copyright may become abandoned or dedicated.
Notwithstanding the foregoing, Grantor, in its good faith business
judgment, may abandon any Patent, Trademark or
O-2-14
Copyright, or application for registration thereof, which is not
necessary for the operation of Grantor's business, upon thirty (30)
days' prior written notice to Collateral Agent.
(iii) Grantor will notify Collateral Agent immediately if it
knows, or has reason to know, that any application or registration
relating to any Patent, Trademark or Copyright may become abandoned or
dedicated, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding Grantor's ownership of any Patent,
Trademark or Copyright or its right to register the same or to keep
and maintain the same.
(iv) Whenever Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the
registration of any Patent or Trademark with the United States Patent
and Trademark Office or for the registration of any Copyright in the
United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, Grantor shall
report such filing to Collateral Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon
request of Collateral Agent, Grantor shall execute and deliver any and
all agreements, instruments, documents, and papers as Collateral Agent
may request to evidence Collateral Agent's security interest in any
Patent, Trademark or Copyright and the goodwill and general
intangibles of Grantor relating thereto or represented thereby, and
Grantor hereby constitutes and appoints Collateral Agent its attorney-
in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and
confirmed; such power being coupled with an interest is irrevocable
until the Secured Obligations are paid in full.
(v) Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the United States Copyright
Office, or any similar office or agency in any other country or any
political subdivision thereof, to maintain and pursue each application
(and to
O-2-15
obtain the relevant registration) and to maintain each registration of
the Patents, Trademarks and Copyrights (other than any Patent,
Trademark or Copyright which is abandoned by Grantor in accordance
with Section (p)(ii) above), including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.
(vi) In the event that any Patent, Trademark or Copyright
included in the Collateral is infringed, misappropriated or diluted by
a third party, Grantor shall promptly notify Collateral Agent after it
learns thereof and shall, unless Grantor shall reasonably determine
that such Patent, Trademark or Copyright is not of material economic
value to Grantor, promptly xxx for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover
any and all damages for such infringement, misappropriation or
dilution, or take such other actions as Grantor shall reasonably deem
appropriate under the circumstances to protect such Patent, Trademark
or Copyright.
(q) If at any time the Indebtedness of the Grantor in respect of any
Previously Leased/Financed Equipment is repaid in full and the Grantor is
not then required to grant to GECC a security interest in such Previously
Leased/Financed Equipment, Grantor shall grant to the Collateral Agent a
security interest in such Previously Leased/Financed Equipment and shall
take all actions necessary to perfect such security interest, including,
without limitation, the filing of financing statements in the appropriate
jurisdictions.
Section 6. Collateral Agent's Appointment as Attorney-in-Fact.
--------------------------------------------------
(a) Powers. Grantor hereby irrevocably constitutes and appoints
------
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of Grantor and in the name of Grantor
or in its own name, from time to time in Collateral Agent's discretion, for the
purpose of carrying out the terms of this Security Agreement, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this Security
Agreement, and, without limiting the generality of the foregoing, Grantor hereby
gives Collateral Agent
O-2-16
the power and right, on behalf of Grantor, without notice to or assent by
Grantor, to do the following:
(i) upon the occurrence and during the continuance of any Event of
Default, in the name of Grantor or its own name or otherwise, to take
possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Instrument, General Intangible or Contract and to file any claim or to take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by Collateral Agent for the purpose of collecting any
and all such moneys due under any Instrument, General Intangible or
Contract whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of this Security Agreement and to pay all or any
part of the premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of any Event
of Default, (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to Collateral Agent or as Collateral Agent shall
direct; (B) to ask or demand for, collect, receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at
any time in respect of or arising out of any Collateral; (C) to sign and
endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Collateral; (D)
to commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or
any Proceeds thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding brought against
Grantor with respect to any Collateral; (F) to settle, compromise or adjust
any suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as Collateral
Agent may deem appropriate; (G) to assign any Patent, Trademark (along with
the goodwill of the business to which any such Trademark pertains) or
Copyright, throughout the world for such term or terms, on such conditions,
and in such manner, as Collateral Agent shall in its sole discretion
determine; and (H) generally, to sell, transfer, pledge and make any
agreement
O-2-17
with respect to or otherwise deal with any of the Collateral as fully and
completely as though Collateral Agent were the absolute owner thereof for
all purposes, and to do, at Collateral Agent's option and Grantor's
expense, at any time, or from time to time, all acts and things which
Collateral Agent deems necessary to protect, preserve or realize upon the
Collateral and Collateral Agent's Liens thereon and to effect the intent of
this Security Agreement, all as fully and effectively as Grantor might do.
Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(b) Other Powers. Grantor also authorizes Collateral Agent, at any
------------
time and from time to time, to execute, in connection with the sale provided for
in Section 8 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) No Duty on Collateral Agent's Part. The powers conferred on
----------------------------------
Collateral Agent hereunder are solely to protect Collateral Agent's interests in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Collateral Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be responsible to Grantor for
any act or failure to act hereunder, except for its own negligence or willful
misconduct.
Section 7. Performance by Collateral Agent of Grantor's Obligations.
--------------------------------------------------------
If Grantor fails to perform or comply with any of its agreements contained
herein and Collateral Agent, as provided for by the terms of this Security
Agreement, shall itself perform or comply, or otherwise cause performance or
compliance, with such agreement, the expenses of Collateral Agent incurred in
connection with such performance or compliance, together with interest thereon
at a rate per annum 2% above the rate payable under the Indenture, shall be
payable by Grantor to Collateral Agent on demand and shall constitute Secured
Obligations.
Section 8. Remedies, Rights Upon Default. (a) Upon the
-----------------------------
occurrence and during the continuance of an Event of Default:
(i) all payments received by Grantor under or in connection with
any of the Collateral shall be held by Grantor
O-2-18
in trust for Collateral Agent for the benefit of the Holders, shall be
segregated from other funds of Grantor and shall forthwith upon receipt by
Grantor be paid over to Collateral Agent as Collateral, in the same form as
received by Grantor (duly endorsed by Grantor to Collateral Agent, if
required);
(ii) any and all such payments so received by Collateral Agent
(whether from Grantor or otherwise) shall be held by Collateral Agent as
Trust Moneys and applied by it in such manner and only at such times as
provided in the Indenture;
(iii) Collateral Agent shall have the right to seize and take
possession of any Collateral and the books and records pertaining to the
Collateral (including, without limitation, customer lists, correspondence
with present or future or prospective suppliers or customers, advertising
or marketing materials, credit files, computer tapes, programs, printouts,
and all other computer materials, records and electronic data processing
software pertaining to the Collateral) and may enter the premises where
they, or any of them, are located for the purpose of effecting such
removal; Grantor shall have a reasonable time to make copies of such books
and records before their removal by Collateral Agent; Collateral Agent
shall not be liable to Grantor for any damage suffered by Grantor by reason
of such entry or seizure unless it results from Collateral Agent's
negligence, bad faith or willful misconduct, and Grantor hereby agrees to
indemnify and hold harmless Collateral Agent from and against any and all
claims, expenses or liabilities that it may incur to any Person (other than
to Grantor in connection with any liability of Collateral Agent to Grantor
resulting from Collateral Agent's negligence, bad faith or willful
misconduct) by reason of such entry or seizure;
(iv) Collateral Agent may hire and maintain at Grantor's premises a
custodian or independent contractor selected by Collateral Agent who shall
have full authority to do all lawful acts necessary to protect Collateral
Agent's interest and to report to Collateral Agent thereon. Grantor hereby
agrees to cooperate with any such Person and to do whatever Collateral
Agent may reasonably request to preserve the Collateral.
(b) Upon the occurrence and during the continuance of an Event of
Default, then, and in any such event, and in accordance with Section 9 hereof,
Collateral Agent may exercise, in addition to all other rights and remedies
granted in this Security
O-2-19
Agreement, and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
on default under the Code (or such other comparable statute) in the applicable
jurisdiction. Without limiting the generality of the foregoing, Grantor
expressly agrees that in any such event Collateral Agent may, without demand or
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
Grantor or any other Person, all and each of which demands, advertisements
and/or notices are (to the extent permitted by applicable law) hereby expressly
waived, forthwith collect, receive, appropriate and realize upon the Collateral,
or any part thereof, and/or may forthwith sell, lease, assign, give option or
options to purchase, or sell or otherwise dispose of and deliver the Collateral
(or contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange or broker's board or at any of Collateral
Agent's offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as
Collateral Agent may deem commercially reasonable, irrespective of the impact of
any such sales on the market price of the Collateral. Collateral Agent and any
Holder shall have the right on any such public sale or sales and, to the extent
permitted by law, on any such private sale or sales to purchase the whole or any
part of said Collateral so sold and shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price of all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Secured Obligations owed to Collateral Agent or such Holder, as the case may
be, as a credit on account of the purchase price of any Collateral payable by
Collateral Agent or such Holder, as the case may be, at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of Grantor, except for any right or redemption as may
be available by applicable law. Grantor further agrees, at Collateral Agent's
request, to assemble Collateral and make it available to Collateral Agent at
places that Collateral Agent reasonably selects, whether at Grantor's premises
or elsewhere. The proceeds of any such collection, recovery, receipt,
appropriation, realization or sale shall constitute Trust Moneys and shall be
applied by Collateral Agent in accordance with the Indenture in the manner
provided in the Indenture.
(c) To the extent permitted by applicable law, Grantor waives all
claims, damages and demands against Collateral Agent or any Holder arising out
of the repossession, retention or sale of the Collateral unless resulting from
Collateral Agent's or such
O-2-20
Holder's negligence, bad faith or willful misconduct. Grantor agrees that
Collateral Agent need not give more than 10 days' notice (which notice shall be
deemed given when mailed) of the time and place of any public sale or of the
time after which a private sale may take place and that such notice is
reasonable notification of such matters. No notification need be given to
Grantor if it has signed, after default, a statement renouncing or modifying any
right to notification of sale or other intended disposition. Collateral Agent
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Grantor shall remain liable for any deficiency if the proceeds of
any sale or disposition of the Collateral applied to the Secured Obligations
pursuant to the Indenture are insufficient to indefeasibly pay in full in cash
all Secured Obligations and amounts to which Collateral Agent and the Holders
are entitled, Grantor also being liable for the reasonable fees of any attorneys
employed by Collateral Agent or any Holder to collect such deficiency.
(d) To the extent that it may lawfully do so, Grantor agrees that it
will not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of any appraisal, valuation, stay, extension or
redemption laws, or any law permitting it to direct the order in which the
Collateral or any part thereof shall be sold, now or at any time hereafter in
force, that may delay, prevent or otherwise affect the performance or
enforcement of this Security Agreement or the Secured Obligations and hereby
expressly waives all benefit or advantage of any such laws and covenants that it
will not hinder, delay or impede the execution of any power granting or
delegated to Collateral Agent or any Holder in this Security Agreement or any
other Security Document, but will suffer and permit the execution of every such
power as though no such laws were in force.
Section 9. Decisions Relating to Exercise of Remedies.
------------------------------------------
Notwithstanding anything in this Agreement to the contrary, Collateral Agent
shall exercise any remedy provided for in Section 8 in accordance with the terms
of, and at the times, if any, specified in the Indenture and in accordance with
instructions from the Trustee delivered at the direction of the Holders of at
least a majority in principal amount of the outstanding Securities or refrain
from exercising any remedy provided for in Section 8 either in the absence of
instructions from the Trustee or in accordance with instructions from the
Trustee delivered at the direction of
O-2-21
the Holders of at least a majority in principal amount of the outstanding
Securities.
Section 10. Limitation on Collateral Agent's Duties in Respect of
-----------------------------------------------------
Collateral. Collateral Agent's sole duty with respect to the custody,
----------
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with
it in the same manner as Collateral Agent deals with similar property for its
own account. Neither Collateral Agent nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of Grantor or otherwise.
Section 11. Expenses. Grantor agrees to pay, without duplication, to
--------
Collateral Agent, from time to time upon demand, all reasonable fees, costs and
expenses of Collateral Agent (including, without limitation, the reasonable
expenses, fees and disbursements of its counsel, experts and agents) incurred by
Collateral Agent or arising in connection with (a) the preparation, execution,
delivery, administration, modification, amendment or termination of this
Security Agreement or the enforcement of any of the provisions hereof, (b) the
custody or preservation and protection of, or the sale of, collection from, or
other realization upon, any of the Collateral, (c) the preservation, protection,
defense, exercise or enforcement of any of the rights of Collateral Agent
hereunder and in and to the Collateral or (d) the failure by Grantor to perform
or observe any of the provisions hereof. When Collateral Agent incurs expenses
or renders services after an Event of Default specified in Section 6.1(a)(viii)
or (ix) of the Indenture occurs, such expenses and the compensation for such
services are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 12. Obligations Absolute. All obligations of Grantor
--------------------
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Grantor;
(ii) any lack of validity or enforceability of any Transaction
Document or any other agreement or instrument relating thereto;
O-2-22
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any Transaction
Document or any other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect of any Transaction Document
except as specifically set forth in a waiver granted pursuant to the
provisions of this Security Agreement; or
(vi) any other circumstances except payment which might otherwise
constitute a defense available to, or a discharge of, Grantor.
Section 13. Continuing Security Interest; Transfer of Secured
-------------------------------------------------
Obligations. This Security Agreement shall create a continuing security
-----------
interest in the Collateral and shall (a) remain in full force and effect until
all Secured Obligations are paid in full in cash (at which time Collateral Agent
will, at Grantor's expense, take all acts necessary or appropriate to return all
Collateral to Grantor and extinguish the security interests granted hereunder,
including, without limitation, the execution and filing of any necessary Uniform
Commercial Code termination statements and any necessary filings with the United
States Patent and Trademark Office and the United States Copyright Office), (b)
be binding upon Grantor, and its successors and assigns, and (c) inure, together
with the rights and remedies of Collateral Agent hereunder, to the benefit of
Collateral Agent, and each of the Holders and each of their respective
successors, transferees and assigns; no other Persons (including, without
limitation, any other creditor of Grantor) shall have any interest herein or any
right or benefit with respect hereto. Without limiting the generality of the
foregoing clause (c), Collateral Agent and any Holder may assign or otherwise
transfer any indebtedness held by it secured by this Security Agreement to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such party herein or otherwise. Neither
this Security Agreement nor any interest herein or in the Collateral, or any
part thereof, except as otherwise permitted herein, may be assigned by Grantor;
provided, however, that this Security Agreement may be
-------- -------
O-2-23
assumed by any other Person pursuant to and in compliance with Article V of the
Indenture if such Person executes and delivers an amendment hereto whereby it
expressly assumes all obligations of Grantor hereunder as if it were an original
party hereto and if all covenants herein with respect to any change in name or
location or otherwise has been complied with in connection therewith. This
Security Agreement shall be deemed to be automatically assigned by Collateral
Agent to any Person who succeeds to Collateral Agent in its capacity as Trustee
under the Indenture in accordance with the Indenture, and its assignee shall
have all rights and powers of, and shall act as, Collateral Agent.
Section 14. Execution in Counterparts. This Security Agreement and
-------------------------
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Section 15. Powers Coupled with an Interest. All authorizations and
-------------------------------
agencies herein contained with respect to the Collateral are irrevocable and are
powers coupled with an interest.
Section 16. Severability. Any provision of this Security Agreement
------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17. Paragraph Headings. The paragraph headings used in this
------------------
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
Section 18. No Waiver; Cumulative Remedies. Collateral Agent shall
------------------------------
not by any act (except pursuant to the execution of a written instrument
pursuant to Section 19 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of
Collateral Agent, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder
O-2-24
shall preclude any other or further exercise thereof or the exercise or any
other right, power or privilege. A waiver by Collateral Agent of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which Collateral Agent would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or remedies
provided by law.
Section 19. Waivers and Amendments; Successors and Assigns; Governing
---------------------------------------------------------
Law. None of the terms or provisions of this Security Agreement may be waived,
---
amended, supplemented or otherwise modified except by a written instrument
executed by Grantor and Collateral Agent in accordance with the Indenture. This
Security Agreement shall be binding upon the successors and assigns of Grantor
and shall inure to the benefit of Collateral Agent and its successors and
assigns. This Security Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
O-2-25
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
CONTINENTAL PLASTIC CONTAINERS,
INC., as Grantor
By:
--------------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent
By:
---------------------------------------
Name:
Title:
O-2-26
Schedule I - 1996 Leaseback Equipment
-------------------------------------
O-2-27
Schedule II - Copyrights
------------------------
O-2-28
Schedule III - Patents
----------------------
O-2-29
Schedule IV - Previously Leased/Financed Equipment
--------------------------------------------------
O-2-30
Schedule V - Prior Liens
------------------------
O-2-31
Schedule VI - Trademarks
------------------------
O-2-32
Schedule VII - Contracts
------------------------
O-2-33
Schedule VIII - Location of Equipment
-------------------------------------
O-2-34
Schedule IX - Consents and Approvals
------------------------------------
O-2-35
Schedule X - Access Agreement
-----------------------------
O-2-36
EXHIBIT O-3
-----------
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT ("Security Agreement") dated as of December
17, 1996, made by CONTINENTAL CARIBBEAN CONTAINERS, INC., a Delaware corporation
("Grantor"), in favor of UNITED STATES TRUST COMPANY OF NEW YORK, a New York
corporation having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as collateral agent (together with any successors in such capacity the
"Collateral Agent") and as trustee for the Holders (as defined in the Indenture)
under the Indenture (as hereinafter defined).
R E C I T A L S :
- - - - - - - -
A. Grantor, Continental Plastic Containers, Inc., a Delaware corporation,
Plastic Containers, Inc., a Delaware corporation ("PCI"), and Collateral Agent
have entered into a certain indenture (as amended from time to time, the
"Indenture"; capitalized terms used herein but not defined herein shall have the
meanings ascribed to such terms in the Indenture), dated as of the date hereof,
pursuant to which PCI has issued 10% Senior Secured Notes due 2006 (the "Series
A Notes") in the aggregate principal amount of $125,000,000 and pursuant to
which PCI may issue 10% Series B Senior Secured Notes due 2006 (the "Series B
Notes"; together with the Series A Notes, the "Securities"), which Securities
have been guaranteed by Grantor (the "Guaranty").
B. This Security Agreement is given by Grantor to secure all of its
obligations (including the payment of amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a) and any successor provision thereto) under (i) the
Guaranty and (ii) all obligations, indebtedness and liabilities of Grantor
pursuant to the terms of this Security Agreement, in each case, whether now
existing or hereafter arising and whether in the regular course of business or
otherwise (collectively, the "Secured Obligations").
A G R E E M E N T :
- - - - - - - - -
NOW, THEREFORE, in consideration of the premises set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby agrees with Collateral Agent as follows:
Section 1. Defined Terms. The following terms which are defined in the
-------------
Code are used herein as so defined: Chattel Paper,
X-0-0
Xxxxxxxxx, Xxxxxxxxx, Xxxx Products, General Intangibles, Instruments and
Proceeds. The following terms shall have the following meanings:
"1996 Leaseback Equipment" shall mean the equipment listed on Schedule
------------------------ --------
I hereto and any additions and accessions thereto.
-
"Code" shall mean the Uniform Commercial Code as from time to time in
----
effect in the State of New York.
"Collateral" shall have the meaning assigned to it in Section 2 of
----------
this Security Agreement.
"Contracts" shall mean all contracts between Grantor and any third
---------
party including, without limitation, all customer contracts now existing or
hereafter entered into as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (a) all
rights of Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (b) all rights of Grantor to damages arising
out of, or for, breach or default in respect thereof and (c) all rights of
Grantor to perform and to exercise all remedies thereunder.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Copyrights" shall mean copyrights, owned by or assigned to Grantor,
----------
including, without limitation, the copyrights listed on Schedule II hereto,
-----------
together with any and all (a) renewals and extensions thereof, (b) income,
royalties, damages, claims and payments now and hereafter due and/or
payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, and (c) rights
to xxx for past, present and future infringements thereof.
"GECC" shall mean General Electric Capital Corporation.
----
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof and any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to any
O-3-2
government, and any corporation or other entity owned or controlled
(through ownership of capital interests or otherwise) by any of the
foregoing.
"Intellectual Property" shall mean Patents, Trademarks and Copyrights.
---------------------
"Patents" shall mean (a) all letters patent of the United States or
-------
any other country, and all applications for letters patent of the United
States or any other country, including, without limitation, any referred to
in Schedule III hereto, (b) all reissues, continuations, continuations-in-
------------
part or extensions thereof and any other rights of any kind related to such
letters patent or applications and (c) any written agreement granting any
right to sell, distribute, manufacture or otherwise use any invention
covered by a Patent owned by a Person other than Grantor, including,
without limitation, any referred to in Schedule III hereto.
------------
"Permitted Liens" shall mean (i) those Liens constituting Permitted
---------------
Liens, as defined in the Indenture under clauses (b), (f) and (h) thereof
and (ii) the non-exclusive royalty free license in respect of certain
Intellectual Property granted to GECC in connection with the 1996
Sale/Leaseback.
"Person" means and includes an individual, a partnership, a firm, a
------
joint venture, a corporation, a trust, an unincorporated organization or
other association or entity and a Governmental Authority.
"Previously Leased/Financed Equipment" shall mean the equipment listed
------------------------------------
on Schedule IV hereto.
-----------
"Prior Liens" shall mean those Liens listed on Schedule V hereto.
----------- ----------
"Requirement of Law" shall mean as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
O-3-3
"Security Agreement" shall mean this Security Agreement, as amended,
------------------
supplemented or otherwise modified from time to time.
"Trademarks" shall mean (a) all trademarks, trade names, corporate
----------
names, company names, business names, fictitious business names, trade
styles, service marks, logos, other sources of business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature, now existing or hereafter adopted
or acquired, all registrations and recordings thereof, and all applications
in connection therewith, including, without limitation, registrations,
recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof,
including, without limitation, any referred to in Schedule VI hereto, (b)
-----------
all renewals thereof, (c) all goodwill of the business of Grantor
symbolized by and associated with such Trademarks and (d) any written
agreement granting any right to use any Trademark of a Person other than
Grantor, including, without limitation, any referred to in Schedule VI
-----------
hereto.
"Transaction Documents" shall mean, collectively, the Securities, the
---------------------
Indenture, the Guarantees and the Security Documents.
Section 2. Grant of Security Interest. As collateral security for
--------------------------
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Secured Obligations, Grantor
hereby grants to Collateral Agent a first priority security interest in all of
the following property now owned or at any time hereafter acquired by Grantor or
in which Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the "Collateral"):
----------
(i) all Chattel Paper;
(ii) all Contracts;
(iii) all Copyrights;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Patents;
(ix) all Trademarks; and
O-3-4
(x) all Proceeds and products of any and all of the foregoing.
Notwithstanding the foregoing, the Collateral shall not include (i)
any Inventory or Accounts (each as defined in the Code), (ii) any Documents of
Title (as defined in that certain financing agreement, as in effect on the date
hereof, executed in connection with the Revolving Credit Facility), (iii) any
1996 Leaseback Equipment or (iv) any Previously Leased/Financed Equipment.
Section 3. Rights of Collateral Agent; Limitations on Collateral
-----------------------------------------------------
Agent's Obligations.
-------------------
(a) Grantor Remains Liable under Contracts. Anything herein to the
--------------------------------------
contrary notwithstanding, Grantor shall remain liable under each of the
Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of each such Contract. Collateral Agent shall not have
any obligation or liability under any Contract by reason of or arising out of
this Security Agreement or the receipt by Collateral Agent of any payment
relating to such Contract pursuant hereto, nor shall Collateral Agent be
obligated in any manner to perform any of the obligations of Grantor under or
pursuant to any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party under any Contract, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
(b) Notice to Contracting Parties. Upon the request of Collateral
-----------------------------
Agent at any time after the occurrence and during the continuance of a Default
or Event of Default, Grantor shall notify parties to the Contracts that the
Contracts have been assigned to Collateral Agent and that payments in respect
thereof shall be made directly to Collateral Agent. During the continuance of a
Default or Event of Default, Collateral Agent may in its own name or in the name
of others communicate with parties to the Contracts to verify with them to its
satisfaction the existence, amount and terms of any Contracts.
(c) First Priority. Grantor and Collateral Agent intend the security
--------------
interests granted pursuant to Section 2 of this Security Agreement to constitute
first priority perfected Liens until the Secured Obligations are paid in full
(including payment
O-3-5
of principal of, premium, if any, and accrued but unpaid interest on, the
Securities).
(d) No Release. Nothing set forth in this Security Agreement shall
----------
relieve Grantor from the performance of any term, covenant, condition or
agreement on Grantor's part to be performed or observed under or in respect of
any of the Collateral or from any liability to any Person under or in respect of
any of the Collateral or impose any obligation on Collateral Agent or any Holder
to perform or observe any such term, covenant, condition or agreement on
Grantor's part to be so performed or observed or impose any liability on
Collateral Agent or any Holder for any act or omission on the part of the
Grantor relating thereto or for any breach of any representation or warranty on
the part of Grantor contained in any Security Document or in respect of the
Collateral or made in connection therewith.
Section 4. Representations and Warranties. Grantor hereby represents
------------------------------
and warrants that:
(a) Title; No Other Liens. Except for the Lien granted to Collateral
---------------------
Agent pursuant to this Security Agreement, Grantor is, and as to the
Collateral acquired by it from time to time after the date hereof Grantor
will be, except as otherwise permitted by the Indenture or this Security
Agreement, the sole owner of each item of Collateral subject to no other
Liens (other than Prior Liens and Permitted Liens), claims or rights of
others. No security agreement, financing statement or other public notice
with respect to all or any material part of the Collateral is on file or of
record in any public office, except such as may have been filed in favor of
Collateral Agent pursuant to this Security Agreement and in connection with
Prior Liens. As of the date hereof, no Collateral is evidenced by
Instruments required to be delivered to Collateral Agent which have not
been delivered to Collateral Agent.
(b) Perfected First Priority Liens. Financing statements on form UCC-
------------------------------
1 have been prepared and delivered to the Collateral Agent herewith. When
this Security Agreement is duly executed and delivered and (i) such
financing statements have been filed in the jurisdictions indicated
thereon, and (ii) the Notice of Security Interest is filed and accepted in
the United States Patent and Trademark Office, then all filings shall have
been made to create, preserve, protect and perfect the security interest
granted by Grantor to Collateral Agent hereby in respect of such of the
O-3-6
Collateral in which a security interest can be perfected by the filing of a
financing statement or the filing of a security agreement with the United
States Patent and Trademark Office. When such filings are duly made the
security interests granted to Collateral Agent pursuant to this Security
Agreement in and to such Collateral will constitute perfected Liens and
security interests therein and subject to no liens other than Prior Liens.
This Security Agreement is enforceable as such against all creditors of and
purchasers from Grantor and against any owner or purchaser of the real
property where any of the Equipment is located and any present or future
creditor obtaining a Lien on such real property.
(c) Contracts. Except as set forth in Schedule VII hereto, no consent
--------- ------------
of any party (other than Grantor) to any material Contract is required, or
purports to be required, in connection with the execution, delivery and
performance of this Security Agreement. Each material Contract is in full
force and effect and constitutes a valid and legally enforceable obligation
of the parties thereto. No consent or authorization of, filing with or
other act by or in respect of any Governmental Authority is required in
connection with the execution, delivery, performance, validity or
enforceability of any of the material Contracts by any party thereto other
than those which have been duly obtained, made or performed, are in full
force and effect and do not subject the scope of any such Contract to any
material adverse limitation, either specific or general in nature. Neither
Grantor nor (to the best of Grantor's knowledge) any other party to any
material Contract is in default or is likely to become in default in the
performance or observance of any of the terms thereof. Grantor has fully
performed its obligations in all material respects under each material
Contract. The right, title and interest of Grantor in, to and under each
material Contract are not subject to any defense, offset, counterclaim or
claim, nor have any of the foregoing been asserted or alleged against
Grantor as to any material Contract. No amount payable to Grantor under or
in connection with any Contract is evidenced by any promissory note, other
Instrument or Chattel Paper which has not been delivered to Collateral
Agent, other than in connection with the sale of Inventory in the ordinary
course of business.
(d) Equipment. The Equipment is kept at the locations listed on
---------
Schedule VIII hereto.
-------------
O-3-7
(e) Chief Executive Office. Grantor's chief executive office and
----------------------
chief place of business is located at 000 Xxxxxxx 0 Xxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxx 00000.
(f) Farm Products. None of the Collateral constitutes, or is the
-------------
Proceeds of, Farm Products.
(g) Patents, Trademarks and Copyrights. Schedule III hereto includes
---------------------------------- ------------
all Patents owned by Grantor in its own name as of the date hereof.
Schedule VI hereto includes all Trademarks owned by Grantor in its own name
-----------
as of the date hereof. Schedule II hereto includes all Copyrights owned by
-----------
Grantor in its own name as of the date hereof. Each Patent and Trademark is
valid, subsisting, unexpired and has not been abandoned. Except as set
forth in such Schedules, none of such Patents, Trademarks and Copyrights is
the subject of any licensing or franchise agreement. No holding, decision
or judgment has been rendered by any Governmental Authority which would
limit, cancel or question the validity of any Patent, Trademark, or
Copyright. No action or proceeding is pending (i) seeking to limit, cancel
or question the validity of any Patent, Trademark or Copyright, or (ii)
which, if adversely determined, would have a material adverse effect on the
value of any Patent, Trademark or Copyright.
(h) Valid and Binding Obligation. Grantor has full corporate power,
----------------------------
authority and legal right to pledge and grant a security interest in the
Collateral pursuant to this Security Agreement, and this Security Agreement
constitutes the legal, valid and binding obligation of Grantor, enforceable
against Grantor in accordance with its terms except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and by
general principles of equity.
(i) Consents and Approvals. Except as set forth in Schedule IX hereto
---------------------- -----------
and other consents which have been obtained as of the date hereof, no
consent of any other Person (including, without limitation, stockholders or
creditors of Grantor) and no consent, approval, authorization of, or
registration or declaration or filing with, any Governmental Authority or
regulatory body is required to be obtained, effected or given in connection
with either (i) the pledge of, and grant of a security interest in, the
Collateral by Grantor pursuant to this Security Agreement or for the
execution, delivery or performance of this Security Agreement or any of
O-3-8
the other Security Documents by Grantor or (ii) for the exercise by
Collateral Agent of the rights provided for in this Security Agreement or
any of the other Security Documents or the remedies in respect of the
Collateral pursuant to this Security Agreement or any of the other Security
Documents.
Section 5. Covenants. Grantor covenants and agrees with Collateral
---------
Agent that until the Secured Obligations are paid in full (including payment of
the principal of, premium, if any, and accrued but unpaid interest on, the
Securities):
(a) Further Documentation; Pledge of Instruments. At any time and
--------------------------------------------
from time to time, upon the written request of Collateral Agent, and at the
sole expense Grantor, Grantor will promptly and duly execute and deliver
such further instruments and documents and take such further action as
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Security Agreement and of the rights
and powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the Liens created hereby and
filings in the United States Patent and Trademark Office and the United
States Copyright Office. Grantor hereby authorizes Collateral Agent to
file any such financing or continuation statements and to make such filings
in the United States Patent and Trademark Office and the United States
Copyright Office without the signature of Grantor to the extent permitted
by applicable law. Notwithstanding the foregoing, the Collateral Agent's
right to obtain further instruments and documents from the Grantor shall
not release the Grantor from its obligations under Section 4(b) to make
filings of financing and continuation statements under the Uniform
Commercial Code in appropriate jurisdictions. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by
any promissory note, other Instrument or Chattel Paper, such note,
Instrument or Chattel Paper shall be immediately delivered to Collateral
Agent, duly endorsed in a manner satisfactory to Collateral Agent, to be
held as Collateral pursuant to this Agreement.
(b) Indemnification. Grantor agrees to indemnify, pay and hold
---------------
harmless Collateral Agent and each of the Holders and the officers,
directors, employees, agents and affiliates of Collateral Agent and each of
the Holders (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
O-3-9
suits, claims, costs (including, without limitation, the settlement costs),
expenses or disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for
such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such
Indemnitees shall be designated a party thereto), which may be imposed on,
incurred by, or asserted against that Indemnitee, in any manner relating to
or arising out of any of the Transaction Documents (including, without
limitation, any misrepresentation by Grantor in any of the Transaction
Documents) (the "Indemnified Liabilities"); provided, that Grantor shall
--------
have no obligation to an Indemnitee hereunder with respect to an
Indemnified Liability if it has been determined by a final decision (after
all appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such Indemnified Liability arose from the negligence or
willful misconduct of that Indemnitee. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in the preceding sentence may
be unenforceable because it is violative of any law or public policy,
Grantor shall contribute the maximum portion which it is permitted to pay
and satisfy under the applicable law, to the payment and satisfaction of
all Indemnified Liabilities incurred by the Indemnitees or any of them. The
obligations of Grantor contained in this Section 5 shall survive the
termination of this Security Agreement and the discharge of Grantor's other
obligations under the Transaction Documents. Any amount paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement shall
constitute Secured Obligations secured by the Collateral.
(c) Maintenance of Records. Grantor will keep and maintain at its own
----------------------
cost and expense satisfactory and complete records in respect of the
Collateral. Grantor will xxxx its books and records pertaining to the
Collateral to evidence this Security Agreement and the security interests
granted hereby. For Collateral Agent's further security, Collateral Agent
is hereby granted a security interest in all of Grantor's books and records
pertaining to the Collateral, and Grantor shall permit access to any such
books and records to Collateral Agent or to its representatives during
normal business hours at the reasonable request of Collateral Agent and
shall upon Collateral Agent's request after the occurrence and during the
continuation of any Default or Event of Default turn over any such books
and records to Collateral Agent.
O-3-10
(d) Right of Inspection. Collateral Agent shall at all times have
-------------------
full and free access during normal business hours to all the books,
correspondence and records of Grantor, and Collateral Agent or its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and Grantor agrees to render to Collateral Agent, at
Grantor's cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. Collateral Agent and its
representatives shall at all times also have the right to enter into and
upon any premises where any of the Equipment is located for the purpose of
inspecting the same, observing its use or otherwise protecting its
interests therein.
(e) Compliance with Laws, etc. Grantor will comply in all material
-------------------------
respects with all Requirements of Law applicable to the Collateral or any
part thereof or to the operation of Grantor's business; provided, however,
-------- -------
that Grantor may contest any Requirement of Law in any reasonable manner
which shall not adversely affect Collateral Agent's rights or the priority
of its Liens on the Collateral.
(f) Compliance with Terms of Contracts, etc. Grantor will perform
---------------------------------------
and comply in all material respects with all its obligations under the
Contracts and all its other Contractual Obligations relating to the
Collateral.
(g) Payment of Obligations. Grantor will pay promptly when due all
----------------------
taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except
that no such charge need be paid if (i) the validity thereof is being
contested in good faith by appropriate proceedings, (ii) such proceedings
do not involve any material danger of the sale, forfeiture or loss of any
of the Collateral or any interest therein and (iii) such charge is
adequately reserved against on Grantor's books in accordance with GAAP.
(h) Limitation on Liens on Collateral. Grantor will not create, incur
---------------------------------
or permit to exist, will defend the Collateral against, and will take such
other action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby, Prior Liens, Permitted
Liens and other Liens permitted under Section 4.13 of the Indenture, and
will defend the right, title and interest of Collateral Agent
O-3-11
in and to any of the Collateral against the claims and demands of all
Persons whomsoever. Grantor will take no action which would or, in the
reasonable judgment of Collateral Agent would, adversely affect the
existence, enforceability, priority or perfection of the Liens on and
security interests in any of the Collateral granted hereunder. To the
extent any security interest granted hereunder in any property constituting
a part of the Collateral either (i) does not constitute a perfected first
priority Lien on the date hereof (but is intended to constitute a perfected
first priority Lien pursuant to the terms hereof) or (ii) ceases without
consent of Collateral Agent to constitute a perfected first priority Lien
after the date hereof, Grantor shall make all filings (including financing
statements or continuation statements and filings in the United States
Patent and Trademark Office and the United States Copyright Office) and
record such instruments as may be reasonably requested by Collateral Agent
to restore the priority and perfection of such Lien. The right of the
Collateral Agent to require any such filing shall not be deemed to impose
upon the Collateral Agent any duty or obligation to ascertain whether any
circumstances exist which require such filings or recordations.
(i) Limitations on Dispositions of Collateral. Grantor will not sell,
-----------------------------------------
transfer, lease or otherwise dispose of any of the Collateral, or attempt,
offer or contract to do so except in accordance with the terms of the
Indenture.
(j) Limitations on Modifications, Waivers, Extensions of Contracts.
--------------------------------------------------------------
Grantor will not (i) amend, modify, terminate or waive any provision of any
material Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral or
impair Grantor's ability to conduct its business, (ii) fail to exercise
promptly and diligently each and every material right which it may have
under each material Contract (other than any right of termination) or (iii)
fail to deliver to Collateral Agent a copy of each material demand, notice
or document received by it relating in any way to any material Contract.
(k) Maintenance of Equipment. Except as otherwise provided in the
------------------------
Indenture, Grantor will maintain each item of Equipment in good operating
condition, ordinary wear and tear and immaterial impairments of value and
damage by the elements excepted, and will provide all maintenance, service
and repairs necessary for such purpose.
O-3-12
(l) Maintenance of Insurance. Grantor will maintain, with financially
------------------------
sound and reputable companies, insurance policies (i) insuring the
Equipment against loss by fire, explosion, theft and such other casualties
as are usually insured against by companies engaged in the same or similar
businesses and (ii) insuring Grantor and Collateral Agent against liability
for personal injury and property damage relating to such Equipment, such
policies to be in such form and amounts and having such coverage as is
customary for companies engaged in the same or similar businesses, with
losses payable to Grantor and Collateral Agent as their respective
interests may appear. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 10 days after receipt by
Collateral Agent of written notice thereof, (ii) name Collateral Agent as
an additional insured or loss payee, as applicable and (iii) be reasonably
satisfactory in all other respects to Collateral Agent. The Company shall
deliver to Collateral Agent a report of a reputable insurance broker with
respect to such insurance at least once in each calendar year and such
supplemental reports with respect thereto as Collateral Agent may from time
to time reasonably request.
(m) Further Identification of Collateral. Grantor will furnish to
------------------------------------
Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as Collateral Agent may reasonably request,
all in reasonable detail.
(n) Notices. Grantor will advise Collateral Agent promptly, in
-------
reasonable detail, at its address set forth above, (i) of any Lien (other
than Liens created or permitted hereby) on, or material claim asserted
against, any of the Collateral and (ii) of the occurrence of any other
event which could reasonably be expected to have a material adverse effect
on the aggregate value of the Collateral or on the Liens created hereunder.
(o) Changes in Locations, Name, etc. Without collateral Agent's prior
-------------------------------
written consent, Grantor will not (i) change the location of its chief
executive office/chief place of business from that specified in Section
4(e) or remove its books and records from such location, (ii) permit any of
the Equipment to be kept at a location other than those listed on Schedule
--------
VIII hereto or (iii) change its name, identity or corporate
----
O-3-13
structure to such an extent that any financing statement filed by or on
behalf of Collateral Agent in connection with this Security Agreement would
become reasonably misleading. Collateral Agent's consent to any of the
foregoing will not be unreasonably withheld so long as Grantor shall (x)
provide Collateral Agent with 45 days prior written notice of its intention
to take any of the actions specified in clauses (i) - (iii) above, (y) take
all actions necessary to maintain the perfection of the security interest
in the Collateral intended to be created hereby and (z) in the event that
Grantor proposes to move any Equipment to a location at which any entity
has obtained a mortgage lien on the real property in connection with the
1996 Leaseback Transaction, obtain and deliver to the Collateral Agent an
access agreement substantially in the form of Schedule X hereto, duly
----------
executed by the holder of such mortgage lien and Grantor.
(p) Patents, Trademarks and Copyrights.
----------------------------------
(i) Grantor (either itself or through licensees) will, except
with respect to any Trademark that Grantor shall reasonably determine
is of immaterial economic value to it or which Grantor abandons in
accordance with Section (p)(ii) below, (i) continue to use each
Trademark on each and every trademark class of goods applicable to its
current line as reflected in its current catalogs, brochures and price
lists in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) maintain as in the past the
quality of products and services offered under such trademark, (iii)
employ such Trademark with the appropriate notice of registration,
(iv) not adopt or use any xxxx which is confusingly similar or a
colorable imitation of such Trademark unless Collateral Agent shall
obtain a perfected security interest in such xxxx pursuant to this
Security Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act
whereby any Trademark may become invalidated.
(ii) Grantor will not, except with respect to any Patent or
Copyright that Grantor shall reasonably determine is of immaterial
economic value to it, do any act, or omit to do any act, whereby any
Patent or copyright may become abandoned or dedicated.
Notwithstanding the foregoing, Grantor, in its good faith business
judgment, may abandon any Patent, Trademark or
O-3-14
Copyright, or application for registration thereof, which is not
necessary for the operation of Grantor's business, upon thirty (30)
days' prior written notice to Collateral Agent.
(iii) Grantor will notify Collateral Agent immediately if it
knows, or has reason to know, that any application or registration
relating to any Patent, Trademark or Copyright may become abandoned or
dedicated, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding Grantor's ownership of any Patent,
Trademark or Copyright or its right to register the same or to keep
and maintain the same.
(iv) Whenever Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the
registration of any Patent or Trademark with the United States Patent
and Trademark Office or for the registration of any Copyright in the
United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, Grantor shall
report such filing to Collateral Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon
request of Collateral Agent, Grantor shall execute and deliver any and
all agreements, instruments, documents, and papers as Collateral Agent
may request to evidence Collateral Agent's security interest in any
Patent, Trademark or Copyright and the goodwill and general
intangibles of Grantor relating thereto or represented thereby, and
Grantor hereby constitutes and appoints Collateral Agent its attorney-
in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and
confirmed; such power being coupled with an interest is irrevocable
until the Secured Obligations are paid in full.
(v) Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the United States Copyright
Office, or any similar office or agency in any other country or any
political subdivision thereof, to maintain and pursue each application
(and to
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obtain the relevant registration) and to maintain each registration of
the Patents, Trademarks and Copyrights (other than any Patent,
Trademark or Copyright which is abandoned by Grantor in accordance
with Section (p)(ii) above), including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.
(vi) In the event that any Patent, Trademark or Copyright
included in the Collateral is infringed, misappropriated or diluted by
a third party, Grantor shall promptly notify Collateral Agent after it
learns thereof and shall, unless Grantor shall reasonably determine
that such Patent, Trademark or Copyright is not of material economic
value to Grantor, promptly xxx for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover
any and all damages for such infringement, misappropriation or
dilution, or take such other actions as Grantor shall reasonably deem
appropriate under the circumstances to protect such Patent, Trademark
or Copyright.
(q) If at any time the Indebtedness of the Grantor in respect of any
Previously Leased/Financed Equipment is repaid in full and the Grantor is
not then required to grant to GECC a security interest in such Previously
Leased/Financed Equipment, Grantor shall grant to the Collateral Agent a
security interest in such Previously Leased/Financed Equipment and shall
take all actions necessary to perfect such security interest, including,
without limitation, the filing of financing statements in the appropriate
jurisdictions.
Section 6. Collateral Agent's Appointment as Attorney-in-Fact.
--------------------------------------------------
(a) Powers. Grantor hereby irrevocably constitutes and appoints
------
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of Grantor and in the name of Grantor
or in its own name, from time to time in Collateral Agent's discretion, for the
purpose of carrying out the terms of this Security Agreement, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this Security
Agreement, and, without limiting the generality of the foregoing, Grantor hereby
gives Collateral Agent
O-3-16
the power and right, on behalf of Grantor, without notice to or assent by
Grantor, to do the following:
(i) upon the occurrence and during the continuance of any Event of
Default, in the name of Grantor or its own name or otherwise, to take
possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Instrument, General Intangible or Contract and to file any claim or to take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by Collateral Agent for the purpose of collecting any
and all such moneys due under any Instrument, General Intangible or
Contract whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of this Security Agreement and to pay all or any
part of the premiums therefor and the costs thereof; and
(iii) upon the occurrence and during the continuance of any Event
of Default, (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to Collateral Agent or as Collateral Agent shall
direct; (B) to ask or demand for, collect, receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at
any time in respect of or arising out of any Collateral; (C) to sign and
endorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Collateral; (D)
to commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or
any Proceeds thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding brought against
Grantor with respect to any Collateral; (F) to settle, compromise or adjust
any suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as Collateral
Agent may deem appropriate; (G) to assign any Patent, Trademark (along with
the goodwill of the business to which any such Trademark pertains) or
Copyright, throughout the world for such term or terms, on such conditions,
and in such manner, as Collateral Agent shall in its sole discretion
determine; and (H) generally, to sell, transfer, pledge and make any
agreement
O-3-17
with respect to or otherwise deal with any of the Collateral as fully and
completely as though Collateral Agent were the absolute owner thereof for
all purposes, and to do, at Collateral Agent's option and Grantor's
expense, at any time, or from time to time, all acts and things which
Collateral Agent deems necessary to protect, preserve or realize upon the
Collateral and Collateral Agent's Liens thereon and to effect the intent of
this Security Agreement, all as fully and effectively as Grantor might do.
Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(b) Other Powers. Grantor also authorizes Collateral Agent, at any
------------
time and from time to time, to execute, in connection with the sale provided for
in Section 8 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) No Duty on Collateral Agent's Part. The powers conferred on
----------------------------------
Collateral Agent hereunder are solely to protect Collateral Agent's interests in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Collateral Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be responsible to Grantor for
any act or failure to act hereunder, except for its own negligence or willful
misconduct.
Section 7. Performance by Collateral Agent of Grantor's Obligations.
--------------------------------------------------------
If Grantor fails to perform or comply with any of its agreements contained
herein and Collateral Agent, as provided for by the terms of this Security
Agreement, shall itself perform or comply, or otherwise cause performance or
compliance, with such agreement, the expenses of Collateral Agent incurred in
connection with such performance or compliance, together with interest thereon
at a rate per annum 2% above the rate payable under the Indenture, shall be
payable by Grantor to Collateral Agent on demand and shall constitute Secured
Obligations.
Section 8. Remedies, Rights Upon Default. (a) Upon the occurrence
-----------------------------
and during the continuance of an Event of Default:
(i) all payments received by Grantor under or in connection with
any of the Collateral shall be held by Grantor
O-3-18
in trust for Collateral Agent for the benefit of the Holders, shall be
segregated from other funds of Grantor and shall forthwith upon receipt by
Grantor be paid over to Collateral Agent as Collateral, in the same form as
received by Grantor (duly endorsed by Grantor to Collateral Agent, if
required);
(ii) any and all such payments so received by Collateral Agent
(whether from Grantor or otherwise) shall be held by Collateral Agent as
Trust Moneys and applied by it in such manner and only at such times as
provided in the Indenture;
(iii) Collateral Agent shall have the right to seize and take
possession of any Collateral and the books and records pertaining to the
Collateral (including, without limitation, customer lists, correspondence
with present or future or prospective suppliers or customers, advertising
or marketing materials, credit files, computer tapes, programs, printouts,
and all other computer materials, records and electronic data processing
software pertaining to the Collateral) and may enter the premises where
they, or any of them, are located for the purpose of effecting such
removal; Grantor shall have a reasonable time to make copies of such books
and records before their removal by Collateral Agent; Collateral Agent
shall not be liable to Grantor for any damage suffered by Grantor by reason
of such entry or seizure unless it results from Collateral Agent's
negligence, bad faith or willful misconduct, and Grantor hereby agrees to
indemnify and hold harmless Collateral Agent from and against any and all
claims, expenses or liabilities that it may incur to any Person (other than
to Grantor in connection with any liability of Collateral Agent to Grantor
resulting from Collateral Agent's negligence, bad faith or willful
misconduct) by reason of such entry or seizure;
(iv) Collateral Agent may hire and maintain at Grantor's premises a
custodian or independent contractor selected by Collateral Agent who shall
have full authority to do all lawful acts necessary to protect Collateral
Agent's interest and to report to Collateral Agent thereon. Grantor hereby
agrees to cooperate with any such Person and to do whatever Collateral
Agent may reasonably request to preserve the Collateral.
(b) Upon the occurrence and during the continuance of an Event of
Default, then, and in any such event, and in accordance with Section 9 hereof,
Collateral Agent may exercise, in addition to all other rights and remedies
granted in this Security
O-3-19
Agreement, and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
on default under the Code (or such other comparable statute) in the applicable
jurisdiction. Without limiting the generality of the foregoing, Grantor
expressly agrees that in any such event Collateral Agent may, without demand or
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
Grantor or any other Person, all and each of which demands, advertisements
and/or notices are (to the extent permitted by applicable law) hereby expressly
waived, forthwith collect, receive, appropriate and realize upon the Collateral,
or any part thereof, and/or may forthwith sell, lease, assign, give option or
options to purchase, or sell or otherwise dispose of and deliver the Collateral
(or contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange or broker's board or at any of Collateral
Agent's offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as
Collateral Agent may deem commercially reasonable, irrespective of the impact of
any such sales on the market price of the Collateral. Collateral Agent and any
Holder shall have the right on any such public sale or sales and, to the extent
permitted by law, on any such private sale or sales to purchase the whole or any
part of said Collateral so sold and shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price of all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Secured Obligations owed to Collateral Agent or such Holder, as the case may
be, as a credit on account of the purchase price of any Collateral payable by
Collateral Agent or such Holder, as the case may be, at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of Grantor, except for any right or redemption as may
be available by applicable law. Grantor further agrees, at Collateral Agent's
request, to assemble Collateral and make it available to Collateral Agent at
places that Collateral Agent reasonably selects, whether at Grantor's premises
or elsewhere. The proceeds of any such collection, recovery, receipt,
appropriation, realization or sale shall constitute Trust Moneys and shall be
applied by Collateral Agent in accordance with the Indenture in the manner
provided in the Indenture.
(c) To the extent permitted by applicable law, Grantor waives all
claims, damages and demands against Collateral Agent or any Holder arising out
of the repossession, retention or sale of the Collateral unless resulting from
Collateral Agent's or such
O-3-20
holder's negligence, bad faith or willful misconduct. Grantor agrees that
Collateral Agent need not give more than 10 days' notice (which notice shall be
deemed given when mailed) of the time and place of any public sale or of the
time after which a private sale may take place and that such notice is
reasonable notification of such matters. No notification need be given to
Grantor if it has signed, after default, a statement renouncing or modifying any
right to notification of sale or other intended disposition. Collateral Agent
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Grantor shall remain liable for any deficiency if the proceeds of
any sale or disposition of the Collateral applied to the Secured Obligations
pursuant to the Indenture are insufficient to indefeasibly pay in full in cash
all Secured Obligations and amounts to which Collateral Agent and the Holders
are entitled, Grantor also being liable for the reasonable fees of any attorneys
employed by Collateral Agent or any Holder to collect such deficiency.
(d) To the extent that it may lawfully do so, Grantor agrees that it
will not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of any appraisal, valuation, stay, extension or
redemption laws, or any law permitting it to direct the order in which the
Collateral or any part thereof shall be sold, now or at any time hereafter in
force, that may delay, prevent or otherwise affect the performance or
enforcement of this Security Agreement or the Secured Obligations and hereby
expressly waives all benefit or advantage of any such laws and covenants that it
will not hinder, delay or impede the execution of any power granting or
delegated to Collateral Agent or any Holder in this Security Agreement or any
other Security Document, but will suffer and permit the execution of every such
power as though no such laws were in force.
Section 9. Decisions Relating to Exercise of Remedies.
------------------------------------------
Notwithstanding anything in this Agreement to the contrary, Collateral Agent
shall exercise any remedy provided for in Section 8 in accordance with the terms
of, and at the times, if any, specified in the Indenture and in accordance with
instructions from the Trustee delivered at the direction of the Holders of at
least a majority in principal amount of the outstanding Securities or refrain
from exercising any remedy provided for in Section 8 either in the absence of
instructions from the Trustee or in accordance with instructions from the
Trustee delivered at the direction of
O-3-21
the Holders of at least a majority in principal amount of the outstanding
Securities.
Section 10. Limitation on Collateral Agent's Duties in Respect of
-----------------------------------------------------
Collateral. Collateral Agent's sole duty with respect to the custody,
----------
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Uniform Commercial Code or otherwise, shall be to deal with
it in the same manner as Collateral Agent deals with similar property for its
own account. Neither Collateral Agent nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of Grantor or otherwise.
Section 11. Expenses. Grantor agrees to pay, without duplication, to
--------
Collateral Agent, from time to time upon demand, all reasonable fees, costs and
expenses of Collateral Agent (including, without limitation, the reasonable
expenses, fees and disbursements of its counsel, experts and agents) incurred by
Collateral Agent or arising in connection with (a) the preparation, execution,
delivery, administration, modification, amendment or termination of this
Security Agreement or the enforcement of any of the provisions hereof, (b) the
custody or preservation and protection of, or the sale of, collection from, or
other realization upon, any of the Collateral, (c) the preservation, protection,
defense, exercise or enforcement of any of the rights of Collateral Agent
hereunder and in and to the Collateral or (d) the failure by Grantor to perform
or observe any of the provisions hereof. When Collateral Agent incurs expenses
or renders services after an Event of Default specified in Section 6.1(a)(viii)
or (ix) of the Indenture occurs, such expenses and the compensation for such
services are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 12. Obligations Absolute. All obligations of Grantor
--------------------
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Grantor;
(ii) any lack of validity or enforceability of any Transaction
Document or any other agreement or instrument relating thereto;
O-3-22
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any Transaction
Document or any other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect of any Transaction Document
except as specifically set forth in a waiver granted pursuant to the
provisions of this Security Agreement; or
(vi) any other circumstances except payment which might otherwise
constitute a defense available to, or a discharge of, Grantor.
Section 13. Continuing Security Interest; Transfer of Secured
-------------------------------------------------
Obligations. This Security Agreement shall create a continuing security
-----------
interest in the Collateral and shall (a) remain in full force and effect until
all Secured Obligations are paid in full in cash (at which time Collateral Agent
will, at Grantor's expense, take all acts necessary or appropriate to return all
Collateral to Grantor and extinguish the security interests granted hereunder,
including, without limitation, the execution and filing of any necessary Uniform
Commercial Code termination statements and any necessary filings with the United
States Patent and Trademark Office and the United States Copyright Office), (b)
be binding upon Grantor, and its successors and assigns, and (c) inure, together
with the rights and remedies of Collateral Agent hereunder, to the benefit of
Collateral Agent, and each of the Holders and each of their respective
successors, transferees and assigns; no other Persons (including, without
limitation, any other creditor of Grantor) shall have any interest herein or any
right or benefit with respect hereto. Without limiting the generality of the
foregoing clause (c), Collateral Agent and any Holder may assign or otherwise
transfer any indebtedness held by it secured by this Security Agreement to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such party herein or otherwise. Neither
this Security Agreement nor any interest herein or in the Collateral, or any
part thereof, except as otherwise permitted herein, may be assigned by Grantor;
provided, however, that this Security Agreement may be
-------- -------
O-3-23
assumed by any other Person pursuant to and in compliance with Article V of the
Indenture if such Person executes and delivers an amendment hereto whereby it
expressly assumes all obligations of Grantor hereunder as if it were an original
party hereto and if all covenants herein with respect to any change in name or
location or otherwise has been complied with in connection therewith. This
Security Agreement shall be deemed to be automatically assigned by Collateral
Agent to any Person who succeeds to Collateral Agent in its capacity as Trustee
under the Indenture in accordance with the Indenture, and its assignee shall
have all rights and powers of, and shall act as, Collateral Agent.
Section 14. Execution in Counterparts. This Security Agreement and
-------------------------
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Section 15. Powers Coupled with an Interest. All authorizations and
-------------------------------
agencies herein contained with respect to the Collateral are irrevocable and are
powers coupled with an interest.
Section 16. Severability. Any provision of this Security Agreement
------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17. Paragraph Headings. The paragraph headings used in this
------------------
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
Section 18. No Waiver; Cumulative Remedies. Collateral Agent shall
------------------------------
not by any act (except pursuant to the execution of a written instrument
pursuant to Section 19 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of
Collateral Agent, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder
O-3-24
shall preclude any other or further exercise thereof or the exercise
or any other right, power or privilege. A waiver by Collateral Agent of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which Collateral Agent would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or remedies
provided by law.
Section 19. Waivers and Amendments; Successors and Assigns; Governing
---------------------------------------------------------
Law. None of the terms or provisions of this Security Agreement may be waived,
---
amended, supplemented or otherwise modified except by a written instrument
executed by Grantor and Collateral Agent in accordance with the Indenture. This
Security Agreement shall be binding upon the successors and assigns of Grantor
and shall inure to the benefit of Collateral Agent and its successors and
assigns. This Security Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
O-3-25
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
CONTINENTAL CARIBBEAN CONTAINERS,
INC., as Grantor
By:
------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent
By:
------------------------------
Name:
Title:
O-3-26
Schedule I - 1996 Leaseback Equipment
-------------------------------------
O-3-27
Schedule II - Copyrights
------------------------
O-3-28
Schedule III - Patents
----------------------
O-3-29
Schedule IV - Previously Leased/Financed Equipment
--------------------------------------------------
O-3-30
Schedule V - Prior Liens
------------------------
O-3-31
Schedule VI - Trademarks
------------------------
O-3-32
Schedule VII - Contracts
------------------------
O-3-33
Schedule VIII - Location of Equipment
-------------------------------------
O-3-34
Schedule IX - Consents and Approvals
------------------------------------
O-3-35
Schedule X - Access Agreement
-----------------------------
O-3-36
EXHIBIT P
---------
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT ("Pledge Agreement"), dated as of December 17, 1996,
made by Plastic Containers, Inc., a Delaware corporation ("Pledgor"), in favor
of UNITED STATES TRUST COMPANY OF NEW YORK, a New York corporation having an
office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as collateral agent
(together with any successors in such capacity, the "Collateral Agent") and as
trustee for the Holders (as defined in the Indenture) under the Indenture (as
hereinafter defined).
W I T N E S S E T H :
- - - - - - - - - -
A. Pledgor, Continental Caribbean Containers, Inc., a Delaware corporation
("CCC"), Continental Plastic Containers, Inc., a Delaware corporation ("CPC")
and Collateral Agent have entered into a certain indenture (as amended from time
to time, the "Indenture"; capitalized terms used herein but not defined herein
shall have the meanings ascribed to such terms in the Indenture) dated as of the
date hereof, pursuant to which Pledgor has issued 10% Senior Secured Notes due
2006 (the "Series A Notes") in the aggregate principal amount of $125,000,000
and pursuant to which Pledgor may issue 10% Series B Senior Secured Notes due
2006 (the "Series B Notes"; together with the Series A Notes, the "Securities").
B. This Pledge Agreement is given by Pledgor to secure the prompt payment
and performance in full when due whether at stated maturity, by acceleration or
otherwise (including the payment of amounts which would become due but for the
operation of the automatic stay under Section 362 (a) of the Bankruptcy Code, 11
U.S.C. (S) 362(a) and any successor provision thereto) of (i) all obligations,
indebtedness and liabilities of Pledgor pursuant to the terms of the Indenture,
the Securities and the Security Documents, including, without limitation, the
obligations of Pledgor to pay principal of, premium, if any, and interest on the
Securities when due and payable, and all other amounts due and to become due
under or in connection with the Indenture, the Securities and the Security
Documents, and (ii) without duplication of the amounts described in clause (i),
all obligations, indebtedness and liabilities of Pledgor pursuant to the terms
of this Pledge Agreement, in each case, whether now existing or hereafter
arising and whether in the regular course of business or otherwise
(collectively, the "Secured Obligations").
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A G R E E M E N T :
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NOW, THEREFORE, in consideration of the foregoing premises, Pledgor
hereby agrees with Collateral Agent as follows:
Section 1. Defined Terms. The following terms shall have
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the following meanings:
"Code" means the Uniform commercial Code from time to time in effect
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in the State of New York.
"Collateral" means the Pledged Stock, the Continental Can Note and all
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Proceeds.
"Continental Can" means Continental Can Company, Inc., a Delaware
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corporation.
"Continental Can Note" means the Note dated December 17, 1996,
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evidencing Indebtedness of Continental Can to Pledgor in the aggregate principal
amount of $30,000,000.00.
"Contractual Obligation" means, as to any Person, any provision of any
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security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"GECC" means General Electric Capital Corporation.
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"Governmental Authority" means any nation or government, any state or
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other political subdivision thereof and any entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to any government, and any corporation or other entity owned or
controlled (through ownership of capital interests or otherwise) by any of the
foregoing.
"Issuers" means CPC and CCC.
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"Person" means and includes an individual, a partnership, a firm, a
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joint venture, a corporation, a trust, an unincorporated organization or other
association or entity and a Governmental Authority.
"Pledge Agreement" means this Pledge Agreement, as amended,
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supplemented or otherwise modified from time to time.
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"Pledged Stock" means the shares of capital stock of the Issuers
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listed on Schedule I hereto, together with all stock
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certificates, options or rights of any nature whatsoever which may be issued or
granted by the Issuers to Pledgor in respect of the Pledged Stock while this
Pledge Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in Section 9-
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306(l) of the Code and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Stock or the Continental Can Note,
collections thereon or distributions with respect thereto.
"Requirement of Law" means as to any Person, the certificate of
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incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Transaction Documents" shall mean, collectively, the Securities, the
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Indenture, the Guarantees and the Security Documents.
Section 2. Pledge; Grant of Security Interest. The Pledgor hereby
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delivers to Collateral Agent the Pledged Stock and the Continental Can Note duly
endorsed in blank (receipt of which is hereby acknowledged by Collateral Agent)
and hereby grants to Collateral Agent for its benefit and the benefit of the
Holders, a first priority security interest in the Collateral, as collateral
security for the prompt and complete payment and performance when due (whether
at stated maturity, by acceleration or otherwise) of the Secured Obligations
owing to the Holders.
Section 3. Stock Powers. Concurrently with the delivery to
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Collateral Agent of each certificate representing one or more shares of the
Pledged Stock, Pledgor shall deliver an undated stock power covering such
certificate, duly executed in blank.
Section 4. Representations and Warranties. Pledgor represents and
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warrants that:
(a) Pledgor has the corporate power and authority and the legal right
to execute and deliver, to perform its obligations under, and to grant the
Lien on the Collateral pursuant to, this Pledge Agreement and has taken all
necessary corporate action to authorize its execution, delivery and
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performance of, and grant of the Lien on the Collateral pursuant to, this
Pledge Agreement;
(b) this Pledge Agreement constitutes a legal, valid and binding
obligation of Pledgor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity;
(c) the execution, delivery and performance of this Pledge Agreement
will not violate any provision of any Requirement of Law or Contractual
Obligation of Pledgor and will not result in the creation or imposition of
any Lien on any of the properties or revenues of Pledgor pursuant to any
Requirement of Law or Contractual Obligation of Pledgor, except as
contemplated hereby;
(d) no consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of
Pledgor or the Issuers), is required in connection with the execution,
delivery, performance, validity or enforceability of this Pledge Agreement;
(e) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
Pledgor, threatened by or against Pledgor or against any of its properties
or revenues with respect to this Pledge Agreement or any of the
transactions contemplated hereby;
(f) the shares of Pledged Stock listed on Schedule I constitute all
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the issued and outstanding shares of all classes of the capital stock of
the Issuers;
(g) all the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable;
(h) Pledgor is the beneficial and record owner of, and has good and
marketable title to, the Pledged Stock listed on Schedule I and the
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Continental Can Note, free of any and all Liens or options in favor of, or
claims of, any other Person, except (i) the Liens created by this Pledge
Agreement and (ii) with respect to the Continental Can Note, the Lien in
favor of GECC (which Lien shall be subject and subordinate to
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the Lien created by this Pledge Agreement in favor of Collateral Agent, for
its benefit and the benefit of the Holders) (the "GECC Lien") and there are
no outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire or instruments convertible into or
exchangeable for any shares of capital stock or other equity interest of or
in either Issuer or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any such capital stock,
any such convertible or exchangeable securities or any such rights,
warrants or options; and
(i) upon delivery to Collateral Agent of the Continental Can Note duly
endorsed in blank and the stock certificates evidencing the Pledged Stock,
the Liens granted pursuant to this Pledge Agreement will constitute a
valid, perfected first priority Lien on the Collateral in favor of the
Collateral Agent for its benefit and the benefit of the Holders, and each
such Lien is enforceable as such against all creditors of Pledgor and any
Persons purporting to purchase any Collateral from Pledgor.
Section 5. Covenants. The Pledgor covenants and agrees with
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Collateral Agent that, from and after the date of this Pledge Agreement until
the Secured Obligations are paid in full:
(a) If Pledgor shall, as a result of its ownership of the Pledged
Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection
with any reorganization), option or rights, whether in addition to, in
substitution of, as a conversion of, or in exchange for any shares of the
Pledged Stock, or otherwise in respect thereof, Pledgor shall accept the
same as Collateral Agent's agent, hold the same in trust for and deliver
the same forthwith to Collateral Agent in the exact form received, duly
endorsed by Pledgor to Collateral Agent, if required, together with an
undated stock power covering such certificate duly executed in blank, to be
held by Collateral Agent hereunder as additional collateral security for
the Secured Obligations. Any sums paid upon or in respect of
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any Pledged Stock upon the liquidation or dissolution of the Issuer thereof
shall be paid over to Collateral Agent to be held by it hereunder as
additional collateral security for the Secured Obligations, and in case any
distribution of capital shall be made on or in respect of any Pledged Stock
or any property shall be distributed upon or with respect to any Pledged
Stock pursuant to the recapitalization or reclassification of the capital
of the Issuer thereof or pursuant to the reorganization thereof, the
property so distributed shall be delivered to Collateral Agent to be held
by it, subject to the terms hereof, as additional collateral security for
the Secured Obligations. If any sums of money or property so paid or
distributed in respect of any Pledged Stock shall be received by Pledgor,
Pledgor shall promptly deliver such money or property to Collateral Agent
and until such money or property is paid or delivered to Collateral Agent,
hold such money or property in trust for Collateral Agent, segregated from
other funds of Pledgor, as additional collateral security for the Secured
Obligations.
(b) If Pledgor shall, as a result of its ownership of the Continental
Can Note, become entitled to receive or shall receive any additional
promissory note payable to Pledgor, whether in addition to or in
substitution of the Continental Can Note, Pledgor shall accept the same as
Collateral Agent's agent, hold the same in trust for and deliver the same
forthwith to Collateral Agent in the exact form received, duly endorsed to
Collateral Agent, if required, to be held by Collateral Agent hereunder as
additional security for the Secured Obligations. Any sums paid upon or in
respect of the Continental Can Note at any time that an Event of Default is
continuing shall be paid over to Collateral Agent to be held by it
hereunder as additional collateral security for the Secured Obligations.
If any sums of money so paid in respect of the Continental Can Note shall
be received by Pledgor at any time that an Event of Default is continuing,
Pledgor shall promptly deliver such money to Collateral Agent and until
such money is paid to the Collateral Agent, hold such money in trust for
Collateral Agent, segregated from other funds of Pledgor, as additional
collateral security for the Secured Obligations.
(c) Pledgor will not (i) vote to enable, or take any other action to
permit, the Issuer of any Pledged Stock to issue any stock or other equity
securities of any nature or to issue any other securities convertible into
or granting the right to purchase or exchange for any stock or other equity
securities of such Issuer, or (ii) sell, assign, transfer, exchange or
otherwise dispose of, or grant any option with respect to, the Collateral,
or (iii) create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with respect to, any of the Collateral, or any
interest
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therein, except for (i) the Liens provided for by this Pledge Agreement and
(ii) with respect to the Continental Can Note, the GECC Lien. The Pledgor
will defend the right, title and interest of Collateral Agent in and to the
Collateral against the claims and demands of all Persons whomsoever.
(d) At any time and from time to time, upon the written request of
Collateral Agent, and at the sole expense of Pledgor, Pledgor will promptly
and duly execute and deliver such further instruments and documents and
take such further actions as Collateral Agent may reasonably request for
the purposes of obtaining or preserving the full benefits of this Pledge
Agreement and of the rights and powers herein granted. If any amount
payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper,
such note, instrument or chattel paper shall be immediately delivered to
Collateral Agent, duly endorsed in a manner satisfactory to Collateral
Agent, to be held as Collateral pursuant to this Pledge Agreement.
(e) Pledgor agrees to pay, and to save Collateral Agent harmless from,
any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Pledge
Agreement.
Section 6. Cash Dividends; Voting Rights. Unless an Event of Default
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shall have occurred and be continuing and Collateral Agent shall have given
notice to Pledgor of Collateral Agent's intent to exercise its corresponding
rights pursuant to Section 7 below, Pledgor shall be permitted to receive all
cash dividends, distributions and income paid on any Pledged Stock and the
Continental Can Note but only to the extent permitted in the Indenture, and to
exercise all voting and corporate rights with respect to the Pledged Stock,
provided, however, that no vote shall be cast or corporate right exercised or
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other action taken which would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Transaction
Documents.
Section 7. Rights of Collateral Agent. (a) Subject to the
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provisions of applicable laws, if an Event of Default shall occur and be
continuing and Collateral Agent shall give notice of its intent to exercise such
rights to Pledgor: (i) Collateral
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Agent shall have the right to receive any and all cash dividends, distributions
and income paid in respect of the Collateral and such dividends, distributions
and income shall be held by Collateral Agent as Trust Moneys and applied in
accordance with Section 6.6 of the Indenture, (ii) all shares of the Pledged
Stock may be registered in the name of Collateral Agent or its nominee, and
Collateral Agent or its nominee may thereafter exercise (A) all voting,
corporate and other rights pertaining to such shares of the Pledged Stock at any
meeting of shareholders of the Issuers thereof or otherwise and (B) any and all
rights of conversion, exchange, subscription and any other rights, privileges or
options pertaining to such shares of the Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of the Issuer thereof, or upon the exercise by Pledgor or Collateral
Agent of any right, privilege or option pertaining to such shares of the Pledged
Stock, and in connection therewith, the right to deposit and deliver any and all
of the Pledged Stock with any committee, depositary, transfer agent, registrar
or other designated agency upon such terms and conditions as it may determine)
and (iii) Collateral Agent shall have the right to accelerate the Continental
Can Note in accordance with its terms and take any other action to collect upon
the Continental Can Note, including, without limitation, to make demand for
payment thereon, in each case without liability except to account for property
actually received by it, but Collateral Agent shall have no duty to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing.
(b) The rights of Collateral Agent hereunder shall not be conditioned
or contingent upon the pursuit by Collateral Agent of any right or remedy
against Pledgor, the Issuers, Continental Can or against any other Person which
may be or become liable in respect of all or any part of the Secured Obligations
or against any other collateral security therefor, guarantee thereof or right of
offset with respect thereto. Collateral Agent shall not be liable for any
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so, nor shall it be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Pledgor or to take any
other action whatsoever with regard to the Collateral or any part thereof.
Section 8. Remedies. If an Event of Default shall occur and be
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continuing, Collateral Agent may exercise, in addition to all other rights and
remedies granted in this Pledge Agreement and
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in any other instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, Collateral Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law) to or upon Pledgor, the
Issuers or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived to the full extent permitted by
law), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of Collateral Agent or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. Collateral Agent shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in Pledgor, which right or
equity is hereby waived or released. Any Proceeds from time to time held by
Collateral Agent and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
of Collateral Agent hereunder, including, without limitation, reasonable
attorneys' fees and disbursements, shall constitute Trust Moneys and shall be
applied by Collateral Agent in accordance with the Indenture in the manner
provided in the Indenture. Collateral Agent agrees that any proceeds received by
it in respect of the Continental Can Note and remaining after application of the
Trust Moneys in accordance with and in the manner provided in the Indenture
shall be delivered to GECC. To the extent permitted by applicable law, Pledgor
waives all claims, damages and demands it may acquire against Collateral Agent
arising out of the exercise by Collateral Agent of any of its rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given in
the manner provided in the Indenture at least 10 days before such sale or other
disposition. Pledgor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of Collateral are insufficient to pay the Secured
Obligations and
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the reasonable fees and disbursements of any attorneys employed by Collateral
Agent to collect such deficiency.
Section 9. Registration Rights; Private Sales. (a) If Collateral
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Agent shall determine to exercise its right to sell any or all of the Pledged
Stock pursuant to Section 8 hereof, and if in the opinion of Collateral Agent it
is necessary or advisable to have the Pledged Stock, or that portion thereof to
be sold, registered under the provisions of the Securities Act of 1933, as
amended, and the rules and regulations issued thereunder (the
"Securities Act"), Pledgor will cause the Issuer thereof to (i) execute and
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deliver, and cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all such
other acts, as may be, in the opinion of Collateral Agent, necessary or
advisable to register the Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) use its best efforts to cause
the registration statement relating thereto to become effective and to remain
effective for a period of 180 days from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of
Collateral Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Pledgor also agrees to
cause the Issuer of such Pledged Stock to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which Collateral
Agent shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) Pledgor recognizes that Collateral Agent may be unable to effect a
public sale of any or all of the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Pledgor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable to Collateral Agent than if such sale were a public
sale and agrees that such circumstances shall not, in and of themselves, result
in a determination that such sale was not made in a commercially reasonable
manner. Collateral Agent shall be under no obligation
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to delay a sale of any of the Pledged Stock for the period of time necessary to
permit the Issuer of any Pledged Stock to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(c) Pledgor further agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make any sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 9 valid and binding
and in compliance with any and all other applicable Requirements of Law. Pledgor
further agrees that a breach of any of the covenants contained in this Section 9
will cause irreparable injury to Collateral Agent and the Holders, that
Collateral Agent has no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 9 shall be
specifically enforceable against Pledgor, and Pledgor hereby waives and agrees
not to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Indenture.
(d) Notwithstanding anything in this Pledge Agreement to the contrary,
Collateral Agent shall exercise any remedy provided for in Sections 8 or 9 in
accordance with the terms of, and at the times, if any, specified in the
Indenture and in accordance with instructions from the Trustee delivered at the
direction of the Holders of at least a majority in principal amount of the
outstanding Securities or refrain from exercising any remedy provided for in
Sections 8 or 9 either in the absence of instructions from the Trustee or in
accordance with instructions from the Trustee delivered at the direction of the
Holders of at least a majority in principal amount of the outstanding
Securities.
Section 10. Limitation on Duties Regarding Collateral. Collateral
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Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as Collateral
Agent deals with similar securities and property for its own account. Neither
Collateral Agent nor any of its directors, officers, employees or agents shall
be liable for failure to demand, collect or realize upon any of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Pledgor or otherwise.
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Section 11. Powers Coupled with an Interest. All authorizations and
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agencies herein contained with respect to the Collateral are irrevocable and are
powers coupled with an interest.
Section 12. Indemnification. Pledgor agrees to indemnify, pay and
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hold harmless Collateral Agent and each of the Holders and the officers,
directors, employees, agents and affiliates of Collateral Agent and each of the
Holders (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs (including, without limitation, settlement costs), expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitee shall be designated a
party thereto), which may be imposed on, incurred by, or asserted against that
Indemnitee, in any manner relating to or arising out of any Transaction Document
(including, without limitation, any misrepresentation by Pledgor in any
Transaction Document (collectively the "Indemnified Liabilities"); provided,
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that Pledgor shall have no obligation to an Indemnitee hereunder with respect to
an Indemnified Liability if it has been determined by a final decision (after
all appeals and the expiration of time to appeal) by a court of competent
jurisdiction that such Indemnified Liability arose from the negligence or
willful misconduct of that Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Pledgor shall
contribute the maximum portion which it is permitted to pay and satisfy under
the applicable law, to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them. The obligations of
Pledgor contained in this Section 12 shall survive the termination of this
Pledge Agreement and the discharge of Pledgor's other obligations under the
Transaction Documents. Any amount paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement shall constitute Secured Obligations
secured by the Collateral.
Section 13. Expenses. Pledgor agrees to pay, without duplication, to
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Collateral Agent, from time to time, upon demand, all reasonable fees, costs and
expenses of Collateral Agent (including, without limitation, the reasonable
expenses, fees and disbursements of its counsel, experts and agents) incurred by
Collateral Agent or arising in connection with (a) the preparation, execution,
delivery, administration, modification, amendment or termination of this Pledge
Agreement or the enforcement of any of
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the provisions hereof, (b) the custody or preservation and protection of, or the
sale of, collection from, or other realization upon, any of the Collateral, (c)
the preservation, protection, defense, exercise or enforcement of any of the
rights of Collateral Agent hereunder and in and to the Collateral or (d) the
failure by Pledgor to perform or observe any of the provisions hereof. When
Collateral Agent incurs expenses or renders services after an Event of Default
specified in Sections 6.1(a)(viii) or (ix) of the Indenture occurs, such
expenses and the compensation for such services are intended to constitute
expenses of administration under any Bankruptcy Law.
Section 14. Obligations Absolute. All obligations of Pledgor
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hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Pledgor;
(ii) any lack of validity or enforceability of any of the
Transaction Documents, or any other agreement or instrument relating
thereto;
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from any of the
Transaction Documents, or any other agreement or instrument relating
thereto;
(iv) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any right,
remedy, power or privilege under or in respect of any of the Transaction
Documents or any other agreement or instrument relating thereto, except as
specifically set forth in a waiver granted pursuant to the provisions of
this Pledge Agreement; or
(vi) any other circumstances except payment which might otherwise
constitute a defense available to, or a discharge of, Pledgor.
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Section 15. Continuing Security Interest; Transfer of Secured
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Obligations. This Pledge Agreement shall create a continuing security interest
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in the Collateral and shall (a) remain in full force and effect until all
Secured Obligations are paid in full in cash (at which time Pledgor shall be
entitled to the return of the Pledged Stock held by Collateral Agent and the
Continental Can Note unless the GECC Lien remains in effect, in which case
Collateral Agent shall deliver the Continental Can Note to GECC), (b) be binding
upon Pledgor, and its successors and assigns, and (c) inure, together with the
rights and remedies of Collateral Agent hereunder, to the benefit of Collateral
Agent, and each of the Holders and each of their respective successors,
transferees and assigns; no other Persons (including, without limitation, any
other creditor of Pledgor) shall have any interest herein or any right or
benefit with respect hereto. Without limiting the generality of the foregoing
clause (c), Collateral Agent or any Holder may assign or otherwise transfer any
indebtedness held by it secured by this Pledge Agreement to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such party herein or otherwise. Neither this Pledge
Agreement nor any interest herein or in the Collateral, or any part thereof,
except as otherwise permitted herein, may be assigned by Pledgor; provided,
--------
however, that this Pledge Agreement may be assumed by any other Person pursuant
-------
to and in compliance with Article V of the Indenture if such Person executes and
delivers an amendment hereto whereby it expressly assumes all obligations of
Pledgor hereunder as if it were an original party hereto and if all covenants
herein with respect to any change in name or location or otherwise has been
complied with in connection therewith. This Pledge Agreement shall be deemed to
be automatically assigned by Collateral Agent to any Person who succeeds to
Collateral Agent in accordance with the Indenture, and its assignee shall have
all rights and powers of, and shall act as, Collateral Agent.
Section 16. Severability. Any provision of this Pledge Agreement
------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17. Paragraph Headings. The paragraph headings used in this
------------------
Pledge Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
P-14
Section 18. No Waiver; Cumulative Remedies. Collateral Agent shall
------------------------------
not by any act (except by a written instrument pursuant to Section 19 hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of Collateral Agent, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by Collateral Agent of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which Collateral
Agent would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
Section 19. Waivers and Amendments; Successors and Assigns, Governing
---------------------------------------------------------
Law. None of the terms or provisions of this Pledge Agreement may be waived,
---
amended, supplemented or otherwise modified except by a written instrument
executed by Pledgor and Collateral Agent in accordance with the Indenture. This
Pledge Agreement shall be binding upon the successors and assigns of Pledgor and
shall inure to the benefit of Collateral Agent and its successors and assigns.
This Pledge Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
Section 20. Notices. Notices by Collateral Agent to Pledgor or the
-------
Issuer of any Pledged Stock may be given in the manner provided in the Indenture
to Pledgor or any such Issuer at the address of Pledgor set forth in the
Indenture and notices may be delivered to Collateral Agent at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Department.
Pledgor and the Issuer of any Pledged Stock may change their respective address
and transmission numbers by written notice to Collateral Agent.
Section 21. Irrevocable Authorization and Instruction to Issuers.
----------------------------------------------------
Pledgor hereby authorizes and instructs each Issuer to comply with any
instruction received by it from Collateral Agent in writing that (a) states that
an Event of Default has occurred and (b) is otherwise in accordance with the
terms of this Pledge Agreement, without any other or further instructions from
Pledgor, and Pledgor agrees that such Issuer shall be fully protected in so
complying.
P-15
Section 22. No Release. Nothing set forth in this Pledge Agreement
----------
shall relieve Pledgor from the performance of any term, covenant, condition or
agreement on Pledgor's part to be performed or observed under or in respect of
any of the Collateral or from any liability to any Person under or in respect of
any of the Collateral or impose any obligation on Collateral Agent or any Holder
to perform or observe any such term, covenant, condition or agreement on
Pledgor's part to be so performed or observed or impose any liability on
Collateral Agent or any Holder for any act or omission on the part of Pledgor
relating thereto or for any breach of any representation or warranty on the part
of Pledgor contained in any Security Document or in any Transaction Document or
in respect of the Collateral or made in connection therewith.
Section 23. Execution in Counterparts. This Pledge Agreement and any
-------------------------
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
P-16
IN WITNESS WHEREOF, the undersigned have caused this Pledge Agreement
to be duly executed and delivered as of the date first above written.
PLASTIC CONTAINERS, INC.
By:
----------------------------
Name:
Title:
Accepted and Agreed:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent
By:
----------------------------
Name:
Title:
P-17
ACKNOWLEDGMENT AND CONSENT
The Issuer referred to in the foregoing Pledge Agreement hereby
acknowledges receipt of a copy thereof and agrees to be bound thereby and to
comply with the terms thereof insofar as such terms are applicable to it. The
Issuer agrees to notify Collateral Agent promptly in writing of the occurrence
of any of the events described in Section 5(a) of the Pledge Agreement. The
Issuer further agrees that the terms of Section 9(a) of the Pledge Agreement
shall apply to it, mutatis mutandis, with respect to all actions that may be
------- --------
required of it under or pursuant to or arising out of Section 9 of the Pledge
Agreement.
CONTINENTAL PLASTIC CONTAINERS, INC.
By:
---------------------------------------
Address for Notices:
Continental Plastic Containers, Inc.
000 Xxxxxxx 0 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
P-18
ACKNOWLEDGMENT AND CONSENT
The Issuer referred to in the foregoing Pledge Agreement hereby
acknowledges receipt of a copy thereof and agrees to be bound thereby and to
comply with the terms thereof insofar as such terms are applicable to it. The
Issuer agrees to notify Collateral Agent promptly in writing of the occurrence
of any of the events described in Section 5(a) of the Pledge Agreement. The
Issuer further agrees that the terms of Section 9(a) of the Pledge Agreement
shall apply to it, mutatis mutandis, with respect to all actions that may be
------- --------
required of it under or pursuant to or arising out of Section 9 of the Pledge
Agreement.
CONTINENTAL CARIBBEAN CONTAINERS, INC.
By:
--------------------------------------
Address for Notices:
Continental Caribbean Containers,
Inc.
000 Xxxxxxx 0 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
P-19
SCHEDULE I
To Pledge
Agreement
DESCRIPTION OF PLEDGED STOCK
Class Certificate No. of
Issuer of Stock No. Shares
------ -------- ----------- ------
Continental Common 6 10,000
Plastic
Containers, Inc.
Continental Common 5 100
Caribbean
Containers, Inc.
X-00
XXXXXX XXXXXX XXXXX XXXXXXX XX XXX XXXX
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
December , 1996
Plastic Containers, Inc.
Xxx Xxxxxx Xxx
Xxxxxxx, XX 00000
Dear Sirs:
The undersigned on behalf of United States Trust Company of New York
hereby acknowledges receipt of (i) that certain stock certificate No. 6
representing 10,000 shares of Common Stock, par value $1.00 of Continental
Plastic Containers, Inc., (ii) that certain stock certificate No. 5 representing
100 shares of Common Stock, par value $1.00 of Continental Caribbean Containers,
Inc. and (iii) [that certain Note, dated December 17, 1996 evidencing
Indebtedness of Continental Can Company, Inc. to Plastic Containers, Inc. in the
aggregate principal amount of $30,000,000.00.]
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
By:
-------------------------------
Name:
Title:
P-21
EXHIBIT Q
---------
NOTICE OF SECURITY INTEREST
---------------------------
WHEREAS, Continental Plastic Containers, Inc. ("CPC"), a Delaware
corporation, having its principal office at 000 Xxxxxxx 0 Xxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxx 00000, is the owner of the United States patents and patent
applications set forth in Schedule A attached hereto and the United States
----------
trademarks and associated United States trademark registrations set forth in
Schedule B attached hereto;
----------
WHEREAS, United States Trust Company of New York ("U.S. Trust"), a New York
corporation, having its address at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, as Trustee under a certain indenture (the "Indenture") dated the date
hereof among Plastic Containers, Inc. ("PCI"), CPC, Continental Caribbean
Containers, Inc. and U.S. Trust, as Trustee, desires to acquire for the benefit
of the Holders (as defined in the Indenture) a security interest in, and lien
on, said patents, trademarks and trademark registrations and said applications
for patents and trademark registrations and the goodwill of the business
symbolized by said trademarks (collectively, the "Collateral");
WHEREAS, pursuant to a Pledge and Security Agreement dated the date hereof
by CPC in favor of U.S. Trust, as Trustee and as collateral agent for the
Holders (as amended, supplemented or modified from time to time, the "Security
Agreement"), the security interest in the Collateral described above was granted
by CPC to secure the payment of certain 10% Senior Secured Notes due 2006 of PCI
upon the terms and subject to the conditions set forth therein and in the
Indenture;
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and subject to the terms and conditions of the Security
Agreement, CPC has granted to U.S. Trust, as Trustee and as collateral agent for
the Holders, a security interest in the Collateral.
Q-1
Executed at New York, New York, the 17th day of December, 1996.
CONTINENTAL PLASTIC CONTAINERS, INC.
By:
-----------------------------------
Name:
Title:
Q-2
EXHIBIT R
---------
MORTGAGE NOTE PLEDGE AGREEMENT
AGREEMENT entered into this 17th day of December, 1996, among CONTINENTAL
CARIBBEAN CONTAINERS, INC., a corporation organized and existing under the laws
of the State of Delaware, duly qualified and authorized to transact business in
the Commonwealth of Puerto Rico (the "PLEDGOR"), and UNITED STATES TRUST COMPANY
OF NEW YORK, a corporation organized and existing under the laws of the State of
New York (the "PLEDGEE").
1. Reference is made to: (i) that certain Pledge and Security Agreement
executed by PLEDGOR in favor of the PLEDGEE dated December 17, 1996 (the
"Security Agreement", that certain Indenture (the "Indenture") dated December
17, 1996 among Plastic Containers, Inc. (the "Parent"), each of the PLEDGOR and
Continental Plastic Containers, Inc. ("CPC"), as guarantors, and United States
Trust Company of New York, as trustee, pursuant to which the Parent is issuing
$125,000,000 aggregate principal amount 10% Series A Senior Secured Notes due
2006 and may issue Series B Senior Secured Notes (such Series A and Series B
Notes, collectively, the "Notes") and (iii) to that certain Guarantee (the
"Guarantee") executed by the PLEDGOR to the PLEDGEE guaranteeing the obligations
of the Parent under the Indenture and the Notes (all of the obligations of the
PLEDGOR under the Security Agreement, the Indenture, the Notes and the Guarantee
hereinafter referred to as the "Obligations"). The Security Agreement, the
Indenture, the Notes and the Guarantee, and all other documents or instruments
issued thereunder, herein collectively referred to as the "Transaction
Document").
2. PLEDGOR, in order to secure and guarantee the due payment and
performance of the Obligations including interest thereon, as well as for the
payment of any obligation or liability, direct or contingent, with PLEDGEE under
the Transaction Documents, due or to become due, whether now existing or
hereafter arising, in this act, does present, deposit, transfer, assign, and
pledge to PLEDGEE the property specifically detailed in Paragraph 8 hereof
(hereinafter referred to as the "Pledged Security"). It is agreed by the parties
hereto that PLEDGEE shall serve as bailee of the Pledged Security pledged
hereunder, subject to the terms and conditions herein set forth.
3. PLEDGOR hereby grants to PLEDGEE a lien for the amount of all of the
Obligations upon the Pledged Security and any other
R-1
collateral property, now or at any time hereafter given unto or left by the
PLEDGOR in the possession of PLEDGEE, and also to secure payment of the
outstanding balance of any other indebtedness of the PLEDGOR with PLEDGEE which
may hereinafter arise or become due under the Transaction Documents.
4. Upon failure by the PLEDGOR to perform and comply with the terms of
the Guarantee, or any other of the undertakings, obligations or liabilities of
the PLEDGOR with PLEDGEE thereunder, or upon the occurrence of an Event of
Default under the Transaction Documents, or in case of insolvency, bankruptcy,
or failure in business of PLEDGOR then, or in any such event, all obligations
and liabilities, direct or contingent, of the PLEDGOR with PLEDGEE, shall
forthwith become due and payable, without demand or notice, and upon such event
PLEDGEE shall have full power and authority to alienate the Pledged Security
then in its possession at such place as PLEDGEE may deem best, before a Notary
Public, at public auction, upon the giving of the notices required by and as
provided under Article 1771 of the Civil Code of Puerto Rico (31 L.P.R.A. Sec.
5030). PLEDGEE may also, at its option, bring legal action or proceedings for
the collection of such unpaid Obligations, and, at its option, simultaneously
foreclose on any of the Pledged Security, without first alienating the Pledged
Security. Out of the proceeds of the sale, and/or the foreclosure, of the
Pledged Security, PLEDGEE shall apply the net proceeds, after deducting all
costs and expenses of the sale and/or foreclosure, to the payment of any or all
of the Obligations, and to pay PLEDGOR any surplus remaining therefrom.
5. In aid of the rights granted to the PLEDGEE in Paragraph 4 hereof, it
is further stipulated and agreed by the parties herein that PLEDGEE, as holder
for value and in due course of the Pledged Security, is hereby vested with the
right to exercise the actions which pertain to an owner and title holder
thereof, as PLEDGEE, with full power to pass good title to any persons, by
delivery or endorsement; and PLEDGEE or any other holder of said Pledged
Security may collect the same in its own name by judicial proceedings or
otherwise.
6. No delay on the part of PLEDGEE herein in exercising any rights
hereunder, or under the Transaction Documents, or under any other document or
instrument executed and delivered by PLEDGOR or the Parent pursuant to the
Transaction Documents, or under any other document or instrument executed and
delivered by PLEDGOR or the Parent pursuant to the Transaction Documents, shall
operate as a waiver of such rights. Any exercise of remedies by XXXXXXX
X-0
hereunder shall be done in the manner and at the times, if any, specified in the
Indenture.
7. PLEDGEE, shall have a first priority, general and continuing lien on
the Pledged Security pledged hereunder until all Obligations, are duly and
totally paid to PLEDGEE, regardless of the date when all such Obligations are
incurred or were constituted, or the date when they mature and become due and
payable by default, demand, acceleration, or otherwise, it being the intention
of the parties hereunder, that the Pledged Security pledged with PLEDGEE in
accordance with the terms hereof shall serve as collateral security for all of
the Obligations, and while any of such Obligations remain unpaid and
outstanding.
8. The PLEDGOR hereby delivers to the PLEDGEE, in pledge for the benefit
of the PLEDGEE, the following property hereby deemed the "Pledged Security":
(i) Mortgage Note in the principal amount of $1,631,000,
secured by mortgage constituted by PLEDGOR, as mortgagor, under Deed
of Mortgage Number ________ executed on December 17, 1996, before
Notary Public Xxxxxx X. Xxxxxx Canals.
9. PLEDGOR hereby represents and warrants to PLEDGEE that:
(a) PLEDGOR has good and valid title to, and sole record and
beneficial ownership of, the Pledged Security, which its to be pledged to
PLEDGEE by PLEDGOR pursuant hereto, free and clear of any and all covenants,
conditions, restrictions, voting trust arrangements, security interests, liens,
charges, encumbrances, options and adverse or equitable claims or rights
whatsoever, except for the lien created hereby.
(b) PLEDGOR is not a party to, subject to or bound by any judgment,
order, writ, prohibition, injunction or decree of any court, governmental body
or instrumentality and no action or proceeding is pending against PLEDGOR which
would prevent or adversely affect the execution, delivery or performance of this
Pledge Agreement or the pledge of the Pledged Security.
10. Upon payment in full of the Obligations, this Pledge
Agreement shall cease and terminate and the Pledged Security shall be delivered
by the PLEDGEE (without recourse to or warranty by PLEDGEE) to PLEDGOR duly
endorsed if necessary.
11. All notices required to be given hereunder shall be made in
writing via registered or certified mail, postage prepaid, return receipt
requested or delivered by hand, to the following
R-3
address, and shall be deemed given upon receipt by the parties at the addresses
set forth below:
TO PLEDGOR:
Continental Caribbean Containers, Inc.
Parque Central Avenue
Bairoa Industrial Park
Bairoa
Caguas, Puerto Rico 00652
Attention: Plant Manager
Telecopy Number: (000) 000-0000
with a copy to:
Plastics Containers, Inc.
Xxx Xxxxxx Xxx
Xxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
TO PLEDGEE:
United States Trust Company of New York
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Re: Plastic Containers, Inc.
Attention: Corporate Trust Department
Telecopier: (000) 000-0000/6
12. This Pledge Agreement may not be changed, terminated or
modified orally or in any manner other than by an agreement in writing signed by
the respective parties hereto in accordance with the Indenture. The covenants,
agreements, rights and options contained in this Pledge Agreement shall bind
upon and inure to the benefit of the parties hereto and their respective
successors and Permitted assigns.
13. The terms, clauses and provisions of this Pledge Agreement
are in addition and not in limitation or substitution of the terms, clauses and
provisions set forth in the Transaction Documents. In the event of any
inconsistency between the provisions of this Pledge Agreement and those of the
Transaction Documents, the terms hereof shall be controlling as necessary to
create, preserve and/or maintain a valid, enforceable first priority lien
R-4
and security interest under applicable law upon the Pledged Security, but
otherwise, the provisions of the Transaction Documents shall be controlling.
14. Any provision(s) of this Pledge Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or illegality of such prohibition without invalidating the
remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.
15. The substantive laws of the Commonwealth shall govern the
construction and interpretation of this Pledge Agreement and the rights and
remedies of the parties hereto.
IN WITNESS WHEREOF, the parties hereto execute this Pledge
Agreement as of the day and year first above written.
PLEDGOR
-------
CONTINENTAL CARIBBEAN CONTAINERS, INC.
By: /s/Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
PLEDGEE:
-------
UNITED STATES TRUST COMPANY OF NEW YORK
By: /s/Xxxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Assistant Vice President
R-5
State of )
)
County of )
Sworn and subscribed to before me by ____________________ and
_____________________, as representatives of the appearing parties whom I
personally know and who are of legal age, _______________, the first and
________________ the second, and residents of __________________________, and
__________________________________, respectively.
In _____________________, ______________________, this _____ day
of December, 1996
_______________________________
NOTARY PUBLIC
R-6
EXHIBIT S
---------
---DEED NUMBER TWELVE (12) ------------------------
---------DEED OF CONSTITUTION OF MORTGAGE----------
---In the City of Caguas, Commonwealth of Puerto Rico, this
seventeenth (17th) day of December, nineteen hundred ninety-
six (1996).----------------
--------------------BEFORE ME----------------------
---XXXXXX X. XXXXXX CANALS, Attorney-at-Law and Notary
Public in and for the Commonwealth of Puerto Rico with
residence in Guaynabo, Puerto Rico and offices at the
Sixteenth Floor of Popular Center Building, Hato Rey, San
Xxxx, Puerto Rico.---------
----------------------APPEAR-----------------------
---AS PARTY OF THE SOLE PART: CONTINENTAL CARIBBEAN
CONTAINERS, INC (Employer Identification Number 66 0342024),
a corporation organized and existing under the laws of the
State of Delaware, registered to do business in the
Commonwealth of Puerto Rico (hereinafter called the
"Mortgagor"), represented herein by Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, (Social Security Number ###-##-####) of legal age,
married, a business executive and resident of San Xxxx,
Puerto Rico, who has been duly authorized to appear in this
public instrument on behalf and in
S-1
representation of the Mortgagor, and which authority he will
show wherever and whenever required to do so.---------------
---------
---I, the Notary, hereby certify that I personally know the
representative of the Mortgagor appearing herein and from
his statements I further attest as to his age, civil status,
occupation and residence. The person appearing herein has
assured me that he has and in my judgment he does have the
legal capacity necessary for this act, and for that purpose
he freely and voluntarily------------------
--------------------------STATE--------------------
---FIRST: The Property: The Mortgagor is the owner of
------------
record with valid, good, insurable and marketable fee simple
title ("pleno dominio") of the real property described in
Paragraph TWENTY FIRST of this Deed, hereinafter referred to
as the "Property".----------------------------------------
---SECOND: The Mortgage Note: Simultaneously herewith
-----------------
Mortgagor has subscribed before the undersigned Notary a
Mortgage Note to the order of Mortgagee (hereinafter called
the "Mortgage Note"), which is literally transcribed in
Paragraph FOURTEENTH hereof.--------------------------------
S-2
---THIRD: Creation of the Mortgage: In order to guarantee
------------------------
and secure:------------------------------
-----(i) The full and complete payment of the principal of
the Mortgage Note and the interest accruing thereon, as
herein established;-----------
-----(ii) The performance and observance of the terms and
conditions contained herein and in the Mortgage Note;-------
------------------------------
-----(iii) An additional credit in the amount set forth in
Paragraph FIFTEENTH hereof to cover interest in addition to
that secured by law (hereinafter called the "Interested
Credit";-------
-----(iv) An additional credit in the amount set forth in
Paragraph FIFTEENTH hereof to cover any amounts that may be
paid by or advanced by the Mortgagee hereunder together with
interest thereon (hereinafter called the "Credit for
Additional Advances"); and----------------------------------
--
-----(v) An additional credit in the amount set forth in
Paragraph FIFTEENTH hereof (hereinafter called "Credit for
Collection Costs and Fees") to cover costs and expenses
(including attorney's fees) of the Mortgagee in the event
that such Mortgagee shall have to take recourse to the
courts, including
S-3
bankruptcy proceedings, or to any other governmental agency
in order to collect all or any part of the principal thereof
or any interest thereon (by foreclosure or other proceedings
or action), (the Interest Credit, the Credit for Additional
Advances and the Credit for Collection Costs and Fees shall
be hereinafter collectively referred to the "Additional
Credits"),-----------------------------------------
---Mortgagor hereby constitutes and creates a voluntary
first priority mortgage (the "Mortgage") in favor of the
UNITED STATES TRUST COMPANY OF NEW YORK, a corporation
organized and existing under the laws of the State of New
York (herein referred to as the "Mortgagee"), as collateral
agent and trustee under that certain Indenture dated as of
December seventeen (17), 1996, or any future holder or
transferee of the Mortgage Note, on the following property
(hereinafter collectively referred to as the "Mortgaged
Property"):----------
-----(a) the Property described in Paragraph TWENTY FIRST of
this Deed;--------------------------------
-----(b) all of Mortgagor's buildings, structures,
additions, fixtures, improvements, appurtenances and
S-4
facilities now or hereafter located thereon or hereafter
erected or placed on said Property and all materials
intended for the construction, reconstruction, alteration
and repair of such buildings or improvements now or
hereafter erected thereon, all of which materials shall be
deemed to be included within the Mortgaged Property
immediately upon the delivery thereof to the Property;------
------------------------------------
-----(c) all of the rights, title and interest of the
Mortgagor, in and to, all and singular, tenements,
hereditaments, rights of way, easements, appendages and
appurtenances, licenses, passages, waters, water rights,
riparian rights, and other rights, liberties and privileges
thereof or in any way or hereafter appertaining, including
any other claim at law or in equity, as well as any after
acquired title, franchise or license and the reversion and
reversions and remainder and remainders thereof and any
other property belonging or appertaining to the Property,
and all of the right, title and interest' of the Mortgagor
in and to any and all sidewalks, xxxxxxx, xxxx, xxxxxx,
X-0
strips or gores of the Property adjacent thereto or used in
connection therewith;----------------------
-----(d) all of the Mortgagor's rights, title and interest
(but none of its obligations) as landlord whether named as
such therein or by assignment or otherwise to receive
payments of money under all leases or similar agreements of
all or part of the Property or of space therein, or at any
time hereafter made and any and all amendments,
modifications, supplements, renewals and extensions thereof,
including without limitation all rents, additional rents,
revenues, earnings, profits and income, payments incident to
any assignment, sublease or surrender of any lease, claims
for forfeited deposits and claims for damages, now due or
hereafter to become due with respect to any lease.----------
-----------------------------------
-----(e) any and all awards, damages, payments and other
compensation and any and all claims therefor and rights
thereto which may result from taking or injury by virtue of
the exercise of the power of eminent domain of or to, or any
damage, injury or destruction in any manner caused to, the
Property and any buildings, structures and improvements
S-6
thereon, or any part thereof or from any change of grade or
vacation of any street abutting thereon, all of which
awards, damages, payments, compensation, claims, and rights
hereby assigned, transferred and set over to Mortgagee to
the fullest extent that Mortgagor may under the law so do.
For such purposes, Mortgagee is hereby irrevocably appointed
attorney-in-fact for Mortgagor to settle for, collect and
receive any such awards, damages, payments and compensation
from the authorities making the same, to appear in and
prosecute any proceeding therefor, and to give receipts and
acquaintances therefor, subject to the terms of paragraph
SEVENTH hereof;-----------------
-----(f) all indemnities to which Mortgagor and the
Mortgagee may be entitled under any policy of insurance
covering the Mortgaged Property or any part thereof;--------
------------------------------
-----(g) all of the Mortgagor's rights, title and interest
to all furniture, furnishings, fixtures machinery, apparatus
and equipment, now or hereinafter located on the Property,
or located in, or used, or procured for use, in connection
with the operation, maintenance or protection of any of the
S-7
buildings, structures, improvements or facilities located or
to be located in the Property, including without limitation,
lighting, plumbing, sanitary, air conditioning equipment and
fire protection systems, now owned or hereafter acquired by
the Mortgagor, which under the Civil Code of Puerto Rico may
properly be characterized or classified as real or immovable
property either by nature or by its objective; and----------
-----(h) all renewals and replacements of, substitutions for
and additions to the Property, and all other property, real,
personal or mixed now owned or hereafter acquired by
Mortgagor or in any way appertaining to such Property as
well as all lands which may be consolidated or grouped with
the Property;------------------------------------------
---FOURTH: Obligations of Mortgagor: For the consideration
------------------------
heretofore set forth the Mortgagor is obliged and undertakes
as follows:-----------------
-----One: To satisfy the debt as set forth in the Mortgage
Note.-------------------------------------
-----Two: To pay prior to delinquency and without requiring
any notice from Mortgagee, all Impositions (as herein
defined) and satisfy any claim, lien or
S-8
encumbrance against the Mortgaged Property which may be or
become superior to this Mortgage, and to permit no default
or delinquency on any other lien, encumbrance or charge
against the Mortgaged Property, unless and to the extent
only that any such item is being contested in good faith by
appropriate proceedings and appropriate reserves have been
set aside with respect thereto in conformity with generally
accepted accounting principles in effect from time to time
in the United States of America.--------------------------
-----Three: The Mortgagor shall pay all reasonable costs,
expenses and disbursements including a reasonable amount for
attorney's fees, as well as all reasonable expenses incurred
or satisfied by the Mortgagee at any time for perfection of
title of the Mortgaged Property, and all such costs,
expenses and disbursements of Mortgagee, if satisfied by
Mortgagee, shall be considered secured in their entirety by
the Mortgage herein constituted.----------------------------
-----------
-----Four: Furnish to Mortgagee, within ten (10) business
days after request in person, or within twenty (20) business
days after request by mail, a
S-9
written statement duly acknowledging the amount on or
secured by, whether for principal or interest, this Mortgage
or the Mortgage Note, and whether any offsets or defenses
exist against he such debt.----
-----Five: (a) Mortgagor shall, at its sole cost and
expense, promptly comply with all present and future laws,
ordinances, orders, rules, regulations and of all federal,
state and municipal governments, courts, departments,
commissions, boards and officers, any national or local
Board of Fire Underwriters, or any other body exercising
functions similar to those of any of the foregoing, which
may be applicable to the Mortgaged Property or any part
thereof or to the use or manner of use of the Mortgaged
Property.-------------------------
-----(b) Mortgagor shall promptly perform and observe, or
cause to be performed or observed, all of the terms,
covenants and conditions of all instruments of record
affecting the Mortgaged Property, noncompliance with which
may affect the lien and security of this Mortgage, or which
may impose any duty or obligation upon Mortgagor or any
lessee or other occupant of the Mortgaged Property or any
part thereof. ------------------------------
S-10
-----Six: Mortgagor will not abandon or cause or permit any
waste on the Mortgaged Property and will at all times
maintain the same in good repair and condition, and will
comply with all laws, statutes and ordinances relating to
the maintenance or use of the Mortgaged Property and with
all requirements, orders and notices of violation thereof
issued by any governmental authority.------
-----Seven: Mortgagor will permit Mortgagee and Mortgagee's
representatives to enter the Mortgaged Property at
reasonable times and upon reasonable prior notice to inspect
the same.------------------
-----Eight: Throughout the term of this Mortgage,
Mortgagor, with reasonable promptness, will deliver to
Mortgagee such information with respect to the Mortgaged
Property as Mortgagee may request from time to time.--------
------------------------------
-----Nine: Mortgagor shall undertake and do and perform all
other things and acts required of it with respect to the
Mortgaged Property as agreed to with the Mortgagee.---------
-----------------------
---FIFTH: Condemnation: (a) Mortgagor shall give Mortgagee
------------
immediate notice of any actual or threatened commencement of
condemnation event that
S-11
the Mortgaged Property, or any part thereof, shall be taken
in condemnation proceedings or by exercise of any right of
eminent domain (hereinafter called collectively,
"condemnation proceedings"), and Mortgagee may, on behalf of
Mortgagor, (i) participate in any such condemnation
proceedings and Mortgagor shall from time to time execute
and deliver to Mortgagee all instruments requested by
Mortgagee or as may be required to permit such
participation, and (ii) adjust, contest, accept, reject or
compromise any proposed award and collect and receive the
proceeds thereof and endorse drafts, and Mortgagee is hereby
irrevocably appointed attorney-in-fact of Mortgagor for such
purposes. The decision of Mortgagee with regard to the
adjustment, contest, acceptance, rejection or compromise of
any proposed award issued in connection with any
condemnation proceedings shall be binding upon Mortgagor;---
----------------------
-----(b) all proceeds of condemnation awards or proceeds of
sale in lieu of condemnation, and all judgments, decrees and
awards for injury or damage to the Mortgaged Property, are
hereby assigned and shall be paid to Mortgagee. Mortgagor
agrees to
S-12
execute and deliver such further assignments thereof as
Mortgagee may request and authorizes Mortgagee to collect
and receive the same, to give receipts therefor, and to
appeal from any such judgment, decree or award. Mortgagee
shall in no event be liable or responsible for failure to
collect, or exercise diligence in the collection of, any of
the same.-------------------------------
---SIXTH: Insurance: (a) the Mortgagor at its expense will
---------
(i) keep the Mortgaged Property insured under an "All Risk"
policy or its equivalent against loss or damage by fire,
standard extended coverage perils and such other hazards
which are normally carried by entities engaged in the same
or similar business in the Commonwealth of Puerto Rico, (ii)
obtain and maintain such other forms of insurance coverage
and with such limits, including commercial general
liability, contractual liability and umbrella policies, with
respect to the Mortgaged Property or the activities of the
Mortgagor which are normally carried by entities engaged in
the same or similar business in the Commonwealth of Puerto
Rico.-----------------------
S-13
-----(b) All policies of insurance shall be issued by an
insurer acceptable to the Mortgagee lawfully doing business
in the Commonwealth of Puerto Rico and (except for public
liability insurance) shall contain the standard mortgage
non-contribution clause endorsement or an equivalent
endorsement satisfactory to the Mortgagee naming the
Mortgagee as loss payee. The public liability policies will
name the Mortgagee as additional insured. Without the
Mortgagee's consent, Mortgagor shall not name any other
party as an additional insured or loss payee under the
insurance policies nor carry separate or additional
insurance coverage concurrent in form or contributing in the
event of loss with that required by this Mortgage.
Mortgagor shall pay the premiums for the policies as the
same become due and payable. Not later than the expiration
date of each of the policies, Mortgagor will deliver to
Mortgagee a renewal policy or policies "premium paid" or
accompanied by other evidence of payment of premium
satisfactory to the Mortgagee.------------------------------
----
-----(c) In addition to the foregoing requirements, each
policy of insurance required to be carried
S-14
hereunder shall contain a provision whereby insurer (i)
agrees that such policy shall not be canceled, modified or
denied renewal without at least thirty (30) days prior
written notice to the Mortgagee, (ii) waives any right to
claim any premiums or commissions against the Mortgagee, and
(iii) provides that the Mortgagee is permitted to make
payments to effect the confirmation of such policy upon
notice of cancellation due to nonpayment of premiums. In
any event, any such policy shall not be invalidated by any
action or inaction of the Mortgagor or any other person and
shall insure the Mortgagee regardless of any breach or
violation of any warranty, declarations or conditions
contained in such policy by the Mortgagor or any other
person. Mortgagor will not violate or permit to be violated
any of the conditions, provisions, or requirements of any
insurance policy required hereunder.------------------------
-----------------
-----(d) Notwithstanding anything to the contrary contained
herein, if at any time the Mortgagee is not in receipt of
written evidence that all insurance required hereunder is in
force and effect, the Mortgagee shall have the right, with
prior
S-15
written notice to Mortgagor, to take such action as the
Mortgagee deems necessary to protect its interest in the
Mortgaged Property, including, without limitation, the
obtaining of such insurance coverage. Any expenses incurred
by the Mortgagee in connection with such action or in
obtaining such insurance and keeping it in effect shall be
paid by Mortgagor upon demand and be secured by this
Mortgage and the Mortgage Note to the extent permitted
herein and therein.----------------------
-----(e) If the Mortgaged Property shall be damaged or
destroyed, in whole or in part, by fire, or other casualty
the Mortgagor shall give prompt notice thereof to the
Mortgagee, and the Mortgagee may make proof of loss if not
promptly made by the Mortgagor.-----------------------------
------------
---SEVENTH: Additional Advances: If Mortgagor should fail
-------------------
to make punctual payment of any Impositions, or should fail
to maintain insurance coverage on the Mortgaged Property as
required from time to time by the Mortgagee, or should fail
to discharge any mortgage lien, encumbrance or charge upon
the Mortgaged Property, or any part thereof, which is
prohibited herein or by the terms of any
S-16
pledge agreement or other instrument under which the
Mortgage Note is assigned or pledged, or should fail to
maintain the Mortgaged Property in good condition, or should
fail to perform any other term or covenant of such pledge
agreement or other instrument, then Mortgagee, after giving
prior notice to Mortgagor, but without consent of or demand
upon Mortgagor and without waiving or releasing any
obligation or default, may (but shall be under no obligation
to) advance such funds as may in Mortgagee's judgment be
needed for the purpose of performing such terms or covenants
and Mortgagee may, in such event, take such other and
further action as it deems necessary for such purposes. All
sums so advanced or paid by Mortgagee and all reasonable
costs and expenses (including reasonable attorney's fees and
expenses) so incurred, together with interest thereon at the
interest rate then in effect under the Indenture, such
interest to accrue from the date of payment, or disbursement
thereof, shall constitute additional Indebtedness secured by
this Mortgage and shall be paid by Mortgagor to Mortgagee on
demand.--------------------------------------------
S-17
---EIGHTH: Further Assurances; Additional Security:
------------------------------ --------
Mortgagor, at its expense, will execute, acknowledge,
deliver and record all such instruments and take all such
action as Mortgagee from time to time may reasonably request
for better assuring to Mortgagee the property and rights
hereby mortgaged and assigned or intended so to be. Without
notice to or consent of Mortgagor, and without impairment of
the lien of, and rights under this Mortgage, Mortgagee may
take (but Mortgagor shall not be obligated to furnish) from
Mortgagor, or from any other person or persons, additional
security for the Mortgage Note or for the obligations of the
Mortgagor secured by the assignment or pledge of the
Mortgage Note; and neither the giving of this Mortgage nor
the acceptance of any such additional security shall prevent
Mortgagee from resorting first to such additional security,
or to the security created by this Mortgage, in either case
without affecting Mortgagee's lien and rights under this
Mortgage.---
---NINTH: Foreclosure Valuation: In compliance with
---------------------
Article One Hundred Seventy Nine (179) of the Law of Puerto
Rico (Act Number One Hundred Ninety
S-18
Eight (198) of August Eight (8), Nineteen Hundred Seventy
Nine (1979); P.R. Laws An., tit. 30, sec. 2575), Mortgagor
hereby declares and agrees that for purposes of any
foreclosure of this Mortgage, the value of the Mortgaged
Property shall be ONE MILLION SIX HUNDRED THIRTY ONE
THOUSAND DOLLARS ($1,631,000).------------------------------
--------
---TENTH: Foreclosure: In the event that the Mortgage
-----------
Note is assigned or pledged or otherwise encumbered as
collateral security for the payment of any other note or
debt, the Mortgagor agrees:---
-----(a) That the Mortgagee may foreclose this Mortgage and
may exercise all other rights, remedies powers and
privileges provided herein or now or hereafter existing at
law, in equity, by statute, or otherwise, without first
foreclosing the pledge or other lien so constituted upon the
Mortgage Note, to the same extent and with the same force
and effect as if the Mortgage Note had been assigned or
transferred directly to Mortgagee rather than assigned or
pledged as collateral security, provided nothing contained
in this Paragraph TENTH shall relieve Mortgagee from the
obligation to comply with the terms of the pledge agreement
or other
S-19
instrument under which the Mortgage Note is assigned or
pledged.--------------
-----(b) That Mortgagor will not exercise any right which it
might have to cancel the recording of this Mortgage by
reason of lapse of time counted from the date of the
constitution of the Mortgage either under the provisions of
Article One Hundred Forty Five (145) of the Mortgage Law of
Puerto Rico (Act Number One Hundred Ninety Eight (198) of
August Eight (8), Nineteen Hundred Seventy Nine (1979); P.R.
Xxxx Xxx., tit. 30, sec. 2469) or otherwise and further
agrees, whenever requested by the Mortgagee, to execute and
file in the appropriate Registry, at Mortgagor's cost and
expense, any and all supplemental instruments which may be
necessary or convenient for the preservation of the lien of
the Mortgage until full payment of debt so secured by a lien
upon or pledge of the Mortgage Note. Without limiting the
generality of the foregoing, Mortgagor agrees that, unless
the Mortgagee shall consent in writing to the cancellation
of the Mortgage at an earlier date, this Mortgage shall be
conclusively, presumed to subsist for a period of thirty
(30) years from the date of its constitution and the
S-20
Mortgagor does hereby waive any right which it might
otherwise have under said Article One Hundred Forty Five
(145) of the Mortgage Law of Puerto Rico (P.R. Xxxx Xxx.,
tit. 30, sec. 2469) to request for an earlier cancellation
of the recording of this Mortgage.------------------------
-----(c) The Mortgagee may in any action to foreclose this
Mortgage or the Mortgage Note, or upon the occurrence of a
default under this Mortgage or under any obligation secured
by a lien upon the Mortgage Note, petition the court having
jurisdiction in the premises to appoint a receiver for the
Mortgaged Property, including all rents, issues and profits
therefrom, and said receiver shall have the broadest powers
and faculties usually granted to a receiver by a court and
his appointment shall be made by the court as a matter of
absolute right granted to the Mortgagee without taking into
consideration the value of the Mortgaged Property or the
solvency of the Mortgagor or of any other party to the
action, and the Mortgagor hereby consents to the appointment
of such a receiver and agrees not to oppose the same.-
S-21
---ELEVENTH: Recording Fees. Mortgagor shall be
--------------
responsible for the payment of all internal revenue stamps
and vouchers, and any notarial fees in connection with the
execution of the original of this Deed and the preparation,
filing and recordation of the certified copy of the same in
the corresponding Section of the Registry of the Property.
Mortgagor shall, promptly upon reasonable request of
Mortgagee, do all acts and things, including, but not
limited to, the execution of any further assurances and the
recording of any additional documentation deemed necessary
by Mortgagee, to establish, confirm, maintain and continue
the lien created and intended to be created hereby, and all
other rights and benefits conferred or intended to be
conferred on Mortgagee hereby, and Mortgagor shall pay all
costs incurred by Mortgagee in connection therewith,
including all filing and recording costs and reasonable
counsel fees.---------------------------
---TWELFTH: Definitions: As used in this Mortgage, the
-----------
following terms are defined as follows:---------------------
----------------------
S-22
-----(a) "Impositions" shall mean all real estate and other
-----------
taxes, all assessments made (including, without limitation,
all assessments for public improvements or benefits, whether
or not commenced or completed prior to the date hereof or
while this Mortgage is in force), water, sewer, electricity,
utility and other rents, rates and charges, excises, levies,
license fees, permit fees, inspection fees and other
authorization fees and other charges, in each case whether
general or special, ordinary or extraordinary, or foreseen
or unforeseen of every character (including all penalties or
interest thereon which at any time are assessed, levied
confirmed or imposed on or in respect of or be a lien upon
(i) the Mortgaged Property or any part thereof or any rents,
issues, income, profits or earnings therefrom or any estate,
right or interest, therein or (ii) any occupancy, use or
possession of or sales from the Mortgaged Property or any
part thereof, or (iii) this Mortgage, any interest hereon or
any other payments due from the Mortgagor under the terms of
this Mortgage, excepting, however, the income taxes now or
hereafter imposed by the United States under the Internal
Revenue Code of Nineteen
S-23
Hundred Eighty Six (1986), as amended, and by the
Commonwealth of Puerto Rico under the Puerto Rico Internal
Revenue Code of 1994, as amended, or the License Tax Act of
Nineteen Hundred Seventy Four (1974), as amended, or under
any other Act of Congress or Act of the Legislature of
Puerto Rico of the same nature, modifying, amending, or
substituting the statutes above mentioned as long as they do
not become a lien on the Mortgaged Property; ---------------
--------------------------
-----(b) "Indebtedness" shall mean (i) the Impositions; (ii)
------------
principal and interest of the Mortgage Note; (iii) the
credits referred to in Paragraph FIFTEENTH of this Deed; and
(iv) any and payments which Mortgagor is or may be obliged
to make under the Indenture and this Deed of Mortgage.
------(c) "Permitted Liens" shall mean (i) the liens
constituted by this Mortgage and the liens, charges and
encumbrances or rights indicated in the title insurance
policy issued in favor of Mortgagee; (ii) liens created by
taxes or assessments by governmental bodies, payments of
which is not yet due or the payment of which is being
contested in good faith appropriate proceedings and for
which
S-24
adequate reserves are being maintained in the sole judgment
of the Mortgagee; (iii) easements, rights-of-way, licenses,
rights, exceptions or reservations in the Mortgaged Property
covered by this Mortgage granted or reserved for the purpose
of roads, streets, alleys, parking areas, highways,
railroads, pipelines, ditches, canals, tractor paths,
electric, telephone and telegraph lines, sewers, zoning laws
and ordinances, oil and mineral rights and other similar
purposes and minor defects and irregularities in title,
provided that: (A) all such easements, rights-of-way,
licenses, rights, exceptions, reservations and defects and
irregularities in title do not materially impair the utility
of the Mortgaged Property in the operation of the business
of the Mortgagor and do not materially and adversely affect
the marketability for the title to such property; and (B)
each such easement, right-of-way, license, right, exception
or reservation, to the extent created after the date of this
Mortgage, shall be subordinated to the lien hereby
constituted unless the same is created by operation of law.-
----------
S-25
---THIRTEENTH: Successors and Assigns: All the terms of
----------------------
this Mortgage shall apply to and be binding upon the
successors and assigns of Mortgagor and all persons claiming
under or through Mortgagor or any such successor or assign,
and shall inure to the benefit of Mortgagee. Neither this
Mortgage nor any term hereof may be changed, waived,
discharged or terminated verbally, except by a public
instrument or deed to that effect signed by the Mortgagee,
and the Mortgagor, notice of which shall be endorsed on the
Mortgage Note.---
---FOURTEENTH: The Mortgage Note: The Mortgage Note
-----------------
referred to in Paragraph FOURTH of this Deed is literally
transcribed herein as follows:--------
----------------"MORTGAGE NOTE"--------------------
VALUE: $1,631,000.---------------------------------
DUE DATE: ON DEMAND-------------------------------
---FOR VALUE RECEIVED, on demand, the undersigned promises
to pay to the order of UNITED STATES TRUST COMPANY OF NEW
YORK (the "Mortgagee") the principal sum of ONE MILLION SIX
HUNDRED THIRTY ONE THOUSAND DOLLARS ($1,631,000). The
unpaid balance of this obligation shall bear interest until
full payment hereof, at an annual rate equal to ten percent
(10%). The principal and interest hereunder shall be
payable simultaneously on demand, and payments of interest
and principal shall be made at the office or domicile of the
Mortgagee within or without the Commonwealth of Puerto Rico,
or at such other place as the Mortgagee may from time to
time designate in writing.------------------------------
S-26
---The undersigned hereby waives presentment, protest,
demand and notice of non-payment.---------
---Payments of both principal and interest are to be made in
lawful money of the United States of America.---------------
----------------------------
---This Mortgage Note is secured by a mortgage, constituted
pursuant to the terms of Deed Number twelve (12) of
Constitution of Mortgage (the "Mortgage") executed on the
date hereof before the undersigned Notary Public, and the
Mortgagee is entitled to the benefits and the security
provided for in said Deed of Constitution of First
Mortgage.------------------------------------------
---In the event the Mortgagee shall take recourse to
foreclosure or other judicial proceedings for the collection
of all or any of the principal hereof or any interest
hereon, the undersigned hereby agrees to pay all costs and
expenses (including reasonable attorney's fees and expenses)
incurred in connection with such foreclosure or judicial
proceedings.------------------------------
---------------------------------------------------
---In Caguas, Puerto Rico this seventeenth (17th) day of
December, 1996.-----------------------------
------CONTINENTAL CARIBBEAN CONTAINERS, INC.-------
(Signed) Xxxx Xxxxxxx Xxxxxxxxx Xxxxxxx. ----------
---Affidavit Number: 933 --------------------------
---Acknowledged and subscribed to before me by Xxxx Xxxxxxx
Xxxxxxxxx Xxxxxxx, of legal age, married, an executive and
resident of San Xxxx, Puerto Rico, as authorized
representative of Continental Caribbean Containers, Inc. In
Caguas, Puerto Rico, this seventeenth (17th) day of
December, 1996.-----
---By: (Signed) Xxxxxx X. Xxxxxx Canals.-----------
------------------Notary Public--------------------
---(Notarial Seal)---------------------------------
S-27
---FIFTEENTH: Various Sums:-----------------------
------------
-----(i) The principal Amount of the Mortgage Note is: ONE
MILLION SIXTY THREE THOUSAND ONE HUNDRED DOLLARS
($1,631,000). -----------------------------
-----(ii) The "Interest Credit" is: ONE HUNDRED SIXTY THREE
THOUSAND ONE HUNDRED DOLLARS ($163,100).--------------------
--------------------
-----(iii) The "Credit for Additional Advances' is: ONE
HUNDRED SIXTY THREE THOUSAND ONE HUNDRED DOLLARS
($163,100).--------------------------------
-----(iv) The "Credit for Collection Costs and Fees" is: ONE
HUNDRED SIXTY THREE THOUSAND ONE HUNDRED DOLLARS
($163,100).------------------------
---SIXTEENTH: Representations: Mortgagor represents and
---------------
warrants that.----------------------
-----i) It is the owner with valid, good, marketable,
insurable and fee simple title ("pleno dominio") of the
Mortgaged Property and of all rights and titles appertaining
thereto.------------
-----(ii) It has good and lawful authority to mortgage the
Mortgaged Property and all rights thereto, in the manner and
form hereby mortgaged.--
-----(iii) The Mortgaged Property is free and clear all
liens and encumbrances whatsoever on a parity or
S-28
superior to the liens of this Mortgage, except for the
"Permitted Liens".-------------------------
-----(iv) The Mortgaged Property is free from taxes and
assessments.-----------------------------
-----(v) It will warrant and defend said Mortgaged Property
and the validity and priority of this Mortgage against all
and every person or persons claiming the same or any part
thereof.-------------
-----(vi) It will execute whatever additional documents or
instruments that may be necessary to record this document as
a first mortgage in the Registry of Property as required by
Mortgagee.-----
---SEVENTEENTH: Notices: All notices, demands, requests
-------
and consents required under this Mortgage shall be given and
shall be addressed to the Mortgagor at Parque Central
Avenue, Bairoa Xxxx, Caguas, Puerto Rico, and if to
Mortgagee, they shall be addressed to Corporate Trust
Division, 000 Xxxx, 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.--
-----
---EIGHTEENTH: Rights of way, Easements and the like: The
-------------------------------- ----
Mortgagor will maintain, preserve and renew all rights of
way, easements, apparent signs, grants, privileges, licenses
and franchises reasonably necessary for the use of the
Mortgaged
S-29
Property from time to time and will not, without the prior
consent of the Mortgagee, initiate, join in or consent to
any private restrictive covenant, ordinance, or other public
or private restriction as to the use of the Mortgaged
Property which would have a material adverse effect on the
Mortgaged Property.-----------------------------------------
---NINETEENTH: Indemnification: Mortgagor will protect,
---------------
indemnify and save harmless Mortgagee and any holder of the
Mortgage Note, against any liabilities, obligations,
damages, penalties, claims, causes of action, costs, and
expenses (including, without limitation, attorney's fees and
expenses) which may be imposed upon or incurred by or
asserted against Mortgagee (except those caused by
Mortgagee, its agents or employees), by reason of (a) any
accident, injury or damage to any person or property
occurring on or about the Mortgaged Property or any part
thereof; b) any use, or condition of the Mortgaged Property
or any part thereof; (c) any failure of the Mortgagor to
perform or comply with any of the provisions hereof
including, without limitation, the provisions of Paragraph
TWENTY THIRD hereunder; or (d) any
S-30
necessity to defend any of the rights, title or interest
conveyed or created by this Mortgage.-----
---Upon receipt by Mortgagee of a notice of any claim or of
the commencement of any action against Mortgagee, in respect
to the above indemnity or to any indemnity or contribution
agreement contained herein, Mortgagee will promptly give
written notice of the claim or commencement of action to
Mortgagor. In case such notice or any such claim or action
shall be given, Mortgagor may assume the defense of such
claim or action, including the employment of counsel and
payment of expenses. Mortgagee shall have the right to
employ its own counsel in any such case, and the fees and
expenses of such counsel shall be at the expense of
Mortgagee unless the employment of such counsel shall have
been previously authorized in writing by the Mortgagor or
Mortgagor shall not have promptly employed counsel to have
charge of the defense of such claim or action, or Mortgagee
shall have reasonably concluded that there may be defenses
available to it which are different from or additional to
those available to Mortgagor (in which case, Mortgagor shall
not have the right to direct the defense of such claim or
S-31
action on behalf of the Mortgagee), in any of which events
such fees and expenses shall be borne by the Mortgagor, but
the Mortgagor shall not be responsible for the fees and
expenses of more than one counsel for Mortgagee. Mortgagor
shall not be liable to indemnify Mortgagee for any
settlement of such claim or action effected without
Mortgagor's consent.----------------------------------------
---Any amounts payable to Mortgagee under this Paragraph
NINETEENTH which are not paid within ten (10) days after
written demand therefor by Mortgagee shall bear interest at
the rate set forth in the Mortgage Note from the date of
such demand, and such amounts, together with interest, shall
be deemed to be indebtedness secured by this Mortgage.------
------------------------------------
---TWENTIETH: Limitations on Liens: Except with the prior
--------------------
written consent of Mortgagee, Mortgagor shall not create,
assume, incur or suffer to exist any mortgage, pledge, lien,
charge or other security interest or encumbrance on the
Mortgaged Property or any part thereof other than the
following:-----------------------------------------
S-32
-----(a) The lien of the First Mortgage constituted pursuant
to the terms of this Deed;----------------
-----(b) those set forth in Paragraph TWENTY-THIRD of this
Deed;--------------------------------------
-----(c) those permitted under any pledge agreement or other
instrument under which the Mortgage Note is pledged or
assigned or under any security agreement or loan agreement
secured thereby.-------
---TWENTY FIRST: Description of the Property:-----
---------------------------
---The Property is described in the Spanish language as
follows:-------------------------------
-----URBANA: Parcela de terreno zonificada industrial
radicada en el Barrio Bairoa del Municipio de Caguas, con
una cabida superficial de veinte mil trescientos cuarenta y
ocho punto setenta y nueve con cuarenta y tres (20,348.7943)
metros cuadrados, equivalentes a cinco punto uno siete siete
tres (5.1773) cuerdas. En lindes por el Norte, en una
distancia de setenta y ocho punto ocho seis ocho (78.868)
metros cuadrados, con la parcela segregada; por el Sur, en
una distancia de setenta y nueve punto nueve tres tres
(79.933) metros cuadrados con terrenos de Guaracanal
Development Corporation; por el Este, en una distancia de
doscientos cincuenta y uno punto ocho xxxx xxxxx (251.885)
metros cuadrados, con la Avenida Marginal Este; por el
Oeste, en una distancia de doscientos sesenta y cinco punto
tres ocho ocho (265.388) metros cuadrados, con terrenos de
Guaracanal Development Corporation.-------------
---Es el remanente de la finca luego de segregados tres mil
seiscientos sesenta y siete punto cero dos siete siete
(3,667.0277) metros cuadrados, segun escritura numero
treinta y cuatro (34) otorgada en San Xxxx, Puerto Rico, el
treinta y uno (31) xx xxxx
S-33
de mil novecientos ochenta y nueve (1989), ante el notario
xxxxxxx Xxxx Xxxxxxxxx Xxxxxx Xxxxxxxxx inscrita al folio
doscientos sesenta y dos (262) del tomo mil trece (1,013) de
Caguas, inscripcion segunda (2da).-------------------------
---The Property appears recorded in the Registry of
Property, First Section of Caguas at page two hundred and
sixty (260), volume one thousand thirteen (1013) of Caguas,
property number thirty four thousand seven hundred seventy
five (34,775) (formerly nine thousand one hundred ninety
five (9,195)), first (lst) inscription.-----------------
---The Property was acquired by Mortgagor pursuant Deed of
Purchase and Sale number seventy nine (79) executed before
Notary Public Xxxxxx X. Xxxxxx on the twenty-first (21st)
day of April nineteen seventy-five (1975), recorded in the
Registry Property, First Section of Caguas at page hundred
and sixty (260) of volume one thirteen (1013) of Caguas,
property number thirty four thousand seven hundred seventy
five (34,775) (formerly nine thousand one hundred ninety
five (9,195)) first (lst) inscription.----------------------
-----------
---According to a title study prepared by Hato Rey Title
Insurance Agency, Inc., the Property is subject to the
following liens and encumbrances:---
S-34
-----(a) By its origin: (i) easement in favor of Puerto
Rico Water Resources Authority; (ii) easement in favor of
Puerto Rico Communications Authority; (iii) easement in
favor of the Municipality of Caguas; (iv) easement in favor
of Puerto Rico Aqueduct and Sewer Authority; (v) lease in
favor of Xxxxxx Xxxxxxxxx xx Xxxxxx; (vi) easement in favor
of Eastern Sugar Association; (vii) easement in favor of
Puerto Rico Railway Light and Power Company; (viii)
restrictive covenants of use and edification; and (ix)
conditions and limitations of commercial zones, for a term
of twenty-five (25) years.------------------
-----(b) By itself: Mortgage in the amount of One Million
Three Hundred Ninety Seven Thousand Dollars ($1,397,000)
securing a Mortgage Note of same amount and bearing interest
at ten and three fourths percent (10 3/4%), constituted by
Deed Number eight (8) executed in San Xxxx, Puerto Rico on
April eight (8), nineteen ninety two (1992) before the
appearing notary, clarified by Deed number eighteen (18)
executed in San Xxxx, Puerto Rico on July thirteen (13),
nineteen ninety two (1992) before the appearing notary, and
recorded at page two hundred
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sixty three (263) of volume one thousand thirteen (1,013) of
Caguas, Registry of Property, First (1st) Section of
Caguas.-----------
---TWENTY SECOND: Miscellaneous:-------------------
-------------
-----(a) The headings of the clauses of this Mortgage are
for convenience and reference only and in no way define,
limit or describe the scope or intent of this Mortgage nor
in any way affect this Mortgage.----------------------------
--------------
-----(b) If any one or more of the provisions contained
herein or in the Mortgage Note shall be invalid, illegal or
unforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof
or thereof, but each shall be as if such illegal, invalid or
enforceable provision had never been included.--------------
----------------------------
-----(c) No failure or delay on the part of the Mortgagee in
exercising any power or right hereunder shall operate as a
waiver thereof or a waiver of any provision or condition
hereof (no single partial exercise of any such right or
power shall preclude any other or further exercise thereof
or the exercise of any other right or power hereunder) and
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that all rights and remedies of the Mortgagee hereunder are
cumulative and shall not be deemed exclusive of any rights
or remedies provided by law.--------------------------------
------------
-----(d) Should the Mortgagor satisfy its obligations
hereunder and the obligations for which the Mortgage Note is
pledged or assigned as collateral security in the time and
manner heretofore set forth, and its obligations under the
Indenture, and it has complied with, and diligently executed
all agreements and stipulations herein set forth, then the
Mortgagee shall execute in its favor the corresponding
release and cancellation of this Mortgage.------------------
-------------------
---TWENTY THIRD: Environmental Matters.------------
---------------------
-----(a) Mortgagor represents that (i) it has obtained all
material permits, licenses and other authorizations which
are required with respect to the ownership and operation of
its business and the Mortgaged Property under any and all
Environmental Laws (as hereinafter defined); (ii) it is in
material compliance with all terms and conditions of such
permits, licenses and authorizations, and is also in
material compliance with Environmental Laws
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applicable to the Mortgaged Property, including, without
limitation, all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental
Laws; (iii) there is no material civil, criminal or
administrative action, suit, demand, claim, hearing, notice
or violation, investigation, proceeding, notice of demand
letter pending or, to its knowledge, threatened against it
or the Mortgaged Property under the Environmental Laws which
could result in a material fine, penalty or other cost or
expense; (iv) to its best knowledge, there are no past or
present events, conditions, circumstances, activities,
practices, incidents, actions or plans with respect to its
operations at the Property which may materially interfere
with or prevent material compliance with the Environmental
Laws, or which may give rise to any common law or legal
liability, including, without limitation, liability under
the Comprehensive Environmental Response, Compensation and
Liability Act of 980, as or similar state, local or foreign
laws herein collectively the "Environmental Law"), or
otherwise form the basis of
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any claim, action, demand, suit, proceeding, hearing or
notice of violation, study or investigation, based on or
related to the manufacture, processing, distribution, use,
treatment, storage, disposal, or handling or the emission,
discharge, release or threatened release into the
environment at or from the Mortgaged Property, of any
pollutant, contaminant, chemical or industrial, toxic or
hazardous substance or waste which, individually or in the
aggregate, could reasonably be expected to result in a
material fine, penalty or other cost or expense.---
-----(b) Mortgagor shall (i) take all actions necessary to
keep its operations at the Mortgaged Property in compliance
with any and all present and future Environmental Laws;
provided however, the Mortgagor at its expense may, after
prior notice to the Mortgagee, contest by appropriate legal,
administrative or other proceedings conducted in good faith
and with due diligence, the validity or application, in
whole or in part, of any such Environmental Law, (ii) remove
as required by law any hazardous or toxic wastes,
contaminants or materials (collectively, "Hazardous
Material")
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present on the Mortgaged Property and keep the Mortgaged
Property free of any lien imposed pursuant to any
Environmental Law and (iii) not release or dispose of any
Hazardous Materials on the Mortgaged Property in violation
of any Environmental Law. Subject to the provision in the
preceding sentence, in the event Mortgagor fails to comply
with the covenants in the preceding sentence, Mortgagee may,
in addition to any other remedies set forth herein, cause
any Hazardous Materials to be removed from the Property at
Mortgagor's sole cost and expense. Any costs or expenses
incurred by Mortgagee for such purpose shall be immediately
due and payable by Mortgagor and shall bear interest at the
highest rate then payable pursuant to the Indenture.
Mortgagor shall provide to Mortgagee and its agents and
employees access to the Mortgaged Property and hereby
specifically grants to Mortgagee a license to remove any
Hazardous Material located thereon. Mortgagor shall
indemnify and hold Mortgagee (and each Holder (as this term
is defined in the Indenture) harmless from and against all
loss, cost, damage (including, without limitation,
consequential damages) or expense (including, without
limitation,
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reasonable attorneys, fees) that Mortgagee (or such Holder)
may sustain by reason of the assertion against Mortgagee (or
such Holder) by any party of any claim relating to such
Hazardous Material or the removal thereof from the Property.
The foregoing indemnification shall survive repayment of all
amounts due under the Mortgage, and any release or
assignment of this Mortgage.--------------------------------
---------------ACCEPTANCE------------------
---The appearing parties ratify, confirm and accept this
Deed because the same has been drawn in accordance with
their instructions.----------------
---I, the Notary, do hereby certify that this document was
read by the appearing parties; that I, the Notary, and the
said appearing parties can read and understand the English
language; that the Notary, advised the appearing parties of
the effects of this document in particular the following:
(a) that title reports were prepared by an independent third
party and not by the undersigned Notary (b) that a certified
copy of this deed must be presented for recordation in the
appropriate section of the Registry of Property; (c) of the
possibility that other documents affecting the rights herein
created
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are presented for recordation prior to the execution and/or
presentation of a certified copy of this deed and of the
preference or seniority that said intervening liens,
encumbrances, and/or rights may gain by such prior execution
or earlier presentation to the Registry of Property; (d) of
the desirability of verifying the status of liens and
encumbrances on the Property as may appear from the Registry
of the Property on this date and of the adverse consequences
which may result from the failure to do so; and (e) of the
possible existence and pendency of additional unrecorded
statutory liens and real property taxes (including the
statutory legal mortgage in favor of the Commonwealth of
Puerto Rico).----------------------
---I, the Notary, do hereby certify that appearing parties,
after having read all of contents of this Deed, signed this
Deed, and initialed every page hereof in my presence; that
this document was executed by the parties before me, the
Notary,---------------------------------------------------
after waiving their right to request the presence of
witnesses, of which right I appraised them.----
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EXHIBIT T
---------
MORTGAGE NOTE
VALUE: $1,631,000 DUE DATE: ON DEMAND
---FOR VALUE RECEIVED, on demand, the undersigned promises to pay to the order
of UNITED STATES TRUST COMPANY OF NEW YORK (the "Mortgagee") the principal sum
of ONE MILLION SIX HUNDRED THIRTY ONE THOUSAND DOLLARS ($1,631,000). The unpaid
balance of this obligation shall bear interest until full payment hereof, at an
annual rate equal to ten percent (10%). The principal and interest hereunder
shall be payable simultaneously on demand, and payments of interest and
principal shall be made at the office or domicile of the Mortgagee within or
without the Commonwealth of Puerto Rico, or at such other place as the Mortgagee
may from time to time designate in writing.-------------------------------------
---The undersigned hereby waives presentment, protest, demand and notice of non-
payment.--------------------------------------------
---Payments of both principal and interest are to be made in lawful money of the
United States of America.---------------------
---This Mortgage Note is secured by a mortgage, constituted pursuant to the
terms of Deed Number twelve (12) of Constitution of Mortgage (the "Mortgage")
executed on the date hereof before the undersigned Notary Public, and the
Mortgagee is entitled to the benefits and the security provided for in said Deed
of Constitution of First Mortgage.-----------------------------------
---In the event the Mortgagee shall take recourse to foreclosure or other
judicial proceedings for the collection of all or any of the principal hereof or
any interest hereon, the undersigned hereby agrees to pay all costs and expenses
(including reasonable attorney's fees and expenses) incurred in connection with
such foreclosure or judicial proceedings.------------------------------
---In Caguas, Puerto Rico this seventeenth (17th) day of December, 1996.--------
----------------------------------------------------
CONTINENTAL CARIBBEAN CONTAINERS, INC.
By:/s/Xxxx Xxxxxxx Xxxxxxxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxx Xxxxxxxxx Xxxxxxx.
T-1
Affidavit Number: 933
---Acknowledged and subscribed to before me by Xxxx Xxxxxxx Xxxxxxxxx Xxxxxxx,
of legal age, married, an executive and resident of San Xxxx, Puerto Rico, as
authorized representative of Continental Caribbean Containers, Inc. In Caguas,
Puerto Rico, this seventeenth (17th) day of December, 1996.--------------------
______________________________
Notary Public
T-2
EXHIBIT U
---------
PERSONAL PROPERTY MORTGAGE NOTE PLEDGE AGREEMENT
AGREEMENT entered into this 17th day of December, 1996, between CONTINENTAL
CARIBBEAN CONTAINERS, INC. (the "PLEDGOR"), a corporation organized and existing
under the laws of the Commonwealth of Puerto Rico (the "Commonwealth"), and
UNITED STATES TRUST COMPANY OF NEW YORK, a corporation organized and existing
under the laws of the State of New York, as trustee and collateral agent under
that certain Indenture dated December 17, 1996 (the "PLEDGEE").
1. Reference is made to that certain Pledge and Security Agreement executed by
PLEDGOR in favor of the PLEDGEE dated December 17, 1996 (the "Security
Agreement", to that certain Indenture (the "Indenture") dated December 17, 1996
among Plastic Containers, Inc. (the "Parent"), each of the PLEDGOR and
Continental Plastic Containers, Inc. ("CPC"), as guarantors, and United States
Trust Company of New York, as trustee, pursuant to which the Parent is issuing
$125,000,000 aggregate principal amount 10% Series A Senior Secured Notes due
2006 any may issue Series B Senior Secured Notes (such Series A and Series B
Notes, collectively, the "Notes"), and to that certain Guarantee (the
"Guarantee") executed by the PLEDGOR to the PLEDGEE guaranteeing the obligations
of the Parent under the Indenture and the Notes (all of the obligations of the
PLEDGOR under the Security Agreement, the Indenture, the Notes and the Guarantee
hereinafter referred to as the "Obligations"). The Security Agreement, the
Indenture, the Notes and the Guaranties, and all other documents or instruments
issued thereunder, herein collectively referred to as the "Transaction
Documents").
2. PLEDGOR, in order to secure and guarantee the due payment and
performance of its Obligations with PLEDGEE, including interest thereon, due or
to become due, whether now existing or hereafter arising, in this act, does
present, deposit, transfer, assign, and pledge to PLEDGEE the property
specifically detailed in Paragraph 9 hereof (hereinafter referred to as the
"Pledged Security"). It is agreed by the parties hereto that PLEDGEE shall
serve as bailee of the Pledged Security pledged hereunder, subject to the terms
and conditions herein set forth.
3. PLEDGOR hereby grants to PLEDGEE a lien for the amount of all of
PLEDGOR's Obligations with PLEDGEE upon the Pledged Security and any other
collateral property, now or at any time hereafter
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given unto or left by the PLEDGOR in the possession of PLEDGEE, and also to
secure payment of the outstanding balance of any other indebtedness of the
PLEDGOR with PLEDGEE which may hereinafter arise or become due.
4. Upon failure by the PLEDGOR to perform and comply with the terms of
the Guarantee, or any other of the undertakings, obligations or liabilities of
PLEDGOR with PLEDGEE thereunder, or upon the occurrence of an Event of Default
under the other Transaction Documents, or in case of insolvency, bankruptcy, or
failure in business of PLEDGOR then, or in any such event, all obligations and
liabilities, direct or contingent, of PLEDGOR owing to PLEDGEE, shall forthwith
become due and payable, without demand or notice, and upon such event PLEDGEE
shall have full power and authority to alienate the Pledged Security then in its
possession at such place as PLEDGEE may deem best, before a Notary Public, at
public auction, upon the giving of the notices required by and as provided under
Article 1771 of the Civil Code of Puerto Rico (31 L.P.R.A. Sec. 5030). PLEDGEE
may also, at its option, bring legal action or proceedings for the collection of
such unpaid Obligations, and, at its option, simultaneously foreclose on any of
the Pledged Security, without first alienating the Pledged Security. Out of the
proceeds of the sale, and/or the foreclosure, of the Pledged Security, PLEDGEE
shall apply the net proceeds, after deducting all costs and expenses of the sale
and/or foreclosure, to the payment of any or all of the liabilities of PLEDGOR
to PLEDGEE, and to pay PLEDGOR any surplus remaining therefrom.
5. In aid of the rights granted to the PLEDGEE in Paragraph 4 hereof, it
is further stipulated and agreed by the parties herein that PLEDGEE, as holder
for value and in due course of the Pledged Security, is hereby vested with the
right to exercise the actions which pertain to an owner and title holder
thereof, as PLEDGEE, with full power to pass good title to any persons, by
delivery or endorsement; and PLEDGEE or any other holder of said Pledged
Security may collect the same in its own name by judicial proceedings or
otherwise.
6. PLEDGOR hereby authorizes and empowers PLEDGEE, at its option, upon
the occurrence and during the continuance of an event contemplated in Paragraph
4 above, to appropriate and apply to the pro tanto payment and extinguishment of
any of the obligations or liabilities of PLEDGOR with PLEDGEE, whether now
existing or hereafter contracted, and whether then due or not due, any and all
monies now or hereafter in the possession of PLEDGEE, on deposit or otherwise,
to the credit of, or belonging to the PLEDGOR.
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7. No delay on the part of PLEDGEE herein in exercising any rights
hereunder, or under the Transaction Documents, shall operate as a waiver of such
rights. Any exercise of remedies by the PLEDGEE hereunder shall be done in the
manner and at the times, if any, specified in the Indenture.
8. PLEDGEE, shall have a first priority, general and continuing lien on
the Pledged Security pledged hereunder until all Obligations of PLEDGOR owing to
PLEDGEE, whether now existing or hereafter arising, are duly and totally paid to
PLEDGEE, regardless of the date when all such Obligations are incurred or were
constituted, or the date when they mature and become due and payable by default,
demand, acceleration, or otherwise, it being the intention of the parties
hereunder, that the Pledged Security pledged with PLEDGEE in accordance with the
terms hereof shall serve as collateral security for all of the Obligations, and
while any of such Obligations remain unpaid and outstanding.
9. The PLEDGOR hereby delivers to the PLEDGEE, in pledge for the benefit
of the PLEDGEE, the following property hereby deemed the "Pledged Security":
Personal Property Mortgage Note in the principal amount of $1,857,000,
secured by a Personal Property Mortgage constituted by PLEDGOR, as
mortgagor, under a Personal Property Mortgage and Affidavit dated December
17, 1996 by and between PLEDGOR and PLEDGEE.
10. PLEDGOR hereby represents and warrants to PLEDGEE:
(a) PLEDGOR has good and valid title to, and sole record and
beneficial ownership of, the Pledged Security, which is to be pledged to PLEDGEE
by PLEDGOR pursuant hereto, free and clear of any and all covenants, conditions,
restrictions, voting trust arrangements, security interests, liens, charges,
encumbrances, options and adverse or equitable claims or rights whatsoever,
except for the lien created hereby.
(b) PLEDGOR is not a party to, subject to or bound by any judgment,
order, writ, prohibition, injunction or decree of any court, governmental body
or instrumentality and no action or proceeding is pending against PLEDGOR which
would prevent or adversely affect the execution, delivery or performance of this
Pledge Agreement or the pledge of the Pledged Security.
11. Upon payment in full of all of the Obligations, this Pledge
Agreement shall cease and terminate and the Pledged Security
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shall be delivered by the PLEDGEE (without recourse to or warranty by PLEDGEE)
to PLEDGOR duly endorsed if necessary.
12. All notices required to be given hereunder shall be made in
writing via registered or certified mail, postage prepaid, return receipt
requested or delivered by hand, to the following address, and shall be deemed
given upon receipt by the parties at the addresses set forth below:
TO PLEDGOR:
Continental Caribbean Containers, Inc.
Parque Central Avenue
Bairoa Industrial Park
Bairoa
Caguas, Puerto Rico 00652
Attention: Plant Manager
Telecopy Number: (000) 000-0000
with a copy to:
Plastics Containers, Inc.
Xxx Xxxxxx Xxx
Xxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier: (000) 000-0000
TO PLEDGEE:
United States Trust Company of New York
Corporate Trust Division
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-00
Re: Plastic Containers, Inc.
Attention: Corporate Trust Department
Telecopier: (000) 000-0000/6
13. This Pledge Agreement may not be changed, terminated or modified
orally or in any manner other than by an agreement in writing signed by the
respective parties hereto in accordance with the Indenture. The covenants,
agreements, rights and options contained in this Pledge Agreement shall bind
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
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14. The terms, clauses and provisions of this Pledge Agreement are in
addition and not in limitation or substitution of the terms, clauses and
provisions set forth in the Transaction Documents. In the event of any
inconsistency between the provisions of this Pledge Agreement and those of the
Transaction Documents, the terms hereof shall be controlling as necessary to
create, preserve and/or maintain a valid, enforceable first priority lien and
security interest under applicable law upon the Pledged Security, but otherwise,
the provisions of the Transaction Documents shall be controlling.
15. Any provision(s) of this Pledge Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, unenforceability
or illegality of such prohibition without invalidating the remaining provisions
hereof or affecting the validity, enforceability or legality of such provision
in any other jurisdiction.
16. The substantive laws of the Commonwealth shall govern the
construction and interpretation of this Pledge Agreement and the rights and
remedies of the parties hereto.
IN WITNESS WHEREOF, the parties hereto execute this Pledge Agreement
as of the day and year first above written.
PLEDGOR: PLEDGEE:
------- -------
CONTINENTAL CARIBBEAN UNITED STATES TRUST COMPANY
CONTAINERS, INC. OF NEW YORK,
as Collateral Agent
By:/s/Xxxx Xxxxx By:/s/Xxxxxxxx Xxxxxxx
--------------------------- ----------------------------
Name: Xxxx Xxxxx Name: Xxxxxxxx Xxxxxxx
Title: Vice President Title: Assistant Vice President
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State of )
)
County of )
Sworn and subscribed to before me by ____________________ and
_____________________, as representatives of the appearing parties whom I
personally know and who are of legal age, _______________, the first and
________________ the second, and residents of __________________________, and
__________________________________, respectively.
In _____________________, ______________________, this _____ day of
December, 1996
_______________________________
NOTARY PUBLIC
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EXHIBIT V
---------
PERSONAL PROPERTY MORTGAGE AND AFFIDAVIT
THIS MORTGAGE, made this 17th day of December, 1996, by CONTINENTAL
CARIBBEAN CONTAINERS, INC. as mortgagor (the "MORTGAGOR"), a corporation
organized and existing under the laws of the State of Delaware duly qualified
and authorized to do business in the Commonwealth of Puerto Rico (the
"Commonwealth"), with principal offices and place of business at Parque Central
Avenue, Bairoa Industrial Park, Bairoa, Caguas, Puerto Rico 00652 in favor of
UNITED STATES TRUST COMPANY OF NEW YORK, a New York corporation with offices at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as collateral agent and as
trustee (the "MORTGAGEE"), under that certain Indenture dated December 17, 1996,
among Plastic Containers, Inc. Mortgagor, Continental Plastic Containers, Inc.
and Mortgagee (the "Indenture").
W I T N E S S E T H
-------------------
FIRST: The MORTGAGOR, pursuant to the provisions of "The Personal Property
Mortgage Law", Act 19 of June 3, 1927, Title 30 L.P.R.A. Sections 1871 through
1886, as amended (the "Law"), hereby mortgages in favor of MORTGAGEE all of the
personal property described in Exhibit "A" hereof and all of the attachments,
parts
V-1
and accessories now affixed or used in connection therewith, including without
limitation, the substitutions and replacements thereof (hereinafter collectively
referred to as the "Mortgaged Property"). The Mortgaged Property is and shall
be located at the location described above as the principal official place of
business of MORTGAGOR. The Mortgagor hereby irrevocably mortgages, transfers,
pledges, sets over and confirms unto the Mortgagee, under and subject to the
terms and conditions hereinafter set forth, the Mortgaged Property in order to
secure:
(a) The full and complete payment of the principal amount of that
certain demand promissory note (the "Note") dated the date hereof, issued by the
MORTGAGOR to the order of the MORTGAGEE in the principal amount of ONE MILLION
EIGHT HUNDRED AND FIFTY SEVEN THOUSAND DOLLARS ($1,857,000.00) bearing interest
at the rate stated therein.
(b) A credit of ONE HUNDRED EIGHTY FIVE THOUSAND SEVEN HUNDRED DOLLARS
($185,700.00), provided for any interest accrued thereon, which credit does not
exceed five annuities of interest;
(c) An additional credit of ONE HUNDRED EIGHTY FIVE THOUSAND SEVEN
HUNDRED DOLLARS ($185,700.00), provided for the attorneys' fees, costs and
expenses which the Mortgagee may incur in the event it resorts to the courts or
initiates mortgage foreclosure proceedings to collect in whole or in part such
principal amount or any interest accrued thereon;
V-2
(d) An additional credit of ONE HUNDRED EIGHTY FIVE THOUSAND SEVEN
HUNDRED DOLLARS ($185,700.00), to cover payment of: (i) any disbursements that
the Mortgagee may make, in the use of its sole discretion; (ii) any fees related
to the recordation of this Mortgage; (iii) any taxes, including any interest,
charges and penalties related thereto, assessed on the Mortgaged Property or
that may otherwise affect the same; (iv) any insurance premiums related to any
insurance policies required by or pursuant to this Mortgage; (v) any and all
costs and expenses, including reasonable attorneys' fees, in order to defend
itself or its mortgage interest in any action or proceeding that may affect this
Mortgage; (vi) any disbursements that the Mortgagee might make for the
Mortgagor's account hereunder and those it may incur for the protection or
preservation of the Mortgaged Property if the Mortgagor defaults in any of its
obligations hereunder; and (vii) any interest earned thereby; and
(e) In general, each of the terms and conditions of the Note and of
this Mortgage.
SECOND: That this personal property mortgage is given as security for the
performance by MORTGAGOR of the above stated obligations (hereinafter referred
to as the "Obligations") undertaken by the MORTGAGOR pursuant to the terms and
conditions of the Note, and which Note literally reads as follows:
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PERSONAL PROPERTY MORTGAGE NOTE
VALUE: $1,857,00.00 San Xxxx, Puerto Rico
DUE: ON DEMAND.
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
UNITED STATES TRUST COMPANY OF NEW YORK, on demand, the principal sum of ONE
MILLION EIGHT HUNDRED AND FIFTY-SEVEN THOUSAND DOLLARS ($1,857,000.00). The
unpaid balance of this obligation shall bear interest from the date of this
Personal Property Mortgage Note until full payment hereof, at the rate equal to
10%. Interest hereunder shall be computed on the basis of a 360-day year.
In the event the holder of this Personal Property Mortgage Note is
required to initiate legal action for collection thereof (including proceedings
under the bankruptcy laws), the undersigned agrees to pay the expenses of such
proceedings, court costs, disbursements and reasonable attorneys fees, which
amount will become due and payable immediately upon the filing of such judicial
proceedings.
The undersigned, and all others who may become liable for all or any
part of this obligation whether as maker, principal, surety, guarantor or
endorser, agree hereby to be jointly and severally ("in solidum") liable and
jointly and severally waive demand,
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presentment, protest, notice of dishonor and nonpayment and any and all lack of
diligence or delays in collection or enforcement hereof, and expressly agree to
extend to the holder the right of set-off or compensation prior to, on or after
maturity or default, and consent to any application of payment of any monies in
possession of the holder belonging to the undersigned or any obligor hereunder
related with this Personal Property Mortgage Note and to any extension of time,
modification of the terms of payment, release of any party liable for this
obligation, release, substitution or exchange of any property, real or personal,
tangible or intangible, guaranteeing payment of the Personal Property Mortgage
securing this Personal Property Mortgage Note, agreeing also to any other
indulgence or forbearance whatsoever. Any such extension, release, modification,
substitution, exchange, indulgence or forbearance may be made without notice to
said party, and without in any way affecting the personal liability of any party
obliged hereunder.
As security for the payment of the principal of and interest on this
Personal Property Mortgage Note; for the payment of an additional amount
equivalent to five annuities of interest on this Personal Property Mortgage
Note; for the payment of an additional amount equal to Ten Percent (10%) of the
principal sum of this Personal Property Mortgage Note to cover any additional
sums which may be paid or advanced by the holder in order to protect the
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interest of the holder in the Personal Property Mortgage Note as defined herein
and the interest that may accrue on such payments or advances; and for the
payment of an additional amount equivalent to Ten Percent (10%) of the principal
sum of this Personal Property Mortgage Note to cover costs and expenses of the
holder in the event of recourse to the courts for collection thereof, the
undersigned has constituted a chattel mortgage over the personal property
located in the Municipality of Caguas, Puerto Rico pursuant to a Personal
Property Mortgage and Affidavit dated the date hereof (the "Personal Property
Mortgage").
In the event that this Personal Property Mortgage Note shall be
assigned or pledged or otherwise encumbered as collateral security for the
payment of any obligation of the undersigned or of any other person, the holder
of this Personal Property Mortgage Note shall be entitled to the benefits and
security afforded by the Personal Property Mortgage constituted as security for
this Personal Property Mortgage Note and by any agreement executed by the
undersigned assigning, pledging, or encumbering this Personal Property Mortgage
Note as security therefor, and may enforce the agreements of the undersigned
contained in each of said instruments, and may exercise the remedies provided
thereby or otherwise in respect thereof without being required first to
foreclose the pledge or other lien or encumbrance so constituted upon this
Personal Property Mortgage Note, all in accordance with
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the terms of said instruments. No reference herein to said instruments, and no
provision of this Personal Property Mortgage Note or of said instruments, shall
alter or impair the obligation of the undersigned hereon, which is continuing,
absolute and unconditional, nor shall such reference affect the negotiability
hereof under the Negotiable Instruments Law of Puerto Rico.
IN WITNESS WHEREOF, the undersigned has caused this Personal Property
Mortgage Note to be executed this 17th day of December, 1996.
CONTINENTAL CARIBBEAN
CONTAINERS, INC.
By: (signed)
-----------------------------
Affidavit No. ____
Subscribed and acknowledged before me in San Xxxx, Puerto Rico, this
_____ day of December, 1996, by ____________________, who is to me personally
known, as __________ of Continental Caribbean Containers, Inc., of legal age,
married, business executive and resident of __________, Puerto Rico.
By: (signed)
-----------------------------
NOTARY PUBLIC
V-7
The security interest in the Mortgaged Property shall stand as one,
general, continuing collateral security for the prompt payment and performance
of the Obligations under the Note until such Obligations have been satisfied in
full. The mortgage lien created hereunder shall at all times constitute a
[first] rank lien on the Mortgaged Property, superior to any other. In the
event the MORTGAGEE's lien in the Mortgaged Property should loose its [first]
lien ranking or become inferior or subordinate to any other lien, the MORTGAGEE
shall be entitled, but not obligated, to discharge such senior lien or
encumbrance or otherwise act to restore the priority of the lien created hereby
in accordance with Paragraph THIRTEENTH hereof, or to declare a default under
this Mortgage and to exercise its remedies hereunder.
The Mortgage constituted hereby shall extend to the Mortgaged Property
and, in addition, to the full extent allowed by law, to any indemnities and/or
compensation granted or owed to the MORTGAGOR by any insurers, or by reason of
condemnation of any of the Mortgaged Property, and by any third parties on
account of any damages caused thereto.
THIRD: So long as any of the Obligations shall remain outstanding,
the MORTGAGOR will not sell or offer to sell, lease, pledge, assign or otherwise
exchange, alienate or transfer all or any part of the Mortgaged Property or any
interest therein, or
V-8
dispose of the Mortgaged Property without the prior written consent of the
MORTGAGEE.
FOURTH: The MORTGAGOR represents and warrants to the MORTGAGEE that
it is the sole owner, with valid, good and marketable, fee simple title of the
Mortgaged Property, and that it has the legal power and authority to pledge,
sell, assign and transfer the Mortgaged Property free and clear of any adverse
lien, security interest, encumbrance or other claims in favor of others, and
hereby covenants to warrant and, at the MORTGAGEE's request, defend the same
from all claims and demands of all persons.
FIFTH: The MORTGAGOR shall (i) maintain the Mortgaged Property in
good working condition (except for normal wear and tear) and free from any and
all liens or other encumbrances (other than the lien created hereby and others
consented to by the MORTGAGEE) (ii) not misuse, abuse or illegally use the
Mortgaged Property, (iii) not permit, allow or cause the Mortgaged Property to
come into the possession of any person, party or entity, nor sell, remove or
allow its removal from its current location without the prior written consent of
the MORTGAGEE, (iv) provide and maintain adequate insurance coverage over the
Mortgaged Property to cover public liability and all risks of fire, flooding,
hurricane, extended coverage and against such other risk as may either be
customary, in amount, from coverage and insurer, as may be
V-9
satisfactory to the MORTGAGEE, or as may reasonably be requested by the
MORTGAGEE in writing, at the MORTGAGOR's sole expense, endorsed to include the
MORTGAGEE as an additional insured and loss payee; such policies (a copy of
which shall be made available to the MORTGAGEE) shall contain a provision
requiring thirty (30) days prior written notice to the MORTGAGEE of any change
or coverage or pending termination of coverage; MORTGAGEE shall also have the
right to purchase such policies, upon MORTGAGOR's refusal to so insure, at
MORTGAGOR's expense; and (v) comply with all laws, ordinances and regulations
affecting the Mortgaged Property or its use and with all plans, specifications,
instructions and/or manuals regarding the same and/or its use.
SIXTH: The occurrence of any of the following events or conditions
shall constitute an event of default ("Event of Default") hereunder:
(a) Default in the payment or performance of the Obligations; or
(b) Any warranty, representation, or statement made or furnished to
the MORTGAGEE by or on behalf of the MORTGAGOR under or in connection with this
Mortgage or the Note or any document, instrument or certificate delivered in
connection herewith or therewith shall prove to be have been incorrect or false
in any material respect when made or furnished; or
V-10
(c) The making of any levy, seizure, lien, attachment or encumbrance
with respect to any of the Mortgaged Property either resulting from any
proceeding against the MORTGAGOR or any of its stockholders or affiliates or
otherwise; or
(d) The dissolution, termination of existence, bankruptcy, insolvency,
business failure, appointment of a receiver of all or a part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against, the MORTGAGOR;
or
(e) The occurrence of any event which constitutes a default, or an
event of default, by the MORTGAGOR under the Note or under any legal document,
instrument or agreement referred to hereunder or thereunder.
SEVENTH: That upon the occurrence of any Event of Default hereunder
or under the Note, and at any time thereafter, so long as all or part of the
Obligations shall remain outstanding, the MORTGAGEE shall have all rights and
remedies available to a mortgagee under a personal property mortgage pursuant to
the laws of the Commonwealth, including without limitation, the right to
foreclose upon or execute against the Mortgaged Property. The MORTGAGEE shall
furnish the MORTGAGOR with reasonable notice of the time and place of any public
sale of the Mortgaged Property or of the time after which any private sale or
any other intended dis position thereof is to be made in accordance with Article
14 of the
V-11
Law. The requirements of reasonable notice shall be met if such notice is
mailed, postage prepaid, to the MORTGAGOR at least ten (10) days before the time
of the sale or disposition. Expenses of retaking, holding, preparing for sale,
selling or the like, with respect to the Mortgaged Property, including
attorneys' fees and legal expenses, shall be for the account of the MORTGAGOR.
EIGHTH: No waiver by the MORTGAGEE of any Event of Default shall
operate as a waiver of any other Event of Default or of the same Event of
Default on a future occasion. All rights of the MORTGAGEE hereunder shall inure
to the benefit of its successors and assigns; and all of the Obligations of the
MORTGAGOR hereunder shall bind its successors and permitted assigns.
NINTH: The conditions of this Mortgage are that if the MORTGAGOR
shall well and duly perform the Obligations above stated in full, according to
the terms thereof, then this Mortgage may be canceled.
TENTH: The MORTGAGOR hereby acknowledges, covenants and agrees that,
notwithstanding the valuation given to the Obligations hereunder, this MORTGAGE
shall remain of record, and the lien created hereby shall remain valid and in
full force and effect, until such time as all of the Obligations have been
satisfied in full.
V-12
ELEVENTH: Upon the exercise of the rights of the MORTGAGEE hereunder
or under the Note, all or part of the Mortgaged Property or such other rights or
security given to secure the Obligations may be offered for sale for one total
aggregate price, and the proceeds of any such sale accounted for in one account
without distinction between such items of security, or without assignment to
them of any proportion of such proceeds, the MORTGAGOR hereby waiving the
application of any doctrine of marshaling.
TWELFTH: The cost and expenses of the execution of this Mortgage and
of any other instrument utilized to extend this Mortgage to cover any additional
personal property, as well as the recordation in the proper public registry(ies)
and the cancellation of said instruments upon the full payment and performance
of the Obligations, shall be payable by the MORTGAGOR.
THIRTEENTH: At any time, and from time to time, MORTGAGOR will
execute, acknowledge where appropriate and deliver, and cause to be executed,
acknowledged where appropriate and delivered, any and all further instruments,
mortgages, conveyances, deeds, extension agreements, certificates and other
instruments or documents as may, in the reasonable opinion of the MORTGAGEE, be
necessary or desirable in order to effectuate, complete, confirm, enlarge or
perfect or to continue and preserve this Mortgage, and the MORTGAGOR hereby
agrees to acknowledge, execute and deliver, or cause the acknowledgment,
execution and delivery of such documents
V-13
or instruments without delay, at no expense to the MORTGAGEE. Upon any failure
by MORTGAGOR to do so, the MORTGAGEE may make, execute, deliver and record or
cause to be made, executed, delivered and recorded any and all such instruments,
certificates, extension agreements and documents for and in the name of the
MORTGAGOR and the MORTGAGOR hereby irrevocably appoints the MORTGAGEE the agent
and attorney-in-fact of the MORTGAGOR to do so. The MORTGAGOR agrees to pay all
filing, registration and recording fees and all federal, state, county,
Commonwealth and municipal stamp taxes or other duties, imports, assessments and
charges on account of the making, execution, delivery and recording of all such
instruments, certificates and documents.
FOURTEENTH: If the MORTGAGEE becomes a party (by intervention or
otherwise) to any action or proceeding affecting the Mortgaged Property, the
title thereto or the MORTGAGEE's interest under this Mortgage, or employs an
attorney to collect any of the indebtedness or to enforce performance of the
Obligations, covenants and agreements secured hereby or to advise MORTGAGEE with
respect to its rights and remedies hereunder and in case of an Event of Default
or threatened default, MORTGAGOR shall reimburse MORTGAGEE, forthwith upon
written notice and without further demand, for all reasonable costs, expenses,
charges and counsel fees incurred by MORTGAGEE, in any such case.
V-14
FIFTEENTH: This Mortgage shall be binding upon and inure to the
benefit of MORTGAGOR and the MORTGAGEE and their respective successors and
assigns, except that MORTGAGOR shall not have the right to assign its
obligations hereunder without the prior written consent of the MORTGAGEE.
SIXTEENTH: Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, unenforceability
or non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
SEVENTEENTH: This Mortgage shall be governed by and construed in
accordance with the laws of the Commonwealth.
EIGHTEENTH: The Mortgagor does hereby agree that in the event the
Note is validly pledged or otherwise validly assigned as collateral security for
any obligations, the pledgee, pledge holder or assignee of the same shall have
all those rights, remedies, powers and privileges provided herein or by law to a
holder of a mortgage note or to the Mortgagee, to the same extent and with the
same force and effect as if the pledgee were the owner thereof, to the fullest
extent allowed by law. In such event, the pledgee,
V-15
pledge holder or assignee of the Note shall be entitled to demand payment on the
Note, foreclose on the Note or otherwise foreclose on any other collateral
securing the Note under this Mortgage. In such event, the Mortgagee shall be
entitled to simultaneously foreclose both the pledge and the mortgage granted
hereby.
Executed in New York, New York as of the 17th day of December, 1996.
MORTGAGEE MORTGAGOR
--------- ---------
UNITED STATES TRUST COMPANY CONTINENTAL CARIBBEAN
OF NEW YORK CONTAINERS, INC.
By:/s/Xxxxxxxx Xxxxxxx By:/s/Xxxx Xxxxx
----------------------- ----------------------------
Xxxxxxxx Xxxxxxx Xxxx Xxxxx
Assistant Vice President Vice President
WITNESSES:
/s/ /s/
--------------------------- ---------------------------
V-16
CERTIFICATE OF RECEIPT
I, the MORTGAGOR, do hereby certify that I have received a true and exact
copy of the foregoing Personal Property Mortgage and Affidavit.
CONTINENTAL CARIBBEAN
CONTAINERS, INC.
By: /s/Xxxx Xxxxx
-------------------------------
Xxxx Xxxxx
Vice President
AFFIDAVIT
---------
Xxxx Xxxxx, of legal age, married, business executive and resident of Glen
Cove, New York, being duly sworn, deposes and says that:
He is the Secretary and Vice President of Continental Caribbean Containers,
Inc., a corporation organized and existing under the laws of the State of
Delaware duly qualified and authorized to transact business in the Commonwealth
of Puerto Rico, and having its principal office in the municipality of Caguas,
Puerto Rico; that Continental Caribbean Containers, Inc. is the lawful owner of
the property described in the foregoing Mortgage, of which this affidavit forms
a part thereof; that the said
V-17
property is free of liens and encumbrances, except the Mortgage of which this
affidavit forms a part thereof; that there are no judgments or executions
pending against Continental Caribbean Containers, Inc. that affect the title of
said property described in Exhibit A of the Mortgage; that the Mortgage is made
for the purpose of securing the obligations specified therein and for no other
purpose, and that the same is a just and valid obligation.
CONTINENTAL CARIBBEAN
CONTAINERS, INC.
By: /s/Xxxx Xxxxx
-------------------------------
Xxxx Xxxxx
Vice President
Affidavit No. ___
Sworn and subscribed to before me by _______________________, of legal age,
married, a business executive and resident of ________, Puerto Rico, as
_________ of Continental Caribbean Containers, Inc., personally known to me,
this _____ day of December, 1996, in San Xxxx, Puerto Rico.
___________________________________
Notary Public
V-18
EXHIBIT A
MORTGAGED PROPERTY
V-19
EXHIBIT X
---------
PREVIOUSLY LEASED / FINANCED EQUIPMENT
loc # asset # Lease Month Equipment Description PEA # XX # Xxxxxx # Xxxxx Xxxx
Xxx Xxxx, XX:
65 1506 Sep-95 XXXXXXXX XXXXXX 065-0140 065-00070 $50,682.00
65 2101 Jan-96 XXXXX MILLING MACHINE 065-0143 065-1070 $29,371.64
65 2302 Apr-96 AIS CONVEYOR 065-0153 065-00359 $75,971.00
65 2613 Jul-96 APT COMPRESSOR SYSTEM 134-1926 134-50304 $18,778.38
$174,803.02
Santa Ana, CA:
110 104 Sep-94 TCM FORKLIFT 110-0827 A23C44868 $25,855.00
110 104 Sep-94 TCM FORKLIFT 110-0827 A23C44835 $25,855.00
110 907 Apr-95 XXXXX EXTRUDER 110-0851 110-00036 R04054 $189,552.00
110 908 Apr-95 XXXXX CO-EXTRUDER 110-0851 110-00036 4057 $56,695.00
110 1001 May-95 ELKHART RAISING FRAME 110-0851 110-00031 $43,675.00
110 1002 May-95 XXXXXXXX INSPECTOR 110-0852 134-10640 $50,682.00
110 1003 May-95 INTEC HEAT CONTROL CABINET 110-0851 110-00032 $15,913.00
110 1011 May-95 INTEC HEAT CONTROL CABINET 110-0851 $15,913.00
110 1105 May-95 RAPID GRANULATOR 110-0845 134-10641 $35,054.00
110 1201 Jul-95 XXXXXXX PALLETIZER 110-0851 134-10644 $241,746.00
110 1218 Jul-95 SIGNODE STRAPPER 110-0851 142-02932? 100927 $34,704.00
110 1220 Jul-95 PAC ENGINEERING BLENDER 110-0851 $51,580.00
110 1701 Sep-95 XXXXX CO-EXTRUDER 110-0855 110-00521 $89,851.00
110 1704 Sep-95 ELKHART RAISING FRAME 110-0855 $49,143.00
110 1705 Sep-95 XXXXX EXTRUDER 110-0855 110-00614 $227,293.00
110 1803 Oct-95 RAPID GRANULATOR 110-0855 110-00729 $37,771.21
110 1804 Oct-95 PACIFIC ENGINEERING BLENDER 110-0855 M110-781 $109,235.87
110 1907 Dec-95 INTEC HEAT CONTROL CABINET 110-0855 110-0657 $19,801.22
110 1911 Dec-95 XXXXXXXX INSPECTOR 110-0855 110-00727 $55,579.61
110 1912 Dec-95 BWI INEX LABEL INSPECTOR 110-0855 110-00731 $51,612.25
110 2002 Dec-95 AIS AIR ELEVATORS 110-0855 110-00769 $142,475.58
110 2003 Dec-95 XXXXXXXX CONVEYOR 110-0855 110-00776 $77,442.32
110 2102 Jan-96 FLEETWOOD SCRAP CONVEYOR 110-0855 110-00770 $8,975.00
110 2310 Apr-96 THERMAL CARE CHILLER 110-0862 110-01089 $158,484.09
110 2402 May-96 APT COMPRESSOR SYSTEM 134-1926 134-50144 $22,385.06
$1,837,273.21
Suisun City, CA:
121 105 Sep-94 XXXXX FORKLIFT 121-0197 GXE230501579372 $18,548.00
121 105 Sep-94 XXXXX FORKLIFT 121-0197 GXE230501589372 $18,548.00
121 202 Sep-94 INEX GEMINI VISION SYSTEM 121-0205 G5016-079 $34,000.00
000 000 Xxx-00 XXXXXXXX XXX SEALER 121-0220 121-00110 5808 $37,665.00
121 1301 Jul-95 APEX FORKLIFT 121-0217 $21,287.00
121 1402 Jul-95 AIS CONTAINER 121-0235 121-00544 $6,138.00
121 1403 Jul-95 AIS CONTAINER 121-0235 121-00544 $9,207.00
121 1501 Sep-95 SOUTHERN PKG CASE ERECTOR 121-0220 146-02687 5851 $43,020.00
121 2004 Dec-95 PRO-PAK CONVEYOR 121-0209 121-00937 $21,260.00
121 2005 Dec-95 SIGNODE STRAPPER 121-0209 121-00834 $10,503.76
121 2006 Dec-95 SOUTHERN PKG CASE SEALER 121-0233 121-00957 $44,020.00
121 2103 Jan-96 FLEETWOOD CABLE BELT CONVEYOR 121-0240 121-991 $6,855.00
121 2301 Apr-96 AIS CONVEYOR 121-0245 121-01222 $16,457.51
121 2508 Jul-96 CONAIR VACUUM LOADER 121-0280 121-00233 $4,812.94
121 0000 Xxx-00 XXX-XXX XXXXXXXX $12,032.38
121 2601 Jul-96 BWI INEX VISON SYSTEM 121-0291 134-50339 $43,865.25
$348,219.84
X - 1
loc # asset # Lease Month Equipment Description PEA # PO # Serial # Total Cost
Cincinnati, OH:
122 1209 Jul-95 INEX GEMINI VISION SYSTEM 122-0840 $45,000.00
122 1805 Oct-95 AIS AIR ELEVATOR BYPASS 122-0813 122-01010 $22,440.00
122 1902 Dec-95 AIS TABLE TOP CONVEYER 122-0862 122-01239 $33,508.00
122 2403 May-96 APT COMPRESSOR SYSTEM 134-1926 134-50144 $21,638.95
122 2501 Jul-96 NAUTICA DEHUMIDIFIER 134-1913 134-50603 $58,000.00
122 2610 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $990.40
122 2611 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $55,331.82
122 2612 Jul-96 AIS CONVEYOR 122-0888 122-00771 $48,101.00
$285,010.17
West Chicago, IL:
123 207 Sep-94 XXXX XXXXXXX 123-0284 123-00086 C033934 $67,805.00
123 401 Oct-94 XXXXX EXTRUDER 123-0285 123-00089 P-2588 $97,280.00
123 502 Dec-94 XXXXX EXTRUDER 123-0290 123-01716 R0075 $88,800.00
123 703 Feb-95 INEX GEMINI VISION SYSTEM 123-0285 G091-124 $45,000.00
123 1215 Jul-95 NAUTICA DEHUMIDIFIER 134-1834 134-50039 0003 $14,500.00
123 1303 Jul-95 NAUTICA DEHUMIDIFIER 134-1834 134-50039 0005 $14,500.00
123 2410 May-96 NAUTICA DEHUMIDIFIER 134-1913 134-50603 $29,000.00
123 2507 Jul-96 ELKHART RAISING FRAME 123-0336 $24,549.00
123 2510 Jul-96 XXXXX STANDARD EXTRUDER 123-0336 123-07724 $745,700.00
123 2603 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $13,712.50
$1,140,846.50
Baltimore, MD:
124 705 Feb-95 DOBOY CASE ERECTOR 124-1326 124-0543 94-16781 $58,425.00
124 1905 Dec-95 CONTROL ELECTRIC CONTROL PANEL 124-1339 124-691 $17,431.10
124 1906 Dec-95 SIGNODE STRAPPER 124-1346 124-697 $19,691.91
124 2506 Jul-96 APT COMPRESSOR SYSTEM 134-1926 134-50144 $20,375.00
124 2608 Jul-96 BWI INEX VISON SYSTEM 134-1981 134-50339 $40,900.00
$156,823.01
Elk Grove, IL (tech center):
134 601 Feb-95 AT & T PHONE SYSTEM 134-1812 $156,549.00
134 1401 Jul-95 XXXX XXXXXXX 148-0669 134-10639 $39,991.00
134 2007 Dec-95 BWI INEX GEMINI QR STROBE 134-1904 134-50563 $15,108.50
134 2008 Dec-95 XXXX XXXXXXX 134-1885 134-50464 $42,096.00
134 2104 Jan-96 KAMAN TRIMMER TRANSFORMER 134-1885 065-1137 $26,687.97
134 2304 Apr-96 ALPHEUS BLAST CLEANER 134-1928 134-50004 $58,549.00
134 2511 Jul-96 PANAMETRICS THICKNESS GAUGE 134-1959 135-05022 $6,361.75
$345,343.22
X - 2
loc # asset # Lease Month Equipment Description PEA # PO # Serial # Total Cost
Houston, TX:
142 101 Sep-94 NISSAN FORKLIFT 000-0000 000000 $24,294.00
142 101 Sep-94 NISSAN FORKLIFT 000-0000 000000 $24,294.00
142 204 Sep-94 XXXXX CASEMAKER 142-0949 142-01338 24797-3130 $62,925.00
000 000 Xxx-00 XXXXXXX XXXXXXXXXX 142-0973 142-02045 270 $267,845.00
000 000 Xxx-00 XXXXXXXX XXX SEALER 142-0985 142-02849 5805 $37,665.00
142 1013 May-95 KAMAN SERVO 142-0987 065-456 $0.00
142 1013 May-95 XXXX XXXXXXX 142-0987 C035278 $65,313.00
142 1014 May-95 INEX GEMINI VISION SYTEM 142-0987 $45,000.00
142 1015 May-95 IDEAL RAISING FRAME 142-0987 $49,500.00
142 1112 May-95 XXXXX EXTRUDER 142-0987 142-02865 $379,100.00
142 1113 May-95 INTEC HEAT CONTROL CABINET 142-0987 142-02933 $17,504.00
142 1114 May-95 XXXXXXXX INSPECTOR 142-0987 134-10640 $50,682.00
142 1115 May-95 RAPID GRANULATOR 142-0987 134-10641 $35,054.00
142 1203 Jul-95 NAUTICA DEHUMIDIFIER 134-1834 134-50039 0002 $14,500.00
142 1206 Jul-95 NOVATECH BLENDER 142-0987 $40,405.00
142 1217 Jul-95 UNISOURCE WRAPPER 142-0987 142-02947 $50,620.00
142 1502 Sep-95 SIGNODE STRAPPER 142-0987 110-00023 200090 $36,034.97
142 1503 Sep-95 XXXXXXX PALLETIZER 142-0987 134-50162 $263,950.00
142 1904 Dec-95 AIS LEAK DETECTOR 142-1006 142-01815 $9,845.00
142 2009 Dec-95 ACTION HANDLING FORKLIFTS 142-1009 142-2005 $26,968.00
142 2010 Dec-95 ACTION HANDLING FORKLIFTS 142-1009 142-2005 $20,368.00
142 2011 Dec-95 ACTION HANDLING FORKLIFT 142-1011 142-2006 $27,346.00
142 2303 Apr-96 AIS CONVEYOR 142-1022 142-03009 $16,645.00
142 2306 Apr-96 BWI INEX INSPECTOR 142-1013 142-02152 $50,900.00
142 2309 Apr-96 SOUTHERN PKG CASE SEALER 142-1026 142-03025 $40,684.22
142 2404 May-96 APT COMPRESSOR SYSTEM 134-1926 134-50144 $21,736.00
142 2405 May-96 NAUTICA DEHUMIDIFIER 134-1913 134-50603 $58,000.00
142 2503 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $71,000.00
142 2614 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $8,587.39
$1,816,765.58
Lima, OH:
143 103 Sep-94 NISSAN FORKLIFT 143-316 901684 $17,800.00
143 103 Sep-94 NISSAN FORKLIFT 143-316 901686 $17,800.00
143 2201 Feb-96 XXXXXXXX CONTAINER TESTER 143-0341 143-01216 $55,426.00
143 2305 Apr-96 BWI INEX INSPECTOR 143-0351 143-01951 $25,820.86
143 2502 Jul-96 XXXXXXXX XXXXXX 143-0353 143-00023 $55,426.00
143 2505 Jul-96 APT COMPRESSOR SYSTEM 134-1926 134-50144 $22,116.16
143 2609 Jul-96 NAUTICA DEHUMIDIFIER 143-0365 143-00438 $14,500.00
143 2609 Jul-96 NAUTICA DEHUMIDIFIER 143-0365 143-00438 $14,500.00
143 2609 Jul-96 NAUTICA DEHUMIDIFIER 143-0365 143-00438 $14,500.00
$237,889.02
X - 3
loc # asset # Lease Month Equipment Description PEA # PO # Serial # Total Cost
Elk Grove, IL (plant):
145 901 Apr-95 KAMAN SERVO 145-1148 065-454 N/A $0.00
145 901 Apr-95 XXXX XXXXXXX 145-1148 145-03087 C035277 $65,313.00
145 906 Apr-95 INTEC HEAT CONTROL CABINET 145-1148 $15,913.00
145 1005 May-95 INEX GEMINI VISION SYTEM 145-1148 145-03089 $45,000.00
145 1006 May-95 XXXXXXXX INSPECTOR 145-1148 145-03088 $50,682.00
145 1007 May-95 RAPID GRANULATOR 145-1148 145-03090 $35,054.00
145 1106 May-95 NOVATECH BLENDER 145-1148 145-03024 $40,405.00
145 1107 May-95 SIGNODE STRAPPER 145-1148 145-30017 $34,704.00
145 1202 Jul-95 NAUTICA DEHUMIDIFIER 134-1834 134-50039 0004 $14,500.00
145 1207 Jul-95 XXXXXXX PALLETIZER 145-1148 134-10644 $239,718.00
145 1208 Jul-95 INEX GEMINI VISION SYSTEM 145-1148 $45,000.00
145 1216 Jul-95 UNISOURCE WRAPPER 145-1148 145-03032 $44,065.00
145 1302 Jul-95 NAUTICA DEHUMIDIFIER 134-1834 134-50039 0006 $14,500.00
145 1801 Oct-95 AUTOMATIC FEEDER 145-1154 145-03113 $106,712.00
145 1910 Dec-95 FLEETWOOD SCRAP CONVEYORS 145-1153 145-03209 $9,199.00
145 2411 May-96 NAUTICA DEHUMIDIFIER 134-1913 134-50603 $29,000.00
$789,765.00
New Market, NJ:
146 205 Sep-94 XXXX XXXXXXX 480-0004 134-50058 C034200 $67,805.00
146 1219 Jul-95 XXXXX CO-EXTRUDER 146-0697 134-10153 $745,700.00
146 1221 Jul-95 ELKHART RAISING FRAME 146-0697 134-10204 $25,482.00
146 1222 Jul-95 DATACOLOR SPEC-PHOTOMETER 146-0695 $14,900.00
146 1504 Sep-95 AIS LEAK TESTER 146-0697 146-05051 20079? $15,345.00
146 1505 Sep-95 RAPID GRANULATOR 146-0697 $35,054.49
146 1703 Sep-95 SIGNODE STRAPPER 146-0697 146-02685 $36,981.00
146 1706 Sep-95 XXXXXXXX JET CLEANER 146-0697 $25,700.00
146 1708 Sep-95 FOREMOST VACUUM CHAMBER 146-0697 146-02649 $61,500.00
146 1807 Oct-95 AIS CABLE CONVEYOR 146-0697 146-03107 $36,052.00
146 1809 Oct-95 XXXXXXXXX PALLETIZER 146-0697 146-02641 $313,020.80
146 2203 Feb-96 APT CONTROLLER 146-0705 146-03386 $74,955.00
$1,452,495.29
X - 4
loc # asset # Lease Month Equipment Description PEA # PO # Serial # Total Cost
Lenexa, KS:
148 203 Sep-94 INEX GEM INI VISION SYSTEM 148-0661 00140? $34,000.00
148 206 Sep-94 XXXX TRI MMER 123-0285 123-00091 C033868 $67,805.00
148 701 Feb-95 XXXX XXXXXXX 148-0665 123-00136 C34729 $42,096.00
148 704 Feb-95 INEX GEMINI VISION SYSTEM 148-0654 148-00562 G089-114 $45,000.00
000 000 Xxx-00 XXXXXXXX XXX SEALER 148-0671 148-00483 5806 $37,665.00
000 000 Xxx-00 XXXXXXXX XXX SEALER 148-0670 148-00483 5805 $37,665.00
148 1004 May-95 RELIANCE EXTRUDER DRIVE CAB 121-0211 121-00124? $13,922.00
148 1008 May-95 ELKHART RAISING FRAME 148-0668 148-00466 $43,675.00
148 1009 May-95 ELKHART RAISING FRAME 148-0669 148-00467 $43,675.00
148 1010 May-95 INTEC HEAT CONTROL CABINET 148-0668 148-00132 $15,913.00
148 1012 May-95 KAMAN SERVO 148-0665 065-455 $25,322.00
148 1108 May-95 XXXXX EXTRUDER 148-0669 148-00743 $189,552.00
148 1109 May-95 XXXXX EXTRUDER 148-0668 148-00739 189,552.00
148 1110 May-95 KOMATSU FORKLIFT 148-0677 $18,251.00
148 1110 May-95 KOMATSU FORKLIFT 148-0677 $18,251.00
148 1211 Jul-95 INEX GEMINI VISION SYSTEM 148-0669 148-00744 $45,000.00
148 1212 Jul-95 KAMAN SERVO 148-0668 $0.00
148 1212 Jul-95 XXXX XXXXXXX 148-0668 C035371 $65,313.00
148 1213 Jul-95 RAPID GRANULATOR 148-0669 148-00745 $35,054.00
148 1304 Jul-95 AIR POWER COMPRESSOR 148-0676 $70,337.00
148 1305 Jul-95 FOREMOST BLENDER 148-0668 148-00394 $45,793.00
148 1306 Jul-95 FOREMOST BLENDER 148-0669 148-00393 $45,793.00
148 1404 Jul-95 AIS CONTAINER 148-0669 148-00384 $6,138.00
148 1405 Jul-95 AIS CONTAINER 148-0669 148-00384 $9,207.00
148 1507 Sep-95 XXXXXXXX XXXXXX 148-0668 $41,754.00
148 1601 Sep-95 ESP CASE PACKER 148-0665 $105,495.00
148 1602 Sep-95 ESP CASE PACKER 148-0670 148-00319 3034C $105,495.00
148 1603 Sep-95 ESP CASE PACKER 148-0671 148-00318 3033C $105,495.00
148 1806 Oct-95 AIS AIR ELEVATORS & CHUTES 148-0695 148-00786 $13,810.00
148 1808 Oct-95 COMPRESSED AIR DRYER 148-0676 148-00693 $30,500.00
148 2307 Apr-96 FLEETWOOD CONVEYORS 148-0702 148-00293 $35,618.00
148 2308 Apr-96 SOUTHERN PKG CASE SEALER 148-0702 148-00288 $42,522.00
148 2401 May-96 AIS CONVEYOR 148-0702 148-00287 $52,198.00
148 2408 May-96 NAUTICA DEHUMIDIFIER 134-1913 134-50603 $116,000.00
148 2604 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $70,371.53
148 2605 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $1,687.27
148 2606 Jul-96 NAUTICA DEHUMIDIFIER 134-1913 134-50234 $14,500.00
148 2607 Jul-96 TOP WAVE BOTTLE GAUGE 104-0465 134-50189 $61,900.00
$1,942,324.80
Lakeland, FL:
150 102 Sep-94 TOYOTA FORKLIFT 150-0060 150-0720 80423 $18,400.00
150 102 Sep-94 TOYOTA FORKLIFT 150-0060 150-0720 80421 $18,400.00
150 201 Sep-94 INEX GEMINI VISION SYSTEM 150-0087 G5017-079 $34,000.00
150 501 Dec-94 TOYOTA FORKLIFT 150-0104 82318 $18,900.00
150 1204 Jul-95 TOYOTA FORKLIFT 150-0110 $19,600.00
150 1204 Jul-95 TOYOTA FORKLIFT 150-0110 $19,600.00
150 1204 Jul-95 TOYOTA FORKLIFT 150-0110 $19,600.00
150 1702 Xxx-00 XXXXXXX XXXX XXXXXX 000-0000 134-50157 $459,710.00
150 2407 May-96 NAUTICA DEHUMIDIFIER 134-1913 134-50603 $43,500.00
150 2504 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $53,250.00
$704,960.00
X - 5
loc # asset # Lease Month Equipment Description XXX # XX # Xxxxxx # Xxxxx Xxxx
Xxxxxxx, XX:
430 2202 Xxx-00 XXXXXXXXX XXXXXXXXX 000-0000 134-50752 $38,294.40
430 2602 Jul-96 TOP WAVE BOTTLE GAUGE 148-0708 148-00263 $65,000.00
$103,294.40
Congo, WV:
475 702 Feb-95 XXXX XXXXXXX 475-0002 134-50215 C34810 $42,096.00
475 2409 May-96 NAUTICA DEHUMIDIFIER 134-1913 134-50603 $29,000.00
475 2615 Jul-96 MAT HANDLING ENCLOSURE 134-1913 134-50611 $17,383.25
475 2616 Jul-96 NAUTICA DEHUMIDIFIER 475-0016 134-50312 $14,500.00
475 2617 Jul-96 CONTROL ELECTRIC 475-0015 475-00057 $41,951.05
$144,930.30
West Memphis, AR:
480 503 Dec-94 US TAPE LABELLER 480-0009 6-0589305 $58,850.00
480 504 Dec-94 LSI WRAPPER 480-0012 LS160 $25,000.00
480 000 Xxx-00 XXXXXXX PALLETIZER 480-0013 134-50239 280 $246,480.00
480 1101 May-95 XXXXX EXTRUDER 480-0016 480-00345 $379,100.00
480 1102 May-95 IDEAL RAISING FRAME 480-0016 480-00347 $49,500.00
480 1103 May-95 INTEC HEAT CONTROL CABINET 480-0016 480-00364 $17,504.00
480 1104 May-95 SIGNODE STRAPPER 480-0015 480-00363 $34,704.00
480 1111 May-95 KAMAN SERVO 480-0016 $0.00
480 1111 May-95 XXXX XXXXXXX 480-0016 480-0037 C035279 $65,313.00
480 1205 Jul-95 NOVATECH BLENDER 480-0016 $40,405.00
480 1210 Jul-95 INEX GEMINI VISION SYSTEM 480-0016 $45,000.00
480 1214 Jul-95 XXXXXXXX-ALCOA LEAK TESTER 480-0016 480-0038 $50,682.00
480 1406 Jul-95 FOREMOST RAILCAR UNLOADER 480-0010 480-00390 $40,750.00
480 1707 Sep-95 XXXX CHILLER 480-0020 480-00703 CT-644-20X10 $13,100.00
480 1802 Oct-95 COCHRANE COMPRESSOR 480-0022 480-00783 $48,716.70
480 1901 Dec-95 AIS CABLE CONVEYER 480-0016 480-00389 $122,656.75
480 1903 Dec-95 AIS AIR ELEVATORS 480-0023 480-00968 $18,165.00
480 1908 Dec-95 MATERIAL HANDLING FORKLIFTS 480-0027 480-980 $16,825.00
480 1909 Dec-95 MATERIAL HANDLING FORKLIFTS 480-0027 480-980 $18,444.00
480 2001 Dec-95 BWI INEX GEMINI INSPECTOR 146-0697 146-02686 $45,900.00
480 2406 May-96 NAUTICA DEHUMIDIFIER 134-1913 134-50603 $43,500.00
$1,380,595.45
===============
Grand Total $12,861,338.81
X - 6
Location: Atlanta, GA
PEA Item # Vendor Equipment Description Total Cost
0001 9430009 Assurance Tech., Inc. Optical Comparator $6,478.86
0001 9430010 Atlas Copco Compressors $67,674.88
0001 9430014 Compressed Air Co. Air Dryer $27,344.28
0001 9430015 Conair Franklin Vacuum Loader $3,138.50
0001 9430021 Englewood Bus Plug $6,127.00
0001 9430022 Xxxxxxx Scientific D18K and XL-610 $3,806.63
0001 9430039 Fryer Company Power Adapter $63.94
0001 9430040 Fryer Company Diascopic Condenser, etc. $3,803.22
0001 9430041 Fryer Company Profile Projector, etc. $12,333.69
0001 9430042 Hunkar Smart Box $9,101.50
0000 0000000 Inter-Tel Phone System $12,214.52
0001 9430059 Pacific Engineering Xxxx Xxx $3,008.80
0001 9430060 Pacific Engineering Railcar Unloader $28,124.00
0001 9430063 Panametrics Thcknss Gge & Probe Cbl $19,079.99
0001 9430064 Pneu-Con Take-Off Boxes $3,717.80
0001 9430073 Southern Copy Mach. Canon Copier $6,349.40
0001 9430074 Testing Machines, Inc. Bottle Crush & Insp. Gge. $11,175.00
0001 9430075 Thermal Care Chillers & Accessories $149,407.50
0001 9430077 Xxxx-Xxxxxx Company Bottle Drop Tester $5,970.00
0001 9430085 Northside Forklifts Forklift $21,841.50
0001 9430093 Atlanta Wood Trends Cabinets for QC Lab $7,906.86
0001 9430098 Xxxx & Xxxx Microedge Microtome & Blade Holder $2,115.00
0001 9430100 Xxxxxx Scientific QC Scale $1,136.87
0001 9430106 Fryer Company Prof. Projector Lens & Access. $2,840.26
0001 9430109 Xxxxxxx Scale KWI Pallet Weight Truck $4,875.57
0001 9430110 Maintenance Equip. Co. Floor Scrubber $5,294.74
0001 9430111 Nautica Dehumidifiers Dehumidifiers $28,927.50
0001 9430112 Northside Forklift Carriage Forks $616.00
0001 9430113 Northside Forklift Carriage $3,270.00
0001 9430114 Olsun Electrics Corp. 15 KVA Transformer $795.00
0001 9430117 Peabody Techtank Welded Carbon Steel Tanks $40,885.00
0001 9430118 Romac Supply Switchgear $34,625.00
0001 9430124 B & S Sheet Metal Fabricators Regrind Box $144.00
0001 9430130 B & S Sheet Metal Fabricators Xxxxxx Gate $525.00
0001 9430133 B & S Sheet Metal Fabricators Grinder Receiving Bin $1,992.00
0001 9430134 Cameron & Xxxxxxx Company Pipe Threading Machine $3,668.10
0001 9430136 Fox Valley Metal Conveyor & Platform Assy. $4,100.00
0001 9430140 Prestige Sales Co., Inc. Workbenches $1,433.58
0001 9430143 Cameron & Xxxxxxx Machine Stand $586.12
0001 9430144 Grainger Equipment Cabinets $325.13
0001 9430145 LAI Maintenance Lube Cart $1,460.00
0001 9430146 Prime Equipment Scissor Lift $15,370.00
0002 9430001 AEC, Inc. Dryers & Accessories $960.00
0002 9430003 AEC, Inc. Dryers & Accessories $3,395.00
0002 9430005 AEC, Inc. Dryers & Accessories $5,215.00
0002 9430007 AEC, Inc. Dryers & Accessories $11,320.00
0002 9430011 Xxxxxxxx Jet Cleaner $25,700.00
0002 9430013 Blades Mach. Grinder $42,374.40
0002 9430016 Xxxxx Standard Flatpak Extruder $745,700.00
0002 9430018 Xxxxx Standard Extruder Installation $135,000.00
X - 7
Location: Atlanta, GA
0002 9430020 Elkhart Raising Frame $24,549.00
0002 9430025 Fleetwood Systems Conveyors $124,985.00
0002 9430026 Foremost Vacuum Assemblies $3,540.00
0002 9430028 Fox Valley Metal Support Stands $210.00
0002 9430030 Fox Valley Metal Operator's Platform $2,750.00
0002 0000000 Fox Valley Metal Hoppers and Accessories $3,550.00
0002 9430034 Fox Valley Metal Transformer Stand $5,400.00
0002 9430036 Fox Valley Metal Hoppers and Accessories $9,246.00
0002 9430043 Hunkar Smart Box $9,101.50
0002 9430045 Ideal Tool Die Head Accessories $14,868.76
0002 9430047 Ideal Tool Die Head $141,193.64
0002 9430050 Olsun Electrics Transformers $14,618.00
0002 9430051 Xxxxxxx Machinery Palletizer $261,804.30
0002 9430053 Pacific Engineering Vacuum Chmbr. & Accss. $43.25
0002 9430055 Pacific Engineering Vacuum Chmbr. & Accss. $315.50
0002 9430057 Pacific Engineering Vacuum Chmbr. & Accss. $1,900.15
0002 9430061 Pacific Engineering Blenders $54,682.00
0002 9430066 Xxxxxxxx Container Tester $50,406.00
0002 9430067 Signode Strappers $38,461.50
0002 9430069 Simplex Systems Sampling Cabinet $965.00
0002 9430071 Simplex Systems Conveyor Controls $5,182.00
0002 9430086 Simplex Systems Extruder Controls $3,573.50
0002 9430088 Southeast Polymer Mach. Take-off boxes $1,134.75
0002 9430091 All Phase Electric 112.5 KVA Transformer $2,187.84
0002 9430096 B&S Sheet Metal Conveyor Chute $1,215.00
0002 9430103 Fox Valley Metal Xxxxxx Stands $1,947.50
0002 9430105 Fox Valley Metal Xxxxxx Extensions $1,960.00
0002 9430108 Kaman Industrial Tech BBM Package $8,588.57
0002 9430115 Xxxxxxxx Machinery Palletizer Installation $11,215.00
0002 9430119 Xxxxx Industrial Systems Power Unit $4,300.00
0002 9430125 B & S Sheet Metal Fabricators Drip Pans $146.50
0002 9430128 B & S Sheet Metal Fabricators Unloading Chute $270.00
0002 9430129 B & S Sheet Metal Fabricators Conveyor Extension & Deflector $418.00
0002 9430131 B & S Sheet Metal Fabricators Conveyor Brackets $689.00
0002 9430132 B & S Sheet Metal Fabricators Discharge Chutes $924.00
0002 9430135 Fox Valley Metal Missed Bottle Detector $510.00
0002 9430137 Fox Valley Metal Conveyor & Platform Assy. $4,100.00
0002 9430139 McMaster Xxxx Supply Crossover Bridge Assembly $1,026.36
0002 9430141 Blades Machinery Sound Enclosures & Silencers $1,898.50
0003 9430002 AEC, Inc. Dryers & Accessories $960.00
0003 9430004 AEC, Inc. Dryers & Accessories $3,395.00
0003 9430006 AEC, Inc. Dryers & Accessories $5,215.00
0003 9430008 AEC, Inc. Dryers & Accessories $11,320.00
0003 9430012 Blades Mach. Grinder $32,819.60
0003 9430017 Xxxxx Standard Extruder Installation $71,810.00
0003 9430019 Xxxxx Standard Flatpak Extruder $1,081,313.00
0003 9430023 Fleetwood Systems Vacuum System $28,343.25
0003 9430024 Fleetwood Systems Conveyors $70,955.00
0003 9430027 Foremost Vacuum Assemblies $3,540.00
0003 9430029 Fox Valley Metal Support Stands $210.00
0003 9430031 Fox Valley Metal Operator's Platform $2,750.00
X - 8
Location: Atlanta, GA
0003 9430033 Fox Valley Metal Hoppers and Accessories $3,550.00
0003 9430035 Fox Valley Metal Transformer Stand $5,400.00
0003 9430037 Fox Valley Metal Hoppers and Accessories $9,246.00
0003 9430038 Fox Valley Metal Extruder Platform $10,300.00
0003 9430044 Hunkar Smart Box $9,101.50
0003 9430046 Ideal Tool Die Head Accessories $64,561.28
0003 9430048 Ideal Tool BBM $532,139.47
0003 9430052 Xxxxxxx Machinery Palletizer $293,771.50
0003 9430054 Pacific Engineering Vacuum Chmbr. & Accss. $43.25
0003 9430056 Pacific Engineering Vacuum Chmbr. & Accss. $315.50
0003 9430058 Pacific Engineering Vacuum Chmbr. & Accss. $1,900.15
0003 9430062 Pacific Engineering Blenders $54,682.00
0003 9430065 Xxxxxxxx Container Tester $45,946.00
0003 9430068 Signode Strappers $38,461.50
0003 9430070 Simplex Systems Sampling Cabinet $965.00
0003 9430072 Simplex Systems Conveyor Controls $5,182.00
0003 9430076 Turnkey Eng Conveyor $13,450.00
0003 9430080 Fleetwood Systems Air Bladders and Access. $2,208.00
0003 9430081 Fox Valley Metal Flanges $210.00
0003 9430082 Fox Valley Metal Hoppers and Accessories $6,180.00
0003 9430087 Simplex Systems Extruder Controls $3,573.50
0003 9430089 Southeast Polymer Mach. Take-off boxes $1,134.75
0003 9430090 All Phase Electric 75 KVA Transformer $1,361.25
0003 9430092 Armin Tool & Mfg. Hydra II Die Head $234,310.00
0003 9430094 B&S Sheet Metal Air Conveyor Access Doors $288.00
0003 9430095 B&S Sheet Metal Xxxxxx Extensions $627.00
0003 9430097 Deublin Rotary Union $17,000.00
0003 9430099 Fast Heat Plate Heaters for Hydra II $6,795.71
0003 9430101 Fleetwood Systems Bottle Detector/Ejector $1,125.00
0003 9430102 Fox Valley Metal Xxxxxx Extensions $300.00
0003 9430104 Fox Valley Metal Xxxxxx Stands $1,947.50
0003 9430107 Hydra-Tech Filter System $2,825.80
0003 9430116 Xxxxxxxx Machinery Palletizer Installation $11,215.95
0003 9430120 Simplex System Controls Extruder Table Elec. Control $3,355.00
0003 9430121 South Bend Lathe, Inc. Blast Cabinet $1,205.00
0003 9430122 Armin Tool & Mfg. Company Hydra II Die Head Assemblies $9,600.00
0003 9430123 B & S Sheet Metal Fabricators Crossover Steps $130.00
0003 9430126 B & S Sheet Metal Fabricators Drip Pans $146.50
0003 9430127 B & S Sheet Metal Fabricators Conveyor Floor Guards $233.00
0003 9430138 Fox Valley Metal Conveyor & Platform Assy. $4,100.00
0003 9430142 Blades Machinery Sound Enclosures & Silencers $1,898.50
==================
$5,060,609.72
X - 9
SCHEDULE A
----------
LIST OF MORTGAGED REAL PROPERTIES
---------------------------------
1. Santa Ana, California
2. Xxxxxxxxx, Xxxxxxxxxx
0. Oil City, Pennsylvania
4. Caguas, Puerto Rico
